Expert: Mark Bouris – Fear is the great thief of imagination

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

Alec: [00:00:30] I'm very good, Bryce. I am very excited for this interview. We've got one of the biggest names in Australian business we don't know. You'd always tell me that you're the biggest name in Australian business. I think this time I'll be bigger. 

Bryce: [00:00:42] It is bigger and it is bigger. It's an absolute pleasure to welcome to the studio. Mark, Bouris. Mark, welcome. 

Mark Bouris: [00:00:47] Hi, guys. Bryce. Ren. it's interesting to be on the other side of the mic for a change. 

Alec: [00:00:52] Yes, yes. 

Mark Bouris: [00:00:53] I don't do many of these, so I'm not one of these for so long, so it's going to be fun. 

Bryce: [00:00:59] So Mark is an Australian businessman who is best known as the founder and chairman of Wizard Home Loans, Australia's second largest non-bank mortgage lender behind Aussie. He's now the chairman of Yellow Brick Road, a business which he founded in 2007. He's also the founder of Mentored, a platform that inspires, educates and motivates future business owners. And we're going to cover so much of Mark's journey in business in today's episode. And we should shout out that if you haven't actually listen to the episode where we appeared on Mark's show, do yourself a favour, go and listen to that. We thoroughly enjoyed that experience. So let's kick off. 

Alec: [00:01:34] Let's do it. So Mark, we always like to start by hearing the story of someone's first investment. We find that's generally a good lesson or a good story that comes out of it. So to kick us off today, what was. 

Mark Bouris: [00:01:46] A good question? The very first time I invested time and effort because I never had any money growing up. So I was in a business and my first one was I was three goes in year nine at school and at a little school at their Lakemba. I was in my garden, which is in Punchbowl where I lived in those days. I thought we had the world's biggest backyard, but it turns out it was very, very small and mum and dad had a tree there that had branches on it. And I used to go and break range off. And just just out of curiosity, just have a look at them what happened and I had one Tom Brokaw branch of lifted out of dried I come back the next way I remember clearly and I noticed that when I looked inside at the air on the end of the branch was it was more of a twig. There was a core in there which is a different colour to the bark. So I got a coat hanger and I pushed the car out and I realised I made something straight and it was like a straw and I was stuffing around with it and I was watching a show on telly in those days, old cowboy shows, and they had pipes and I was pretty young. People had pipes. It was a cool thing that I've ever had a bloody pipe. And I thought to myself, I can make a pipe. So I got a cricket stump and I sort of like a chunk of the cricket cricket stump and I got Dad's handle and drilled the middle bit out a hole through it and stuck the branch in. It was a bracelet or twig in it, and I form myself a pipe. And by the way, the TV shows, in those days, they had old school pipes made out of corn cobs and stuff like that. So I had this pipe and I was stuffing around with it and I thought to myself, I'm going to smoke something. So I went in mum's kitchen and I got tea leaves out of the tea thing and I put filled up tea leaves and lit it. And I worked out. I didn't know this, but I worked out. You can use them tea leaves like tobacco and so smoking it anyway, of course, you know, you get excited about these things. And I took it to school shadow my mates at school and with the tea leaves and I smoked it and I started saying to me, School, can you make me one? So I started making them sell them and then they all got found out. We all go and about. The headmaster contacted my mom and had to go and say, you know, and stop doing it. But nonetheless, that was my first sort of investment of time and effort with risk associated with it, which something it was successful in that there was a market for it and it was very rudimentary, obviously. But I was, you know, I would have been about 14, 13 or 14. So that's a very first foray into business, just based off the back of curiosity and that sort of yeah, I can do that. 

Bryce: [00:04:23] Yeah. So Mark, love that first story. 13, 14, everyone sort of, you know, dreams of then taking those business stories from a young age and becoming a successful entrepreneur, which you've definitely done. Is there any sort of major learning, I guess, from from that first initial foray into making straws and selling to your mates that you've carried through or that you then sort of built on and sort of started creating businesses from there? [00:04:49][26.5]

Mark Bouris: [00:04:50] Probably not consciously, yeah. Today, yes, consciously. But then what it did is it affirmed the importance of curiosity and believing that you can do something and being prepared to in observer. So observation, I think is a really important thing when it comes to business. There's a lot of power of observation, you know, like non-judgmental observation, just. Observing the way things existent happen, really just even from a sort of like a physics point of view, the power that you get out of sitting around watching how things happen, how people interact, you know, how people respond, how what what creates interest. And then saying to yourself, how can I improve on that? Or How can I actually do that? Compete or not compete. Participate in life. There's some people who just participate and there are some people who observe, but they never talk. If you want to be in business and you've got to learn to blend those two things, observe and participate and observe and then participate. It's a mix of the two, but the two are very powerful when you bring them together. And it's it's not a there's no getting excited or there's no being passion or bullshit. To me, it's all bullshit. It's quite logical, it's deduction based and it is dispassionate. You really got to go back and this way. Know Isaac Newton observed his three laws. He's immutable laws of motion, which still exist today, came about through his observation. So I think that's really important. [00:06:17][87.2]

Alec: [00:06:18] Well, if Newton has three laws, I think you could add a fourth immutable law, which is that Australians love residential property and so do you. You observed that law and started with it. Home loans in the mid-nineties. Can you tell us about the I guess, the inspiration, the observation, and then the participation that really got off the ground? [00:06:41][22.7]

