Latest / The Curve / The Weekly: AMD’s $1tn month, Warner Bros CEO drama & The Curve Fund is now on Sharesies

Transcript

The Weekly: AMD’s $1tn month, Warner Bros CEO drama & The Curve Fund is now on Sharesies · The Curve

• 0:01
  Coming up in today's episode, Vic Harris gives perhaps the world's best metaphor when it comes to AMD and NVIDIA, two of the world's biggest AI businesses.
• 0:11
  We talk about why, when the whole market in September was struggling, did one business go up by 30%?
• 0:17
  And finally, what on earth is a golden parachute and how can we all get one ASAP?
• 0:22
  AKA a $600 million payout.
• 0:25
  This is The Curve Weekly, where we read the finance news so that you don't have to.
• 0:29
  I'm Vic Harris, a finance professional who's made a career making money for other people.
• 0:33
  And I'm Sophie Hallwright, XTV and radio producer, who was sick and tired of not understanding the economy, how to invest or build my wealth, so we started this podcast.
• 0:40
  But before we dive into the headlines, here's a word from today's sponsor.
• 0:46
  This episode of The Curve Weekly is made possible thanks to Pathfinder's KiwiSaver plan, helping you invest alongside your values.
• 0:53
  If you have any tricky ethical investing questions percolating around and you want an expert to answer, submit it via the ethical hotline via the link in the podcast show notes.
• 1:02
  Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver plan.
• 1:06
  A product disclosure statement is available at pathfinder.kiwi.
• 1:11
  Hello, it's Victoria.
• 1:13
  Hello from Tamaki, Dakota.
• 1:15
  She made it.
• 1:16
  I'm the bottom of the world.
• 1:19
  Oh my God.
• 1:20
  How is it to be home?
• 1:21
  Strange.
• 1:22
  Is it?
• 1:22
  In a good way.
• 1:23
  It's just like, it's been not even a week.
• 1:27
  So yeah, feeling still adjusting.
• 1:31
  But so good.
• 1:33
  Yeah.
• 1:33
  So good to be back here.
• 1:34
  Staying with my parents, which is.
• 1:36
  It's an adjustment in itself.
• 1:38
  The couch is looking like your old couch from your old house.
• 1:42
  And all of a sudden I was like...
• 1:43
  They stole my... Oh, it is?
• 1:46
  Yeah.
• 1:47
  Stop.
• 1:47
  That's so funny.
• 1:49
  I was like, oh, this is my platter.
• 1:51
  Oh, and these are my cups.
• 1:52
  Oh, and... That is so funny.
• 1:53
  I don't know what's going to happen when I move back into my house.
• 1:58
  They'll have an empty house.
• 2:00
  No, it's good to be back.
• 2:01
  And...
• 2:02
  Yeah, it's getting sunny, it's getting warm, me just chasing the sun.
• 2:05
  Were there any big moments or any in-flight dramas, lost luggage, altercations with a flight attendants?
• 2:15
  Do you have any updates on that from me?
• 2:16
  No, it was really sad leaving London, to be honest.
• 2:19
  I think it was just such a whirlwind and had so much life admin and yeah, it wasn't till I was at the airport.
• 2:28
  And I was sitting there replying to messages, like beautiful messages from friends.
• 2:31
  Just bawling.
• 2:33
  Like, inconsolable.
• 2:35
  People probably thought someone had died.
• 2:37
  Like, I honestly was just tissue after tissue.
• 2:40
  And you know when you're trying to be real subtle, you're like...
• 2:43
  What was the setting?
• 2:44
  Were you on the plane at this point?
• 2:45
  No, just in the lounge, just replying to beautiful messages.
• 2:49
  And honestly, it was just waterworks, waterworks.
• 2:52
  Yeah.
• 2:52
  And then I got on the plane and just absolutely conked out.
• 2:55
  But also leaving my flat in London, like closing the door.
• 2:59
  And it sounds very like movie scene, but you know, like closing the door.
• 3:02
  And it was like so empty.
• 3:03
  And I was like, oh my goodness.
• 3:05
  Wow.
• 3:06
  End of an era.
• 3:07
  It's so emotional.
• 3:08
  You've built a whole life over here.
• 3:11
  Being back here, I'm like, oh, okay, this is my new home.
• 3:15
  And everyone's going about their day and you're like, hi.
• 3:20
  It's funny when such a massive thing changes in your life and yet everything else is just as normal.
• 3:26
  It's like, why are there not banners and signs everywhere?
• 3:30
  Like, welcome home, Vic.
• 3:31
  Oh, first time back in the supermarket.
• 3:32
  You know, you just, you sort of expect people to...
• 3:37
  revolve around your big news.
• 3:39
  I went to this Pilates studio and I was like, hi.
• 3:41
  And they're like, hi.
• 3:42
  And you're new here?
• 3:43
  I was like, yeah, yeah.
• 3:44
  I just moved back from London.
• 3:45
  Yeah.
• 3:49
  Oh, gosh.
• 3:49
  Anyway, no, it's good to be back.
