Latest / The Curve / RTC7: Investing mindsets + how to actually invest in a company

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RTC7: Investing mindsets + how to actually invest in a company · The Curve

• 0:00
  Welcome to the Curve Podcast, a conversation for women who want to learn more about money,
• 0:06
  their money for the future they want to have. We're all busy in the pursuit for financial
• 0:12
  confidence and increasing your wealth should be a simple one. That's why the curve was created.
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  This podcast is for women to learn about investing in a non-scary or intimidating way.
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  With short episodes you'll have time to learn, digest and understand everything to do with the
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  world of investing. Don't expect to be an expert on day one. No question is a silly question.
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  If you're asking it, so is everyone else. So thank you for being here and for listening,
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  because together we really can raise the curve. Oh we're back again. Hi. Hello. Now I left the last
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  episode feeling like, oh cool great. I sort of feel like I somewhat know some things about
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  shares. Why are you looking at me like that? Because I haven't said my name so fast.
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  But I think it's quite obvious. I've got very different voices. So last time we spoke a lot about
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  the shares and just in general terms and I left with my little note pad being like, cool great,
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  I know some stuff. I wouldn't even know where to start looking for a company that I could potentially
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  buy a share in. Like where to find these businesses is what you want to know. That was a very
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  long introduction of what I was trying to say. Yes. And that's the question I actually get asked
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  the most is, that's all well and good, that this is what I'm looking for and looking to invest.
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  But how do I find these businesses? How do I become? I want to become a part owner, but how do I
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  find these businesses? So I want to tell you a bit about my day so far. So this morning I needed to
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  get somewhere. So I jumped in the Uber. I then needed a coffee. So I went and paid for my coffee
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  with my visa. I then was on my way to yoga and my Lululemon outfit. How was that?
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  That was great. And then I actually called you so far on my iPhone. Brands, brands, brands.
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  I see where you're going. Exactly. And this was all before 10am. So just a little busy day.
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  These products that I've mentioned are all listed. They're all listed companies. You've got Apple,
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  Lululemon, Visa, Uber, they're all listed companies that you can get involved in. Finding investment
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  ideas is not difficult. You're using these products and services throughout your day without
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  even knowing. It's stopping and realizing, hey, I love these Lululemon pants or, hey, this
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  transaction with this visa is very easy. And the Uber app is so good. If you're thinking that
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  lots of other people are thinking that. So it's being aware of what you're using throughout your day.
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  And if you're finding something that's really good, really useful or solves a pain,
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  solves a pain point for you, you just Google it and see if it's listed.
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  It's actually, it's basically just changing your whole mindset from being a consumer to being
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  an investor, right? 100%. 100%. Because we're just the victim of being shot in the face of
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  advertising here. And we buy into it as a customer, but your right is changing that thought process
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  to be, well, if I'm spending all this money as a customer and I'm loving using it or doing that
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  or whatever. And it comes down to services as well. For example, if you're in the marketing industry
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  and you're using a different software or a different zero, when it first came out, I guess,
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  if you're an accountant or exactly using that and thinking, wow, this is actually really great.
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  And everyone in our team's using it. So that means that lots of other team,
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  accounting teams are using it and just have. I feel quite inspired. All of a sudden feel like
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  this is actually not as hard as you think. It's just thinking about what you do and where everyone
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  that you like following trends. Yes, exactly. What's a theme or what's a trend that I want to get
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  involved in? And it comes back to, if you don't understand it, then don't buy it. There's so many
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  businesses out there that you don't have to invest in the ones you don't understand. It's actually
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  really bad thing to do because if you don't understand the business, what are you investing in?
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  So it's just when you're a consumer or you use their service or their product,
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  it's much easier to make that investment decision. There's always a trick that I use when I'm
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  looking at companies to invest in. And it's called the elevator pitch. And I give myself the
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  elevator pitch test. Do you actually do it to yourself? Yes, 100% in the mirror. Where are you?
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  No, it's just a metaphorical. I'm not in the elevator. I just would love to see that.
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  No, so it's cool. You're giving your investment the elevator pitch test. And what that means is
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  if you can't explain it to a friend and the time it takes to ride the elevator down,
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  it's not worth your time. That kind of comes back to the same argument if you don't understand it,
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  don't buy it. Well, I'm getting from this is that everyone I know needs to invest in Instagram
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  because that is where most of us spend exactly about time. And we could have seen that trend.
