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Hot Shares or Hot Mess? Finding Real IPO Opportunities · She's On The Money

• 0:00
  Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yor
• 0:04
  Speaker 1: the Order Kerni Whaltbury and a waddery woman. And before
• 0:08
  Speaker 1: we get started on She's on the Money podcast, I
• 0:11
  Speaker 1: would like to acknowledge the traditional custodians of the land
• 0:14
  Speaker 1: of which this podcast is recorded on a wondery country,
• 0:18
  Speaker 1: acknowledging the elders, the ancestors and the next generation coming
• 0:22
  Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
• 0:27
  Speaker 1: and the storytelling of you to make a difference for
• 0:30
  Speaker 1: today and lasting impact for tomorrow.
• 0:33
  Speaker 2: Let's get into it.
• 0:34
  Speaker 3: She's on the Money, She's on the Money.
• 0:57
  Speaker 4: Hello, and welcome to She's on the Money. The podcast
• 0:59
  Speaker 4: at Demas defies the world of finance. You can make
• 1:02
  Speaker 4: smart money moves, no finance degree or secret decodering requires.
• 1:06
  Speaker 2: I still want a decodering. Yeah, me too.
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  Speaker 4: Actually, I'm beck sired and as always I'm here to
• 1:10
  Speaker 4: ask all the questions you've been too shy to ask
• 1:14
  Speaker 4: or don't actually.
• 1:15
  Speaker 2: Know how to google. I'm not shy to google things.
• 1:17
  Speaker 2: I'm not shy to google things.
• 1:18
  Speaker 4: I'm trying to show you my Google history. Of course,
• 1:21
  Speaker 4: I'm not shy to look it up, though, I'll look
• 1:23
  Speaker 4: it up. But if you got hold of my phone,
• 1:26
  Speaker 4: if something really bad happened to me, beck and you
• 1:28
  Speaker 4: somehow have a hold of my phone, just wipe.
• 1:30
  Speaker 2: It for me. I'm going to look at it.
• 1:33
  Speaker 3: First.
• 1:33
  Speaker 2: You can look, you can look.
• 1:34
  Speaker 4: I trust you to look at and then and then
• 1:36
  Speaker 4: I'll like nobody else can see, say for me, how
• 1:39
  Speaker 4: to spell?
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  Speaker 2: What does this mean?
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  Speaker 3: Like?
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  Speaker 2: I just it's a lot. I've got how spelled me
• 1:44
  Speaker 2: the other day?
• 1:45
  Speaker 4: Yet look, I would too, honestly look it, like, how
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  Speaker 4: do I spell the word that I can't spec?
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  Speaker 2: You know how I do that? I voice? Yeah, that's
• 1:54
  Speaker 2: a good idea. Actually that's voice to text. Thank you.
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  Speaker 2: It's got me.
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  Speaker 4: So today we're diving into the world of IPOs. So,
• 2:00
  Speaker 4: I know IPOs kind of sounds like financial jargon. I
• 2:03
  Speaker 4: actually don't know what it is.
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  Speaker 2: It is actually financial certainly is.
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  Speaker 4: But they're actually something you might come across more than
• 2:08
  Speaker 4: you think, and understanding them can give you a big
• 2:10
  Speaker 4: investing advantage. And also you'll sound more like a finance
• 2:13
  Speaker 4: bro if you start talking about IPOs that brunch. It
• 2:15
  Speaker 4: does sound pretty cool. So lucky for us, we've got
• 2:18
  Speaker 4: Victoria Divine, our financial expert who knows the ins and
• 2:21
  Speaker 4: outs of investing. I do hello, thank you for having
• 2:24
  Speaker 4: me on my own show.
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  Speaker 5: Very grateful to be here, but also grateful you're letting
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  Speaker 5: me talk about IPOs. And I was really glad we're
• 2:31
  Speaker 5: talking about it.
• 2:32
  Speaker 2: You really just my arm with this.
• 2:34
  Speaker 3: Yeah.
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  Speaker 4: You were like what and I was like, Ah, sit down.
• 2:36
  Speaker 4: This is going to be a juicy one, but also
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  Speaker 4: one that makes us feel smarter at the same time
• 2:42
  Speaker 4: as going finance isn't that complicated. I feel like so
• 2:46
  Speaker 4: many of these jargon y terms just make us feel overwhelmed,
• 2:49
  Speaker 4: and then when you break them.
• 2:50
  Speaker 2: Down, you're like, that's not that hard. The finance bros
• 2:53
  Speaker 2: be brown baby browing baby brow in.
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  Speaker 4: So IPOs are actually one of the most common questions
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  Speaker 4: we have been getting recently from our listeners.
• 3:02
  Speaker 2: Yeah. I think it's because lots have been in the media. Yeah,
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  Speaker 2: to be more like, what is that? Why is it
• 3:06
  Speaker 2: in the media? What does that mean?
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  Speaker 4: And everyone wants to know if there are a chance
• 3:10
  Speaker 4: of getting in early on the next big thing, right
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  Speaker 4: or if it's more of a gamble, And honestly, there's
• 3:15
  Speaker 4: a bit of both going on. So today, I'm going
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  Speaker 4: to break down exactly what IPOs really mean, why companies
• 3:22
  Speaker 4: go public, and what investors need to look out for
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  Speaker 4: when those exciting new shares.
• 3:27
  Speaker 2: Hit the market. Okay, okay, I think it's going to
• 3:29
  Speaker 2: be really fun. I mean, you're not sold yet, not yet.
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  Speaker 4: But I actually don't know what it is, and so
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  Speaker 4: that's I think my first question will be what actually
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  Speaker 4: doesn't mean?
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  Speaker 2: Like what is an IPO?
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  Speaker 4: So an IPO means initial public offering, which sounds really boring,
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  Speaker 4: but it's essentially like the company's first time on the
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  Speaker 4: share market. It's when a private business decides, you know what,
• 3:48
  Speaker 4: we're a pretty good business and we would like to
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  Speaker 4: sell shares to the public. And it's often to raise
• 3:53
  Speaker 4: money so that they can grow. But it's not just
• 3:56
  Speaker 4: like a money move. It changes the whole company's structure
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  Speaker 4: and their goals because they have a whole heap of
• 4:01
  Speaker 4: other responsibilities. So like if I said, oh, Beck, I'm
• 4:04
  Speaker 4: going to sell shares in shes on the money. Instead
• 4:07
  Speaker 4: of me just being in control, I now have shareholders
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  Speaker 4: to report to. I'm going to have like a board
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  Speaker 4: who I have to justify my decisions to. It's not
• 4:14
  Speaker 4: a small decision by any stretch for the imagination. But
• 4:17
  Speaker 4: essentially IPO is the first time a company deboos on
• 4:21
  Speaker 4: the share market. And so that's I'm assuming just based
• 4:25
  Speaker 4: off what you've said, it's kind of their decision. So
• 4:27
  Speaker 4: why do some companies decide to IPO? Is that the
• 4:31
  Speaker 4: right my say? You can say that, yeah, Why does
• 4:32
  Speaker 4: some companies decide to list themselves on the share market?
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  Speaker 2: Why to IPO and why to not IPO? To IPO
• 4:40
  Speaker 2: or to not IPO? That is the question, that's the question.
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  Speaker 4: But companies often decide to go, all right, we're going
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  Speaker 4: to list on the share market and have an IPO
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  Speaker 4: to raise really big funds really quickly, especially if they're
• 4:52
  Speaker 4: like expanding or the company carries some debt that they
• 4:55
  Speaker 4: want to pay off.
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  Speaker 2: But there's also, I guess the flip side.
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  Speaker 4: When you go on the share market and when you
• 5:01
  Speaker 4: decide to list publicly, companies lose a little bit of control,
• 5:06
  Speaker 4: which is why some people are really happy to stay private.
• 5:10
  Speaker 4: And it's one of those things where you know, even
• 5:12
  Speaker 4: if my business has got absolutely massive, I like not
• 5:15
  Speaker 4: having other people tell me what to do. I don't
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  Speaker 4: want to have to, you know, talk to shareholders and
• 5:21
  Speaker 4: justify the decisions I make inside my business, so it's
• 5:25
  Speaker 4: not for me, Like going public is a really big shift.
• 5:28
  Speaker 4: It means that the company is now accountable to shareholders
• 5:31
  Speaker 4: and has to produce finance reports and post them publicly,
• 5:35
  Speaker 4: and there's pressure to meet earning expectations, which I guess
• 5:38
  Speaker 4: can then change how they're going to internally run the
• 5:41
  Speaker 4: business as well, Like no longer can you just make decisions?
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  Speaker 1: Right?
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  Speaker 4: Okay, So in my head, I'm thinking a company that
• 5:49
  Speaker 4: maybe like a little small business, maybe they're getting big enough,
• 5:51
  Speaker 4: they need more money, they need expects maybe they even
• 5:54
  Speaker 4: need like publicity to some extent exactly, and then so
• 5:58
  Speaker 4: they decide to go Yeah, and.
• 5:59
  Speaker 2: I think you think She's on the money.
• 6:01
  Speaker 4: As an example of this throughout this episode is going
• 6:04
  Speaker 4: to really help, right, So, like, let's pretend that I'm
• 6:07
  Speaker 4: thinking about listing. I'm not, but let's pretend I'm thinking
• 6:11
  Speaker 4: about listing, And it's because beck I really want She's
• 6:14
  Speaker 4: on the Money to grow even bigger than it is.
• 6:17
  Speaker 4: And I want to create an app, and like I
• 6:19
  Speaker 4: want to She's on the Money app because you know one.
• 6:23
  Speaker 2: And we all know this already.
• 6:24
  Speaker 4: One doesn't exist in the market, but it costs hundreds
• 6:26
  Speaker 4: of thousands of dollars to create an app and keep
• 6:29
  Speaker 4: it updated, like it's not for me being completely transparent,
• 6:33
  Speaker 4: it's not feasible for me to do that on my own.
• 6:35
  Speaker 2: So maybe in order to.
