Latest / The Curve / TCW6: A company at the top and bottom of The Curve

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TCW6: A company at the top and bottom of The Curve · The Curve

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  We're really excited to have partnered with Audi to bring you the Curve Weekly, a podcast
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  Hi and welcome to the Curve Weekly, the podcast that keeps you up to date with all the money,
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  business and stock market tea.
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  Someone was like to me today, hey how's your weekend so often I was like, it feels like
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  I worked all weekend.
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  Yes, we worked all weekend, but worth it because guess what today is the Curve Classroom
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  The Curve Classroom is live.
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  The Curve Classroom is live.
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  Yeah.
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  Right yourself, my friend, right yourself.
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  No, but in all seriousness, there are podcasts that are exclusive to the Curve Classroom.
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  And yeah, it's a good old time.
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  I must say I was doing the Curve Classroom.
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  Hop to it.
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  Now, talk to me.
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  What is happening in the market?
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  Talk to me.
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  Talk to me.
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  Talk to me.
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  Well, I kind of got sick of saying every week.
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  Oh, this week the market's up.
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  Well, things have changed.
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  Have they?
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  Yeah.
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  I shouldn't have said that.
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  The market, so the US market, I finished down last week.
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  The S&P 500, which is the main index, was down about 0.7% and the NASDAQ, which has
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  got more of the tech companies, was down 1.3.
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  But why?
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  But why?
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  But tell me why?
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  Well, this is because we've got this earning season going on.
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  Companies reporting their results.
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  And there was a lot of tech results that came out the previous weeks when I last
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  a group before and did really well.
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  And now that's kind of, I guess, the shine has been taken off those names.
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  But what do you mean?
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  So basically, it went up because they got good results.
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  Yeah.
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  And now it's kind of leveled out again.
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  Yeah, kind of the euphoria kind of fades, I guess.
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  People get really up to most second and they're like, oh, actually, is this actually a
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  really good result?
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  And they're like, oh, New Zealand's getting absolutely flooded and all the stuff's
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  happening in the world.
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  Well, I don't think New Zealand really impacts the US stock market.
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  No.
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  Okay.
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  But yes.
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  I'm sure a month of these that I would start to be sounding a little bit more intelligent.
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  But no, the New Zealand market was actually up last week.
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  Where?
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  I know.
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  So they don't all move in unison.
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  But the biggest, underperformer, the biggest, or the biggest weakest market, that's
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  what I think.
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  The worst market.
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  Yeah, the worst market, yeah.
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  Thank you.
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  English, not my strong point, was the Australian market, which was down 1.6% for the week,
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  which is so down worse than the NASDAQ, which is quite surprising.
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  And this was all around interest rates.
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  So they had their interest rate announcement where the Reserve Bank of Australia, which
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  is the big...
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  Hontro banks.
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  Big Hontro bank.
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  King Hontro.
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  Oh, well, you are struggling today.
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  Yeah.
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  Sorry, yeah.
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  Sort of out, man.
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  Yeah.
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  They have increased interest rates by 0.25% to 3.35%.
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  Ooh.
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  Is this what you spoke about recently when you said Australia hasn't hyped the interest
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  rate as much as we have?
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  So their inflation is actually worse.
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  Yes.
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  So it's been trying to curve it.
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  Well, we had the worst inflation relative to Australia, the highest.
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  And so we had to really ramp up our interest rates to control it.
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  And Australia didn't really have to, because their inflation wasn't as bad, whereas now
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  they...
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  So they're increasing interest rates, but not at a greater rate as we are.
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  So our official cash rate is at 4.25, and Australia is still at 3.35.
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  And the official cash rate is the level of inflation?
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  No, that's the interest rate.
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  So what's the...
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  What's the cash rate then?
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  That's that.
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  That's that.
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  So that's the interest rate for the country effectively, and then the banks will add on
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  a couple of percent.
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  I'll talk about that.
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  Are they interest rates?
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  Yeah.
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  Their official cash rate on the OCR.
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  And so that's when the reserve bank sets that rate, and then all the banks kind of follow.
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  So you'll see when that increases, mortgage rates tend to increase pretty rapidly up
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  now.
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  So Australia and stock market do well if they were increasing interest rates.
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  It didn't.
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  Oh.
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  I see it was down one point.
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  Someone else's in bed.
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  It was sleep.
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  Bit of sleep this morning.
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  Oh, sorry.
