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Inflation, IPOs and SpaceX Selloffs: It’s the New Financial Year Market Update · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money. My name's
0:10
Speaker 1: Tatasha Bamblet.
0:11
Speaker 2: I'm a proud First Nations woman and I'm here to
0:14
Speaker 2: acknowledge country. Hello, beautiful friends, we gather on the lands
0:17
Speaker 2: of the Aboriginal people. We thank acknowledge and respect the
0:20
Speaker 2: Aboriginal people's land that we're gathering on today. Take pleasure
0:22
Speaker 2: in all the land and respect all that you see.
0:25
Speaker 2: She's on the Money podcast acknowledges culture, country, community and connections,
0:29
Speaker 2: bringing you the tools, knowledge and resources for you to thrive.
0:32
Speaker 1: Hello, and welcome to She's on the Money, the podcast
0:35
Speaker 1: where we discuss all of the issues concerning your wealth
0:38
Speaker 1: goals so that you can feel more in control of
0:39
Speaker 1: your financial future. I'm Victoria Devine, and this week we're
0:43
Speaker 1: taking a closer look at the market, from the economy
0:46
Speaker 1: to inflation, to its impact on the stock market, and
0:49
Speaker 1: what predictions we might have for the twenty twenty seven
0:52
Speaker 1: financial year. If you're feeling a little bit overwhelmed by
0:55
Speaker 1: it all, we'll be breaking down what various market indicators
0:58
Speaker 1: mean and how it might actually affect different sectors of
1:01
Speaker 1: your finances, from wages and employment to your share portfolio.
1:06
Speaker 1: Joining me today on the deep dive couch is the
1:09
Speaker 1: voice of the people, Miss Becsi ed Beck. How are you? Oh?
1:14
Speaker 3: Very well, I'm very excited to learn about tax and whatever.
1:19
Speaker 3: We're not learning about tax, we're learning about the market
1:22
Speaker 3: by end of financial year.
1:24
Speaker 1: Yeah, okay, I did mention the end of financial that's it. Yeah,
1:27
Speaker 1: you did clock in on that. I got humbled. I'm
1:30
Speaker 1: so sorry, and I took the helm today. I did
1:33
Speaker 1: the intro because I feel like I'm navigating this.
1:36
Speaker 3: Ship, thank god.
1:37
Speaker 1: Honestly, today we're doing the market update. And for those
1:40
Speaker 1: of you who have been playing along at home for
1:42
Speaker 1: a little while, you know how excited I get to
1:45
Speaker 1: do a quarterly market update. Now this stuff lives rent
1:49
Speaker 1: free in my mind. And I'll be leaning on you
1:52
Speaker 1: Beck a little bit to ask any questions that you
1:55
Speaker 1: might have along the way, because sometimes I get really
1:57
Speaker 1: excited talking about inflation, and I think get that some
2:01
Speaker 1: people in our community are like the stop backtrack, what inflation? Yeah,
2:08
Speaker 1: that's okay. Whether it's about a particular market indicator like
2:11
Speaker 1: inflation or a particular share or stock, just interrupt me.
2:15
Speaker 1: Don't be afraid to ask questions.
2:17
Speaker 3: But it's very sweet to watch you.
2:18
Speaker 1: Oh it is, thank you, but also it's sweeter when
2:21
Speaker 1: you get it. Yeah, so fair.
2:23
Speaker 3: I know I'm not the only one who has questions,
2:25
Speaker 3: particularly about specific events that have happened in the shear
2:27
Speaker 3: market recently, which I know we'll get to later in
2:30
Speaker 3: the episode, but please tell me what's going on in
2:32
Speaker 3: the market. We're going to start sit down.
2:33
Speaker 1: We're going to start with inflation, okay, and end on
2:37
Speaker 1: maybe a little bit of an investing takeaway. But before
2:41
Speaker 1: we get there, before we dive in, and before I
2:43
Speaker 1: tackle SpaceX, we're going to take a really quick break.
2:51
Speaker 1: Welcome back to a deep dive episode of She's on
2:54
Speaker 1: the Money, where we are just about to get into
2:56
Speaker 1: the new financial year updates, starting with our olgnate inflation amazing.
3:00
Speaker 3: Okay, So I guess right off the bat, what actually
3:04
Speaker 3: is inflation? If you could remind me, it's ups and
3:06
Speaker 3: downs how to impact finances.
3:09
Speaker 1: I literally led you down the garden path earlier. I
3:12
Speaker 1: was like, oh, well, if you didn't understand inflation, ask
3:14
Speaker 1: and you're like, hey, I'm going to ask about inflation.
3:16
Speaker 3: P let woke up on that.
3:17
Speaker 1: Yes, So basically, inflation refers to the purchasing power of
3:20
Speaker 1: your money, which is important, Beck, because I'm assuming if
3:24
Speaker 1: you've got money, you want it to purchase as much
3:26
Speaker 1: as possible. Sure, good deal, good yesterday, Beck, a coffee
3:30
Speaker 1: might have cost you six bucks, which, like I mean,
3:33
Speaker 1: don't want to talk about that. But when inflation goes up,
3:36
Speaker 1: the value of your money goes down, which means that
3:39
Speaker 1: it might cost you more to purchase the exact same thing.
3:43
Speaker 3: Hmm, okay, got you. So coffee might be eight dollars
3:46
Speaker 3: even though it's the same being, same milk, everything like that.
