2 BULLS IN A CHINA SHOP | Transcript continues
2 BULLS IN A CHINA SHOP | Transcript continues
Kyle (24m 9s):
Right. And you have to be able to speak their language in order to buy their chariots
Phil (24m 15s):
Or, or you, you learn when those chariots are heading towards you, you learn their language pretty quickly.
Kyle (24m 22s):
You may not have a choice. Yeah, yeah, yeah.
Phil (24m 26s):
I'll speak proto Indo-European. And, but when they, when they hit Europe and they hit the, the Carpathian mountains, some of the chariot riders went north and that's where the Germanic languages developed from. And the, some went south and that's where the Greek and Latin languages developed from. And then these roots all again combined, couple of centuries later into what we now know as English and what we are speaking here. That's crazy. Apparently. Okay. Yeah.
Kyle (24m 52s):
Yeah. Fuck yeah. Okay, I'm gonna learn more about that.
Phil (24m 57s):
Sorry. Anyway, I, we should be talking about investing, trading, anything.
Kyle (25m 1s):
We'll just slap an after hours label on this and just talk.
Phil (25m 4s):
Okay. We're after hours. Oh good. Well I'm glad, I glad I togged off for this episode.
Kyle (25m 9s):
Phil (25m 12s):
Hey, have we talked about Miss America?
Kyle (25m 14s):
No, no. When was the last time I even watched that?
Phil (25m 17s):
Well, this is what, I can't believe it seems to have been something that's fallen off the cultural radar. So much so that the current, miss America only has 2,623 followers on Twitter. And she seems like a lovely person and she's a nuclear engineering students. She's gonna go into the nuclear industry, so Oh, good for, I, I think I'd like to start a movement where we support grace I, I dunno how to pronounce it. Stan Stanker Stanky who's Miss America, 2223 nuclear engineering student. And let's all follow her because she's going to make a better future with nuclear power.
Kyle (25m 58s):
I am a big fan of nuclear power. Is that is my background from the military.
Phil (26m 4s):
Oh really? Is that, so you won nuclear powered submarines or something? Yep.
Kyle (26m 8s):
I was electricians mate, nuclear qualified. So got to run the, the power plant, do all the maintenance on the switch gears and motor generator sets and all that fun stuff.
Phil (26m 21s):
Wow. And you've still only got one head.
Kyle (26m 23s):
Yeah, yeah. Actually, when you're underway, like you still have dosimeters that you use to like monitor your exposure, but you get significantly less radiation exposure underway than you do when you're in port. Oh, that's cuz the cosmic background radiation is so strong. Yeah.
Phil (26m 41s):
Kyle (26m 42s):
With the ocean shielding you from that. Like instead of like you get exposed to like two to 300 milligram or something like in a month outside and under the sub, like we were getting maybe four to five milligram.
Phil (26m 54s):
Kyle (26m 55s):
It's actually significantly less exposure.
Phil (26m 58s):
Oh. And, and Eric talks negatively about the, the Navy.
Kyle (27m 3s):
I remember, I remember a new guy, we pulled into the, what is it, Hawaii I think to, for a port call. And we didn't get to spend much time there. We're just there to, to fix something. So we get like every shift got like 12 hours in port. We ended up spending our time at a little pool that we found. I, I didn't even know, I don't even know whose pool it was to be honest with you. I think we just found a pool and went swam in it. But I came back and I was so you, you're the
Phil (27m 28s):
Military, you could go wherever the fuck you want.
Kyle (27m 31s):
Right? Well I got back to the boat. I was so sunburned in this newer guy, he's a radioman column Conners cuz they're in the front of the boat, the cone of the ship. And he asked me if I got, you know, a little son while I was out on port call. I was like, no, I got real serious and scared. And I looked at him and I said no, they made me go do an emergency repair in the reactor. Does it look bad? I thought he was gonna pass out.
Phil (27m 57s):
Yeah. It was volunteer. Only one of those operations wasn't we? Yeah, right. We need a volunteer. We may not come back.
Kyle (28m 4s):
Look at his face. Is it bad? Oh, Gracie. Okay. So yes, I am giving her a follow right now.
Phil (28m 14s):
And if we can spread the word.
Kyle (28m 17s):
Oh she's, well it depends. Are you talking about her, her profile or the Miss America one? Cuz Miss America itself is 69,000 followers or 67,000.
Phil (28m 26s):
No, no, I'm talking about her personal following. I gotta find that one. S T A N K E Miss America 2023.
Kyle (28m 34s):
That's, that's actually the name of the escape hoods that you wear when you're trying to abandon a submarine in an emergency. It's a stinky hood you put on.
Phil (28m 45s):
Maybe she's a joke. Me, I've been fooled all along.
Kyle (28m 52s):
Well I, you, I think Miss America kind of died off cuz wasn't like Trump like the biggest sponsor of that for the longest time. And
Phil (28m 58s):
I thought he was Miss Universe.
Kyle (28m 59s):
Oh, I think you're right. Okay.