Mark Bouris: [00:06:41] Well, that's a really good question. I never really thought about sort of framing it that way or framing the narrative around it. But when I think back about it, the first thing is that I would just say to you was that I was always observing capital markets. So the wisdom business, the Aussie business, the ranch business and others, there were many others were premised upon or prefaced by one really important factor that was deregulation in the lending market. That is, they had an enquiry similar to the enquiry that the Treasurer is now calling for and racial the Reserve Bank. There was enquiry back in the Colin Campbell enquiry which sort of made some recommendations around lending in this country that it should be deregulated and Keating was the one in the end who did it. And the deregulation basically meant that others people other than banks could lend money. So people, it wasn't all that sort of people. And I knew about that because I was always observing or or being involved in a reading sense what's going on in a marketplace. And the reason I was interested in that sort of stuff because I, I figured I had, I had a masters degree in capital markets which I obtained from University, New South Wales when I was in my twenties, and I therefore had an interest in reading about something that didn't actually exist. My thesis was based on what happened in the US, but I was always curious to know why didn't happen in Australia. And then I saw this event that allowed it to happen in Australia deregulation. And then I got quite curious about could I do it? And I knew, I knew John quite well and I was watching what John was doing with Macquarie Bank and I was watching what the other John, John King John was doing with Rams that were early starters. At that stage I was working, I think I was working law firm. I can't quite remember, but a bit like the pipe. I knew where the pots were because I've been watching this process. So I thought to myself, I can do this, but I needed to host it a bit like I found a tree in the front garden that that was my host. I have to add, I have to have a host to implement my idea and and then participate. And so I found a host the host was a company called Mortgage Partners or something like that. It was a group of four guys who had a mortgage broker business which helped me borrow some money. And I needed the money to borrow that money to do a property development to build some house. It was a fascinating package deal out of dumb down Southern Highlands where I bought land. I had to settle on it. I didn't have the money settled on because I never any money, same as when I was a kid and I couldn't borrow the money and I had to build 20 houses and 20 lots of land a build a road. Well, shit. And these guys arranged for me and I thought that was a pretty good job of what they did. I'm going to go to them and say, Why are you going to raising rams doing because you're really good at this mortgage business. But I'll show you how to do it in a technical sense. And I approached them. I bought 40% and ultimately bought 100% and I changed the name for whatever it was called, knows as I can remember. That's how a non memorable the name was was just pretty crap name. And I kept these guys in the business with me and I gave them a little bit of equity and I turned it into wasn't home loans. That's how I got involved with that. Home was again through observation and I think that's important. You're going to skill base or you've got something you really think you're good at or you've studied or you have a better sense of than most other people. Therefore, you've got a bit of an edge and you've got to keep observing what's going on in the marketplace. I mean, you're always going to be reading. In my case, I was always reading These days you can. Be watching. It doesn't matter, you know, get on YouTube and other places, Instagram, etc., or podcasts. But you've got to be observing whatever faculties you want to use. Then blend the two and then believe in yourself. You can do it. Grab the tools. Find a host. Don. I mean, that's it. I'm not talking in a parasitic sense, but it's fine to host some because sometimes it's important to get the working parts. And I had to find the working about side of on a tree when I was a kid this summer found a business with, you know, all the limbs in it. And then I just turned it around into what I thought of what it could be. [00:10:42][240.4]

Bryce: [00:10:43] I like that. Can I do it via because a lot of people out there with business ideas and dreams of being an entrepreneur are probably at that stage of saying, Can I do this? And a lot of people would probably guess the answer is no or I'm not willing to try. Or What was it? What are the boxes that you take that sort of led you to say, Yeah, I can. I can do this? Like what? And maybe some advice for those that are at that point in their journey of going, Can I do this? [00:11:08][25.7]

Mark Bouris: [00:11:09] Well, don't ask question too many times as the first thing you know is Nike says, just do it. I mean, you don't over overcook it, don't overthink it, don't overstretch all the parts, don't get too much too heavy into the planning stage and always say it's better to do the work and backfill. So, you know, go forward. Just keep backfilling all the time, you know, just keep digging forward and just don't expect it to be perfect. Anyone who's a perfectionist on your scenario that you just put to me, they'll never start. So you've got to start. You can't. If we can't be a perfectionist, you've got to make sure that you sort of have a general idea of where you want to go. You've got to have this belief in yourself that, okay, look, I'll go forward, I'll dig some holes, but I'll never make too much mess or backfill. Like, you know, basically get a big branch tied around your fuckin waist and everywhere you go, let it cover your tracks. You know, be prepared to do that, if you know what I mean. Like, don't get too over, over exuberant about, oh, fuck, I don't want to make mistakes. You got to make shitloads of them. Yeah, shitloads of mistakes. And, and and this is not about making mistakes. It's about learning. You know, you're going to learn on the way through. So if you have this I'm going to learn about this on the way through. I don't know. I know some of the skills, but I don't really know how to be in the business of this. I'm going to learn about this, particularly if it's some sort of like start up new sort of new construction and be prepared to make the mistakes and just have in your mind. I've got to have some way of covering my tracks. So I call it backfilling or covering my tracks. It doesn't matter. And you've got to have that mindset. So this is a mindset thing. Bryce It's about changing the way you think about mistakes and turn it into, I'm going to learn and I'm prepared these mistakes. I'm prepared to learn and I'm going to learn the whole way through. And even my mentor business like but the fact, like I didn't know how to run a publishing business, I didn't know how to do a podcast. You know, we start off as a my brochure, but like I had no sense of it whatsoever. Like my very first podcast, I just turned up when I did the first Celebrity Apprentice or first Apprentice before The Celebrity Apprentice. I'd never done television in my life. And I watched one episode of Donald Trump before I went on the show, one episode, and I didn't watch out all the way through it because I got bored. [00:13:15][125.6]

Alec: [00:13:16] So he made it. [00:13:16][0.5]

Mark Bouris: [00:13:16] So and so. I've got a general idea what to do. And because of I had a bit of a sort of our got nerves of shit because you know, they got on air signs you got, you got bugged things in your ear, you got audio shit all over you. You sit in a room and got lights, camera, action. You know, like I never even went into the studio before I did the first episode. And, and then when they see they're confronted with 12 in that on that, at that stage it was 12 candidates. What the fuck, what are we going to do here? And you just go through the process, make mistakes, you know, for sure it gets edited. So, you know, so you guys do it, you edit yeah, you make up, you make stuff. So that's interesting. But then no, that's shit. I'll take that out. You know, you're sort of looking after your audience and looking out for your own rep, but that's that's what I'm backfilling. Make mistakes, be prepared to learn. Don't worry about that sort of stuff. Don't try and perfected, you know, like even now, my upgrade business, I'm still trying to perfect it now. Like what I mean by that is I'm still working on my model, changing my model. You know, people say, Oh, you changed my whole time. I don't change mine. I'm just responding to markets and changing what my audience wants and changing, you know, what my distribution wants or whatever the case may be. I'm always, let's call it improving. [00:14:27][70.8]

Bryce: [00:14:28] Yeah, yeah. [00:14:28][0.5]

Alec: [00:14:29] Love that. So you founded Wizard in 96. In 2004, you sold it to J. J j money. [00:14:37][8.6]

Mark Bouris: [00:14:38] General Electric. [00:14:38][0.3]

Alec: [00:14:38] Yeah. We're fascinated by this idea of the right time to sell because it can be hard. And, you know, for eight years you would have been working on this business, building it. It would have been. AB And in 2004 you decided it was the right time. Talk us through that. [00:14:53][14.8]

Mark Bouris: [00:14:54] Well, from 96 to 90, I only had 40%. So I actually didn't work in the business at all. I was just an investor. So I sort of sold my house and the money from selling my house or the business use that as working capital and to do some other things like sponsor New South Wales and stuff like that. So I don't really say I get into business until about. On a date because we had a dispute in the organisation and one of the major guys there, there was a dispute as to how we were going to grow or the speed at which we want to grow. My view was I just want to grow as fast as possible and I said, if we're only in the business, 250 grand, two in New South Wales and the State of Origin, he was against that. So I bought him out and then then I bought everybody out. And then it's like. [00:15:32][38.6]

