Latest / The Curve / El Niño Is Here. And it's about to hit your wallet.

Transcript

El Niño Is Here. And it's about to hit your wallet. · The Curve

• 0:01
  today's episode we speak about spacex the biggest company to ever go public it has broken records all over the show and elon musk is now a trillionaire there is a rumor though about potentially spacex merging with another business so we're going to talk about what would that actually mean for elon musk the stock market for all of us
• 0:21
  El Nino sounds like a cocktail, but it's not. It is a massive weather event that is happening right now. And last time it wiped out trillions in the global economy. There is a silver lining with this big weather event. As much as it sounds devastating, and it will be, there is also an interesting long-term investing trend that Vic has spotted, which we're going to talk about.
• 0:43
  It's not as dire in terms of the investment. It's actually really innovative. So we'll talk about that and exactly how you could invest if it's of interest to you. The UK has just joined a growing list of countries that has banned social media for under 16 year olds. Yay. Everyone's talking about the social side of this. We are going to talk about the financial impact, surprising, and how there are some companies that are going to be way more effective than others.
• 1:07
  This is The Curve Weekly, where we read the finance news so that you don't have to. I'm Vic Harris. I'm a finance professional and have had a career making money for other people. And I'm Sophie Hallwright, ex-TV radio producer, who was really sick and tired of not understanding the economy. So we started this podcast. And a huge thanks to our podcast producer, Emily Rigby, and our social media manager, Lucy Munro, and the rest of the team behind this episode. But before we get into the headlines, a quick word from today's sponsor.
• 1:36
  This episode of The Curve Weekly is made possible by Pathfinder KiwiSaver Plan, helping you invest alongside your values. Pathfinder's one mindful money, best ethical investing provider for five years running. So we've teamed up with them to bring you the ethical hotline. Got questions about the ethics of an investment or unsure where you draw the line? Submit your questions via the link in the podcast show notes. And thank you so much to Pathfinder for making this episode of The Curve Weekly possible. Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver Plan. A product disclosure statement is available at pathfinder.kiwi.
• 2:05
  We have to talk about the elephant in the room. It's not an elephant, actually. My tan? Yeah.
• 2:12
  I was going to say, elephant's way too pale for what we're talking about. It's stunning. Just got back from Greece. You look so healthy. I don't know if it's a shit compliment, but you do. Which is so counterintuitive, right? Because you're killing your skin cells. Because you go so olive, you can kind of justify a bit of a burn because you're like, well, for fair girls, I hate burning myself. It's like, yeah, but when you kind of had a few drinks in the sun and then you're like...
• 2:36
  How long have I been in the sun? How was Grace? It was really nice. Do you feel like you've had a holiday? Yeah. It was just like really nice that we'd wake up, work. Like kind of everyone on the trip has their own businesses. So it was really great. And we had two young kids. So it was like they'd go down for a nap. We'd work. Then we'd go to the beach in the afternoon. Like it was just like a great balance. Did you have set working days where you were like, hey, by two, let's call it? No, everyone was just kind of on the buzz. And some people would be like, I'm going to the beach. And they're like, I've got to stay and work. Like it was, yeah, it was really, really nice. And I was like, oh, it'd be
• 3:05
  park up in Greece for a I think Soph would kill me I'm just doing the Park House from Greece again the wifi's not working that would be the only thing I'd kill you about is if you couldn't it's windy I'm stuck on paros I've had a few rosés no no you on rosés is a vibe
• 3:22
  You are always welcome to podcast drunk, just so you know. No, no, absolutely not. No, no, I'm being serious. Two drinks, absolutely fine. Four, we might need to respond. Financially educating while pissed is not... Pissed is different. Okay, yeah. You are so funny when you head to. Bye, bye!
• 3:38
  Not financial advice, but it is financial advice. I can't imagine. Here's what I'm doing with SpaceX, in case anyone wants to know. Can we talk for a second about the remote working? Because I actually have been thinking about this a lot. You know, all of us here are so close to Europe. We're so close to places that would be amazing to work. Would you say it was more of a great way to have an in-between holiday where you were semi-working, but also having a break? Or do you think it would be possible to do that and be almost as productive as you would be if you were in London?
• 4:08
  I definitely wasn't as productive. Like I didn't have my two screens. Right. And like you're just sitting like, yeah, I like it for a period of time, but not permanently. No, but other people are different. I think it's based on outcomes, right? If people can still produce the outcomes that you need as an employee. I definitely think the setup, you're right, is quite a big thing. Like if you can have great internet, somewhere that you can get up, go to your desk.
• 4:34
  It's like when you order a burger and you're like, I'm going to get it wrapped in lettuce. It's like, if you're having a burger, have a freaking burger. I was going to say, I'm pretty sure you just had a lettuce burger. Probably like with a, like, with low carb bread or something. You know? Yeah, yeah, yeah, yeah. Not full lettuce.
