What does it take to change the way Australians invest—and what do you learn along the way? In this candid episode, Paul Rickard (the first ever managing director of CommSec and co-founder of The Switzer Report) opens up about the highs and lows of a career spent at the heart of the markets.
Paul reveals how he was once booed for winning Stockbroker of the Year, shares the untold story of how he helped launch CommSec inside the Commonwealth Bank, and offers a no-nonsense take on the stock tips every investor should know—whether you're new to the market or have seen a few cycles.
He also gets personal, reflecting on what he wishes he'd known early on, what he really wants to be when he grows up, and the one mindset shift that can separate success from failure in investing.
You'll fall over when you hear what he bought CommBank stock at!
If you want to learn from someone who's seen it all—from boom times to busts, bubbles to breakthroughs—this episode is not to be missed.
Read the transcript
Today I'm talking to Paul Rickard. He's been my business colleague for over a decade. He's a bit of a numbers and maybe he probably knows how many years in total. But before that, he was the founding CEO of CommSec, which is a pretty significant organization for investing in Australia. Paul, thanks for joining us. Thanks, Peter. Great to be here. Mike. Best podcast almost a decade with you, Peter. Yeah, almost a decade. Uh >> We actually did some podcasting in the early days. It was in the early days. Early days. But we never did this kind of No, I was thinking about this before we started. Yeah, I'll ask you lots of questions over the years about what you think about various stocks or what you think about Reserve Bank governors and Federal Reserve bosses and international lawyers and their CEOs. Yeah, CEOs. Yes, you pick up clients and CEOs. Even my ex-CEOs. Um but a lot of the questions I've been asked today will get back to um what you think, how you process. And I know you're you're you tend to be more defensive in your approach, I think. And part of the reason is you're you're just so fabulously rich after the Commonwealth Bank got listed. We won't talk about that. That's that's uh personal stuff. But I want to get to understand and we get other people to understand how you invest and why you invest. So, what drew you to investing in the first place? You you you didn't do economics at university. No, I started off being wanting to be an engineer and a scientist and a mathematician uh and got into investing uh a little by accident because my first job was with a uh an insurance company, Right. which was based out of the US. We had a big business here in Australia. Do you remember this insurance company? It's called Hartford Bonner, which was actually a very arrogant name. It's I think it's now part of AIG after about five years of takeovers later, right? Yeah, okay. But uh my first job was to uh automate program their investment ledger. Oh. And this is it's all done by hand. >> Yes, the stocks done by hand. Yeah, everyone pretty well. So, this is the days of uh before PCs were just coming out, right? We had a 64K, not 64 megabyte or 54 And were you enthusiastic about the arrival of computers? >> Uh well, I didn't know what to Well, I I they used punch cards and things at university, so I guess I was sort of in the space. Look, and that was my job. So, I knew nothing about investments. I hadn't even thought about them. I was sort of straight out of uni. And um that's the people I started with and then that led very quickly to going and working for an investment bank. Uh which one? Uh well, at the time it was again um preeminent in the street, it was City National. It was a joint venture between Citibank and National Mutual, which became Axiom. So, at the time it was the second biggest life insurance company in Australia. >> This is pre-deregulation. What you were talking about? Yeah, I'm talking about 1985. >> Yeah. No, 80 80 83, sorry. 83, yeah. This is just at the time of deregulation. Right. Um and Citibank was the biggest bank in the world. Yep. And National Mutual was the second biggest insurance company. We had AMP and National Mutual and AMP Sydney. Ross is the boss of National No, this is the pre-AMP. No, in my That's what Mutual was all Melbourne-based. So, in Melbourne, people went with National Mutual, the Sydney people went with AMP. That was the way sort of They were the biggest investment Right. They weren't business before fund managers. This is their superannuation. But they were they were insuring everyone. They were and they were the biggest investors in Australia, so you know, but you had this investment bank, which was the biggest bank in the world and the second biggest investor in Australia. And uh that Macquarie was uh hadn't wasn't called Macquarie. What became Macquarie was Hill Samuel. It was just starting. >> So, but it was just before those days, so um and I went and worked to your merchant banks in those days. And my first boss was a guy called Peter Warne, who's now