Latest / The Curve / RTC48: A deep dive into the Meta stock + why it's fallen 60%

Transcript

RTC48: A deep dive into the Meta stock + why it's fallen 60% · The Curve

• 0:00
  Welcome to the Curve Podcast, a conversation for women who want to learn more about money.
• 0:07
  They are money for the future they want to have.
• 0:10
  We're all busy in the pursuit for financial confidence and increasing your wealth should be a simple one.
• 0:16
  This podcast is for women to learn about investing in a non-scary or intimidating way.
• 0:21
  With short episodes, you'll have time to learn, digest and understand everything to do with the world of investing.
• 0:28
  So thank you for being here and for listening.
• 0:31
  Because together we really can raise the curve.
• 0:36
  Morning.
• 0:37
  Hello.
• 0:39
  Evening.
• 0:40
  Evening.
• 0:41
  Gosh, I can't wait to hear both.
• 0:43
  Hang.
• 0:44
  Morning.
• 0:45
  Or evening.
• 0:46
  God, it's getting annoying.
• 0:47
  Not long.
• 0:48
  Yes.
• 0:49
  Back in a week.
• 0:50
  So I'm currently in Madrid and I'm staying in my friends apart.
• 0:54
  I feel like every episode it's like another city.
• 0:57
  And it sounds really romantic and it sounds amazing, but I really wish I could show you what's happening behind the scenes.
• 1:06
  So I'm in a really cute little room in the heart of Madrid.
• 1:10
  And outside I'm really hoping that you can't hear people screaming and drunk 15 year olds because it is like the center of the party spot in Madrid.
• 1:19
  But I was like setting up.
• 1:21
  It's fun when you're with friends.
• 1:23
  It's like you feel like such a weirdo going into a bar and drinking a cocktail, staring at everyone.
• 1:28
  Like last night I took myself out for dinner.
• 1:30
  We can just really cute place.
• 1:32
  It was like a natural wine bar.
• 1:34
  Ordered myself some like delicious food.
• 1:36
  But I'm sitting in the corner, staring at all these cool people with their friends.
• 1:41
  And I purposefully didn't want to get my phone out to be just like scroll and we're doing dumb shit while I wait for my food.
• 1:46
  So I'm trying to be present, but I just stare at everyone.
• 1:50
  I'm just serial killer vibes.
• 1:53
  It really is.
• 1:54
  Especially because I was in like a dark corner.
• 1:57
  Also surprisingly hard to communicate when you don't speak the same language.
• 2:01
  Like I forgot how hard that was.
• 2:04
  But I kind of love that.
• 2:06
  Like I hate going to a new city and everyone speaks English.
• 2:10
  Or you start to speak Spanish or start to speak Italian and they speak English back to you.
• 2:15
  And you're like, no, I'm trying.
• 2:17
  I think it's great if you're not trying to record a podcast in 30 minutes.
• 2:22
  And your phone is died and you don't know how to get home.
• 2:24
  You know, like I mean, there's a time in a place.
• 2:27
  Yeah.
• 2:28
  For like Lucento.
• 2:29
  Hola.
• 2:30
  Muy bien.
• 2:31
  But absolutely not when you're.
• 2:33
  Help, help.
• 2:34
  How do I get home?
• 2:36
  Oh, my gosh, that happened to me in China.
• 2:40
  I was there for work.
• 2:41
  And I was like, you know what, I'm going to quick run before my meetings, before the conference.
• 2:46
  Uh, and you can't get Google maps in China.
• 2:50
  Why?
• 2:51
  And so because they've blocked Google, like they just, yeah, I couldn't see a lot.
• 2:55
  Yeah.
• 2:56
  And so I went for a run and I was like, look, I'm just going to go few blocks this way, few blocks that way.
• 3:00
  I kind of, yeah, I kind of thought I knew where it's going.
• 3:03
  Uh, and then I got so lost and I couldn't, I couldn't ask anyone for help.
• 3:08
  I went into hotels and was asking them, you know, do you know the name of my, my hotel?
• 3:12
  They couldn't help me.
• 3:13
  And I ended up sitting on the curb and just started crying.
• 3:16
  And I was like, I am in Shanghai.
• 3:19
  And I can't get back to my hotel.
• 3:22
  I was like, work sent me over here to go to these meetings.
• 3:25
  I'm lost anyway.
• 3:26
  And then, and then I stood up and I was like, stop being, stop being useless.
• 3:29
  And I stood up, just started walking aimlessly.
• 3:31
  And then I just stumbled across my hotel.
• 3:33
  And I was like, oh, but I was sitting down.
• 3:38
  And I was like, oh, my gosh.
• 3:40
  I was like, what am I going to do?
• 3:42
  I am in, I'm in China by myself.
• 3:44
  You know, and you start, everything starts getting like so overwhelming.
• 3:47
  And then you're like, okay, just be practical.
• 3:49
  Like get up, walk.
• 3:50
  You're not going to find your hotel sitting on the curb.
