A Listener Production This is the Motley Fool Money Mailbag Welcome to Motley Fool Money, our very special Sunday Mailbag edition No less, you know why it's special, I know why it's special It's because we have the gentleman who's representing Australia's Premier Online Investment Club In our midst, in our presence, we must genuflect, we must bow and scrape We must kiss the ring, we must make sure we don't upset him Because we know he can wrap up the week Here's of course Andrew Ram, Paige, S.Y.M.S. Paige, how are you? I'm very good, sir, how are you? Very well, I'm so close to the Motley Fool, for those who don't know May I tell you, how good of your weekend been?
Have you indulged in fixed strengths and endurance? Or have you given yourself some time off? I'm out of break week, this week Recovery Recovery, yes You're changed, you don't have to use recovery weeks Well, I just have to make up with something particularly impressive next week There you go, you listeners, you've heard here first, he's on a promise I'll look at that, we'll see how he goes May I ask you how you work, as always, we spoke 15 minutes ago So this is the second round That's the same, that's the same I did hang out on watching you as a podcast recording So I did the life of domestic police that I live One benefit slash cost of working from home is like There you go, there you go Make time for you to get any questions Yeah, let's start straight on in All right, Trev slash Trent I'm not sure whether it's Trev the nickname or Trent the real name or vice versa I'm a keen and fascinated listener Thanks so much for the great pods I've enjoyed them and learned a lot, thank you mate I have a question about comparing company statistics When weighing up purchasing a stock Trev slash Trent Like I always make people use ticket codes I don't call you on that in a minute too I don't buy stocks, I buy shares in companies And that's exactly the same thing, it's entirely different So I'm just going to say, when I write, it's so much easier if I'm writing style of buying shares I always say, I make myself write by shares in a company or a company's shares Just to reinforce that point, I know it's pedantic and I get that people know that I just think sometimes, it's the opposite It's like, what's your thoughts become your words, what's your words become your actions Your actions become habits, all that kind of stuff So you know, if we start from the right position, we're going to go to good places Anyway, I've been comparing two company stats to a way up to better purchase I'm definitely far away from being a professional stock picker I'm a plant operator, but I love learning and investing In short, by the way, it's easy to do a real thing And I just sit on our chairs and bash on keys So it makes better be a plan to write on the stock picker So when I compare net income and the stock price I can't understand why a company can be valued at such a substantial amount more With the one with higher net income I'm looking at Endeavor Group And Paul, there you go I was not even close I'm looking at Endeavor and Paul Endeavor's around $4 a share And Apple's around $24 But Endeavor is generating a better net income and a better dividend yield I know there's not everything for the company But what am I missing? Or is this just a mystery courtesy of Mr.
Market? Thanks so much, TT What a great question You'll come across this all the time There's a couple of, I'm not familiar with these particular companies To make the comparison But I would suspect it comes down to one or two or a combination following One being a difference in growth prospects So they can both have the same income In fact, one could have a higher income or higher net profit But really not have much potential for growth It's probably a very mature business Maybe just general GDP system level kind of growth And there's nothing necessarily wrong with that at the right price But the other one might be on a path to quadruple its profits in the next three years And when you're buying shares You're buying exposure to future cash generation ability So the one that has the better ability Should rationally be priced at a higher level So it's probably telling you something about the different growth outlooks of the company The other one And when you mentioned Ampol My ears pick up This may be a chance here Some particularly very capital intensive type businesses Can have all kinds of one-off non-cash adjustments, etc, etc So when the data providers Unthinkingly just scrape the data in Here's net profit And therefore this is what it is It may include something that is a genuine one-off non-cash cost That distorts the picture Companies usually are pretty helpful In the fact that they will give you what they call a normalized earnings So it's sort of like The rules are there for a reason They're good And I'm not trying to undermine the rules Statutory earnings need to be reported in a specific way But what's more interesting to a business owner Is what is the true earnings capacity Not is what are the statutory earnings Because I can't spend statutory earnings I can spend cash at the end of the day And we can go down a very deep rabbit hole As to whether it's a real cost or not It is a real cost These breakdowns and depreciations They are They very much are But they are non-cash And there are extenuating circumstances And all gets very weird and wonderful Have a look at some of the recent presentations Usually any decent company will call it out As to what This is what you're looking at Let me help you Here's the results As we must legally report them Now let me help you understand them Bear in mind though Of course companies also have a very strong incentive To present the best picture possible So there can be all kinds of adjustments That may technically be true But may not adequately represent A fair and reasonable viewpoint of the company And that is your job Your investor To sort of get to the truth of the matter But you might be able to think of another scenario there But I would say it's either some kind of adjustment That's like giving you An unfair comparison Or just different growth prospects So that's absolutely true There's one more fundamental I did in the numbers while you were talking Which I gave me the advantage You've made a very common error And I mean that with a smile And with the best of intent You're looking at the per share price I.e. $4 a share And comparing the same profit Of the two companies And wondering why they're different And what's missing there Is the old pizza analogy With the number of slices So you're right They're generating around the same This audio is just terrifying I'll do it for those who want to play at home Endeavor's making $0.29 a share Ampol is making $0.55 a share So it sounds like On a per share basis You've got more profit for one than the other That's absolutely true The difference is with Endeavor There's 1.814 billion shares on issue And Ampol only has 239 million shares on issue So you've actually got a share count Which is massively different And that's the difference here It's the equivalent of the slices of pizza One slice is $24 One slice is $4 The question you should ask yourself Is there other slices of the same size If they're not Or how many slices there are Think about it And it's actually quite a really good question Because in this case The company's market capture is pretty close Now pretty close in proportional terms Ampol is $6.4 billion Endeavor is $7.3 billion So the difference is big If you had to get the change I'd take the change But they're kind of roughly the same As you ask Why is the share price so different That's the easiest way to start Endeavor share price is 1.6 The Ampol share price Yet the market capitalization is the same The total price of the pizza is the same But the slices are really different That prices And the answer is The number of those slices There's a heat more slices of Endeavor So each slice is smaller Or it costs less The slices of Ampol are fewer So they each cost more Even though the price of the pizza Is roughly the same Now that's the starting point Then to Ram's point You then add on things like The growth prospects You add things like One-off costs or one-off benefits And that's why you get A PE ratio for Endeavor of 16 times Ampol is 25 times That's the number you want to look at In terms of the difference And ask yourself those questions Which Ram's beautifully answered Yeah I'm just going through the Ampol presentation I haven't looked at it for ages I mean It's generally accepted Or generally stated I'm not going to make this case The best time to buy a miner Is the P is sky high Why? Because that generally means Profits are