Bryce: [00:15:33] How you resolve disputes. [00:15:33][0.6]

Mark Bouris: [00:15:34] Basically. Well, the dispute the dispute got quite, quite bad. Like he actually got a managed to get a injunction against us, against us for trading and the judge ordered us to go on a mediation. So it was pretty heavy. But I bought him out and and then I took control of the business. So it was around 98 that I got fair dinkum involved in the business because that stage I had too big a percentage not to be involved. And and he was sort of like the managing director, so to speak, of the business. He's gone, so someone had to leave the joint. So I sort of stepped into it more, more so in those days. So 98 to 2004, to answer your question then, like how do you know when to sell or do you plan to sell all the time? I take the view from day one you've got to be ready to sell, so therefore plan to sell. So think about who could be the buyers. Let's say your business, for example, is no point sale wins. Now, someone might come to you tomorrow and say, we want to buy your business. So you're always saying, I'm building the business to sell. So therefore you've got to ask yourself the question how much I don't want for it. So if I'm going to sell next year, do I want X amount of dollars for it? Do I want, you know, $50 million for my business? Then if my business is worth 50, I would sell for $50 million. Is it for my business to be worth $50 million? What is the multiplier that the industry applies to businesses like mine against my revenue? So let's say in your industry it's your publisher broadcast. Let's say it's a and growing let's say it's a five time model. So if you want to get 50 million, you've got to be making 10 million a year trying to say, you know, we're earning 10 million a year. So in two years. So then you say, okay, well, getting we're making 5 million a year means we got to double our revenue. So to get it to ten, at which point it will be worth 50. So how do I double my revenue from here to the next four months? If I'm going to spend more money in advertising, I've got to have greater distribution. I've got to get better. I guess I've got to put in if we're doing one podcast, we're going to do five podcasts, we go to ten points. What have I got to do to get the revenues up? And that's how I always look at stuff. So when Kerry got involved in my business. [00:17:42][128.2]

Alec: [00:17:43] Just for context. Kerry Parkinson. [00:17:44][1.1]

Mark Bouris: [00:17:44] Kerry Packer and. [00:17:45][0.7]

Alec: [00:17:45] Wizard. [00:17:45][0.0]

Mark Bouris: [00:17:46] Kerry bought 50% of my business before he bought, just before he gave me the cheque and put the money into the business. He said to me, I want this business worth in five years time, five or $10 million. And I thought, What the fuck can you do? [00:18:00][14.0]

Alec: [00:18:00] What? What valuation did I invest up. [00:18:02][1.9]

Mark Bouris: [00:18:03] At 25 million. Wow. [00:18:04][1.2]

Alec: [00:18:04] Okay, so he wanted you to tax it in five years. [00:18:07][2.5]

Mark Bouris: [00:18:07] So. Yeah, yeah, yeah. So I had to. I had to do it 20 times. Yeah, yeah, yeah. So it's and. [00:18:13][5.4]

Alec: [00:18:13] And you don't say no to Kerry now. [00:18:15][1.4]

Mark Bouris: [00:18:15] And I but I thought it was a bit crazy. But, you know, he knew more about this sort of stuff than me. He didn't say what to sell. He just said, let's assume let's put ourselves in a position every day between here and 45 that we could sell for five and a minute in five. Wow. Not not that I want to sell. Like and these are called liquidity events. When you have shareholder agreements and big shareholders come in, always when a liquidity event, they say liquid event is going to be five years time liquidity then basic means we sit down, all of us, and we send them a grade. We list, we sell or we stay. That makes sense. That's what most big investors want. So his view was his and my liquidity. That will happen in five years time. We'll sit down and work out whether we sell list or stay. He didn't care which was the he was saying we got to sell. But to do that, you got to say, okay, well, what value would we sell? At what value would do we want to have? It makes you start to think about these things which you would not ordinarily about. Otherwise, you're just going to get caught in the weeds every day doing what you're doing and you don't have a bigger strategic thought sitting around you. So like in everything you do and plan should be around about what? Around when do I want to exert and what price I want to get and how do I work backwards from there? So you build your budget off the back of that. So that's what we did. We built our budget off the back of that. And you know, do we need to make acquisitions? You know, do we need to grow through acquisition? Could be grown up organically. How much money do we need to allocate? Advertising, you know, in those days is all television and radio and paper newspaper. But like, how do we do? Where do we get our best bang for the buck? Everything we did was around that process, everything. So I didn't know when was the best time to exit Renault. I had no idea. But we always, from day one were building it as if we were going to do an exit. And the reason I knew to exit was the valuation we got off of was exactly what he said. And it was it was like four and a half, five years from the time he, you know, he and I got together, I thought, well, that's seems to be right. And also the market was getting a bit tricky. So, you know, it's about trying to get it at the best time. You know, it's not arbitrage markets, but it's about trying to get out at the height. So there was you know, the property market was on fire till about 2004 and it started coming off at 2005. I could see it. I'm a good indicator because some of my businesses are a good indicator because applications start to drop off. [00:20:30][134.5]

Alec: [00:20:30] Yeah. Yeah. [00:20:31][0.5]

Mark Bouris: [00:20:31] People stop buying property, therefore, because they can't borrow as much for some reason interest might be too high like that. And they're going now. Or alternatively, we start to see purchase prices not increasing and you know, we get a good look into the residential market. Yeah. And I could see that it was happening and Australian property market post missile just dropped off the cliff until it hit 2008 when the GFC occurred, which really jumped off a cliff off of that. But so we were first out. [00:20:59][27.4]

Alec: [00:20:59] Yeah, you look back in history and you say, gee, money entering Australia, wanting to make a big acquisition wise wizard and then three years later the GFC, it's like great timing for you, terrible timing for that. [00:21:13][14.1]

