Umm… can I invest in that? How everyday events create opportunities | Guest expert Sally McDonald

Maddy Guest: [00:01:01] Hello and welcome to another episode of your income company, a podcast for like minded people who want to make smart investment decisions. I'm Maddy and I'm here with my good friend Sophie. [00:01:11][9.9]

Sophie Dicker: [00:01:12] Good morning, Maddy. I'm so excited today because we are joined by a very special guest. But before we start today's episode, we'd like to acknowledge and pay respects to the one three people of the nation who are the traditional owners of this land. We pay our deepest respects to the elders past and present and to the next generation who we hope to create a different future for. [00:01:32][19.7]

Maddy Guest: [00:01:32] Today, we are incredibly fortunate to be joined by the very impressive Sally MacDonald. Sally's career began when she graduated with a Bachelor of Commerce from Melbourne University and obtained an MBA from the Harvard Business School. Sally started working at Boston Consulting Group in both Melbourne and New York and worked in consulting for almost 15 years before becoming the CEO and managing director of Arton Group. At the time, the group was listed on the stock exchange and also included the Ralph Lauren brand. Sally turned the business around from loss making to record profits in her seven years. That there's no doubt that it was this performance that caught the attention of BIG W, where sally became the CEO between 2015 and 2016 before returning to consulting as an investor and business advisor. Welcome, Sally. [00:02:18][46.3]

Sally MacDonald: [00:02:19] Hi, guys. [00:02:19][0.3]

Sophie Dicker: [00:02:20] Thank you. Thank you so much for being with us here today. We're so excited. You're our first in-person interview guests. [00:02:25][5.7]

Sally MacDonald: [00:02:27] Deep eye contact right now. [00:02:28][0.6]

Sophie Dicker: [00:02:28] Right now. What we do with all our guests is ask them some questions before we start and move into our topic. And our first question for you this morning is, what is your morning routine? [00:02:37][8.3]

Sally MacDonald: [00:02:37] You're not going to like me. I don't love routine, but coffee, I guess, would be the most regular thing that I would have. And I actually get it delivered in bed. [00:02:46][8.9]

Maddy Guest: [00:02:47] Oh, like [00:02:48][1.4]

Sally MacDonald: [00:02:49] my husband by my husband. So it was not by husbands. That would be extremely lazy. No. And then, look, I love pilates. I love cycling, but walking the dog. But otherwise, yeah, every day's a little different. [00:03:02][12.6]

Maddy Guest: [00:03:02] And Sal, who, what influenced you to invest. [00:03:05][2.6]

Sally MacDonald: [00:03:06] Look, unfortunately, nobody and I was probably quite slow to invest. So I look at you guys and anybody in their twenties now I think get going. It's such an opportunity and advantage that you've got Google, that you got the whole world at your feet. We had Encyclopedia Britannica, you know, a world book. You had to look out for your information books. And if you wanted to buy shares, you had to find a broker that was pretty intimidating the older guys. So I didn't get going until probably my late thirties and it was probably working at Artane and meeting fund managers as part of the job. And they'd ask me ton of questions and, you know, by rating or whatever on the company with the share price. And I'm like, hold on. How did you get that? If you got that information from me? Oh, hold on. There's some of them were not smart. Some of them weren't visiting stores. They didn't know anything about handbags or apparel or retail. And I'd be explaining concepts to them. I'm thinking, hold on, they've got these jobs in finance, you know, advising and buying and selling shares. I'm going to do it. So I had a good friend from uni that actually was managing our super and I took it back from him. I said, sorry, love what you're doing, but and have done it directly ever since and now manage my mother's money as well. And I'm absolutely loving it. I just I would say do it, do it early. [00:04:24][77.9]

Sophie Dicker: [00:04:25] Yeah. It's always with money. And I've found it's such an exciting process like investing. So everyone needs to jump on board. And our last question is, in one minute or less, if you were a stock or a company, who would you be and why? [00:04:36][11.9]