Phil (29m 1s):
Was he Miss Universe? Yeah, you're right. Yeah. I mean it's gotta be bigger than, it's gotta be the whole universe, not just earth when it comes to Donald. Yeah,
Kyle (29m 7s):
That's pretty, it's pretty self-centered of us to assume that we're the center of the universe.
Phil (29m 12s):
That's right. We need the beauties from Beetlejuice and from beat as well. Oh,
Kyle (29m 19s):
I love that. You know that star.
Phil (29m 23s):
Well it was a movie. I was just, in my mind, I was reaching around for a star, star Beetlejuice. Yeah.
Kyle (29m 31s):
Oh man. So
Phil (29m 32s):
Kyle (29m 34s):
Serious. That's the north star, isn't it?
Phil (29m 37s):
The brightest star in the sky, I believe. Which
Kyle (29m 39s):
One's? The North star? Oh, that's Polaris.
Phil (29m 41s):
Polaris, yeah, that's right. Yeah. Yeah.
Kyle (29m 43s):
I got a telescope one year for Christmas and man, the joy of finding Jupiter for the first time and actually like seeing the moons. Ah, mm mm And I don't know if you saw, but actually we had the Northern Lights visible down here, like we're in the middle of Illinois
Phil (29m 60s):
F far south.
Kyle (30m 1s):
Wow. It, it was supposedly visible all the way down to like Alabama. There was like a major solar storm about a month ago. Yeah,
Phil (30m 8s):
No, didn't hear that.
Kyle (30m 9s):
I stayed up to try to see it. I didn't see shit. I didn't, yeah, I didn't stay up on
Phil (30m 13s):
That too much. Light, light pollution or I
Kyle (30m 15s):
Don't know if it was that like it just looked brighter and to the north than usual. Yeah. I didn't see any of the cool greens or any of that stuff that I was, you know, hoping to, but it could have been one of those scenarios where like you just get like flashes of it.
Phil (30m 27s):
Kyle (30m 28s):
That's right. Like anytime they talk about meteor showers, you go out looking like you're gonna see a bunch of cool shit and it's like, you know, streak every five minutes. Like that's a good one. Yeah, yeah,
Phil (30m 38s):
Yeah. Well we get the, I think, do you get the Leonard showers? Is that in the northern hemisphere
Kyle (30m 43s):
As well? I, no, I'm not sure.
Phil (30m 44s):
Do we get the same meteor showers in the south southern hemisphere
Kyle (30m 47s):
I's, see why we wouldn't, wouldn't we?
Phil (30m 48s):
I think they might. Well because we're pointing at different parts of the sky, especially at different times of the year as well. Yeah,
Kyle (30m 55s):
That's true. Mm.
Phil (30m 56s):
Any astronomers, listen. I know,
Kyle (30m 58s):
Phil (30m 58s):
Kyle (31m 1s):
I'm not going into that rabbit hole. What else been going on?
Phil (31m 11s):
Well, I've been, I wouldn't say trading, but I have been working with a new system's, the wrong word methodology I guess you'd call it. Yeah. On the Australian version of the podcast. Just to clarify, I've got shares for beginners, which is targeted at Australia, and then stocks for beginners, which is targeted to everywhere else in the world and the universe hopefully.
Kyle (31m 35s):
Yeah. That's the one that's eaten in our market share. Oh yeah,
Phil (31m 39s):
I know. We're, we're such fierce competitors obviously.
Kyle (31m 43s):
I know. And
Phil (31m 44s):
Yeah, anyway, there's been this guest, he's been on the podcast for a long time, Tony Kister. And he's got a, it's called q a quality at value. And I hate to call it a system, it's a methodology. I mean, he's not actually making money out of it because he's made so much money and he's just kind of semi-retired playing golf. He owns racehorse and things like that. But he wants to share what he's done and he's, he, one of his mates is a podcaster and they started doing a podcast together where his teaching his method and it's basically to do with a value investing and fundamental analysis. And it's a long, long, long, long spreadsheet. I think there's about 20 columns in it and it's waiting certain factors in the valuation of a company and then it's, there's a stop loss as well.
Phil (32m 29s):
Like it's a 10%, if it drops 10%, you're just out straight away for risk management. Or if the stock is commodity based, if the commodity becomes a sell, then you sell out of the stock because you know, as commodity makes sense. Businesses are always Yeah, yeah, yeah. Because they're always at the, the mercy of the underlying commodity affecting their share price. Anyway, so there's the, the full blown version and actually it's one of my affiliate marketing partners. And so a lot of listeners, and I've met some listeners who've listened to my podcast and then they've gone over to Qav because it's a very, just very sensible, and a lot of the people now are much better at spreadsheets than Tony ever was.
Phil (33m 13s):
There's this community who are working on this spreadsheet. Right, right. But that's the full blown version, the club version. But they've got a, a light version now as well. And because I don't have the time, you know, between doing recordings, podcasting and you know, just trying to keep bread on the table and the roof over our heads.
Kyle (33m 30s):
I know, right?