Mark Bouris: [00:21:14] Well, don't forget that JI generally was already in the Australian market and G was the world's largest consumer finance company, largest being the bank of our big in any other mix. Anybody world's largest consumer finance company. They had they already owned in Australia businesses like you probably wouldn't remember them but like Avco, etc., which became G Money, which were those sorts of companies. It was my very first loan I have with these these guys back when I was 20 to buy a colour television. When colour TV just came out, I couldn't wait to buy colour television. I went to a place called Norman Ross, which is currently now these days called Harvey. Norman and I had no money and I borrowed $300 and I bought borrowed from Avco, which J owned. So like I'm 20th going back 46 years and I worked at the interest rate but I paid it off and I paid 35% interest. Oh, but I didn't give a shit because I go to tele and I like it for me. I had a colour TV and TV then stopped at 1030 at night. So I was literally yeah, so I would literally it was only 910 seven ABC. That's right. And I would watch television or it just to see this colour. It wasn't great colour, but I would do this and so G was already here. Okay. And I, it's funny, you know, I'm not a superstitious dude, but and I'm not like, you know, the universe shit it. But, but what I remember is this Kerry said to me, he said, Not only have we got to have a price we would sell for in five years time, we've got to find who the buyer is. So you've got to know you've got to build a business to suit a buyer. Let's say you're a publisher. You might be saying, well, maybe News Ltd might want to buy me or maybe Channel Nine want to buy me, you know, part of the Fairfax or whatever. You know, you've got to find a buyer and why would they want to buy you? You know, then what am I going to do to build it for that particular buyer so that that becomes attractive for that buyer, or at least not on at least not unattractive. And as I said, I was always I read everything in those days, especially about my game mortgages. I remember reading the paper and there was a guy called Don Argus who was the those days as the CEO, very famously a banker of National Australia Bank. And Don Argus was in an interview just like we hear the CEOs of the big banks today and they answer the question by the AFR, the Financial Review journalist to him was this What keeps you awake at night? Which competitor Cummings's Marketplace could take, could completely fuck up your business? And right now the same question gets asked by journalists to the bosses of the big four banks in particular, and the answer is Amazon, Google. They worry that then the answer was, I said someone like General Electric coming to Australia and participating in this marketplace because the balance sheet was massive. Yeah, world's largest company at the time by market cap. Its market cap was greater than every Australian company, including BHP and the banks added up together. [00:24:06][172.2]

Alec: [00:24:06] Really. [00:24:06][0.0]

Mark Bouris: [00:24:08] It as before. So it was massive. So it had the capacity to take on the Australian banks who made a fortune. It was just like it was there were the most profitable banks in the world and and I remember reading that Don Argus say that and to be honest with you, I didn't really know much about General Electric when I heard Don Argus say that, but it did stick in my mind to maybe go and start doing some research and research. And then I worked at the GM, owned a mortgage insurance company in Australia called Genworth changed name. But I didn't try what it's called Jim was it was the biggest mortgage insurer in Australia. So every deal we did a wizard, we used to have to get more insured through a company called Genworth. I made sure that I met the guy who ran this in Australia and his name was Tom Gentilly. So they had the biggest mortgage in Australia. They had all sorts of other stuff, you know, in the country, in Australia, the biggest aeroplane maker, for example, in in the world. I got to know Tom and because we did business with him, we were one of the biggest non-bank suppliers and insurance requirement to them. And I started to discuss this, Tom, like, you know, at some stage I'm going to want. Get out of this business. What's your interest? And I knew that what would worry me is if I went to a bank that he would lose all the mortgage insurance business because the banks didn't use gee, they use somebody else. And especially St George Bank, for example, they they self-insured. So they did it all through Singapore an insurance policy which they so then often do Lloyd's. So they again observing the marketplace and sort of then knowing where the host is and the host was. G So to speak. I just had to get him interested. Yeah. And, and they were interested and then. [00:25:44][95.8]

Bryce: [00:25:44] In a big way. [00:25:44][0.4]

Mark Bouris: [00:25:45] A big way. But, but I told Kerry and l Kerry said, I don't want to sell. [00:25:48][3.3]

Alec: [00:25:49] Oh, really? [00:25:50][0.1]

Mark Bouris: [00:25:50] Yeah. No, no. Originally Kerry did want to sell. He wanted to buy. [00:25:52][2.5]

Alec: [00:25:53] Well, okay. [00:25:54][0.5]

Mark Bouris: [00:25:54] So he owned a thing called Challenger at the time. The Challenger group. Yeah. And he wanted me to when I put that to me. So you sell it to me, sell it to the Challenger group. And I'm going to make you chairman of the Challenger group. And you're I'll give you shares in Challenger. [00:26:09][14.2]

Alec: [00:26:10] Okay. [00:26:10][0.0]

Mark Bouris: [00:26:10] Now I'm sitting there, I'm thinking of shares in G or shares in Challenger. I take the shares and J. Yeah. By the way, I didn't turn out to be such a great outcome because was. [00:26:17][7.2]

Alec: [00:26:18] I hope you sold. [00:26:18][0.4]

Mark Bouris: [00:26:19] No, I didn't. I got, I got, I got caught in the GFC. [00:26:20][1.6]

Alec: [00:26:21] Yeah. [00:26:21][0.0]

Mark Bouris: [00:26:21] Right, yeah. I mean I still saw it. Understood. Well don't worry. But, but, but, but, but I know I had the world's I know I took shares in General Electric because it had it had never not paid an increased dividend in 30 years. [00:26:36][14.2]

Alec: [00:26:36] Well, yeah. [00:26:37][0.6]

Mark Bouris: [00:26:37] And G.E. was the only listed company that was originally put on the Dow Jones Index in the 19th century, the only company remaining. And it had grown every year from that point, and it never stopped paying an increased dividend every quarter for 30 years. So I thought this could be the safest thing in the world. But what I didn't realise if a GFC came was no one knew what happened. But they then being the world's largest, therefore became the world's most exposed. [00:27:05][27.7]

Alec: [00:27:06] Mhm. Yeah. [00:27:06][0.9]

Mark Bouris: [00:27:07] So the loss of credit rating as a result of it though the only there's only six triple-A rated companies in the world today. Today's only five I think, and G was one of them. But when the JSE hit because of their exposure to the consumer finance market, GE lost its credit rating and then their price collapsed pretty much straight away. [00:27:25][17.9]

Alec: [00:27:25] Yeah. So you sold in 2004? In 2007, you start Yellow Brick Road. And I am fascinated by this idea of entrepreneurs going again. You know, you had probably more money than you needed and you could have done anything. You didn't need to work, but you could have started a business in any field and you decided to go back into the property home loan space. And I'm fascinated by entrepreneurs that for love or for passion, or because they have an edge in this field, they go get in the same field. So what was the thinking there? And starting a real, real estate focussed business in 2007. How did that go? [00:28:05][39.7]

