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TCW28: Grab the popcorn, big stock market moves! · The Curve

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  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 at least once in their lives
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  and Annie shouldn't miss out just because she can't afford it. Help me, I'm poor.
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  That's probably the best count down we've ever had. Wait, that's just for the climate,
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  that's nice though. We'll kind of end up. So for context, we're kind of studio hopping at the moment.
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  This is the first time we've actually had people in the room when we've recorded. It's a bit awkward. We've got
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  geared and they're doing like really nifty technical stuff, like editing the video while we talk.
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  Yeah, I was just going to say, no, no, no, I was just going to say so before we started recording,
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  I went just because I've got to move out of my house that I'm in at the moment and I went to
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  see a new place just down the road because I thought, perfect, it's close to the new podcast studio,
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  efficiency, I'm really starting to become thick Harris and then I walk in and the guy who's
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  going to be my flatmate potentially was kind of cute and I thought, this might not be a good idea
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  because I've done this before. I like, it's just dope, the flatmate. Yeah. We're not dated.
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  Quite good for him. A great way for him to find girls. He's got six people coming in to say
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  yeah, imagine, imagine if it was all just a fake room. We did kind of talk like it was a
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  full-on interview. It's like, what do I need to know about you? Wow, what's your five-year goals?
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  You know, it's like, what do you look for in a guy? We're going for a really straight
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  home, but I just thought was that a bad idea to be living with someone that you're physically
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  attracted to, maybe. I mean, depends on what you get. Sorry, right up. Anyway, I've come
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  straight from the beach and Sophie's come straight from work. Yeah, with God, we just think
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  today we're really need to coordinate your outfits. I know, sorry. I mean, honestly, you've come
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  from my visa and I've come from like, I wish I could. It would be so nice. I don't know if she was on.
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  It's quite nice. Very relaxed. All right. Also, day three of not watching me here, so yeah.
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  You know, when you get out of the shower, you're about to get on the shower and you're like,
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  should I? Shouldn't I? And then you, then you don't. It's like, you always should, you know.
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  You always should. It's like, it's like, I'm going to say, don't I? When you're drunk and you're like,
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  should I text that guy? Always alone. Always alone. I know, that's the opposite.
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  I'm slowly learning about the here, not the guy situation, but one day, one day, anyway, we have
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  so much to get through. And I don't want this to be our in a half episodes. So let's crack on.
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  This is my favorite time of the year. War hold on. Is the end of financial year? No. Tax year. No.
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  Earning season, earnings report season. Yeah, it happens four times a year in the US and it comes
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  around four times. Yeah. You're so nervous because there's other people on the road. I can totally
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  jump. Oh, thank you. I keep slowing. Oh, come on. Polite anyway. Sorry. Okay. So just to put in
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  context, so the index is up. So the S&P 500 is up 18% so far this year. And that's up nearly 30%
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  from the lows that we had in October last year. So from January to now, it's up 18 from October
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  to now. It's up nearly 30. And Tesla is a good new 135%. Yeah. So it's doing a lot of the heavy
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  lifting for the index. And they reported their result during the week. And profitability wasn't
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  that good. Is that because they discounted their cars? Yes. So they cut their prices, which mean
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  revenue is good, but profits weren't so much because they're making less from each car essentially.
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  So which is what we call their margins and margins were hit. And so she didn't really move
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  initially because they used to market was kind of expecting it. But then Elon Musk hinted. So every
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  after every result, when a company reports the results to the public, they do a follow-up earnings
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  call. So they might release their results. They jump on an actual call. Then a few hours later,
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  they jump on a Zoom for anyone to dial in. Have you ever been on one with Elon Musk? Yeah. Yeah.
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  And then Mark Zuckerberg. Yeah. So it's usually the CEO of the company or investor relations.
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  So this is usually the CEO, the chief financial officer. There's a whole lot of management
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  teams. So it's kind of like it's like a post. I've been elected as prime minister speech. Yeah.
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  They put their results out. And then analysts can ask questions. They're like, hey, why is your
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  revenue gone down in Australia? But it's up in the US. It's like a speech. You go like the
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  reporters. Yeah. Excuse me. I've got one over here. Yeah. Yeah. So would you have either asked anyone
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  scary, like any big dogs, with the big, big companies, you have to be kind of, I guess,
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  a bigger dilemma. Yeah. Oh, no. You have to be like if you should just to ask.
