Latest / The Curve / TCW17: Is AI taking over the world, the NASDAQ comeback and a new IPO!

Transcript

TCW17: Is AI taking over the world, the NASDAQ comeback and a new IPO! · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us class at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can afford it. Help me, I'm poor.
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  Hi. How are you feeling? Oh, you're absolutely exhausted.
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  So can I head the most amazing weekend? We spent two and a half days wearing
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  rods. Yeah, oh gosh, it was so nice. So I've poured me a bath on Friday night. I was like,
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  Oh, I've been married couple. Oh, no, but you don't, you went on the most amazing retreat
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  in just south of Cambridge in New Zealand. Resolution retreat? Yeah, and it was an all-female
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  kind of revitalization relapse. Just having my food cooked for me was such a dream. Yeah.
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  And just having just nothing to do, you're on retreat time. It was like, do I want to go
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  do the fitness class? No, do I want to go to a spa? Yes, that honestly. It's just like so beautiful.
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  And Aaron, a half in the song just reading my book? Yes. I must say I felt like a different woman
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  coming out of that class. I could do that every weekend actually. Really enthused about, I'm going
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  to be healthy. I'm going to make my own come butchering, sauerkraut and cook my own meals,
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  and last night I got really excited. I made my dinner, firstly, which was healthy, great,
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  portion size control, etc, which we'd learned at the retreat. And then I, you had chocolate? No,
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  I did it, but I heard that you did it. I fell off a bandwagon like three hours after I got home,
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  I was like, damn it! There was the whole thing they were doing was no sugar. And it was crazy. We started
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  watching that sugar film. And like the amount, it was like 40 teaspoons of sugar in a normal
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  person's diet without even realizing they're eating sugary shit. And I was like, God.
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  But also every night after dinner, man, so for like, where's dessert? We're like, where's the chocolate?
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  Like honestly, like, addicts. It was like, it was a sugar addict. I was like, oh my gosh,
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  and then the lady turned around and put something on the table and I was like, and I thought it was
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  chocolate. It was still the point we were going to get in the car and drive and go and find chocolate.
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  So bad. It made me think I need to change that habit really, really bad. Like at one point
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  with so hungry, she looked at me and she goes, I've got half a bag of cheeselps in the front of my
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  top box. And I was like, we can't do that! Also, oh, they've been there for so long. Lovely.
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  Anyway, so we're feeling revitalised in a cheedeck, ready to start the week. Yes.
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  I love it. How are we like, so yoyo? What do you mean? Well, like sometimes we come in here and we're
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  like, God, massive weekend, so exhausted. And then do the complete opposite. It's like we need to
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  find a happy medium. Yeah, the balance thing. I'm real bad at finding the happy medium. Am I the
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  full touch? Or I'm doing absolutely. We were speaking to Joe, the lady who runs the retreat
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  afterwards, just so for now, and we were like, so what's really good food if you're hungover?
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  And what can you do? What's a really good alcoholic drink that you can drink? And she was looking
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  at us like, you guys are alcoholics. It's like, gosh, it makes us sound like we party a lot,
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  but no, it's more hungover eating that is. I reckon we we party occasionally. Well,
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  do you party more than me? But when we go, we go for it. And then we have like months of sabbaticals
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  off the alcohol. Extremities. Yeah. Extremities. We're a couple of extremities. Gosh.
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  Must find a happy medium. Oh, God. Okay. What is happening? I need to get a jingle that goes like
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  after our random chat about our lives and to what's happening in the market. In fact,
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  I'm going to do that today. That's a great idea. Yeah. That's great. That's your cue to,
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  yeah, yeah, I'll do some kind of jingle. You know, like the sushi one. That's saying,
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  same pierce. It's a kind of love, last week. Every time I hear it, I'm like, oh my god,
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  it's such a start singing before I speak. God, people will tune out. Yes, but this week,
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  well, sorry, last week in the US stock market, we had a really, really good week. And it's all
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  around reporting seasons. So this is the time of year and you think that this come around four times
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  a year. In the US, we companies, public companies report their financial results to investors.