Phil (33m 31s):
I don't have time to do the kind of research that's required to do this. So the light version means that they basically give you an email and say, okay, this is on the buy list, this is on the sell list. And you just start working it. And I didn't think it was gonna be like trading, but it is a little bit like trading because there's been, so the market's been a little bit up and down recently. Yeah. And you've been a lot of stop losses triggered. So you, you've gotta try and build up basically a, a portfolio of about 15 to 20 stocks, which you hold onto. And then slowly it's, we treat it like weeding the garden. You know, if something's not going well, you take it out and replace it with some something else until you end up with a portfolio of stocks that you're happy to do.
Phil (34m 11s):
So at the
Kyle (34m 12s):
Moment, certain buffet talks about a lot, I think it was buffet, right? He talks about weed in your portfolio at like so many people cut the roses and try to keep the weeds.
Phil (34m 22s):
Yeah. So it's been really good to be able to work with this discipline. And I think we've only got six stocks in our portfolio at the moment cuz so many have become cells. But one of them, and you know, one started running and I think it's still up 60%. Is
Kyle (34m 37s):
Phil (34m 39s):
No, no, no. It's a gold, it's an Aussie goldmine. They're all Aussie shares, although, okay. They're working, they're, they're working on making a US based version of this system, which hopefully we can introduce within the year as well, which is very interesting. Oh,
Kyle (34m 51s):
That'd be really cool. Yeah, yeah. Yeah. It'd be interesting. I don't know much about value investing or fundamental analysis. I've focused mostly on technical over the last, you know, three years. Yes.
Phil (35m 0s):
Yeah, that's right. There is one technical indicator that they used, and I may have mentioned this on the last time I was on the podcast, but it's basically, if I can describe something that's visual in words, it's a five year chart on a monthly time, you know. Okay. Early, not five minutes, but it's monthly and basically you draw, like if if the stock's gone down, you draw the line between the two highest points. Yeah. And when it crosses that line upward, that means, well it's possibly a buy and then the opposite as well on, on the sell side of things. Yeah. That's, anyway, getting back
Kyle (35m 36s):
To that, just trend lines and, and support resistances. Yeah. You can do that on any timeframe too, by the way, markets are fractal. So those, those same patterns and those same support resistance, they become less strong but more dialed in to the timeframe you become like a five minute trend line's not gonna be nearly as strong as a monthly. Makes sense to,
Phil (35m 54s):
Can you say fractal? Fractal? Yeah. Can you say fr fractal again, fractal, that
Kyle (35m 59s):
Means that the same, when you look at a monthly chart and you see a pattern on there, you can yeah. Zoom in on one candle and see the same patterns and see them play out and interact the same way.
Phil (36m 9s):
I know markets are just like, what is it? That's chaos theory, isn't it?
Kyle (36m 13s):
Yeah. I mean, what did they say?
Phil (36m 15s):
Yeah, there was a book about, about the butterfly wings in the Amazon start a hurricane in the Atlantic and Yeah. But, and that's the thing, it's like everything from the smallest, when you're looking at something at the smallest level to the greatest level, what's it like algae's got the same structure as trees, for example.
Kyle (36m 33s):
Phil (36m 34s):
We shouldn't get too much into that. We'll, a little
Kyle (36m 37s):
Phil (36m 37s):
We're just enjoying chatting so much.
Kyle (36m 40s):
I was interested
Phil (36m 40s):
Anyway, but, so yeah, I've been using that, but it's just been great to have that support and discipline and I'm sorry, I was gonna say with this one stock that ran, I, I think it's up 60%. It's sort of like, well, should we be selling? And the answer I got back is, well, why would you bench Michael Jordan? Right. And I think that's, that's one of the things, and it's for traders as well, you know, you've gotta let your winners run. Is is that the case with trading as well? That's seems to be one of the
Kyle (37m 9s):
Well, there's, I think the new traders have a tendency to aim for home runs too much. And I went through this myself where they shoot for the fences, they shoot for the stars, they don't pay themselves. And then you end up getting what's called upst stuck where you were up $300 and then it comes back down to $200 in profit. And then you thought in your head you're thinking, I'm down a hundred, then you don't wanna sell because you had 300 and you wanna get that back. So you, you tell yourself, oh I'll, I'll sell it when it gets back to 300. And then what ends up happening is it goes back up there and you don't sell it because why would you sell it? It's going up eventually you end up turning what has be, you know, a nice win into usually a full loss because it just ends up reversing on you and you refuse to take profit because you're constantly thinking about what you could have had, not what you can get now.
Kyle (37m 56s):
Phil (37m 56s):
Yeah. And that's part of it is the psychology, isn't it?
Kyle (37m 59s):
Yes. And that's what most of trading is about, is just understanding who you are, your tendencies and how to work with them to, and minimize your weaknesses.
Phil (38m 9s):
So would you use a, a trailing stop loss in that situation?
Kyle (38m 14s):
What I like to do with, when I have a good trade and I get a good entry, I take off at certain risk to reward ratios. Mm. So if my stop is like on a stock, if it was a $5 stop, then I'd want my first take profit to be somewhere around two to one. So $10 profit, I'll get paid there, then I'll go to break even on my, the rest of my position and I'll let a small piece of that run like a third to see if I can get more out of it. And then I, I like to trail the stops manually looking at support resistances along the move as it moves up. So when you look at those pullbacks, when it, and it kind of comes off from those peaks, you just, you can just stick your stop, you know, couple points below that just to give you a little room in case it slips as it gets close to it.