Sally MacDonald: [00:04:37] Oh, look, I'm tempted to say Tesla, because he's just so. Yeah, of course. But every other guest will say that as well. I'm going to say, if I could choose, I would be Cathy would of invest. I absolute hero. I think she's the best investor in the world of my generation. She's in her 60s. She started the business probably only five, ten years ago. I don't know if, you know, if I invest, but they publish a ton on Twitter, Reddit, YouTube, Instagram. They talk about a fund manager on Instagram. And I think she has sort of three of the best ten or twenty performing funds in the US. And they just and they've got. In Morocco all over the world, and they're focused very much on disruptive themes and technology and how the world's changing and we're in this golden age of change and she's so intelligent, so smart. I just think she's a rock star. So I'm going to choose Kathy. [00:05:30][52.6]

Sophie Dicker: [00:05:31] Nice. Well, I'm sure we'll look that one up. [00:05:33][1.8]

Maddy Guest: [00:05:33] I don't think we will ever catch you later on today. So when we start making investment decisions, there are so many factors to consider. And today we really want to start with the macro or I guess the bigger picture of investing. So when researching companies or ETFs that you want to buy, it's important to have an understanding of sort of the political global events that are going on at the moment that could potentially have an impact on your investments or also create some investment opportunities. So I guess if we take it back a little bit, so can you sort of explain to us how you would define the macroeconomic environment or what that really is? I think just [00:06:09][35.6]

Sally MacDonald: [00:06:09] take out the word macro and just call it the economic environment. And everything affects the share market. And sometimes it's rational, sometimes it's not. I think it's powerful to have a few of the sort of, I guess, some knowledge about the economy just so that you're not scared as an investor because you shouldn't be, I don't believe, putting money into the market and hoping it goes up in a month. You've got to be in the long term or don't do it. So the macroeconomic environment is things like unemployment rate, the CPI, which is the inflation rate and the GDP or growth would be the three main sort of, I guess, the lagging indicators of where the economy is. And by the time they measure, that's what's been. But you also have so many other things, like consumer confidence, like volatility index, like the yield curve, like the terms of trade. And is the government in budget deficit or surplus? How are exports? And and that's what's interesting. Or even like housing starts that that would be called a leading indicator. So it's sort of if there's less houses that are starting construction today, that possibly means that in a few months time we'll see lower growth, we'll see less jobs. Investors are watching all of these things and getting super complicated about it and throwing a lot of terms because that gives them more confidence and also means that you think, oh, I can't manage my money myself, I have to give it to this person. So you do have to take a step back, I think, from the macro economy at all times and say, hold on, what am I investing in one company? What's that CEO? What's that team? What's that product? What's that gross margin? And I believe in looking at the fundamentals of company and saying, well, when the seas rising, it's good times. Everybody might rise with it. But when this is going down, not everybody will go down. And I want to find the boats that can navigate their way out of the harbor or have something that's different or better than the next boat if you think of boats as shares. So, yeah, I have all these wacky analogies. I'm so, so sentence. So that that's really it in a nutshell, I think. And and I think, again, if there's ever a term used, you know, with a lot of confidence, particularly on American business TV, just look it up on Google and go, oh, okay. That's what that is, you know, and I still do that. I don't think Investopedia or whatever it is. Oh, yeah, that's right. I just [00:08:26][136.9]

Maddy Guest: [00:08:27] Bieber is such a great race [00:08:28][1.3]

Sally MacDonald: [00:08:29] on it. Who needs university media? [00:08:32][3.1]

Sophie Dicker: [00:08:33] So. So you mentioned investor confidence and would you be able to define kind of what this is? And is that the main thing that has an effect on share prices? [00:08:43][10.3]

Sally MacDonald: [00:08:44] Oh, that's a really hard question. I think so. [00:08:47][3.1]

Maddy Guest: [00:08:48] Too hard. Too hard. [00:08:49][1.1]