cyclical low Conversely when P is really, really low It's usually when you go A temporary high on the price Or the commodity price That's probably going to fall the other way So just be very careful With a cyclical company That can be part of the reason as well Yeah I mean the historical record Is interesting here as well Ampol is a $6.4 billion company Right Their earnings in 2024 Were less than they were in 2015 They've gone up and they've gone down There's one-off factors And this and there's that And they're hyper-capital intensive And it's super cyclical And it's very race-a-thin margin It's ultra-competitive And it's dealing with global macro forces It's just I put it in the category of A typical business that is described As blue-chip Because it's just big And established And profitable Paying a dividend But yeah I mean I'm having a going I wish I was the owner Of a $6.4 billion company That was making however much It's making in profit per year But it's not exactly growing And it's not exactly an easy business as well And it's been a pretty poor run For shareholders over the last I mean yeah Share-by-side now in five years Just last week I was talking about the dangers of extrapolation It doesn't mean anything Could be incredible By the last five years In fact I think they have gone Through a few restructures And pivots and whatever Which is always interesting And they may have spent The last few years Building a foundation For incredible growth going forward And you know The good thing about being cyclical Is sometimes the wins are in your sales And things are about to go To the moon So I don't want to throw shade on it But I think it's always I think it's always interesting When you look at a company's history Over a meaningful period of time Five, ten years plus And if they haven't performed In that time And not just the share price The share price are probably Fundamental But the business itself Is just not really growing And not in terms of the actual cash That it's managing to throw off And having forced By industry conditions And the reality of their business To whatever money they do make To reinvest huge portions of that Back in to the business To remain competitive It's just It's not terrible But there's other businesses out there That don't have the same capital intensity Have far more growth prospects That do not have cyclicality involved in it Are not beholden to global macro forces That the company's CEOs Are zero control over So as I say I've just been really negative on that And that guarantees That the shares are going to go to the moon I've literally spent 30 seconds Scrolling through a presentation That's the depth of my research I'm covering my butt very firmly here But it is I would say that You would have to form a view And I'm sure some people have As to Why is the next five years Is going to be different For the last five years And maybe it will be very different But you want to have a reason for that Because if it's not It's going to be Well 2030 And you're going to be looking At a share price It's about the same I think that's pretty much Let's move on to another question I'm going to look at it By the way So maybe that's the same story Growth styles are falling Growth profits are falling Which is weird Because normally the The caveat kept having a recession So drinking And drinking habits are changing But yes So earnings first share They've only been listed Since they got signed off In 2021 So they've only got four years Of history there But not a lot of growth It's a saturated Grover retailer I think I saw Ram In central Victoria Playing 4D chess While riding a unicycle Blindfolded I didn't know I forgot about that Can you make some distance Well mate Run a unicycle from your place To Victoria and back In time for the podcast That's impressive Well done Thank you Oh dear So Ben then passes on A comment We've just recorded Friday's episode So Ben Apologies in advance Because he then says Thanks for the slowdown In the Berkshire Buffett At our references He's given my liver A much needed reprieve And a chance for a quick Rant for the pod machine Yes I finally related Says Ben Hopefully you will indulge me So yes Unfortunately you now Probably had a horrible There are many things The younger generation Should be angry about Says Ben But I thought I'd raise this one Superannuation I think as most young people Are not engaged with theirs It flies under the radar But someone who works in the industry It's hard to be to ignore And not get angry On the 1st of July A person can have up The $2 million In a tax-free super pension That means a couple Could have $4 million Assuming 5% income Rent interest dividends Realized couple gains etc This will equate to a combined $200,000 in tax-free income On top of this They can have over another $28,000 in tax-free income Each outside super Due to tax-free thresholds Low income tax offset And senior Australians Pension tax offset You don't actually need To get the age pitch to qualify He says That comes to potentially $256,000 of tax-free income And they would still get A Commonwealth senior's health care card And probably own their own home How much is that?
God, it's so outrageous Ben goes on Meanwhile a nurse and a tradie Make $100,000 each Would pay $25,000 in tax Leave them with a combined $150,000 If they can't afford Private health insurance There'd be another $1,000 in tax each Any investments that hold outside super With tax their marginal tax rate 3% in this case And their super savings are taxed 15% And they are most likely Paying down a mortgage or rent How is this fair? Question mark Question mark With more and more people retiring We're going to have more people Paying no tax Than younger workers Carrying the can Maybe if some tax was paid On these super benefits The rest of us working SOBs Could get some tax relief Or at least not be settled With an ever-growing pile of debt According to the ABC Millennials in general Will be a bigger voting cohort Than the boomers for the first time With neither major party Offering anything resembling tax reform Maybe now is the time Younger generations made their voices heard And demanded a fairer deal Rant over Thankfully you can get that off my chest It says Ben I feel much better now I know Scott has some ideas on this I look forward to hearing your comments On a system that paves us capital over Labour Keep up the great work My weekends would not be complete Without a double dose of you two Cheers Ben Thanks Ben That's very fine mate And a very good quality rant too By the way You started to respond mate So keep going I'm one of these people Who really is supportive Of safety nets and welfare I just think each of us Have different circumstances And fortune in life And I don't believe In throwing people to the wolves As a society When we have the wealth To make sure that there is A bare minimum level of dignity That we can afford Those that are less privileged At the same time I really get aggravated For what is called Middle class welfare Or in this case Upper class welfare Especially when it comes From the taxpayer As Ben said The nurses and teachers And fireys And paying tax To give people a discount I'm not saying you're rich And you need to suffer And boo you're evil Let's get out the pitchforks I'm not saying that But I am saying Maybe you don't need Some of these benefits Maybe let's save them For people who really need it And if God forbid Life takes a left turn for you When you find yourself In a very difficult situation Then I'm really happy To live in a country That will look after you But why am I giving you A discount to someone Who's like on $5,000 Tax free a week Who probably owns their home Out right It's so unfair It's so unfair And look Just to preempt The usual retort Which is where Yes but we pay tax Our whole life It's like yes you did But so are these people As well And because of the way Things have unfolded They will never be In your situation Almost mathematically You just can't get there Because what was it You take the average Household from 1970 I'm going to butcher it But it's something like On a single income You could have spent 25% of your household income To buy a house And have it paid off Within 13 years Or something like that And that is Before anyone goes Over interest rates And over this And over this In terms of pure hours Worked and what was able To be achieved back then Which is so vastly different To the scenario That the younger people Are facing today They'll never be mortgage free At this rate And still having to In fact add a more Significant tax burden In real terms Taxes I think people are Paying more tax now Than they ever have And a whole bunch Of other reasons