• 4:49
  I have to tell you this story because it's really good. I just told Emily Lucy before you came in. And so we'd had a few rosés. I can just say it. Can I guess what happened? Did you pay for like a whole bill or something? You got really excited and generous and went and just like. Oh, no, that's another good story.
• 5:06
  I'll tell you that one first. Most of these stories happen at the beach club. Anyway, and like I am, I, you know, I just, I love a tequila shot. Like, don't get me wrong. The waiter came over and I was like, hey, I tried to be real subtle. I was like, hey, can I just order like, can I order seven tequila shots for the group? She's like, yeah, yeah, yeah, yeah. And then a few girls in the group were just like, what was that? And I was like, oh, look, I've got my period. And I just asked if they had tampons. Subtle. I was like, wow. I was like shocked at how well I just lied. Because you're quite bad at lying normally. And they were like, oh, okay. Yeah, yeah. They were like, you should have
• 5:34
  Anyway, then the lady came back. She's like, what tequila do you want? Do you want Patron? And I was like, oh, fuck.
• 5:38
  It's so annoying. It's like when you try and order low alcoholic and they come out and they're like, who's drinking non-alcoholic? You're like, can you not? Yeah, yeah. And then she's like, do you want Patrona? And I was like, oh, Patrona. And then the girl's like, oh, what was that about? And I was like, oh, she was just asking me if she wanted me to put it on the bill for everyone or like just pay for it separately. Tampon. Yeah. Again, I was like, wow, you're really great at lying. Really doubling down here. And they were like, oh, okay, okay. And then they said this tequila shop's coming out and they're like, I knew it.
• 6:08
  And then there was like a few shops at the beach, like at the back, behind the restaurant. And obviously after a few drinks and I was like, oh my gosh, I need some new sunnies.
• 6:19
  Which is a great ploy, actually, to be selling patrons, alcohol at the front, and then have a shop at the back. So when they leave, they're like, oh yeah, this bag looks great, this bikini. Anyway, so that was me. I fell for it. It's like the supermarket layout, you know? Like putting the snacks right as you're about to check out. It's all strategic. And then when you fall for it, you're like, idiot. So anyway, I bought these really nice sunnies. Then I woke up the next morning, and the tenants in my house in New Zealand were like, oh, we're moving out. You need to pay rent this month. And I was like, can I take back the sunnies?
• 6:48
  shit, my emergency phone is now on my face. I know. What do I do about it? Now I'm in an actual emergency.
• 6:55
  But like, and then, yeah. Not ideal. Not ideal. It's so weird that you bring up the emergency fund thing. Because I do think that you kind of, when you're in a really good place, you sort of forget. It's almost like if you're fit, you stop going to the gym. Or if you are really stressed and you start meditating and then you feel better, you stop. When you're sick, you eat really healthy. But then when you're better, you don't. And then so if you feel stable and good and happy, you're like, do you know what? I'm actually going to spend my entire emergency fund. And when it rains, it pours. Yeah, shit.
• 7:22
  yeah we haven't really figured out what we're gonna do but that's okay love the calmness maybe just like sell a whole lot of stuff in my wardrobe i'll buy it yeah okay before we get into today's episode just a quick mention to say that our we've been doing what is a catchy name i think we've called it our anonymous wedding cost spreadsheet which is not the best i know it's not a great name
• 7:43
  The point is we're trying to anonymously gather as much data as we can on people's weddings, how much they spent on everything from bridesmaids to flowers to events, photography, etc. This doesn't matter if you're engaged, married, single. We have sections that are like, if you're single, for example, it's like how much do you spend on being a guest, that kind of thing. Yes, yeah. There's been some really great things coming through and I will just read one out very quickly. We're going to share all of it once we've got enough data. So if you want to fill it out, there's like a link in the podcast show notes.
• 8:10
  Someone wrote, spent five figures on a floral arrangement for the ceremony and my dress ended up covering 90% of it in all the photos. I didn't even realise that you would get a floral arrangement specifically for photos. I kind of thought it was more for the vibe. A lot of people are saying flowers, which is interesting. I've seen, you know corporate Natalie, do follow her on Instagram. She got married and it was the most audacious, enormous, outrageous ceremony. Sort of like, look at all those flowers.
• 8:40
  oh wow like quite beautiful yeah nice anyway her whole wedding and then the reception they had this big dance floor like black and white squares and all these big hanging lanterns and like it was so over the top it's also um like at a beautiful setting it was quite stunning anyway there is some big block your ears if you're under five shit happening on the stock market isn't there
• 9:04
  SpaceX let's talk about it biggest IPO in history went down last week IPO it's gone public it's it's you and I can buy shares yeah it's a whole thing and the reason that this is enormous oh there's just actually so many reasons why this is I know and the more I read about the more I'm like oh you know you think you find these stats or like angles and it's it's
• 9:28
  It's just really consuming. The main thing here, and one of the big stories that's circling, is that Elon Musk is officially... A trillionaire. A trillionaire. He has a trillion in wealth, which is... It's almost more valuable than the entire... Every listed public company in America almost, right? His net worth... So it's $1.3 trillion now because SpaceX IPO'd. It did really well. So at $1.3 trillion US dollars, yeah, his net worth nearly exceeds the market cap of...