the uh chairman of our bank. So, Right. uh a lot of very smart people were I worked with, too. Yeah. And chairman of the ASX. Yeah. Yeah. He was chairman of the ASX, chairman of Macquarie. So, um Peter Warne, total fogey, but incredibly smart guy. Mhm. Yeah. So, uh that's uh that's where I started. So, that's that drew me to investment. Um But hang on, you but you you you you didn't have a business, did you? Yeah, but I was a senior That's right, he was an engineer. My stuff and looked at me with horror. Oh, this Here we go. I have no less son. But I was son by a lot faster of what the society what can I have to be an engineer. Right. Uh and um you know, what's he doing with this working finance? >> What why didn't you like engineering, Paul? Well, I I I don't really regret of them now. I just thought all the maths and all the principles, but what sort of puzzled me was when I went to sort of my first tutorials and things all these my fellow university students had all been the decade the whole life they'd been building things and playing with skateboards and they'll stand I don't know but my stuff never worked. It didn't look right cuz I never had the passion. I look a lot like my father, but I never really had the passion. So, um and you know, what you got to do to sort of finance, you got more pay. Uh it was exciting and um And if you think that in '85, this is pre-deregulation. >> Deregulation. So, we had a lot of you working well. There was the head-hunting people. >> There were head-hunting people, so it was um and it was a lot happening in the Yeah, huge change in the economy. '85 was also the time of uh the tax cut they had tax summit. >> Yep. And then also it was the start of the Before recession we had to have it. It was also the comments around the dollar. Mhm. Uh and the dollar crashed. Yeah, under under 50. Under 50 because of some comments he made about the Republic. It was wrong with John. I'm just trying to think what it was. But '85 was also the time of the Republic. I was talking to John Laws on probably two or three or three years before that time. But I I was like it's your year at the time. Yeah, it was your year. I I I left GB then. Yeah. And uh yeah, and and people >> used to listen to John Laws to hear what people what Keating had to say. It was a big big moment. All right, so um What then? >> And then then two years later we had the crash. Right. And that's where I was working at this bank. I actually saw the crash. You went through the crash. I was with a uh straight stock broker called Peter Warman and Company. >> Right. The days of independent brokers, right? Before corporatization. And um and he was a leading broker. He was a really smart guy and he was way ahead of other people in terms of things like what we call arbitrage. >> Arbitrage, that is. Although it was unknown what this is pre-Macquarie's big run out of all the professional guys where we would buy one thing and sell something else to offset. Mhm. Basically just play a spread. So. And he was uh we had the days when we used to chart on a printer. A ploff. Of of margins, not not on screen. You didn't have too many screens. I used to look at You used to go to a printer and have a sort of a basic sort of clock graph. X axis. So, you used your screen and charts. Screen and charts, yeah. Yeah. Well before a lot of other people were, but uh and uh this was just in the lead-up to the crash. So, the crash was sort of in '87 was exciting and then I I wasn't We went down I wasn't down at the original stock exchange, but we were sitting in in an office with computers and and that was in some ways quite almost predictable because not that there was going to crash, but there were the the lead-up to it was very predictable. We had a huge blowout of inflation and we had a huge stuff in the US. And um you know, markets were crazy and we were coming up. It's probably the time when Packer got But so that got me excited about investing in there and that's sort of where it comes back to. So, Yeah. So, I changed initially and then sort of just taking the off. So, so did did the '87 crash actually help or hinder your career at that point? Probably uh put it back a little bit because I um I then went overseas and uh a couple of years in the UK. But just like Rockefeller Rockefeller taking over. Yeah, yeah. Uh looking for, you know, a couple of banks and that. I still worked over Yeah, yeah, yeah. And uh no, no, no, not um not not um back here. >> Not back here. And I thought I would have liked to go back back here, but that probably would have been I went overseas and and worked in the UK and that was all right there in the financial markets cuz uh they were so different to Australia. >> Yeah. And they're very sophisticated. And and in a relative sense, very sophisticated. And um Yeah, they're also very cultural. Yeah, you had uh The mob the mob The boys from the private schools, so You know. Oh, you went to a private They and the barrow boys from the East End of that the barrow boys. The barrow boys from the East End, you