there So it's just It's not about Being negative towards One generation over Or other Or even just Being angry that Some people are Wealthier than others That's just how The world is But it is right To get angry When people have Been giving a leg up When they don't need it And other people Are not able to enjoy The same conditions And opportunities That the previous generations So I think it's Perfectly reasonable For people who don't Have that to go Hey this is unfair Can I stop paying Can some of my tax Stop going to multi-millionaires it's kind of weird that that would even need to be a controversial statement but it is I'm not going to offend it at all part of a fair argument is stage of life you've already mentioned the fact that people are in different situations and therefore bears around for different reasons if you take a longitudinal view the same tax rules effectively those people did work and they're retiring tax-free and you're now working we may retire tax-free if our stage of life are treated fairly it's less unfair than it seems because we all get the opportunity at that point in time to have that benefit so it's kind of right now someone's paying taxes but then that's not unreasonable as an objective because people in retirement don't work for health and ability reasons it's not unreasonable as a concept to have tax-free for the reasons you've just talked about but with that said the current structure is atrocious we know that the stock market is 9% a year on average if you invested entirely in shares which you didn't and then you get some capital gain you cash out and use you could be earning $350,000 a year tax-free it's even worse than you started with plus you had the tax-free which is just unconscionably stupid and unreasonable and unfair and inappropriate the other thing I would say is that there are other ways of half-step back you mentioned around I think people probably reasonably when they first started let's think about from a personal perspective how can I pay too much tax I want to pay less tax why should I pay this much tax people who are listening now are saying I work really half my for 100 grand a year why should I pay more tax than 100 grand a year there should be flat tax all that kind of stuff on a personal selfish level we all want to pay less tax we all get paid more we all want lower cost we all want bigger houses we all want nicer cars that's a natural and probably even at some level a good thing because it kind of incentive matters and it creates the desire to go and add value be valuable be productive the only lens if you care about policy rather than self-interest the only lens is simply what do you need to fund and who is in the best position to provide funding for it in the most reasonable way I won't say fair because it's fair for a lot of people the most reasonable way now do I think a nurse who is earning 100 grand paying 45 grand in tax versus a retiree on 250 grand paying no tax do I think it's fair absolutely not but I would say the other thing is in a bigger context and again we've done a bit of a pre-recorded tax conversation I would broaden the question out Ben we do a lot of binaries in life and you're right to compare those two you're 100% right but things like resource royalties for example rents or multinational taxes there are other things I think we should consider in terms of adding to or reshaping the tax stake which would have benefits of both now I probably still make a change to super versus non-super working but it might be that we give people 100 grand a tax break by taxing multinational companies more I only say that to just highlight the point there are more ways to skin that particular cap than otherwise might seem obvious and we shouldn't just do one versus the other but when you do compare those two there is clearly in my opinion plenty of people sitting here and super and very happy about it but I've had plenty I've had so many people contact me you know I've had more people contact me who've said you're right I benefit from this and I don't like it than have said get off the grass I want to maximise my super and I'll help everybody else and that's a nice I'm an optimist and I'm a Pollyanna and I like to believe in the best and that does make me feel better so yeah we should absolutely change it Ben I can't just read anything you said you're 100% right I mean it'll change with the demographics of the voting public I suppose until they become ones who get the money yeah yeah remember the flower children who wanted free love and peace and getting more today's boosters right so we changed through our lives for better or worse can I read this tweet this is from Tariq Brooker an avid commentator on Twitter he's got some good content the year is 1970 you're a 24 year old baby boomer living at home looking to marry your sweetheart and get your own home a 20% house deposit in Sydney is less than 10 months of average earnings in Melbourne it's slightly under 7 months in Sydney a mortgage at a prevailing benchmark owner-occupier mortgage rate consumes 25.6% of average full-time male earnings in Melbourne it's 17.8% so again what I love about what he's done there is everything's been normalised in terms of work which is what really matters you know like the amount of hourly wages change and interest rates change I get all of that but this is just sort of saying it's like well one income after 10 months you've got your 20% deposit wrap your brain around that anyone under the age of 40 45 frankly 50 almost right you know that you can work for 10 months on an average salary and save a 20% deposit like that is so fantastical it's almost unbelievable right and then and then once you've got a mortgage a quarter of your earnings supports that mortgage a quarter nothing what is it at the mark I read the stat a little while ago I can't remember what it is yeah it's a very significant portion and it's sort of like gosh things are broken it's so broken but yeah and again all power to you what would I have done in that situation you know you play the cards that you're dealt but then to turn around and say yes but I also need a discount on this and I need this and I need that that comes from somewhere and it comes from people who are working today who don't have the same opportunities that you do so it's sort of like enjoy your retirement you worked hard you deserve it absolutely but all the other people are saying is well can we can we have the same opportunity I don't think it's an unreasonable thing to ask yeah that's right it's probably hard on to solve but it's not reasonable well no it's not no I push back on that I mean there's some look yes housing is a difficult situation you can't try to make a house deposit 10 months of income here I don't know you solve that with a click of pen though you solve this this upper middle class oh yeah I agree just very quickly I've been very clear on super I was simply making super I ditched all the tax free income tax free even the 30% tax in super I was simply making it all tax at 15% no matter what and you pay tax at your marginal rate when you take money out yeah that's accessible and it's a marginal rate so if you pay $15 you pay the tax but I increase the tax rate threshold for retirees because I don't include the pension I give the pension for everybody so every retiree gets a pension you increase the tax rate threshold to buy 20 grand and you then say every dollar you earn above that is taxed at a marginal rate yep it's very very simple really easy and that way you really need distortions but you also have to deal with exit tax which we already got anyway so if you don't have money in super you're a straight you're very efficient tax on that amount of money and you always ask one of the great litmus tests with any kind of proposal is to say well what would you prefer and ask yourself would you prefer a situation like that which is yes admittedly not as favourable for you as the current situation now or that you don't have that money in super I get it but it's still vastly superior to the ultimate scenario you'll take it right which hat would you rather wear I'll take that one thank you I'd much rather be someone who is paying a million dollars a year in tax but earning 10 million dollars a year and then someone who pays no tax and doesn't have an income can I pay as much tax as possible whatever the regime it almost means that unless you're going to get really silly it just means that I'm incredibly wealthy so I'll be wealthy and pay a lot of tax rather than poor and not pay any thank you it's not from now yep Motley Fool Money for more subscribe to the free newsletter at fool.com.au forward slash listener I've got a Bitcoin question