• 3:52
  So I was like, it's so scary.
• 3:57
  I think it's when you're overseas.
• 3:59
  You don't speak the language and you're just, you, you can't, it's kind of like
• 4:03
  when you spend time with your family, you revert to being a child.
• 4:06
  One thing could go wrong and you lose the plot.
• 4:08
  Like I was, yeah.
• 4:10
  I mean, I've cried probably four times in the last week since I've been in
• 4:14
  Porto Madrid and Lisbon just because like stupid stuff happens and I just start crying.
• 4:19
  So yeah.
• 4:21
  Like when I curved my tire the other week and I just called my dad crying.
• 4:24
  And I was like, oh my god, you popped a tire like chill out girl.
• 4:28
  But I'm just like, it's something like, dad, what do I do?
• 4:33
  He's like, oh, cool.
• 4:34
  I'm like, oh, yeah.
• 4:37
  We have some deeper rooted sort of shit that we need to deal with, I think.
• 4:42
  If we're just like, like just crying.
• 4:44
  Yeah.
• 4:46
  Sort it out.
• 4:48
  Sort it out.
• 4:50
  Anyway.
• 4:52
  So we're going to do a stock story today.
• 4:55
  And I so for love these.
• 4:57
  And I hope your rhinoceros.
• 4:59
  Yeah, it definitely gives me investing ideas.
• 5:01
  Yeah.
• 5:02
  And it's really good to kind of look at both sides of, you know, the good and the bad of a stock.
• 5:06
  Why a stock has done well or hasn't done well, making sure you're looking at the full picture.
• 5:11
  And yeah, provide ideas, I guess, for a formal diversified portfolio.
• 5:16
  I got the diversified word in there already.
• 5:18
  Oh, good.
• 5:19
  God.
• 5:20
  It's not even been five minutes, babe.
• 5:22
  Oh, gosh.
• 5:25
  So.
• 5:26
  So.
• 5:28
  Well, I mean, you know what?
• 5:29
  When you first started talking about diversification, I was like, oh, God.
• 5:33
  It's a word I just don't.
• 5:34
  It's so boring.
• 5:35
  It means nothing.
• 5:36
  I'm like, confusing.
• 5:37
  And now I fully understand the concept.
• 5:40
  I understand why it's your number one phase go to topic.
• 5:44
  For anyone who doesn't know what diversification is, we have actually done a whole podcast on that.
• 5:49
  So it's essentially a means basically spreading your risk in terms of investing lots of different.
• 5:55
  You know, how you got to the supermarket and there's different verticals.
• 5:58
  So there's like shampoo aisle.
• 6:00
  There's, you know, the frozen fruit section.
• 6:03
  There's the, I don't know, rice section biscuits, etc.
• 6:06
  It's basically like buying something from every column.
• 6:09
  So that if for some reason, one of those things ran out of stock and you got to the supermarket and you want corn chips.
• 6:16
  And all you ever eat is corn chips and they're all gone.
• 6:19
  Then you'd starve.
• 6:20
  It's the same kind of thing when it comes to your portfolio.
• 6:23
  So diversification is essentially making sure that you're not investing in just one company in case something happens.
• 6:30
  And then your portfolio turns to total shit.
• 6:33
  It's kind of like dating as well.
• 6:35
  You know, not just dating one guy.
• 6:37
  Don't multiple because you never know if they're all going to be done.
• 6:39
  Oh god, who's what time for that?
• 6:41
  You know, don't put all your eggs in one basket.
• 6:44
  Definitely don't have time for that.
• 6:45
  I went on bumble over here.
• 6:47
  And Madrid and I tell you what, there's some very good-looking men in Spain.
• 6:52
  None of them have messaged me back.
• 6:54
  But thank you.
• 6:56
  Keep diversifying.
• 6:57
  Keep diversifying.
• 6:58
  Maybe I'm not there time.
• 7:00
  Oh, that's so funny.
• 7:02
  So this company is, we probably use their products all the time.
• 7:08
  Well, I know I do multiple times a day.
• 7:10
  Unfortunately, probably first thing in the morning, which is not good.
• 7:15
  But it's Facebook or Meta.
• 7:17
  Oh, yeah.
• 7:18
  The company is called Meta now.
• 7:19
  They changed their name.
• 7:20
  But essentially, it's Facebook.
• 7:22
  I think it's clever they changed it.
• 7:24
  Because there's a meta like the new internet basically.
• 7:27
  It's like, change your company's name to being the internet.
• 7:29
  Yeah, it's like calling your company worldwide web or something.
• 7:33
  Yeah, it's like years ago.
• 7:35
  Yeah, so it's meta in terms of the metaverse.
• 7:40
  Yeah, so that's why they're renamed it.
• 7:42
  And also, they've got so many different products now.
• 7:45
  You've got Facebook.
• 7:46
  You're Instagram.
• 7:47
  You've got WhatsApp.