• 6:38
  Speaker 4: Do that and actually create this app that I want
• 6:40
  Speaker 4: to that in the back of my mind, I go,
• 6:42
  Speaker 4: if I create this app that She's on the Money,
• 6:44
  Speaker 4: community will like triple and we'll, you know, gain a
• 6:47
  Speaker 4: whole heap more revenue. I'm going to list, which means
• 6:51
  Speaker 4: I'm going to do what's called an IPO, which is
• 6:53
  Speaker 4: the initial public offering, and that's the first time I'm
• 6:56
  Speaker 4: issuing shares. And everyone wants to get in on a
• 6:58
  Speaker 4: good thing, Like beck I think you love shees on
• 7:00
  Speaker 4: the money, so you might go fire out Brussels sprout,
• 7:03
  Speaker 4: I love what VI's up to you. I love She's
• 7:05
  Speaker 4: on the money. I would love to get in on
• 7:07
  Speaker 4: this because I reckon her shares have been valued expert
• 7:10
  Speaker 4: it's worth more. So you go and buy a few
• 7:13
  Speaker 4: of the She's on the Money shares, and then you go,
• 7:15
  Speaker 4: when she finally does this app that I know she's
• 7:18
  Speaker 4: been talking about, my shares are going to be worth
• 7:20
  Speaker 4: so much more because I believe in the company. And
• 7:22
  Speaker 4: that's often what people want to do when they have
• 7:25
  Speaker 4: an initial public offering. They go, oh, that's the first
• 7:27
  Speaker 4: time that that company is listing, and irrespective of what
• 7:30
  Speaker 4: the company is, you might go, I really believe in
• 7:33
  Speaker 4: what they're doing, and I'm hoping that when they're listing,
• 7:37
  Speaker 4: that's like the first time price and it's not an
• 7:39
  Speaker 4: all time high price like you were assuming that. Often
• 7:42
  Speaker 4: when you get involved in an IPO, you get to
• 7:44
  Speaker 4: purchase first, but it means that you might be getting
• 7:47
  Speaker 4: a really good deal because then the market is ultimately
• 7:51
  Speaker 4: going to start seeing what you're seeing in shees on
• 7:53
  Speaker 4: the Money?
• 7:54
  Speaker 2: Does that make sense? Y?
• 7:55
  Speaker 4: Solutally, you and I know She's on the money and
• 7:57
  Speaker 4: it's a little bit niche like it's a finance podcast.
• 8:00
  Speaker 4: Not many people know about it, so you can see
• 8:01
  Speaker 4: the value. But if I went to Joe Blow down
• 8:03
  Speaker 4: the street and said, hey, would you buy She's on
• 8:05
  Speaker 4: the Money shares, Joe Blow might be like, I don't
• 8:07
  Speaker 4: even know who She's on the Money is, and then
• 8:09
  Speaker 4: you'd be like, oh, it's Victoria to buyne and then
• 8:11
  Speaker 4: they'd be like, I've literally never heard of this person,
• 8:14
  Speaker 4: but you should buy shares.
• 8:15
  Speaker 2: It's got so much potential.
• 8:16
  Speaker 4: He's going to go I don't see the value so
• 8:19
  Speaker 4: often an IPO, and I mean it can go one
• 8:21
  Speaker 4: of two ways. So an IPO often they'll release shares
• 8:25
  Speaker 4: and then over time they increase in value and you've
• 8:28
  Speaker 4: got a good deal when you got in at the start,
• 8:31
  Speaker 4: or there was a whole heap of market hype and
• 8:33
  Speaker 4: you got in at the start and then your share
• 8:35
  Speaker 4: price started to drop. So that's why we're talking about
• 8:39
  Speaker 4: it kind of being a risk at the same time
• 8:40
  Speaker 4: as being a really good opportunity if you know what.
• 8:43
  Speaker 2: You're talking about.
• 8:43
  Speaker 4: Okay, this actually makes a lot of sense. I just
• 8:46
  Speaker 4: I guess I wonder if you're about to go public,
• 8:50
  Speaker 4: or if a company's about to go public and you've
• 8:52
  Speaker 4: kind of had your r on it, where like what
• 8:53
  Speaker 4: do you actually find out? Like where is this information?
• 8:56
  Speaker 4: Can you just like google that company and then you
• 8:59
  Speaker 4: can you can there will often be a lot of
• 9:01
  Speaker 4: like PR releases and media releases. You'll also learn about
• 9:06
  Speaker 4: it from the ASEX. So the ASEX is the Australian
• 9:08
  Speaker 4: Stock Exchange and their website has a whole heap of
• 9:11
  Speaker 4: information like I'm telling you right now, if a company
• 9:14
  Speaker 4: is going to go through an IPO process, they are
• 9:17
  Speaker 4: jumping up and down and trying to let everybody know
• 9:19
  Speaker 4: about it, because everybody wants a good IPO.
• 9:21
  Speaker 1: Right.
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  Speaker 4: It's kind of like a launch party. I see it
• 9:25
  Speaker 4: as a launch party, right, Like I want to have
• 9:27
  Speaker 4: a launch party for my really fancy business. If no
• 9:30
  Speaker 4: one shows up, low key embarrassing, you want to write,
• 9:34
  Speaker 4: h yes, yes, we want a Corey Worthington launch. So
• 9:39
  Speaker 4: we want everyone to want yellow sunglasses. Yeah, And we
• 9:42
  Speaker 4: want everyone to buy because that gives the rest of
• 9:45
  Speaker 4: the market confidence because if they haven't seen our company,
• 9:49
  Speaker 4: they haven't seen shees on the money, they don't know
• 9:51
  Speaker 4: what it's about. And then they see the IPO and
• 9:53
  Speaker 4: it's gone hectic. You'd be like, oh my god, maybe
• 9:56
  Speaker 4: I'm missing out on something. Because at the end of
• 9:59
  Speaker 4: the day, the share market is inherently psychological, right, Like,
• 10:03
  Speaker 4: and you and I as investors, we like seeing other.
• 10:06
  Speaker 2: People get in on a good thing and then go, oh,
• 10:08
  Speaker 2: hold on, what are they doing that looks good?
• 10:11
  Speaker 4: So you want to create that sense of fomo with
• 10:14
  Speaker 4: an IPO, Like they're going to be jumping up and
• 10:17
  Speaker 4: down about it. Yeah, okay, that's good to know. Maybe
• 10:19
  Speaker 4: I'll have a browse because I assume that even if
• 10:21
  Speaker 4: you're not fully looking at one place, I don't know
• 10:23
  Speaker 4: where to start, but I could just kind of have
• 10:25
  Speaker 4: a brows and nan see what's absolutely And like your
• 10:27
  Speaker 4: favorite companies, if they're planning on launching, they will start
• 10:31
  Speaker 4: talking about it and prepping for it because you have
• 10:34
  Speaker 4: to change your entire business structure and like the way
• 10:37
  Speaker 4: you report things and the things that go on in
• 10:40
  Speaker 4: the business. It takes literally like eighteen months to prep
• 10:43
  Speaker 4: a business for launch. So they'll be probably whispers at
• 10:46
  Speaker 4: the start about it, and then once they have a
• 10:48
  Speaker 4: lot of confidence that they have a date and they're ready,
• 10:51
  Speaker 4: they'll talk about it.
• 10:51
  Speaker 2: It's kind of like a book.
• 10:52
  Speaker 4: Launch, Okay, actually sounds like it's actually a bit it's
• 10:56
  Speaker 4: a massive process. Like as I said, it can take,
• 10:58
  Speaker 4: you know, eighteen months just to prep a company to
• 11:01
  Speaker 4: go into their IPO because they're launching. And obviously, if
• 11:05
  Speaker 4: you're going to buy a share in my company, beck
• 11:07
  Speaker 4: you're going to go, well, I want to make sure
• 11:09
  Speaker 4: that you've got everything organized. I'm not going to buy
• 11:11
  Speaker 4: a share in your company if you're running a circus.
• 11:14
  Speaker 4: Behind the scenes, there's obviously the financial prep, there's going
• 11:18
  Speaker 4: to be audits, and then there's a really big I
• 11:20
  Speaker 4: get excited about this document. It's called a prospectus. You
• 11:23
  Speaker 4: probably don't care about it.
• 11:25
  Speaker 2: Prospectus.
• 11:26
  Speaker 4: It sounds bougie, right, but it's essentially a really big
• 11:29
  Speaker 4: document that outlines everything about the company. It has all
• 11:33
  Speaker 4: of the financials, it has all of the risks, all
• 11:35
  Speaker 4: of the goals of the launch, what they want to achieve,
• 11:38
  Speaker 4: what their company structure looks.
• 11:40
  Speaker 2: Like, who works for them.
• 11:42
  Speaker 4: And during this process, you can't just do it on
• 11:44
  Speaker 4: your own right, so they'll often hire underwriters who are
• 11:48
  Speaker 4: going to help set the share price and attract investors,
• 11:51
  Speaker 4: because if you ask me while she's on the money's work,
• 11:53
  Speaker 4: I'll be like one million dollars, one billion dollars, Like
• 11:57
  Speaker 4: I'm going to tell you.
• 11:58
  Speaker 2: It's worth heaps.
• 11:59
  Speaker 4: But when need to actually hire someone called an underwriter.
• 12:03
  Speaker 4: You might not have heard of the term underwriter, but
• 12:05
  Speaker 4: an underwriter assesses risk. So insurance companies usually have them,
• 12:09
  Speaker 4: and these are the people that if you go through
• 12:12
  Speaker 4: the insurance process and say, oh, the I really want
• 12:14
  Speaker 4: to get income protection, what will happen is your financial
• 12:18
  Speaker 4: advisor will apply to the insurance company, and the underwriters
• 12:22
  Speaker 4: will view your application, assess what type of risk you
• 12:25
  Speaker 4: have and then put a number on that and go, oh, well,
• 12:28
  Speaker 4: you know, Beck loves a vape, so she's probably a
• 12:32
  Speaker 4: little bit more of a risk than the average bear.
• 12:35
  Speaker 4: So we might add a little bit of a loading,
• 12:37
  Speaker 4: which is a little bit more money that you pay
• 12:39
  Speaker 4: per month to cover yourself.
• 12:41
  Speaker 2: So what happens in the space of shares is.
• 12:45
  Speaker 4: An underwriter will look at it, review the company and
• 12:48
  Speaker 4: give a suggestion as to what the share price should be,
• 12:51
  Speaker 4: like should it be a dollar per share? Should it
• 12:53
  Speaker 4: be five hundred dollars per share. You can't just ask
• 12:56
  Speaker 4: the company, oh, how much money did you want to
• 12:58
  Speaker 4: sell shares for? Like that's not how works. It is
• 13:00
  Speaker 4: actually a really long, really extensive process. But when it's
• 13:04
  Speaker 4: done correctly, it can really pay off.
• 13:07
  Speaker 2: Just it cost a lot of money. Oh yeah, absolutely, Like.
• 13:09
  Speaker 4: An order to just doesn't come in and says oh, yeah,
• 13:11
  Speaker 4: i'll do you solid and like we'll just do this
• 13:13
  Speaker 4: for free.
• 13:14
  Speaker 1: Yeah.
• 13:14
  Speaker 4: Like underwriters are very very educated, Like they have to
• 13:18
  Speaker 4: go through so much university and to be really technical
• 13:21
  Speaker 4: They're not just looking at that prospectus document. They're looking at,
• 13:25
  Speaker 4: you know, the market. They're looking at what the economic
• 13:27
  Speaker 4: circumstances are. They're looking at, you know, the demand for
• 13:30
  Speaker 4: the product into the future. They'll do a whole like
• 13:33
  Speaker 4: swat analysis. They'll look at your strengths, your weaknesses, your opportunities,
• 13:37
  Speaker 4: and your threats. They'll look at all your competitors and
• 13:39
  Speaker 4: like try and place you. If that makes sense that
• 13:44
  Speaker 4: it's a lot. I would be too fragile for that process.