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  Because otherwise imagine there's probably like a million people on the phone call trying to
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  make me not that many. But like listening to Mark Zuckerberg, oh my god, I love you. You know,
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  just like, oh, that's awesome. Anyway. So, yeah. So they have this call anyway. So what they
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  say on that call is actually really important. Because you get a lot more out of the management
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  than just he's a written piece of paper with our results. And so Elon Musk said that there might
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  be more price cuts if market conditions become more unstable. So the share price actually fell
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  4%. So the initial result, everyone was like, oh, yeah, that's okay. And then after they had the call,
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  then the shares fell. And he actually said a comment. And he said, because everyone wants to know,
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  you know, what do companies like this, when they're so big and they've got operations in lots of
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  different countries? You know, what are one of those management teams seeing in terms of the
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  economic situation? And he said, you know, one day, it seems like the world economy is falling
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  apart. And the next day, everything's fine. So I don't know what the hell is going on.
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  Is this what he's doing? Yeah. Elon. I think it's kind of true. Don't you reckon?
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  Yeah. Sometimes you read headlines and it's all doom and gloom. And then you walk around and
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  then the restaurants are full. And everyone's out and about. And you're like, what the hell?
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  You know, it's just kind of really contradicting. You know, that was I thought that was quite a
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  funny quote. Also had Netflix. So Netflix had a interesting result. So their subscribers jumped
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  by six million, which was more than double what everyone was expecting. So people were
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  expecting about three million. And they added about six million. And this is only in three months.
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  So this is only in a quarter. So they jumped up by six million.
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  They're six million. Yeah. Wow. And this was all around. You might remember that they cracked
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  down on passwords. Yeah. Yeah. I remember I was actually trying to watch on Sunday when I was
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  hungover. I was trying to watch off my flatmates Netflix. And it was like, sorry, you've used too
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  many devices that I was like, oh, damn it. I was like, what are you trying to watch? You've got
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  Netflix. No, not but not here. I've left mine in New Zealand with my flatmate. And then so I was
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  trying to use my yeah, yeah. I could have just signed in. But I was too lazy. Anyway. And one
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  thing that we actually spoke about in the current weekly newsletter was the strike that the actors
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  and writers are having in Hollywood. Yeah. So this is actually impacting Netflix. So they have
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  a lot more cash now. So they've got about five billion dollars of cash in their accounts,
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  which is much higher than people expected because they're really struggling to produce content
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  to pay for content because there's a strike going on. So it's going to lead to more delays in terms
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  of probably revenue because they aren't producing content. So yeah, it's kind of interesting to see
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  this flow on effect of these strikes by the actors and writers in Hollywood. So for anyone that's
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  missed it, go read it. Yeah. Get the email. But also essentially, people are piping out saying
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  why are, you know, the CEOs of Disney, like the Bob, is it Bob? Oh my god. Yeah, it's getting
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  millions, 27 million. 27 million. But then you've got really the argument that the actors and
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  writers are saying is that they're getting paid shit and they want better contracts and they want
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  better protection from streaming companies and who make content in such short time frames and
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  have really high demands from actors and writers and also artificial intelligence. They want
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  protection from that because writers will be out of a job if you have artificial intelligence
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  like creator series. So they're just asking for better pay and better protection. And then now
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  they've started to call out Bob Iger and be like, excuse me, like how can you tell your workers?
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  But what do you mean my protection? Is that like something in the contract? It's like you're not
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  going to get fired because of AI? Or yeah, I don't know something around. I don't know what
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  the scope would be, but yeah, essentially that we won't use AI for the series. It's so interesting
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  because how can you promise that as a business? If you don't even know if that's going to be the right
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  thing to do. Yeah. So watch this space. Okay. Sorry, quickly, I want to say on the Netflix thing.
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  Yes. Quite a good example of looking at, you know, that's almost an opportunity. If you think
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  that Netflix is a great company that's going to make a comeback, then if it does dip for some reason
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  because of something like that, it's not like writing is going to strike for two years.
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  Yeah, you know, so for me, like when I bought Netflix a year ago, it was down so much.
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  It's almost like sometimes when they're really good quality companies. When this sort of thing
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  happens, it's kind of an opportunity you want to buy when stuff like this happens. Yeah. Yeah.
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  And this is not advice. No. And we're not telling you to time the markets. Yeah.
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  In other news, there's been a bit of a change to the index. So I don't like this already.