Mark Bouris: [00:28:06] Well, the reason I started is it's a little bit more to the story because those two in those days, 2000 from 2005 to 2009, James Packer and I had a joint venture with General Electric outside of Australia. So G bought Australia-New Zealand from me for was it, but I kept James and I kept the rights everywhere else in the world. All right, so g come to us and they said, look, we've got banking licences in 36 countries around the world. Some are doing, some do. But we're really big in India, Brazil, Mexico and Russia and Germany. And they said we'd like to form a global joint venture with you to set up Wizard Wizard distribution system around the world using our banking licences. And because they thought it was a good way to set up branches, they like the model. They said to me, But we're hopeless setting businesses up. We can't set business up. So they said to me, Why don't we do this together? So they said, We'll put in the balance sheet and you guys can have 40% of the business and you can set the rest up. Of course James had nothing. He had told us he had 20% at 20% and we had to put our share of money into it by the way. So, you know, we had to match dollar for dollar, not dollar gold without putting in 60, opening 40. And so we said we'll start off in India. So we set up a business in India, we had a wizard home loans in India. Oh well. And we did that from 2005 through to 2009. We use a balance sheet. We had 58 branches in India, became the fourth largest lender in India. Wow. In a period of three years it like 500 staff and ice together every six weeks. And I spent a week there and then I fly home and I did that for a couple of years. And then during that period G decided that I wanted to apply for banking licence in Australia and sit in on the wizard business here in Australia. And they had the application in and they also to be a bank you have to be able to not only was a branch to be a banking branch, not only should lend money, but they should be able to, you know, take money in and do other stuff, financial products. But again, didn't know how to do that. They said to me. Why don't you set something up which is on the other side of the ledger? So it's not lending money, but it's planning wealth advice, wealth products. So I said as I said, I can observe a thing called Yellow Brick Road. So Wizard is your branches. The idea was you walk in. It was a branch. You go to Wizard on the left hand side, for example, to do your mortgage. If you go on the right hand side to get your finished plain done. [00:30:30][144.5]

Alec: [00:30:31] Yeah, right. [00:30:31][0.3]

Mark Bouris: [00:30:31] Okay. So I set it up and they said, you know, if we like it, enough will bite off you. There's no downside. So I set it up. That's what I did. That was the whole reason about Yellow Brick Road in 2007 and to do away and bought accounting practises when board financial planning businesses. I went and bought insurance broking businesses, the whole kit and caboodle. The objective was to continue run the wizard business globally. And our next stop was Russia. And then after that, we were planning to go to Mexico and Brazil. But then we had this finished building planning. This is going to be great. But it did no mortgages. It wasn't allowed to mortgages because I was the chairman of Wizard in Australia. Still, GFC hits says we're out of every we don't we don't want to be an industry anymore we're going to sell those businesses Australia we're not into the yellow brick road and oh fuck you know and plus my shares are go like go south and Jesus isn't good. So sometimes self-interest is a really important factor in what you do. And because I didn't know how far the share prices go down, I had no idea what was going on. Like, you know, no one knew at the time. It's a bit like what everyone felt and covered when no one knew what the outcome was going to be. So I thought, well, I'm going to take insurance policy out here. G Release me from all my obligations, which meant I could get on the mortgages. And that was in 2009 February doesn't right? As a result of being released in February 2009. I then took Yellow Brick Road into the mortgage industry, literally like the day after and the financial planning staff and all the other stuff. Insurance. It wasn't really my go, but I kept that wealth piece going. But my main objective was to lend money and and I can now use my model. That was in May. We were running in, rolling out another place in the world. I'll use my model here in Australia. Wizard. The business in Australia got sold to Aussie and CBA together. They bought it, they closed wizard down and rebranded all the wizard branches Aussie and today CBA still owns the name and I've tried to buy it from they won't sell it, they won't release it to me. As a result of that, I was able then to sell the yellow brick road effectively to become an opportunity, like I said, to be able to grow and take the place of Wizard. [00:32:41][130.0]

Alec: [00:32:42] Hmm. [00:32:42][0.0]

Mark Bouris: [00:32:42] Yeah, that's what I did. It was as just sitting there looking at me. So why would I mean, it was in the middle of the GFC. Not a great time to start a financial services business, but it doesn't matter. Like it turned out to be a really good outcome. So you know, sometimes the best time to do things is when it's a shit time. Yeah, the tide's completely out, you know. [00:32:58][15.4]

Bryce: [00:32:58] Yeah, I love that. Well, Mark, we are going to turn to some other aspects of your entrepreneurial journey in a moment, but we're just going to take a quick break to hear from our sponsors. So Mark, you're in the publishing business as well, which you've mentioned with Mentor. You know, we've had the pleasure of coming on one of the podcasts, but it's a platform designed to like inspire and educate future business leaders. You've spoken to plenty of start ups around the country. I'm interested to know what are some common struggles that you often come across with start ups or potentially some pitfalls or things that start-ups overestimate when they when they kicking off. [00:33:33][34.8]

Mark Bouris: [00:33:34] The biggest one is patient capital money, you know, but money that's not looking for returns straight away. Generally speaking, they're always trying to raise money. Fortunately, some start-ups can self-fund. That's a different thing. Until about most start-ups, especially tech ones, can't sell fund. And generally speaking, the mistake, let's call it the illusion that they sort of operate under is that I'll go raise money when I need to. But when you need to raise money, generally speaking, you can't raise money because it's pretty fucking obvious to everybody, you know. Right? [00:34:04][30.7]

Alec: [00:34:05] So like right now. [00:34:06][0.9]

Mark Bouris: [00:34:06] Yeah, yeah. You know, I'm saying and like and, but when you don't need to raise the money, generally speaking, if you go to the marketplace, the thing is going through your mind is I don't want to dilute my equity. [00:34:15][9.2]

Alec: [00:34:16] Yeah, yeah, yeah. [00:34:16][0.7]

Mark Bouris: [00:34:17] I don't want to give anything away. Mm hmm. Well. [00:34:19][1.7]

Bryce: [00:34:19] So what do you do? [00:34:20][0.4]

Mark Bouris: [00:34:20] That's the time. You do it. You do do it. You buy the bullet. Are you better off having a percentage of a smaller percentage of a bigger business that will survive if you have a big percentage of a smaller business that might struggle if it needs cash flow. Because, you know, like if if you can't, there are there are, you know, some people come up podcast telling me that then one of the reasons I come on my podcast is because they might be in the middle of a race series B or series I would have because they use my platform to promote themselves, which is fine, I don't care. It's cool, it's good. But I always keep in contact with all those people and often say to them, I go and have a coffee with them and I say, Listen, how much you trying to raise to say 3 million? I'm in a million. Half. I say close the race, take them only half carry. Send me the money's on the table. Take it off the table. Don't ever leave the money on the table. Yeah, ever don't think that you're going to get three if you've got only got one half and even if it's like oversubscribed you know. Yeah that's different. But it's all about global liquidity. I mean, one thing you got to remember, I would say to people, you've got to remember is the world has a certain amount of liquidity, just the whole world. Okay. And unless governments are printing money but they used to that stopped. Okay. That liquidity is a constant. It's and it just moves from asset class to asset class wherever the greatest return is relative to the risk. For example, we've just gone through this really low interest rates, like ridiculously low interest rates globally. So people are saying, you know, I'm prepared to take a bigger risk. So let's put let's put 10% of my portfolio on my family assets or whatever it is into start ups. Because, you know, and if I'll take a view that one out of every ten might kill, it got really good, which means I can increase my total portfolio of yield. But when interest rates are going from 0.1 of a per cent or less, you know, if you're putting money in deposit at retail, but now to 3% you say, wait a minute, I'll just take a rest. I won't put any more money into start ups. Don't think you'll ever arbitrage those processes. When you when the money was available, everybody there was liquidity everywhere in the world and you didn't need the money because everybody was like it was like manna from heaven. You know, I just I can fall in love. And then the moment the moment this thing's driving, I shit my sales and I good. I do. I need some liquidity, more cash flow and that's the worst time because you might get it, but you might get screwed. And if you thought you're going to give away equity before, you're going to give away more equity this time. So that was the thing that I learnt from Kerry. You know, we had two other partners, you know, not in the beginning, but we got to a point. We've grown so fast and so big. We got to bank partners in two global international banks, not Australian banks. On each occasion we had to give equity way. But Kerry said like, so what? You're like, look at the valuations we're getting and they're putting the money and we'd have to put the money in. We're talking about large sums of money that putting in will allow us to make acquisitions so we grow at a much faster rate than we would ever grow. And you know that that's something I'll learn from him. And maybe he was a gambler, you know, like he was famous for this. You know, if he was winning big, the casinos didn't like it. He just took it all, hoovered it up, say, like, I'm out of it. And if even if used for 20 minutes, as soon as he started getting the cash on the table, he's he's gone. [00:37:27][186.6]