• 9:58
  majority of the S&P 500. Market cap is just basically the size of the business, which shows you how valuable it is. And because he owns 42% of SpaceX and a huge amount of Tesla and a huge amount of other businesses, that market cap is an indicator directly of his own wealth as well. And when the share price goes up,
• 10:17
  then the size of the company or the market cap goes up. So that's why the dollar value of his percentage shareholding goes up. But I was looking at this in relation to other kind of billionaires. And Larry Page, who is one of the founders of Google, he's worth about $300 billion. He's the next most wealthy person. So you have $1 trillion more wealth in Elon Musk than you do in the next closest billionaire. Like, it's crazy. Oh, my God.
• 10:46
  Yeah. Because also when you think about that much money, even 0.1% is a huge amount because it's so much. You know, if someone has a billion more dollars, that's a lot more money. If you have a trillion more, it's so mind boggling in terms of how much money that is. Yeah. I want to talk about the fact that for a brief moment there, SpaceX...
• 11:09
  was technically bigger than one of your favorite businesses that has been around for a really long time. What does that indicate? So for context, anyone that hasn't listened to this podcast before, Microsoft, for a very long time, this has been Vic's favorite business. Yeah. Still one of.
• 11:26
  And it's been around for, am I right? Like over 30 years? Over 30 years, yeah. The fact that this business, SpaceX, all of a sudden put on its dress and went public and then is for a moment more valuable than a company that has been around for 30 years, but also very successful, it's not as though
• 11:43
  it's just been plodding along. Very consistent, very profitable, been through some of the worst times in the world that we've had in terms of global financial crisis, COVID, dot com, everything. And it's still around. Like that to me shows sustainability and success in terms of an investment. Yeah.
• 12:05
  And do you know what? It's quite interesting that you bring that up because in the same way when you're looking at funds or you're looking at investing in things, a lot of stocks or funds or people who manage money or whatever, they might be like, we've had a great return in 2022. Probably no one said that, but it's the idea that...
• 12:23
  If you're, if you have consistently, you have a record of like a long, a long history of like continually compounding your return year on year on year. It's more impressive than a one-off basically. Totally. Like anyone can be like, you know, I ran a marathon. It's like, cool. I ran 20 marathons. You know, it's like, holy wow. Yeah, exactly. Exactly.
• 12:43
  It's like, yeah, it's always looking at the performance over the longest period of time that you can. Because we're also long-term investors. So we're not investing for one month or six months. We're investing for a long period of time. We want to see that it can do well over a long period of time. And that's why IPOs are a more risky investment is because they haven't proven that.
• 13:03
  I don't know the track record of this company year over year over year over year. One of the things I wanted to ask you about with this particular story and what's going on, is it the SEC, which is the sort of governing body that puts restrictions in place and rules around what you can and can't do with the stock market, right? Yes, yeah. It's almost like...
• 13:22
  a big group of police men and women who are looking at what's going on and saying, you can do this, you can't do that. You can't incite a trade. You can't, you have to release your financials to the public. Like, yeah, all these things. You have to do things by the book if you're going to be a public company because your shares are available to mum and dad investors. So, yeah.
• 13:42
  So one of the things that I wanted to ask you about when I was researching this story, some of the things that were coming up was the idea that analysts have been saying that the way that Elon Musk has valued SpaceX is nonsensical and out of this world.
• 13:58
  Because the point of an IPO is like you're sort of showing someone all of your homework, right? You're opening up your financials and you're saying, this is why we're valuing ourselves like this. You have to prove the reasons why. And a lot of people are saying the way that this is valued is absurd. Yes. And then on top of that, normally it takes a certain amount of time. Like there's rules in place around how long a business has to be sort of public before it gets put into like indexes. Yeah.
• 14:25
  And that's been massively fast tracked, right? Like Elon somehow managed to get the company almost immediately put into these big indexes. And I guess my question is like, do we think this would be happening under different administration? Like if there was different government in power in America, would that be different? And is it kind of an alarming almost flow on of? I think it just shows money's power, right?
• 14:48
  If you're bringing the biggest IPO to the stock exchange, like you shouldn't, but you do have a bit of swinging power. You know, it's like if you don't take me, I will go somewhere else. You know, you go to the NASDAQ. If they don't take you, I'll go to the New York Stock Exchange or, you know, like make it worth my while because this –
• 15:08
  is absolutely game-changing for not only the bankers involved, like the Morgan Stanley, JP Morgan, but the stock exchanges, the country, like even, you know, if he decided to list in the UK, for example, like, you know, there's, yeah, it's just money is power. And when you're bringing the biggest IPO in history, he has got the rules bent for him. And that's what people are saying. Like the S&P 500 index has said, no, we're going to stick to our rules.