• 3:51
  We have a new office for the Care Investments, which is awesome.
• 3:54
  And got like first week with the team.
• 3:57
  Yeah, it's feeling really good.
• 3:59
  And honestly, I feel like I'll blink and I'll be like, what, London?
• 4:04
  You know?
• 4:05
  No, I won't.
• 4:05
  I've got two homes now.
• 4:06
  It's great.
• 4:07
  I'm like, I don't want to start the waterworks again.
• 4:09
  But –
• 4:11
  Because there's so many good things and so many exciting reasons why you're in New Zealand.
• 4:17
  Oh, totally.
• 4:17
  And I moved back on my own accord.
• 4:19
  You know, it wasn't because I lost my job, my visa was up, like, you know, something disastrous happened with family.
• 4:24
  Like it was because I, I wanted to.
• 4:27
  And so I keep telling myself that I speak to friends that it took me a year to adjust being back in New Zealand from London, you know, like, and when I moved to Sydney, it took a year to kind of find my groove.
• 4:39
  So I'm,
• 4:40
  Yeah, it's, we've got exciting things around the corner.
• 4:43
  You've got Christmas, you've got New Year's, you've got summer, you know, like it's going to be a fun time.
• 4:48
  Before I know it, I'll be back over there and you'll be like, what?
• 4:51
  Hang on, this is so soon.
• 4:53
  I do think there's something weird about Auckland and London where...
• 4:59
  And I don't know if you've always felt this with London.
• 5:01
  London, to me, has always kind of felt like home, even before I lived here.
• 5:04
  And I think it's similar for you because your dad's British.
• 5:07
  I mean, you have a passport.
• 5:09
  It is technically – you could live here forever if you wanted to.
• 5:13
  But at the same time, New Zealand is so different in so many ways.
• 5:17
  It's so different, but it's so similar.
• 5:19
  Like, it's one of those weird things to hit your head around because it is a massive change and it's a huge shift.
• 5:25
  And moving home.
• 5:27
  I think it was the taxi back from the airport on Thursday night.
• 5:30
  And I was like...
• 5:31
  there's not a mouse in sight.
• 5:33
  There is nothing open.
• 5:35
  The streets are so quiet.
• 5:38
  And it was great because we got back from the airport super quick.
• 5:40
  But I was like, wow, if you're driving back from the airport in an Uber in London on a Thursday night, it'd be like sirens and people on the road.
• 5:49
  I had a beautiful message from someone that was like, nothing's permanent.
• 5:52
  And this is just a
• 5:56
  And I was just like, yeah, it's so true.
• 5:57
  This is just a phase.
• 5:58
  It's not forever.
• 5:59
  And I think that's something that I've kind of been trying to harness.
• 6:03
  This is just a phase.
• 6:04
  For sure.
• 6:04
  I think the thing for you and for anyone who missed the end of our last episode, not to get into too much detail, but I would say a huge amount of emotion is because...
• 6:16
  New Zealand has always felt like home to you.
• 6:18
  You always planned on moving home at some stage, probably just under different circumstances.
• 6:23
  And that combined with a swift pack up and off you go, you know, there's so much going on with the curve, which is such a good thing.
• 6:32
  And it's really exciting for the business for you to be in New Zealand.
• 6:36
  There's just a few moving parts that aren't happening necessarily at the same time.
• 6:39
  And I think that that is an overwhelming feeling in itself.
• 6:42
  It's so me though, right?
• 6:43
  Like, right, okay, need to move back to New Zealand.
• 6:45
  Cool.
• 6:46
  It's so you.
• 6:48
  There is nothing more you than how this whole thing played out, actually.
• 6:52
  And I won't even go there with some of the more personal things, but I'm like, I just, it's so Victoria Harris.
• 6:58
  And you know what?
• 7:00
  In the same way you made the decision like, right, got to do it, off I go, you can make the same decision to go anywhere at any time.
• 7:07
  And just like that message, you know, you can change your life so quickly.
• 7:11
  It's good to be reminded of that when you see people like you that just get shit done and do it.
• 7:16
  I was actually thinking about that.
• 7:17
  So if we knew we were like, we need to move to London.
• 7:19
  And I was like, absolutely not.
• 7:21
  I was like, I've got my dog here.
• 7:22
  I've got my house.
• 7:23
  I was dating in absolute tool at the time.
• 7:27
  And I was like, no, this is my life.
• 7:29
  Like, this is, what do you mean?
• 7:30
  What do you mean?
• 7:31
  I'm 35.
• 7:32
  I'm not moving to London at 35.
• 7:34
  You know, like I was so, and then now I'm like, thank goodness I listened to you.
• 7:40
  And thank goodness we did.
• 7:42
  Because even if we moved over there and it was a complete disaster, you can move home.
• 7:45
  You can move somewhere else.
• 7:46
  You know, like, give it a go.
• 7:48
  I think it's just for anyone who is like listening, who's like, oh, should I, should not.
• 7:51
  Like, moving countries is for...
• 7:53
  one of the most, for me personally, the most rewarding things.