for you it's a Bitcoin challenge I'm going to ask you to take a deep breath and accept this person's asking good faith it's not trying to be difficult and it's from R I listen to the podcast for over 10 years and I will allot to the wisdom and collective brains trust Bitcoin journey I've listened to many hours of healthy debate and the strongman approach between the two of you as Bitcoin's value has grown up increasingly interested in the phenomenon if Bitcoin were to become as widely used as the dollar in say 10 years time and its price continued to rise early investors or even those who invest today would have significant advantage over those unable to invest now this includes people with no capital or even my kids for example a child born five years ago for instance would miss out on those gains simply because they weren't around to buy in early if in the future they end their first paycheck in Bitcoin there would be a financial disadvantage compared to those who were fortunate enough to invest earlier as far as I can tell this issue hasn't really existed with traditional fair currencies like the dollar is investing in Bitcoin or hoping it becomes a widely used currency something like a property investor who owns hundreds of houses hoping real estate itself becomes currency would that inherently create an unfair economic advantage for early adopters what am I missing how do you square that circle looking forward to your thoughts best R yeah good question we should take all the money off early Apple investors they bought Apple stock before I had the opportunity to buy it and they benefited unfairly or insert any number of stocks here we should take all the property off the boomers because they bought property early like you accept that as R points out if Bitcoin becomes money there's no feared example of I had all the gold then gold I was going to choose to be used as money and therefore I had a massive advantage to start with there was no feared example or equivalent so you can choose to invest or not you still get paid in dollars your paycheck relative to my store of cash is a thing but my cash is growing in value because it's become more valuable I might have stored up more or accumulated more but it doesn't become money in the same way I get where I was going here I take your point as well there's a different thing where Apple stock became money then I would agree with you in this case you're saying well there's an asset over there which is a separate asset if it was to become money or the only major money that would have money you can't become equivalent to fair in usage if I had dollars and dollars became worth something I'd have a thing but I had dollars well that would actually tease me up perfectly because it's the old bug tree best time in the planet was 50 years the next best time is today at any point so I was very late every single person who chooses to adopt this thing is always late you'll find there's great examples online of people who are buying at a thousand dollars a coin going oh I had the chance to buy it when it was $10 wow I'm too late I'm too late my cost basis I think the average is 40k Australian yes that's a humble brag it's the only asset by the way that you get no credit for any other share or asset you buy you go oh well done with bitcoin it goes well you're lucky you don't get any credit for it but I can tell you when I bought it and I bought it over I continue to save in it but when I really started to adopt it I felt horrendously late I remember the peak of the 2017 bubble was 20,000 US and so here I am buying a premium to the bubble top it just felt so expensive but I don't want to get into the debate but R is positive that it will happen so once that happens I'm going to say it's just money unless you're getting paid in that well what do you want do you want to get paid to your point a fiat currency who's designed to lose purchasing power every day or do you want something that will preserve your purchasing power at the end point this just becomes what's called sound money or hard money it's just that money that's not diluted and one that doesn't lose purchasing power when is that a bad idea to adopt it's not a general it's become worth doing it's just not one of the implications that creates meaningful equality based on adoption time this is why I'm trying to screen it from the rooftops here there'll be a point in the future where everyone will turn around and go you got lucky and it's not deserved and I really push back on that because it's like screw you it offends me in fact and it's insulting because it always looks easy in retrospect I did this dumb thing and I got massive reward for it no I did a huge amount of research and thinking I copped so much flack and criticism and derision and was laughed at I had to hold this thing as it underwent 30 40 50% drawdowns and volatility that would you know make a tech investor I took extraordinary risk I did an insane amount of work I built a huge amount of conviction and I defied conventional wisdom and you're going to turn around and just say I got lucky and I don't deserve it no it's the same for the people who did extremely well pick a different local example bought a few medals at 10 cents well done to anyone who held on to it you've got the advantage here's the other thing it's not just having to do that but then once having done that to resist the temptation to sell think of the person who bought Bitcoin at a thousand dollars they had to go and he still holds today they had to someone knocked on the door and said I'll give you 10,000 for it nah 20,000 for it nah 30,000 nah at every single point they had to resist the urge to spend that money in a way and they didn't ultimate marshmallow test they resisted consumption and that was the choice that they took and then they got rewarded for it because they were an early adopter that's why this is such an incredible opportunity because at a point when it just becomes money I've got to be careful it's already money of course it's money when it becomes more widely accepted as a money you don't have it won't grow at these rates forever we're just in the S part of the adoption curve and that's going to run its course at some point over many decades and when it's done it's done and then you're just left with money like you're ubiquitous and the only growth you'll get is the increase in productivity and purchasing power that just comes with the enhancement of the economy you won't get these 20% compound annual gains in the same way that the best time to hold Apple stock or Nvidia stock or Fortescue stock or Google stock or realestate.com stock was the early days that's where the best gains came why did the best gains come then because that was the point of maximum risk there's an alternate reality out there where the whole system crashed 10 years into the journey or it could crash tomorrow and so it's sort of like why shouldn't the people who take all the risk get all the reward that's exactly the kind of person who spent their whole life laughing at it criticizing it calling it a tool for pedophiles and criminals etc that turn around 10 years and go it's not fair I should have some like when you spent every single effort that you could to push back and throw shade on this thing and now that it turned out in a way that you didn't expect and now other people have to make you whole I'm speaking I've got a friend in mind sorry I'm not trying to project but it's right there it's open it's voluntary if you want to do it you can do it there's risk in it absolutely and that's why there's such good upside at the moment if you don't want to take the risk then don't take the risk but even if that's the point even if you completely ignore it and you wait until the year 2070 and you go okay fine this is why I'm being paid in now you're still using a money that is so vastly superior than anything else we've ever had why wouldn't you do it it's like the Japanese refusing to use gunpowder for cultural reasons in the end they did it's not like they went well in the last country to adopt gunpowder so there's no point in doing or I guess I should do no it was still a good idea to adopt it and it would still be a good idea to adopt it why wouldn't you adopt it you have to adopt it and I don't know I'm going to I think it's a real issue I don't know what proportion of Bitcoin Satoshi has do you know the number I've got a million what's that oh you've got a million so 5% of it yeah right there you go so if Bitcoin became the only money or the money of account for the entire world Satoshi would have 5% of the world's entire net worth as a result of that Michael Saylor is a better example because Satoshi's gone Michael Saylor