• 15:31
  you know, well, Elon Musk be like, F you. Like, you know, like, is there going to be repercussions because they didn't bow down to him? Whereas the NASDAQ was like, yes, we will bend the rules and that you go into the index much quicker than everyone else and fast-trick you. So therefore, there's a favoritism. Yeah, there is, like, it's political, which sucks because it shouldn't be. Like, the rules are the rules, and they've been the rules for so long. And this is what...
• 15:55
  scares me with this IPO is that we're moving into a territory that we've never seen. We've never seen a company get into the index this quick. We've never seen an IPO this big. We've never seen a company come to market with their valuation at 100 times revenue, yet people seem to forget and still buy it and it still goes up. And it's like, where are the fundamentals here? Like, yes, I get, and I'm not saying that AI isn't a massive industry that is game-changing
• 16:25
  some kind of fundamental basis for your investment decisions. Otherwise, it's just the wild west of investing. Totally. And it just like the whole system can collapse. Because I think as well, when it comes to a lot of investors who don't feel comfortable stock picking, and they've gone into these indexes, and the whole point, the reason they're doing them is because they want to be diversified, they just want to be passive, they don't want to have to make decisions. But if you've got, you know, now majority of your wealth is investing in SpaceX, yeah.
• 16:52
  It's pretty shit for people who are trying on purpose to just be passively investing because it kind of isn't. And the fact that people are buying this when the size of the company is 100 times larger than the revenue it's producing, that just screams to me, you're investing in hype. You're investing in, this is a FOMO investment. And yes, I get on the caveat is that we are dealing with a CEO and a founder who is like,
• 17:17
  literally out of this world there just has to be you have to come back to fundamentals with this stuff otherwise when things start getting a bit too carried away and a bit too you know out of touch with reality that's when we do start getting things like bubbles what did it go up on this first day about 30 i just landed in Greece and our group chat was going off everyone's like oh my god have you seen i was like i know wild even though that's happening i still think a lot of clever sensible investors are looking at that saying i just would not be going near that
• 17:45
  We're all talking about it because it is the biggest IPO in history. But there are so many other companies over the last few weeks that have done incredibly well. They've gone up more than 30%. Yes, we're talking about this opportunity, but it doesn't mean there aren't other opportunities where you can make money. It's kind of you don't want to be like left out. You know, it's like... It's FOMO to the extreme. It's like when everyone's seen a movie and you haven't. And you're like, well, I want to go see the movie so that I can join in the conversation. The other big thing with this is that there is now rumors that Elon Musk is going to merge SpaceX with Tesla. That's right. Holy...
• 18:14
  what does that even mean? And wouldn't that mean it's the biggest company in the whole world? Yeah, it would be over $4 trillion company. So SpaceX, which is now at $2.5 trillion,
• 18:27
  in terms of the value of the company because it's gone up and then tesla is about 1.8 so yeah you'd have nearly four like what is happening though why would spacex and tesla be merged but the thing is he got ridiculed because he was ceo of like all these these four different companies and so he's like well let's just merge them all and then i'm the ceo of one company is it going to be like an ai driven tesla floating around like connected technology sending internet to the
• 18:53
  earth like like tesla uses ai like there is a lot of synergies but if i was investing in spacex and now i'm buying tesla which you know is manufacturing yeah there's kind of again it's just like rumored and there'd have to be a lot more digging into kind of the benefits and stuff but kind of wouldn't be surprised if that happens yeah at this rate
• 19:13
  Nothing would shock me. Quite scary, though, to have someone that holds that much power, that much value in a company. And it does scare me, yeah, what that means for economic decisions, political decisions of someone who's that wealthy and can really have an impact on the world. The premise is that the rules are changing for the people that have money. Yes. And that is what's scary, because the rules are in place to keep it fair and to keep it...
• 19:40
  not political. And we've seen it with all the big tech companies. You know, it's just kind of hang on like, whoa, yeah. Whoa, hold on a second. There's also been another big announcement in the markets. After 107 days of war in the Middle East, there has been a framework, an agreement decided between the US and Iran. There's going to be a ceasefire for two months.
• 20:06
  Whether that actually happens, I don't know, but the markets loved it. It means oil prices coming back down. It means there's progress. It means you take it as face value. If we go back to when the war first broke out, which was like end of February,
• 20:22
  Oil was about $67 a barrel. And then within about a week of the war breaking out, it went to about $120. So it nearly doubled. We'd never seen anything like that. That leads to inflation, oils, and absolutely everything. And now oil's back down to about $76. So back down to where it was. So...
• 20:42
  Fingers crossed that that starts to flow back into the economy before it does more damage. You know, we're going to see a lag. We're going to see inflation go up because things have had to be repriced because of higher oil prices. But let's hope that because it was, you know, only for a few months, that it is...
