Latest / What the Flux / In Conversation with Chris Judd [Part 2] - Why the best investors embrace being embarrassed

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In Conversation with Chris Judd [Part 2] - Why the best investors embrace being embarrassed · What the Flux

• 0:05
  Speaker 1: This is what the flux i'mb And It's Monday, the
• 0:07
  Speaker 1: third of November. Today Brett and Justin will be sharing
• 0:10
  Speaker 1: the second part of their deep dive interview with Chris Judd,
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  Speaker 1: two time AFL Brownlow medallist, Premiership captain and founder of
• 0:16
  Speaker 1: Serity Macro Funds. But before that, here are the top
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  Speaker 1: three business news stories from Australia and around the world.
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  Speaker 1: ANZ has warned of an upcoming one point one billion
• 0:24
  Speaker 1: dollar profit hit. Anz's plan to lay off eight percent
• 0:26
  Speaker 1: of its global workforce will set them back four hundred
• 0:29
  Speaker 1: and fourteen billion dollars. Then their asse to find for
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  Speaker 1: incorrectly reporting bond trading data to the Treasury will cost
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  Speaker 1: them two hundred and sixty four million total. In other news,
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  Speaker 1: paypalers signed a deal with open Ai to become the
• 0:40
  Speaker 1: first payment's wallet embedded into Chat GPT. Starting next year,
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  Speaker 1: PayPal buyers and sellers will be able to complete transactions
• 0:46
  Speaker 1: through the AI tool. And finally, the government is investing
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  Speaker 1: seven point nine billion dollars into the medicare system to
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  Speaker 1: encourage more doctors to bulk field patient visits. Previously, doctors
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  Speaker 1: receives a financial incentive from the government for bulk billing,
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  Speaker 1: concession card holders and children underst extinct, but as of
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  Speaker 1: the first of November, the incentives will apply for any patient.
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  Speaker 1: That's it for me today, I'll pass it over to
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  Speaker 1: Bretton Justin for the insightful conversation with Chris Judd.
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  Speaker 2: All right, time to move into the flux five questions.
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  Speaker 2: First one, Jadie, if you weren't running serity, what is
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  Speaker 2: a job that you would secretly or not so secretly
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  Speaker 2: love to try.
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  Speaker 3: I don't know if I could do anything else. I
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  Speaker 3: genuinely so.
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  Speaker 4: If I wasn't doing this, I'd be investing PA full time,
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  Speaker 4: which is what I was doing before Sarity.
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  Speaker 3: What's a job? Maybe economists?
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  Speaker 2: Based on what you just told us.
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  Speaker 4: I'd like to be an economist. Yeah, I like that
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  Speaker 4: side of.
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  Speaker 2: It, Foreign affairs edit.
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  Speaker 4: Or something about economists, though I just don't have skinning
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  Speaker 4: the game. It's just an annoying some would smug, sort of.
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  Speaker 3: Sound clever, but so what else?
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  Speaker 5: Not footy coach?
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  Speaker 3: Not footy coach?
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  Speaker 4: That'd been anyone's interest? Long pause, because I can't think
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  Speaker 4: of it like this is It's nice when you find
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  Speaker 4: something sure you've built around. I think it's I suited this.
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  Speaker 4: Not for a second do I think I'd prefer to.
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  Speaker 3: Be doing something else.
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  Speaker 4: Small team and we have a really good time. We
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  Speaker 4: bounce into work each day and you know, it doesn't
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  Speaker 4: feel like work and that's not a cell. That's just
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  Speaker 4: how it is. So I haven't got anything for you, unfortunately.
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  Speaker 5: And jaddi's there a leader that you've had in the past,
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  Speaker 5: whether personally or professionally, and they've really inspired you. And
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  Speaker 5: it could be in football, could be in work or
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  Speaker 5: professional sense.
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  Speaker 4: There's lots, is the answer, and both good and bad.
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  Speaker 4: Like I don't use positive role models very much for
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  Speaker 4: someone whose life ten to fifteen years further along in
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  Speaker 4: life and go that's what I want to be, because
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  Speaker 4: it can be a bit restrictive on where you meant
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  Speaker 4: to go. I use negative role modeling for that a lot.
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  Speaker 4: Like I'm happy to say I don't want to be
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  Speaker 4: there in fifteen years, so I get.
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  Speaker 3: Some utility out of that. Yeah, I don't know about There.
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  Speaker 4: Certainly investors who I just love listening to and derive
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  Speaker 4: a lot of inspiration of it. Anyone who calls themselves
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  Speaker 4: a macro investor, and even the real macro investors meant
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  Speaker 4: to invest explicitly in bonds and currencies and stuff, and
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  Speaker 4: we people that really kill me calling myself a macro investor.
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  Speaker 4: But drug and Miller is just the king extent on
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  Speaker 4: the Drugamella. Like, we just love reading any of his
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  Speaker 4: stuff or listening to any of his recent stuff. He
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  Speaker 4: doesn't talk a lot. But guys, I can't pull you
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  Speaker 4: to Jones. They're just they're really cool to cool to
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  Speaker 4: listen to. There's not a big macro type environment in Australia.