• 7:48
  So calling it just Facebook after one product, you know,
• 7:53
  it's kind of makes sense.
• 7:54
  Yeah.
• 7:55
  So yeah, so they changed their name.
• 7:56
  So it's now called Meta.
• 7:57
  And Google actually did this as well.
• 7:59
  They changed their name to Alphabet.
• 8:01
  But yeah, so Facebook.
• 8:03
  So billions of people all across the world use their products on a regular basis.
• 8:07
  Use them daily.
• 8:08
  Multiple times a day.
• 8:09
  I mean, we use ours for the curve.
• 8:11
  You know, we're on it.
• 8:12
  You and I.
• 8:13
  So if we're on it like multiple times a day.
• 8:15
  Oh, good God.
• 8:16
  So if I counted the amount of times I was on it.
• 8:18
  Yeah.
• 8:19
  Oh, gosh.
• 8:20
  I don't almost I want it.
• 8:21
  So, you know, and if they got rid of Instagram, Facebook and WhatsApp.
• 8:25
  You know, how many businesses and people would be able to survive or connect with each other?
• 8:29
  Like there's the very,
• 8:30
  what would you say permeated into society and into billions and billions of people across the world?
• 8:38
  So very, very kind of sticky,
• 8:41
  essential products.
• 8:43
  But I wanted to kind of take a step back and kind of talk about the history of Facebook because it's quite interesting.
• 8:47
  So a lot of people will know how it came about.
• 8:51
  It was founded in 2004 by Mark Zuckerberg.
• 8:55
  Well, there's, you know, there's that, that movie, the social network, which kind of.
• 8:59
  Oh, my God.
• 9:00
  Yeah.
• 9:01
  Like he didn't actually make it up.
• 9:02
  Exactly.
• 9:03
  Yeah.
• 9:04
  So there's all, however it started, but anyway, it was officially kind of founded in 2004.
• 9:08
  Because can I ask?
• 9:09
  Question.
• 9:10
  Excuse me, teacher.
• 9:11
  Do you think that that was, he stole someone's idea?
• 9:15
  I mean, I've watched the social network, but it's a pretty glamour hollow, Hollywoodized movie.
• 9:20
  So I don't know what's.
• 9:22
  God, I'd love to know.
• 9:24
  I mean, it's not hard.
• 9:26
  I reckon the fact that it's been so successful and that it's been, you know, it's one of the biggest companies in the world.
• 9:33
  And he's managed to do it by himself without those two.
• 9:36
  I'm kind of like, it was probably his idea.
• 9:38
  You can have an idea, but your execution is everything.
• 9:41
  So it's totally, I don't know.
• 9:43
  There's a part of me that thinks if he's as clever to make it as big as it is,
• 9:46
  he probably is as clever to have come up with the idea.
• 9:49
  100% and they all could have all been sitting at a room being like,
• 9:51
  Hey, should we start this thing that, you know, like does this?
• 9:53
  And then they just create it, but he's like, actually, this is really good.
• 9:56
  It's got legs and actually takes it that step further.
• 9:58
  So they could have all gone with the idea, but it's kind of that.
• 10:01
  Yeah, like you say, the execution and actually driving it to become a really, really successful business.
• 10:06
  So it was, it was started in 2004.
• 10:09
  And in 2006, only two years later, they turned down an offer by Yahoo to buy the company for a billion dollars.
• 10:19
  So in two years, they turned down, yeah, it's, that's crazy.
• 10:23
  Like they had multiple offers, multiple offers to buy the business.
• 10:27
  And they turned down one, two years later, four billion dollars by Yahoo.
• 10:33
  And then 10 years ago, so in 2012, they IPO's, which means,
• 10:42
  that's when a company becomes public for the first time.
• 10:45
  So public investors can buy shares.
• 10:49
  So it lists on the stock exchange and it shares are traded on a daily basis
• 10:54
  and people can buy and sell shares.
• 10:56
  And the only reason it did that, which I found this quite interesting, I didn't actually know this,
• 11:01
  was it didn't want to become a public company.
• 11:04
  But because it had over 500 shareholders, the rules in the US that once you have over 500 shareholders,
• 11:11
  you have to publicly disclose your financial results.
• 11:15
  And there's all these kind of disclosure requirements, which is effectively like a public company.
• 11:19
  So it's kind of like, okay, well, we've got 500 shareholders,
• 11:22
  we have to disclose all this public information.
• 11:25
  We may as well become a public company.
• 11:27
  So that was kind of the rationale.
• 11:28
  Interesting.
• 11:29
  They didn't need money.
• 11:31
  They didn't, you know, there wasn't any kind of reason apart from that strategy behind it.
• 11:37
  Yeah, yeah.
• 11:38
  And it was actually a really disastrous IPO.
• 11:40
  Really?
• 11:41
  It was, it was terrible.
• 11:43
  Yes, which is quite fascinating considering how well the company has done now.
• 11:48
  But in the beginning, it was listed at like $38.