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  I thought you said Australia had done...
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  The worst.
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  Oh, okay.
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  I have to admit it.
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  Sorry.
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  I thought you listened to what I say about that.
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  Yes, no.
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  The Australian market was the worst out of...
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  Got it.
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  And it's because of the OCR increase rate.
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  Yes.
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  Yeah.
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  Because that effectively takes the wind out of the sales, really.
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  Got it.
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  So interest rates haven't been this high in Australia since 2012.
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  And the highest level of eva head was in 1990, where the...
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  The level wasn't even born.
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  I was.
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  But the official cash rate was at 17 and a half percent.
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  Oh, that's terrible.
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  So remember I told you this is 3.35 and imagine being 17.5.
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  And then you have the banks adding a couple of percent on top of that.
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  Well, sorry.
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  Well, 17?
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  The official cash rate.
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  So their interest rates were like unbelievable.
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  Unbelievable.
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  Unbelievable.
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  Was the world ending at that point?
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  Why was it so bad?
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  Was it the...
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  No, but then property prices and stuff aren't as expensive.
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  So you don't need those big mortgages.
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  So all that kind of stuff comes into play.
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  But it just goes to show like we were like,
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  Whoa, you've increased from...
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  It was 0.25% this time last year.
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  And it's now 3.35%.
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  And it's been 17 before, so that's all come down.
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  Yeah, exactly.
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  But we're still...
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  We haven't really experienced interest rates this high,
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  because they've been low for so long.
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  So we're like, oh, 3.35%.
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  Shit, shit.
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  So it's more just to remember that this stuff happens constantly.
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  But it was up and down.
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  Yeah, cool.
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  One really interesting result was lift.
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  So lift shares last week, they found more than 30%.
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  Now, lifts had a pretty tough time.
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  So lift is the Uber one of them?
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  Yeah, yeah.
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  Should I say that?
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  Another Uber type business.
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  Yes, a ride sharing business.
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  Do you use it?
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  No.
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  Yeah, yeah, yeah.
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  So there's shares have been down 7% year to date,
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  which means, you know, in the first kind of six weeks of this year,
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  whereas Uber's are up 35%, so there's quite a stark difference.
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  And the issue price fell significantly
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  because they've had to lower their prices due to competition.
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  So they're kind of calling out, hey, look,
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  Uber's eating our breakfast.
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  Like, we need to lower prices to gain markets here.
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  So they're kind of saying, you know, we're not
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  in a very strong position, yeah, exactly.
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  And the great thing with Uber is that they've really diversified.
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  So they've kind of hit the nail on the head with it.
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  They've now got food delivery, parcel delivery.
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  It's going to say, because the other day,
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  I felt my laptop charger at work.
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  And that was like, we're just sendin' Uber.
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  And I was like, I can't afford an Uber Victoria to go home and back again.
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  She was like, no, just send it in a parcel.
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  Yeah.
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  You can go pick something up from your house.
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  That's amazing.
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  Quite amazing, yeah.
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  So, but it just shows the different dynamic of like,
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  your company's moving in different ways.
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  And then another key bit of news was around Disney.
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  Now, I've known spoken about this before,
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  but there's a lot going on with Disney at the moment.
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  They had their result out last week.
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  And this is the first result.
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  Remember, the CEO came back.
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  Yes, yes.
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  So this is his first result.
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  Oh, I'm kind of excited for this.
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  And the stock was at 8% after the result.
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  So the market was like, woohoo.
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  Is this name robbed?
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  An original.
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  Oh, boss.
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  Got two out of three letters, right?
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  Bob Iger, yes.
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  And there was kind of three things from the result
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  which I wanted to call out.
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  And firstly was that they reinstated the dividend.
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  So that means they cut the dividend during COVID
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  because theme parks weren't open.
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  They're struggling to get people in the door.
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  And dividends for anyone that doesn't know just a quick one.
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  It's basically when the company pays out
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  a certain amount of their earnings
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  to the people that are invested in that stock.
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  Exactly.
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  So when you're reinstating that, you're giving an indication
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  to investors that you're really confident about the future.
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  Because we've got enough cash.
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  We can pay it out to investors.
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  So reinstating the dividend, big green flag,
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  if you ever see that in a result or in a news article.
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  The second part is that Disney Plus lost about 2.4 million
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  subscribers in the last three months of the year.
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  Yeah.