3:49
Speaker 1: Exactly, So instead of six bucks, you're now paying eight bucks,
3:52
Speaker 1: but you still earn the exact same amount, So your
3:55
Speaker 1: money isn't stretching as far as it used to. And
3:58
Speaker 1: these things are track and measured globally with what's called
4:04
Speaker 1: the consumer Price Index or you might have seen it
4:07
Speaker 1: referred to as CPI, which measures the percentage change in
4:11
Speaker 1: an average price of regular goods and services consumed by
4:14
Speaker 1: each household. So stuff in your standard grocery trolley, like
4:17
Speaker 1: if you're going to go to Woolies today, put a
4:19
Speaker 1: whole heap of stuff in your trolley, take it home,
4:22
Speaker 1: look at the price of that, and then we do
4:23
Speaker 1: the same thing in twelve months, I can almost guarantee
4:26
Speaker 1: it's more expensive. You're still getting the same bag of flour.
4:29
Speaker 3: Yes, Oh my god, there's nothing more infuriating. But okay,
4:33
Speaker 3: I got you. So when we say things like there's
4:35
Speaker 3: a cost of living crisis because things like inflation have increased.
4:39
Speaker 1: Yes, and we'll loop back to this, but some things
4:43
Speaker 1: which might impact inflation, so like, it's not just food,
4:48
Speaker 1: it's property and transport and material costs like beck, how
4:53
Speaker 1: much it costs for something to be farmed and then transported,
4:56
Speaker 1: for example, does also play into it. And at the moment,
5:00
Speaker 1: I meant, we're feeling the ongoing impacts of the fuel
5:02
Speaker 1: crisis on inflation. And I think it's one of the
5:04
Speaker 1: first times that the general public and I say that liberally,
5:08
Speaker 1: but the general public has been really concerned about oil prices,
5:11
Speaker 1: like not in the way and I mean, you and
5:13
Speaker 1: I have been complaining about the cost of a tank
5:16
Speaker 1: of fuel for forever, but now we're like, oh, what's
5:20
Speaker 1: going on in the strait of her muz And nobody
5:22
Speaker 1: had ever heard of that before. But I feel like
5:24
Speaker 1: the conversation is increasing because we're like, hey, this is
5:28
Speaker 1: actually a bigger problem than we thought it was. Because
5:31
Speaker 1: while like and going back to you know, the farming
5:34
Speaker 1: and the transport of it all, some things are becoming
5:37
Speaker 1: even more expensive to deliver and transport due to that
5:40
Speaker 1: fuel crisis. And like, let's say you're a business owner,
5:43
Speaker 1: especially a small business owner, if things like your energy
5:47
Speaker 1: bills or your rent arising, then you might have to
5:50
Speaker 1: increase your product costs or you might not have as
5:54
Speaker 1: much cash flow. And like, cash flow is important because
5:57
Speaker 1: you pay your staff with cash flow. You have to
5:59
Speaker 1: pay taxes with your cash flow, So you might be
6:02
Speaker 1: cutting your staff's shifts, right because you're like, oh, well,
6:06
Speaker 1: I can't really increase the cost of my coffee beans.
6:10
Speaker 1: Maybe I'll just you know, have staff on less. And
6:12
Speaker 1: obviously that's a role on effect in the economy because
6:16
Speaker 1: people are then taking homeless money. And like, it just
6:18
Speaker 1: is cicklical. And this might not be as big a
6:22
Speaker 1: deal if we're all earning enough to buy things that
6:25
Speaker 1: we need to maintain a standard of living. But if
6:28
Speaker 1: prices are generally increasing faster than people's incomes are, then
6:32
Speaker 1: it becomes even more difficult for us to sustain a
6:35
Speaker 1: decent quality of life or like be able to buy
6:38
Speaker 1: the same things that we were buying last year.
6:40
Speaker 3: Yes, that is so true. You can really see the
6:44
Speaker 3: effects of that literally everywhere you go. So for a
6:46
Speaker 3: word that's thrown around a lot, inflation is a pretty
6:48
Speaker 3: big deal.
6:49
Speaker 1: It's massive, it's huge.
6:51
Speaker 3: So where are we at in Australia.
6:53
Speaker 1: So Australia's headline inflation was projected at four point eight
6:59
Speaker 1: percent in June. But our target inflation so we always
7:04
Speaker 1: want inflation, right, So inflation is indicative of a growing economy. Sure,
7:09
Speaker 1: I want us to have a growing economy. Yeah, but
7:11
Speaker 1: we don't want it to be growing so fast that
7:13
Speaker 1: it's not keeping up with wages. Right, So our target
7:18
Speaker 1: for inflation was somewhere between two and three percent, but
7:21
Speaker 1: we were four point eight percent. So, as you can imagine,
7:24
Speaker 1: this might explain why it's harder for people to get
7:26
Speaker 1: buy And can you guess how that might impact our
7:29
Speaker 1: finances back?
7:30
Speaker 3: Well, I guess no, actually, because it doesn't affect me.
7:33
Speaker 1: No, I'm just like no, I don't even care about money.
7:36
Speaker 3: It is hard to really do anything ever, all the time.
7:40
Speaker 3: So if inflation keeps growing and stuff keeps getting more expensive,
7:43
Speaker 3: people can't afford to buy stuff businesses cut their shifts
7:47
Speaker 3: or worse, closed down, which means fewer jobs, less money
7:50
Speaker 3: to buy basic grow throes, more housing and security.
7:53
Speaker 1: It's a big deal.
7:53
Speaker 3: So what can we do? How is inflation being managed?