• 11:53
  And so that was the price that people would buy the shares at when it went first to their public.
• 11:58
  And then it kept going down and down and down and it felt about $18.
• 12:03
  And then it didn't get back to that kind of $38 price for about 16 months.
• 12:10
  So it was kind of what we call underwater.
• 12:13
  Why do you think that was?
• 12:15
  It was probably the market at the time, but also.
• 12:19
  I'm not sure there's obviously it could have been priced too high.
• 12:22
  So it means that that $38 mark, you know, everyone kind of gets the shares that they want.
• 12:29
  There's no kind of people demanding the shares after that.
• 12:32
  It could have been, it could have been that the tech companies at the time weren't doing very well.
• 12:37
  Could have been, you know, kind of the economy at the time.
• 12:39
  I'm not, I'm not sure what was going on back in 2012.
• 12:42
  Interesting.
• 12:43
  But since the IPO, it's gone from $38, which was the IPO.
• 12:48
  Yes, it fell a bit and it's gone up and down, but it now it's at $380.
• 12:54
  So it's gone from $38 at IPO to $380 now.
• 12:59
  So it's what we call a 10 beggar, which means that it's not really that impressive though.
• 13:05
  Is it like some companies go up like 100%.
• 13:08
  That's gone up.
• 13:10
  So $38 to $380.
• 13:13
  It's gone up 10 times.
• 13:15
  Yeah.
• 13:16
  That's all that 100%.
• 13:18
  That's a beggar times 10.
• 13:19
  Yes, so yeah, yeah.
• 13:21
  So yeah, so that's, and that's only in 10 years.
• 13:25
  Oh, don't say that as if it's going to take over the world even more.
• 13:29
  No, I'm saying it's such a short space of time.
• 13:32
  Like 10 years ago, like I was on the 23.
• 13:35
  Like I was still using Facebook and Instagram.
• 13:37
  I guess the question is kind of why are we talking about Facebook now?
• 13:41
  And the reason I wanted to kind of bring this up as a stock story is that they had a recent result.
• 13:48
  So we talked a few episodes ago about US reporting season and how companies have to report their results.
• 13:55
  If you're a public company in the US, you have to report your financial results four times a year.
• 13:59
  And so Facebook has recently reported their financial results.
• 14:05
  And it wasn't good.
• 14:07
  Really?
• 14:08
  Yeah.
• 14:09
  So the share price fell about 20%.
• 14:12
  Which is quite, quite big, particularly for a company this size.
• 14:16
  You know, you tend to see movements like that in more small companies.
• 14:21
  Because how much would 20% be like monetary wise?
• 14:26
  Good question.
• 14:27
  Billions.
• 14:28
  Yeah, the market cap is about 300 billion market cap is like what a company is valued at.
• 14:35
  Yes.
• 14:36
  So it's this number of shares times the share price.
• 14:39
  So the share price moves up and down.
• 14:41
  The number of shares tends to say the same.
• 14:44
  So you take the share price and you times that by the number of shares that are available to the public.
• 14:49
  And that's how you get the value of the company.
• 14:52
  So the value of Facebook is about 300 billion dollars.
• 14:58
  So essentially the value of it now would be a lot less because their share price has gone down 20%.
• 15:03
  Yes.
• 15:04
  So sorry, that's the new, that's the new price now.
• 15:06
  So it's lost 20% of its share price and 20% of its the value of the business.
• 15:11
  And this is Instagram Facebook.
• 15:13
  This isn't just Facebook.
• 15:14
  Let me talk about it.
• 15:15
  Yeah.
• 15:16
  It's interesting because when we talk about it, I'm solely thinking about Facebook, which in my mind has surely died.
• 15:22
  There's not that many people that are loving Facebook these days, except my grandma.
• 15:27
  Yeah.
• 15:28
  And that's where the biggest question is that the reason they had a bad result was that their revenue had been impacted and their earnings.
• 15:38
  Because there was kind of kind of three reasons I guess.
• 15:42
  The first one was, like you said, competition.
• 15:45
  So increased competition from the likes of TikTok means that your Facebook and Instagram are losing losing markets here.
• 15:54
  In terms of stream time.
• 15:56
  Yeah, it's going to say screen time.
• 15:58
  And is that also then advertising dollars because people are starting to spend their dollars with say TikTok.
• 16:05
  Exactly.
• 16:06
  And that means that, you know, a company only has so many marketing dollars to spend and now it's being reallocated or some of it is being reallocated.
• 16:14
  Exactly.
• 16:15
  Which is Facebook.
• 16:16
  If you had only Instagram, if everybody only had Instagram on their phone and that was all my eyeballs were looking at.
• 16:22
  Then of course, advertising would that would be their sole focus in terms of where they're advertising.
• 16:27
  But now I'm like, hey, I'm actually splitting my time between Instagram and TikTok.
• 16:32
  And TikTok may now have 20% of my eyeball time.
• 16:37
  And Instagram only has 80, not 100% now.