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  But when we were talking to friends and they're like, oh, I'm not really using Facebook anymore.
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  Instagram's great. And then Instagram would have been the best time to invest in Instagram.
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  Then launch stories. And you could then shop on Instagram. And it was adding all these features.
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  And people were just people as in our friends and our so yeah, like our age group.
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  People were using Instagram a lot more. And the people around you were using Instagram a lot more.
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  That's happening globally. That's happening worldwide. And so that just means more people
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  using the platform. That's going to translate into more revenue for Facebook, Facebook owns Instagram,
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  by the way. And the growth outlook of that business is going to be a lot better. And that's going
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  to translate into better earnings, which means a better price for their shares.
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  So in the last episode you spoke about you're an own part, oh no, but it doesn't mean that you
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  actually can be involved in decision making in that company. So you have no rights. Yeah.
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  So if we were then to look at the Instagram example and you're wanting to invest in that,
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  but you didn't want to invest in Facebook. You specifically wanted to invest in just Instagram.
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  Do you have a choice as to where your money goes with the share? Or is it this the company as a whole?
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  The company as a whole. So you don't because Facebook owns Instagram and they own WhatsApp. And you
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  can't because that is the incorporated company is Facebook that you can't invest in Instagram.
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  But you've been a fit from that because as Instagram grows and becomes a greater portion of Facebook
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  overall, you'll be benefiting from that growth. Okay. But sometimes you have to take a few
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  few weeds with the roses, you know. Great. Is it? Okay, just make it up on the spot. Yeah, I think
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  my granddad would like that one. But sometimes businesses always have a division that that you don't
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  like or that it's it's it's not really relevant or it's not the growth story, but you kind of take
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  it because it's part of the business, part of the overall. Like a cool fashion label but they have
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  shitty shoes or something. Yeah, yeah, exactly. Okay. So that's a really good example of saying,
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  you know, look at your life and the way that you interact with products and things and people and
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  whatever to find businesses that you personally see growth in. But then then what like how do you
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  know if it's listed and then how do you even go to investing in that company? So you found a company
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  that you think has a great outlook. You can see it doubling in five years and you really want to
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  be a part of that business and you want to become an owner, a tiny owner at that, but you still want
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  to become an owner and be a part of that growth story. So once you've found that, yeah, what you're
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  kind of asking us is how do I actually buy the shoes? What other than googling is Nike a listed
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  company? Can I buy shirt? That's literally what I would Google. I have no idea. And that's exactly
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  what you should do. That's exactly what you should do. How do you find out if a company's listed?
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  Literally just Google it. I can't believe it's that easy. So you would literally type in
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  is Microsoft a public company or what is Kathmandu's share price? And then that will bring up whether
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  it's listed and whether the public can buy those shoes. However, there's always a, of course,
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  there's a butt, a fun police strike, but the good thing about New Zealand is we only have one stock
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  exchange. So one place where companies can list their shoes. So for us, it's easy. If you find a New
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  Zealand company, say Kathmandu, like the previous example, say Kathmandu, you really want to get involved
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  in Kathmandu and you want to buy shoes in Kathmandu, you can just go to the NZX website, which is our stock
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  exchange and find Kathmandu there. And you can do the same thing in Australia because there's only one
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  stock exchange there. So one place, one stop shop, one shoe market, one place where those
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  shoes transacted. However, if it is a global company, like a lot of examples we've put in here,
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  so sorry for the confusion, the likes of Microsoft, Amazon, Nike, Lululemon, it's much better to
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  just Google them, to Google those companies because with bigger countries, so the likes of the US,
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  there's multiple exchanges where where companies can list shares. And you may have heard of some
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  like the NASDAQ, the New York Stock Exchange. So instead of going to each exchange and trying to find
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  this company that you want to invest in, I just go to Google and go, is this company listed?
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  Is this company publicly traded? What is this company's share price? And would they have shares
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  on different stock markets or would they only be listed on the New York? Yes, you can list in
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  multiple. So some companies for the likes, the likes of Fisher and Pico Healthcare, which is
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  a New Zealand company is actually listed in Australia as well. So it's listed on both stock exchanges.