• 13:47
  Speaker 4: I love reading the documents, though, Beck it's so I
• 13:50
  Speaker 4: don't know, it's like it's pervy because you get all
• 13:53
  Speaker 4: the information about a company that's previously been private.
• 13:56
  Speaker 2: Like don't you want to Like, I'm so pervy.
• 14:00
  Speaker 4: I want to know what other people are earning and
• 14:02
  Speaker 4: spending and like what debt do they carry?
• 14:05
  Speaker 2: Why did they take on their I need to know.
• 14:07
  Speaker 2: Just a bit of light reading.
• 14:08
  Speaker 4: Yeah, just grab a prospective and a glass of wine,
• 14:11
  Speaker 4: and you got a good Friday night.
• 14:13
  Speaker 2: Because I was like heaven or for you and hell
• 14:15
  Speaker 2: for me.
• 14:15
  Speaker 4: Maybe maybe I'll read it to you, like you can
• 14:18
  Speaker 4: sit on the couch with your little soda water and
• 14:20
  Speaker 4: I'll be like, get this and you'll be like, I
• 14:22
  Speaker 4: don't care.
• 14:23
  Speaker 2: Maybe a bedtime story.
• 14:24
  Speaker 5: Yeah, maybe we can have Netflix on and I'll read
• 14:26
  Speaker 5: it while we watch it.
• 14:27
  Speaker 2: Actually that I'm doing the.
• 14:29
  Speaker 4: Work so that I can then explain it to you
• 14:31
  Speaker 4: and you'll be like I didn't even need to read
• 14:33
  Speaker 4: it because you did.
• 14:33
  Speaker 2: The hard way exactly. I appreciate that. You're welcome. Don't
• 14:36
  Speaker 2: say I don't do anything for you.
• 14:38
  Speaker 4: So just in case someone's listening to this and they're like,
• 14:40
  Speaker 4: this is a fool proof way to make money fast,
• 14:42
  Speaker 4: I'm assuming there's a bit more to it, is that, right?
• 14:45
  Speaker 5: Yeah? As I said before, like it could be a
• 14:47
  Speaker 5: really really good thing, or it could be a flop.
• 14:50
  Speaker 2: Like we've all seen launch parties where it's like, oh,
• 14:53
  Speaker 2: that's nice, they're finally launching, and that's terrible, Like you
• 14:58
  Speaker 2: know what I mean, Like it's like a launch right,
• 15:00
  Speaker 2: And I've said this literally in this episode before, So
• 15:03
  Speaker 2: what could happen is like so much hype, so much marketing,
• 15:07
  Speaker 2: the cover of the book so incredible.
• 15:10
  Speaker 4: And then you get the book and you're like this
• 15:12
  Speaker 4: is terribly written, Like this is.
• 15:14
  Speaker 2: Just not for me. Like finally the launch party happens,
• 15:17
  Speaker 2: you brought the book Beck, you were like this twenty
• 15:19
  Speaker 2: nine dollars book worth it? And you're like, I would
• 15:22
  Speaker 2: not pay ten dollars for this? What have I done?
• 15:24
  Speaker 2: Pictures in here?
• 15:25
  Speaker 5: No, there's no pictures, no drawings, Like what is this?
• 15:28
  Speaker 5: And there's like more than one hundred pages. Ill.
• 15:30
  Speaker 4: No, So just because the company goes public doesn't mean
• 15:34
  Speaker 4: it's gonna like skyrocket like you do your initial launch,
• 15:38
  Speaker 4: which is the IPO. But then you've got to kind
• 15:40
  Speaker 4: of sustain the business. You can't just sell shares for
• 15:43
  Speaker 4: an inflated amount and then expect the market to not
• 15:47
  Speaker 4: see through that if it's a sham, if that makes sense.
• 15:50
  Speaker 4: So in fact, some IPOs flop literally right after they're listed.
• 15:55
  Speaker 4: Like any investment, it carries risk, and we need to
• 15:58
  Speaker 4: be on top of that risk and kind of weigh
• 16:00
  Speaker 4: it up. Right. So, and this goes back to she's
• 16:02
  Speaker 4: on the money, and it's not because I think the
• 16:04
  Speaker 4: business is good. It's just a good example. You know,
• 16:06
  Speaker 4: she's on the money so deeply, right, So, like you know.
• 16:09
  Speaker 2: The team, you know how it works.
• 16:11
  Speaker 4: You have this prime position, like you're kind of in
• 16:14
  Speaker 4: the like the director's box of being like I actually
• 16:17
  Speaker 4: know their ethics. I actually know who works for them,
• 16:21
  Speaker 4: how they even edit their podcasts. I know, you know
• 16:24
  Speaker 4: in the pipeline, like you know what's gone on in
• 16:26
  Speaker 4: twenty twenty five and probably twenty twenty.
• 16:28
  Speaker 2: Six, Like you've seen a bitstess plan.
• 16:29
  Speaker 4: Yeah, so you're like, no, that's pretty solid, Like I'm
• 16:32
  Speaker 4: pretty bought into this, Like I know that's pretty good.
• 16:34
  Speaker 4: But not everyone has that director's seat right, And sometimes
• 16:38
  Speaker 4: companies can put out this shiny version and you might
• 16:41
  Speaker 4: feel like you've had a director's seat, but it was
• 16:43
  Speaker 4: a really curated version. Another example is kind of like
• 16:47
  Speaker 4: brand new restaurant opening night, so excited it's just opened
• 16:50
  Speaker 4: in your area. Beck Like, let's imagine pizza shop down
• 16:53
  Speaker 4: from your house. You haven't had a restaurant there ever,
• 16:56
  Speaker 4: and you're just so stoked that a restaurant is opening
• 16:58
  Speaker 4: your house, have cheap wine. You're just like, oh my god,
• 17:02
  Speaker 4: this is going to be the perfect date location for
• 17:05
  Speaker 4: Jess and I.
• 17:06
  Speaker 2: I love it.
• 17:06
  Speaker 4: There's long waitlists, so you're like, oh, this is popular.
• 17:09
  Speaker 2: Good sign love seeing a buzzing environment.
• 17:12
  Speaker 4: You're so excited, but you're not really sure yet, Like
• 17:16
  Speaker 4: what if you don't like the menu? Some opening nights,
• 17:19
  Speaker 4: there's everyone lighting up around the corner, and then the
• 17:22
  Speaker 4: night after they've given everyone food poisoning. Ah, And then
• 17:26
  Speaker 4: you went and had a really shitty time. The weight
• 17:28
  Speaker 4: stuff were really rude. You know, you were paying forty
• 17:31
  Speaker 4: eight bucks for a margarita pizza. You're like, oh, actually
• 17:35
  Speaker 4: this was all really good. When I saw them building
• 17:37
  Speaker 4: the locations, when they started marketing, I thought this is
• 17:41
  Speaker 4: going to be lit.
• 17:42
  Speaker 2: I went, I never want to go back there again. Yeah,
• 17:44
  Speaker 2: I had a crap time.
• 17:46
  Speaker 4: I'd actually prefer to just order Dominoes online and just
• 17:48
  Speaker 4: sit at home, do you know what I mean? Like
• 17:50
  Speaker 4: that is what could happen. So like some are an
• 17:53
  Speaker 4: absolute hit and some are a miss. That might mean
• 17:56
  Speaker 4: that the company has to then go back to scratch
• 17:59
  Speaker 4: and kind of go, all right, we need to have
• 18:00
  Speaker 4: a look at our business model, and maybe they like
• 18:02
  Speaker 4: drop the prices of their pizza, fire someome stuff and
• 18:04
  Speaker 4: hire some kind ones and the whole situation changes and
• 18:07
  Speaker 4: maybe then it becomes your local. But they have to
• 18:11
  Speaker 4: prove themselves. You can't just do a fancy IPO and bebougie.
• 18:16
  Speaker 2: Yes, does that make sense?
• 18:17
  Speaker 4: Totally makes sense. I imagine if you are in that situation.
• 18:20
  Speaker 4: It's hard to come back from negatives from exactly and
• 18:24
  Speaker 4: if an IPO happens, like if a company has an
• 18:26
  Speaker 4: IPO and it flops, deck media love that, yeah, like
• 18:30
  Speaker 4: they want to talk about that.
• 18:31
  Speaker 2: They want to be like, oh my god, did you.
• 18:32
  Speaker 5: See Victoria's company iPod It launched it like sixty bucks
• 18:36
  Speaker 5: a share and the next day it was ten dollars
• 18:39
  Speaker 5: a share, Like they're gonna slam that because the investment
• 18:44
  Speaker 5: news or like the investment news cycle, they love a
• 18:46
  Speaker 5: negative story or they love it. Do you want to
• 18:48
  Speaker 5: be like, oh, yes, Victoria's launch happened and she sold
• 18:51
  Speaker 5: her shares for sixty dollars per share, and look at
• 18:54
  Speaker 5: that overnight they are now it's sixty one dollars.
• 18:56
  Speaker 4: That is solid and consistent ross. We love to see it,
• 18:59
  Speaker 4: no one cares, but if it crashes, you love. Everyone
• 19:03
  Speaker 4: wants to watch juicy, Juicy juicy. We need the juice
• 19:06
  Speaker 4: and I get it. That's why I exist. I love
• 19:09
  Speaker 4: a little bit of drama, but I also need to
• 19:11
  Speaker 4: balance it out with reality. And that's why it's so
• 19:13
  Speaker 4: important to always kind of have your blinkers on when
• 19:16
  Speaker 4: you're making a decision. About investment for yourself, because you
• 19:20
  Speaker 4: need to make a decision that's right for you, not
• 19:22
  Speaker 4: what the market is saying. Really good example of that
• 19:25
  Speaker 4: bitcoin and cryptocurrency. Yeah, so everybody in the market and
• 19:28
  Speaker 4: everyone in the media was talking about how incredible bitcoin
• 19:32
  Speaker 4: was and how incredible crypto was, and it was the
• 19:34
  Speaker 4: next big thing, And people who'd never even invested on
• 19:36
  Speaker 4: the share market were going and purchasing crypto assets because
• 19:39
  Speaker 4: their friends were. They had a little bit of fomo.
• 19:42
  Speaker 4: They thought that everybody else was onto a good thing.
• 19:45
  Speaker 4: But what they were hearing was market noise. Yeah, did
• 19:48
  Speaker 4: that make the actual asset that they were purchasing more valuable? No,
• 19:52
  Speaker 4: The price was actually driven by the demand as opposed
• 19:56
  Speaker 4: to the value of the product. So wanting it more
• 20:01
  Speaker 4: meant if more people are buying it, the share price
• 20:03
  Speaker 4: goes up, and that's really exciting if you can back yourself.
• 20:07
  Speaker 4: But then the share price crashes because people go, hold on,
• 20:10
  Speaker 4: hold on, I paid eighty bucks a share for X.
• 20:13
  Speaker 4: I don't think it's worth it. Oh do you know
• 20:15
  Speaker 4: what I'll do.
• 20:16
  Speaker 2: I don't think it's worth it.