• 21:00
  transitory, not like it's not going to stick and we can actually not have flow-on effects of higher interest rates and all of that, that actually impacts economies more. So the point is, hopefully, this has almost been nipped in the bud before it causes huge ripple effects for inflation, interest rates, etc. Like it might for a little while be slightly more expensive or you might notice things increasing in price. But hopefully with this ceasefire, it will mean because oil is not double the price,
• 21:29
  And the ceasefire allows negotiations to go on as well. So it's like, okay, let's stop, let's talk. If this doesn't stick and we see oil price, it's just like it's going to, you know, the next time we have a ceasefire, people won't believe it. So it's, yeah, it just starts like... It's a bit crying wolf kind of situation. People will just be like, well, this is going to go on forever and they'll price it and then the stock market and blah, blah, blah. But the fact that oil prices have come right back down is a good sign that the market is believing that...
• 21:57
  we will get to a place of resolution. I mean, I hope we do. Yeah, same. We have a story that is kind of exciting, I will say, to see this taking form in a different part of the world. So in case you missed it, Australia has banned social media for under 16 and New Zealand's trying to do it. The UK has just passed law that essentially anyone under the age of 16 won't be able to access Snapchat, TikTok, YouTube, Instagram, Facebook, and X.
• 22:25
  which is such huge progress. There was all of these stories that were coming out and basically court cases where young people were trying to sue social media platforms for the impact it was having on mental health. And so the fact that this is happening, really happening, and actually all children are going to be protected from what has been so harmful is really kind of amazing.
• 22:47
  Yeah, so Australia's done it, Canada, Brazil, Indonesia. You've got France, Spain, Denmark. Like, it's really gathering pace, New Zealand. And the UK last week has implemented a ban. I feel like the UK is so, so moving as well. It's crazy, isn't it? I'm like, go you. I'm quite surprised. It's kind of like, where did you come from? The two that they are going to be able to use is WhatsApp and YouTube for kids. Yes, yeah, because there's a lot of educational material on that, YouTube.
• 23:13
  Yeah, I was looking at there was some studies done and Google put out that 95% of teens in the UK had said that watching videos helped with their schoolwork. Yeah. Whereas like in your head when you think YouTube, all I think is, oh my God, what are they finding on there? What are they watching?
• 23:30
  Think about back in the day if we found like a sealed section in a magazine. It's one page, you know? It's not a big deal. Oh, that was so good. Imagine if you saw the sealed section, all of a sudden you see like there's an algorithm that shows you a hundred more. Yeah, yeah. It's a big deal because we know how damaging it can be for young people. But like financially, the impact's pretty small. Which I'm like, why are these social media companies...
• 23:56
  really dragging their feet with implementing it. You know, why aren't they coming out of the gates being like, yeah, cool, we'll do it. Do you mean the financial implications of these businesses by excluding this age group are actually really insignificant? Yeah, because it's the teens. They don't have a lot of disposable income. You know, they're not the ones that are being monetized. I mean, these platforms make money through advertising, right? That's how they make their money. The biggest social media platform that will be impacted from this is Snapchat.
• 24:23
  It's because they've got 41% of all their revenue is for under 18s, then TikTok and then YouTube less so. I think Snapchat's going to go down the drain. Overall, it's like $11 billion is spent annually on the six major social media platforms by advertisers. The other thing with this is the fines aren't that massive. They're kind of a bit of a rounding error for, like if you think Meta, one of the biggest social media platforms,
• 24:53
  and you get a couple of million dollar fine if you breach this. Like it's not – But imagine if it was 100 people and you had – it was 100 million, you know? Like that's still a lot. Yes, yeah, but like to go through court and everything. It's more if you're caught targeting this age group, there is fines. It's not if you're caught targeting one, two, three, four. It's like if you are caught –
• 25:14
  Oh, yeah, it's not. It's like a one-off, so it's so small. You'll get pinged if you're found to be targeting this age group. Can I just ask, how would they be targeting them if they can't even access it? There's ways around. You're supposed to have an age verification to be able to download and all of that. The interesting thing with this, I read, is that it's been introduced in Australia, but...
• 25:39
  It's frustratingly hardly moved the needle in terms of under 16 year olds that are actually using it. No way. But it will be a thing that will be implemented over time. I don't know, it will have an effect. But kids like to use things that aren't allowed, you know? So it's like... It's almost like made it crack for them. Yeah, it's like it's gone kind of like...
• 25:58
  underground like black market or I don't know so I hope that it is just a kind of a teething issue if you are addicted to something from a young age it's a lot harder to separate yourself I think if a lot of these teenagers get to 16 and they're not using social media and they're actually quite happy yeah it'll be really interesting to see what the uptake is at that point but then in saying that if I think about the drinking age for example yeah obviously you access it before the drinking age like I was 15 or something 14 god like what?
• 26:27
  way too young, but there is something about wanting to get there because you're not allowed it until a certain age. So, you know, in the same way, if your parents don't give you, I don't know, roll ups and chips at school and then you get to- It's like McDonald's. Exactly. And then you just like eat yourself sick.
