What we have learnt from earnings season so far

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 am joined by my equity buddy Ren. How are you going? 

Alec: [00:00:31] I'm very good. Bryce. Good to be here. Start of earnings season. We're getting some results come through. We're going to talk about that today. We've got some other things to talk about, but I think earnings season is really front of mind for investors. So if you haven't been paying attention, we'll give you an update. [00:00:48][16.5]

Bryce: [00:00:49] We're going to give you a loose update of what's been going on around the markets. Just a quick reminder, though, again, before we do start that we are not experts, we are not financial professionals and we are not licenced. So we are here learning just like you. And nothing on this podcast should be taken as advice. So do not take financial advice from a podcast. [00:01:07][18.6]

Alec: [00:01:08] Yes. [00:01:08][0.0]

Bryce: [00:01:09] So earnings season. [00:01:10][1.2]

Alec: [00:01:10] Earnings season. And in our Google doc, you started with two words vibe check. So Vibe chat, are you asking are you tell. [00:01:21][10.6]

Bryce: [00:01:22] I'm asking what's so we're seven days in or thereabouts eight days into earnings season over in the states starting to have a trickle here in Australia as well. We've had JB Hi-Fi, one of the main ones coming in. [00:01:35][13.5]

Alec: [00:01:35] JB Hi-Fi, consumer discretionary records, sales of record profits. I like it. [00:01:41][5.6]

Bryce: [00:01:41] I know. What's the what's your vibe? [00:01:43][1.8]

Alec: [00:01:44] I think for the last few months I have been pretty calm about the state of the economy. I think I've said a few times that if you turn the stock market off and you didn't look at the inflation numbers, the economic picture actually doesn't look too bad. Yeah, but it is becoming a running joke in the office that I keep calling the bottom. Yes, every day. So going into earnings season, it just it just feels like the expectations are rock bottom. [00:02:15][31.0]

Bryce: [00:02:15] Yes. [00:02:15][0.0]

Alec: [00:02:16] You know, companies are reporting terrible, like pretty weak results, but the share price is jumping because expectations are so low. And maybe that sets off sets us up for a bit of a surprise on the upside. You've got to look beyond this earnings season, I guess. But look, my vibe right now is it's feels like it's okay. Everything well, just like the the economic story, the state of these companies, the state of the consumer. We haven't seen the mass layoffs. We haven't seen the business bankruptcies. We have seen Start-Up funding dry up a little bit. But I think on the whole, things feel okay. Participation rates are at an all time high unemployment rate in an all time low, job vacancies high. That's that's good economic signs. [00:03:02][46.4]

Bryce: [00:03:03] Yeah. Well, for our global listeners, was it last week that our unemployment rate figures came out here in Australia and they were like 3.5% or something. [00:03:11][8.6]

Alec: [00:03:12] A few a. [00:03:12][0.4]

Bryce: [00:03:13] Few weeks ago. Yeah. So pretty, a pretty astonishing figures. Yeah, I. [00:03:18][5.5]

Alec: [00:03:18] Would. But that's not just an Australian story. That is a global story. Yeah. That's why all these airports of chaos because people don't need to work in an airport anymore. [00:03:25][6.7]

Bryce: [00:03:26] Chaos sucked in if you're going to Europe. [00:03:28][2.4]

Alec: [00:03:31] All right. Well, you put it in. What's your vibe? [00:03:32][1.5]

Bryce: [00:03:33] My, my. I haven't been as positive as you. I don't think. But I don't think I'm definitely not rock bottom, like, oh, my God, we're done. I've been. [00:03:42][8.8]

Alec: [00:03:42] Through. You've been Chicken Little AJC. [00:03:44][1.3]

Bryce: [00:03:44] Oh, yeah, I've been I've been probably more cautious coming into earnings season, but I'm fast sensing that you're right. The expectations were so low that it feels like some of these companies, a number of companies, despite weaker results, will be beating expectations when. [00:04:06][22.0]

Alec: [00:04:06] We're going to talk about this later. But let me bring it forward because I think is really illustrates the just how rock bottom the market's expectations are. Yeah. So most of the American banks have reported they all reported double digit declines in profit. [00:04:19][13.0]

Bryce: [00:04:20] Yeah. [00:04:20][0.0]

Alec: [00:04:20] So Goldman for example, Goldman Sachs, 47% fall in profit, 23% fall in revenue. Shocking. Ouch. Yeah. All of the banks missed analyst expectations. So we we talk about earnings season being an expectation game. What are the analysts putting out as the estimates debate or not not hit. Yeah those estimates so they all fell below the in the estimates being put out by investment banks yet the bank index had its biggest one day gain in 18 months. [00:04:53][32.9]

Bryce: [00:04:54] That doesn't make any sense. Well, it. [00:04:55][1.3]

Alec: [00:04:55] Does, because it's like the market is pricing. The market expects even less than Wall Street's estimates change. So what is what is expected from these companies is. [00:05:06][11.0]

Bryce: [00:05:07] Just nothing. [00:05:07][0.4]

Alec: [00:05:08] Terrible. [00:05:08][0.0]

Bryce: [00:05:08] Results in business. [00:05:09][0.5]