• 7:57
  You make new friends, you adjust to a new lifestyle, you become immersed in a new environment, different culture.
• 8:03
  It's so, so, it's hard, but it's so, so great in so many ways as well.
• 8:08
  Yeah.
• 8:09
  Yeah, I'm proud.
• 8:11
  I'm proud of the three years.
• 8:13
  I'm proud of what you did in London, the life that you built, but also the courage to know when it's time to mix it up and to go and take new opportunities and feel excited by, yeah, what is next.
• 8:25
  We have an incredible announcement.
• 8:34
  We have an incredible announcement.
• 8:40
  The Curve Fund is on Sharesies, which is so... Can we just pause to explain what this actually means?
• 8:49
  Because for anyone listening, unfortunately, if you're in Australia or New Zealand for this one, so sorry about that if you're listening from somewhere else in the world.
• 8:56
  However, Curve Fund, so if you would like to invest with us, you can now do it through Sharesies, which is so amazing.
• 9:03
  It's a trading platform.
• 9:05
  Most people in New Zealand and Australia use Sharesies.
• 9:08
  For me...
• 9:09
  Very happy about this.
• 9:11
  It's just so much easier.
• 9:12
  So much easier.
• 9:13
  Everyone's familiar with how to use shares.
• 9:14
  And you can literally now search the Curve Fund like you would a stock.
• 9:18
  Like you'd search Amazon or Tesla and buy shares.
• 9:23
  You can do exactly the same but with the Curve Fund.
• 9:25
  So super easy, super seamless, and huge milestone for us because they don't just put anyone on there, you know?
• 9:32
  The best part about this is for anyone that...
• 9:35
  Or it is automatically investing, which we're hoping most people who listen to this are.
• 9:39
  It's an easy place if there's any investments that you want to redirect or you are interested in even just having a look at what we invest in.
• 9:47
  Or allocating your entire portfolio to.
• 9:49
  Yeah.
• 9:50
  No, sorry.
• 9:51
  We're not giving you advice.
• 9:53
  We're not giving you advice.
• 9:54
  We've had so many people be like, when are you on Sharesies?
• 9:57
  When are you on Sharesies?
• 9:58
  Which is so great because they've obviously, like you said, so have got automatic recurring investments that are investing into lots of different things.
• 10:06
  And so they're just adding the Curve Fund into that each month or each fortnight, whatever it is.
• 10:11
  And so many, I was actually out for coffee with a girl and she got a notification and it was like, the Curve Investments is now on Sharesies.
• 10:17
  She was like, hey, cool.
• 10:18
  That's so fun.
• 10:20
  That's so fun.
• 10:21
  Oh, I love that.
• 10:22
  It would be great, Vic, for a second for anyone wondering, and I'm saying this because we've had lots of questions quite similar through to DMs, emails, etc.
• 10:32
  Are the fees the same?
• 10:34
  There's been quite a few common questions.
• 10:37
  So let's just answer those for anyone that's wondering.
• 10:40
  Yes.
• 10:40
  So the fees are exactly the same.
• 10:43
  So if you do an investment through Sharesies into the Curve fund, you pay 1.5%.
• 10:48
  If you do it through the Curve investments website into the Curve fund, then you pay 1.5%.
• 10:55
  So it is exactly the same no matter what.
• 10:57
  If you go through Sharesies though, you don't get access to like our client portal and things like that.
• 11:02
  It will all just show up on the Sharesies platform.
• 11:05
  And so if you have any issues or anything, it's through Sharesies.
• 11:10
  don't have the direct relationship with you because you're you've done it through the Shearsy platform if that makes sense but we had an incredible response in like the first hour it was crazy and I want to update you once I know like the first day and first week numbers but like nearly a hundred grand in the first hour which is wild yeah
• 11:31
  We were meant to do an update on performance last week, but obviously you were relocating your life to New Zealand.
• 11:39
  So if we could do a quick sort of what's been happening in the fund updates.
• 11:44
  I know we put some things on socials, but can we just go through some of the top topics?
• 11:48
  Top results.
• 11:49
  Yes.
• 11:50
  So the Curve Fund had its first negative month in September, which, don't worry, not a bad thing.
• 11:57
  Remember, markets go up and down, so do funds.
• 12:00
  And we're still up about 1.4% for the last three months.
• 12:05
  June, July, August were really good months.
• 12:08
  Then September was down.
• 12:10
  So you take the unit price at the end of September and you put it over the unit price at the end of August.
• 12:17
  And that is the return for the month.
• 12:18
  And so it went down in September.
• 12:20
  When you're looking at yearly return, you'd be taking...
• 12:24
  We haven't had the fund for a year.
• 12:25
  But when you're taking the yearly return, you would have taken it from the end of September last year and compared it to the end of September this year.
• 12:32
  And what was that return?
• 12:33
  It might be 5%.
• 12:34
  It might be 10%.
• 12:36
  So whenever you're looking at a return, really look at what period are you looking at?
• 12:40
  And that's why we always say with investing in funds, look at the longest period of performance you can.