Sally MacDonald: [00:08:50] No, just because I think investor confidence is defined sort of by the media to some extent to say, you know, at the moment stocks are feeling really frothy. Somebody will say that on a business generally like, oh, that means they're too high there and somebody else will come in and go, no, the long term historical price to earnings ratio or profitability or of buying shares is actually really OK versus the money supply. And before, you know, you lost. So and then what really triggers, say, the sell off last February was covid. But was it you know, what day did it happen on it? Is it sort of happened gradually. And then you get into the classroom. So you look back and go, why didn't I see that coming? The market had gone down for ten days in a row. I should have sold then and bought back, you know, three days later. But, you know, so investor confidence is really hard. You just have to be watching a lot of things. And I think it is experience over time, you get a feeling that you can read multiple views of the same market in one day. But I think it obviously comes back to if the economy's growing, if it's outpacing growth, if unemployment's falling below what's expected, if inflation is in check. It's often about meeting expectations, though. So I always say to my kids that the most successful way to parent is to have really low expectations. No, I'm joking. [00:10:08][77.9]

Sophie Dicker: [00:10:10] So the best [00:10:10][0.6]

Sally MacDonald: [00:10:10] way to invest maybe is to have low expectations and a long term viewpoint as well and be realistic. Is going to be bumps and slides along the way. [00:10:18][7.2]

Maddy Guest: [00:10:18] Yeah, I think that's the benefit of long term investing is, you know, I guess all of these things start to matter a bit less. And you don't have to be worried about, you know, is consumer confidence up? Is it down? I think is overpriced because if you're in it for the long term, you know, you can actually ride out all of those bumps. [00:10:32][14.0]

Sally MacDonald: [00:10:33] Right. And Kathy would acquit her again. I mean, they bring her onto TV three years ago to talk about how Tesla is going to be at three thousand dollars a share or 1000 dollars a share and laugh at her because it was about a hundred dollars at the time. And lo and behold, now it was seven hundred dollars in a split. And she's right and they're wrong. So I think what you have to work on as an investor is having your own viewpoint, regardless of what other investors are saying and have that based on sort of reasonable analysis and evidence and fundamentals. [00:11:04][31.1]

Sophie Dicker: [00:11:05] And so people say they say never buy into a stock because someone said it around the pub at a table like you have to be doing your own research and understand what you're buying into it. [00:11:13][7.5]

Sally MacDonald: [00:11:13] Nobody's going to listen to that. Everybody's going to buy stock exchange halted. And I have done that. And you go home. And what does a company do again [00:11:20][7.1]

Sophie Dicker: [00:11:21] is the management. [00:11:21][0.3]

Sally MacDonald: [00:11:22] What's the gross margin of the product? It doesn't make money what you like. I just think they don't do that. [00:11:28][6.1]

Maddy Guest: [00:11:28] Yeah, I actually did do that. Not not that recently so far. But I went back to the French like a year later. You talked, given me the stock pick and she's like, no, I sold out at that ages ago. And I was like, amazing. Thanks for telling me. So it's all I wanted to know. Have you I guess we're sort of chatting about how global events can impact share prices. Is there anything is there an example of this in your career? I mean, Kobe obviously being probably the most obvious one. But, you know, something that's happened where you've seen sort of share prices really directly impacted. [00:12:00][31.6]