7:57
Speaker 1: Just deny it, deny, I deny, yes, Like, just pretend
8:01
Speaker 1: it's not happening. No, Well, the Reserve Bank of Australia
8:05
Speaker 1: or the RBA typically raises the cash rate to help
8:08
Speaker 1: cool inflation. So we've been talking a lot about the
8:12
Speaker 1: RBA hiking prices and everyone's stressed about that, but there's
8:16
Speaker 1: actually good reason for it. So when they see inflation
8:19
Speaker 1: growing too quickly, which is at the moment, they make
8:22
Speaker 1: the call to raise the interest rate and this impacts
8:25
Speaker 1: things like property and housing. So despite the speculations around
8:29
Speaker 1: rate rising happening again, the RBA closed the financial year off,
8:33
Speaker 1: and oh my goodness, I breathed the biggest sigh of
8:35
Speaker 1: relief because obviously I run a mortgage breaking business and
8:40
Speaker 1: any of my clients would have had an increase to
8:43
Speaker 1: their rates and that's not cute. But they close off
8:46
Speaker 1: the financial year, hallelujah, with a hold on the cash rates.
8:50
Speaker 1: So they didn't increase I mean, they didn't decrease it,
8:52
Speaker 1: which would have been nice, but I didn't expect that
8:54
Speaker 1: because it was like not financially feasible, to be honest.
8:58
Speaker 1: But they held the cash rate for point three five percent,
9:02
Speaker 1: which is still the highest it's been since twenty eleven. Okay,
9:06
Speaker 1: so it's quite high. So if you pay a mortgage,
9:08
Speaker 1: or you pay rent, or even if you're invested in
9:10
Speaker 1: these types of assets in your share portfolio, you're going
9:13
Speaker 1: to start to see the influence of the cash rate
9:16
Speaker 1: on your investments. Now, I'm still.
9:18
Speaker 3: Relatively news to my own investing journey, as you know,
9:21
Speaker 3: but can you explain how this might impact some of
9:23
Speaker 3: the more popular stocks or like ETFs that our listeners
9:27
Speaker 3: might be invested in.
9:28
Speaker 1: Yes, so it could be like twofold, right, So when
9:31
Speaker 1: the cash rate goes up back, yeah, you're making more
9:33
Speaker 1: on your savings account, and lots of people are like,
9:36
Speaker 1: yay money, wein like, my savings are getting more interest. Yeah,
9:41
Speaker 1: but if you have a mortgage, you're like, what the heck,
9:43
Speaker 1: I'm paying more and I don't like the sure Okay,
9:46
Speaker 1: But we need to keep in mind that while things
9:49
Speaker 1: like inflation are impacting us here in Australia, things like
9:53
Speaker 1: global inflation, trading, and geopolitics affect overseas markets, and it's
9:58
Speaker 1: it's not just a cost thing either. Like these things,
10:02
Speaker 1: they impact our mindset when it comes to investing as well,
10:05
Speaker 1: or what we call market sentiment if you're a professional
10:09
Speaker 1: in the industry, and market sentiment is just basically how
10:13
Speaker 1: comfortable people are to invest, Like people aren't that comfortable
10:17
Speaker 1: to invest when life is really really expensive, when they
10:21
Speaker 1: can't afford it, they're selling down their portfolios. But I
10:24
Speaker 1: got some quick stats that I would like to share
10:26
Speaker 1: with you please. These are of late June this year
10:30
Speaker 1: when it comes to really popular ETFs here in Australia.
10:34
Speaker 1: So across the board we have seen the impact of
10:37
Speaker 1: the US Iran war from February this year. Like I
10:40
Speaker 1: don't think that's going to be surprising to anyone, but
10:42
Speaker 1: specifically we're seeing a disrupted oil supply and elevated global
10:46
Speaker 1: energy prices which have prompted increased inflation across all three markets,
10:52
Speaker 1: which has been driving sharp early quarter sell offs. Right,
10:55
Speaker 1: so people are selling because stuff's just expensive and it's
10:58
Speaker 1: really stressful. But weirdly enough, the SMP five hundred, which
11:02
Speaker 1: is the top five hundred companies in the US actually
11:05
Speaker 1: rows ten percent, like it increased in value by ten
11:09
Speaker 1: percent since the US Iran War began. And this is
11:13
Speaker 1: mostly due to the exponential investment in AI infrastructure. So
11:16
Speaker 1: you've seen it everywhere. Everyone's talking about data warehousing, including
11:20
Speaker 1: semiconductors and chips, so the things that are helping build AI.
11:24
Speaker 1: So it's not necessarily just like AI in general, which
11:28
Speaker 1: is like the operating system, but it's you know, the
11:31
Speaker 1: things that actually create it in the background, because you
11:33
Speaker 1: need really really strong powerful computers. I suppose to where's
11:39
Speaker 1: the AI live beck, Yeah, right, So top performers like Navidia, Micron, Intel,
11:46
Speaker 1: and Alphabet are all being publicly traded under this umbrella.