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  But what I'm saying is that if you're trying to find a company to invest in in Australia New Zealand,
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  you can just go to the respective stock exchanges and look on those websites. Anywhere outside
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  of Australian New Zealand, it's easier just to Google. With somewhere like Apple or any of those
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  big companies be listed on multiple stock exchanges within say America or they just be on one.
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  It's usually only one in each country, just because you're trying to get access to that pool
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  of investors. So if you're listed on the New York Stock Exchange in America, you've got access
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  to those American investors. So there's no need to then list on the NASDAQ as well.
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  I guess what I was wondering is, is there competitive prices on different stock markets?
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  The prices are all the same. So the dollar value might not be the same. So you're not going to be
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  able to get a better price from somewhere else. If there's traders out there, that's what they do.
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  Regulating it. They search for those discrepancies and they will buy and sell them until there's
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  no discrepancies anymore. So the average investor like you and me, I'm just imagining like a Sherlock
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  honeslocking guy. And there's computers and algorithms and we won't go into that.
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  It's like the black market of investor. But let's get back to what. We'll talk about exchanges
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  and how they work in a few more episodes. But I guess the summary is New Zealand or Australian
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  company just go to the exchange website and see if it's listed. If it's anywhere else,
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  it's best just to Google. Another way is actually, which might be a bit easier, is say you found a
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  company you want to invest in, Lulu Lemon, for example. And you didn't know if it actually had
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  shares that the public could buy. You can go on to their website and try and find an investor
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  relations page or type in Lulu Lemon investor relations. And investor relations is the hub
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  place to go for investors and shareholders to find information about the company purely from
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  an investment point of view. Does that make sense? Yeah. So any New Zealand listed company will have
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  an investor relations page within their company website. And that will have everything from
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  the annual report, which I think is a great document. If you're ever thinking about investing
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  in a company to read the annual report, it gives a great breakdown of the operations of the
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  business, the business divisions, the recent financial results. It's just a really good summary
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  of the business. And there's been times when I've read annual reports, I'm like, oh my gosh,
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  I didn't know that that company owned that company or had operations in Australia as well as New
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  Zealand. It's a really good eye opener and gives a good overview of the company. So you can either
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  look on the Exchange website, Google it, or look at the company website and see if there's an
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  investor relations page and then go from there. Okay, so let's just, would the whole go from there,
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  let's elaborate on that. What would I do from there? So say I find Lulu Lemon, whether it's on their
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  website or on the New Zealand Stock Exchange, what's the next steps? I guess the next step is buying
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  the shares and actually transacting and actually putting that money to work. And to do that for New
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  Zealand based investors, there's a few platforms that you can do that with. What are they? So there's
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  Shearsies, which is so user friendly and it's a great platform and you can transact, you can buy
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  New Zealand shares and you can also buy US shares, so United States, shears in the United States.
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  But that's kind of it. So they're about to launch Australian shares, although they may have already,
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  but it's good for if you want to transact US shares or New Zealand shares.
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  Which is probably the top two for New Zealanders really isn't it? Especially and especially for
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  the likes of you and me wanting to try and find a company that we understand that we know
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  well and we want to invest in. Like a Zorro or something. You can see that they're obviously
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  growing and they've got lots of different brands and interesting. But they're not listed. So
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  are they not? No. Oh wow. Yeah. Why is that? They just don't need the capital. They don't need
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  the money. Interesting. Yeah. Another platform is called Hatch. Hatch or Hatch? Hatch. Okay. Yeah,
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  not Will Smith. Hatch. Hatch like a chicken. Hatch. Hatch your nest egg. Is that what they call it when
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  you're nest egg? Yeah. Why is that? I want egg in chicken connotations. Hatch and don't put
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  all your eggs in my basket and a lot of chicken. Build your nest egg. Yeah. It's also. Yeah.
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  Anyway. So Hatch is one. So she has these and then this Hatch but they only do US shares. So again
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  if it's an Australian New Zealand company you can't do that through Hatch. You can only do US
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  US companies and then there's other platforms like your local bank will probably have a platform.
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  I know ASB has a platform to invest. Yeah. Where you can go and you can buy and sell New Zealand
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  and Australian on your shares. You just put money in an account and then you get them to
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  transact before you. But they fund managers essentially. No. They're just a platform for
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  transacting. Similarly to share to share these and Hatch. They just facilitate the transactions.