• 16:40
  Then naturally advertisers are going to be like, hey, let's invest in this TikTok, you know, advertising on TikTok.
• 16:46
  And let's go there as well.
• 16:47
  And I want to know that we can't buy TikTok.
• 16:49
  I wish TikTok was public because I would turn a little bit on that.
• 16:52
  Yeah.
• 16:53
  So it's, yeah, it is, it is frustrating.
• 16:55
  But yeah.
• 16:57
  So this is the kind of thing is like, so that first was that, yeah, this increased competition.
• 17:02
  Which means that advertising dollars are being kind of taken away from Instagram and been put on other platforms.
• 17:08
  The other thing was that there was Apple actually did some some iOS changes.
• 17:13
  So it changes to its system, which is in terms of tracking people's movements on the phone.
• 17:21
  Yeah.
• 17:22
  So this really impacted Facebook.
• 17:24
  And this was done kind of 12 months ago.
• 17:26
  And Facebook came out and said, you know, it's not going to make any difference.
• 17:28
  Advertises are still going to advertise with us.
• 17:30
  And we've slowly decided to see that advertisers, if they can't actually track where you are,
• 17:37
  then advertising dollars are less powerful, less useful.
• 17:42
  So they're kind of like, oh, you know what, you can't actually give me accurate data now because of these changes.
• 17:49
  So I'm going to go and spend my advertising dollars elsewhere.
• 17:53
  So that's kind of in one campus, the at the slow down and advertising dollars.
• 17:58
  And then the other thing is also that they were making a lot of investments,
• 18:03
  which is kind of what we talked about before in this meta, into the metaverse.
• 18:07
  And so people are kind of a bit still, still a bit uneasy around like, what the hell is this metaverse?
• 18:13
  What is it going to be?
• 18:14
  What does it mean for Facebook?
• 18:16
  Can we start there? I don't even know what it is.
• 18:19
  Yeah, so it's like an alternate universe.
• 18:21
  So if you think about, it's kind of interrelated with like cryptocurrencies.
• 18:28
  And you can go in and you can create this like, I'm still not 100% myself.
• 18:34
  You know when people put on those like, I'm thinking like Sims, you know,
• 18:39
  you go and create these alternate universes and you have your metaverse and you have,
• 18:43
  it's kind of like, are we going to be living in a fake world?
• 18:50
  Is that what's happening?
• 18:51
  Yeah, it's literally, it's kind of like trying to explain the internet to someone
• 18:56
  before the internet was around.
• 18:59
  It's like, it's like an alternate universe, really.
• 19:02
  It's probably the best way to take it out.
• 19:04
  What does Facebook own it?
• 19:06
  Digital universe.
• 19:07
  No, no, no, it's not.
• 19:08
  You don't own, you don't own the universe, but you're trying to create.
• 19:14
  Products within the universe?
• 19:16
  Yeah, like create an alternate universe world, really.
• 19:22
  Right, okay.
• 19:23
  I don't know.
• 19:24
  I guess this is the big question when it comes to Facebook.
• 19:26
  And this is kind of what I've been struggling with is,
• 19:30
  do you believe that management can execute on delivering growth in the future,
• 19:40
  whether it be from advertising revenue, whether it be from this metaverse investment
• 19:45
  that they're making?
• 19:46
  Do you believe that they can allocate capital, allocate money?
• 19:52
  Well, enough to grow this business and keep growing their earnings.
• 19:58
  And the questions are, have they done it well in the past?
• 20:01
  My answer that would be like, yes, you know, they've bought Instagram really, really.
• 20:06
  They bought Instagram for a billion dollars back in 2012.
• 20:10
  And it's now valued over kind of, but now it's now generates 20 billion dollars
• 20:13
  of revenue for Facebook.
• 20:15
  So they have bought companies well, they've seen opportunities,
• 20:19
  they've known where to position the business and what to take advantage of.
• 20:23
  Do you think they'll buy TikTok?
• 20:25
  They know that we went from looking at videos and images and static images to going to video.
• 20:33
  They've made that pivot.
• 20:35
  They've pivoted the business well and taken advantage of these opportunities well historically.
• 20:42
  So for me personally, it does give me comfort that they know what they're doing in the future.
• 20:48
  So there's investments that they're making, yes, they're costing the company a lot of money,
• 20:51
  which is what investors don't really like.
• 20:53
  But in the long run, you know, is it going to pay off?
• 20:57
  And that's the question you should be asking yourself, is this 20% for on the share price?
• 21:01
  A buying opportunity or not?
• 21:03
  And that's the kind of thing, is this a short term issue or is it a long term issue?
• 21:07
  Or is the business investing in something that's not going to ventuate that no one's going to use
• 21:12
  and it's just wasting this money?
• 21:14
  That's kind of the questions you need to be asking yourself.
• 21:17
  When you see a really big fall in a share price or a company share price is going down and down and down and down,
• 21:23
  you need to go, okay, what is causing that?