11:49
Speaker 1: In fact, these companies are over indexing when it comes
11:53
Speaker 1: to earnings per share, like they're killing it. Then the
11:56
Speaker 1: Nasdaq Composite, which is again top one hundred cupmpanies also
12:01
Speaker 1: referred to as the Nasdaq one hundred, it closed at
12:05
Speaker 1: and that this might not mean a lot to you,
12:07
Speaker 1: but I'll contextualize it twenty six one hundred and sixty
12:11
Speaker 1: seven points, which is up thirty five percent right year
12:16
Speaker 1: on year, which honestly is wild, Like to me that
12:19
Speaker 1: is an insane amount of growth given we're in the
12:21
Speaker 1: middle of a warback, there's so much going on. We're
12:25
Speaker 1: in a cost of living crisis. I know it's hard
12:27
Speaker 1: on us, but it is arguably even harder in the
12:30
Speaker 1: US where they don't have the same types of infrastructure
12:33
Speaker 1: and support. But it's still growing, Like, isn't that creep
12:38
Speaker 1: You would think that maybe logically these things would be
12:42
Speaker 1: growing at a slower rate because people aren't as excited
12:45
Speaker 1: about these things because the cost of bread is just
12:48
Speaker 1: too much. Yes, right, So we're a bit stressed. While
12:51
Speaker 1: we're seeing like huge waves of investment and growth in AI,
12:54
Speaker 1: we've also seen a growing culture of layoffs. Like everyone's
12:59
Speaker 1: being made made redundant. I feel like we all have
13:01
Speaker 1: a mate who's just been made redundant. And we're seeing
13:04
Speaker 1: internationally as well, so like tech giants, Oracle, Amazon, Meta, Microsoft,
13:10
Speaker 1: where there seems to be like a trend and I've
13:14
Speaker 1: seen it all over TikTok of token maxing. I don't
13:18
Speaker 1: know if you've seen this, but it's essentially the performative
13:22
Speaker 1: overuse of AI to signal productivity. So people are like, oh,
13:27
Speaker 1: we're using heaps of AI, We're placing lots of like
13:29
Speaker 1: you know, stuff with aio live love or something. I
13:33
Speaker 1: don't know, but hilariously, and I think this is kind
13:37
Speaker 1: of funny people. And in Australia, this is happening. They're going,
13:42
Speaker 1: We're going to replace things with AI. That's great. We've
13:45
Speaker 1: just you know, budgeted one hundred million dollars for this
13:48
Speaker 1: AI thing, but they actually haven't taken into consideration the
13:52
Speaker 1: tokens that are necessary for performing specific tasks. And they're
13:56
Speaker 1: blowing through their entire hundred million dollar budgets in like
14:00
Speaker 1: the first three months of the year. But that budget
14:02
Speaker 1: was meant to last for twelve months, right, Okay. In
14:06
Speaker 1: a way, I'm like, serves you, right.
14:08
Speaker 3: It's kind of satisfying.
14:10
Speaker 1: It's kind of satisfying because I'm like, haha, like it
14:13
Speaker 1: didn't work out the way that you thought it would
14:15
Speaker 1: replacing humans. Did it work as well for you?
14:18
Speaker 3: I guess better?
14:19
Speaker 1: Yeah, exactly. And like, personally I love to see it.
14:22
Speaker 1: I mean, I'm also really interested in AI because I'm like, oh,
14:25
Speaker 1: how could this benefit our community? But they doesn't seem
14:27
Speaker 1: to be And this is like a side note, There
14:29
Speaker 1: doesn't seem to be a lot of conversation about like
14:32
Speaker 1: adding value, Like how can we take Beck and her
14:35
Speaker 1: role and use AI to make her uber like performative
14:40
Speaker 1: or how do we make her super like productive and
14:44
Speaker 1: like the best version of Beck? Yeah, but instead the
14:47
Speaker 1: conversation is like, Okay, how do we take Beck's role
14:50
Speaker 1: and replace it with a robot?
14:51
Speaker 3: Yeah?
14:52
Speaker 1: Fully like and yeah, anyway, I just have a lot
14:55
Speaker 1: of conversation that I want to have about that. And
14:57
Speaker 1: also like if you're using AI at your job and
15:00
Speaker 1: you're like, you know, turbo charging what you're doing at work,
15:04
Speaker 1: and you're like, you know, you're managing that whole process
15:06
Speaker 1: and you're saving like six hours a day, does that
15:09
Speaker 1: mean you're meant to work another six hours a day
15:11
Speaker 1: for that employer or do we have to change the
15:13
Speaker 1: way that things are working right? I don't know. I
15:15
Speaker 1: just have a lot of questions. Oh yeah, I didn't
15:17
Speaker 1: think about that anyway. We saw a really huge drop
15:21
Speaker 1: in assets, like in the asset when it goes back
15:23
Speaker 1: to like the tokavaxine conversation because ive got derailed. Apologies.
15:27
Speaker 1: We saw a huge drop in assets in April due
15:31
Speaker 1: to tariff changes because our old mate Trumpy Trump decided
15:36
Speaker 1: to tariff everybody, So I feel like anything can change.
15:39
Speaker 1: Vanguard is a very popular conversation in our community, and
15:43
Speaker 1: Vanguard shareholders have seen a bit of growth this year
15:46
Speaker 1: with a general trend of value building over the last
15:49
Speaker 1: twelve months, which proves our time in the market beats
15:53
Speaker 1: timing the market philosophy again and again and again. So
15:57
Speaker 1: I guess here the story was one of stability. People
16:02
Speaker 1: wanted ongoing dividends during a time of tech uncertainty and
16:05
Speaker 1: market volatility. Like, volatility is just where the market's going
16:10
Speaker 1: up and down, and when things are more volatile, it's
16:12
Speaker 1: happening more often. It's like more rough seas, and when
16:15
Speaker 1: things are not so volatile, like it's just a general
16:18
Speaker 1: lap of the ocean. Right, Does that make sense? That
16:20
Speaker 1: does make sense. So then if we go to like
16:22
Speaker 1: some more flashy tech ETFs and have a chat about those.