the CEO of MicroStrategy they own he doesn't know oh I really should know this but by far the largest amount so he will make Elon Musk look like a poor part if this goes to a million plus a coin at some point I think there is and when it becomes the money the rather than I just to be again really clear and specific your point I think that's a bad outcome I don't think distribution of the currency because of its eventual adoption is a good thing for humanity separate to where the coins were so again that's all to separate the two thoughts here because you know I'll say speckling I don't mean speckling pejoratively so I hope that's okay to use but the idea of like when this becomes the money I was smart enough thoughtful enough I was born early enough to kind of pick up the money before it was money it didn't represent the value that you created you weren't transferring your current wealth into Bitcoin in a one for one relationship it was intelligent speculation on a future value of the money and so I kind of got an unfair advantage I think that's a fair you got it right now what's stopping you you are stopping you which is fine but you can't use the word I've got to pick you up on it it's not unfair it's unfair if I'm saying no you're not allowed to buy any scott I'm only allowed and me and my friends are if you're going no I don't want to then that's not unfair I don't suspect it's reasonable for a new money to not proportionally represent the money which it replaces that's what I'm kind of with it's a redistribution based on again I'll say I really don't mean it negatively I use the word speculation generally negatively I'm even tricking up my own words I'm not when the dollar replaced the pound as Australia's currency we didn't say to people sorry we're going to replace the dollar with the pound we've been to that dollar for about 10 years we let you buy the dollar earlier now we decided to do it so guess what everyone's wealth distribution is radically changed by the adoption of the currency if you said one pound is worth whatever it wasn't dollars I don't know the numbers I should and therefore everyone was not not made whole but there was no disadvantage in investing in or taking a I'll say speculation again because we don't know what's going to happen so it's that kind of idea you can go to the bank you can convert your pounds at this exchange rate and this is something that's bootstrapped from zero entirely organically without orchestration or control so it's a different character and a different beast but even if you put that aside let's play it forward let's take the second example that I got 10 million bitcoin I own half the supply of bitcoin right now this is what we'll cook the noodle a little bit here because when people call it a hard money or refer to hard money it just means it's hard to make in this case it's impossible to make more of right so I've got all these magic internet what I've really got is a password in my head that's what I've really got now if I want to spend it I have to swap it with someone so there's no there's no advantage I have in order to prosecute the strength that I have I have to the very act the very act of spending is the act of redistribution and this is how it redistributes and already has in fact as we're seeing the current corporate adoption play out which is just so fascinating it's just completely amazing to me it's not any mainstream coverage whatsoever it is and again there's a lot of good chain analysis it's just black and white like the level of since the ETFs launched in the US the number of fortune 500 companies and companies of every scale that are adopting are just extreme they've only just come in now and where are they getting that from there's only 3.125 mined every 10 minutes at this point in time you can look at the set of available coins and where are they all coming from where's Michael Saylor buying from from the early adopters they're redistributing them so it's a problem that sorts itself out and I don't know how else you do it my point is whether you bought it at a cent or whether you're buying it now at 160,000 Australian dollars you are going to a better form of money and the best analogy here is consider someone in Turkey who's using a lira they can switch to US dollars in fact anyone who lives there or knows the region knows as soon as you get any money you either spend it or you switch it into US dollars now are they going you know what I'm just going to switch it into US dollars I'm going to wait for it to go up and then I'm going to switch it back into the local currency no I'm going to the better money and it is a one way street I'm never going back to a seashell I'm never going back to a bale of tobacco because it's demonstrably inferior money and I choose to stay with the US dollar in my example because it's vastly superior and that's never going to change and to sort of say yeah but Bob switched his earnings into the US dollar a couple of years before I did and so I've had to suffer this crippling inflation and debasement of my currency but he was smart enough or lucky enough to switch out that's not fair what's going to be done about it it's like well nothing except maybe you should switch out too because it's a better money but Bob needs to give me some of his money I'm like well why I don't understand it and we're at a point I tend to think now that if you have any there'll be people listening to this go this is all nonsense because it's never going to happen fine if you're in the camp of Jesus I don't know but maybe it's got a reasonable chance of doing it maybe you should act on that I'm not saying go all in but maybe you should act on that or maybe you're super high conviction maybe you should act on that as well but the opportunity there it's free and open and to the early adopters go the biggest foils as is the case for every asset in human history except for fear I think for what it's worth I think both of these can be true I don't think the reality of the redistribution means Bitcoin is bad or not better or any of those things I think that's where it can have benefits and it can have drawbacks and that's okay so my personal take is the stuff you posit as the positives are absolutely right one of the social drawbacks is a redistribution of wealth in a way that maybe isn't what you would design if you had the choice I think both of those things can be true because I do think because it's a money rather than an asset money is yes it's a store of value to some degree but we're really talking about a transactional token in whatever form digital or plastic or paper I think both can be true I think we can personally I think it's okay to say I don't think it's a better option I think Bitcoin is still better I acknowledge that Michael Saylor is going to make $20 million and the person with cash in their pocket who keeps the cash 20 years is going to be worse off that's going to happen and that I don't think is a good thing but I also don't think it necessarily means that Bitcoin is doing all this negative or it can't be adopted or she stopped or any of that sort of stuff I think we can live in that gray of there's some wonderful advantages which are worth it there's some disadvantages which suck for some people that's like everything else in life that's just the reality it's not perfect but it's better than what we have that's where I not because I'm trying to appease to parents with not much money in their own house and kids born to renters and those three people have very very different outcomes based on the world they're born into and their ability to either have or accumulate money either from scratch or with something else behind it so you're right in terms of the redistribution of my view but I also think the not born yet ones it's always the case because we're all born with nothing other than lucky or unlucky parentage and lucky or unlucky skills that do determine where we end up in life that's not about the rise of individual money per se but it absolutely is the amount of money you have and so you might be born into money or not born into money that's not so different to the impact of Bitcoin even when it continues to grow value you made the point you made it better than I was going to so that is so crucial I mean my great great great grandchildren who aren't even born yet if they are born into a world of sound neutral money that fills my heart with joy and optimism the starting point here is that people assume that what we've got now is good and even and fair is it fair? do you think that Rupert Murdoch is on the same playing field as you? do you think Elon Musk is do you think that these guys get a better or worse cost of capital than you get?