• 21:25
  Is it short term?
• 21:26
  Is it long term?
• 21:27
  You know, should I be taking advantage of this?
• 21:29
  And those are the kind of the questions that a lot of investors are seeing themselves,
• 21:34
  whether they're invested in Facebook already or they're sitting on the sidelines kind of waiting to invest,
• 21:38
  it's like, do you trust management that they're doing the right thing?
• 21:43
  Really.
• 21:45
  Can we do a bit of a deep dive into the metaverse at some stage?
• 21:49
  Because I'd love to understand it more.
• 21:51
  Because I feel like it's quite hard for me to make a decision on that without really understanding
• 21:56
  what it is there investing in.
• 21:58
  Yeah, I think we need to give an expert on that because the metaverse.
• 22:01
  Because I feel like you don't really know what it is.
• 22:03
  No, but the metaverse is so confusing.
• 22:06
  We just don't need to be taken out of real life anymore than we already are.
• 22:10
  And you know one thing with Facebook that really kind of gives me a better idea,
• 22:13
  gives me a bit of sense of ease, I guess.
• 22:16
  If I am investing in Facebook or if I don't share it in Facebook,
• 22:19
  is that Mark Zuckerberg owns 14% of this company.
• 22:23
  You know, he, yes, admittedly, he's a billionaire and that 14% is about $40 billion.
• 22:29
  But he owns a lot of this business.
• 22:32
  You know, he most likely would not be making...
• 22:36
  To also his baby.
• 22:37
  Yeah, yeah, exactly.
• 22:39
  And he's going to be most likely making these investments to grow,
• 22:44
  to grow his business so that, you know, his shareholder will be more and more.
• 22:50
  But you know, like if he was, if there was no,
• 22:54
  no founder at the helm with a large shareholder,
• 22:57
  it probably made me a bit more skeptical because a CEO could be making all these investments
• 23:02
  and then be like, see ya.
• 23:04
  But and there's still that risk that he, you know,
• 23:06
  that Mark Zuckerberg could get up and leave.
• 23:08
  But it does give me a lot more comfort knowing that he owns such a large state of this company
• 23:12
  and he is young.
• 23:13
  He's driven this business from $38 to $380 in terms of share price.
• 23:18
  You know, he has grown this business to a $300 billion business.
• 23:23
  And it does give me some comfort he knows what he's doing.
• 23:26
  But it also is, can be painful because if investors don't believe him,
• 23:32
  the majority investors, then the share price isn't going to go anywhere.
• 23:36
  But does that really matter if the share price goes down and the business,
• 23:40
  like in the business, it's not actually going to affect the functionality of the business, right?
• 23:45
  Yeah.
• 23:46
  And eventually, eventually over the long term share price follows earnings growth.
• 23:50
  So if he is investing now and almost taking, you know, short term hit in terms of earnings,
• 23:56
  but earnings are going to accelerate or grow faster and be bigger in the future.
• 24:00
  The share price will eventually follow that and investors will eventually wake up and go,
• 24:04
  oh, hang on.
• 24:05
  Actually, he is doing what he said you do.
• 24:08
  And the share price is probably up 20% from there.
• 24:14
  So they're the ones that lose out.
• 24:16
  But yeah, so it's a real interesting dynamic when you get companies that have bad results
• 24:23
  or their share prices fall.
• 24:25
  It's really important to sit there and go, okay, is this a short term issue?
• 24:29
  Is this a long term issue?
• 24:31
  And it's hard.
• 24:32
  It's hard to just, it can be really hard to figure out.
• 24:36
  And you probably will get it wrong sometimes.
• 24:38
  I still get it wrong sometimes.
• 24:40
  But, and here we go.
• 24:42
  That's why you have me a diversified portfolio.
• 24:46
  That's why you have me, like me, that most ego to swear.
• 24:51
  Maniac ever.
• 24:52
  Sorry.
• 24:53
  Wow.
• 24:54
  Okay.
• 24:55
  And that's why you got it.
• 24:56
  So this is why, okay, so it's like, you know what,
• 24:59
  if you decide to invest $2,000 into Facebook,
• 25:02
  and it's a total blanca, well, it's fine,
• 25:04
  because it's only two percent of your portfolio.
• 25:06
  Okay.
• 25:07
  Yes.
• 25:08
  Not over $100,000 in your portfolio.
• 25:09
  And also maybe if this share price falls,
• 25:12
  because all of the other tech companies have fallen anyway haven't they?
• 25:15
  It's always though it's the only company that's done shit.
• 25:18
  So that's probably something to keep in mind as well, isn't it?
• 25:21
  So it's really important to look at share prices in relation to the stock market
• 25:25
  and how the market has performed.
• 25:27
  Because if you've got a stock that's down 10 percent and you're like,
• 25:30
  oh my gosh, it's fallen 10 percent.
• 25:31
  It's like, yeah, with the markets falling 20,
• 25:33
  that's actually really good.
• 25:34
  Your stock is outperforms the market.