Alec: [00:05:09] And so. Yeah. It's like these are objectively bad results. 47% fall in profit, 23% fall in revenue for Goldman, not even hitting the estimates that Wall Street was putting out. But the bank index had a good day. [00:05:24][14.4]

Bryce: [00:05:24] But what did Goldman's stock price do? [00:05:26][1.5]

Alec: [00:05:26] I think they reported Monday before open. And when they opened, I think they were up 4%. Okay. So, yeah, it's like it's a bad economic storm. I think the market's just confused. Honestly, I'm confused. [00:05:39][13.5]

Bryce: [00:05:40] Yeah, well, I was I was saying to you in the office on Monday that I feel like there's a bit of rhetoric changing now. You know, some economists and market analysts and strategists are starting to come out and say, oh, you know what? Whilst we thought we were heading into a recession, if we do, it's not going to be so bad. Some now thinking, you know, we might even be missing a recession. So there's chit chat everywhere. But anyway. [00:06:03][22.6]

Alec: [00:06:03] So let's let's get into the numbers. So 7% of the companies in the S&P 500 have reported 60% have reported earnings per share above estimates. [00:06:14][11.0]

Bryce: [00:06:15] Yes, sounds like a good number. [00:06:17][1.7]

Alec: [00:06:17] And that doesn't mean they've made money. That just means, you know, like an estimate could have been you down 50% and you're only down 49%. [00:06:23][6.1]

Bryce: [00:06:24] Yeah. Yes. But if you also look at that relative to past earnings seasons, it's actually down by at this point in a in a cycle or at this point in an earnings season, roughly 77% of companies are beating estimates. So it is weaker than the last sort of five years or so. So and there are some sectors that are absolutely pumping, though. And in terms of revenue growth, no surprises that the number one sector that we're seeing some pretty strong growth coming from his energy. In terms of the S&P 500 companies that are in there, they're giving Q2 revenue growth upwards of 45%. [00:07:02][37.6]

Alec: [00:07:04] For energy. [00:07:04][0.2]

Bryce: [00:07:04] Companies, energy companies. [00:07:05][0.7]

Alec: [00:07:05] And for context, the S&P as a whole is about 10%. 10.2%. [00:07:09][3.4]

Bryce: [00:07:10] Yeah. [00:07:10][0.0]

Alec: [00:07:11] So like. [00:07:11][0.5]

Bryce: [00:07:12] No surprise. [00:07:12][0.2]

Alec: [00:07:13] Of course, energy companies are reporting good results. The question is, how long does oil price prices stay hot? Information technology below the S&P average, 7%. Consumer staples, 5%. Surprisingly, consumer discretionary early days, but has held up okay. [00:07:32][18.9]

Bryce: [00:07:32] And I'm also surprised with health care it's it's about five just below 6%. So below the S&P 500. I thought given still what's going on with COVID and those sorts of things, that they would have been benefiting from a little bit more from that, the flu that's been going on. [00:07:50][17.5]

Alec: [00:07:50] But I guess. [00:07:50][0.2]

Bryce: [00:07:50] Like summer over there. [00:07:51][0.8]

Alec: [00:07:51] But I guess like there was a big step change. But it's not like the quarter on quarter or or I don't know if there's a year on year, but still Q2. [00:07:59][7.9]

Bryce: [00:08:00] Yeah. [00:08:00][0.0]

Alec: [00:08:01] Yeah, yeah. Like that. That step change is already happened. Another trial we came across, looked at the companies in the S&P 500 and how many of them are like estimating a higher earnings per share for the next three months? Yeah, and that really peaked in mid 2021. About 79% of S&P 500 companies were coming out and saying in three months, our earnings are going to be higher than they are now. US not so anymore. Now, so far, 41% of companies are coming out and saying that this data's from fidelity. So credit where credit's due. But it is interesting that the chart really tracks the S&P 500, the movement in stock prices with the movement in earnings expectations. [00:08:50][49.8]

Bryce: [00:08:51] Yeah, I would have thought, which is not surprising. [00:08:52][1.3]

Alec: [00:08:54] Yeah. Still, 41% of companies are coming out and saying they think in three months their earnings will be higher than they are today. Yes, that is that like that's good. Is it 41%. [00:09:05][10.9]

Bryce: [00:09:06] Down from 79. [00:09:07][0.7]

Alec: [00:09:08] Yeah. [00:09:08][0.0]

Bryce: [00:09:09] Yeah. At its peak. At its peak. I'd be interested to know which sectors those companies are involved in as well. [00:09:16][7.2]

Alec: [00:09:16] Yeah, I'd be interested to know the 21% of companies in the height of optimism in like middle of 2021 when money was cheap and says were free. [00:09:26][9.2]

Bryce: [00:09:26] We're not going to do it. [00:09:27][0.7]

Alec: [00:09:27] Over the 21% of companies saying, Yeah, yeah, probably gone. We probably don't have this. [00:09:32][4.4]

Bryce: [00:09:33] Oh, dear, oh, dear. So that's a that's our vibe check and a bit of a high level view of what's what's going on across the S&P. [00:09:39][6.1]

Alec: [00:09:39] But let's I think it's important to stress it is early days. Only 7% of companies have reported there is a phenomenon where companies have good results, try and get to the front of the queue and report early companies with bad results, sometimes push their at. [00:09:55][15.4]