do you think these people have more ability to transact in assets and in jurisdictions it's not fair at the moment the great thing about Bitcoin is you can be a peasant in rural Africa or you can be a billionaire in Manhattan and you can both use it at the same cost whether you're buying one Satoshi or a trillion US dollars worth of Satoshis you've both got the ability to do that at the same sort of cost it is the most egalitarian fair kind of thing that is out there and for people to go oh but it might be unfair for anyone who chooses to dismiss it I just reject it on so many levels it's always a better it's always a step up for you whenever you choose to do it and you're moving away from a system that is grossly, grossly unfair and I say this as an Australian who enjoys a wonderfully stable monetary and fiscal system relative to the world you've got to remember there are 6 billion people on this planet there's 170 different sovereign currencies that are out there the average life of a currency is about 20 years because once you get outside of the yen the euro, the US, the Canadian the Aussie dollar and a handful of others literally 90% of these currencies are effective theft mechanisms from the poor to the rich and that's not hyperbolic that is the literal kind of truth and if you don't know or understand that I just really encourage you to go to some other places and talk to people there and ask why is it that they've got rolls of $100 bills stuffed in the walls why? oh they're not patriotic no they're being constantly stolen from in a very sneaky indirect way because it's just the best analogy I've come up with is share people get it we've all got shares in a company there's 100 shares out there Scott you're a founder I'm a founder we're going to give 50 each but behind your back I'm going to give myself 10 extra shares every year and if you want to say and if I can go no I'm not stealing from you you've still got the same number of shares like no I'm stealing from you and that is what happens and I'm sorry I'm getting really worked up but it's like it really invigorates me I suppose to sort of make the point here because it's just if anyone takes a cold hard logical objective look at the current system it is so grossly grossly unfair and to push back against something that at least nothing is guaranteed but at least has the promise of being egalitarian and fair without all the funny buggery stuff you know why is it that a billionaire hedge fund manager gets bailed out after engineering the worst financial collapse since the great depression that happened in our recent life that doesn't happen under a sound money standard we're advocating for maintaining that and the people who built their fortunes on this unfair system that they should be able to port it across at any time they want without any help like just think about it for a second and think about what you're asking for and if there's any I'll shut up in one second if there's anything that is again there's a lot of there's a lot of big audience I'm proud to say and you're out there going it's all buckers then fine don't do it that's the great thing about a voluntary system but if you are out there going jeez I don't know well then I would say at the very least spend a bit of time educating yourself there's so many resources out there there's never been more resources today than there was even like a few years ago and then come to your own conclusion and here's the interesting talk about Michael Sutherland he makes the point he's like you'll never meet anyone who's spent 100 hours studying it who isn't like hyperbolic do you suspect that might be a little bit of if you spend 100 hours and that's all you do I'm not supposed to be mosaic so that's not going to be critical I dare you to 100 hours I'm going to not actually start to lean towards that point it's kind of if all you do is whichever echo chamber you choose chairs let's be honest I'm talking about bond investors I'm all that chairs all the time and I'm sure that's true I'm not sure whether it's genuine cause and effect or whether it's just the human nature if it's 100 hours doing anything you're probably going to you're going to be mind-changed by the process I reckon I could do 100 hours on the flat earth theory could you really do I think so I reckon I could confidently put you on a debating stage and say argue the merits of share investing and you could do so from first principles and rigorous logic and rationale even though you may have that entrenched bias because you can just say well here are the facts and you'd be right to do that so there is always that risk but again I don't want to tell people what to think you've got to answer your own conclusion I don't ever care if someone doesn't bitcoin I don't care but what sticks in my craw is people who have spent zero time thinking about it who like to apply and talk about how ridiculous it is without even having even looked at it it's just like you and me getting on the podcast someone writes and goes what do you think about X, Y, and Z and we just spend all this time talking about how terrible it is and you shouldn't touch it and it's a scam and they're like well it's a completely ill-informed view if you want to do the work and then have the debate let's have at it if you just want to have bad faith arguments because it just doesn't gel with your world view it's just so disingenuous and that's the thing that you find out there it's the Peter Schiff's of the world it's the I don't know there's a whole bunch of naysayers that are sort of out there it's just sort of like really bad faith arguments and then when their arguments are completely and utterly and thoroughly debunked they still go yeah but nah and I was like well that's on you but you're really at a point I don't think there's an objective truth that exists somewhere out there in the universe for all kinds of things and it's our job to try and get as close to it as we can but whatever the topic is if you're just going to be la la la with hands in the ears it's just sort of like not even worth engaging with in my mind because what's the point there's no sequence of words there's no argument there's no rationale that I can present that will change your mind and therefore it's not worth the debate anyway I'm obviously pretty passionate about it you can tell you obviously had some debates in the past obviously which are coming out I have a question for you and I don't know if you want but I'm curious if there could be a solution that would allow a digital currency to be everything Bitcoin is but not and again I know it's inherent in the system so I'm just going to spend that for a second would it not be better to be able to replace a fiat currency in a dollar for dollar like for like system rather than have a system that required an accumulator to make that speculation what final adoption might look if we could say right now we are going to port everyone on earth's net wealth in US dollar terms or whatever the standard is and we're going to put that into Bitcoin would that be a good thing it would propel humanity forward to a new golden age of prosperity because we're going to get rid of all the funny fiat games that we're going to play but you've already said it but I'll make the point it's like saying if the tooth fairy came down well yeah then that would be great and adoption is required by money well it's because of the whole thing I think that's what I was kind of getting at I think you're getting at the point of sure but it is what it is and the returns let's finish with a question I'm going to say I might actually jump at a question okay Matt I've got a question from Paul because I think he's getting over the next three Bitcoin questions no no it's actually Paul's question is a great question it's asking how we go about we use a checklist and how we find great companies I'm looking at the time and thinking that's a half of our 40 minute conversation actually we did a pre-record on that too we did but some specific questions so I thought we'd do that but yes so Matt will ask Matt what he said I've got a long time listener first time emailer I just want to say I'm a religious user of the pub machine every episode is like a dose of caffeine mixed with insight and the occasional top tier rant he put religious in italics which makes me think that we maybe should have what name would you what do you type a special pope each time oh yeah you have to do that. I don't know. One of the Ninja Turtles, Max.
I like it. I just can't do a thing to Catholics. We're not seriously going to go. You do make it easy, Catholics.
Sorry. How much of your cast is my head just dropped with this? Oh, dear. Well, there you go.
The only benefit I suppose is we're coming in a more atheist country, so there's fewer Catholics who are... 18% of Australia is Catholic. I like those. Not that you would get it from the recent coverage of the latest Pope.
Oh, man, we love it. We love it. Same as the Royal Family. I like it on a tangent, but it's all bread and sakes, as you mentioned.
It's kind of that, right? Someone gets up in a fancy get-up and they're on TV, you know, wall to wall for hours. Oh, man. It's hard to imagine.
No, I'm going to get myself out of the way. So, Max says, honestly, speaking of which, honestly, the way you can pivot from dividend stocks to geopolitical soapboxes, maybe religious commentary, gives versatility a whole new meaning. It's like listening to the finance version of a late-night comedy panel with better takes on inflation. I'm going to find a way to get that around marketing, Matt.
Everyone's very nice, but if I can say, someone says it's like listening to the finance version of a late-night comedy panel with better takes on inflation, that's what I was going to get. Now for my question. Very well worth it. I've been pondering the idea of Australia taking a more, let's say, creative trade approach against the US.
Not out of malice, just as a hypothetical power move. For example, I want 100% tariff on Tesla imports. Let's make Elon really work for our market. Tearing up the AUKUS agreement and spending money elsewhere.
Maybe Swedish submarines in a few cases like air meatballs. No lithium exports to the US unless they refine it in Australia instead of shipping it offshore for processing. If we're supplying the world of the revolution, we should at least get some jobs out of it. I'd love to hear your thoughts on whether there's any economic or strategic merit in these kinds of approaches, or if it's just asking for trouble with a sigh of irony.
Keep up the great work and never stop the rants. Cheers, Matt. Do you want to go first? It's a lovely dream, Matt.