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  I know. Should I skip it? Yeah. I wouldn't you just skip it. It's a lot of, not a chance to skip it.
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  Okay. Love the honesty. Yeah. Okay. Kim Kardashian. Yeah.
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  Yeah. Yeah. Okay. Okay. So Kim Kardashian, her skims business, it's just being valued at
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  four billion dollars. I'm sorry. Anyone that does not like Kim Kardashian fine. She is a weapon.
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  She touches anything and it's like worth billions. It's just she could sell. Yeah. It's
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  what's yum. She could sell tissues like toilet paper or something. Oh yeah. Super basic. She should
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  yeah. The other day I was at metafring for a drink. She was wearing this beautiful tight top.
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  And I was like, oh, where is that from? I'm gonna say skims. It's just like touch it.
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  Do I have? And my hand like melted. It was a beautiful material. I put it under here.
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  It's great. Really? Yeah. Not right today. But are they spanks? Or are they just like, no?
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  They're kind of like, am I wearing? No. It's like high on the show. There's someone in the room.
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  Normally would not today. No, it's like higher cuts. I like that. Not like, not like high, high.
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  Yeah. Yeah. Yeah. It's flattering. Yeah. But it's like high enough. Hugging the love handles.
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  Yeah. Yeah. Yeah. No, but it's subtle. It's the sole comfortable. And the bra, like everything.
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  Everything I've bought from her is just like amazing. Yeah. So her company's with four billion.
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  Four billion dollars. It's only been around for four years, which is nuts. And so one of
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  her businesses, right? Yeah. I mean, she had one of like a tiny, I mean, sorry, one out of her
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  millions of businesses. And it's set to generate $750 million in sales this year, which is wild.
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  Oh, yeah. That's a lot of money. Yeah. But it's interesting. So I guess when it comes up with
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  evaluation for a business, it's dependent on the amount that you raise and the percentage that
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  you give away is determines the value of the business. So just to explain that. So she has raised
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  270 million. So that's the cash that investors have given her for a certain percentage of the company,
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  which means the overall business is valued at four billion dollars. So every time you raise money,
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  that's when you get a new valuation for your business. Oh, I see. So she's just raised.
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  Yes. Yeah. So she just raised nearly 300 million dollars. But why would she raise?
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  Doesn't she have enough money to just do it herself? I mean, probably, but she's probably got
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  other things she wants to spend that money on. Yeah. Yeah. And if there's people that are willing
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  to invest and grow the business, she probably so owns a majority of it anyway. So she's been
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  affitting. But they go roll out stores and they want to become like Apple, you know, like where it's
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  like this, these beautiful flagship in store experiences, which I can totally see. Her
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  aesthetic is very, very beautiful in terms of the stores. Are we like Luleen and Steroids?
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  Yeah. Yeah. Shake. And lastly, I'm going in holiday this week. And thank you so much for introducing
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  that into the current relevant rider. Just give me a second chance rubbing it in.
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  No. So the Britain Railway and Underground Strikes are on. Again, I feel like they're on strike
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  every five seconds. Anyway, fun fact for you. And so I bet it's not fun. So it's going to cost bars
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  and restaurants in London over 200 pounds and lost revenue for the underground going on strike next
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  week. And what does this have to do with the holiday? Well, because I'm going to have to find
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  alternative transport. Oh, darling. Oh, do you need a hand getting over the grace?
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  First of all, problems. No, so I read this. I read this step and I was like, whoa, I was like,
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  bars and restaurants, you're going to lose 200 pounds. And next week strikes. And the first thing
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  my friend said was like, how will we get to the airport? And I was like, oh my gosh. So I stopped
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  working and obviously figured it out. Yeah. But don't worry, I will get to grace for all those
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  people panicking. I will walk. I will leave two days earlier and walk to get work. Just to win
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  the degree. Anyway, and finishing on a question from, fuck, sorry. Just thinking about my holiday,
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  I've already checked out. No, a question from the audience. Yeah. I've just seen the gap
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  in my, before my pants to my top. And I've, it's, I've similar to you with your third day of
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  your hair washing, it's a bit of leftover tan. And you're really going to. And my, on my tummy,
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  it's not. Oh, I'm not okay. Definitely to scrub. What's the question back? Sorry. Oh, I'm just
• 14:17
  waiting for your messages. Oh, my hand. Here we are. Okay. This is a really good one. It's quite
• 14:25
  long. So, uh, it's stressful. Be careful. Yeah. Be careful. Be comfy. So I have a kiwi-save related
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  questions. This is for the kiwi lessons, obviously. But also for, is it relevant if you've got a
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  pinch or, yes, yeah, yeah, actually, we'll be relevant. Yeah. So I listened to a kiwi-save episode
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  recently and it spied me to increase my contributions from 3%, 10%. I figured since I've been lucky enough
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  to have regular pay increases since I started my job as a grad three and a half years ago,
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  it would be a good way to help me curb my lifestyle creep. My one concern is that I'll be sacrificing
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  a lot of cash with the risk that I might not end up wanting to buy a house in New Zealand
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  when I might want to move overseas, which is actually fair enough. Yeah. Someone mentioned a
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  concept that heard about where you might decrease your contributions to 6%, so instead of 10. Yeah.