• 20:17
  Speaker 4: So I'm going to sell my share at eighty bucks
• 20:19
  Speaker 4: today because I just want to cut my losses, like
• 20:21
  Speaker 4: I want my money back. And so the market starts
• 20:24
  Speaker 4: to see these shares selling, and your share price starts
• 20:28
  Speaker 4: to drop because there's not as much demand for it.
• 20:31
  Speaker 4: And then you see your share price dropping and you go,
• 20:32
  Speaker 4: oh my god, like I bought in at eighty dollars too,
• 20:35
  Speaker 4: Now it's worth seventy Should I just cut my losses
• 20:37
  Speaker 4: and sell right now? And because you didn't have a
• 20:40
  Speaker 4: commitment to that product, because you didn't have a commitment
• 20:43
  Speaker 4: to that share and fully understand it, you're like, oh,
• 20:45
  Speaker 4: I just want to cut my losses, you know, whereas
• 20:48
  Speaker 4: it might be a really great opportunity, but if a
• 20:50
  Speaker 4: lot of people are selling down, you might want to
• 20:52
  Speaker 4: get on that train too. So we need to put
• 20:53
  Speaker 4: blinkers on and not look at what other people are doing, yeah,
• 20:56
  Speaker 4: and look at what works for you. So I guess
• 21:00
  Speaker 4: this entire model means you need to have your head
• 21:02
  Speaker 4: screwed on properly. You can't just get excited because it's
• 21:05
  Speaker 4: an IPO and it's super shiny, and they're obviously going.
• 21:07
  Speaker 2: To get a whole heap of market press.
• 21:09
  Speaker 4: They're obviously like the Today Show wants to interview them like,
• 21:12
  Speaker 4: you know, it might be a skincare company and they've
• 21:14
  Speaker 4: just done this incredible you know, skincare range and they're
• 21:17
  Speaker 4: finally taking it public. That's good news story. So you
• 21:20
  Speaker 4: see it and you get in on the hype. But
• 21:22
  Speaker 4: I guess you need to understand that the hype is
• 21:25
  Speaker 4: just hype and you need to analyze it yourself to
• 21:28
  Speaker 4: make sure it's a good decision so that it doesn't
• 21:30
  Speaker 4: end up being a bad money loss. You know, yes,
• 21:34
  Speaker 4: So after the break, we're going to go to a
• 21:35
  Speaker 4: quick breakback because I've been talking about IPOs and I
• 21:38
  Speaker 4: need to come down a little bit. I'm going to
• 21:40
  Speaker 4: give you the inside scoop on spotting the real opportunities
• 21:43
  Speaker 4: and what's just smoking mirrors because I've told you to
• 21:45
  Speaker 4: look out for it, but how how do I see?
• 21:49
  Speaker 2: How do I see? So stick around you don't want
• 21:51
  Speaker 2: to miss this. Welcome back everyone.
• 21:57
  Speaker 4: Before the break, you promise us all the hot tips
• 21:59
  Speaker 4: for investing in IPOs.
• 22:00
  Speaker 2: So where should we start? Do you get it now? Though?
• 22:03
  Speaker 4: Like before we go, like IPOs, do they feel as
• 22:06
  Speaker 4: overwhelming as they did at the start of the episode,
• 22:08
  Speaker 4: because you're like, I don't know what an IPO and
• 22:10
  Speaker 4: I'm like, I am glad you are here.
• 22:11
  Speaker 2: Then yeah, totally.
• 22:12
  Speaker 4: And I just like when you see the abbreviation of anything,
• 22:15
  Speaker 4: it's like that is scary.
• 22:17
  Speaker 2: I don't want to know. Yeah, but it really is
• 22:19
  Speaker 2: making sense.
• 22:20
  Speaker 4: But also like it's just the first time a share
• 22:23
  Speaker 4: is available on the market. Yeah, and I think a
• 22:25
  Speaker 4: lot of people again the finance bros be browing. Investing
• 22:29
  Speaker 4: in IPOs is my passion. Okay, suit down, bru. They
• 22:32
  Speaker 4: got me, good, they got you. But like, also that's
• 22:35
  Speaker 4: why we don't like finance bros.
• 22:37
  Speaker 2: That's true. So let's go back to basics.
• 22:39
  Speaker 4: I want you to understand the business model. If it
• 22:42
  Speaker 4: comes to you know, understanding I guess whether you should
• 22:46
  Speaker 4: invest in a company's IPO or not. We really want
• 22:48
  Speaker 4: to just like strip it back and have a look
• 22:50
  Speaker 4: at the business model. How does the company make money,
• 22:54
  Speaker 4: what does it sell?
• 22:55
  Speaker 2: What does the.
• 22:56
  Speaker 4: Company actually do, whether it's in a growth industry or not.
• 23:00
  Speaker 4: I want to understand a solid business model is going
• 23:03
  Speaker 4: to have long term potential as opposed to something clearly
• 23:06
  Speaker 4: short term. And to me, that's essential before considering an
• 23:09
  Speaker 4: IPO investment. Why beck, Because I am not the type
• 23:13
  Speaker 4: of person who buys like penny stocks. I'm not the
• 23:16
  Speaker 4: type of person who is in it to get rich quick.
• 23:19
  Speaker 4: That is not my game. I'm a long term investor.
• 23:22
  Speaker 4: So if you've got a short term business model, how's
• 23:25
  Speaker 4: that going to fit into your long term portfolio? Like,
• 23:27
  Speaker 4: how are you going to hold that for ten plus years?
• 23:30
  Speaker 4: Like if you wouldn't hold a share for more than
• 23:33
  Speaker 4: ten years, Beck, you should not hold it for ten minutes. Well,
• 23:37
  Speaker 4: but like you shouldn't. You shouldn't because why are we
• 23:40
  Speaker 4: buying it? Because if you're buying it for a short
• 23:42
  Speaker 4: period of time, you are probably just buying it because
• 23:45
  Speaker 4: of market hype. You're probably buying it because you see
• 23:48
  Speaker 4: a little opportunity to get rich quick. That's not who
• 23:50
  Speaker 4: we are, that's not what we do. We are long
• 23:52
  Speaker 4: term investors because that is the safest way to invest.
• 23:56
  Speaker 4: And we know and I'm probably getting a little bit
• 23:58
  Speaker 4: off track here, but we know that if if you
• 24:00
  Speaker 4: took any thirty year period in the Australian stock market history, Beck,
• 24:05
  Speaker 4: and anyone who has invested for that period has not
• 24:09
  Speaker 4: lost money. Well invested for a shorter period like ten years. Yeah,
• 24:13
  Speaker 4: the markets go up and down, like you can sell
• 24:15
  Speaker 4: out and lose some money. But if you stretch it
• 24:18
  Speaker 4: out and go to thirty years, nobody in the Australian
• 24:22
  Speaker 4: share market has lost money over a thirty year period.
• 24:25
  Speaker 2: Woll But isn't that really cool to think? Okay? Cool?
• 24:27
  Speaker 4: If I zoom out and we always say went intown,
• 24:29
  Speaker 4: zoom ount, but zoom out and look at the bigger
• 24:31
  Speaker 4: picture and IPO is shiny. It's really exciting. I love it,
• 24:35
  Speaker 4: and I get so in aviod like I am going
• 24:37
  Speaker 4: to read that prospectus. I get it, but like I'm
• 24:39
  Speaker 4: reading it because I think and I'm hoping that I'll
• 24:42
  Speaker 4: get into a good thing at the start and be
• 24:45
  Speaker 4: able to ride the wave for a ten year plus
• 24:48
  Speaker 4: period of time. I'm not trying to ride the wave
• 24:50
  Speaker 4: for five minutes because it launched and then I'm going
• 24:52
  Speaker 4: to sell my shares.
• 24:54
  Speaker 2: That's not who I am.
• 24:56
  Speaker 4: Back to the prospectus, though, I can't talk about this enough.
• 25:00
  Speaker 4: It's going to sound really unsexy, and I don't think
• 25:02
  Speaker 4: I sold you on it before I told you could
• 25:03
  Speaker 4: watch Netflix. But it's really important if you're actually going
• 25:06
  Speaker 4: to make the investment to read the prospectus. Okay, that document.
• 25:11
  Speaker 4: It's going to reveal, usually in quite simple terms, financials,
• 25:15
  Speaker 4: the business risk, what their future plans are going to
• 25:18
  Speaker 4: look like. What I would be doing is spending some
• 25:21
  Speaker 4: time here to understand exactly why you're buying into it
• 25:24
  Speaker 4: and questioning yourself the entire time being, like, am I
• 25:27
  Speaker 4: just buying into this ipeo because it sounds shiny? Am
• 25:30
  Speaker 4: I buying into it because another podcast talked about it?
• 25:33
  Speaker 4: Am I buying into it because my friend at brunch said,
• 25:36
  Speaker 4: oh my gosh, there's this really cool IPO going on,
• 25:38
  Speaker 4: and I'm interested too. You need to understand exactly what
• 25:41
  Speaker 4: you're buying into and any risks that might actually not
• 25:45
  Speaker 4: be immediately obvious.
• 25:46
  Speaker 2: Okay, we're going to critically think about this, and now
• 25:49
  Speaker 2: I just have a quick question. You were allowed many questions.
• 25:52
  Speaker 2: They do not have to be quick, Thank you. I
• 25:54
  Speaker 2: don't know. I'm so obsessed with the actual logistics of this.
• 25:58
  Speaker 4: But the prospectus is of publicly else Yes, and it's
• 26:01
  Speaker 4: on would you find ax or on the website of
• 26:03
  Speaker 4: the bony both.
• 26:04
  Speaker 5: We're going to spam it everywhere because we want everybody
• 26:07
  Speaker 5: to read our perspectives and think this company is lit.
• 26:09
  Speaker 5: I'm gonna invest, So like the ax is going to
• 26:12
  Speaker 5: list their prospectives, but also the company is going to
• 26:15
  Speaker 5: be like, hey, did you see this?
• 26:17
  Speaker 2: Did you see my respective? They're going to put it
• 26:19
  Speaker 2: on their website.
• 26:20
  Speaker 4: Like this isn't a gate keeping kind of document where
• 26:23
  Speaker 4: they're like, oh, I hope no one reads this. Like
• 26:25
  Speaker 4: they're pushing their best foot forward in this document. It's
• 26:27
  Speaker 4: kind of like it's kind of like a pitch. Ye,
• 26:30
  Speaker 4: Like it's not a pitch, but like it's kind of
• 26:32
  Speaker 4: like them saying, hey, here's why we're listing. Because if
• 26:35
  Speaker 4: you're listening for no good reason, why are you doing that?
• 26:37
  Speaker 2: You're not going to make money? And can anyone read
• 26:40
  Speaker 2: this or just have to be translated by.