• 12:46
  If you've been around for 10 years, what's the 10-year annual yearly performance?
• 12:51
  I was just wanting to explain because I do remember when I first started learning about investing, the idea of a return or like is it up or down or the market's up, the market's down.
• 13:01
  It's off this.
• 13:03
  It's just there's lots of lingo and clarifying what you're talking about when you say we're up 1% or down 1% is really, really helpful.
• 13:10
  And when you talk about stocks like Amazon's up 30%.
• 13:14
  I will always say, you know, in a day or for this month or over the week it was up, you know, 30%.
• 13:20
  Like, cause it is, you're kind of like, okay, cool.
• 13:22
  Cause up 30% over five years is actually really shit.
• 13:26
  Up 30% in a day is fucking great.
• 13:28
  So, you know, it's like you really need that context.
• 13:31
  when we're reporting the curve fund or any fund, whether it's KiwiSaver, Super, whatever it is that someone's investing in, what would be the way that they could compare the after fees performance on what the market is doing?
• 13:45
  Because I think there can be a lot of overwhelm when it comes to picking your Super or your KiwiSaver or your pension or picking a fund and you can get really confused with after fees, before fees, all of that jazz.
• 13:57
  And then you layer on top everyone talking about
• 14:00
  ah, well, you could just invest in the index, you know.
• 14:03
  Yes, but you've got to make sure that that is also after fees.
• 14:06
  Okay.
• 14:06
  You know, like if I just Googled S&P 500 return right now and it gave me a return for September, let's say, it wouldn't be after fees because that's just the price, but then I need to find some kind of vehicle that I can invest into the S&P through, which is usually an ETF, and there's fees associated with that.
• 14:26
  So you just need to make sure whatever you're looking at, comparing apples with apples, are comparing after fees.
• 14:30
  and after fees.
• 14:31
  Also, the thing is, each fund will have its own benchmark that it's benchmarking itself against.
• 14:36
  Some might be the S&P 500.
• 14:38
  Some might be more of a global index.
• 14:40
  It really depends.
• 14:41
  You can't just compare every fund with the S&P 500 because not every fund purely invests in the US.
• 14:46
  Like, we invest all over the world.
• 14:48
  So...
• 14:50
  Yeah, if we're a pure US fund that invested on in US companies, yes, the S&P 500 index would be appropriate benchmark for our fund.
• 14:58
  But that's not.
• 14:59
  Yeah, can we talk about some of the investments and what's going on?
• 15:02
  Because the idea of it being down...
• 15:05
  might be kind of alarming to people.
• 15:08
  The best stock in the portfolio in September was AMD.
• 15:12
  We've spoken about this briefly.
• 15:14
  Was it last week?
• 15:15
  Like the week before.
• 15:16
  And so AMD is, it makes computer chips.
• 15:21
  It designs computer chips, which are much needed for AI.
• 15:25
  It's the second player, I guess, behind NVIDIA.
• 15:29
  And it's got a female CEO.
• 15:31
  It's just reached $1 trillion in terms of its market cap, so its size.
• 15:36
  And it had an absolute incredible September.
• 15:42
  It was up 30% when it was a really tough month across the world in terms of share prices.
• 15:49
  Yeah.
• 15:51
  September is actually a, it's always a bit of a difficult month.
• 15:56
  And the reason is everyone goes on holiday in August.
• 16:00
  And August is a really good month.
• 16:02
  People come back from holiday.
• 16:03
  They're like, right, I'm going to rejig my portfolios.
• 16:05
  You know, you've got brokers, you've got fund managers like myself.
• 16:08
  And they're like, okay, cool.
• 16:09
  I'm back.
• 16:09
  I'm like, what am I going to invest?
• 16:10
  And so September is usually historically a,
• 16:14
  been a tough month.
• 16:16
  So I'm sitting here, I'm like, this is no surprise.
• 16:19
  It's like, it is what it is.
• 16:20
  We also had, you know, concerns about bond yields, which we can link the podcast to explain what that was.
• 16:27
  We explained it in a lot of detail.
• 16:29
  Inflation, oil prices went back up.
• 16:31
  So there was a lot going on
• 16:33
  in the world, but then you also overlay this human behavior of people coming back from holiday and being like, I'm going to rejig my portfolio.
• 16:41
  Isn't that just so classic though, when we talk about the idea of women being less volatile, less emotional, less reactive investors?
• 16:51
  Why is it that people feel like they need to make a decision after holiday?
• 16:55
  Is it almost like the start of the year where you think, right, now I've got to be in action and I need to make decisions?
• 17:01
  It's almost like that same thing.
• 17:02
  And you see it around tax times as well.
• 17:04
  You see it in Australia and around June, July.
• 17:08
  So you do see it.
• 17:09
  There's these little pockets of this kind of behavior in different regions.
• 17:14
  But yeah, this is kind of why September is usually a bit all over the show.
• 17:18
  Yeah.
• 17:19
  Can we talk about AMD and why was it up so enormously in a month that you would expect the performance to be kind of shit?