Sally MacDonald: [00:12:01] Yeah, it's not a share story, but I've bought a property. During the first European debt crisis in 2011, Greece looked like it was going to be bankrupt and the property market for two weeks. And I don't know what was happening to the share market at the time. So I was focused on property, but it just went dead. Nobody turned up to auctions and it was even in Australia, even in Australia. And it was just a really quiet time. And then it sprung back into action sort of a few weeks after everybody got used to the fact that different countries in Europe might be bankrupt and that they'd be bailed out by the European Monetary Fund. So a lot of the time, it's what is unexpected in the market if the market has built it into the expectations gradually or whether it suddenly has to do that and there's a drop off in valuation. I mean, pandemic was an amazing buying opportunity in some companies, but it's not for the faint of heart, you know. Yeah. You know, I think my kids came to me and said we should sell everything and have a little portfolio at the time. And I said, no, this is the time to hold fast or put a bit more money in what you know. Now, I'm like, I'm not sure if it's now. You can't really I don't believe in timing the market. I don't have the expertize. I'm not working at this full time. So I think time in the market is more important. And can I think of an example where an event, I guess things go in and out of favor and it's always good to think what's out of favor currently because that's often where the value is. If you're a value investor, I tend to be a thematic investor. So I like disruptive companies that a high technology, very defensible, strong products and a changing the world. So Tesla, for example, where it's sort of a joke initially, but my kids knew the brand name of Tesla and it was so strong to them was better than Porche five years ago. Like, how can that be? Probably my best stock and was more around seeing that eBay was a thing and people were buying selling their junk on eBay. And I was, I think, CEO at the time, like, bother with that stuff on the weekend. I've got better things to do, like visit retail malls and my stores. No, but what I noticed was that there was this thing called PayPal being used to transfer money because you needed something really secure. But that's not a macroeconomic trend. I don't think that it is sort of a trend that big companies can't innovate and can't build digital interfaces very well for younger people or for people that are digital natives or for me who's like a digital native. So I invested very early in eBay in order to get into PayPal. So I'm tend to ignore the macroeconomic, I guess, circumstances at the moment in Australia at least, you know, there's talk about and the world, you know, the market's strong housing market is on fire. What about inflation? Yeah, and everybody's expecting that's coming. It's like this big tsunami out there somewhere. We're not sure how much or when, but, you know, should we be preparing some of our portfolios, which are, you know, sort of cyclical against inflation? Or what if there's more strains of covid, what's essential services, some allocation of funds, maybe not to cash because you're getting whatever you decide you're paying for the honor, but maybe to invest in something like. Food or agricultural land or that that is something that I've considered and I've seen friends overseas who are funds managers, talk to me about that as well. So that is something I'm looking at in in my professional life. I'm working with an egg food fund at the moment, so I am actually actively investing other people's money in that area. [00:15:33][212.7]

Maddy Guest: [00:15:34] Yeah, that's interesting. I think you make a great point about sort of reframing maybe this conversation even a little bit from, you know, the macro environment to more just our broader environment. And, you know, you talk about pipeline, so much of investing and spotty investment opportunities is actually just looking around you. And you know what? What is picking up? Because they think about things like PayPal. And, you know, if you're saying it on websites everywhere and it's becoming a really big thing, well, you know, their results might come out in another few months time and it might reflect that pick up in activity. But you can say it now so you can actually get ahead of the market by investing in that and get it before it goes up, which is where the opportunity is. So I think maybe it's about looking around us more and looking at the trends and what we're using. And that can be a really great way to spot opportunities. [00:16:21][46.6]

Sally MacDonald: [00:16:22] Look, I'm a retailer, so I notice when people start wearing Mughals shoes and so quickly they're not wearing as much black, they're wearing color, or when it happens, quickly happens so and so you take that same sort of situational awareness and you turn that to the share market and apply that to how does this effect, in which company do I pick in order to sort of ride the back of it? And there are there's so much out there. Shopify was another one. Yeah. As I was, you know, running, I think online commerce maybe for Big W at the time or might have been a bit earlier than that. And lots of little brands I were talking to were using this amazing product which Shopify and instead of being 100000, 200000 to open a website, it was five thousand dollars. And I'm looking into a Canadian company. What? OK, yep. Go hard. And so I tend to very much bet on what I see in the environment when I say bet that we should today. No such thing is Bettino is [00:17:20][58.1]

Sophie Dicker: [00:17:20] investing its own informed decisions. Exactly. [00:17:22][2.1]