• 26:41
  Speaker 4: Like no, no, no, no, anyone will be able to
• 26:44
  Speaker 4: read it. I mean you might not fully comprehend the
• 26:48
  Speaker 4: balance sheets in it, and you might be like, oh,
• 26:49
  Speaker 4: I don't really understand what this means. That's why you
• 26:52
  Speaker 4: should have done my investing masterclass, because I would have
• 26:54
  Speaker 4: taught you exactly how to read a business P and
• 26:57
  Speaker 4: L and you know, a cash flow statement and all
• 26:59
  Speaker 4: of that. But that's okay, but you're going to have
• 27:02
  Speaker 4: a look at it and there will be usually summaries
• 27:05
  Speaker 4: of what.
• 27:05
  Speaker 2: Each of those things mean, Like, oh, great, this cash.
• 27:08
  Speaker 4: Flow statement shows that this business has been functioning with
• 27:12
  Speaker 4: positive cash flow for the last four years or whatever
• 27:14
  Speaker 4: it means. So I can going to outline it whether
• 27:18
  Speaker 4: it outlines all of the risks maybe like sometimes, maybe, yes,
• 27:23
  Speaker 4: sometimes or maybe no. That's where you have to put
• 27:25
  Speaker 4: your like critical analysis hat on and go hold on,
• 27:28
  Speaker 4: Like let's zoom out. Let's say it's like a skin
• 27:29
  Speaker 4: care brand. You need to zoom out and be like, oh,
• 27:31
  Speaker 4: is this an oversight traded market? Like how well can
• 27:34
  Speaker 4: a skin care company do in this market? Like what
• 27:37
  Speaker 4: do all my friends and family do? Like you're thinking
• 27:40
  Speaker 4: about it from a lens that you know the company's
• 27:42
  Speaker 4: not going to write about.
• 27:44
  Speaker 2: I see very cheeky, isn't it? Well, cheeky bed Like
• 27:48
  Speaker 2: that's the game. Yeah, that's the name of the game. Okay,
• 27:51
  Speaker 2: So I've read the prospectus and I know what I'm doing. Yep,
• 27:54
  Speaker 2: How do I now know that the price that's been
• 27:58
  Speaker 2: set is a good price?
• 28:00
  Speaker 4: It's a hard question to answer, but picture this right,
• 28:02
  Speaker 4: maybe like you're shopping for a bag beck, So you're
• 28:04
  Speaker 4: like in the market and you're like, a really want
• 28:06
  Speaker 4: a nice backpack, like I want it to fit this
• 28:08
  Speaker 4: and that, right, But then you start looking into it
• 28:10
  Speaker 4: and there's one on TikTok and it's probably the same quality,
• 28:14
  Speaker 4: but every single TikToker that you follow is currently using
• 28:18
  Speaker 4: this bag, and like you start to feel influenced by
• 28:21
  Speaker 4: them and decide, I think I want that one. But
• 28:24
  Speaker 4: it's pricier than the others. And it's pricier than the
• 28:27
  Speaker 4: others because of the hype behind it, right, Like it's
• 28:30
  Speaker 4: been like driven up, not because there's a better quality bag,
• 28:32
  Speaker 4: not because it's actually even better, but like you've seen
• 28:35
  Speaker 4: it everywhere, all your favorite influencers have it, Like the
• 28:37
  Speaker 4: hype is there. IBOs can kind of be the same way,
• 28:41
  Speaker 4: you know how I was talking about the pizza shop,
• 28:42
  Speaker 4: Like everyone's really excited about it, like you're driving up
• 28:45
  Speaker 4: the hype. Then you get there and you're like, wait,
• 28:46
  Speaker 4: this isn't Like now I'm inside the shop, it's not
• 28:49
  Speaker 4: actually that good companies sometimes set a high price because
• 28:54
  Speaker 4: of the buzz that's been generated. Right back to our
• 28:56
  Speaker 4: pizza shop, Like you got inside the shop and the
• 28:59
  Speaker 4: pizzas astronomically expensive.
• 29:01
  Speaker 2: You like, hold up, like the buzz was.
• 29:05
  Speaker 4: There and I had hoped for a different price, but
• 29:08
  Speaker 4: the company that owns the pizza shop was like, oh
• 29:10
  Speaker 4: my god, there are so many people interested in our
• 29:12
  Speaker 4: pizza shop. We can charge more for the pizzas. That's
• 29:15
  Speaker 4: why they said their price really high. You were pissed
• 29:18
  Speaker 4: off about it, but the company saw that as an
• 29:20
  Speaker 4: opportunity because there was so much buzz, and they assumed
• 29:23
  Speaker 4: that because the demand was there, they could absolutely charge more.
• 29:28
  Speaker 4: But that doesn't mean forty eight dollars for a margarita
• 29:30
  Speaker 4: pizza's worth it. Like that doesn't mean that it is
• 29:33
  Speaker 4: worth it to the consumer. Just because everyone's talking about
• 29:36
  Speaker 4: it and there's buzz on the street about the new
• 29:38
  Speaker 4: pizza shop, it doesn't mean that you're getting good value,
• 29:41
  Speaker 4: and it doesn't mean that you should be investing in
• 29:43
  Speaker 4: it right because you could have spent half the price
• 29:46
  Speaker 4: and gotten a Domino's version and been really happy with it.
• 29:49
  Speaker 4: To see if you're now we're going to get a
• 29:51
  Speaker 4: little bit technical, So if you're listening to this, honestly,
• 29:53
  Speaker 4: you might want to listen back to this a couple
• 29:56
  Speaker 4: of times. And this is not because I'm being super technical.
• 30:00
  Speaker 4: It's just because, like we're going to talk about ratios,
• 30:02
  Speaker 4: and sometimes that texts a little bit like see not
• 30:04
  Speaker 4: in a contents anyway.
• 30:05
  Speaker 2: Absolutely not.
• 30:06
  Speaker 4: But if you've never talked about this, why would you
• 30:09
  Speaker 4: be like, Oh, yes, Victoria, the price to earnings ratio
• 30:11
  Speaker 4: absolutely makes sense in this situation. But to see if
• 30:15
  Speaker 4: you're paying I guess the hype tax, you're going to
• 30:18
  Speaker 4: check the IPO's price to earnings ratio okay, or it's
• 30:22
  Speaker 4: price to sales ratio compared to similar companies in the
• 30:26
  Speaker 4: same industry. So what I want to say before I
• 30:29
  Speaker 4: explain the PE ratio is that you wouldn't use it
• 30:33
  Speaker 4: in isolation, beck like it's one factor, but you would
• 30:37
  Speaker 4: make sure that you have additional context around the business
• 30:40
  Speaker 4: before relying on the PE ratio. And when I say
• 30:43
  Speaker 4: additional context, like you understand the market, you know what
• 30:46
  Speaker 4: the pizza shop's about, Like you're not just looking at
• 30:49
  Speaker 4: a number and going, oh, PE ratio of x okay
• 30:52
  Speaker 4: in or out, Like that's not how it works, because
• 30:55
  Speaker 4: you might go, oh, PE ratio is down, but this
• 30:57
  Speaker 4: makes sense because there's this much to or that doesn't
• 31:01
  Speaker 4: make sense because you know it just doesn't right. So
• 31:04
  Speaker 4: even though you should always use a PE ratio, with
• 31:07
  Speaker 4: additional context. I guess here are some common situations I've
• 31:11
  Speaker 4: like written down of like what a high PE or
• 31:13
  Speaker 4: a low PE means. So a high PE ratio means
• 31:17
  Speaker 4: that the ratio is actually higher than similar shares in
• 31:21
  Speaker 4: its industry, not across the board, not across the entire market,
• 31:24
  Speaker 4: but in its industry. And this means that investors actually
• 31:27
  Speaker 4: might believe that the stock's earnings will increase. They're like, oh,
• 31:30
  Speaker 4: this is a pretty good share, Like I want to
• 31:32
  Speaker 4: get in on this, so they're paying a bit more.
• 31:35
  Speaker 4: And this also means on the flip side, that the
• 31:38
  Speaker 4: stock might actually be overvalued, like you might actually be
• 31:41
  Speaker 4: paying too much for it.
• 31:42
  Speaker 2: I see.
• 31:43
  Speaker 4: On the flip side, if you get a low PE ratio,
• 31:46
  Speaker 4: that's where the ratio is lower than similar shares in
• 31:50
  Speaker 4: the same industry, it might mean that the investors believe
• 31:53
  Speaker 4: that the stock earning is going to decrease, like they
• 31:55
  Speaker 4: don't really trust it. They're like, oh, whatever, Like this
• 31:58
  Speaker 4: isn't like a good pizza shop. I'm not that into
• 32:00
  Speaker 4: tested in buying stock. But on the flip side, it
• 32:03
  Speaker 4: could also mean that the stock is undervalued and it's
• 32:05
  Speaker 4: a really good opportunity for you, so PE ratio like,
• 32:10
  Speaker 4: it's a formula of essentially taking the share price. So
• 32:13
  Speaker 4: the price that they've listed at, let's pretend it's like
• 32:16
  Speaker 4: sixty dollars. They're like, oh, share price is sixty dollars.
• 32:19
  Speaker 4: So you take the share price of sixty dollars and
• 32:21
  Speaker 4: then divide it by how much money you would earn
• 32:25
  Speaker 4: per share. So the E is the earnings per share,
• 32:29
  Speaker 4: so the company is profit divided by the number of
• 32:32
  Speaker 4: shares that exist. So it's basically saying that you would
• 32:38
  Speaker 4: how much money you're you going to make from the share,
• 32:39
  Speaker 4: Like if they have a dividend that they would pay out,
• 32:42
  Speaker 4: what is that and those figures you won't have to
• 32:45
  Speaker 4: calculate your earnings per share because that will be public knowledge.
• 32:48
  Speaker 4: So you just take the stock price and divide it
• 32:50
  Speaker 4: by the earnings per share and that will give you
• 32:52
  Speaker 4: a PE ratio.
• 32:54
  Speaker 2: Okay, now give me five years to absorb that.
• 32:59
  Speaker 4: I told you I want to listen to it a
• 33:01
  Speaker 4: couple of times, and it's not because I'm, you know,
• 33:03
  Speaker 4: being smart or using terms that are complex. It's just
• 33:07
  Speaker 4: because it's a topic that we've never talked about before,
• 33:10
  Speaker 4: and it's really important to understand that this is a
• 33:13
  Speaker 4: really solid ratio in this industry, and if you can
• 33:17
  Speaker 4: wrap your head around it, like it's essentially I'm saying, Beck,
• 33:20
  Speaker 4: I need you to find two numbers and do a
• 33:22
  Speaker 4: little calculation, which is, take number A and divide it
• 33:25
  Speaker 4: by number B, and that will give you a price
• 33:28
  Speaker 4: to earnings ratio which will help you, not make the
• 33:31
  Speaker 4: decision for you, but it will help you make a decision.
• 33:34
  Speaker 4: And I guess to give you some sense of what
• 33:36
  Speaker 4: the average for the market is because you're like, well,
• 33:38
  Speaker 4: what happens when I get a number?
• 33:40
  Speaker 2: Like what's high? Is it a billion?
• 33:43
  Speaker 4: What's low? Is it negative billion? Like what does that mean?