Alec: [00:37:27] Yeah. [00:37:27][0.0]

Mark Bouris: [00:37:28] And one of the reasons why he was banned from a lot of casinos in the end, I think, as I recall, only one casino group, Steve Wynn, would allow him to play in the casinos. [00:37:37][9.0]

Alec: [00:37:37] Yeah, well, is that why did he end up buying Crown or. [00:37:40][3.0]

Mark Bouris: [00:37:41] Was it that's James. [00:37:41][0.4]

Alec: [00:37:42] Yeah, yeah, yeah. I was going to say, you know, down so much, they had to buy one in Vegas. [00:37:46][4.4]

Mark Bouris: [00:37:47] Just written books written about him in Vegas. Like he's so famous as a gambler. [00:37:50][2.9]

Alec: [00:37:51] Yeah, well, I helped it. [00:37:51][0.8]

Mark Bouris: [00:37:52] Totally famous as gambling. I went with him a few times to various casinos with him, that there were places in Vegas, especially when he said Bellagio, where they would give him premises and he'd have his pilot there. And he's doctor there. And he's there is they have a, you know. International polo players, you know, the whole of it from Argentinians. And but but he would go where he played. Was his own table available 24 hours a day? Nobody else allowed on it. And in fact, in one one time where they they actually had made a little kitchen for him so that that he could they could because he only eight certain things like chops and sausages and steak and eggs and some of these like, you know, meat grill. And and they were very vegetables officially. And that person was available to cook 24 hours a day when everyone it. And he could gamble 24 hours a day whenever he wanted. And I'll never forget that. And and it was just that the person would be called Dale or whatever the person is, just stood there waiting for him to turn up and they'd have a shift and someone else come in. So that's how famous was in the end. But I watched him and soon as he start winning, he's gone, man. Yeah. And that was shit them. Because what they're hoping, as you put it, all back in. [00:39:01][69.6]

Alec: [00:39:01] Yeah, yeah, yeah, yeah. [00:39:02][0.7]

Mark Bouris: [00:39:02] And that was part of his mentality and he told me that money's a grab it. So liquidity is a big deal. Raising money is a big deal. So that's probably what I see. All of those start ups are coming to see me, especially start ups or those who want to go on to the next stage of growth. It's capital. Lack of capital. Yeah, patient capital. And the best time to get it is when there's lots of liquidity and you lock it in. Mhm. [00:39:28][25.2]

Alec: [00:39:28] So we've spoken a lot about Kerry Packer and you know in terms of the pantheon of Australian business greats, he would be right up there. But I think you more than most people have had exposure to a wide range of business people in your, you know, with the days and with Kerry in with all the start-ups you speaking to now, I guess across all the great business people that you've met, are there any common traits that you say time and time again? [00:39:54][25.8]

Mark Bouris: [00:39:55] Appetite for risk, but understanding what risk actually means? Hmm. So it's not just the probability of the event occurring that you're worried about. It's a probability event you're worried about multiplied by the gravity of the event you worried about. So you've got to understand gravity and probability. Risk is the not the sum of, but the multiplication of those two things. So you've got to apply those two things to each other. So they all had a good understanding of risk. I had a lot of exposure. Alan Bond Something that like of course you went to jail and he did the wrong thing, etc., whatever. A common trait of someone like him. I was a law firm representative and all these people. Unbelievable vision. Like if you go to the Gold Coast now and you got a Ribena and you look at the University Bond University, and then you look at the whole sub of Ribena. [00:40:44][48.6]

Alec: [00:40:44] I've never put two and two together before. [00:40:45][1.3]

Mark Bouris: [00:40:46] That's him. [00:40:46][0.2]

Alec: [00:40:46] Yeah, right. Okay. [00:40:47][0.7]

Mark Bouris: [00:40:47] There you go. He did that right. But he also. But, but he also created like a city. So Ribena was nothing. It was nothing there. And Ribena today is like let people live houses and parks and schools and shopping centres. It's like a big deal. Like he's one of the best parts of the Gold Coast and his vision, like if he had told you that vision back in 1985 when he started this whole process, I remember it. You said you mad like, you know, it's hard to see into 2022 like that's Nostradamus stuff, you know, and but he did it. Yeah, that's that's his thing. I mean, so a great visionary, John Stones, who controlled that same group, David Jones, Dad's Steam, Penfolds Wines, Brickworks, Woolworths Industrial Equity Group, the biggest he would have been the biggest employer in the country in the late eighties, which again, I was at a law firm doing his work, John Fallon's massive visionary, where things can go and big brand guy really, you know, big thinker, but a great vision as to where the will go. These guys didn't survive. None of them made it. They but they made money. Don't get me wrong. They made a lot of money, but they didn't actually get to see the vision out. But the vision actually got happened. Those things they envisioned actually happened. So I think, you know, the to a great imagination and there's a thing that I always say fear is the great thief of imagination. If you're a person who's over considered and fearful, then your imagination will be diluted. Now, I'm not saying these guys had no fear. I'm I'm saying that fear less, but they didn't let fear get in the way of their imagination. So they controlled managed to control the fear, to allow the imagination to open up and broaden out. And I think they're there some of the traits that those traits, I mean, they all work really hard, but every one of them is pinned to their business. [00:42:43][115.5]

Alec: [00:42:43] Yeah. Yeah. [00:42:44][0.4]