Sally MacDonald: [00:17:23] But very much backing something that I've seen like that. And they've always been my best stock picks. So sticking to what you know, something, but also with what you're using and you have personal experience with this wonderful way to start and it makes you more engaged in what you're doing as well if you're just starting out. [00:17:38][14.8]

Maddy Guest: [00:17:38] I was listening to a podcast where our funds manager was chatting. Maybe it was last week or a couple of weeks ago, and she was saying that she invested in a jewelry company and she used to go into the jewelry company in the stores and ask the staff, you know, how are sales going and checking out whether things are on discount and actually getting her information from that, which I thought was just so funny. [00:17:58][20.3]

Sally MacDonald: [00:17:59] The best fund managers did that when I was at Oroton and Ralph Lauren Fisher. And because you'd ask him, have you ever been into a store? And they go, no. Are you like, right? Yeah, it's through your name and the good ones, like, well, I've been in all these stores in the other side of the country as well. That's the other thing about trading department stores and the investors and discussion around how the department stores are faring. And you're thinking you've only ever been to the Melbourne city store in the Sydney City store. You have to go to backblocks to really see, you know, do your fundamental research. Absolutely. I'm totally lazy. But that look, we have an advantage as women in some of those areas because we can go in and just look like any old customer. You know, when I was CEO at various companies, I take my kids when they were little and they'd smear Muffin's, you know, on the mirrors, not necessarily on purpose, but and you have only 10 percent of your brain sort of alive to what's happening in the store or what you need to get today, because you've got 90 percent making sure children don't die. And so and that's how a normal customer is. So, yeah. Versus you know, if you're going in in a suit, you're a male. You're the only male in the store. You're all the bosses here. You know, suddenly it's cleaner, it's tidier. The value of being underestimated is wonderful. And you can collect a lot of information by asking really simple questions. And I encourage people to do that. I think curiosity is is what can drive your great investment. [00:19:21][82.3]

Sophie Dicker: [00:19:22] So I think that's one of the things like sometimes people don't want to ask those questions because it can come across as like, oh, I don't know what I'm talking about. And people don't want to seem, I guess, uneducated, but really in this space, asking questions, talking to people. And I mean, that's really what we're trying to get more people opening up this dialog and asking the questions so that we can actually have those conversations about investing. [00:19:44][21.6]

Sally MacDonald: [00:19:45] It's a problem in Australia. And I want to change it to in a different way. Maybe I'm at dinner parties and I want to talk about investing and stock picks. And do you think any women my age want to do that? Yeah, they don't want to. Do they look at me like I'm well, annoyed. Very, very annoyed. And I know that I to leave it at work, play that it plays it like it is. It's so much fun. And don't you, you know, so I change it to fashion or some other topic that I still trying to get information I think. For some reason, we've been groomed to think that money is dirty or money's implied that, you know, we're not going to have equality until we manage our own capital and or have half of the capital decisions out there in Australia. So where the private equity money goes, who's actually making the money decisions? They're the ones power. [00:20:33][48.7]

Maddy Guest: [00:20:34] Yeah, that's so interesting. I actually had a friend messaged me the other night and we have a birthday lunch this weekend and she said, can I got a couple of questions? Can I ask you at the birthday lunch we can talk about investing. And I was like, yes, like amazing. That is what I want to talk about. It is that dialog so very funny that you bring madnesses [00:20:52][17.8]

Sophie Dicker: [00:20:53] do is like can you come over for dinner? And I was like, sure, she's like, I need to talk to you about, like setting up my investments and like, OK, [00:20:57][4.8]

Sally MacDonald: [00:20:59] that needs to be a safe space for people to ask what they consider stupid questions. But I do think there's a level of machismo around finance. And and I went to Harvard Business School, but I was still told by some board members my financial skills weren't very good and it's not true. Yeah, I rejected that because I was leading Oroton at the time or whatever company it was. You know, through incredible change, I knew exactly how to drive the commercial leaves of that company. But I just don't think they used to women with a voice that maybe inflects upwards or who have short, blond, curly hair having opinions on on some of those things. So it's just you can't be what you can't see maybe. So, you know, those of us that that are seeing need to be big and bold about. [00:21:46][47.4]