• 33:47
  Speaker 4: So many value investors would say, okay, the like twenty
• 33:50
  Speaker 4: to twenty five is a average p ratio. If it's low,
• 33:55
  Speaker 4: it's low. If it's high, it's high. And you would
• 33:57
  Speaker 4: go from there. These are things and like back to you,
• 34:00
  Speaker 4: you know how we're talking At the start, you're like, oh,
• 34:01
  Speaker 4: you can google things, like you could literally google what
• 34:05
  Speaker 4: is a good price to earnings ratio for the food
• 34:07
  Speaker 4: and beverage industry?
• 34:08
  Speaker 2: Like I can go from there.
• 34:09
  Speaker 4: If we're talking about the pizza shop, right, you could
• 34:11
  Speaker 4: be like well, I've calculated the pe ratio, but I
• 34:14
  Speaker 4: don't know how to use it.
• 34:15
  Speaker 2: Now.
• 34:16
  Speaker 4: You could look at the actual industry and then you
• 34:18
  Speaker 4: could go and look at, like, you know, the pizza
• 34:20
  Speaker 4: shop down the road, and go, well, what is their
• 34:23
  Speaker 4: pea ratio because they do a boom in trade, Like
• 34:25
  Speaker 4: is that an overvalued stock? Is it undervalued? Is it
• 34:28
  Speaker 4: like on market? Like should I be paying more for
• 34:31
  Speaker 4: this ipo or for this first time that the brand
• 34:35
  Speaker 4: new pizza shop is offering pizza. Should I be buying
• 34:39
  Speaker 4: in with them? Or am I going to look over
• 34:40
  Speaker 4: it to this other pizza shop? Because if you found
• 34:42
  Speaker 4: that they had like a peer ratio of ten, which
• 34:45
  Speaker 4: is a low PEE ratio, you might be like, well,
• 34:47
  Speaker 4: is that because the pizza industry is undervaluing a company
• 34:51
  Speaker 4: that's been around for a long time, or is this
• 34:53
  Speaker 4: an opportunity there or if it's overvalued, is that like
• 34:57
  Speaker 4: the most popular pizza shop in town? Does everybody want
• 34:59
  Speaker 4: to be in with that? Or is it overvalued or
• 35:02
  Speaker 4: is it actually just a really good investment. So we
• 35:05
  Speaker 4: want to not just take that number and go, oh, yep,
• 35:08
  Speaker 4: it was twenty, so that's good. We want to kind
• 35:11
  Speaker 4: of contextualize it once we have it. Okay, Okay, does
• 35:14
  Speaker 4: that make sense? It makes a lot of sense, but
• 35:16
  Speaker 4: I just want to quickly double check with you. So
• 35:17
  Speaker 4: the way to get that number is to find the
• 35:20
  Speaker 4: profit of the company and divide that by the number
• 35:24
  Speaker 4: of shares available.
• 35:25
  Speaker 2: Not no, No, you're going.
• 35:27
  Speaker 4: To take how much they are going to sell their
• 35:29
  Speaker 4: share for. Okay, that's a very easy number to find.
• 35:33
  Speaker 4: So you're going to take their share price and then
• 35:36
  Speaker 4: divide it by the earnings per share, which is how
• 35:40
  Speaker 4: much you would make from owning that share.
• 35:42
  Speaker 2: Okay.
• 35:43
  Speaker 4: And that's available on that's all available online, and it
• 35:46
  Speaker 4: should be in the prospectives. If it's not in the prospectus,
• 35:49
  Speaker 4: you would be able to find that information via the ASX.
• 35:53
  Speaker 2: Great, thank you. And so price to earnings and now
• 35:57
  Speaker 2: price to sales.
• 35:58
  Speaker 4: Is different, okay. So price to sales ratios is nice.
• 36:01
  Speaker 4: So we've got like price to earning, so we're like,
• 36:04
  Speaker 4: what are they charging?
• 36:05
  Speaker 2: What's the pe ratio?
• 36:06
  Speaker 4: Now we need to look at price to sales and
• 36:09
  Speaker 4: a price to sales ratio I think is quite important
• 36:12
  Speaker 4: and I always use the two of them when I'm
• 36:14
  Speaker 4: looking at a stock, Like I would never use one
• 36:16
  Speaker 4: in isolation.
• 36:17
  Speaker 2: I always do the two.
• 36:18
  Speaker 4: But a price to sales ratio is essentially a valuation
• 36:22
  Speaker 4: ratio that compares a company's like share price to its income,
• 36:27
  Speaker 4: So like.
• 36:27
  Speaker 2: Are they actually making enough money?
• 36:29
  Speaker 4: Like not just what they're paying you, which we look
• 36:32
  Speaker 4: at in the price to earnings, but like how much
• 36:33
  Speaker 4: revenue is coming into this business?
• 36:36
  Speaker 2: And it's usually an.
• 36:37
  Speaker 4: Indicator of the value that the financial markets or like
• 36:41
  Speaker 4: the investing market as a whole, has placed on each
• 36:44
  Speaker 4: dollar of a company's sales or revenue. So I guess
• 36:48
  Speaker 4: TLDR because like I don't want to like dive too
• 36:50
  Speaker 4: deep into it, but we can do a whole ratios
• 36:52
  Speaker 4: podcast at some point. But the price to sales ratio
• 36:56
  Speaker 4: shows how much investors are willing to pay per stock. Okay,
• 36:59
  Speaker 4: like how much they will to pay per dollar of
• 37:02
  Speaker 4: sales for a stock.
• 37:03
  Speaker 2: If that makes sense.
• 37:04
  Speaker 4: So like, if they're doing like a million dollars worth
• 37:06
  Speaker 4: of trade, that will translate directly to like a dollar
• 37:09
  Speaker 4: for a dollar share price valuation, if that makes sense.
• 37:13
  Speaker 2: So the PS ratio PS I love you.
• 37:16
  Speaker 4: But PS ratio is calculated by dividing the stock price
• 37:20
  Speaker 4: by the underlying companies sales per share, which again will
• 37:25
  Speaker 4: be accessible. You don't need to do all of these
• 37:26
  Speaker 4: calculations in the background to then get this calculation. This
• 37:30
  Speaker 4: information is available, but you do have to kind of
• 37:32
  Speaker 4: plug it in.
• 37:33
  Speaker 2: And do you know what you can do?
• 37:34
  Speaker 4: You can google price to sales ratio calculator on one
• 37:39
  Speaker 4: will come up and you can just plug it in
• 37:40
  Speaker 4: and it will do it for you so that you
• 37:42
  Speaker 4: know that it's correct. Okay, right, Like lots of investing
• 37:45
  Speaker 4: platforms have this for free. But back to what I
• 37:48
  Speaker 4: was saying before, because we compared the low PE ratio
• 37:51
  Speaker 4: to a high PE ratio, a low price to sales
• 37:54
  Speaker 4: ratio could imply that, like, shares are currently being undervalued,
• 37:59
  Speaker 4: and so like that. Why you know how I said,
• 38:01
  Speaker 4: I always do the two together. Obviously, if the PE
• 38:03
  Speaker 4: ratio and the price to earnings ratio is saying, oh,
• 38:06
  Speaker 4: this stock's undervalued, but then my price to sales ratio
• 38:09
  Speaker 4: is saying it's overvalued, we need to do some more research, beck.
• 38:12
  Speaker 4: We kind of want them to make sense together. So
• 38:15
  Speaker 4: a low ratio BECK could essentially imply that the share
• 38:18
  Speaker 4: is undervalued and it might be a goodbye. While a
• 38:21
  Speaker 4: ratio that's higher than average. It could actually show you
• 38:24
  Speaker 4: that the stock is currently being overvalued, and then we're
• 38:26
  Speaker 4: going to look at it again in context. We never
• 38:29
  Speaker 4: just look at these ratios on their own. One of
• 38:32
  Speaker 4: the downsides to having a PS ratio or a price
• 38:36
  Speaker 4: to sales ratio is that it doesn't take into account
• 38:39
  Speaker 4: whether the company makes any earnings or whether it will
• 38:42
  Speaker 4: ever make any earnings as a whole. It depends on
• 38:46
  Speaker 4: how you're doing it. And I mean, at the end
• 38:48
  Speaker 4: of the day, to PS ratio is a key tool
• 38:50
  Speaker 4: that analysts use when it comes to valuation. Like it's
• 38:54
  Speaker 4: kind of like the bread and butter in the investment market,
• 38:57
  Speaker 4: and I think it just it makes sense that you
• 39:01
  Speaker 4: get to understand that. Whether you do that or not
• 39:04
  Speaker 4: completely up to you. But my job is to give
• 39:05
  Speaker 4: you all the tools and resources so that you could
• 39:07
  Speaker 4: like quickly calculate something and be like, oh, that kind
• 39:10
  Speaker 4: of makes sense to me, and it makes you feel
• 39:11
  Speaker 4: empowered making decisions.
• 39:13
  Speaker 2: Yeah, totally.
• 39:14
  Speaker 4: That felt extremely complex to me, but hopefully that but
• 39:18
  Speaker 4: if we sat down and did it a couple of times,
• 39:20
  Speaker 4: Like the price to earnings ratio is just taking two
• 39:22
  Speaker 4: numbers dividing them by that totally ave reages twenty to
• 39:25
  Speaker 4: twenty five, and then you've got a price to sales ratio,
• 39:28
  Speaker 4: and that's going to tell you what a share is
• 39:30
  Speaker 4: trading at per dollar. Like, and they make sense when
• 39:33
  Speaker 4: we start to really break them down again, the bros
• 39:35
  Speaker 4: have browed too hard and made us think that it
• 39:38
  Speaker 4: is really complex, but their jobs they're just still a
• 39:41
  Speaker 4: little boys.
• 39:42
  Speaker 2: Well that's very true. It's always can do it exactly.
• 39:46
  Speaker 4: We're on the same pay we have the same algorithm.
• 39:49
  Speaker 4: It we do it seems okay. So beyond the numbers,
• 39:54
  Speaker 4: is there anything else you look at to get a
• 39:56
  Speaker 4: read on, like the company? What clues are they feel
• 39:58
  Speaker 4: in my portfolio?
• 40:00
  Speaker 2: Cute? They got to look cute.
• 40:01
  Speaker 4: They've got to look cute, Like I don't want to yea, yeah,
• 40:04
  Speaker 4: if I'm gonna like buy into a stock, like and
• 40:06
  Speaker 4: you've got ugly logo, absolutely not no, So I think,
• 40:10
  Speaker 4: obviously beyond the aesthetics, which absolutely play no role in this,
• 40:15
  Speaker 4: I'm going to look at their leadership team. Okay, creepy
• 40:18
  Speaker 4: little store cart and you should be too, right, So, like,
• 40:21
  Speaker 4: I want to look at their leadership team and what
• 40:23
  Speaker 4: their track record is. You can go down an absolute
• 40:26
  Speaker 4: rabbit hole. But what you're going to do is have
• 40:28
  Speaker 4: a look at like.