know, they could uh outdrink, out out deal, outtrade any of I don't know Elizabeth any of them. The private school boys, sorry. But you know, from uh the guys that got to Eton or other schools, right? Harrow. Harrow, yep. Uh but they mixed together, right? It was partly the culture because I'm not saying they mixed socially. They certainly mixed out Sorry, on the weekend, but they mixed in the pub. Yeah, yeah. You know, and it was a very heavy drinking culture. All right, it was unbelievably heavy drinking culture, including um very very um a different culture cuz it started they started really early, like, you know, cuz partly cuz of the it was the UK, Europe was in, so everyone started 7:00 a.m. Right. Um But, you know, the lunch was at 12:00 and it wasn't uncommon to have people go to lunch and have four or five pints. And lunch time come back at 4:00 or 2:00. >> I'd be aggressive trader. Be aggressive trader for 2 or 3 hours and then have another long lever pints afterwards, right? And it was a I don't know how they survived, right? You just wouldn't get away with it these days. Or maybe they didn't. Maybe they died early. All right, so what do you think was your defining moment around Yeah, but this shook me and forever. But yeah, we all make uh investments when we are but initially we find the way we want to go at it. So, look, two things really shaped it. One was um buying into the Commonwealth Bank and taking part in uh just in the initial IPO but in buying Commonwealth Bank shares at $5.40. At this point, everyone listening hates your guts. If justify this as we go on. Yeah. And then there was a second issue at about $6. And so I guess my mother actually And and I learned from that just watching the and and they were paying dividend and it was usually about 5 or 6% and just watching the price go up to keep reinvesting and sort of said, "Hang on, there's something interesting about this stuff that everyone Everyone was talking about, you know, gold or something sexy and but these stocks and then looking at the power of compounding. Yeah. The magic of compounding. The magic of compounding. And I used to I used to bring out um uh some This is when CBA was still in the sort of the '40s. This is a few years later. But, I used to bring out an example of what the dividend had become. And so the first and then talked about not just the shares grow in uh share capital but they grow in income. Yeah. So, with CBA you know, listed $5.40. I think it paid dividend of about 20 40 cents. I can't remember the number or something. score 40 cents. So, it was was a big difference. So, it started pretty high, yeah. It would have been a reasonable. Yep. When it was up at it got to about $40, dividend per share was about $4. All right? And so everyone I sort of think our share price is just going up. That's where all the growth is. But, it was sort of saying to people saying, "Okay, sure, you can have a you know, you can show your share price growth. But, I can actually show you income growth." Yeah. And you can go put your money in a term deposit or a bond. And the income doesn't grow. It's the same income. Like you buy a term deposit or a bond that has coupon of 5%. You get 5% and it until it expires, you're still getting your bucks. Yeah. Your capital stays the same. And you just get your $5. It's a fixed 5% or something. And the dividend on the CBA share had grown from at least up to right now this is something like 40 cents to $3. Yeah. And then I just had a realization that you can have a the magic of of part of the magic of investing shares is growing income. >> Yeah. Um is really sort of defined my thinking. So, that led me to sort of think I should have sold stocks I already owned and reinvested them. And then the other thing was looking at how when we set up CommSec uh and that's another story itself. But, a few years later and then looking at where our clients invested Yeah. and some of the emotional investing Mhm. and it's just how you know you can see people the latest fad, the latest >> hot stock, Bitcoin going Yeah, just money would just pour in suddenly that and then and people would get late to it. 3:00 a.m. one hour in he's set and then and the and the the people who were and they get crucified. And we get unfortunately because we made it uh we democratized, I think is the word I like to use. Brokers were used to Well, CommSec it was a little bit up but I think yeah, the whole industry of them. Share investing was democratized. It went away from just the people who don't know that lived in the north shore of Sydney or eastern suburbs of Melbourne. They were paying 1% or 2%. They were paying 1 and 1/2%. Yeah. Yeah. When you came along and really pissed a lot of brokers was it a 70 at dollar And initially it was 75 dollars trade. It was saying it. That was cheap, right? But, you know, on people were charging, you know, on a on a $10,000 thing they were charging 2 and 1/2 cent brokerage $250. And when you you got the award of stockbroker of the year, all the stockbrokers booed you. He