• 26:44
  because it's something you weren't allowed. It'll be really interesting to see if that's what happens with social media. Yeah. I'm like fully 100% addicted. It's absolutely crazy. And the more that I have no access to it, for example, if I leave my phone downstairs, which I've started doing, and it's honestly changed my life...
• 27:00
  But I'm still the moment I have my phone addicted in the same way. It's not as though space from it helps me. And you're an adult with your, what is it? Prefrontal cortex is completely grown. Developed, grown. And you still can't. It doesn't sound like it, does it? It's grown. My prefrontal cortex. But you know, it's crazy how as a fully...
• 27:24
  fully grown adult yeah i have no self-control on it i mean imagine a 16 or an eight-year-old yeah after the break we are going to be talking about sounds so boring the weather
• 27:38
  so sunny here in the uk no it is actually really sunny it is really sunny we're really lucky we're in summer clothes it's more around the climate and how that has impacted and i know we've spoken about this before but it's like something that's happening immediately this year that is going to really really impact stocks countries the economy companies yeah so we're going to run through some we're going to have some great investing ideas at the end as well yes all fun
• 28:02
  Okay, but first here is a word from today's sponsor. I invest so much more now, but I still don't feel great about profiting from companies that I don't believe in. You know, weapons. I just, I personally do not want to be making money from conflict. But what about weapons companies that supply like both sides of the conflict? Pretty confusing, right?
• 28:21
  I know, it's so confusing and I feel like I'm not alone in that. Yeah, I mean 80% of New Zealand investors don't want weapons in their KiwiSaver, yet Mindful Money reports that over $400 million is still invested in weapons manufacturers, which is why choosing the right provider matters. Like Pathfinder KiwiSaver Plan, which aims to avoid profiting from conflict.
• 28:42
  They've been recognized as weapons-free by Mindful Money and written loads of blogs on this topic, even covering their position on Gaza, which a lot of people have avoided. So if you want to check out our podcast show notes to learn more, and thanks so much to Pathfinder for making this episode of The Curve Weekly possible. Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver plan. A product disclosure statement is available at pathfinder.kiwi. Oh.
• 29:04
  All right, the weather. I think there is a really exciting kind of multi-decade investment trend happening here. It's something that we use every day. There's different ways to invest in it. So there is a short-term way and a more long-term way. So we're going to jump into both.
• 29:20
  I think this is a really good example of how there is always an economic angle with things that are going on in the world. I would never have thought, oh, the flow-on effects of this could be enormous globally. Yeah. Is this you just being really good at reading the news and seeing the insight? Or is this what people are talking about with this in general?
• 29:39
  I think it's a combination. I think you can read headlines like this and just move on. Or you can read headlines and go, hang on, how is that going to impact the world's economies, companies, and how can I get involved in terms of investing? We've just spoken about how we got over what's going on with oil in Iran, and it's like everyone's like, oh, nice. And then there's...
• 30:02
  There's another big thing coming. And it's called El Nino. Is it El Nino? El Nino. It's a really fun name. El Nino. El Nino. It sounds like little cute baby or something. La Nina is the opposite. La Nina. La Nina and El Nino. I love them. Yeah. Such cute names. They sound like two little kids. La Nina. Like a boy and girl twin or something. Oh, I love it. People may have heard of El Nino. It's a type of wind pattern that is across the Pacific Ocean and with the talk of...
• 30:28
  Everything going on in the climate over the last few years, these extreme weather patterns have become more and more frequent. It is when the surface temperature of the sea exceeds two degrees Celsius. The last time we had a strong El Nino event like this was in 1997. Oh, wow. Before that was 1982. Like 30 years ago. Yeah. Yeah.
• 30:50
  There's so much connected to weather, ocean, all of that. So crops, shipping, energy demand, food prices. And so we're going to dig into kind of why this is a big deal and why the timing right now is like so brutal, considering pretty much every country in the world is dealing with like this post-war energy inflation. You know, post-COVID, we're still trying to get used to getting back to supply chains that are more normal, like food prices and cost of living through the roof, like all of that.
• 31:18
  Just because there's not enough going on. Yeah. We thought we'd give the whole world a cold. Yeah. Obviously things like crops, okay, weather changes, that makes sense. But can you explain what is this directly going to be impacting? It's going to impact the weather, so we're going to have more extreme weather events.
• 31:34
  The biggest byproduct of that is crops, like agriculture, which disproportionately affects emerging countries, developing countries, because they're the ones that are big agriculture producers. Shipping, because you can't go through certain lanes, you have to go around kind of thing. So that adds shipping congestion, shipping costs, increased costs, energy demand, because we're now going to have extreme heat, extreme cold, all of that. So people will need more power at different random times? Yeah.
• 32:01
  That leads to higher food prices, which leads to inflation, and people are already feeling the pinch. So it's starting now, and if it ends up how people predict, like if we look back to 1982, the global income loss, so the impact of the globe was $4.1 trillion. It's all of Elon Musk's wealth. Yeah, it is. Yeah.