Bryce: [00:09:55] The end. [00:09:55][0.1]

Alec: [00:09:55] Push their timing back. So early days, it's important to stress. [00:09:59][3.6]

Bryce: [00:10:00] Absolutely. We have seen a couple of big names come out and we're not going to dwell on them too much because they're heavily reported. And if you'd like more info, you've probably already come across it. But we're going to do a bit of. The speed round with some of the some of the big tech companies over in the states. Netflix beat estimates despite posting a loss of 1 million subscribers off the back of 200,000 in Q1. But the stock jumped 6%. [00:10:26][26.9]

Alec: [00:10:27] Yeah. Yeah. Better than losing 2 million. [00:10:29][2.3]

Bryce: [00:10:30] Better than losing 2 million. [00:10:31][1.0]

Alec: [00:10:32] Well, we're talking streaming side note. I've got a gripe with Disney. It came out that Disney plus lost like $6 billion so far for Disney. So I think they had to do it. But can they sort their movies out? It is an alphabetical list. Is it? If you go to the movie category on Disney plus, it is an alphabetical list. [00:10:50][18.4]

Bryce: [00:10:51] As you're saying, it should be presented in a different way, like thematics or categories. [00:10:55][3.8]

Alec: [00:10:56] Yeah, well, like use all the data you have on me and give me some recommendations. Do it every streaming service. [00:11:02][6.2]

Bryce: [00:11:03] Know that you like alphabet. [00:11:04][1.1]

Alec: [00:11:05] Well, a few times me and my housemates have been on Disney. Plus, we've been like, Let's get a movie. And you're just like, Man, let's get out of here. They are losing valuable viewing hours to their competitors because of that terrible, unstructured list. Anyway, let's move on. Johnson and Johnson. [00:11:22][16.9]

Bryce: [00:11:23] Oh, Bob, is it Bob Chapek? [00:11:24][1.1]

Alec: [00:11:24] Yeah. [00:11:24][0.0]

Bryce: [00:11:25] If you're listening, sort it out. Johnson and Johnson Beat Estimates Just Pharmaceutical Unit was their largest contributor for their strong results. Sales are up 3%. [00:11:34][9.0]

Alec: [00:11:36] Tesla. [00:11:36][0.0]

Bryce: [00:11:36] Tesla. Disappointed? [00:11:37][1.1]

Alec: [00:11:38] Oh, he say this is the thing in the headlines. This is what gets made about this time of year. So the exact wording was like Tesla disappoints and streak of record profits. But what they're saying is that for about the past year, every quarter Tesla has increased its profit quarter on quarter and this quarter it went backwards. Still reported a profit of $2.3 billion. Yeah. And we all know that this COVID zero policy and continued supply chain interruptions has made it difficult for Elon and for Tesla, especially Shanghai and Germany, which came out and said what like giant money furnaces was is quite yeah. About those two factories for a company that was not making a profit for years to consistently be turning a profit as they scale think is impressive. It's like. [00:12:27][48.4]

Bryce: [00:12:27] Kudos. [00:12:27][0.0]

Alec: [00:12:28] Yeah. I don't know. It's it's like can Wiesel calm down on the rhetoric from on the upside and the downside? [00:12:34][5.9]

Bryce: [00:12:34] Yeah. Well, the more interesting thing about Tesla, though, is what they've done with their Bitcoin position. [00:12:39][4.9]

Alec: [00:12:40] They sold it. Yeah. For a pretty big loss. Yeah. [00:12:43][2.3]

Bryce: [00:12:43] Massive loss. I think they brought in at about 900 million from selling 75% of their bitcoin position. But they spent a couple of billion. [00:12:52][8.6]

Alec: [00:12:52] I don't know. [00:12:53][0.3]

Bryce: [00:12:53] Yeah. Yeah. Anyway, you're. [00:12:55][1.6]

Alec: [00:12:55] The bitcoin. [00:12:55][0.1]

Bryce: [00:12:55] Guy now. I'm out of Bitcoin. [00:12:56][0.9]

Alec: [00:12:57] No, you know, let's say that you sold your bitcoin. Yes. [00:13:00][3.7]

Bryce: [00:13:02] I sold a fair chunk of it. [00:13:02][0.9]

Alec: [00:13:03] Have you? [00:13:03][0.2]

Bryce: [00:13:03] Actually, yeah. Really? Yeah. I just think there's better option in the markets at the moment. [00:13:07][4.1]

Alec: [00:13:08] Well, yeah, yeah. Paper and price. Yeah. [00:13:12][4.1]

Bryce: [00:13:13] I haven't sold at all and I will get back into it, but I'll. [00:13:16][2.5]

Alec: [00:13:16] Probably buy the top now. [00:13:17][1.2]

Bryce: [00:13:18] Not it. I'm happy with where it's at. If I get back in with at where it's at, then I'm happy with that. But I just feel like that could get better opportunities in the market. And I just was like, I want the cash. [00:13:28][10.8]

Alec: [00:13:29] Well, so you may have sold at the bottom. Have you seen that? It's rallied. [00:13:32][2.5]

Bryce: [00:13:32] Haven't. I didn't I didn't sell like in the last two weeks. I sold a while ago. [00:13:37][4.6]