Mark Bouris: [00:42:44] Every one of them had either extraordinarily agreeable families and, you know, spouses and kids and what have you or got married three or four times. Hmm. It doesn't matter. Same deal. But they were. But they but their whole they were pinned to their job. That was I think that was a hobby. That's what I love the most. I don't want to call it passion. It's. Who we were, but that was they were just stable to their business in everything they did everything. They weren't saying, well, let's have balance and balance in my life. I got to go and play golf or got to go on an annual holiday. If it wasn't a holiday mate, the family was well looked after, but they were on the phone. They'll go to London and they got it'll be all. We're going to get a lot of them all because I'm going I'll meet somebody I need to meet. You know, like everything was round business and they had common traits. I did it myself. That's how I was. Everything I did was around my business and, you know, I end up getting divorced three times. So four kids read, you know, like, you know, that's I just. I just didn't. I expected too much of my spouse. Yeah, to be frank with you. But a lot of times these guys have survive. But that's because, you know, maybe their spouses are older or just different era of people. But that was that's a common trait or a uniform trait or universal trait that I've seen in all these individuals. The guy who was the boss, Davison, was the boss of G Capital. So G Capital, which was a subsidiary of General Electric, was their most profitable business. And they used to make after tax three and a half billion dollars every year. GE Capital was established by a guy called Davison. He was the CEO of GE Capital. Same deal, same same type person, absolutely stable to the business, and had a massive vision when he first started GE Capital up as a nothing to becoming, you know, the world's largest financier of aeroplanes, jet aeroplane engines, you know, the world's biggest financial institution for consumers. Sure. You know, the g could and it kill that off. That doesn't matter. He still achieved it. It doesn't mean you're going to live forever. But his vision was right. [00:44:50][126.2]

Bryce: [00:44:50] Mm hmm. Well, Mark, we unfortunately have just about run out of time, but just about just about. We've got time. We always try and squeeze is. [00:44:59][9.0]

Mark Bouris: [00:45:00] Always one. [00:45:00][0.4]

Bryce: [00:45:00] Voice that leads to another one. Then let's do another one. You've got your finger on the pulse when it comes to Australian property. That's for sure. Ren and I aren't in the game at the moment, have been obviously priced out for the last few years and there's we're. [00:45:14][13.4]

Alec: [00:45:14] Going to need a just beginning to afford it. Yes. [00:45:17][3.1]

Mark Bouris: [00:45:17] You do. [00:45:18][0.1]

Bryce: [00:45:18] But there's a lot of headlines that property is calling not only here, but in some of the hottest markets around the world. And when we say cooling, we're saying like 0.1% in Sydney, like, wow, that's Boggle. Well, what are your views on property market here in Australia and then the flow on effect to the banks? You know, for those listening and thinking about it from an investing standpoint, from equity markets, what what are the flow, what or your thoughts on the banks here in Australia? [00:45:45][26.3]

Mark Bouris: [00:45:45] There's not vice obviously, but it's just a personal view. But when it comes to banks, I think investing in banks, if you just watch their pricing, I think the banks will become make so much money out of this cycle in the next 12 to 18 months. It's not funny. It's just going to make so much money because this is a period where they can increase their margins, they can actually advertise and everyone else can't afford advertise. They can take market share big time, which is, you know, like look at Chinese, it's having a tilt and right now it's Suncorp. This sort of activity is perfect for their banks because they've got big balance sheets, very sustainable, massive back books that just generate income. People can't refinance because I tell you what, people can refinance when one of the big issues is for a bank or me. In my business, we have what they call a back book. In other words, they have a book of mortgages where they pay money to people, right? As the banks have the biggest box of mortgages in the country. Most of the money they drive from a mortgage comes from the back book, not from a new or new loan. Because when a bank does a new loan, it pays too much away and everybody else has to advertise to get it, etc. set it up. Whereas they make no money upfront, but they make money on the back book. So the biggest danger of that book is refinancing. So we just gone through a massive refinancing period where now you're with Westpac and CBA comes out with a better price and the broker refinances you into the CBA. Westpac loses part of his book, but at the same time Westpac refinance the CBA. They're all refinancing each other. We all were right. So our back book was getting beaten up a bit and we're actually losing the period, the length of period for which we hold a loan in as an asset class. Now the net present value, which is really important to us, one of the biggest factors in an NPV calculation is in the number of periods. So you want to extend the period of time you own this asset. Okay. So, you know, people are doing either an NPV calculation. That's that's it's not that sensitive to interest rates is more sensitive to time to end and and principal so the amount of money you lend the amount of the asset, the amount of money lent. So I don't see. I do say the amount of money that we lend going forward being less. As I said, that's not that important over the next two years for the banks. So the P in the NPV piece will be slightly affected going forward. But in the terms of the back book, the only time when if peak, if principal can be reduced, that is because interest rates are really low and people are paying off their mortgage faster. But guess what? Interest is going to be really high so people will not be reducing. P In the NPV calculation in terms of n the number of periods that's going to extend, because if I look at you, when you come to me, you go to a loan. Westpac, let's say you got $1,000,000 Westpac today. They say your income has been the same for two years. You come to me, you say, Mark, I want you to refinance my Westpac loan because your maturities rates lower. Okay, cool to me, income to me, your expenses. Well, first thing is your expenses have gone up. Everyone's have. Yeah. Okay. So you're going to have less net. Yeah. For me to assess. Second thing is when I issue, I'm assessing you on the current interest rate plus 3% a year ago I was assessing one 2% plus represent 5%. Now I'm assessing on four and a half per cent plus 3%, 7%. That means I'm going to lend you less money. So which means you won't refinance because you can't borrow the million dollars that you owe. Westpac, you can only borrow 900. So that means Westpac will not be getting refinanced, which means the period for which Westpac holds it holds an asset will be now longer and that's going to last right through this high interim period, which means NPV of the bank's books are going to get bigger and they're just going to have money, cash flow, just falling over costs of nothing to maintain a loan. It's like 50 bucks a year or something. It's all because of electronics. Everything's electronic, you know, going to the bank with a cheque and making payments. I to say that's all been done. You know, the dragging the money out of your account, you've got automatic payments, etc.. So, so to answer your question, I think banks are going to kill it over the next period and there might be some scary period where everybody gets nervous about the matter. New business banks can. Right. And then. Bank share prices could fall. That might be a time to buy because I think they're not going to make the money as the new prices, the new lending. They're going to make the money out of the bank book. And it's nice and protected now, both in principle and term. So I think banks had to kill it. Another thing is really interesting at the moment is if you want to do the NPV, look at the interest rate. This is a period rates going up, everyone can hide. So I've got a back book where I lent everybody the money at two and a half percent interest rates, Government Reserve Bank puts up a half a per cent, so I might say I'm putting up to 3% generally, but I put my whole back book up to three 3.05%, pick up another five basis points if you're got a huge bank book, the amount of money you may at a point that extra of five basis points of 50 extra five basis points is crazy and that's when banks make their money. So I think to answer your question, bank stocks, particularly the big guys, it's going to be really, really good investment going forward in terms of property market prices have to come off. Normally our normal cycle is when these rates go up, we don't get that much of a price reduction. But because you're coming off such a low base in interest rates and we're going to projected to be so high. So I saw a Commonwealth Bank, ANZ Bank came out yesterday, said we're going to have a half a per cent increase every month to the end of the year. [00:51:00][315.0]