16:26
Speaker 1: There are a number of flashy tech ETFs that make
16:28
Speaker 1: up the NASDAQ one hundred or the SMP five hundred,
16:32
Speaker 1: there was a lot of volatility. Vanguard funds saw a
16:36
Speaker 1: steady rise, completely outperforming the SMP five hundred. So VDA,
16:41
Speaker 1: which is Vanguard Energy, saw an increase of sixteen percent duh,
16:45
Speaker 1: because of like the Iruan US War Pressures VYM, which
16:50
Speaker 1: is the Vanguard High Dividend Yield ETF, saw an increase
16:54
Speaker 1: of eight point one percent, and that comprises of like
16:58
Speaker 1: just to give you some context, that's a little bit
17:01
Speaker 1: more conservative, and they are more incompaigning companies and AI chips,
17:08
Speaker 1: which kind of makes sense as to why that's increased.
17:10
Speaker 1: And then VO which is a very popular one in
17:13
Speaker 1: our community, which is the Vanguard SMP five hundred ETF,
17:18
Speaker 1: that was up by four percent. And that even though
17:21
Speaker 1: that is the Vanguard SMP five hundred, that still beat
17:25
Speaker 1: the SMP, but not by as much as the other
17:28
Speaker 1: Vanguard funds, okay, And I think that that was interesting
17:32
Speaker 1: because lots of US are looking at those ETFs at
17:34
Speaker 1: the moment. And then closer to home, so we've been
17:37
Speaker 1: talking about the SMP five hundred which is America closer
17:41
Speaker 1: to home, the ASX two hundred, which is the Australian
17:43
Speaker 1: Stock Exchange top two hundred companies. They closed at eighty
17:49
Speaker 1: eight hundred points, which is actually down zero point nine percent,
17:55
Speaker 1: which is year to date. So I've just got like
17:57
Speaker 1: late June statistics in front of me. Over the last
18:02
Speaker 1: you know year, like since the start of the year,
18:04
Speaker 1: it's awesome, Like peak growth in about February. That was
18:09
Speaker 1: energy driven, so like that was energy driven inflation with
18:12
Speaker 1: three consecutive Like the RBA was increasing the interest rates,
18:16
Speaker 1: so that obviously then filtered into the general market, and
18:21
Speaker 1: I reckon the RBA interest rate hikes might have weighed
18:24
Speaker 1: down overall gains because people are getting a bit stressed
18:27
Speaker 1: and like we're being a little bit more conservative and
18:29
Speaker 1: not investing as much. So obviously that's going to mean
18:32
Speaker 1: that the top two hundred companies in Australia aren't going
18:35
Speaker 1: to have seen as much growth.
18:37
Speaker 3: Got you? Okay, So it sounds like we aren't getting
18:39
Speaker 3: the same sort of growth here in Australia maybe because
18:42
Speaker 3: we aren't like Silicon Valley.
18:44
Speaker 1: Yeah, Silicon Valley is like big dog. That's like the
18:48
Speaker 1: tech hub in the US. Like if you're a tech
18:51
Speaker 1: company and you exist in America and you exist not
18:55
Speaker 1: in Silicon Valley, they like you look down their nose
18:57
Speaker 1: at you. Got you. Yeah, it's like the fancy tech hub.
19:01
Speaker 1: It's like where Apple is, It's where Microsoft is, It's
19:03
Speaker 1: where all of those big companies like live. Yeah, that
19:07
Speaker 1: makes sense.
19:07
Speaker 3: Too, Okay, So just somebody keep in mind maybe when
19:10
Speaker 3: you're like considering your next move.
19:12
Speaker 1: Yeah, we're definitely not getting the same amount of growth
19:15
Speaker 1: in Australia as we're seeing internationally. Yeah, and do you
19:19
Speaker 1: know what that's okay? Because like slow and steady wins
19:22
Speaker 1: the race Beeck, Like we love consistency, Like I don't
19:26
Speaker 1: need something super super shiny and super exciting, because every
19:29
Speaker 1: time you've ever chased a share for its return, most
19:33
Speaker 1: people will be like it backfired, I e. SpaceX. Anyway,
19:37
Speaker 1: I think that's where it's so important to talk about
19:40
Speaker 1: your money values and how they might impact your choice
19:43
Speaker 1: to invest. Like, for example, you might really love Beck
19:47
Speaker 1: the idea of space, but you really don't like Elon Musk,
19:52
Speaker 1: which is so fair absolutely, Like I love space, I
19:56
Speaker 1: do not love Elon Musk. No, Like, can you imagine
19:58
Speaker 1: Beck being a trillion and having the ability to change
20:03
Speaker 1: the entire world? You could eradicate global poverty, yeah, I know,
20:08
Speaker 1: you could eradicate global hunger, Like, you could do so much,
20:12
Speaker 1: and you just don't. You just buy a yacht.
20:14
Speaker 3: That's crazy.
20:16
Speaker 1: That makes me sick, I know anyway, But that's again
20:19
Speaker 1: another story for another day, Like, I just trillionaires shouldn't exist.
20:24
Speaker 1: I've written before, as you know, but I don't know
20:27
Speaker 1: if everyone in our community knows. Every week I write
20:29
Speaker 1: a column for The Age and the Sydney Morning Herald
20:32
Speaker 1: and it comes out on a Sunday, and a while
20:34
Speaker 1: ago it's still one of my most popular articles on
20:37
Speaker 1: the website. I wrote about how I don't think billionaires
20:40
Speaker 1: should exist, like nobody needs to be a billionaire. Nobody, nobody. Anyway,
20:45
Speaker 1: that's a side note. Let's jump back into market recap.