• 17:26
  The whole AI space has obviously been absolutely booming.
• 17:29
  NVIDIA has had an incredible run and it was kind of AMD's turn.
• 17:33
  It had been a bit of a laggard in terms of its performance versus NVIDIA for many, many years.
• 17:38
  And now people are like, you know what, I kind of want to diversify.
• 17:41
  So that's why AMD had done so well.
• 17:45
  A really great analogy that I thought of when it comes to, you know, how does AMD and NVIDIA fit in the space?
• 17:53
  AMD, it's like the fashion designer.
• 17:56
  So it designs what we call these CPUs and GPUs.
• 18:00
  There's almost like different strengths.
• 18:02
  So CPUs, they're like the brain chips that are in like laptops and PCs and servers.
• 18:08
  And that's what we've used for many, many, many, many years.
• 18:11
  Computer processing units.
• 18:13
  They handle generally one task after another very quickly.
• 18:17
  Then you've got these GPUs, which are graphic processing units.
• 18:22
  They were originally built for gamers, so they're a lot more visual.
• 18:25
  And now they are effectively the workhorse for AI because they do thousands of calculations at once.
• 18:33
  So they're just kind of like the big dogs.
• 18:35
  They're better, they're more efficient, they're more powerful.
• 18:38
  Were both of these chips...
• 18:41
  Nvidia and AMD's products?
• 18:44
  Like have they both done both chips?
• 18:47
  And do they both still distribute and create both styles?
• 18:52
  So this is where I'm getting at.
• 18:54
  They only design them.
• 18:56
  So Taiwan Semiconductor Manufacturing Company, TSMC.
• 19:01
  Why are they so, oh my God, the lingo.
• 19:04
  It's too many acronyms.
• 19:05
  They are the biggest chipmaker in the world.
• 19:10
  So they're like the manufacturer, and they manufacture for AMD, Apple, NVIDIA, like pretty much everywhere.
• 19:16
  If that company fell over, and it's in Taiwan, which is quite a geopolitical, like high-risk country right now, if anything happened to that company, that would absolutely cause a massive global recession, in my opinion.
• 19:32
  We talk about NVIDIA and all its tentacles that it's invested in lots of different companies.
• 19:39
  And if that fell over, what would that mean?
• 19:40
  It's like, no, no, no, no, no.
• 19:42
  We're looking at the wrong thing here.
• 19:44
  TSMC is the company that everyone should be focusing on that effectively holds the power for most of...
• 19:54
  AI across the world.
• 19:55
  How on earth is there one major factory?
• 19:57
  That makes no sense.
• 19:58
  I know.
• 19:59
  I know.
• 19:59
  I think an analogy is really good.
• 20:01
  So AMD is like the fashion designer.
• 20:04
  So they design the clothes.
• 20:06
  They don't make the clothes.
• 20:08
  They then get someone else to make the clothes.
• 20:11
  So it designs the dress.
• 20:13
  It hands the pattern to the manufacturer, which in this case is TSMC, and they make the clothes.
• 20:19
  And then it sells the finished product under its own label.
• 20:21
  Yeah.
• 20:22
  You lost me at that they sell it under their own label.
• 20:24
  Who sells what under their own label?
• 20:25
  So AMD designs this jumper.
• 20:29
  It designs it in red and oversized and then it goes, cool, I want it to be made.
• 20:34
  I don't own a manufacturing facility to make these clothes.
• 20:37
  I outsource.
• 20:38
  I get someone to make it.
• 20:40
  They give it back to me and then I sell it like any fashion designer would.
• 20:43
  Can you invest in TMC or whatever that company is?
• 20:46
  Yeah.
• 20:47
  Yeah.
• 20:47
  Yeah.
• 20:48
  Yeah.
• 20:48
  Yeah, you can and I'm looking at it.
• 20:53
  But I thought that was a really great analogy.
• 20:55
  That's a really, sorry, you're right, but stunning analogy.
• 20:58
  It was really good.
• 20:59
  I also thought this whole time that AMD and NVIDIA actually created the chips.
• 21:04
  They don't.
• 21:04
  They're just the designers.
• 21:06
  I'm so glad you told me that.
• 21:07
  And just wrapping up on the fund, we actually made three chips.
• 21:11
  New investments in the month, which is very exciting.
• 21:14
  Eli Lilly, a healthcare company.
• 21:16
  So they are the leaders in the GLP-1 manufacturing.
• 21:20
  So really think that's going to be an absolute growth space.
• 21:23
  And we haven't even scratched the surface of what that medication, what those drugs, that protein can do.
• 21:28
  Vic, last Monday when we had our brilliant lead investor, Nicole,
• 21:33
  Filling in for you on the podcast, we were talking about peptides.
• 21:36
  We talked about Eli Lilly.
• 21:38
  Can you elaborate on why you see the space as growth?
• 21:43
  Yeah, look, I mean, Eli Lilly has had a fantastic run in terms of its share price.
• 21:48
  And people have cottoned on to this.
• 21:51
  We've only scratched the surface.