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  So this is the first decline since late 2019.
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  But it still has more subscribers in Netflix.
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  Does it?
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  Yeah.
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  So it's got 234 million subscribers versus Netflix at 230.
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  But it also owns Hulu and a few others.
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  But the Disney Plus family has got 234 million subscribers.
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  Well, you know what?
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  I was trying to find a movie the other day on Netflix.
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  And the person I was hanging out was like,
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  oh, there's not a lot going on Netflix anymore is there.
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  And I thought, invest a hat.
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  Invest a hat.
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  Do I need to sell my Netflix shares?
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  Yeah.
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  And the other reason it did really well
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  was that Disney cuts 7,000 jobs.
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  So about 3.2% of its workforce.
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  This is part of its strategy to reduce costs
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  by about $6 billion.
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  So less costs.
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  And if you're revenue is growing,
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  that just means more profits.
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  So investors liked that.
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  And that's why the stock was up.
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  So the stock was up 8% after the result.
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  So Disney.
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  Yes.
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  And that is the curve weekly for you this week.
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  I'm so impressed and I just keep that to 10 minutes, by the way.
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  Because honestly, we have struggled to shut up recently.
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  I mean, I've got plenty more I can talk about if you want
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  to keep listening.
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  Is there any fun things?
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  Any other real interesting stuff?
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  Any of my apps is always fun, so key.
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  OK, yeah, well, there is actually one more thing.
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  Oh, what?
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  Another little learning lesson.
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  So remember, when you buy shares in a company,
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  you become a part owner of that company.
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  And so with Disney, there was a really large shareholder,
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  the large chunk of shares.
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  And because he had such a large chunk of shares,
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  he actually asked for a board seat on the board.
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  So when you own enough shares, you
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  have a lot of voting rights as well with that.
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  So you can say, hey, I want to set on the board
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  because I want to bring a good change.
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  Hold on, how much would you have to have enough company
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  to even be there?
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  So he had about $1 billion.
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  So yeah, you've got to be pretty big time to have
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  a board seat on a big company.
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  But the person who it is is Nelson Peltz.
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  And his daughter is Nicola Peltz, who's married to Brick
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  on Beckham, just to bring it back to someone.
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  This feels like a gossip magazine or something.
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  So he, a few months ago, board a whole lot of stock,
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  tried to get a board seat.
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  And it's been nearly one month of fighting to the board
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  seat because a lot of companies don't like it.
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  Because you've got an outsider coming in being like,
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  telling you what to do.
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  I wouldn't want that with the camera.
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  And so it's exactly.
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  And so it can be a bit of a, you know,
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  a lot of heat-butting and kind of not so much.
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  Not so much.
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  And so he has actually now withdrawn his bid for a board seat.
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  But he still owns the stock.
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  So we'll see what's going to happen, play out there.
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  But if he was trying so hard, so I think the result came out
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  and he was like, oh, you know what?
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  They're actually doing, you know, they're doing OK
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  or they've done what I expected.
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  So therefore, I don't need a board seat.
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  You could fight for a board seat.
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  And then once you get on there, you've got pretty
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  disgruntled people trying to work together.
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  It can be actually really counter-intuitive.
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  So there's lots of reasons.
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  But he has actually withdrawn his bid for a seat on the board.
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  So Bob has done a good job.
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  He's basically happy with Bob.
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  Yes.
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  Well, TBC.
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  But it seems like, yeah, things are heading
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  in the right direction.
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  Cool, that was a fun little update.
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  He loves that.
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  If anyone would like to make sure they do not miss out
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  on the curved classroom, which is
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  adding on the first of March, you know,
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  head to either out Instagram bio
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  or the show notes of this podcast.
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  Hopefully.
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  So you're there.
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  Yeah, hopefully see you there.
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  Do you know what, Vic?
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  Do you know what I'm most excited about?
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  The lives, getting everyone together
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  and having big kind of like investing club meetings.
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  Yeah, it's always fun.
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  Yeah, just to see everyone chat makes a new friends.
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  I'm excited about that one.
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  So I've need two friends here.
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  Oh, what a fucking bitch.
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  Anyway, have a great week.
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  Stay safe, stay dry.
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  If you are in to make me a little bit of a cyclone going on.
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  Yeah, hopefully you've escaped a few.
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  We've been getting very wet, haven't we, Vic?
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  Yes.
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  OK, bye everyone.
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  Bye.
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