• 25:37
  And that's what you want.
• 25:38
  You want lots of those stocks in your portfolio.
• 25:41
  Whereas Facebook, for example, is falling 60 percent over the last 12 months.
• 25:46
  And the market is down 20.
• 25:47
  So it's actually done a lot worse in the market.
• 25:50
  So shit.
• 25:51
  So it's falling 60 percent in a year.
• 25:54
  That's huge.
• 25:55
  Yeah.
• 25:56
  So yeah, I guess it's like that could be an incredible buying opportunity.
• 26:01
  Or you could be jumping on board a one track train to disaster town.
• 26:07
  Yes.
• 26:08
  Yes, I could say.
• 26:10
  Yeah.
• 26:11
  As unlike if you're getting 60 percent off technically from the start of the year,
• 26:16
  and you still think the company's really great,
• 26:19
  then you're getting a half price more than a half price share.
• 26:22
  Yeah.
• 26:23
  And that's the thing that's really difficult to figure out.
• 26:26
  And, you know, is it going to disaster town or is it going to the moon?
• 26:31
  And, you know, you're going to have some,
• 26:35
  some stocks that are on the train and some that are on the rocket.
• 26:38
  But you, yeah, you just need it.
• 26:40
  Are you on the rocket or the train?
• 26:42
  I've got a few on the train.
• 26:44
  Well, I don't know, but I hope they don't end up.
• 26:46
  I hope that train turns around and heads to the moon.
• 26:49
  So you've got some and you're hoping they're on the way to the moon.
• 26:52
  Yes.
• 26:53
  I don't even know if I've ever, I kind of remember if I've invested in Facebook.
• 26:57
  I can tell you.
• 26:58
  Do you have a vision?
• 26:59
  Oh, thank you.
• 27:00
  Yeah.
• 27:01
  The next episode we do next week is going to be on my portfolio
• 27:07
  and that asked me to send a breakdown of what I've invested in.
• 27:10
  So she's obviously all over it.
• 27:12
  I couldn't remember if I've done like $100 here and there, but obviously.
• 27:17
  Yeah.
• 27:18
  We do this stock stories to bring you ideas to the table and have chats
• 27:22
  and you have balanced discussions of both sides of the risks
• 27:26
  and the opportunities of each investment.
• 27:28
  And it's not, we're not saying invest in these at all.
• 27:31
  We're just kind of saying, you know, these are the things you should be looking at
• 27:34
  when you're looking at different stocks in different ways.
• 27:37
  You know, not to freak out when a stock, when a share price falls 20%.
• 27:40
  You know, be pragmatic about it and be like, okay.
• 27:43
  Okay.
• 27:44
  And I'm going to, and I'm going to be like, okay.
• 27:48
  Why is it fallen?
• 27:49
  What is the reasoning?
• 27:51
  It's like being breathing in the back up.
• 27:55
  I did that today in a park.
• 27:57
  It's laid down and just went off and I got up and I was like, could you hear that?
• 28:00
  And I'm like, yeah, you're okay.
• 28:01
  I was like, yes.
• 28:02
  I wasn't having a panic attack.
• 28:05
  So three deep breaths.
• 28:08
  Three deep breaths.
• 28:09
  And then figure out why is the share price fallen?
• 28:13
  And do I believe it's going to be a short term issue or a long term issue?
• 28:17
  If it's a short term issue, then you should probably be buying some.
• 28:21
  If it's a long term issue, you should probably selling some.
• 28:24
  Because we want our presence to grow over the long term.
• 28:29
  So when you invest in stocks, you always talk about there being five main things
• 28:33
  that you should look for.
• 28:35
  Ideally, you want to tick from all five.
• 28:38
  We have a full episode on this.
• 28:40
  If you haven't listened to it, I think it's called how to pick a winning investment.
• 28:45
  But it's from maybe season one or season two.
• 28:48
  Essentially, the five things are aligned management team.
• 28:52
  Like is the management team either a having skin in the game or like is the CEO also an owner or founder?
• 28:58
  In this case, Mark Zuckerberg tick.
• 29:01
  14% did you say?
• 29:03
  Yes.
• 29:04
  So two strong competitive advantage, which I would say it used to, maybe not anymore.
• 29:10
  I mean, tech talkers really up its arse in terms of competitive and a competitor.
• 29:18
  But maybe the metaverse situation is going to be what you know,
• 29:23
  and that's kind of what you decide is what your view is.
• 29:26
  And there's probably people listening to this going, oh my gosh, I can't believe you guys don't know what the metaverse is.
• 29:30
  Oh my god, it's an express thing.
• 29:32
  Oh my gosh, Facebook is going to be killing it.
• 29:35
  And hats off to you guys.
• 29:36
  No, if that's the case, please, because we would love to know.
• 29:40
  Yeah.
• 29:41
  And hats off to you.
• 29:42
  And you probably can see this massive opportunity.