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  But usually it starts with the banks and then Netflix is usually you're one of the first off of
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  the rank and then we're moving to kind of the tech companies. And last week was really, really
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  big for all the tech companies we had Alphabet, which is Google, Amazon, Meta, which is Facebook,
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  Microsoft, Apple. So we all, all those companies reported their results. And that's why the NASDAQ
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  was up 2% because that's the tech focused index. But the key thing that they all spoke about was
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  their investments in AI, artificial intelligence. Oh, this is freaking out. So I think it's
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  going to be in the headlines and you know, it's going to be a lot of chat about it for a long time.
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  And I think it's going to be the new, you know, I feel like we were talking about Bitcoin,
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  the digital currencies and how they're going to change the world. And now we've jumped to AI and
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  chat GPT and how that's going to change the world. And so yeah, it's, it's quite an interesting
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  space, but there's all these big tech companies are investing quite heavily into artificial intelligence.
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  I've been thinking about this AI stuff a lot over the last few weeks because a lot of people have
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  said to me, oh, using chat GP to, you know, write your social captions. Sorry, whatever. Are you
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  using it for this and that? It's crazy that it can do basically everything. And I'm just wondering
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  why the fuck is it being invented when so many of us are not going to have jobs? You know, like that,
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  that's technology and that's advancement. And we, we grow in a depth. A few of us might
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  be put out of jobs, but there will be regulation and rules in place about what you can do. You know,
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  there's, there's, we always get freaked out about these things. Oh my god, they're going to change
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  the world like the internet. But then how many jobs is that creative? Do you know what I mean? People
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  get freaked out about change. And so classic for that. Yeah. Oh, I just fell off my shirt,
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  which means the whole shirt's going to be open this entire. Just do the next one. I just still feel
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  really, well, now I look like I'm going to a business. I feel like I appreciate the optimism
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  in terms of different perspectives because I honestly have been really freaking out about this
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  quite a long time. I'm just like, why would they create stuff that it's going to wipe out
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  the majority of the jobs for people? But then, yeah, that's quite a nice balanced view to think
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  about. And I will come out of it. And all these companies, you know, Google, Amazon, Facebook,
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  they think, well, how they've changed the landscape of technology, how we use technology
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  over the last kind of 10 years. You know, like it's crazy, but they've, I reckon they've improved
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  productivity, which means improved output for a lot of people, a lot of countries. You know,
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  like there's people always get scared of change and like the uncertainty that it's bringing
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  and what that means for their jobs. But I would flip it on the other side and say,
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  a lot, all these companies have bought about so much
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  positiveness to the world. Positiveness doesn't sound like it was. Positiveity.
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  Positiveity. Yes. And productivity and jobs and all of that that I think, I don't know,
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  I'm not getting scared yet. I'm excited. Okay. And can we invest in AI as a club? You know,
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  is there like ETFs that AI for this? Yes, there definitely is. I don't know the name of the names
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  off the top of my head. We do a bit of research after this, because I think that would
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  I'd love to look into a few years. Yeah. I don't mean Microsoft. Yeah. So Microsoft's partnered
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  with OpenAI, which makes chat GPT. Microsoft was up seven percent last week.
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  Oh, we've got someone's research going, I bet that's happy this week. I'm saying, I am.
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  So they're pouring billions and billions of dollars into that investment. So that's one way
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  to get. I'm so impressed. Microsoft is so forward-thinking because I really think of
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  Microsoft as the PC, those giant computers back in school, the big chunky square things.
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  I don't think of it as this progressive forward-thinking company, but the fact that
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  for however long they've been investing in AI as kind of like the sleeping giant,
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  that's just kind of maybe not a giant, but you know, they're like the sleeping creeper that's
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  slowly creeping in the background and then they're like, oh, that's actually owned by Microsoft,
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  oh, they've been to that, they've discovered that, which I quite like. They're like the
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  more modest version of Apple. Yeah, they're not like loud and proud, and we've
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  invented this, and we have done this, yeah, that's why I like them. But we also had, yeah,
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  so we had the Microsoft result, which was really good, Amazon result was really good as well.