Kyle (38m 58s):
But in theory, if it's gonna continue running, then you should be holding those as support for the next move up the continuation moves.
Phil (39m 6s):
So are you using that because I've seen these formulas that you can find on anywhere on the internet is about the risk reward ratio. Yeah. So you, you work out, okay, I'm gonna, if I get in this price, if it goes down, I don't know 5% I'm out, but if it goes up I 20% I'm out. And so you can, you use it as a statistical kind of right
Kyle (39m 28s):
Tool. Exactly. This is all about Yeah. This is all about trying to get as many hits as you can. Right.
Phil (39m 35s):
And I think Eric was talking about 40% is kind of the, the success rate that most people would be looking for
Kyle (39m 42s):
For your trades to work out. Yeah. 40% is a sustainable Yeah.
Phil (39m 46s):
The number out of the number of trades. Yeah. Yeah. Trades. Yeah.
Kyle (39m 49s):
Yeah. If you win 40% of your trades and you use a good, if you have good risk reward principles, you should be able to make a fortune with that. If it's sustainable. It's, it's the, the aspect that most people don't think about or consider when they're thinking about how to make more money in the stock market is how to lose less. That's something that George was really good at stressing when we first talked to him. George from Trade Pro Academy, he's since retired, but that was something he was a big proponent of, you can either make more money or you can lose less money. Those are your two pasts increasing your profitability.
Phil (40m 28s):
Yep. Yeah. It's good to have it distilled into that kind of few words, isn't it?
Kyle (40m 34s):
Yeah. But I, no, it's, it's, it's tough. It is, it is. It's tough to to yeah.
Phil (40m 39s):
Kyle (40m 39s):
Do it consistently, right. Yeah. Yeah.
Phil (40m 42s):
And, and that's it. I mean that's why people are like Erica so valuable to have around, to be able to talk to that sort of thing. And, and also by using this qav system that I'm using, I just sort of, I just go, okay, I'm just all in here. I'm, and you know, this is not my whole portfolio. You know, that's, and this is the other important thing is you just, you don't put your whole portfolio into something to try out, you know, you've got your long-term ETFs, you know, dividend reinvestment, blah, blah.
Kyle (41m 7s):
Phil (41m 8s):
And you try it out with some, but just to try this out and just to, I really have taken the emotion out of it I feel now because I really, well, it's about trust and I really trust Tony kind and because first of all, he's not doing this to make any money. He's just doing it because, you know, you, there's only so much time you can spend golfing and playing with your race horses.
Kyle (41m 31s):
Yeah. And plus you wanna feel like you're doing, doing something, you know, meaningful Yeah. Helping people. Yeah. Yeah. That's right. To achieve financial freedom is one hell of a goal.
Phil (41m 39s):
And it's just also like I mentioned is that so many of my listeners have gone over to him and to use the system and you know, they're kind of so thankful to me that they really feel like that there's a structure to their investing. And I know it's not trading as you like to look at it, but it's,
Kyle (41m 57s):
No, this is, that's, that's just good guidance I think it sounds like for people who want to be a little more active in their investing, call it active investing, I think is the term I like to use. Yeah.
Phil (42m 8s):
Hello. It's funny, you know, because now I'm, I'm so disciplined in following it. Like, I might be recording someone in Cantonese, for example, and I see an email come through with a cell on there and I'm kind of like, well, I'm on my phone trying to sell the stock, get the six, six digit code, enter the six digit code, you know? Right, right. Is it a market order or is it a limit order? Yeah. Yeah. That that was a, that was a good take. Yeah. Just do that that little bit again. You know, we need, we
Kyle (42m 38s):
Need the URL again,
Phil (42m 40s):
Sell, sell. So
Kyle (42m 42s):
I have to close my charts whenever I do interviews, so I'm not tempted to start trading futures goddamn futures markets open 24 7.
Phil (42m 51s):
But I I I think you wanted to talk about trust because you've got trust issues, don't you?
Kyle (42m 55s):
I I think we all do, don't we?
Phil (42m 58s):
No, well, no, I think we, we have issues with undue trust in certain people. Yeah.
Kyle (43m 4s):
Yeah. I think what you'd mentioned was you're talking about fund managers before we hit the recording button here. I thought that was, that would be a fantastic conversation because you had an experience. I'll let you tell that so I'm not stepping over you.
Phil (43m 18s):
Well, trust, I think trust is one of those things that we rely on too much. And I'm, I'm just gonna refer to a couple of guests here. One was a psychologist and his name is Stanley Tettlebaum and a retired psychologist. And his two things, well he's got many, many, many great lessons being a psychologist. But the first one being catch losses. Catch losses, catch losses, and also how to lose risk management. Yeah. Risk management and how to lose and how people end up trusting people too long. And then that sort of brought me around to Gary Broad, who's another great Twitter contributor, and he's been, he's become a semi-regular on my podcast, Gary underscore broad on Twitter.