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  Speaker 4: It's a very much a bottom up environment. So yeah,
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  Speaker 4: a lot of those overseas macro guys are sort of
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  Speaker 4: investors who I really like listening to and following and
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  Speaker 4: love people that can make calls that are potentially going
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  Speaker 4: to embarrass them. You know, I hate sitting around a
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  Speaker 4: table some like to invest in and I throw up
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  Speaker 4: the idea and everyone agrees it's not a good outcome.
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  Speaker 4: You know, I love it when you're sitting around the table.
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  Speaker 3: With five people with foget. That's the stupidest because if
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  Speaker 3: you're right, they're all buying it. You push up the price.
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  Speaker 4: So I like, it's harder to do that. You'd be
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  Speaker 4: harder to do that if you were a drugon Miller
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  Speaker 4: or one of those huge names, because everyone's so keen
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  Speaker 4: to try and to you down. But I like people
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  Speaker 4: that even have had huge success, that are still able
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  Speaker 4: to make calls that would leave them embarrassed if they
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  Speaker 4: didn't work out.
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  Speaker 2: It's funny. Your philosophy of thinking of the negative actually
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  Speaker 2: reminds me a lot of Charlie Munger. He used to
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  Speaker 2: always say a lot, how can I not stuffed up
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  Speaker 2: this investment? Or would inverse a lot of his thinkings.
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  Speaker 2: So surprised didn't mentioned him always invert. Yeah, want to
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  Speaker 2: exactly is there a failure or a setback that you
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  Speaker 2: now look back on as somewhat of turning point for
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  Speaker 2: you or influential in your life or profession.
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  Speaker 4: Everyone wants the vulnerability to open up. I'm sure there is,
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  Speaker 4: I said himnoxis if I don't have.
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  Speaker 2: Something ready to go, clearly doing your need didn't really
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  Speaker 2: matter to you.
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  Speaker 4: We're doing when there was a blessings my moment to
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  Speaker 4: stop playing football. Look at Yeah, there's a lot of
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  Speaker 4: injuries when you play, and you know, sports a failure game.
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  Speaker 4: There is one team that succeeds each year, you know
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  Speaker 4: the other seventeen have failed, some worse than others. So yeah,
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  Speaker 4: I think I think what you can learn from sport
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  Speaker 4: is people make the mistake of extrapolating something that's temporary
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  Speaker 4: into something that's permanent. So any example would be, you know,
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  Speaker 4: we played Richmond. My favorite Carlton moment was the elimination
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  Speaker 4: final in thirteen against Richmond.
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  Speaker 5: Kicked four.
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  Speaker 4: Nick Dagan kicked four in his second last game ever
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  Speaker 4: for the Blue. That was a great day, great day.
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  Speaker 4: Richmond should have won. They were six goals up at halftime.
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  Speaker 4: I reckon and at the end of that game, you know,
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  Speaker 4: I in the football world thought Richmond were really flighty,
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  Speaker 4: do you know what I mean? Like they should have
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  Speaker 4: had a better team. I think they've been the finals,
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  Speaker 4: the third in a Rahan been bundled out.
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  Speaker 3: First week of finals.
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  Speaker 4: You know, it was just but if you fast forward,
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  Speaker 4: I don't know, eight years, they couldn't have been further
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  Speaker 4: from that. They were just rock hard mentally, just one
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  Speaker 4: of the great teams. You know, in lots of ways,
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  Speaker 4: I think of those dynasty teams, they're almost the most
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  Speaker 4: impressive because they had some wonderful players. I don't know
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  Speaker 4: if they were as jam packed with stars as some
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  Speaker 4: of the great team and it can argue over it all,
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  Speaker 4: but they couldn't be more bulletproof, and how much you know,
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  Speaker 4: me and the entire football world admired them, and it
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  Speaker 4: was just a lesson. Would have been so easily for
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  Speaker 4: everyone to extrapolate because they'd been so flighty for the
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  Speaker 4: last extended period of time they would be forever.
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  Speaker 3: But it just wasn't true.
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  Speaker 4: And you say that with investing, it's important to work
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  Speaker 4: out when something is a one off and when something
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  Speaker 4: is sort of systemic. And often when there is something
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  Speaker 4: that's one off, a lot of investors will extrapolate that
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  Speaker 4: it's permanent, and that can be that can be to
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  Speaker 4: their detriment.
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  Speaker 2: So flighty basically mentally weak, is what I'm hearing.
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  Speaker 4: Yeah, well they were, and you know I was part
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  Speaker 4: of the teams that were too, but they certainly weren't.
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  Speaker 3: Eight years later, they're incredible.
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  Speaker 5: Juddy. Do you have like a daily ritual habit that
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  Speaker 5: you do that sets you up for the day or
• 6:55
  Speaker 5: every day is a bit different.
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  Speaker 3: I get up really early and exercise. What are we
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  Speaker 3: talking at five o'clock?