was the the war night. He gets the award and the bill just boos you as he took money off the minute I was It was 3:00 a.m. and people were still drinking, all right? It was 11:30 at night. I don't know but you know program running hours behind schedule. >> Yeah. And this was the the whole lot of water under the You got booed. You got booed. They've had a lot to trip on. But that I thought we all agreed without groaning that was fair. It was you. But, coming back to your story about investing, it was then seeing how um in particular in the early days of CommSec how we had Yeah. People were a lot of clients were quite emotional about investing. They got on the fence like Yeah. they put too much into it and they got crucified. Mhm. But, the people that were had a portfolio had looked at sort of basic principles of diversification. Um that's where I sort of heard my approach because it was the early days of saying, "There's a great stock of CBA. Not necessarily be great capital growth but I get income growth." And maybe you might say that was lucky but they were all happy to have it. And then seeing how the other side who who come into the market want to find the fad uh and they got crucified. How the market saved them out because the professionals were onto this stuff. Yeah. Yeah. Yeah, and they And the way the professionals learn from experience. And that's what you're saying. >> Yeah, and you learn by experience that well. Yeah. Um And then And then I guess the third thing was you know, you you really started to sort of read a couple of the books, right? >> Mhm. The great people of you Okay, that's Benjamin Graham or those stuff. I didn't start out that way, but that was it was more a bit like that experience and watching others and then sort of refining it with sort of uh you know, from some of the the the yeah, the the time tested great friends. Yeah, and then and then I think you know, when you and I first started told me about how we wanted to invest for our financial planning clients. That's when we agreed that and in this lot of this came from you. I was more a stable investor but we had core So, core you get these beautiful reliable stocks that give income and give give growth as well. But, if you want to pay for some alpha returns, big returns we call them the satellites. And some of them you're in them for a while and you get out of them for Yeah. And and they become a part of your investing strategy. Yeah, and the satellites are tricky because and we see it time and time again with things that uh I would say over hyped but they become thematic and then everyone gets onto it. Like Tesla. Tesla was fantastic and I sort of the model, isn't Yeah, we had we had we had the same with um I was trying to think what was before lithium but we had the same with lithium. I mean, when everyone was telling you how there was going to be this massive supply problem and the price went crazy and then it was what happened is that the supply dropped off a little bit and or should I say supply increased a little bit and some of the demand wasn't quite there. Price collapsed. We've got the same sort of hype now you know, with rare earths. We've got the same sort of hype on AI. And the question is where you are in that hype cycle, right? There's no doubt that these things are going to be in demand, right? But they're hard to I think for the common investor to find part four questions. That's you and I largely that is the the non-professionals who you know Some first person get things very wrong, too. They don't always get it right. Yeah. But, the the the hard part for um you know, what I describe as as the the sophisticated amateur. Mhm. All right. Because they inform I don't They inform pattern each this time but you're where are you in the cycle? Yeah. Yeah, just um um and you know, you get you know, people make a lot of money out of spitting out and chewing up you know, um unsophisticated uh investors. Yeah, and then and then it was Paul it's it's also what kind of time line I've got. I I I can remember and you would, too. The great company of of Australia was NextDC. Now they would tell you when NextDC takes off everyone gets on it and then it goes sideways for a while because it it has to buy new factories to fill them up with servers and other servers. And and and until that's in place and it started to make more money again, that share price doesn't go. So, people might get caught but it's the timing thing. Yeah, and you've got to be patient because I mean, there are have they believers in the rare earth story for years, right? But, yeah, and And they weren't Oh, yeah. Yeah, they weren't over that period. But, you know, if you if you bought into some of these rare earth companies five years ago You would have bought some awful stuff. Especially because of all these Malaysian government didn't need his lawyers and Lionas had a shocker here. Let's go. What are the routines or habits that help you stay informed and grounded, Paul? Um well, first of all, I think you've got to um stay current with