It's the sort of thing up for beers and you can absolutely go to town, which I suspect. By the way, we do this podcast over for anyone who's wondering. If that actually pushes you, then knock yourself out. I'm not sure which way to take it, really.
It's one of those things. So, look, let's start at the very beginning. Here's the problem. I'm not sure if you're mostly kidding or half kidding or half serious or entirely serious.
I think it's cool, by the way. The hardest part is the implication. The hardest part is what does the US do as a response? And that's kind of the big one for me, right?
You can tell you, let's really stick it away alone. I have some sympathy for the idea. What happens when you do that? What does Donald Trump say?
Well, if you're into that, I'm going to do this to you. And it's kind of like the China-US problem. We saw China and the US deal with their issues largely by just whacking each other harder. Now, in the last week, we've seen it come back, and that's lovely.
I'm really happy to see that having come back, and things are much, much better than they would have been otherwise from that perspective. So, could we? Yes. There's two ways to think about the terrorist stuff.
The first is to really kind of take the hairy-chested fight back kind of approach. The other is to say, well, it kind of sucks. We'll have to take our lumps. Let's make it as least bad as possible.
And that least bad thing is really what I guess I'm focusing on, we probably should think about. And that is just that idea of, if you feel weak to say, we'll just copy it, whatever we've given, right? And that's understandable. I probably made this point before, and if I have, I apologise for doing it again.
You can say, let's have the fight, let's stick it to them, let's not take a step backwards, let's show strength, let's be our own people, do all that sort of stuff. And I love that thought, you know, at some deeply moral level, that's the right approach. The thing is, if you're a kindergarten kid and a school bully, the year six bully takes your lunch money, and you decide to fight him, hit you back and hit you harder, and you throw a sword fight and hit you again harder, at some point, the smartest approach is stop punching, right? Just walk away, run away, do whatever you can.
And that doesn't feel very macho, doesn't feel very manly, doesn't feel very moral or responsible, doesn't feel like we're kind of being cowards a little bit, but that's just a reality of business, right? So, could we do those things? Yes. If we did them, Trump, because he's Trump, with an ego the size of, you know, whatever, he's going to say, well, if I'm going to do it back to you, then I'm going to win this one, so I want to win, that's what I'm all about winning.
We're probably better to accept that Trump said it was going to do and try and manufacture the least possible damage rather than the other way around. Yeah, that's what I do. It's way, far, far, far from being reasonable or reproachable or okay or acceptable or any of those things. It just is, what the thing is, is, in a very real world example, just the least worst outcome from doing that, and least worst means we end up with the best possible outcome for us personally.
Because, again, think about when we do this, the Yanks say, I've only got 100% tariffs on your exports. So, okay, now that goes. All right, now we've got 1,000 tariff on Tesla imports. What's more important to us?
What's more important? Do the Yanks care about Tesla imports or do we care more about the things we send overseas? And at the end of the day, they're going to make that decision. And if we're paying more tariffs on their stuff, it costs us more.
We sell less stuff because they put tariffs on us. We say, well, we should have to them. Yeah, we're still poorer for it. So, I kind of think, you know, we shouldn't accept it.
We shouldn't say it's okay. But I think we owe it to ourselves. So, all the government owes it to us to give us the least worst outcome we can generate. And I suspect that's probably just copying it sweet, funding out the markets for our products, minimizing the pain until Trump leaves the White House and then trying to suck it.
Your thoughts, Ryan? So, apologies. My internet dropped out midway through your answer. So, if I repeat anything here, just to let me know.
But the short answer is I'm a free trade maximalist. I just really think that, you know, trade is an act of mutual beneficial transaction. Both parties are doing it because they want to do it. And I just don't get what's the problem with that.
Yes, people love to invoke fringe edge cases. And yes, look, but if there is, like in 99.99% of the time, this is the better way to go. Blanket tariffs and this is a very slippery slope. And yes, there are security implications and strategic implications.
And for those things, they probably deserve some kind of special attention. I don't know. That's a very nuanced kind of debate. But just as a starting point, I just think, why on earth would I stop someone wanting to buy something from overseas who wants to do that and get in the way of someone from overseas who wants to sell us something?
Who is hurting here? I don't understand what's the negative thing. You might say, oh, but there's an Australian producer that's hurting because no one's buying their stuff. It's like, but, so, by pointing a proverbial gun at someone and saying that you can only buy this thing that you don't want, is the solution to my problem.
Who's benefiting there? It seems like we are changing the rules to pander to one special vested interest, which hardly seems fair. It just seems like a nonsense to me, all of it. Get the hell out of the way.
Let people trade. It's a good thing. But that being said, Trump is already putting these things in place. So how do we as a country respond?
We do nothing. We diplomatically try as best we can to mitigate that or to encourage him to sort of walk it back. But yeah, as you say, I'm not saying you roll over and just take it as it comes. Sometimes you've got to punch the bully back.
But more often than not, we're just going to cause ourselves more pain. That's the problem. It's like, do I feel better? It's like, yeah, we stuck it to them.
Woo! I've got less stuff. Everything's more expensive. It's a real Pyrrhic victory and you've got to play the bigger game.
Sometimes it's best just to walk away from the bully. Or sometimes, strategically, sometimes it's better to give the bully some of your lunch money. It's not great. I'm not saying it's an ideal outcome.
But if you're trying to reconcile the problem, you're still left with no lunch money and a broken nose. It's like, well, that's kind of... People really strongly disagree with this, but I think they disagree with it primarily for the pride reasons. We want to think we're important.
We want to think we're big. We want to punch it by the world stage and all those things because it makes us feel good. But the reality is we're a country of 27 million people. The Yanks have got 350 million people.
The world's actually going to be by miles of 15 times our size. The city's a bit bigger than us. I think you're... We're infuriating it.
It sucks. It shouldn't be the case. Free or freer. Trade should be the priority.
Trump's an idiot for doing anything differently. But this is the world we're in. The only question we're going to ask ourselves is what's the least worst why we get out of this. Because you can't make tariffs go away from him because it's not going to happen.
He's shown with China what's going to happen. Do you want to escalate it? Do you want to escalate it? Yeah, I'd love it to be true.
It would make me very happy to put pies out on Teslas just because I'm sometimes very occasional, sometimes a slightful person and I think that's what Trump is doing. I have one of his closest advice we feel better about. I think that's kind of the point of the question. You're kind of saying, hey, what if we just did it?
Why don't we just make some really specific points? AUKUS is hard. AUKUS is hard because it's a defence relationship. I've said before, I've preached on a past podcast, maybe in a pre-recorded, probably in a past one.
I find defence impossible to give an opinion on because the future is the future. I've not given this example before, but before World War II, we've spent too much money on defence and World War II broke out and we've got enough money on defence. Are we spending too much on defence at the moment? Not enough.