Alec: [00:13:37] Yeah I knew I definitely sold to the top. [00:13:41][3.3]

Bryce: [00:13:41] I definitely didn't sell at the high and I but I didn't sell for a loss either. So anyway, we're not here to talk about Bitcoin. [00:13:47][6.0]

Alec: [00:13:47] I mean, everything that I thought about you, it's just been shattered. [00:13:50][2.1]

Bryce: [00:13:52] I've lost faith in it. Ran to close out the speed round. [00:13:54][2.1]

Alec: [00:13:54] TSMC Yeah. [00:13:56][2.0]

Bryce: [00:13:57] Taiwan, semiconductors. They posted a record net profit. Some analysts say that despite a slowdown in chip making more broadly, TSMC continues to grind away. Some analysts believe it's in a class of its own, quote, with a well built moat. And that, yeah, it continues to grow while the industry itself is down. So one of the biggest suppliers of chips or one of the most important suppliers for Apple. So yeah, they've done they've done well. [00:14:27][30.2]

Alec: [00:14:28] All right. [00:14:28][0.1]

Bryce: [00:14:28] And the speed around. [00:14:29][0.5]

Alec: [00:14:29] So let's turn to a couple of companies that we don't speak about as much that have also reported over in the States. We've tried to get a diverse cross-section of industries that we don't speak a lot about toys, oilfield services and airlines. Yeah, so Hasbro as well. [00:14:46][17.2]

Bryce: [00:14:47] Yes. [00:14:47][0.0]

Alec: [00:14:48] What can we learn from their report? [00:14:49][1.5]

Bryce: [00:14:49] Nerf guns, Dungeons and Dragons, monopoly, some of the biggest games in the world. Boys toys. Toys. What can we learn? Well, they've increased prices. And despite the inflation driven demand slump in American for retail and apparently there's a wider slowdown in the gaming market post the pandemic when we know when. [00:15:11][21.2]

Alec: [00:15:11] Yeah. When everyone was buying gold. [00:15:12][0.9]

Bryce: [00:15:12] Everyone's playing board games. Yeah. Hasbro has defied defied all of that and has beat expectations with a profit increase. Two reasons for that. They had huge demand for their latest game Magic the gathering ever heard of it's a card game show. [00:15:26][13.9]

Alec: [00:15:26] It's not magic with a. [00:15:28][1.4]

Bryce: [00:15:28] I'm pretty sure. [00:15:29][0.9]

Alec: [00:15:30] Anyway, let's keep rolling. Whatever it. [00:15:32][1.3]

Bryce: [00:15:32] Is, it's magic. Sorry. You're right. Have you ever heard of it? Hmm? I have. [00:15:37][5.7]

Alec: [00:15:38] Yeah. You know what? I've heard about it. Do you watch The O.C. back in the day? [00:15:41][3.0]

Bryce: [00:15:42] No, actually. [00:15:43][0.9]

Alec: [00:15:43] Have a Seth played it. Oh. [00:15:45][2.0]

Bryce: [00:15:46] Okay. So it's not that new? [00:15:47][1.1]

Alec: [00:15:48] No, no, no, no. [00:15:48][0.5]

Bryce: [00:15:49] Anyway, and the second reason is that they've increased their prices. And so that's how they've managed to pump out a bit of a profit. [00:15:56][6.5]

Alec: [00:15:56] Yeah. So toymakers consumer discretionary is they come you're going to much more likely to stop buying toys than you are to stop buying food or, you know, any of those consumer staples. But they still saw a 17% increase in profit. [00:16:11][15.2]

Bryce: [00:16:11] Yeah, they're pretty upbeat from what I read. They did mention, though, that the next sort of three months will be a probably a little bit more telling. Yeah. [00:16:19][7.4]

Alec: [00:16:19] So that's toy makers. Let's turn to oilfield services. One of your favourite industries. Love it. Halliburton, one of your favourite companies love it. Well, again, we love New. [00:16:32][12.2]

Bryce: [00:16:32] York Stock Ticker. How HBO, they're responsible for most of the world's hydraulic hydraulic fracturing operations. And given the price of oil over the last few months, it's been an incredible well, not turnaround, but a an incredible result for Halliburton. They've beat expectations. They also have done for the past four quarters. You love to say that as an investor, always good news when that happens. Revenue up 24%, net income up 54%, and also profit margin up 6%. Higher oil prices means more people want to get into the game. Companies that are in the game spend more on their operations and this benefits Halliburton. [00:17:10][38.3]

Alec: [00:17:11] Yeah, a lot of marginal oil fields start to become viable as the oil price goes up. So Hasbro looking strong. Halliburton, no surprise, is looking strong. I guess for both of them, there's a little bit of uncertainty about where future demand is going to go. Hasbro, because of the state of the consumer balance sheet, Halliburton because of how long these high oil oil prices will stay. [00:17:35][24.2]

Bryce: [00:17:35] They are particularly bullish on the oil prices over the next few years. [00:17:39][3.7]

Alec: [00:17:39] Because of chronic underinvestment for the past few years. Yes. Yeah. Okay. [00:17:42][3.1]

Bryce: [00:17:43] Yeah. Chronic underinvestment, political agendas. And interestingly, they called out the increasing the increase in global temperatures. We're seeing the UK going through a 40 degree heatwave. [00:17:54][10.8]