• 21:52
  Eli Lilly is the dominant player in terms of producing GLP-1s.
• 21:57
  And yes, they've got...
• 22:00
  bad connotations with weight loss, but I think the impacts that they're having on diabetes is only scratching the surface.
• 22:07
  I think there's so many other ways that the GLP-1 protein can be used to combat so many other things from alcohol addiction to there's just, we haven't even scratched the surface.
• 22:20
  And I genuinely think it's one of the fastest growing areas of health care.
• 22:25
  And we didn't have a lot of healthcare stocks in the portfolio.
• 22:28
  So when I was looking at kind of diversifying across different sectors and looking at healthcare, this was the standout.
• 22:36
  We've also got a bit of Novo Nordisk, which hasn't done very well.
• 22:38
  So we've kind of got both of the key players in that space because I do think that it's just going to go from strength to strength as we get an aging population, as people want to extend their life.
• 22:49
  And for anyone that's listening to that and thinks...
• 22:52
  I thought you guys talk about future-focused companies that have a positive impact, etc., and feel a bit of a bee in their bonnet around the idea of GLP-1s being used in a negative way.
• 23:05
  I feel like with any drug, there is people that use it for what it's not supposed to be used for, and that overshadows the incredible benefits that it does have for people that do need that medication and the impacts it has on society in terms of
• 23:20
  way less spend on healthcare because we are targeting kind of obesity related illnesses a lot earlier and therefore keeping people out of hospital.
• 23:27
  Therefore, there's more healthcare budgets getting spent on other things.
• 23:30
  Like there's so many positive impacts of new medications.
• 23:35
  I think we should do a deep dive because we touched on it last week and we did talk about, in general, the fact that peptides are starting to be used or seen as longevity tools.
• 23:47
  We also actually added AstraZeneca, which is a UK-based healthcare company, very, very high-quality global medicine company.
• 23:56
  It treats peptides.
• 23:57
  such a range of conditions and you've probably had you know some kind of medication from AstraZeneca across your across your life they treat cancer they treat asthma so we are getting more invested in health care in general and so these two stocks were added in the portfolio this month.
• 24:12
  Coming up after the break, we talk about a big pay packet that a Warner Brothers executive has just gotten.
• 24:19
  Okay, very exciting.
• 24:20
  I can't wait to hear.
• 24:21
  But first, we have a quick word from today's sponsor.
• 24:24
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• 24:29
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• 24:49
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• 24:58
  Why do I feel like Warner Brothers have not been in the news lately?
• 25:03
  And am I right in thinking Warner Brothers we spoke about with regards to the Netflix Paramount saga?
• 25:10
  Or was Warner Brothers not involved in the big love triangle that happened six months ago?
• 25:15
  Yes, it was.
• 25:16
  Can we recap?
• 25:17
  Yeah.
• 25:17
  For anyone that's missed that.
• 25:18
  Netflix made a bid for Warner Brothers.
• 25:20
  By that, it means it said, hey, we want to buy you and take you over and you will become part of the Netflix business.
• 25:29
  and they were progressing that, going back and forward on price, and then along came Paramount.
• 25:35
  They were like, hang on a second, we want Warner Brothers.
• 25:38
  So they made a bid.
• 25:41
  Anyway, there was a bit of a bidding war.
• 25:42
  Netflix's price, they went a bit higher.
• 25:44
  Then Paramount went higher.
• 25:46
  Anyway, and then there's all these other kind of sweetenings of the deal,
• 25:49
  Anyway, Paramount won and the deal was essentially closed.
• 25:55
  Warner Brothers is now part of Paramount, which has been renamed Skydance.
• 26:00
  And now it's been announced that the CEO of Warner Brothers...
• 26:09
  So this is the company that owns HBO, Harry Potter, Friends, Looney Tunes, like so many iconic series and movies.
• 26:17
  Anyway, the CEO has just been paid over $600 million as kind of an exit package for this deal closing.
• 26:28
  Wait, wait, $600 million to leave?
• 26:30
  $600 million because now he's a CEO of a redundant company.
• 26:35
  Warner Brothers is now part of Paramount.
• 26:37
  Warner Brothers doesn't exist.
• 26:38
  So they're like, thank you very much.
• 26:40
  Here's $600 million.
• 26:42
  We'll see you later.
• 26:43
  So it's like his exit package in the same way that if someone was getting paid up three months of gardening leave and we're like, we get three grand, he's getting $600 million.
• 26:53
  Yes, yeah.
• 26:54
  And the biggest chunk of that came from stock options.
• 26:58
  So I want to kind of explain this.
• 27:01
  And he also had a golden parachute attached to his contract, which I'm going to explain as well.
• 27:05
  Oh my God, a golden parachute.
• 27:08
  So you must just, when you're researching this at this point, be like, so it's going to love this.
• 27:13
  Golden parachute.
• 27:15
  This is so good.
• 27:16
  So options is the right, but not the obligation to buy a company's shares at a fixed price in the future.
• 27:25
  And that fixed price is called a strike price.