what's going on in the States um because that's the that is the lead by. All right, driver. It It doesn't matter what's happening here in Australia. Um You know, we going to get some influence or direction from what's going to happen in the US as far as And then that's I think look, fortunately information sources are there but it's you know, like CNBC every single year in the morning is your Look CNBC up and see what's going on and what what they were writing about or whatever these sort of stuff. Yeah. Uh and this is a data source, right? Uh and it's just telling you sort of you know, an overall summary of what's going on. Um But then I think you've got to take it a step below that and actually just purely for sort of sectors and the areas that the people are investing in and then what and what life. And often that we get the follow on in Australia. So I think what's hard, really hard in Australia, is to understand some of the why. So it's really hard I find to get a feel for what's really going on in the US or probably You can read all the statistics. But They're often They're often lagged and delayed, aren't they? Yeah, and so in this So being here, look, staying I think the first thing is to stay in touch with with what's going on in the US as best you can. Um I think the second thing is to um look at the different sectors and industries that are booming a lot booming in Australia and ask your questions as to why. So you you look at trends and then trends in Yeah, I I know you often like certain commentators that give you insights. Yeah. Yeah. I mean and and certain fund managers. I mean I think look, it's if you if if you look at sort of the Australian market, it's very concentrated. We have a very concentrated fund manager market. Uh and they're very big for the size of the market. So it's really hard for them to shift in out of stocks and or sectors. Um and so as much as possible try to understand some of those issues there if you can. So without being unrealistic cuz it's not possible for you know, there's I won't pick on Australian Super, but Australian Super's equities portfolio is massive Yeah, massive. It might be 100 billion. I don't know what it is, but it's their portfolio 100 100 billion dollars or something in the management. They're not that heavy in Australia, but they've probably still got 10 or 12 Well, they got out of Australia to get started, didn't they? So they can't they can't just turn that off. They can't say we don't want any mates or we don't want any mates. It's painful. It's impossible, right? Uh but it really changed the nature of my act. But they do make shifts. And so as much as you can learn from where thinking and they're some of them are going to be more long term, but some of them are short term, but as much as we think that that they're looking at in terms of value, I think you get closer to that. I think you get as you said trends, you get clues from I I tend to be a more fundamental person. So uh you know, what is cheap I eventually believe will become more expensive and what is expensive will become cheap. And they you know, the age-old metrics and things like price earnings that they don't go away. Is fundamentally a share price is just about earnings. But timing is an issue because something can stay expensive for a really long time and stay cheap for an awful long time as well, right? But eventually there will be rotation because the same things I'm looking at other people looking at. Eventually they'll say this is something, you know, we've become very much in the mental market. And I don't know whether that's a permanent trend or a short-term trend. But I do think eventually that people rotate back into what's cheap. And then you've just got to be very patient. So if you think So let's say say granted, right? Also realize it's not possible to buy the top, buy the bottom and sell the top even on the day. Like the market is just there's just so many algorithmic trading, right? And I know if I buy something immediately the price will fall. Why is it cuz Yeah, yesterday it's all lines by on the elbow Trump this again. But then the day it is there. But but anyway, if you don't if you don't you say about this looks like real price to get in, you know, you buy something two minutes later it'll be up, right? You got to sell something I was going to take a profit here, blah blah Yeah, count down latest price. Just just accept it. You're not going to eat you know, you you're not going to buy a bottom and a top. Uh buy the bottom sell the top. And even on the day you're not going to get a great price because there's too much algorithmic trading, other things occurring that you've got no insight on and you're going to walk out of your soap here. So don't don't if you get a bad feel or something, don't worry about it, right? It In the scheme of things, it's not going to It's your It's your long-term view on a stock is more important than the short-term getting it right. Accurate. Um so and then finally sort of like I I I do sort of take a real