Sophie Dicker: [00:21:47] We are going to take a quick break to hear from our sponsors, but we will be right back to discuss how we can identify some of those macroeconomic environment opportunities with Sally. [00:21:57][9.2]

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Sophie Dicker: [00:22:33] So we've broken down, you know, what the macro environment really is or the economic environment is, and some ways that it does impact the share market. So do you have any tips for learning how to start to identify trends? We spoke a bit about how you in your industry and in the retail industry, you saw PayPal and Shopify early on, I guess just tips on how to spot those opportunities. [00:23:00][26.3]

Sally MacDonald: [00:23:01] I think you have to read a lot and there's a lot of information out there so that you don't even have to generate new ideas. You can go to some of the best performing fund managers, like a Magellan in Australia, I guess, or Kathy would have Arek invest. R.K. Sound like a sponsorship I NCEA and [00:23:23][22.2]

Maddy Guest: [00:23:23] they are more than they [00:23:26][2.3]

Sally MacDonald: [00:23:26] are. Come on, bring it day. You'll find on online information about their funds and there's usually a little top 10 holdings box down the bottom right or left or there's a product disclosure statement, but they have to by law tell you who they're investing it. And you can look at those companies and say, you know, first of all, you can find out who the best performing fund managers. I can Google that and is a ranked table every year in Australia and overseas by country or by industry, if you're interested just in health care and then you can go to product disclosure statements and or top 10 holdings and you can research those companies. So that's a really easy way to get started. It's death based. You're not looking foolish, you just looking around. But why not borrow from the best people who are clearly performing well? Otherwise, I think, you know, reading and trying to always ask yourself the contrarian questions, saying, OK, so inflation's coming. What are the companies that will do? Well, despite very high inflation or what happens now if one of those companies or what are the companies that the lighting maybe surprising me in my own life? Or what are the problems or the things that I hate? I hate going to the petrol station personally. I find it so boring. And if I could never go again, I would never go again just for interesting on it. So I'm in the invest documentation and you can follow them quite often. The fund managers in in states particularly, they'll publish weekly. You know what's happening with cryptocurrency pieces. So you before you know, you have so much more, too much to read, you never get on top of it. So then you've got to sort of say, well, what sparked my interest? It's, oh, I love this whole idea of green energy or electric vehicles or electric battery storage. Let's read everything about that and then start to say, well, who are the best fund managers? What are they, their top five picks? So I sort of did that around when when I didn't know a lot to give an example about. One area was gaming. I saw that the, you know, virtual gaming and sports watching was becoming a huge thing. And so I sniffed around and I found a few companies and I saw this one Nvidia that I had never personally heard of. So I asked my kids, do you know what's happening? I've got two kids or three kids, but to a particular computer, scientific. And they're like, oh, my God, they're they're virtual. Gaming is amazing. It's better that I'm like, you're fifteen years old. How do you know this? You play way too many games. That's my fault. He's like, no, definitely get that one, not amd or not, you know, and they'll have opinions which I know is odd to ask younger people, but you want to ask people outside of your group. So if you're in your 20s, ask people in your 30s, 40s, 50s, and then I'll watch videos on the from the company. I love to see the CEO or the CFO. I know that sounds like something my parents generation would do. All we had a nice face, so I invested and my mother in law was like that. I'm like, no, no, no. But I still think it's quite telling how they can articulate their story. And then I read a lot I use in another, I guess Roll-Up have stock information called Guru Focus, which is very, very cluttered with every number in the world. That gives you a lot of information on whether that company is doing insider trading, whether all the management is selling the stock at the moment. [00:26:40][194.3]

Sophie Dicker: [00:26:40] Not illegal to know. Oh, I don't like insider trading. [00:26:44][3.5]