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  So with shares as for example you put money in your wallet then you transact and you spend
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  their money. With ASB it's very similar. You have money in your account and you just go out and
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  you say I want to buy a hundred shares of Ketman do and they will transact there for you.
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  They're only thing with ASB is be careful of the fees. They do charge. I think it's roughly about
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  $30 a transaction depending on if it's in Australia or in New Zealand and that can really
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  eat into your return. So you don't want to be buying and selling shares all the time on this
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  on this on on any platform to be honest and you shouldn't be doing that if you're a long time
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  investor. So when you say that do you mean you shouldn't you share these or Hatch or do you
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  mean you should use you should but just you can use any any of these platforms but just don't
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  be transacting all the time especially with ASB because you get charged your transaction fee
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  and that just eats into your returns. If you're getting charged $30 every time that you're buying
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  or selling a share and it kind of comes back to the argument of make sure you look at after fees
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  returns because fees always add into your return and you know nothing's nothing's free. They
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  have to be able to run these businesses to to help you facilitate those transactions. So it's kind
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  of fees will always be there but just just be aware that read the small print exactly use the one
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  that you think is right for you and gives you the access to the shares of the companies that you
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  want to buy. I feel a little scared about the idea that in this one it sounds so silly but the
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  idea that I could lose everything. How do you go into it with a mindset that's not
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  fear driven? Is that a siliquition? No it's all about having that investing mindset and we were
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  kind of talking about it when you're going about your day to day and you're trying to find
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  investment ideas. It's having that investing mindset of what products are using what services
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  are using and putting that investor hat on I guess and having that on as much as you can. What
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  you're talking about is kind of around how how do I not freak out? It's just putting a lot of
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  trust out there with not a lot of information. I mean I know you can make educated decisions but
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  yeah and it's and it is scary because you can lose 100% but it comes back to
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  and you're dealing with money you're dealing with your savings there's always going to be an
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  element of emotion in that but when you are making decisions about how to save your money or how
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  to invest a lot can go right but then a lot can also go wrong so the people do tend to make
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  irrational choices and that's just the emotion coming into it but I try to come back to kind of
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  five questions about when I'm when I'm making a decision about to invest or to sell I try to come
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  back to these kind of these five questions and ask myself what influences are it play right now
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  while I'm making this decision why am I selling or why am I buying is it irrational is it emotional
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  am I just scared have I just heard a tip it from a friend that they have heard from another friend
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  another friend that something's going to go wrong with this investment of mine and so I need to sell
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  or am I making an informed decision or am I getting caught up in the hype but there would be
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  a lot of right totally like the news headlines these days the the people's uninformed opinions
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  that you get all the social media and people just being uneducated and thinking something's true
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  and it's not necessarily and the tall poppy syndrome that we have in New Zealand you going to
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  friends and saying oh I own this stock and it's done really well and people trying to bring you
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  down or say oh wow you should sell that because of this this this it's well it's all well and good
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  taking those opinions on board but that opinion that you heard is probably not an informed opinion
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  and if it's from someone that is well rehearsed and investing and well and that you respect
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  then maybe take it with a grain of salt and do a bit more research around what they see as
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  also who's talking about their stocks on a Saturday night like hopefully I know I know but
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  but I guess it's yeah you're right we obviously want that conversation to be hit but not in a
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  flipping arrogant I know more than you do kind of a way and and people do tend to do that so it's
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  just removing yourself from that and saying what influences are at play right now while I'm
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  making this investment decision the second one is which might seem interesting but how's my
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  overall health and wellness and that comes back to have I had a really shit day and I'm really grumpy
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  and I just want to sell everything and I'm sick of this and it's it's kind of getting consumed in
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  your emotions and I keep coming back to emotions because it's so difficult and it's something that
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  I still struggle with which is removing that emotion from investing and you're dealing with money