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  Speaker 4: Now, it's getting up early. And if I wake up
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  Speaker 4: after four I'm not going.
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  Speaker 3: Back to sleep again.
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  Speaker 4: Sometimes bed time, well I'm at four, it's early, but
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  Speaker 4: it's about ten o'clock okay, Yeah, so yeah, I get
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  Speaker 4: up early in exercise, and then I just ingest as
• 7:13
  Speaker 4: much overseas finance content as I can as rapidly as possible,
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  Speaker 4: so through podcasts and things like that. That sort of
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  Speaker 4: been the routine for the last ten years. So I
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  Speaker 4: consciously try and read or consume content that I don't
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  Speaker 4: think austraining fund managers will be because I want a
• 7:32
  Speaker 4: different perspective on markets, because I want different outcomes. I
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  Speaker 4: don't read the fin Review. I don't read local papers.
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  Speaker 5: Really never all started with the fin Review?
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  Speaker 3: Did it? Did? Did? I used to read it every
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  Speaker 3: day for ages.
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  Speaker 4: So yeah, generally overseas content, and then there's some good
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  Speaker 4: analysts who write daily updates that I always read. It
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  Speaker 4: feels like it gets you on top of what's coming
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  Speaker 4: for the day. So that's sort of the routine.
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  Speaker 2: Last song from us Juddy, what is the best investment
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  Speaker 2: you've ever made? And it doesn't have to be money.
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  Speaker 2: It could be your precious time or your energy.
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  Speaker 4: Well, look, I think it's it's I mean, it's your
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  Speaker 4: health and your relationships. Clearly, you know, if you're unhealthy,
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  Speaker 4: none of it matters. And you swap all the money
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  Speaker 4: in the world to be healthy and get an extra
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  Speaker 4: period of time, and it's about to end. And likewise,
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  Speaker 4: you know, particularly if you pick a partner that you're
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  Speaker 4: not suited to like, that's just a disaster.
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  Speaker 3: So that'd be the two most important investments.
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  Speaker 2: I would have made for strong answer, and we've asked
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  Speaker 2: that one to quite a lot of people's strong answer
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  Speaker 2: that way.
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  Speaker 5: Finally, just before we finish, because we've got a couple
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  Speaker 5: on ouns, no financial advice, but is there any businesses
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  Speaker 5: you're looking at the moment either you may have invested in,
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  Speaker 5: but that really really exciting you right now?
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  Speaker 3: Pumps the most liquid smallst thcene.
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  Speaker 4: No, I mean I've got I've got some, but I
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  Speaker 4: don't love giving single stock tips. But I mean the
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  Speaker 4: themes we really think are exciting. I've largely touched on.
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  Speaker 4: Like I don't think robotics has had its AI moment.
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  Speaker 4: I think in an era of open, open source world,
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  Speaker 4: I don't think software has got the economic mote that
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  Speaker 4: it used to. And I think having a hardware component
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  Speaker 4: is going to be more important because manufacturing things is challenging.
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  Speaker 4: So I think robotics is really interesting. It's hard to
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  Speaker 4: play in Australia. It's sort of some additive manufacturing companies here.
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  Speaker 4: Some of them look interesting, some of them just look
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  Speaker 4: wildly over price to me. Things that are going to
• 9:21
  Speaker 4: improve the electrical grid I think are really interesting and
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  Speaker 4: I don't think they've had their moment where they're in
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  Speaker 4: the spotlight yet not properly. I think they will soon.
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  Speaker 4: I don't think the gold runs over, and I think
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  Speaker 4: it would pay.
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  Speaker 3: You know.
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  Speaker 4: I guess maybe interesting is that everyone's so eager to
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  Speaker 4: call a bubble a bubble in AI, bubble, in gold,
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  Speaker 4: bubble here, any financial commentator wants to call a bubble,
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  Speaker 4: so that when there's the invariable correction, I say, look,
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  Speaker 4: I got it. You know it might have been thirty
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  Speaker 4: percent life. But what I think where the enormous bubble
• 9:54
  Speaker 4: has been has been in government debt. And it was
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  Speaker 4: only a few years ago you had eighteen trillion with
• 10:00
  Speaker 4: negative yearning debt. And that's what I think is unwinding.
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  Speaker 4: And whilst you're seeing the uptick in prices in a
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  Speaker 4: lot of things, I think the unwinding of the bubble
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  Speaker 4: is happening now in government debt and to an extent,
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  Speaker 4: fiat currencies. And that bubble was enormous and I think it's.
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  Speaker 3: Got a long way to unwind.
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  Speaker 4: And the outcome of that bubble is you'll see much
• 10:21
  Speaker 4: higher prices than things that are scarce because FA.
• 10:24
  Speaker 3: Currency is not.
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  Speaker 5: Yeah, Jennie, thanks for joining us on what the flux
• 10:28
  Speaker 5: in conversation and we'll check it in five years time
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  Speaker 5: and see.
• 10:31
  Speaker 3: Thank you, Jans appreciate it's good fun.
• 10:33
  Speaker 2: Thanks Joy