Alec: [00:51:01] Oh well, every month. [00:51:02][1.1]

Mark Bouris: [00:51:03] August, September, October, November, December. Yeah, I saw Commonwealth Bank saying we're going to have half a cent next month, half a cent the month after a quarter of a cent month after that I've seen. So that's 11.25 to take us up to 2.6% cash rate, which is, you know, around variable rates, very important half a. So as a rule of thumb, generally speaking in new lending every half a per cent that an interest rate increases, we the lenders will lend you 5% less. [00:51:28][25.3]

Alec: [00:51:29] Okay. [00:51:29][0.0]

Mark Bouris: [00:51:30] Because the assumption there is that your income is the same as it was before and we're also assuming that your cost of living is the same. In fact, it's gone up. So within a half a per cent less. So, you know, if they go up 2%, that's four times for half a cent, that's you know, four or 5% of four by 5% reduction. Yeah. Now there are 3085 sub areas in Australia that CoreLogic looks at for price rises and price increases up until the end of the first quarter this year, 26% of those 3085 sub areas in Australia had a reduced price last month, just for the month in June. 46% of them. [00:52:12][42.1]

Alec: [00:52:13] Yeah, well went down. [00:52:14][0.8]

Mark Bouris: [00:52:15] So I've never seen this before. So I think we're actually in a really weird cycle where prices will actually come off across the board by this time next year, assuming we have all the bank increases, the interest rate increases that everybody is proposing, if it stops, then if it stopped tomorrow, which I doubt very much. I just want to mention one thing to to to underline why I say the interest rate increases will not stop. Two days ago, someone from the Reserve Bank and I can't remember her name, I apologise to her that she put out a paper, very good paper, talking about how resilient the mortgage market is in Australia. And I urge anybody to enter the publications, the media section of the RBA and grab hold and read it. It's about 20 pages, you know, she talks about negative equity in Australia is 0.1 of a per cent pre-pandemic is .2. 6% Australia. That's right. Now, notwithstanding the rate rises, she talks about the amount of bitcoin $50 billion that Australians are save during the pandemic, which has never been the case before. She talks about offset accounts and redraw accounts, how, you know, most mortgage holders, Australia are ahead of market blah blah blah, right. Really very good, sensible data based logic and deductions based on logic that say that the marketplace is in good shape. Mortgage market might place in good shape, but that doesn't mean that there's not going to be some people are going to suffer tartly that it will be the case. And she did highlight they were borrowed last year and they'll be for probably going to have some trouble in their fixed rate drops off when they go to the high variable rates. But that's a small percentage. So everybody go and, you know, raise a hand, said Yahoo! How great is that? Fantastic. You know, we feel great. The Australian mortgage market is in good shape. You know, I read another way if I'm at the Reserve Bank and I've got that those findings, those conclusion from me, I'm saying them. So the fact is I can put rates up. [00:53:56][101.4]

Alec: [00:53:57] True. Yeah, yeah, yeah. [00:53:59][1.6]

Mark Bouris: [00:54:00] That's totally of my looking at it. Yeah, but they're all gone. How good is this? We can put rates up. [00:54:04][4.3]

Alec: [00:54:04] Yeah, there's some resilience. There is. [00:54:05][1.4]

Mark Bouris: [00:54:06] Resilience. It can handle more rate rises. So if I'm looking at is what is the probability of us having the ANZ rate rise scenario that's you know, half a cent every month to the end of the year or even the, you know the other scenarios Westpac, CBA to 50 and in a 25 or both which one's much more extreme than the other, but both, which are pretty tough periods, tough in terms of, you know, the effects on them on the market. Well, it doesn't matter what they say. What is the RBA thinking? That's the only post that matters. Yeah, not what Westpac says. The CBA says what is? Because they are working on a presumption. Now, how likely is that resumption again will occur? This is what has to be at risk before you know. And what is the gravity of it occurring? The gravity is quite severe in my opinion, in terms of pricings because I know how much money I can lend. I just told you point me, 50 basis points, point 5%. So what's the chance of these rate rises occurring? Well, I don't know because I'm not in the Reserve Bank. But if I reserve what the Reserve Bank said, she's either trying to bullshit me and trying to convince me something that's not the truth, or let's assume it is the truth for a moment. That means there's a lot of headroom in there for them to start raising rates. [00:55:12][66.1]

Alec: [00:55:12] Hmm. 

Mark Bouris: [00:55:13] And I reckon that's what's going to happen. 

Alec: [00:55:15] I would say the RBA are in the business of bullshitting people, but that will get Bryce started because they gripe with the RBA and the 2020. We won't raise rates until 2024 announcement. But that's let's say that for a whole other point. Yes, I think. 

Bryce: [00:55:29] They're always wrong anyway. Mark, we have unfortunately now run out of time. It's been an absolute pleasure. I felt like we could have kept talking for another hour. There's so much to cover, but I know that our audience would have taken so much from that discussion. If you'd like to learn more about Mark's journey and all the people and start-ups that he's talking to. You can head to mentor dot com drew plenty of shows I think that's straight talk the mentor and survive and thrive. 

Mark Bouris: [00:55:55] So I describe it as a YouTube series. 

Bryce: [00:55:57] Yeah. So check check all that out and do self favour. Listen to the one that we were on.

Alec: [00:56:01] Yeah, it was good. 

Mark Bouris: [00:56:03] It was a good one, actually. Actually, I have to. Thanks very much. But I really I love your business model. I think your business models very good. It's quite intellectual and quite, very smart. And you have lots of publications with others doing the publications for you, so to speak. So you're not spreading a sales truth. It's a wrap up. So it's a you're a broadcaster. I mean, all of us are like broadcasters at the end of the day role like television stations, just we're putting on different platforms. But you're a broadcaster and I can see at some stage someone you on the shoulder for sure. 

Bryce: [00:56:32] Well, thank you. Actually, it's J. Style tough on this show. 

Mark Bouris: [00:56:37] Maybe. 

Bryce: [00:56:38] But thank you so much. Mark is an absolute pleasure. That's all. Hey, thanks for listening to this episode of Equity Mates. We love hearing from you, so drop us a line at Contact@equitymates.com. Or even better go to your podcast player and leave a five star review. Also a reminder that the Equity Mates content train doesn't stop when you've run out of episodes to binge. We've got a brand new website, a Facebook discussion group. We're on Instagram, YouTube and slowly making our way as an influencer on Tik-tok. That's Ren. So come and say hello and join the community. We'd love to welcome you. Until next time.