Phil (44m 1s):
And he's talking about the funds management in industry and the financial planning industry. And this is from a, a thread that he posted today about fund managers who take thousands of meetings a year, read countless investment letters and follow industry trends. Then many of them throw that work away in invest where other allocators are investing. Their goal isn't to get you the best returns, it's to avoid being wrong alone. They think it's okay for them to lose your money as long as they do it in a brand name fund where others are invested and
Kyle (44m 34s):
Phil (44m 35s):
That's part. Well that's interesting. Yeah. Yeah. And, and again, we come back to that thing about mutual funds. So we call 'em managed funds here. So I might be, you know, flipping between the two and the way people invest and then the way fund the, the way financial planners will be helping you to invest. Now if some financial planners are great and they can help you curate some great stocks to be in and great investments. Yep. But others are just all you're, they're there for is to take your phone call when the market's going down and you to say to them, well just, just hang in there. The market will improve. The market always improves, you know, rather than having anything to do with that lead managing the money.
Kyle (45m 15s):
I, the ones I've talked to, they, they, some of the ones I've talked to said their main goal is to keep you from doing something stupid. I
Phil (45m 23s):
Know. I know. Yeah.
Kyle (45m 24s):
And I, I think that's what they want. They want you to just stay calm. It's the long haul, don't make rest decisions just cuz the market's going down today. If you've got 20 years on your horizon, then you don't need to be selling out now.
Phil (45m 35s):
But then there's many opportunities that you miss because you'll remain fully invested through these periods.
Kyle (45m 41s):
Phil (45m 42s):
And not be able to take advantage of getting in when the market is down to turbocharging returns.
Kyle (45m 49s):
But you made a great point that you can't be wrong alone.
Phil (45m 53s):
Yes, yes. Well, that's Gary, that's Gary's point. Yeah.
Kyle (45m 56s):
Well, it it makes perfect sense, especially in the world of, in, you know, finance and the stock markets where you're gonna be wrong. It's just the nature of the game. The goal is to, the goal is to have good risk controls though. So that way though, when you're wrong, it doesn't bankrupt you.
Phil (46m 11s):
But, but it, I mean it's hard for these fundies as well, we call 'em fundies here in Australia fund managers.
Kyle (46m 16s):
And that sounds like a fun term,
Phil (46m 19s):
But it's so difficult for 'em, first of all, like, you know, they can only invest in a limited, limited universe of stocks because of their mandates. They can't get into anything small because they, they've just got too much money to invest. Right. And, you know, so they, they would just, if they tried to get a smaller stock, they would just blow the price out of the water because they, they've just got too much al
Kyle (46m 45s):
Money or completely dis completely destroy it when they try to sell it.
Phil (46m 48s):
Yeah, yeah. But then that, that sort of brought me to thinking about trust and my poor experience with a stockbroker who I was with for 10 years until I started making this podcast and understanding more about the industry. I mean, I mean, I can't believe that I started this podcast and I didn't even know what an ETF was and the right this stockbroker, he was just enabling my stupidity and idiocy and just thinking, oh, you know, I can just pick a stock and I'll make money out of it. You know, let's buy this. You know? Right, right. I mean, if only he had just done some basic education with me and said, well, look, let's put, you know, 80% of your money in a long-term ETF or an index fund and then, you know, we'll play around on the sides.
Phil (47m 36s):
But no, you know, because he is making money out of my brokerage and every time I traded, he had no incentive whatsoever to do that. And I, I just sort of looked back at that and I think, you know, I got taken out to some nice lunches and then I just think, what a idiot. Well, let
Kyle (47m 52s):
Me, I was, let me ask you this. Yeah. Like how did you get put in touch with them? Like was it a friend's recommendation or
Phil (47m 59s):
I found the, I found them myself and mean, it's one of those stories, oh, you know, this stockbroking firm has been around for 130 years and they're solid and they're conservative.
Kyle (48m 10s):
Phil (48m 11s):
You know, falling for the marketing, that old marketing shtick.
Kyle (48m 14s):
Well, I mean, when, when you talk about trust, the, the, what I was thinking of was like, how often we get money advice from people who aren't qualified to give it to us. Oh,
Phil (48m 24s):
Kyle (48m 24s):
Like how many, like, there's a lot of people that when they, they get a financial planner, they go to their friends for recommendations, but their friends don't know more than they do. Just do you like the guy? Yeah. Okay. I'll trust him. That that's the, that's the amount of research that people do. It's, it's kind of insane to me. Mm. But I mean, just speaks to, speaks to our ignorance. I mean, like, I wasn't too far removed from making mistakes like that. Like Yeah. Probably not, probably much, much more recent than 15 years in my case. Yeah.
Phil (48m 58s):
It's, I think this is, for me, this is one of the areas that robo-advice, which is a terrible name by the way. It's really just online investment advice is really the term. But it, that kind of is meaningless. I I think they've gotta work out a, a marketing with a marketing team, what the best term is. But however You can now go and just punch in a few figures about yourself and what you like and your stage in life and all of that. And it'll spit out a, a low cost portfolio for you. And it's, again, it's like you, like someone, I went through this exercise with my mother late last year where her financial planner, who she's been with for years, she loves him. He's a lovely man.