20:48
Speaker 1: But yeah, I just I've got a lot to say
20:50
Speaker 1: on Elon Musk. But if you don't like Elon Musk
20:54
Speaker 1: and you do love the idea of space, maybe something
20:57
Speaker 1: like a company called rocket Lab in New Zealand is
21:00
Speaker 1: a company that you might be looking at, or you
21:02
Speaker 1: could consider because they're trading under the Nazadaq one hundred
21:06
Speaker 1: now too. Or maybe if you only support AI, if
21:10
Speaker 1: it's being used to like benefit healthcare and medical research,
21:15
Speaker 1: so those kind of companies might take your fancy. You
21:17
Speaker 1: could look at something like that because you might go,
21:19
Speaker 1: I don't want general employees being replaced, but I also
21:22
Speaker 1: see a lot of benefit for AI being used in
21:24
Speaker 1: the healthcare space, because better healthcare, better outcomes, better everything, right,
21:29
Speaker 1: So it kind of pays to be aware of what's
21:31
Speaker 1: out there and then find a situation that works for
21:34
Speaker 1: you personally.
21:35
Speaker 3: Just on that. Our community has been asking about this
21:38
Speaker 3: SpaceX thing, and I always worry because if I say
21:41
Speaker 3: too fast, it sounds like SpaceX, SpaceX, SpaceX.
21:43
Speaker 1: I mean, he probably likes that. So we know that Ela.
21:47
Speaker 3: Musk is behind it.
21:48
Speaker 1: But what's the what is the I guess like big deal.
21:51
Speaker 3: I think I get it, But what Why was it
21:53
Speaker 3: valued at trillions of dollars and why were so many
21:55
Speaker 3: people racing to buy it?
21:57
Speaker 1: Okay, so SpaceX wasn't I. That happened recently, and an
22:01
Speaker 1: IPO is an initial public offering, So SpaceX was a
22:05
Speaker 1: private company and an IPO is the first time it
22:08
Speaker 1: appears on the general share market so that you and
22:11
Speaker 1: I can buy it, so the general public has access
22:14
Speaker 1: to it, right, And it was a big deal because
22:17
Speaker 1: it was one of the largest, if not the most
22:19
Speaker 1: valuable offerings in an IPO to date. So they were
22:24
Speaker 1: looking to offer around five hundred and fifty five million
22:29
Speaker 1: shares and raise approximately seventy five billion dollars to help
22:34
Speaker 1: continue to fund their exploration and AI computing partnerships and
22:38
Speaker 1: plans and all of this. Then once it launched, brought
22:42
Speaker 1: this company's value up to around to get this one
22:46
Speaker 1: point seven trillion American dollars. Wow, like that is way
22:51
Speaker 1: too many zeros to put on this podcast. And so,
22:55
Speaker 1: for better or for worse, the infamy around I guess
22:57
Speaker 1: elon musk SpaceX itself like starlink as well as you
23:03
Speaker 1: know the words the biggest IPO in history, Like this
23:07
Speaker 1: thing popped off Beck Like everybody was like, are you
23:10
Speaker 1: in on SpaceX? Have you bought SpaceX? Are you buying SpaceX?
23:12
Speaker 1: To be very clear, I did not purchase SpaceX. It
23:15
Speaker 1: didn't align with my values, Like it didn't you know,
23:19
Speaker 1: it didn't fit with me. But even Gina rian Hart
23:22
Speaker 1: bought a very big amount of shares in this, Like
23:25
Speaker 1: she she publicly came out and was like, I bought,
23:28
Speaker 1: you know, a billion dollars worth of shares. It's crazy,
23:31
Speaker 1: but she doesn't play. There was so much speculation around
23:35
Speaker 1: the valuation of this because it was so big and
23:38
Speaker 1: after looking at the structure of the company, like it
23:41
Speaker 1: wasn't going to be earning one point seven trillion dollars
23:44
Speaker 1: anytime soon. Like that was just market optimism. That was
23:47
Speaker 1: people being excited about being in on the next big
23:50
Speaker 1: thing and buying something and pushing their value up really quickly.
23:55
Speaker 1: But that doesn't mean beck it's sustainable. That number was
23:58
Speaker 1: built on a projected value, Like they aren't profiting from
24:03
Speaker 1: chips or semiconductors in the same way that a company
24:06
Speaker 1: like Navidia is. Like Navidia is doing good stuff and
24:10
Speaker 1: we've talked about it on the show before, but like
24:13
Speaker 1: what SpaceX did was profit on potential and that's why
24:19
Speaker 1: it literally push like it has in the last few days.
24:24
Speaker 1: Slash weeks absolutely plummeted, Like yeah, people got excited, it
24:29
Speaker 1: went up. There's market optimism. There's market optimism. The smart
24:32
Speaker 1: investors that got into the IPO at the start and
24:35
Speaker 1: they were like, I see people, I see they're going
24:38
Speaker 1: to be really excited about this. I'm going to buy
24:40
Speaker 1: it at the very beginning, and I'm going to sell
24:42
Speaker 1: it at the top and watch everybody flounder. Wow, people
24:44
Speaker 1: started selling off and getting rid of it and these
24:47
Speaker 1: like the share price absolutely crashed and like I think
24:52
Speaker 1: it was a big deal even if you didn't buy
24:54
Speaker 1: because the SpaceX ipo. It shook up the market. People
24:58
Speaker 1: were looking like people were like everybody had their finger
25:02
Speaker 1: on the pulse, including me. Just because I wasn't buying
25:04
Speaker 1: it doesn't mean I wasn't reading everything about it. And
25:07
Speaker 1: it caused people to sell their chip stocks in order
25:10
Speaker 1: to make their funds liquids so they could put more
25:12
Speaker 1: money into SpaceX. So there was like a lot of
25:14
Speaker 1: movement in the market. I see beck after one week
25:18
Speaker 1: of trading publicly, we heard of people breaking even with
25:21
Speaker 1: sell offs happening in the first few days. So not
25:24
Speaker 1: only did we see the biggest valuation, but we also
25:27
Speaker 1: saw the biggest instantaneous loss over one trillion dollars in
25:32
Speaker 1: value of one uset.