Alec: [00:17:54] Yeah. And the US is 100 million people in the US are about to get hit with record temperatures. [00:17:57][3.5]

Bryce: [00:17:58] Wow. There you go. They specifically called that out as a as a factor that's going to drive the price of oil because of the increase in fossil fuels and demand for cooling and everything that goes into that. [00:18:11][12.7]

Alec: [00:18:11] So which is an ironic and sad perpetuating cycle of. Yes. Making it worse. [00:18:16][5.5]

Bryce: [00:18:17] Yes. [00:18:17][0.0]

Alec: [00:18:18] Okay. Anyway, so those two companies, a lot hinges on future demand. A company that we can be pretty confident is going to say recovering demand. Well, the industry is airlines. [00:18:30][12.2]

Bryce: [00:18:31] Yeah. Well, if you if you're travelling and you're standing in line at an airport, you'd certainly be thinking that airlines would be doing pretty well. [00:18:37][6.0]

Alec: [00:18:37] You'd be saying, how can there be more demand from this? Yes. Shout out to Flynn, my housemate who went to the airport five and a half hours before his international flight and needed every minute of that time crazy. [00:18:51][13.5]

Bryce: [00:18:51] Crazy again sucked in. If you're travelling, I'm not getting operating. Revenue for Delta Airlines has recovered 99% from its pre-pandemic levels. [00:19:01][9.6]

Alec: [00:19:01] On 82% of inventory from pre-pandemic levels well. [00:19:05][3.9]

Bryce: [00:19:06] Plied delta. [00:19:06][0.3]

Alec: [00:19:06] So basically they've jacked their prices. [00:19:08][1.9]

Bryce: [00:19:09] Yeah. Well if you're listening overseas for as an Australian or you're trying to fly to Australia, you would know that to get to Europe at the moment, if I was to buy a ticket tomorrow, it's about five grand. [00:19:19][10.5]

Alec: [00:19:20] The amount that you've said would suck to be flying right now and then you know exactly how much of a ticket to Europe is. I feel like, oh. [00:19:28][7.9]

Bryce: [00:19:30] Yeah, Delta. They've raised prices which we're seeing across the industry. [00:19:32][2.3]

Alec: [00:19:32] So Bryce to close out reporting season so far. We were going to turn to the American banks, but I think we've already covered it. But I do just want to talk about Jamie Diamond's earnings call. The CEO of Jp morgan was called out by an analyst. So we do a bit of dramatic role playing dominated by the analyst and newbie Jamie Diamond. [00:19:51][18.6]

Bryce: [00:19:53] Sure. [00:19:53][0.0]

Alec: [00:19:54] It shows how different the actions and I guess what we're saying from the data today is compared to, say, those expectations about the next three, six months. Yeah. [00:20:05][11.1]

Bryce: [00:20:05] Yeah, absolutely. [00:20:06][0.2]

Alec: [00:20:06] And this was all summed up by an analyst that went pretty hard. So I am. Michael Mayo, could you help me reconcile your words with your actions after Investor Day? Jamie, you said a hurricane is on the horizon, but today you're holding firm with your 77 billion expense guidance for 2022. I mean, it's like you're acting like this sunny skies ahead. You're out buying kayaks, surfboards, wave runners just before the storm. So is it tough times or not? [00:20:35][28.7]

Bryce: [00:20:35] Thank you for the question. Michael Mayo, may I let me we run the company. We've always run the company consistently investing, doing this stuff through storms. We don't, like, pull in and pull out and go up and go down and going to markets out of markets through storms. We manage the company and you've seen us do this consistently since I've been at Banc One. We invest, we grow, we expand, we manage through the storm and stuff like that. And so I mentioned to all of you on the media call that there are very good current numbers taking place. Consumers are in good shape. They're spending money. They have more income. Jobs are plentiful. They're spending 10% more than last year, almost 30% plus more than pre-COVID. Businesses, when you talk to them, they're in good shape. They're doing fine. We've never seen business credit be better ever, like in our lifetimes. And that's the current environment. The future environment, which is not that far off, involves rates going up maybe more than people think because of inflation, maybe deflation there might be a soft landing. I'm simply saying there's a range of potential outcomes from a soft landing to a hard landing driven by how much rates go up. The effect of quantitative tightening, the effect of volatile markets and obviously this terrible humanitarian crisis in Ukraine and the war, and then the effect of that on food and oil and gas. And we're simply pointing out those things make the probabilities and possibilities of these events different. It's not going to change how we run the company, the economy. It will be bigger in ten years. [00:22:02][86.5]

Alec: [00:22:03] Nice. Well done. Thank you. That's only one take as well. So my three takeaways from that. First of all, he speaks about how good businesses and consumers are today. Secondly, he's basically like, I have no idea what's coming coming in the future. And then thirdly, he ends with the economy is going to be bigger in ten years than it is today. [00:22:24][21.5]

Bryce: [00:22:25] So he is just up to some headlines if he's going to be out there talking about storms and. [00:22:29][4.4]

Alec: [00:22:29] Yeah, yeah, yeah. Well, maybe it's just it's like it's like right now, numbers are good. We have no idea what's coming next. Yeah. And that just feels like. [00:22:39][9.2]