Yeah, you call it satellite approach. I look very much at my sector balances and I work on the basis I think people will basically rotate into the cheap sectors. And so I think about what's, you know, um you have to be things like, you know, materials, you know, commodities. Well, what's happening in the world is is the outlook for commodity prices you know, more positive than negative? Uh and if it's more positive than negative or if it's from a long way and it's more the chances are that they're more likely to sort of move higher. That that's just I would go more overweight materials, right? Uh and work on the basis as an organization about rotation back into And the best worst example both you and I thought the banks were going too high. So we started getting out and we thought materials had been over over over done. And so it was a good Yeah, I mean get in and that's basically worked out. But you know, that that was a good good example of your thinking. Thought Uh have there been any books or market thinkers that really had a big influence? I know with me Buffett's the heavy blood. But What are you? Look, Buffett's huge, right? I think he's um uh huge for everybody principally and and uh Yeah, it's it's really valuable to look at the other days when the him and Charlie used to give the the uh the the Yeah, the the recitation at the at the uh at the AGM in uh in um Idaho and Iowa. Iowa? Um Omaha. >> Omaha. Omaha, Idaho, wasn't it? Yeah. Uh that's right. Omaha, Nebraska. Nebraska and Nebraska. But I think they got Idaho. Yeah, Nebraska's on the boundary of the the boundary of Idaho. The borders Idaho is one of the states. So I think it's right. I think I got it right. Yeah. >> Yeah. Uh Yeah, so that used to be great reading and then any insights now in thinking. Look, probably more so not so much books, but more so from Yeah. listening to some of the fund managers that we talked to. Yeah. Just to see how they approach this. Uh And you know, bear in mind it's a tough job being a fund manager because you live and die by your performance. Mhm. The metric is so clear. Right. And uh you've got to have it in the beginning because otherwise no one's going to give you money. And and their thinking is to what they look at. And they know every fund manager gets But you learn a lot from them in terms of the way they approach it. and that's how I sort of I'm not saying we're going to follow what they're doing, but I want to learn and understand their thinking could be what Given that the sort of things that you have to survive each day and I think you know, I suffer from the same external criticism that my family and I'm sure your friend could be bored because the stuff that I I can't imagine you you send me interest in politics cuz you Yeah, politics is in back of the economy. But do do you think the kind of things that we have to survive and then internalize and have a view on that normal people find boring. Yeah, a little bit, yeah. Um I mean I go back I don't I'm not a hugely active trader. And so But you're an active reader I love to read the stuff. And I go back to the age of seeing a fund the market rather than timing is is is important. Yeah. And so I find that also just in what we do, Pete, it's very hard to look after your own stuff. You've got clients and uh as they have time. So I don't go into the market right looking at what I'm going to buy or sell today. I just don't. But you're for sure buying a lot of stuff that Yeah, I got to sell something. I got to buy this stuff. And I I like to understand why the market has done something during the day, right? And so try to The market's not rational, but there's there is something that's driven it, right? And and I think that in trying to understand a bit about the why helps you think about what's next. >> How do you separate the noise then in this volatile market? Yeah, I mean um It's a hard question. I mean the hard try How are you on that? Um I think Well, first of all, I mean there's so much now the noise is programmatic for us, right? So you know, you just have to look at things so Again, give me a good example, right? You know, company comes out with the with with profit report. The consensus was suspecting X, the company delivered Y, right? But automatically the uh trading algorithms will decipher that profit report in seconds. Yeah. Look at the numbers, compare it to consensus and work out of all of what they think the company's full price. And most of them will probably come up with something 10 or 15 cent. And they'll sell. Yeah. There's no thinking It's all sell or hedge. There's no thinking goes into it. So and and and they'll keep selling until a price figures, right? And they'll they'll do that on a on a on a programmatic basis. There's no human sitting there saying, "Hey, Mo, let's have a look at this. So what if I actually made some there's some reason for this?" They'll just do it. So um there's a lot of noise and that also occurs to what happens overnight. You know, if Wall Street's down X and we've closed off if the bots here