25:34
Speaker 3: Wow.
25:35
Speaker 1: That is meant it was actually crazy and like completely predictable.
25:40
Speaker 1: But so many people were so optimistic and like if
25:44
Speaker 1: you think about the people that were purchasing it, like
25:46
Speaker 1: obviously like Gina Ryan Hart, sure, but the average Joe
25:49
Speaker 1: blow Yeah was talking about it the pub. They were like,
25:52
Speaker 1: oh my god, did you see SpaceX? So you're going
25:54
Speaker 1: to buy SpaceX? That's sick. I bought SpaceX. I put
25:57
Speaker 1: five hundred bucks in and then someone goes home and
25:58
Speaker 1: they go, maybe I should put five hundred bucks in?
26:01
Speaker 3: Yeah.
26:01
Speaker 1: Yeah, is that because you valuated the share? No it
26:05
Speaker 1: was not.
26:06
Speaker 3: So what's that saying? Is that like, like we shouldn't
26:09
Speaker 3: be scared of every single share that's valued high? Like
26:12
Speaker 3: does it mean like the bigger they are, the harder
26:14
Speaker 3: they fall?
26:15
Speaker 1: Exactly? And look, we don't know what the long term
26:18
Speaker 1: picture on this looks like. Sure, but if SpaceX wasn't
26:22
Speaker 1: aligned to your investing habits and goals before, maybe reassess
26:26
Speaker 1: the market and the paperwork before leaping in on hype,
26:30
Speaker 1: like literal hype that's all that's driving this good core exactly.
26:34
Speaker 1: So we're going to go to a really quick break.
26:36
Speaker 1: But after the break, we're going to be covering what
26:38
Speaker 1: we predict might happen over the next few months and
26:40
Speaker 1: what you might be considering based on this information. Don't
26:44
Speaker 1: go anywhere, all right, Beck? Knowing what we know now
26:50
Speaker 1: about the market this year and about recent events, what
26:53
Speaker 1: things do we see popping up on the horizon.
26:57
Speaker 3: So like, is there a kind of stocked harrow maybe
27:00
Speaker 3: that we can do to figure out our next move?
27:04
Speaker 1: Yeah, like you just head down to the South Melbourne market. Yeah,
27:07
Speaker 1: when under the stairs is going to give you all
27:09
Speaker 1: the stock tips. No that's not true. She'll just tell
27:11
Speaker 1: you about your life and it's oddly confronting. But we're
27:15
Speaker 1: going to continue on with this like AI and tech
27:18
Speaker 1: story because I think everyone has heard rumors about both
27:22
Speaker 1: Open AI and Anthropic joining the party late last year.
27:26
Speaker 1: Ah so for those playing at home, they're the companies
27:29
Speaker 1: behind your friends Chat, GPT, and Claude, respectively. So following
27:33
Speaker 1: some series funding rounds and early vetting by the SEC
27:37
Speaker 1: or the Securities and Exchange Commission, which is generally like
27:41
Speaker 1: that's generally a sign that a company is gearing up
27:43
Speaker 1: to be publicly listed, they might join the fold of
27:47
Speaker 1: companies with a potential trillion dollar valuation, which is kind
27:51
Speaker 1: of crazy, like these companies feel like they're coming out
27:54
Speaker 1: of nowhere, but also they're just big, Like that's crazy.
27:59
Speaker 1: But after what just happened with SpaceX, I guess we'd
28:03
Speaker 1: strongly recommend a grain of salt. With all the hype
28:06
Speaker 1: around these valuations, so fair like it just makes sense
28:11
Speaker 1: to be having maybe a really big shake of salt.
28:14
Speaker 3: Yeah, totally, And like people were going crazy for like
28:17
Speaker 3: a space company, you know that's not in everyday life,
28:20
Speaker 3: not well known about, like among every single person in
28:22
Speaker 3: the world. But can you imagine the mania around the
28:25
Speaker 3: AI assistance.
28:26
Speaker 1: Yeah, it's actual madness, Beck, and I can only expect
28:29
Speaker 1: more madness.
28:31
Speaker 3: So how long can our listeners remain cool? Especially if
28:34
Speaker 3: they're feeling tempted by these headlines in the coming months?
28:37
Speaker 1: All right? So disclaimer, this is general advice only you
28:40
Speaker 1: hold a general advice license. But I cannot and will
28:44
Speaker 1: not tell you what to do. I can put information
28:47
Speaker 1: on the table and I can share it with you,
28:48
Speaker 1: and you can go away and make your own decisions, right, Yeah,
28:51
Speaker 1: And all I ask, Beck, is for you and our
28:53
Speaker 1: community to return to your money values and your investment goals.