Sally MacDonald: [00:26:45] It's sort of is. And usually that's not a great sign. If they're selling everything and it's usually a good sign if they're buying, that's an option. You again, invest based on that alone, but you sort of just collecting lots of pieces of information. Sometimes I'll use dividend money like spare money if you like to buy a little piece of a company. I was interested in solar energy that I didn't really know much about it. And after sniffing around, I found an Israeli company called Solar Edge. And I thought, oh, you know, I don't really know much about this, but I'm not going to be engaged unless I put some money. This I put in a thousand or two thousand dollars into Solich when it was virtually nothing. And then I read every statement from then on and it went up and up and up. So I got lucky. But it won't always happen that way. So it's just learning incrementally and using every resource. But my. First, he would be absolutely going to fund managers looking at their top 10 holdings and picking in those people that, for example, follow archivist on Reddit themes that that I'm also part of who tell you she published they publish every day what they've bought and sold. So it's completely that stuff becomes available, I think, after a month or a week in the US by law. But they're often held by trading companies. You don't know who it is, are completely open with it. So you have people who just up for their trades without the management fee. You need a lot of time to do that, by the way. I think it's sniffing around and ferreting. It's very much like retailing where you know, or selling product. We're using thousands of pieces of little data all together to form. [00:28:15][90.3]

Sophie Dicker: [00:28:16] Yeah, I think as well. Like, it doesn't need to be when people are researching, it doesn't even need to be that hard. It can just be, as you said, a pick up from a conversation that you've had with a friend or someone a different age. It could be from a podcast. The other day I was listening to a podcast and it was a news podcast. It was talking about it was microchips and a shortage of microchips in the world. So you think, oh, there's a shortage of microchips, like there's an opportunity. So it's just picking up those little conversations. You don't need to be scrolling through like racists and racists. It's great to say. But, you know, it can just be interacting with your environment. [00:28:46][30.3]

Sally MacDonald: [00:28:47] So make your middle name, Gleen, wherever you go. Just leave it. No, I do. But I do want to say, I think it's really important to then go back to whoever you're trading with, CMC instead, whatever, and say, OK, what are the sales size? What is the gross margin? What is the net margin like? How profitable is this company or not? So a company like Microsoft, Amazon, these companies. Oh my God, the gross margins, 50 or 80 percent and the net margins, 45 percent. And they're growing at 20 percent. And that what is. Oh, my God. That and the you look at the Big Bang stocks and you say, OK, I try and find a company, Australia, that replicates that, but I'm getting sidetracked to just sales, gross margin, net margin and or what cash or debt they have to if they're not profitable, which can still be a really great investment. You need to know how much funding they got that's getting into sticky bits. You just have companies that are profitable and they've got high margins that, you know, things get tough, their margins come down a little bit, but they're still very profitable and they're still going to be long term. [00:29:51][64.4]

Sophie Dicker: [00:29:51] Yeah, and anyone who's listening is really confused by all those, like technical, I guess, finance terms. We are going to be doing an episode on that to explain some of them to what you can look for when you are looking at companies. Don't stress it's coming. [00:30:04][12.2]

Sally MacDonald: [00:30:04] It's coming. I want to be part of that. Know the price to the PE multiple. I always explain to people as the price per ml of perfume go down, right. Sometimes you get a fancy bottle and so they're charging a lot. But the actual price per meal of the perfume is not that good, right? It's pretty low cost because it's cheap synthetic. This is beautiful florals in essences. So anyway, [00:30:27][23.3]

Sophie Dicker: [00:30:28] we can talk about the way I put in [00:30:29][1.2]

Maddy Guest: [00:30:30] so sell each episode. We have been asking our guests to add a start company news trend industry to our watch list. And the purpose of this is to get us thinking outside the box and broaden our horizons in the investing space. But we are not financial advisors and this is purely for educational purposes only and absolutely does not constitute financial advice. I sell what I bring to the watch list today. [00:30:53][23.4]