Phil (49m 38s):
He comes around and talks to her and tells her, tells her what he's been doing, and he retired. And so it went to another financial planner where they had to reissue all of the details about the, about the investments, but more, more importantly is the cost of managing those investments. And now that of course armed with a bit more knowledge, you know, I could would say to him, well, you know, how can we get the costs down? And while we would've liked to have taken her away and maybe, you know, managed ourselves that, you know, that would never have flown with my mother. We were, we were able to negotiate because there's, when you've got a financial planner, there's three sets of fees that are involved here in Australia.
Phil (50m 19s):
I mean, it's most gonna be something very similar in the States, but we were able to reduce the fees of each of those levels to the state where it was like 2% a year previously for being invested in quite high risk investments. I might add. That's,
Kyle (50m 35s):
That's, that's massive. Yeah.
Phil (50m 36s):
Yeah. Whereas now it's under 1% and, you know, at least they look after a lot of things that, you know, we don't have to worry about like the social security or the pension that she gets and things like that. Anyway. But a again, that's the story about trust. Oh, and the, the point about robo-advice is, is that I was able, in this situation to have a company who have sponsored my podcast and have been on the podcast robo-advice company. They give free appraisals of portfolios. And so they were able to help me to arm myself in terms of what I needed to talk to with the financial advisor. Hmm. And again, this is where the trust comes into it, doesn't it, is that people aren't lucky like us, so we can talk to inve experts in the investment field to help us out this way.
Kyle (51m 23s):
Phil (51m 24s):
And again, they fall back onto that trust thing where they trust someone or they think this is a nice guy, or this, this person dresses beautifully, you know, I'll, I'll go with them. And
Kyle (51m 35s):
Phil (51m 35s):
I think it's just really with the plethora of podcasts and YouTube videos and blogs and so forth about investing, if you're interested No, no, not everyone's interested. You know, you can't be interested all the time, but you would presume that people who are listening to our podcast are mildly interested in this space. Right? Right. But they can educate themselves so they don't have to lean on blind trust.
Kyle (51m 58s):
One of the, one of the coolest things I think somebody told us, and we're talking about how to pick a good financial planner, like some of the things, so red flags to watch out for. Hmm. The number one thing he said was how happy their secretary is, or the person that greets you, the receptionist. Hmm. Does she, does she look like she's enjoying her job or does she hate it there? And then also if mad money's playing on the, on the, the screens, then definitely don't wanna go there.
Phil (52m 24s):
Well, again, that episode I had with Stanley Tiba, he had a list of questions to ask your financial advisor and yeah, it's a great list of questions. I can share that with you and listeners if you'd like as well. Yeah,
Kyle (52m 35s):
Phil (52m 37s):
Remind me to do that now. Right
Kyle (52m 39s):
Now. Just, what was the name of the, the episode,
Phil (52m 45s):
Well, there's two with, it's the first one with Title Abound. Anyway, I can send you the, the blog post.
Kyle (52m 50s):
Yeah, if you send me that then I'll, I'll get it in the episode descriptions. People can check it out. Yeah. Yeah.
Phil (52m 54s):
Kyle (52m 54s):
Up to the end here. Yeah. You got anything else we should touch on before we wrap up? I
Phil (52m 60s):
Just, perhaps we should talk about that negative Apple Podcasts review, because I know we're at the end of this episode. We're gonna p ask people to like and review and everything. And first of all, did you realize how hard it is to leave a review on Apple Podcasts?
Kyle (53m 13s):
Oh my God, it's such a pain in the ass. I ask all my guests to leave a review and then they're like, how do I do that? And they're like, fuck. I don't know how to tell you that. That's
Phil (53m 20s):
Terrible. It's, I didn't know until a couple of weeks ago and then I worked, I was trying to work it out because when you have a negative review, of course you wait, you
Kyle (53m 26s):
Got a negative review or We
Phil (53m 27s):
Did. No, no. I got a negative review and it was, first of all, I had a, someone who was selling a trading system, Simon Ree. Yeah. You might be interested in him on the podcast, but the, the listener was very miffed that I was promoting something like trading to beginner investors. Now I understand that point, but I think that people just need to be introduced more to all of the availability and the whole way of that the markets work. You know, it's like why I talk about fixed income so much, which I think might bore people, but I find it fascinating that there's this whole other market out there that nobody even hears about, which is 10 times large or more than equity markets and has so much influence on it, you know? And Right. Just even being aware of that is very valuable information.
Phil (54m 10s):
Kyle (54m 10s):
And then the other thing I would say to that is something that Eric talks about a lot. Why limit yourself? Like learn? I mean, there may be some things that maybe you wanna incorporate in the way that you pick your investments. That's right. Just maybe, yeah, because you have a little technical analysis so you can get some better entries or, or be better informed about when to exit.