• 32:21
  see ya you could save you could save the entire world from outing out you could donate everything and help it all it just means that we're going to have more extreme cold and more extreme heat we know even now this week is a heat wave in london and just how the the city just cannot function i mean we had to buy a air con unit for home which is on constantly and it is exactly so much more power
• 32:45
  You multiply that by millions and billions of people. Like that's power that has come from something. Like it's... That makes sense. The flow on effects are huge. And also the flip side in the Southern Hemisphere right now, you have extreme, extreme winter. You know, you've got elderly people that need to use power that are probably already struggling because power prices have been so elevated for so long. We've had AI sucking up all this power generation for so long. And now you've got this. It's just...
• 33:11
  When there is normal supply and increased demand, that creates higher prices. I mean, you kind of only have to look around at your own lifestyle to see this happening. I think with this, it is, I guess, a magnified trend of what is an overarching longer trend. The world is getting hotter and that is leading to very disruptive supply of food, like everything. It's really having impact on people, planet, everything.
• 33:39
  I think a lot of people sit up and pay attention to global warming when it immediately impacts their life. I think that the sort of future in 10, 30 years, there's not going to be a plan that's really hard for people to fathom. In the same way that when it comes to investing and someone says invest for 10 years, they're like, I can't even imagine what I'm doing next week.
• 33:57
  perhaps seeing extreme weather conditions and having to live through them and, you know, like directly respond. Maybe it's going to be a positive thing in the sense that it's like, it's magnifying a much bigger problem for a shorter period of time. It's kind of like going back to oil. You know, we kind of all use it and we don't realize how reliant we are on it. And then it's not till there's a major chokehold in the Middle East and the price of oil goes up and it has like catastrophic damage on ripple effects all through...
• 34:27
  so many countries and starts impacting us that you kind of sit up and realize, okay, maybe I should be investing in more companies aiming to do more renewable energy. And like, it's the same with this. It's like, okay, maybe this is the antithesis moment where it's like, oh gosh, you're right. Okay, how can I do something about it? Should we talk about some of those investing themes? It feels weird to say benefit from. Remember when you're giving...
• 34:53
  money to companies, you're allowing them to grow and prosper and be better. Like there is water ETFs. Because there's going to be so much disruption with crops and agriculture, the supply of water is going to be quite constrained. So to be able to give money to companies that, you know, build water distribution, infrastructure, all of that, yes, you're benefiting, but you're also helping the cause. And then same with investing in agriculture, you're giving those companies capital and money to help
• 35:21
  you know, maybe put in new systems or wheat, corn, you know, that kind of stuff, stuff that we need to make so much other food around the world. When there is disruptions in crops, the price of those crops go up because there's obviously less supply. And then so people are having to pay higher prices. As an investor, you benefit from those higher prices. So it's not probably the nicest way to invest in this. For me, I personally prefer the kind of the water ETFs.
• 35:49
  I think it's just like data centres. You can invest in data infrastructure. Companies that are supplying the data centres to these big tech companies is exactly the same. Water infrastructure is so key for agriculture and for so many things that being, I guess, that part of the supply chain and investing in that...
• 36:10
  It's so critical. Would you say the difference is almost if you were to look at the war and what it's done to energy prices and oil, you could either invest in oil companies, which would be kind of similar like agriculture investment, where you're kind of investing the thing that you know is going to do well, but kind of for reasons you don't really love. But then the water infrastructure ETF would almost be like the equivalent of investing in clean energy because we know we need more access to. Exactly. That's the example.
• 36:35
  Yeah, you've kind of got the agriculture ETF up here, which is like... The direct impact where you could make money, but it's like... Well, it's going to be volatile, like the oil price. You can invest in the oil price, you can invest in agriculture, or you can invest, I guess, one step down, which is kind of the infrastructure layer of like, yes, data centres supporting AI, water supporting agriculture, like all of that is kind of...
• 37:00
  It depends where you sit. I think for me, the water side is a really interesting play. There's some great ETFs in that space. And I just think that's a much longer term structural play than the agriculture ETFs, which is probably a bit more short term.
• 37:15
  put some more details of this in the Curve Weekly email that we send out. If anyone is not signed up to the newsletter, we'll put some details around specific ETFs. Obviously, this is not advice and you need to do your own research around it, but we'll give a few different examples of things that you can look into if these spaces are, you know, potentially interesting for you to invest in. Because I think one of the things is with something like a water ETF, I mean, there's hundreds of them might be quite helpful to give like...
• 37:43
  a few to look at rather than trying to sift through it yourself. But if you've got any questions on this, let us know. And if you want to get access to our newsletter, you can just put your details. We'll put the link in the podcast show notes. Yeah, and I think investing in water, the more that I read about it, the more I was like, I think this is like multi-decade investment case. Interesting. I think there's stats around that the US alone needs water.