• 40:29
  Speaker 2: Who's the CEO? Who has that CEO led? Before you
• 40:33
  Speaker 2: can look.
• 40:33
  Speaker 4: At their LinkedIn? Do you know how many people I
• 40:35
  Speaker 4: look at on LinkedIn? Like, I have no shame. You
• 40:37
  Speaker 4: know how it sometimes tells you who has seen your profile? Yeah,
• 40:41
  Speaker 4: there will be six million CEOs, six million market analysts
• 40:45
  Speaker 4: who all have Victoria Devine has looked at your profile,
• 40:47
  Speaker 4: and they'll be like, why I'm judging your business?
• 40:49
  Speaker 2: Yeah, I'm here. I have no shame.
• 40:51
  Speaker 4: But you're going to look at the track record of
• 40:54
  Speaker 4: a company because if they have a strong record of success,
• 40:58
  Speaker 4: they might be more likely to steer the new company
• 41:01
  Speaker 4: that they're working for in a profitable direction. Sure, and
• 41:04
  Speaker 4: I've done this before, right, Like I was not sure
• 41:07
  Speaker 4: about it ETF that had just launched market. I didn't
• 41:10
  Speaker 4: get in on ipo because like, sometimes I'm just a
• 41:13
  Speaker 4: little bit conservative, like IPOs are fund I've gotten in
• 41:16
  Speaker 4: on IPOs before, that makes sense. But sometimes I just
• 41:19
  Speaker 4: like to watch and I like to wait, and I
• 41:21
  Speaker 4: like to see that it does what it says it's
• 41:23
  Speaker 4: going to do, and if it means like hey, a
• 41:24
  Speaker 4: tiny bit more for that stock, my plan is to
• 41:27
  Speaker 4: hold it for a really long time. So with that intention,
• 41:30
  Speaker 4: my money should double anyway, right, So, like whether I
• 41:34
  Speaker 4: saved a little bit or not, Like, that's not my
• 41:36
  Speaker 4: problem to me. That's an investment in making sure that
• 41:39
  Speaker 4: I'm making the right decisions for me and my portfolio.
• 41:42
  Speaker 4: But there was an ETF so an exchange traded fund
• 41:45
  Speaker 4: yeah that I was like, Oh, this kind of looks interesting.
• 41:48
  Speaker 4: It was by a good company, but they'd never done
• 41:50
  Speaker 4: this segment before. And so I looked at the fund manager,
• 41:54
  Speaker 4: and then I went on his LinkedIn and saw where
• 41:56
  Speaker 4: he used to work. And then I went on his
• 41:58
  Speaker 4: old company's page and I looked at what ETFs he
• 42:00
  Speaker 4: used to manage there and how that worked, and saw
• 42:03
  Speaker 4: that he did a really good job and then handed
• 42:05
  Speaker 4: over the reins to somebody to go into bigger and
• 42:07
  Speaker 4: better things. And I'm thinking, oh, this guy knows this industry.
• 42:09
  Speaker 4: Because it was one of the first ethical like portfolios
• 42:13
  Speaker 4: that this company had done. And I was like, how
• 42:15
  Speaker 4: do they know how to construct an ethical portfolio? Because like,
• 42:19
  Speaker 4: as much as you might think that's quite simple, it's
• 42:21
  Speaker 4: actually quite complicated to make sure that not only are
• 42:24
  Speaker 4: the businesses in that portfolio ethical, but also they perform,
• 42:28
  Speaker 4: because like, I'm not going to buy an ETF that's
• 42:30
  Speaker 4: ethical and then be happy losing money, Like I want
• 42:33
  Speaker 4: my investments to create wealth for me, right, So I
• 42:36
  Speaker 4: did the biggest deep dive this poor guy's LinkedIn, his
• 42:39
  Speaker 4: old assistance LinkedIn got looked at like everyone who managed
• 42:42
  Speaker 4: him on his manager, I was a super creepy stalker.
• 42:45
  Speaker 4: And I regret nothing because that gave me a lot
• 42:49
  Speaker 4: of validation that that was probably an investment that I
• 42:52
  Speaker 4: wanted to get involved in. So like, if the leadership
• 42:55
  Speaker 4: team is new, you.
• 42:56
  Speaker 2: Can have a look at that.
• 42:57
  Speaker 4: But also I want to know had I I've gone
• 43:00
  Speaker 4: and done this research beck and found that this guy
• 43:03
  Speaker 4: had never actually constructed an ETF before, he'd never picked
• 43:06
  Speaker 4: shares out. Why would he know that? Why would he
• 43:09
  Speaker 4: have any experience in ethical investing? Like that would have
• 43:13
  Speaker 4: been a red flag to me that they had just
• 43:15
  Speaker 4: done I guess a tokenistic portfolio that I wasn't probably
• 43:19
  Speaker 4: interested in. But what I found was like he had
• 43:21
  Speaker 4: a background in ethical investing, he had put together ETFs before,
• 43:25
  Speaker 4: he'd actually spoken at international conferences on constructing ethical portfolios,
• 43:30
  Speaker 4: And I was like this guy, Like, I back that.
• 43:33
  Speaker 4: So we want to find good things. Yeah, right, Like
• 43:35
  Speaker 4: it's kind of like you work for a radio station, beck, Yeah,
• 43:38
  Speaker 4: So new guy comes into the office, You're like, oh,
• 43:42
  Speaker 4: what does he do? Like, Oh, he's coming pretty top dog.
• 43:45
  Speaker 4: You go on his LinkedIn, you see that he's worked
• 43:47
  Speaker 4: at other radio stations and he's kind of worked his way.
• 43:49
  Speaker 2: I'd be like, Oh, this.
• 43:49
  Speaker 4: Guy's got some good experience. You can't wait for him
• 43:51
  Speaker 4: to join the team. That's what we're doing, but with
• 43:54
  Speaker 4: our shares. Okay, that's super creepy, stalker. We don't mind
• 43:58
  Speaker 4: if people see that we've been on their LinkedIn, Right,
• 44:01
  Speaker 4: you don't mind.
• 44:02
  Speaker 2: Yeah.
• 44:02
  Speaker 4: The next thing you want to do is check for
• 44:04
  Speaker 4: insider selling. Okay, So insider activity can I think be
• 44:09
  Speaker 4: quite telling if founders or like early investors are starting
• 44:13
  Speaker 4: to sell really large portions of shares at the initial
• 44:17
  Speaker 4: public offering. To me, that might signal doubt about the
• 44:20
  Speaker 4: company's future performance. Like why is the CEO selling all
• 44:24
  Speaker 4: of their shares.
• 44:24
  Speaker 2: Once it got listed? Why they scared?
• 44:27
  Speaker 4: Because often in a company like a company might issue
• 44:31
  Speaker 4: shares to their existing employees. Yeah, so I might go, oh,
• 44:34
  Speaker 4: beg you've worked for shares on the money. I'm going
• 44:36
  Speaker 4: to give you a few shares as like you know,
• 44:37
  Speaker 4: part of your remuneration package.
• 44:39
  Speaker 2: And you go, sweet.
• 44:40
  Speaker 4: They but then we go we're going to go to market, Beck,
• 44:43
  Speaker 4: and you're like, thank god, I've got time to get out,
• 44:45
  Speaker 4: but I'm going to sell my shares the second it
• 44:47
  Speaker 4: gets listed to some unknowing other person.
• 44:50
  Speaker 2: Yeah, okay, but.
• 44:52
  Speaker 4: If they're holding onto their shares, or even if the
• 44:55
  Speaker 4: CEO is buying more shares, that could be a really
• 44:57
  Speaker 4: positive sign that it's a good company and the CEA
• 45:00
  Speaker 4: is like, I really believe in this. Yeah, okay, that's
• 45:03
  Speaker 4: doing some creepy stocker things.
• 45:05
  Speaker 2: Again. Yes, I love that.
• 45:06
  Speaker 4: It's market research. If it is publicly accessible information.
• 45:10
  Speaker 2: Beck, it's research research. It's research. I'm great, my great.
• 45:14
  Speaker 4: The other thing I've got a whole list here I
• 45:16
  Speaker 4: do apologize is so we're going to have a look
• 45:18
  Speaker 4: at the company's industry trends and their growth potential. So
• 45:22
  Speaker 4: like investing in IPOs in industries with like really strong
• 45:26
  Speaker 4: long term growth potential, like maybe like renewable energy or
• 45:30
  Speaker 4: like tech can be advantageous. So we're probably gonna want
• 45:34
  Speaker 4: to and this is maybe just personal advice avoid IPOs
• 45:37
  Speaker 4: in sectors that have been stagnant or like overly trend dependent,
• 45:42
  Speaker 4: as they might actually not have sustainable long term returns.
• 45:46
  Speaker 4: Like I don't want to get in on something that's
• 45:48
  Speaker 4: like it's a bit done. Yeah, so I guess a
• 45:51
  Speaker 4: good example of this, Like I'm just gonna say, like
• 45:53
  Speaker 4: a Stanley cup, right, so like last year on TikTok,
• 45:56
  Speaker 4: last even eighteen months on TikTok, every man in his
• 45:59
  Speaker 4: dog has their like Stanley drink cup, Right, so I
• 46:03
  Speaker 4: would say that that trend might be a bit done.
• 46:06
  Speaker 4: I don't know what the long term growth potential of
• 46:08
  Speaker 4: a you know, a new drink bottle company might be.
• 46:11
  Speaker 2: I'm a little bit you know, wary.
• 46:13
  Speaker 4: They're not exactly you know, a tech company or renewable
• 46:16
  Speaker 4: energy that's going to positively contribute to our society for
• 46:19
  Speaker 4: a long period of time. Like maybe and I'm not
• 46:22
  Speaker 4: saying that Stanley Cup's had its day. It's like absolutely
• 46:25
  Speaker 4: still a thing, but like maybe a new drink bottle
• 46:27
  Speaker 4: company that's coming in to be their competitor. You're kind
• 46:29
  Speaker 4: of like, oh, but people have already done that, Like
• 46:31
  Speaker 4: do I want to be buying that, like I can
• 46:33
  Speaker 4: go get a fake Stanley cup tomorrow from kmart. This
• 46:36
  Speaker 4: isn't new technology, This isn't something that I think is
• 46:38
  Speaker 4: going to be sustainable in the long term. Right And
• 46:41
  Speaker 4: obviously we're not talking about Stanley specifically here because they
• 46:44
  Speaker 4: have market share at the moment. It's a new company
• 46:47
  Speaker 4: coming in and you're like, oh, they're iboing, Like oh,
• 46:49
  Speaker 4: I love the Stanley drink cups. That makes sense. But
• 46:51
  Speaker 4: like if Kmart's doing them, is it done now? Like
• 46:55
  Speaker 4: it's the trend over? Like I want sustainable long term returns,
• 47:00
  Speaker 4: and then reputation. Reputation is really important, And I mean
• 47:03
  Speaker 4: I have been on the slam multi level marketing companies
• 47:07
  Speaker 4: for a really long time bandwagon and I'm just going
• 47:10
  Speaker 4: to continue to talk about it. But if you're not
• 47:13
  Speaker 4: googling a company name and the word scam or controversy
• 47:19
  Speaker 4: or cork case, like what are you doing?