Sally MacDonald: [00:30:54] That is scary because I know you'll look back later and say she was wrong. She's right. I still think Apple and Microsoft are wonderful buys thirty four or thirty five times the price to earnings. So when you work out what that is later, it's an important metric. I think that's the same as Woolworths and Wesfarmers, just to keep it in perspective. But then look at the gross margins of Apple and Microsoft and compare those to the supermarket. They're a little bit high. So I still think there's a lot of value there in Apple. Have an amazing new battery that new batteries taking over the world or not battery, but chip, which is outpacing and much better than intel processing that's been there before. Otherwise, I have invested in some specs which are these special purpose. Cashbox companies in the US, that's a bit speculative, but generally, I think, you know, I like to invest in electric or, you know, green batteries and vehicles, gene sequencing, risk editing, autonomous robots, these sorts of things, or fintech, these things that are slowly creeping away and growing and getting bigger and bigger. And the companies in those that will take over the world before we know it, [00:32:05][71.3]

Sophie Dicker: [00:32:06] it's very likely it's going to be it's going to be very exciting, probably the next 50 to 100 years to see where technology takes us. So now the last question that we ask every guest is what piece of advice would you give your younger self when you first started out investing? [00:32:20][14.3]

Sally MacDonald: [00:32:21] Consider this as a full time career. [00:32:22][1.3]

Maddy Guest: [00:32:23] Really fun. [00:32:24][0.3]

Sally MacDonald: [00:32:24] I had no idea that my younger self, though in the end, I think I started investing sort of as soon as you could get the information free on the Internet, which wasn't that long ago, I would say, to be different. I'll say the most important decision you make in life is who you partner with. That's a great one. Yeah. And that's not to say that you shouldn't partner. You have to partner. It's just that you need to partner with someone that will respect your right to controlling your or your finances together and encourage you. And and I certainly have that. And I think it's really, really important. A man is not a financial planner and a woman's not a financial planner either. By the way, guys or girls. I don't care. It's just. Yeah, it's you've got to own your to work so hard in your job and then they take superannuation away and not actually know where the soup is going and to not actually invest that just don't it. It's our education system is failed us if that's really what we are. [00:33:24][60.5]

Maddy Guest: [00:33:25] We actually have another podcast on our network called Mapei Love and they are podcast all about relationships and money. And I talk about a lot of that kind of thing. And I think it's such an important topic because, you know, so often I talk about it a lot. A lot of us sort of think that, you know, our partner will take care of it or someone else will take care of it, our families. And it's just really not it doesn't cut it anymore. And I think we have to be a lot more proactive. [00:33:47][22.1]

Sally MacDonald: [00:33:48] Yeah. And there's a lot of well, either divorce or early death or for whatever reason, it doesn't work out. And then you have whatever time age you are and you have no clue. And so you have to own. Yeah. Your financial decisions and your financial future and your security. I think it's very, very important and I don't know why American women do. My understanding from having lived there seven years were more embracing of the fact that they can do it. So we need to we must have more conversations, more confident men here that we need to put back in their box and say, no, it's my money, too. [00:34:21][33.9]

Sophie Dicker: [00:34:22] Now, I think you've summed it up perfectly and you have pretty much said what our mission is here. We want people to take control of their finances and we want to bring up wealth equality in Australia, around the world, wherever we can get rich. So we just want to say thank you so much. [00:34:37][15.4]

Sally MacDonald: [00:34:38] I look, honestly, you have to get financially literate if you're not and you are listening to this and not as a chore either. But there will be a way that you can learn the information in a fun way or in a way that suits the way you learn. So just don't be discouraged. Don't let anybody put you down so that you somehow are not smart enough to understand that it's rubbish. [00:34:59][20.7]

Sophie Dicker: [00:35:00] Perfect advice. Thanks so much for your time today. We really appreciate it. [00:35:03][3.3]

Sally MacDonald: [00:35:03] Thanks, guys. It was fun. [00:35:03][0.0]

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