Bryce: [00:22:39] But our time horizon is ten. [00:22:41][1.6]

Alec: [00:22:41] Yeah, but that, that, that whole, like, oh, things are actually okay right now, but dark clouds are potentially approaching, but we don't really know. Feels like the theme of reporting season. [00:22:51][9.8]

Bryce: [00:22:51] Yeah, that's. [00:22:52][0.6]

Alec: [00:22:52] True. Like the step into the unknown. [00:22:54][1.5]

Bryce: [00:22:54] Yeah, yeah, yeah. Now, we should point out as well, we're making markets accessible, not sponsored, but we did grab that transcript from the quarter app. Fantastic app. If you want access to global companies during reporting season transcripts, earnings calls, you name it. [00:23:10][15.8]

Alec: [00:23:10] Yeah, all very searchable. Now again, non sponsored. We have worked with them previously and hopefully they hear this and we work with them again. Yeah, yeah, yeah, yeah. But yeah. Good app free. I love that. Yes. Let's take a break and then let's talk about some other things. Nancy Pelosi, Tik Tok taking it to Google and Apple's latest software platform. [00:23:29][18.8]

Bryce: [00:23:32] Or R.N.. Well, let's close out the episode. Three things to touch on the first. Let's do it. Nancy Pelosi and Nvidia. [00:23:38][6.8]

Alec: [00:23:39] So I was surprised by this. Have you you haven't come across this. Nancy Pelosi. [00:23:44][4.7]

Bryce: [00:23:44] May know. So I'd heard about this story. So I'll just touch on that quickly and then. Yeah. So Nancy Pelosi's husband has. [00:23:52][7.7]

Alec: [00:23:53] Hold on. Who's Nancy Pelosi? [00:23:54][1.1]

Bryce: [00:23:54] Speaker of the House? Yeah. In the U.S.? [00:23:56][1.9]

Alec: [00:23:56] Yeah. [00:23:56][0.0]

Bryce: [00:23:57] She has bought about. Sorry. Her husband has bought about $5 million in Nvidia. [00:24:02][4.8]

Alec: [00:24:03] The chip maker. The chip maker. [00:24:04][0.9]

Bryce: [00:24:04] Chip designer on the surface. Great. Then you go to the next level down. The Senate in the US is expected to meet to discuss a bipartisan bill to boost semiconductor manufacturing in the country. [00:24:15][10.9]

Alec: [00:24:16] And pump what, tens of millions or something into these. [00:24:18][2.7]

Bryce: [00:24:18] Companies? Yeah. And pump millions now. Some articles suggest that Nvidia aren't going to be the beneficiary of this bill. Others could argue that being in the industry. [00:24:27][8.9]

Alec: [00:24:28] In the biggest American chip companies. [00:24:30][1.3]

Bryce: [00:24:31] You couldn't say that they will benefit from this. Now, we're not here to decide whether or not they will, but it's just an interesting development, however. And you said that this isn't new. [00:24:40][8.7]

Alec: [00:24:40] Yeah, because when I put this in the dock, you didn't think there was a lot to this story. And it's time I introduced you to one of Finn twits or Finn memes or Reddit's biggest names, which is Nancy Pelosi is the genius stock picker of right. It's okay. Over the last few years, it's come out that Pelosi seems to be on the right side of a lot of big trades. And it got really big in 2020 or 2021 when her husband bought a heap of alphabet stock at the same time that Congress were considering antitrust regulation against alphabet antitrust regulation, that didn't happen. Yeah, right. And so people will like Nancy Pelosi's stock pick up, blah, blah, blah. And they've been a there's been a number of examples after that. And every time I think it's like quarterly, they have to disclose or it's like 45 days after they make a trade, they have to disclose it. And so it makes headlines all the time now. And like Wall Street bets and stuff, it's like, what's Nancy Pelosi buying? What's she's selling? Just ridiculous, massive on TikTok as well. To be fair to the Pelosi's, basically what they buy is large cap American tech. It's like alphabet, Microsoft, Apple. They recently got into like roadblocks and a couple of other things. But yeah Pelosi best if Jim Cramer is the worst. Pelosi's the best. [00:25:59][78.6]

Bryce: [00:26:00] I'm going to track her closely. Closely. Pelosi There's nothing you can do about it like it's well above. No, I guess. [00:26:07][7.1]

Alec: [00:26:07] There is something you can do about it. Because of how big this meme became, a number of Congress people proposed a law to stop Congress people trading. [00:26:17][10.2]

Bryce: [00:26:18] Wow. [00:26:18][0.0]

Alec: [00:26:19] And similar to like, you know, what happens in Australia is our leaders always our prime minister puts their assets in a blind trust. Yeah. So they don't see how it's invested. They, you know, they have professionals managing their money so they don't miss out on returns. But it's not like they can use the information they have in that job as leader to make money. [00:26:37][18.5]

Bryce: [00:26:38] Yeah. [00:26:38][0.0]

Alec: [00:26:38] There was a proposal for something similar in the US. It didn't get up. Have you? Guess how Pelosi voted on it? [00:26:44][6.1]

Bryce: [00:26:45] On the negative side. [00:26:46][1.2]