Phil (54m 28s):
That's right. Because I, I'm not, I don't subscribe to the religious wars between fundamental and technical analysis. Me
Kyle (54m 35s):
Neither. I think there's a place for both. There's
Phil (54m 37s):
A place for both. And it's really interesting and fascinating to talk about. And I think Eric was talking about candles as well, and like, there's a whole discipline of candles and then there's a whole discipline of patterns and, and it's just, I mean, I, I know people think of, think of it like reading the tea leaves and it's not going to predict anything in the future, but it is such a great way to visualize the market. You know, it takes everything out of it. But, and just, just even being able to look at a chart and say, oh, this stock is in a down trend. It hasn't reversed yet. Don't buy, you know, whereas, you know, when you first come into the market you're thinking, oh, this stock's down 50%. It must be a buy.
Kyle (55m 18s):
Right? Yeah. It's gotta go back up, right? Yeah. Yeah. It's gotta go. It's just there. One of the most fascinating things that I think learned in, in my journey was just how much emotions actually drive markets. The emotional aspect of it. The markets run on emotions. That's, that's just how it works.
Phil (55m 37s):
It is. It's it's emotion. Well it's emotions, but a lot, a lot of the weight of the big money. I, I, I was talking to a guest a couple of weeks ago about this because there was one particular stock that I had a holding in and it came up with an earnings upgrade and it was a cracker of an earnings upgrade. And as we're talking about it in a situation like this, the market opened and we said, okay, it's gonna be a huge amount today. And we looked at it and it was flat. It hadn't moved Yeah. An inch. And I don't think that was psychology. I think in that particular case, first of all, the
Kyle (56m 9s):
Phil (56m 11s):
The expectations, there was an expectation that that was going to be coming because there was a, a steel stock. So any idiot can see that the price of steel had been going up for a long time. Right, right. Even though it's, it's, and, and it had since reversed in that time as well. So there was no, there anyone who was holding it, they might say, okay, we're gonna hold on for a little while, but they're not going to buy any new positions in it because they know that the price of the steel, the underlying commodity that we spoke about before was going down. And so you can see that it's, it isn't just psychology, but even knowing that kind of information rather than being the idiot goes, oh, you know, had a really good earnings upright,
Kyle (56m 54s):
Let's go and buy it. I was just, I was just talking to my mom the other day. She was asking me if I thought the markets were gonna crash. He talked to the guy who used to manage her money and he said he had moved all his stuff out of the markets cuz it crash is coming and somebody else is telling her that. And I said, the more people that tell you the markets are gonna crash, the less likely it is to happen. Because if everybody's already sold, who's left to sell? Once you sell, you're a buyer. Now once you buy, you're a seller because that's where your money is. That's the next thing you have to do. And that's, that's how those earnings reports like that everyone gets excited about something where they think it's gonna blow out. They all buy it beforehand. There's no one left to buy it. Who's gonna buy it? Now everyone already did.
Phil (57m 35s):
Although there's a couple of people that I really respect who see a, a, a default, a debt default crisis on the way. There's just too much debt. Interest rates have gone up too fast and there's gonna be a lot of corporate debt that is gonna be unsustainable and we're gonna see the mother of all debt crises coming up, which will affect, again, this is the fixed income market having such a profound effect on equity markets. And we only saw a, a small case of that a few weeks ago with the Silicon Valley Bank core situation. Yeah. You know? Yep. But there's only so many banks that can be bailed out. Right.
Kyle (58m 12s):
Especially at that size.
Phil (58m 13s):
The US government just doesn't have that amount of Dosh and Jamie Diamond great. You know, he might want to acquire all of them, but you know, he's not gonna be able to afford get all of them. Let's face it, you know,
Kyle (58m 24s):
I hope not. Last thing we need is JP Morgan. Hmm.
Phil (58m 29s):
Kyle (58m 30s):
Run in the country. Well,
Phil (58m 31s):
Don't they already?
Kyle (58m 33s):
Phil (58m 34s):
Isn't there a nexus between
Kyle (58m 36s):
Not Wolf Street
Phil (58m 37s):
Yeah. Investment banks and the US government and treasury and I, I I very, I enjoyed your conversation about Janet Yellen because it's true.
Kyle (58m 46s):
Phil (58m 47s):
It's just, I mean, what are you people doing over there? Who were your elected officials?
Kyle (58m 56s):
We've got easily five more days than she said in the worst case scenario. My, my calculations, I don't care. Get it done. Get it done. Yeah. Jesus Christ.
Phil (59m 5s):
Kyle (59m 6s):
Yeah. Also, I don't understand how that whole budget thing works either. Like you planned the budget, didn't you already know what you were gonna spend? Why wasn't the debt limit raised then? Or is this all the overages?
Phil (59m 16s):
Yeah, yeah. I dunno. But I, I think the, the idea that there's gonna be a crisis coming if the debt limit is not passed by June 1st, I think that's a bit,
Kyle (59m 25s):
Oh God. Yeah. I think there's definite weight to that, but I can't imagine.
Phil (59m 28s):
No, I don't think there is. I don't think there is weight to that at all. I mean, I mean, I'm just a little guy here in Sydney, but you know, let me give you my expert view on this.
Kyle (59m 37s):
I'm saying if they don't pass it, yeah, there could be some major problems, but the No,
Phil (59m 41s):
I don't think chances don't, but I don't think there would be even major problems if they didn't pass it. No, I, I begged to Dile.