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  Meta, so they've had a pretty tough time since they changed their name, 18 years ago. Yeah,
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  they've had a really tough time. You reckon it was the name change? No, there was the big
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  investment in the Metaverse that they were stating that they were going to do, and people got
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  concerned because they were even you wasn't growing and they're making this huge investment,
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  but now they've turned that around, did you know they have three billion daily users
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  on their family of products? So what's that? Instagram, Facebook, three billion people are
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  day, use their product. Like, that is wild. Hold on, so they, so they did start to plummet,
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  and this was around the time that they changed to Meta, and they started focusing on the Metaverse,
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  and advertisers were pulling back on spending, and now that, so they had three quarters of declining
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  revenue growth, and then this latest result, they announced back to revenue growth, and so
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  there she is, you probably wouldn't know this, are up 140% since November.
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  So this is why I knew it. I knew when it was down, I should have put more money in Facebook.
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  That's why people were like, oh God, I've missed the boat, or like, oh, I've missed the opportunity,
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  it's like, things can change pretty quickly. I reckon this is going to have more Tesla.
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  I have a feeling like, you know, everyone's like, oh, poor Tesla, but I reckon it's going to
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  make you come back to it. It's usually when things fall the hardest, they rebound the fastest as well.
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  Not everything, I'm not saying that everything that's falling you should buy, absolutely not.
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  Please don't put me in jail. But I'm just saying that these stocks are the volatile ones,
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  so when they fall hard, they usually rebound hard as well. That makes sense.
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  Yeah, it's almost like they're the almost like the fuck boy of the stock world,
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  you know, like they'll be like almost like the narcissism, like love bombing at the start,
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  and then sometimes they just go june disappear, so it's like all or nothing.
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  Yeah, all or nothing. They're the ones that are like, in your face,
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  oh, Tesla, Tesla, and then you're like, oh, where did Tesla go?
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  They're like us in our weekends, you know?
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  All or nothing. We're either super, super,
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  grandmars, grandmars, not going out, or we are out in the clubs.
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  God, I must be happy for the people to keep up with us.
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  I know, gosh.
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  Like, well, you need to really know, we could be turning up like,
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  oh, it's fine, I'm going to,
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  you don't know, you're going to get it.
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  Oh, we get party back, we'll sleep back.
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  Oh, that's really exciting that the Nasdaqs are up and that all these things are happening.
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  Yeah, because it was also quite concerning,
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  heading into this reporting season, people were like, oh, gosh,
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  we know the banks are having a tough time,
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  but these tech companies have operations in so many different countries around the world.
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  They're a really good indicator of how the world is tracking from an economic standpoint.
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  You know, is it growing? Is it not?
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  And so for all five of these companies to come up with really good results is super, super important.
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  You know, there's lots of commentary now around maybe the recession's going to be not as bad,
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  maybe there's not going to be a recession, you know, things are looking a lot more positive.
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  Very good. Sorry, it is good. I'm not, I am paying attention, it's just that I don't want my
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  shirt to be done. I can't pay attention because your tits are remembered.
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  Yeah, but they're not there, they're too small or shortly, they're not distracting.
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  We also had Spotify, which is a company.
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  We do. Oh, regularly.
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  If you haven't heard raising the curve, it's going to Spotify.
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  And Apple actually.
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  Well, please can you also give us a review?
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  Rachel review will follow us because just as I said, no, apparently that really happens.
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  Sorry, you can get to it. Sorry, I'm a little blown up.
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  So they, the issue price was down for the week, but it jumped straight after the result.
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  Because people are really excited in any kind of fellow way.
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  But they have reached half a billion monthly active users.
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  So that means every month there's 500 million people using the Spotify platform.
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  Well, well, well.
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  Again, wild.
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  That's crazy.
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  It's not only a business, 500 million people are using your product.
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  They're paying users only grew 15% and their non-paying users grew 22%.