• 27:27
  So for many CEOs, their package is
• 27:31
  Their enumeration package is made up of a salary that get paid each year to fund their day-to-day expenses.
• 27:37
  And then a lot of it is what we call stock options, where it's an incentive for the CEO to make the company do really well and the share price do really well.
• 27:48
  And so what happens is that a CEO will be offered stock options.
• 27:52
  And it's essentially saying, look, we're going to offer you these options at
• 27:55
  a pretty minimal price.
• 27:56
  It might be like a dollar a share.
• 27:58
  And let's say the current share price is maybe $1.50.
• 28:03
  So they get a discount on the current share price.
• 28:05
  They get a discount on the current share price, yeah.
• 28:07
  But they don't have to buy it, right?
• 28:09
  No, it's just a contract.
• 28:10
  It's almost like buy their name.
• 28:12
  Yeah, and it's a right to buy the shares in the future.
• 28:15
  It's not an obligation.
• 28:16
  So you don't have to do anything except say, yeah, cool, I'll sign, I'll agree.
• 28:20
  Let's say we fast forward five years and, you know, the share price is now $5.
• 28:27
  It's gone from $1.50 to $5.
• 28:30
  You would be sitting there as a CEO going, I want to exercise my right to these options because my options have gone from, you know, on paper for a dollar to five dollars.
• 28:42
  And I want to realize that gain.
• 28:44
  So options for anyone that's like, what?
• 28:47
  Why?
• 28:47
  Why?
• 28:48
  What?
• 28:48
  What?
• 28:48
  It's like, it's literally just shares.
• 28:50
  Yeah.
• 28:50
  It's just shares.
• 28:51
  It's not, there's no, there's not like a new thing.
• 28:54
  It's just the option to buy the shares.
• 28:55
  And it's the stupid lingo that they always say your options rather than your shares.
• 28:59
  It's basically like saying, here is your pay packet of however much million and here is your stock like from the business.
• 29:07
  And at a time in the future, you'll have the option to buy them for the agreed amount that we started.
• 29:13
  So say it was a dollar and then they've gone up by 10 times.
• 29:16
  You still get the option to buy them at a dollar rather than original price.
• 29:20
  plus.
• 29:21
  That time period is called the vesting period.
• 29:23
  So like your vesting period might be a year, it might be two years, three years, whatever it is.
• 29:27
  And the whole thing is to incentivize CEOs to grow the business.
• 29:30
  Because on the flip side, like if you genuinely believed you could grow the business, you would be like, yeah, sure, I'll sign that.
• 29:37
  And because I don't have to put down any money, it's an option to buy them in the future.
• 29:40
  I don't have to buy them in the future.
• 29:43
  And also the flip side is, in some cases, you might be offered options for a year.
• 29:49
  at a dollar and then in five years time, the share price is actually 50 cents.
• 29:54
  You would not buy those shares because it's a negative, you've had to pay a dollar, but the share price is 50 cents.
• 30:02
  You'd be like, no, thank you.
• 30:03
  Yeah, it's such a great way to incentivize CEOs or anyone in a business, staff, you can do it with staff.
• 30:11
  And so, yeah, there's just, you'd be like, no, no, I actually don't want those options anymore because they're worth less than what was the agreed value.
• 30:18
  They just kind of disappear.
• 30:19
  It would also be a ginormous red flag if a CEO said, I don't want options because the whole point of their job leading the business, especially if they're a public company, actually it doesn't even matter if they're public or not.
• 30:33
  If they're able to increase the value of that business, they would want a piece of the pie.
• 30:37
  They want to be involved.
• 30:38
  They want to get the upside beyond just a salary.
• 30:41
  It's almost like, you know how we talk a lot about how amazing it is if you can own your business.
• 30:47
  salary or you can own your future earning and it's almost like a hybrid of being employed but being a founder because you're operating in a way like you own the business because you have quite a significant way that you can make wealth if the if the stock price goes up I just want to say for anyone that's listening a really really great thing to keep in mind when you are negotiating salary and getting involved in a business obviously it's different
• 31:16
  depending on what your role is.
• 31:17
  But if you're in a fast growing startup, a lot of people make a lot of wealth by getting options.
• 31:25
  And we actually have an episode coming out in a few weeks time on Vic's money story and how she really got that first kind of leg up financially.
• 31:33
  And it came from stock options.
• 31:35
  And we go into detail on her own personal money story, but it's just a good reminder that...
• 31:40
  You can still be an employee.
• 31:41
  You don't have to go and start your own business to be able to see the upside of a vast growing business.
• 31:46
  You can be involved in a different capacity.
• 31:49
  And actually, a lot of businesses like Google, a lot of big ones that aren't even small startups offer this.
• 31:54
  And so many people have made a lot of money this way.
• 31:58
  Mm-hmm.
• 31:59
  Yeah.
• 32:00
  So with the Warner Brothers CEO, so Warner Brothers issued a whole lot of stock options when the share price was absolutely beaten down in 2024.
• 32:10
  So a large chunk of the Warner Brothers CEO's.
• 32:14
  Pay packet was the stock options.