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  And then set up another account, which is the same fund, but it's not under kiwi-save and you
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  contribute the other 4% there. So then you can access it. Yeah. So you are contributing 10, but
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  you're kind of splitting it up. One's into kiwi-save and locked until you. What is this person's name?
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  I haven't finished. Sorry. Is this a thing? Can you think of any downsides? I can't get my brain
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  around whether compound interest on the 10% is the same if you've got six or four. And how does
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  it work out? Can you please explain? I'm sorry, that's such a good question. Yeah. Yeah. So
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  the idea of splitting it up. Yeah. Yeah. Yeah. Really good question. Love that you're contributing 10%
• 15:46
  awesome. That's great. Wish I'd done that. And not lifestyle creed. Yeah, wish I'd done that.
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  Well, I still creed for anyone that's like, what is that? It's just essentially if you get paid
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  more, you start spending more rather than actually investing it. My lifestyle's like, oh,
• 15:59
  she's such a creed. Such a creed. Anyway, I think this is a really good suggestion in terms of
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  because you never know what's going to happen. And as long as you're saving and investing,
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  you're not giving yourself that flexibility, it depends. If you're a really terrible saver,
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  maybe having it locked in in Kiwi Saver to your 65 or to your first house is a good idea.
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  The last thing you want is to be putting that extra, you know, that that 4% into another fund.
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  And then you keep dipping into it and using like a bank account. Yeah. As long as you're very,
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  very strict with yourself, I think it's a good idea because you never know what's going to happen.
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  Like she said, she might want to buy a house overseas. I think that's so clear.
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  She might even need it, I don't know, to start a family or something that she just gives
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  herself a flexibility. And so I think that's a really good way. So it doesn't affect your
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  compound interest in it? No, it's still compounding the same. Even though it's in two separate funds,
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  and it's 6% and 4%. If both of those grow by 10%, they're both growing. Do you know what I mean?
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  It's just splitting it into two separate accounts or two separate funds.
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  Doesn't mean you're getting any less. You're still contributing the 10% dollar amount.
• 17:08
  The thing is, probably, is to make sure it's an automatic payment just like your other one,
• 17:13
  so that it comes out without thinking about it. Yeah. And it's so out of sight out of mind,
• 17:17
  you can definitely. And there are funds. A lot of Kiwi Saver providers will have Kiwi Saver
• 17:21
  versions of a fund and then non Kiwi Saver versions. So you get pretty much identical performance.
• 17:26
  Yeah. So that's what I've done. I've got... Really?
• 17:29
  Yes. So my savings are in an identical fund to my Kiwi Saver.
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  Your savings? Yes. My savings are in a fund.
• 17:36
  What savings? My savings that I saved up. Oh, yeah.
• 17:39
  An identical fund is my Kiwi Saver, but it's just not locked until I'm 65.
• 17:45
  Oh, so that's not... You haven't stopped it with that money?
• 17:48
  No, I've stopped it. Other stuff. Wow. Oh, that's interesting.
• 17:52
  I don't have much stockpicking. Yeah. Wow. You're doing something new every day.
• 17:56
  Yeah. Oh, my God. I feel a bit cheated, really.
• 17:59
  Surprise. Yeah. Wait until next episode.
• 18:02
  Thank you so much for listening to The Curve Weekly.
• 18:04
  Make sure you hit the subscribe button to stay up to date with all the many business stock market
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  find our cute little podcast. And we hope you have a good week and see you next Monday.
• 18:26
  Bye. Bye.
• 18:28
  Sweet. Yeah. See you next Tuesday.
• 18:30
  Well, see you next Tuesday. I mean Monday.