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  So that's still amazing growth, but they're paying users not growing as much.
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  But if you've got this pool, it's almost like a moat of users that you can kind of look warmly.
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  Yeah, they're already using your product.
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  They're liking it. They're not paying.
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  But you know, you can, you can play around with, hey, how do we get them to pay?
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  And then we also had some really interesting news from Johnson and Johnson.
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  So they're the big pharmaceutical where they've also got a consumer health division.
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  So they own the brands like Band-Aid, Listerine, all those consumer health names.
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  And then they've also got the pharmaceuticals business which created the vaccine, for example.
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  And they announced, they announced this a while ago, but they actually put pen to paper
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  or actually made it official.
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  Is that they're going to split the businesses?
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  So they're going to effectively spin off their consumer health division.
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  So kind of like divorcing, you know, yeah.
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  Separating.
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  And I guess why would they do that?
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  Well, a lot of companies do do this if they've got two or three or whatever,
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  quite defined divisions.
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  And it's usually because one, they feel like one's undervalued.
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  So when your, when your product company and you're listed on the stock market,
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  you've got one share price, a number of shares which creates the market value.
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  So you've got the shares times the share price equals the value of the business.
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  And some companies and some CEOs and the people on the board think that,
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  if we split these off, one plus one could equal three, and it could actually be a lot.
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  So sorry, I'm just going to say that.
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  So essentially what's happened is they've got their consumer health side,
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  which is the Band-Aids, etc.
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  And then they have the pharmaceutical side.
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  And whatever their share prices say it was $3, they might look at that and think,
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  yeah, that's reflective of our consumer health products, but it's not of our pharmaceuticals.
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  So they're basically separating it off so that that can be fairly evaluated
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  rather than sitting in the shadow of the other company.
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  Exactly.
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  And this is why Spinoffs, which is what we call when you spin off,
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  you're spinning off the consumer health division.
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  When you spin that off, the historically those businesses have done really well
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  because they've got their own management team, they've got their own investors.
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  And like you said, they're not overshadowed by this other part of the business.
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  They've got all the resources they need,
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  dedicated resources, whether it's people, time, money to grow.
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  And so they tend to do really well.
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  And we explain this more in the curve classroom actually around,
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  yes, spin-offs and why they're good.
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  So this business, this new consumer health business from Johnson Johnson,
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  going to be called Kenview.
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  Kenview.
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  Kenview.
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  I don't even know how you say it, but
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  and it's going to be probably the biggest IPO this year.
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  So an IPO meeting, an initial public offering,
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  which is when a company lists shares for the first time.
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  So it's going to be about $43 billion.
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  When is that happening?
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  So they don't, they haven't set a date yet,
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  but it's going to list on the New York Stock Exchange,
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  and it's going to, the IPO price,
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  so they set a range to kind of test demand.
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  And it's going to be between $20 and $23.
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  I'm not going to lie.
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  I don't massively love the idea of that business.
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  Just, I don't know heaps about it,
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  but I just, I wouldn't invest lots of money personally in it.
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  However, I might invest a tiny little bit
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  if I can get access to the IPO just to see what it does.
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  I'm kind of interested.
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  I feel like I've heard so much about IPO's,
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  even if it's $5.
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  And in this current environment,
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  like that, those kind of products,
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  the consumer health products,
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  is what we're going to keep spending money on,
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  no matter what, if we go into recession or not,
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  that's going to be what we're spending our money on.
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  And so, I don't know, it's just something to think about,
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  but it'll be cool to have another company
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  on the Stock Exchange.
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  That's all from me.
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  Okay, thank goodness, because I've got to go to the reta song.
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  No, but I need to use the learner.
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  I need to change my top.
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  Root!
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  You come up with the jingle then.
• 16:50
  Okay, next episode, everyone.
• 16:52
  Vika's going to have written a little,
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  a little jingle.
• 16:56
  A little jingle.
• 16:57
  Okay, we might be skipping the curve weekly for the next few weeks.
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• 17:10
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