Alec: [00:26:47] Of the negative, there's probably more to play out in this story. It feels pretty obvious that there should be some rules around trading. Yeah. [00:26:56][9.3]

Bryce: [00:26:56] Yeah, you would think so. [00:26:57][0.8]

Alec: [00:26:57] Yeah. [00:26:57][0.0]

Bryce: [00:26:58] Until there isn't. Feels like something she's going to continue. Well. [00:27:02][3.3]

Alec: [00:27:02] As finance content creators who try to make memes on Instagram, it's great for us. [00:27:08][6.0]

Bryce: [00:27:09] Yeah, true. Ah, I ran another headline, Google Search Results. [00:27:13][4.0]

Alec: [00:27:13] So this is so much a headline. This is a red flag that I've started hearing about and I don't think it's really made its way into financial analysis, but I want to put it on the table because we're all Google shareholders in one, one way, shape or form, but from our super or retirement accounts to our ETFs to individual shares. I want to know if you've been hearing this as well. Tik Tok Search being better than Google search. [00:27:39][25.6]

Bryce: [00:27:39] I haven't heard that. I just don't engage with tick tock that much. [00:27:42][3.0]

Alec: [00:27:43] It's not on tick tock hiring it though, but it's something that I've heard a few times. I reckon now that I've called it out, people listening and you are going to start noticing, okay, there's heaps of noise about when you're searching for location. So restaurants near me or hotels on TikTok? Well, on either the Google search results are just filled with ads and dodgy reviews are not that helpful and it's all text based, whereas the searching on tick tock is you get like visuals and it's a lot more, it's a lot better. [00:28:16][33.7]

Bryce: [00:28:17] You might get someone doing a tick tock review on the restaurant you're searching. [00:28:20][3.3]

Alec: [00:28:21] Yeah. Or you might get like footage of the restaurant or the hotel, you know, like you search hotels in Bali and you actually see the hotels. Wow. And it's like this. This whole idea of, like, the. Visual search, like you don't need text based answers anymore. If you really want to see what the experience will be like or what a restaurant is like, it's more effective to search it on TikTok or Instagram than Google. Wow. So I wanted to put that on the table because I'm interested to get your thoughts on it. I can honestly say I've never done it on Instagram on Tik Tok. [00:28:50][29.5]

Bryce: [00:28:50] I haven't even considered searching for something on TikTok. So I've. But now that you've said it, I'm super intrigued to give it a crack. [00:28:58][7.5]

Alec: [00:28:58] We do a lot. [00:28:59][0.3]

Bryce: [00:28:59] But I can say no because we're going to really push the time that I think that I can definitely see the benefits of this for things like hotels, experiences, restaurants. You want a visual, you want to get an understanding of of what you're getting yourself into. During your search process? I guess so. [00:29:16][16.7]

Alec: [00:29:16] Well, I'm going to say straightaway, Tik Tok can't beat Google because it's not geo located. I searched the restaurants near me and then it said, Did you mean food near my location? And I've got a place in Brooklyn and Colorado. [00:29:30][13.7]

Bryce: [00:29:31] Well, you have been complaining about Google geolocation, so. Yeah, you know, their search functionality it's T.J. located are true. [00:29:40][8.7]

Alec: [00:29:40] This is the exact opposite. Yeah. We're trying to run a global business news podcast with the Dive and Google and it gives me Australian results. Yeah, but look, I think it's interesting to just keep an eye on it because obviously the whole Google thesis starts with they have a search business with 98% market share that generates heaps of cash that then can fund everything else they're trying to do. It feels like maybe there's a different way to search that is just bubbling up as Internet speeds get faster and it's easier to search visually. You know, when five years ago you would blow your 4G data allowance if you were trying to do every Google search with people with video. Yeah, yeah. It's an interesting one. Like I don't think TikTok them nailed it, but I think if anyone was in pole position to nail it probably wouldn't be Google. [00:30:33][53.3]

Bryce: [00:30:34] Yeah. Interesting. I'm going to jump on and actually test this out because I don't spend a lot of time on Tik Tok, let alone searching for things that well. [00:30:40][5.9]

Alec: [00:30:40] Given you've spoken so much about going on a European holiday and you are getting married later this year, probably thinking about a 2023 honeymoon. Yes. So if you can plan it just on TikTok. [00:30:49][9.3]

Bryce: [00:30:50] That's not. [00:30:50][0.2]

Alec: [00:30:50] Bad. Like hotels in I see me going to Italy. So like hotels in Rome. That's pretty good. Are you going to Italy? [00:30:56][5.7]

Bryce: [00:30:57] Yeah. There will be an ad, of course, who doesn't have to go to Italy anyway. [00:31:00][3.2]

Alec: [00:31:01] Because there's one thing you need to know about priceless. It's that. [00:31:04][3.1]

Bryce: [00:31:05] Nowadays. [00:31:05][0.0]

Alec: [00:31:06] He's only known at Italian restaurants in Sydney. He wouldn't go anywhere. [00:31:10][3.9]