Kyle (59m 49s):
Phil (59m 49s):
That? Well, this is what I'm reading again on Finit, is that the US government is receiving about 300 billion a month in taxes. The debt is something like the, the interest on the debt is 60 to 70 billion a month. So the debt can still be paid, they can slow down government a bit for a while and work out what they're doing. And to me it seems like what they're arguing about is a, a slow down in the rate of increase in government expenditure over 10 years. It's not like they Right. You know, they're asking, was it Kevin McCarthy? And is asking for wholesale cuts in government budgets, it seems like now let's just slow down the pace of increase of government.
Kyle (1h 0m 38s):
Phil (1h 0m 39s):
And I know there's a poli I know there's a political divide here as well and you know, I don't want to get into that,
Kyle (1h 0m 45s):
But as long as we rag on both sides equally, that's Yeah. I think we can maintain our bipartisanship. Ah,
Phil (1h 0m 51s):
Well that's that's right.
Kyle (1h 0m 53s):
Just you have to make fun of everybody.
Phil (1h 0m 55s):
That's right. Yeah. Equal opportunity, fun making.
Kyle (1h 0m 58s):
Exactly, exactly. No, that's a good point cuz I do remember that being buried in that whole thing that Janet was talking about was like, yeah, we might be in trouble come June, but if we can make it through June, then there's incomes coming in in July. Basically the US is paycheck to paycheck right now. Yeah, yeah,
Phil (1h 1m 15s):
Kyle (1h 1m 15s):
Right. Like, like the rest of the constituents.
Phil (1h 1m 18s):
But still, I mean the, the US government has got 30 trillion in debt and a 1 trillion budget deficit. I mean,
Kyle (1h 1m 24s):
Phil (1h 1m 25s):
They just sort of, they,
Kyle (1h 1m 27s):
But we also just print money too, so I don't know how that fucking works either.
Phil (1h 1m 32s):
Well that's how they create money. That's where money is created. You gotta get Right, you gotta get some fixed income people on the podcast. It's so interesting to find out about how this works. You know,
Kyle (1h 1m 41s):
I, I am afraid to dive into, I don't know if I need another thing to another
Phil (1h 1m 45s):
Rabbit hole to,
Kyle (1h 1m 46s):
To fall into. Yes, exactly. I gotta do an options deep dive next still. Yeah.
Phil (1h 1m 53s):
Oh, they're, they're so fascinating options, you know?
Kyle (1h 1m 56s):
Oh man. Yeah. The option to lose money quickly.
Phil (1h 1m 58s):
The history of opt, even just the history of options going back to, you know, the ancient Greeks and options over crops, you know, it's,
Kyle (1h 2m 5s):
Well wait, really? They're
Phil (1h 2m 6s):
Actually, they're actually more like futures contracts and options. But to me that's, they seem to be very close. I dunno, maybe they're, maybe I'm just being an idiot again here, but it's just the, the idea that a farmer might have a crop coming and a speculator will come in from the big city and say, well look, here's, you know, what, what was the ancient Roman coin denari or something? Here's 500 denari for, for your crop that I will take delivery of and let's speculate her is, thinks, you know, oh, I can see a shortage coming up at harvest time. Right. And the, the farmer gets certainty, they're happy about it. They, they might be missing out some income, but yeah. So the idea of options and futures contracts go back a long, long way.
Kyle (1h 2m 49s):
Well it's interesting cuz that's kind of the whole point of futures, isn't it? Or wasn't that like the original purpose of like, our futures market was for the, the people who own their businesses to be able to have cost certainty and be able to sell their things into the future. Well,
Phil (1h 3m 1s):
I think it's the Chicago Board of Exchanges actual region reason for existence there in Illinois.
Kyle (1h 3m 7s):
Right, right. Yep. Up in Chicago. Yeah, I've stood in front of the bull.
Phil (1h 3m 11s):
Oh, have you? I must come over. Strong testimony must come over there. I haven't. Speaking of which, I was with your manscaping promo code. I tried the promo code, I tried the promo code and didn't work. What is it again? Wait,
Kyle (1h 3m 22s):
What? Two balls? Not two balls. Two balls. Two
Phil (1h 3m 25s):
Balls. Oh, that was my mistake.
Kyle (1h 3m 27s):
Phil (1h 3m 27s):
L I don't know, I was just thinking manscaping. You know, I just seemed to fit in.
Kyle (1h 3m 33s):
Oh man. Their products are really good. I was so surprised. I thought for sure it was gonna be kind of a, a, a lark, but I actually really enjoy the stuff they sent me.
Phil (1h 3m 45s):
Should we wind this up because I, I need to get back to my now because we've closed a position now we need to work out what we're gonna open.
Kyle (1h 3m 53s):
That's exciting. All right folks. Well, unfortunately we have come to the end of our time with Phil, but it's okay. You can check out one of his many beginner podcasts or you can check out his website shares for beginners.com. Make sure we have all those links in the episode description. Be back soon with another exciting episode. But in the meantime, pretend this is Thunderdome and your rating will determine which bull leaves. And I'd also like to end this episode in the traditional Ossie farewell.