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  and you're dealing with your savings it can be easier said than done I never thought that would be
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  a piece of advice that you'd give because you think of your health and your wellbeing is so
• 19:23
  separate from your investments but it makes so much sense hearing you say it like that and an
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  example if you say you had five stocks in your portfolio and four of them had done terribly and you
• 19:37
  were sitting there going oh my gosh I suck at investing and I'm never going to make money I'm just
• 19:44
  going to sell everything or maybe you've had a few really good runs with investing and you've
• 19:50
  chosen four stocks that have done so well and you're like yes oh my god I'm a genius at this
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  I'm doing fantastically well and then you buy something you haven't done your research on just
• 20:01
  because you're in this euphoria moment and you've got all this confidence it's removing that
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  always being humble and being like yeah okay those last few investment decisions have been great
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  and I've done fantastically well out of them this is a new investment decision and I need to look at it
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  from a new lens with a new lens and not get too confident in the fact that those previous ones
• 20:22
  have done well and vice versa those previous ones that didn't do so well don't beat yourself up
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  about it third question is why am I pursuing this option and not an alternative that question's
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  kind of coming back to you know asking yourself why do you feel the way you do about this company
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  and it's just jotting down a few things and having having almost a one page or or a few sentences
• 20:43
  about why why am I in this business so that you can come back to that if you ever think something's
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  changed or you all you feel like you're questioning your investment decision the fourth one is you
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  know what is choosing each option mean to me and about me that's coming back to your goals what
• 20:58
  am I trying to achieve here am I trying to achieve having $10,000 having $10,000 at the end of 10
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  years am I going to achieve that by by investing in this business what are your goals and what are
• 21:09
  you trying to achieve and then the fifth one which is what I always try and do when I'm making
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  an investment decision is how might I be proved wrong what am I missing what am I not aware of
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  you're trying to be devils advocate really exactly took the words out of my mouth it's what what
• 21:28
  am I missing say you're investing into technology company and it's all about customer growth and
• 21:33
  winning customers you're thinking how could I be proved wrong could be a competitive technology
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  that comes into play it could be if I see growth rates start to slow in its new customers or
• 21:43
  trying to find that what we call the beer case in the investing world which just means what's
• 21:49
  what's the worst case scenario that could happen here just so that you know in the back of your
• 21:53
  head what to look for preparing for the worst exactly positive investment chat from Vick Harris
• 22:00
  fingers crossed that won't happen but it's always just good to have your wits about you the overall
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  argument with all these questions is just try to remove the emotion and be aware when you are
• 22:11
  making an investment decision under emotion versus under an investing mindset it's easier said
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  than done and I am still learning every day to do this but it's all and it comes back to what we
• 22:22
  said about don't fall in love with the stock it doesn't know that you own it it doesn't love
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  you back take three deep breaths and come back to horror because it is you make weird decisions when
• 22:32
  you're in a strange mindset so it makes total sense with anything with anything if you're in
• 22:37
  yeah work anything in my personal life in fact anything in my life in general if you're in a bad
• 22:42
  state of mind it's just make decisions make your investment decisions when you're feeling confident
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  and good and level headed and not emotional about something completely unrelated yeah it's
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  just looking at every decision objectively and in its own bubble which is a word we've heard a lot
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  like yeah so it's not all doom and gloom the she market is very exciting and I love investing in it
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  but and is that the end of our five years yeah so the five what influences are at play
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  when I'm making this investment decision how is my overall health and wellness why am I pursuing
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  this option and not an alternative option what does choosing each option mean to me and about me
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  and how might I be proved wrong I feel like we need to be writing those down sticking them on
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  our mirror remembering because those are important hey thanks so much for it I know why I feel a
• 23:37
  little overwhelmed I mean it was good and super helpful but every time I start well every time I
• 23:43
  start to feel good and confident I realize how much more there is to learn yes yeah it's more
• 23:49
  the more you learn the more you realize you don't exactly and gosh I've I've been in this industry
• 23:55
  for what seems like forever and I still learn every day every day is a learning curve and so well
• 24:02
  might feel overwhelming we are slowly tripping away at it and like with anything there's just so
• 24:07
  much to learn but we're building those foundations and we're eventually going to come out of this
• 24:12
  you know a lot better investors we're all going to be buying boats no what's a mind boost oh my
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  a mind boat I I was trying to say we're all going to be buying boats oh my words slowed massively
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  yeah we're all going to be buying boats eventually I have to be buying shares and boats first
• 24:28
  which is an option I've had it recently if everyone's buying boats then yeah you buy shares in
• 24:33
  boat companies and you benefit woo see out in the order thank you so much for joining us on today's
• 24:40
  episode of Raising the Curve we hope you learnt something just a quick reminder that you're not
• 24:46
  expected to be an expert on day one confidence will grow the more time you spend on building your
• 24:52
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