• 47:21
  Speaker 1: Oh?
• 47:22
  Speaker 5: This information is public knowledge, Beck, Like you can google,
• 47:26
  Speaker 5: for example, money scam. You could google money, cork case,
• 47:32
  Speaker 5: and so much information would come up to me. If
• 47:35
  Speaker 5: I was then going to invest in that company, that
• 47:37
  Speaker 5: might be a red flag that they have so many
• 47:39
  Speaker 5: court cases against them, Right, is that free to do,
• 47:42
  Speaker 5: yes back to it is simple.
• 47:44
  Speaker 4: To google, but you just need to know what to google.
• 47:46
  Speaker 4: So when we're looking for reputation, obviously that's not just
• 47:49
  Speaker 4: googling like you know, keywords and scam whatnot. Like that's
• 47:53
  Speaker 4: just me being a little bit spicy, but like we're
• 47:55
  Speaker 4: gonna have a look at like media coverage, like what
• 47:57
  Speaker 4: coverage have they gotten?
• 47:58
  Speaker 2: Has it been positive? Has it been negative?
• 48:00
  Speaker 4: Usually now in you know, twenty twenty four, there's reviews everywhere.
• 48:05
  Speaker 4: Having a look at the company's reviews, Like what do
• 48:08
  Speaker 4: their Google reviews say. We're going to also look on
• 48:10
  Speaker 4: their Instagram and their social media because often people will
• 48:13
  Speaker 4: take to Facebook or take to Instagram to vent like
• 48:17
  Speaker 4: what are the comments sections saying what are their tagged posts?
• 48:19
  Speaker 4: We're not looking at what the company is put out
• 48:21
  Speaker 4: on their pretty little grid. We're looking at what have
• 48:24
  Speaker 4: they been tagged in? What hashtags are being used? Like,
• 48:27
  Speaker 4: Cause if it's like a pizza company, right, you're going
• 48:29
  Speaker 4: to go to their Instagram. They're gonna have beautiful pictures
• 48:31
  Speaker 4: of the Margarita pizza. They're gonna have beautiful pictures of
• 48:34
  Speaker 4: this happy team, and then you're going to go to tagged,
• 48:37
  Speaker 4: and there might be a post from Beck being like,
• 48:39
  Speaker 4: look at this cockroach in my pizza?
• 48:41
  Speaker 1: Right?
• 48:41
  Speaker 2: Do you know what I mean?
• 48:41
  Speaker 4: You're like, Oh, that's not what you said you were.
• 48:44
  Speaker 4: So we're going to look at the brand reputation. In
• 48:47
  Speaker 4: a perfect world, you'll also be able to understand employee satisfactions,
• 48:51
  Speaker 4: So websites like glassdoor can really help you understand if
• 48:55
  Speaker 4: the team is there. Also, again publicly accessible information, but
• 49:00
  Speaker 4: we are going a little bit creepys talker. How long
• 49:03
  Speaker 4: have their employees been there? LinkedIn will tell you that
• 49:06
  Speaker 4: if you go to the company's LinkedIn page, Yes, say
• 49:09
  Speaker 4: an average tenure, it's less than a year.
• 49:11
  Speaker 2: What's going on?
• 49:12
  Speaker 4: Yeah?
• 49:12
  Speaker 2: What's that?
• 49:12
  Speaker 4: Why is everyone leaving after twelve months? What's the average
• 49:16
  Speaker 4: tenure of their leadership team? Specifically, like do they get
• 49:19
  Speaker 4: a new CEO every eighteen months?
• 49:21
  Speaker 5: Like?
• 49:21
  Speaker 2: What's going on here? Red flag?
• 49:23
  Speaker 4: And then understanding their company's culture and their core values.
• 49:28
  Speaker 4: Is the company run by people who are also associated
• 49:31
  Speaker 4: with a cult?
• 49:32
  Speaker 2: Good thing? To figure out if it is. I'd probably
• 49:35
  Speaker 2: be concerned. I would be I'd be asking some questions.
• 49:40
  Speaker 2: I would be asking some questions and being like, is
• 49:42
  Speaker 2: this for me?
• 49:43
  Speaker 4: Rolemably not, and then we're obviously going to have a
• 49:46
  Speaker 4: look at the market condition. So this isn't specifically for
• 49:49
  Speaker 4: your industry or your specific share, but like IPOs tend
• 49:53
  Speaker 4: to perform better in stable or bullish market. So remember
• 49:58
  Speaker 4: back to like when I say bullish, do you know
• 50:00
  Speaker 4: what bullish means?
• 50:01
  Speaker 2: Bullish? I can't remember.
• 50:03
  Speaker 5: It's aggressive, like going up, like the red flag is
• 50:06
  Speaker 5: like flying, and the bull is running for the red flag.
• 50:09
  Speaker 5: And the market's are like doing really well, and a
• 50:12
  Speaker 5: bear bears.
• 50:12
  Speaker 2: Like to hibernate. They like to have a little nap
• 50:15
  Speaker 2: and they're not doing much work.
• 50:17
  Speaker 4: So a bull market is where it's doing really well
• 50:20
  Speaker 4: and it's growing. In a bear market, it's gone into
• 50:22
  Speaker 4: a little bit of hibernation. It's just chilling, like it's
• 50:25
  Speaker 4: probably going to come back because you know it ebbs
• 50:27
  Speaker 4: and flows. But in a bullish market, obviously an IPO
• 50:32
  Speaker 4: is going to go better because the market sentiment and
• 50:34
  Speaker 4: people are ready to buy. Whereas in like a period
• 50:37
  Speaker 4: of lull or hibernation, if I said do you want
• 50:40
  Speaker 4: to buy aniwchhe You're like no, I might just continue napping,
• 50:43
  Speaker 4: like I'm not that interested, Like I'm seeing everybody else,
• 50:45
  Speaker 4: you know, not buying, so I'm not going to buy
• 50:48
  Speaker 4: does that make sense? And then in a volatile market,
• 50:52
  Speaker 4: So in a bear market, new stocks they can experience
• 50:56
  Speaker 4: I guess really dramatic like price rings. They might like
• 50:59
  Speaker 4: launch it a really high price and then go down,
• 51:01
  Speaker 4: but that might not actually be reflective of their value.
• 51:03
  Speaker 4: So I would weigh what the current market conditions are? Okay,
• 51:07
  Speaker 4: go what kind of market are we in? But also
• 51:10
  Speaker 4: if you are a company and you are considering ipoing
• 51:14
  Speaker 4: and going onto the share market, and you're like, let's
• 51:16
  Speaker 4: do this during economic downturn?
• 51:18
  Speaker 2: What are you doing?
• 51:20
  Speaker 4: That's like a really dumb decision. You're selling yourself into
• 51:23
  Speaker 4: a period of time where people aren't that confident in investing,
• 51:27
  Speaker 4: let alone investing in new things.
• 51:29
  Speaker 2: Right, you want to do it in a bulls market? Yeah,
• 51:30
  Speaker 2: So I'd be like, why are you doing it in
• 51:32
  Speaker 2: a bear market? To you, potato? And how do we
• 51:34
  Speaker 2: find out if it's a bull or bear? Right now?
• 51:36
  Speaker 4: So you can just google it, like what's the Australian
• 51:39
  Speaker 4: share market up to at the moment? I do a
• 51:41
  Speaker 4: lot of obviously investing content you can ask me. I'll
• 51:44
  Speaker 4: talk about it, but yeah, I feel like I've yapped
• 51:46
  Speaker 4: on and on and on about this, so h I
• 51:48
  Speaker 4: think the question on everyone slips remains. Will Shees on
• 51:52
  Speaker 4: the Money ever be the next IPO? Absolutely not, absolutely not,
• 51:56
  Speaker 4: Like I know that you might want us to IPO
• 51:59
  Speaker 4: and it would be really fancy, And I feel like
• 52:02
  Speaker 4: this is not like a mean thing to say, but
• 52:04
  Speaker 4: I feel like sometimes if you are a business owner,
• 52:07
  Speaker 4: ipoing and selling shares can be quite ego driven. Sure,
• 52:11
  Speaker 4: like you're like, I'm list it, like okay, cool, Like
• 52:14
  Speaker 4: no one gets like literally like I don't think you're
• 52:17
  Speaker 4: cooler because you have a company that iPod. I just
• 52:20
  Speaker 4: don't like the idea that I would be responsible for shareholders.
• 52:25
  Speaker 2: Yeah, Like I like that the buck stops with.
• 52:27
  Speaker 4: Me and I make the decisions because, like, let's be honest,
• 52:30
  Speaker 4: a lot of the decisions that I make in my
• 52:32
  Speaker 4: business a company would be like, oh, I'm sorry, Like
• 52:34
  Speaker 4: you could increase shareholder profit by not sending your team
• 52:37
  Speaker 4: members on international conference trips. And on the flip side,
• 52:41
  Speaker 4: I'm like, oh, I love that I can have a
• 52:44
  Speaker 4: business that gets to invest in the growth of my team, like,
• 52:48
  Speaker 4: and that's not like the values that I hold Sometimes
• 52:52
  Speaker 4: don't align with high shareholder return.
• 52:54
  Speaker 2: Right, Okay, does that make sense? Yeah, and you're allowed.
• 52:58
  Speaker 2: I could do what I want. You can do what
• 52:59
  Speaker 2: you want the free world, including right now. I reckon,
• 53:02
  Speaker 2: let's go do what we want. Let's have a coffee.
• 53:04
  Speaker 4: There's diet coke in the frigid work now, Oh my god,
• 53:06
  Speaker 4: I know.
• 53:07
  Speaker 2: Josh hooks us up. So we've got to go get
• 53:09
  Speaker 2: one of those.
• 53:10
  Speaker 4: But I think before I leave you, obviously with investment,
• 53:14
  Speaker 4: all investments carry risk, we know that. But with the
• 53:16
  Speaker 4: right research, I think you can pick investments that fit
• 53:20
  Speaker 4: your goals and what you want to achieve, not just
• 53:23
  Speaker 4: the investments that everybody's talking about. Great call, We're going
• 53:26
  Speaker 4: to go get a little cheeky diet coke. But if
• 53:28
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• 53:30
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• 53:33
  Speaker 4: us each week as we kind of help you to
• 53:34
  Speaker 4: get closer to financial freedom. And also we're trying to
• 53:37
  Speaker 4: make finance fun. And if you want to share that
• 53:39
  Speaker 4: money confidence with your friends, please don't keep it to yourself.
• 53:42
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• 53:45
  Speaker 4: are financially free.
• 53:46
  Speaker 2: The better beck I love that.
• 53:47
  Speaker 4: It's so true V Die coke time, but I got's
• 53:49
  Speaker 4: go by.
• 53:56
  Speaker 5: The advice shared on Cheese on the Money is generally
• 53:59
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• 54:03
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