28:57
Speaker 1: And that sounds so lame, but like, if they are
29:00
Speaker 1: long term, will buying this share or SpaceX or anthropic
29:05
Speaker 1: or chat GPT or a different etf genuinely support your
29:10
Speaker 1: long term growth? And if you aren't sure, my friend,
29:13
Speaker 1: what research do you need to do to be really
29:16
Speaker 1: confident in the decisions that you're making? Or are you
29:19
Speaker 1: just hearing media and instagrams and TikTok about SpaceX and
29:23
Speaker 1: making decisions on that? Please stop that? Like, how much
29:27
Speaker 1: do you actually Beck know about semiconductors and chips, not
29:30
Speaker 1: a lot, but like easily you could be convinced via
29:34
Speaker 1: peer pressure to purchase into a share or into an
29:37
Speaker 1: asset just because your mates are comfortable with it. Absolutely,
29:40
Speaker 1: but you actually don't know a lot about these things,
29:43
Speaker 1: and that doesn't make a lot of sense. So who
29:45
Speaker 1: are the companies behind them? What's their story, what are
29:47
Speaker 1: they doing? And I know it's so easy to be
29:50
Speaker 1: swayed by headlines and then analysis paralysis, but truly understanding
29:54
Speaker 1: what you are really investing in, whether it is a
29:58
Speaker 1: product or it's a service or sheer potential like SpaceX,
30:03
Speaker 1: it's gonna help you understand what it means to make
30:06
Speaker 1: the right choice for you or feel better about the
30:10
Speaker 1: wrong choices even when things dip.
30:11
Speaker 3: Yeah, okay, that's so so fair, so nice. I think
30:15
Speaker 3: that all sounds quite responsible, and honestly I trust it.
30:19
Speaker 1: Go forth, go forth and prosper, but be very cautious
30:23
Speaker 1: when people are excited about things, Because our mate Warren
30:28
Speaker 1: Buffett says, be fearful when people are greedy, and greedy
30:32
Speaker 1: when people are fearful, And I think that that is
30:35
Speaker 1: a very good place to leave this episode, because when
30:38
Speaker 1: you are seeing other people in the market be greedy
30:40
Speaker 1: and buying up lots of stuff. There is the very
30:43
Speaker 1: real possibility, and I say possibility because it's happened every
30:47
Speaker 1: single time, that it's being driven by hype not by substance. Yes, Like,
30:53
Speaker 1: there's actually not a lot of substance to it. And
30:55
Speaker 1: whilst SpaceX Beck space is cool, Yeah, is so fun,
31:02
Speaker 1: but they actually haven't done anything and they haven't sold
31:05
Speaker 1: any product. We are buying that with potential. Yeah, I
31:09
Speaker 1: cannot tell you how much I do not want to
31:12
Speaker 1: grow my wealth based on someone's potential, let alone. Elon Musks.
31:17
Speaker 3: Yeah, that's like so true.
31:19
Speaker 1: I don't I just can you just prove it? Like
31:21
Speaker 1: I'm just like the type of girl try it and true,
31:24
Speaker 1: Like I love a bank share and I do so
31:27
Speaker 1: personally because they just do what they said they were
31:30
Speaker 1: gonna do. They're like, we're gonna, you know, keep people's
31:32
Speaker 1: money safe, Well, do some loans, We'll make some profit
31:36
Speaker 1: and then you know what we'll do, We'll share that
31:37
Speaker 1: profit with you, Beck, Hell yeah, and you go thank you.
31:41
Speaker 1: It might be small, but SpaceX, I think people get
31:44
Speaker 1: really excited about things because of the potentially huge upside,
31:49
Speaker 1: Like you see SpaceX and go, oh my god, trillions.
31:53
Speaker 1: I want to be in on that. Yeah, but it's
31:55
Speaker 1: not reality. Is that it's like gambling. That's why people
32:00
Speaker 1: in the share market to gambling as opposed to going
32:03
Speaker 1: Oh yep, a bank share They've existed in Australia as
32:06
Speaker 1: long as you know, almost Australia has existed, and they've
32:08
Speaker 1: just done what they said they were going to do.
32:10
Speaker 1: And I've shared this example on the podcast before and
32:13
Speaker 1: again it's not a recommendation, but NAB the bank has
32:17
Speaker 1: never not paid a dividend. Yes, they've never not paid.
32:22
Speaker 1: There's shareholders, they've never not paid the people that have
32:24
Speaker 1: invested in them.
32:25
Speaker 3: Yeah, yeah, I got SpaceX.
32:28
Speaker 1: Dont just promised you all we're going to go to space?
32:31
Speaker 3: Yeah?
32:32
Speaker 1: You put Katie Perry on a spaceship? What a waste
32:36
Speaker 1: of money?
32:36
Speaker 3: Like random?
32:37
Speaker 1: Yeah, she paid for that privilege, Like she got to
32:41
Speaker 1: go into space at what cost? Like I just there
32:45
Speaker 1: are so many ethical questions that pop up, So we
32:48
Speaker 1: need to wrap this up same time next quarter. Hey,
32:52
Speaker 1: let's do it.
32:52
Speaker 3: I really don't know what's gonna happen between now and then,
32:54
Speaker 3: but I can't wait to see all right.
32:56
Speaker 1: Well, thank you, my friends, for joining us for another
32:58
Speaker 1: She's on the Money market update. We hope that you
33:01
Speaker 1: feel sufficiently informed, if not more, curious, about your own
33:04
Speaker 1: investments and the investment world at large. We would love it,
33:08
Speaker 1: Beck and I would love it because we have like
33:10
Speaker 1: egos that need to be inflated. If you left us
33:12
Speaker 1: a review, if you really loved this episode and found
33:15
Speaker 1: it helpful. Otherwise, please feel free to follow us up
33:17
Speaker 1: with any questions and make sure that you're subscribed so
33:20
Speaker 1: you never miss an episode. Take care, my friends, and
33:22
Speaker 1: we'll catch you on Friday.
33:24
Speaker 3: Bye, guys.
33:29
Speaker 1: The advice shared on She's on the Money is general
33:31
Speaker 1: in nature and does not consider your individual circumstances. She's
33:35
Speaker 1: on the Money exists purely for educational purposes and should
33:39
Speaker 1: not be relied upon to make an investment or financial decision.
33:42
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