I don't know. No one knows. You can't know. It's almost quite a definition, right?
And even the agreement. Do we need the subs? Probably not. Is it worth being part of a broader US-UK defence alliance if it costs a few subs we may not need?
Is that worth it? Again, I don't know. It's literally impossible to know. I feel like I'm being...
I've got opinions on everything, right? So I'm not backing this one at all. There's just no way to know the future in any sense, but especially in defence. It's like in Cherance I said before, are we inside outside the tent?
Do we want the US-UK operating without us? We're pretty outside down here if someone decides to wander over the horizon. Do I want a couple of... Because we're small.
Do I want big, tough, scary, large, well-resourced friends? Yeah, I really kind of do. Now, maybe it should be China and Indonesia rather than the UK and the US. We can have a geopolitical conversation about that, but I kind of like being part of a major defensive alliance.
We can rely on the people to come and help the things get a bit tough. So, yeah, I don't know. That's my office thought. Then on the lithium thing, people want to process stuff onshore, and I get it, but the reality is I think we can process it offshore better and cheaper and more profitably, and we get to benefit from that because we get more value for it and we buy the things they make cheaper.
Can we make cars here? Yes. The reality is we mine steel. We mine iron.
We send overseas. They make the steel in the cars. They send the cars back to us, and that's cheaper than if they make the steel and buy the cars and make the cars ourselves here. So what do you do?
You make a few jobs here, yes. Do you have to buy $75,000 in Commodores to do it? Probably. Is that worth it, or do I have cheaper cars, which gives importers some work, and then the money I save, the $35,000 I save, because I buy $45,000 a camera instead.
I spend in 158 different shops, employing a lot of retail shop assistants, manufacturers, and other product manufacturers. I think that's where it's, again, think about things that are binary, right? Lithium onshore, offshore, job in lithium processing, no job in lithium processing. Seems really seductive.
The money I spend on higher prices because we do it ourselves here is I can't spend somewhere else on some other business who's also trying to get by. A hairdresser, a physiotherapist, a leather goods manufacturer, whatever, right? Those things that might only be spent once. It's been most officially manufactured.
Creates the most jobs in the market. Do you have thoughts on AUKUS and lithium, mate? Oh, man, they're huge topics. Huge topics.
I think you can't even talk about AUKUS without a broader context of what we actually want. I think to think that we should be investing in anything that allows us to project power beyond our borders is pure hubris because of the economy of the size of our people and what are we wanting to do with that power? I don't know. Are we invading Indonesia?
I don't get it. You still have control, mate. It's still an effort. Yeah, watch out, Kiwis.
Israel's a good example. You're going to be careful with what I say here. But I think what you want to do is really put your investment into defence and deterrence as best you can. You can charge your vertical here.
What's it called? You can charge your vertical ball and you'll splice on the outside. Hell yeah, because we can do that. And Aikidna is just a great example.
I've never heard that before. Because you can fend off a much bigger animal, right? And it's like, honestly, I was going to say the country's name, but everyone knows the country. We're going to roll over the horizon, right?
It's like, let me be real. Just for a second, again, put your patriotism into it. We've got nothing. We're not, you know, it's David and Goliath.
Absolutely nothing in terms of, you know, pound for pound, what we could meet in some neutral battleground and fight. We could do incredible things with some very sophisticated sort of missile technology, drone technology, submersible technology, mine technology, which are great for projecting power, but are really, really wonderful in terms of defense. And what it does is it gives you a real asymmetric advantage there. It's like, look, we don't have the number of aircraft carriers that you do.
We never will. But I tell you what, you want to sail anywhere near our waters and it's going to cost you a lot, right? It's really going to cost you a lot. And we can do it.
It's like how drones are being shown to be so incredibly effective in Ukraine. They're super, super cheap. They're taking down tanks. How much does the drone cost to produce versus how much does the tank?
We need to be thinking much smarter about a military capacity rather than the stupid stuff that comes out of Canberra where people are talking about tanks and we might as well be trying to enlist pikemen and crossbow people, right? I don't think we're going to keep the breeding program for the sound of it. It's a big topic and I've got some strong thoughts on it, but I think what we want to do is we just want to make sure that any would-be invader is given serious pause for thought. That's the best we can do and that's fine.
And in fact, we can go a long way on that. And even better still, we can make just the thought of invasion really unpalatable because we're just such a valuable trade partner. Alliances? Yeah, I mean, yeah, I love it.
Obviously, it's good to have friends, right? It's good to have big, powerful friends. Absolutely. But I always hate being the unthinking lapdog of a superpower.
The US is doing it. Okay, we're doing it too. What? Does anyone still think in the year 2025 that sending our men and women over to Afghanistan or Iraq was a good idea?
I don't. I think that was a really dumb idea. Did we have any... Oh, you just did it because the US asked us to.
And it's just like, friends, are we friends or are we blackies? So if we don't talk about being allies, let's be allies. But if you want someone who's just going to say how high when you tell us to jump, then no. That's the relationship.
That is not a healthy relationship on the personal level and on the state level. And it strikes me as, while I'm first to say that it's a very important alliance we have with our friends in the US and even the UK and Europe, it's great. I want to be friends with everyone, right? I'll be friends with any country that wants to be friends with it.
I think that's a pretty good idea or all things considered. But don't expect me just to follow your lead blindly when you decide to go on some stupid half-thought adventure into some other part of the world where all you're going to do... I think Afghanistan was projected to have cost us, when I say us, I mean the US and the West Collective, something like $20 trillion, which is a number so vast that it's hard to get your head around. And what do we get out of that?
A lot of people lost their lives. I don't know what else. Is the world safe? Do you feel safer now than you felt back then?
I don't know, right? We often talk about, in this podcast, return on investment, right? That's probably the worst thing. What could have been achieved with that $20 trillion?
I tell you what, I reckon if we were to spend that money in making good infrastructure investments in places like Afghanistan, it's hard to get radicles. People who are radically against you who want to strap bombs to their best and blow themselves up to people who are doing incredible good for you and helping you, right? It's much easier to do when you've got absolutely no hope in your life and nothing to live for and half your family's been blown up and you've got a garage. That's a different story.
We just need to be a lot smarter with this stuff and I'm just battling at this point. We'll have a wonderful defense podcast coming up shortly. In the meantime, I think we've probably taken up enough of our listeners. Valuable weekend time or there's a morning time when you're listening to this podcast as we always like to say.
Are we coming up on Friday? Yes, hell yeah. Thanks for the great questions. If you're still here by now, we've offended the Defence Hawks, the Catholics, and pretty much everybody else.
So for the people still listening, you'll probably fall asleep listening to this podcast, not really even here. Thanks for listening, and full on. Cheers. The Motley Fool and people appearing in this program may have positions in the company's mentioned.
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