• 29:44
  And you're like, okay, I'm going to invest millions into into Facebook and go you.
• 29:50
  But there'll be other people out there going, oh my gosh, I don't believe this metaverse thing is going to eventually.
• 29:54
  And I think they're wasting their money.
• 29:55
  So that's the kind of thing that you need to decide.
• 29:57
  And everyone will have different views balance sheet is one of them.
• 30:00
  So does it have a strong balance sheet?
• 30:02
  Yes, Facebook has about 30 billion dollars of cash.
• 30:05
  So they can afford to invest in the metaverse.
• 30:07
  They can afford to buy competitors.
• 30:09
  They can afford to launch new products.
• 30:12
  Yeah, they can back into a lot with that money.
• 30:16
  Oh, I forgot the other ones.
• 30:18
  Revenue visibility.
• 30:19
  This is probably a bit of a gray area as well.
• 30:21
  Okay, I would say that they have very good revenue visibility.
• 30:24
  But recently with advertisers kind of pulling their money and putting it elsewhere.
• 30:30
  Probably not as good as visible revenue as you would as you would have previously thought.
• 30:37
  So that's probably a bit of a gray area.
• 30:40
  And then the last one is it in a structural growth industry.
• 30:43
  And I would say, yes, I would say more people are going more and more people are going online.
• 30:49
  Again, this metaverse is kind of a new thing going on.
• 30:54
  But there's also, so when we talk about structural growth, we're talking about kind of multi-generational,
• 31:00
  you know, very, very long term growth, something that's a big change.
• 31:03
  It's trends.
• 31:04
  Yeah, it's trends.
• 31:07
  And one thing would be a really good example would be like trends towards caring about the environment.
• 31:13
  You know, 10 years ago, probably not that many people cared.
• 31:16
  Now it's like you probably hit someone.
• 31:19
  Sorry, I shouldn't have that.
• 31:20
  You wouldn't shouldn't have anyone.
• 31:21
  But you know, like it would be very weird for someone to be completely oblivious
• 31:25
  to living their life somewhat in line with caring about the planet, right?
• 31:28
  Yeah.
• 31:29
  That's a general trend.
• 31:31
  Or generally we're moving towards digital payments.
• 31:34
  Or generally we're using more electronics.
• 31:38
  You know, it would be the opposite would be a newspaper where there's not that many people buying physical news.
• 31:42
  People buying physical newspapers anymore.
• 31:44
  So we need to fix this structural growth, that's what she means.
• 31:47
  Yes, I would argue that meta is very much in a structural growth industry.
• 31:53
  You know, we're spending more and more time online doing things digitally.
• 31:57
  And I think they're really capitalizing on that.
• 32:00
  And I think the metaverse is probably the next kind of structural growth area.
• 32:04
  But the fact that meta gets a lot of its revenue from advertisers does kind of add like the cyclical element.
• 32:11
  Which means that, you know, it's more up and down growth.
• 32:15
  It's more growth in cycles.
• 32:18
  So it's a bit of a confusing one in terms of its in terms of that.
• 32:23
  So there is a tiny element that in terms of growth that will come and go.
• 32:29
  The underlying.
• 32:30
  I think that the growth is very much structural.
• 32:33
  So it probably takes I think it gets probably about a four.
• 32:37
  Maybe a three and a half.
• 32:39
  Three and a half at the moment.
• 32:41
  Yeah, yeah.
• 32:43
  It's still very good.
• 32:45
  Yeah.
• 32:46
  It's fine, it's fine.
• 32:48
  It's fine.
• 32:49
  The ship's sinking, but it's fine.
• 32:51
  It's just a little bit of water.
• 32:53
  We'll just tip it out the side.
• 32:55
  It's fine, it's fine.
• 32:56
  We'll round it up to five, yeah.
• 32:58
  We can kind of see an island in the distance.
• 33:00
  We will make it.
• 33:01
  We won't be drowning.
• 33:03
  Oh, gosh.
• 33:05
  Yeah, so.
• 33:06
  We star that one.
• 33:08
  Mm-hmm.
• 33:09
  Okay, that was a great epic.
• 33:11
  Thank you so much for just generally letting me know what has happened.
• 33:15
  Yeah, that's because we have assistance.
• 33:17
  You know?
• 33:18
  Mm-hmm.
• 33:19
  You haven't lost your job yet.
• 33:21
  Yay.
• 33:22
  Okay, I'll talk to you in five minutes when we record the next episode.
• 33:26
  Okay, that sounds good.
• 33:27
  See you soon.
• 33:28
  Bye.
• 33:29
  Okay, bye.
• 33:30
  Thank you so much for joining us for today's episode of Raising the Curve.
• 33:34
  Please subscribe and leave a review on whatever platform you're listening on.
• 33:37
  And we would also love for you to share this podcast with anyone you think would benefit from it.
• 33:42
  For more information about the Curve and how you can learn more,
• 33:45
  head to thecurve.co.nz or find us on socials at the underscore CurveNZ.