Bryce: [00:31:10] That's not true. That is not true. A lot of other restaurants anyway. And we'll close out with an article that was featured in our thought starters email that goes out once a week where we feature five interesting news articles, or not necessarily just news, but five interesting articles that have been thought provoking from around the world of business and markets. So make sure you sign up to that. If you haven't, you can head to our website where there's a simple way to to sign up comes out every Monday but one this week. Ren was on Apple CarPlay. Yeah. [00:31:42][32.1]

Alec: [00:31:43] Well, have you seen all these articles about Apple is going to get into the electric vehicle game? Yeah, yeah. Like Apple is going to build a car car. Apple car. Yeah, right under our nose. Apple have been putting their plans in place to create the Apple car. And no, it doesn't include them buying Tesla or building a factory of their own apple carplay. The pretty innocuous piece of software is something that we should keep an eye on as consumers and investors have. [00:32:12][29.2]

Bryce: [00:32:12] Because as as far as I'm aware, CarPlay is just the simple integration of your Apple phone onto the like head unit of the car. Well, it's a song you can like just yeah, yeah yeah. Use your phone you your handsfree. But like. [00:32:24][12.0]

Alec: [00:32:25] Yeah, it's a software platform that allows you to like yeah. [00:32:28][3.1]

Bryce: [00:32:28] So what's the link between that and. [00:32:30][1.6]

Alec: [00:32:31] Yeah, this is why it's exciting. So Apple are the best if you if I was going to sum up what Apple is best in class art it's building beautiful platforms, software or hardware and then allowing other developers aggregating millions of users on that platform and then allowing other developers to build products and sell to their users and they take a clip of the transaction. Pretty simple, but that's a business model like App Store off. Yeah. Yeah. Well, they also sell the hardware, but you know what I mean. Like, that's, that's the beauty of, like, the iOS ecosystem in all of its iterations. That's what they're going to do with the augmented reality glasses. That's what they're doing with CarPlay as well, but we're just not really paying attention. So they're now building all these features for CarPlay. There's like an app store that you can download a bunch of stuff. They allow you to pay for parking, they allow you to pay for electric vehicle charging. You can order food from third party delivery platforms through CarPlay. But the really interesting. Thing that opens up a huge market for them is they've quietly announced you can't quietly announce something. They've quietly unveiled a feature that will allow you to pay for petrol, pay for fuel through CarPlay. [00:33:45][74.6]

Bryce: [00:33:46] Okay. Like for like in what sense? Just like prepay at a station or. [00:33:50][3.9]

Alec: [00:33:51] Yeah. You like the station has like an app that you get through CarPlay and you pay for your fuel through that. [00:33:58][7.0]

Bryce: [00:33:58] But is that like is that revolutionary? [00:34:00][1.2]

Alec: [00:34:01] But I'm just thinking like, imagine if Apple click click the ticket on however many billions of dollars is spent on fuel. [00:34:07][6.4]

Bryce: [00:34:08] So you're saying from a business model for them, that's great. But I think from like a like from a advancing car technology and stuff, that's I mean, is that. [00:34:16][8.3]

Alec: [00:34:16] Well, no, it's not that. It's like, yeah, it's paid for. Feel like it's it's barely friction. There's barely friction in the inside. [00:34:24][7.4]

Bryce: [00:34:24] Yeah. [00:34:24][0.0]

Alec: [00:34:25] But for me, it's just like, well, what does the future of a software enabled car look like? And there are worlds like in some ways, like Tesla is leading the way for building their own software and like a lot of the big carmakers are trying to do that themselves. But on the other hand, Apple are building their own platform that they want to integrate with car manufacturers. And, you know, if Apple can have hundreds of millions of cars integrated with their software, then that's a platform where they can, again, offer a yeah, Apple CarPlay App Store and third party developers can build things for their software platform there. And all of a sudden it's like, Oh, they've done that. [00:35:07][41.8]

Bryce: [00:35:07] They've done it again. Yeah, love apple. [00:35:09][2.2]

Alec: [00:35:09] And so it's early days because I don't think any petrol stations are using this at the moment and they're not clipping the ticket at the moment. All right. [00:35:17][7.4]

Bryce: [00:35:17] But they. [00:35:18][1.1]

Alec: [00:35:18] Will. They will. They will. At some point. They will. But one of the big service station operators over in the US, I think they have like 1600 service stations have announced that they're going to start using it in the coming months. Wow. Just an interesting one to keep an eye on. If you want to read that full article. You can head to our website and you can also sign up to the email. The Apple Car. The idea that Apple gets a factory and builds a car might be a sideshow for the Apple car. Well, this. [00:35:47][29.0]

Bryce: [00:35:47] Is a sideshow when they do go, hey, we just bought Tesla anyway, so what happened won't happen. But that does bring us to the end of today's episode. If you've enjoyed listening or have taken some value or think that some of your friends would benefit from joining the Equity Mates community, please let them know about the shows. We've got plenty in the network write and review on your iTunes app. That's always a help to get us in front of new audiences as well. So we always appreciate your support and Ren. It's been an absolute pleasure. We will be picking it up next week. [00:36:19][31.2]

Alec: [00:36:19] Unless you've talked off to Europe. [00:36:20][1.1]

Bryce: [00:36:21] Unless I've talked up this year, which I definitely won't have that. We'll pick it up there. [00:36:25][3.9]

Alec: [00:36:25] So good. [00:36:25][0.3]

Bryce: [00:36:26] 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.