• 32:17
  So $382 million of the $600 million that we were talking about before was stock options for the Warner Brothers CEO.
• 32:27
  Holy shit.
• 32:28
  So $382 million.
• 32:29
  Well over half was stock options.
• 32:33
  And with stock options, there is, I briefly mentioned this vesting period.
• 32:37
  Say these kind of, these stock options vest or kind of become shares in two years time and you left in 18 months, you don't get them.
• 32:47
  You know, that most cases it's like if you leave before these options turn into shares, then you don't get them.
• 32:55
  And that's pretty standard.
• 32:57
  What happened with the Warner Brothers CEO is that there's a golden parachute.
• 33:01
  And what that means is that... Can I guess?
• 33:04
  Yeah.
• 33:05
  Is it because he's forced out, so he's not in a position where he's choosing to leave or sell his stocks, he automatically jumps the queue, doesn't have to worry about vesting and gets access to all of the stock?
• 33:16
  Yeah.
• 33:17
  Yeah, all at once.
• 33:18
  So even if it was in five years' time and you got taken over six months into that five years, it automatically kind of gets brought forward and converts into shares and you get it.
• 33:31
  He must have been sitting there absolutely stoked with the takeover, thinking, okay, genius.
• 33:38
  And you've got two companies.
• 33:39
  You're like, well, either way, I'm going to walk away with about $600 million.
• 33:42
  So I don't really care.
• 33:43
  Absolute win.
• 33:44
  Yeah.
• 33:44
  And also, like, look, I get it.
• 33:46
  As a CEO, if there's a takeover, you know, your job is going to be redundant.
• 33:50
  And you want the CEO to encourage a takeover if it's good for shareholders, not prevent it because they're going to lose their job.
• 33:58
  So there is kind of merit in having these golden parachutes.
• 34:01
  I mean, this is an absolute ridiculous amount.
• 34:03
  600 million that they have to pay so anyway yeah you can make a lot of money with options there's literally no downside it's all upside because you have the right not the obligation like you have the choice not the obligation of whether you take up those options and convert them into shares
• 34:20
  if you are talking about it with your employer as part of your overall, you know, remuneration package, it should be considered that they can go down and be worth nothing.
• 34:31
  But they can also go up and be worth lots.
• 34:34
  But, you know, there is that, there is that risk that they could be worthless essentially.
• 34:39
  Can we talk about why Paramount wanted Warner Brothers?
• 34:43
  For scale.
• 34:44
  And why did Warner Brothers sell?
• 34:46
  Warner Brothers had a ton of debt.
• 34:49
  It was like drowning.
• 34:50
  It had this cable TV business that was, you know, obviously nobody's watching television anymore.
• 34:56
  And it effectively was quite desperate.
• 35:00
  Yeah.
• 35:01
  In terms of its survival, it needed to be a part of a bigger business that has scale, that has growth.
• 35:08
  And Netflix could see that and so could Paramount.
• 35:12
  It's also got some really, really great franchises.
• 35:15
  God, imagine if one day as CEOs we were earning $600 million.
• 35:20
  I cannot imagine earning that much money or actually having the confidence to think...
• 35:26
  that I deserve that much money.
• 35:28
  That's a conversation I can have with my therapist.
• 35:33
  So this is really awkward.
• 35:34
  I actually have to wrap this podcast episode up by myself because Vic's laptop has just died.
• 35:40
  So she's not here to say goodbye.
• 35:41
  This has never happened before.
• 35:44
  Vic is normally the most organized person you'll ever meet.
• 35:46
  But thank you so much for listening.
• 35:48
  And, yeah, we've got a couple of really interesting stories we'll be covering on Wednesday's Curve Weekly, one being as luxury fashion dead and as Zara, ASOS, et cetera, the new way to shop.
• 35:58
  We're going to dive into that as well as Bumble is going private.
• 36:01
  Okay.
• 36:02
  What does this mean?
• 36:03
  It's a huge story, quite a fun one, and I'm looking forward to unpacking that.
• 36:07
  But finally, for anyone listening who is interested in the Curve Fund, we will link that in the podcast show notes.
• 36:12
  But have a great week, and yeah, we'll see you on Wednesday.
• 36:16
  Thank you so much for listening to this episode of The Curve.
• 36:18
  Feel free to leave a comment to let us know what you thought.
• 36:20
  We always love hearing your feedback.
• 36:22
  New episodes are out Monday, Wednesday, and Friday, so make sure you're subscribed to be notified whenever a new episode drops.
• 36:28
  In the meantime, we're around on social so you can find all the links in the show notes.
• 36:32
  Hope you have a great week and we will see you for the next episode.
• 36:35
  Okay, quickly, the Curve was created to empower and educate you about investing, but we are not financial advisors.
• 36:41
  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.
• 36:50
  And always remember to do your own research before making any investment or financial decision.
• 36:55
  We're here for any knowledge and support you need, but the final call is always yours.
• 36:59
  And thanks for being here.
• 37:01
  You got this.
• 37:01
  Yeah, we know you got this.