• 38:07
  nearly over 600 billion in water infrastructure over the next 20 years. And the key reason, AI data centers now require an enormous amount of water to cool their servers. We've got this whole new demand going on. And yes, water infrastructure might sound like the most boring thing to invest in. It's your steady defensive. It's like, it's, yeah, you can have the spicy stuff in your portfolio. But for me, this is the tortoise and the tortoise in the here. Love it. Yeah.
• 38:36
  Okay, so we've got a community question. It's actually a voice note. I'm gonna pick up the hotline here. Okay, I'm gonna play this voice note. I used to be able to do $150 a week into investment, but at the moment, paying off mortgages, et cetera, I can only afford $50 a week.
• 38:52
  and I'm wondering, what I usually do is like, I just wait for my account to reach a certain amount and then make the investment. Would it be worth for me not to do that and just invest that $50 a week, paying the fee every single time? I use Hatch, so the fee is like three bucks.
• 39:12
  But I believe it's $3 USD, is it worth paying the $3 each time and just invest the money right away every week or just wait, say like at least $150 worth and then pay and then do the investment? So I think what she's asking is should she invest regularly and cop the fee of investing because obviously all DIY platforms have a fee.
• 39:35
  Or should she wait till she has more money and then have the same fee but more money going in? So for example, if she was going to put her $50 in every week and it's going to cost her $3 in a trading fee, should she wait till the end of the month and do $200 in one go and just have one of those $3 fees? Because the fee's a flat fee, obviously the smaller amount that you put in, the higher the percentage...
• 39:59
  But I'm pretty sure they tear it depending on which platform. So like, yeah, if you put in $50,000, you're not still paying $3. But I guess the trade-off of that is if you are waiting to have enough money to invest,
• 40:12
  and, you know, the stock market's growing and you're not investing, then you can also lose out on that return. I guess it's figuring out that balance. I mean, $3 on... $50. It's quite a lot for only $50. Yeah, you'd be best to look at the percentage. So what is $3 over $50? You're paying 6%. So any investment you make has to go up by 6% for you to even...
• 40:37
  be making a return. If you put in 100, that's 3%, 200, 1.5%, you know what I mean? So the bigger the amount you put in, the less that $3 is as a percentage. If you're paying proportionately on how much you're putting in, it makes sense to do it as often as you can, like every week invest. If it is a flat fee, it probably makes more sense to do a one-off monthly investment, wouldn't you think? Yes, yeah, to kind of wait and do... Just in terms of waiting. If you're paying $3 every week to invest...
• 41:03
  It can easily eat into your return. Yeah. Whereas if it's like tiered, I think it's more about investing regularly. And yeah, firstly, figuring out if that percentage is actually not tiered based on how much you're investing. 1%-ish is like one, one and a half is a pretty standard amount to be paying. You can't get around...
• 41:23
  paying no fee. They're doing you a service, so you have to pay away something. And if any platform says they have no fees, they're charging somewhere else. They're charging when you change currency, or they're charging when you deposit your money on their platform rather than invest. That's what I hate about those foreign exchange places that are like...
• 41:41
  zero commission. I'm like, you're not just doing everyone a favor by exchanging our money into other currencies. Like we are paying you. How stupid do you? Before we wrap up, there's something we spoke about actually a few months ago. I feel like anyone that pays close attention to this podcast will know what we're talking about, but we have some exciting movements I would say and our content plan and our release schedule. How can I make it sound more exciting?
• 42:09
  So if you are not subscribed to our sub stack or our newsletter, make sure you are because we'll be announcing something in the next few days. And other than that, oh, we have a really exciting episode coming out on Thursday. It's Holly. Remember the property podcast that we did and she spoke all about her absolute blowout buying with her ex-boyfriend. We have a part two. It was a second blowout. Oh, yeah.
• 42:35
  For anyone that enjoyed that episode, it was actually one of our most downloaded in the first seven days ever. So if you haven't listened to part one, get onto it. But part two comes out this week as well. And other than that, Vic, I think that's all our announcements. Do you have anything else you'd like to add? No. Okay. Have a great week, everyone. See you next Monday. Yeah. Thanks, everyone.
• 42:55
  Thank you so much for listening to The Curve Weekly. Make sure you hit subscribe or follow wherever you're listening so you're always up to date with the latest finance and investing news. And feel free to leave a comment to let us know what you thought about this episode because we would love your feedback. We've got new Curve Weekly episodes for you to listen to every Monday. But until then, listen to Erasing the Curve. These are our in-depth podcast episodes where we chat about
• 43:15
  all things money. We're also around all week on socials if you're hungry for more Curve content and all the links are in this podcast show notes. We hope you have a great week and we'll catch you for the next episode of The Curve Weekly on Monday.
• 43:33
  Okay, quickly, the curve was created to empower and educate you about investing, but we are not financial advisors. Our platform exists for educational purposes only, and it doesn't provide personalized investing advice for your individual needs and should not be relied upon to make an investment or financial decision. And always remember to do your own research before making any investment or financial decision. We're here for any knowledge and support you need, but the final call is always yours. And thanks for being here. You got this. Yeah, we know you got this.