will just sell it down. And um until it reaches a level that basically is is justified. So that's all that's noise, right? Because you can't stop it. The SEC futures taking over. And they're just as likely to buy back the same little flimsy piece of information, right? So so many ways many of us should be thinking how do we beat the robots? Because we've had them. Yeah, beat the robots, but we can we can have the advantage of the fact that they're just going to they'll they'll go too far along the way. And they know that, right? But so that's I think that's partly noise to sort of just expect that to happen and not to get too upset about it. Cuz what happens with those stocks is is that you know in the case of profit announcements all misses and things is that the fund managers have been able to look at the listen to what they are doing in the actual briefing that goes out to the market starts with the other talks. Now this is what the analysts say. Couple of days later, that's where they start to reposition, right? Um and that's when you sort That's That's the noise coming out of the market actually money talking. Cuz the bots suddenly are just as likely to buy back two minutes later, right? Although but they're not They don't really don't care about They're not taking any fundamental view of the company, right? And do you think that a lot of the experts that the media go to are fund managers who might have a much shorter yeah, time frame than people like you and me who are looking for a buy opportunity? with quality companies. Yeah, absolutely. I mean because the the big long-term investors don't really talk to the media. The the the people they go to uh you know, and I won't govern age, but there's a there's a there's a handful of people they're generally what we describe as but they're fund managers, but they're pretty active fund managers. And often their view and what they're saying is obviously there's already the position there, right? Yeah, I know. You know, and if they're being critical of the company, you know, for X and Y chances are they're long in the stock. Well, they don't have to get out, but they're telling them they're not happy or they want to make that basis. And the ones they're tipping they're already on it, right? So look, you got to be a little bit careful. It's actually know what they're thinking, but how they see it also in a professional case as I was being as a director and seeing the feedback you get from investors, there's some that you you know, you value it. Some you know, I just We'll we'll see you at tomorrow, right? They'll tell you they're all to the investor, but if the price goes up twice, it's there at tomorrow. So they're the ones in the media in the Vboard of that category. The long-term investors typically aren't They don't want to talk to the media. Yeah. Here's a good question for you, Paul. What is a belief that many hold about investing that you disagree with? Ooh. Well, it's one of the media that markets are rational. They're not, right? the markets are not rational. We're people We're people reacting to different bits of data and we're emotional and we're not rational. So Lord John Maynard Keynes said that a market can remain irrational longer than you can remain liquid. Yeah, and that's the truth, right? And that goes with patience, right? You could be absolutely right about a stock that you could be terribly wrong for the for a period of that before you're right. And you can't wait for the payout to be over there. So um What's a good question, Paul, but I didn't actually think of it at the point. Um what's Yeah, what? Yeah, I I think I like the idea idea of buying the dip. And I also integrate it with Buffett's view that I want to be greedy when other people are fearful. But I want to be greedy really great quality company. Yeah, so an example of of a company you and I recommended for our clients during the coronavirus crash was CBA at 58. That was That was a no-brainer. And I think the the stuff you read in the media can scare you too much away from what are good buying opportunities. Look, we might have got it at 64 and went to 58. In fact, in my lifetime I bought Macquarie at 24 25 during the GFC and I thought killed it cuz it was up to 50 before the GFC and went down as low as 18. Thank god Ken Henry and Wayne Swan backed the banks and Macquarie came out of it. But I think that I like to go against the the short-term negativity that engulfs crappy stocks in the GFC. The crappy stocks and so the the dot-com bust, but there's good quality ones when you when you're going for the exits as you know good quality stuff falls as well. That's a great buying opportunity. Yeah, I I probably The other one I'd say is I would I mean the error I make and I see a lot of people make is she is we tend to take profits too soon. Uh and you know, if you look at long long-term growth markets are up. So you say what I'm always got a lot of volatility before you get the credit. And I think it's fundamentally is cuz the economy's growing, profits are growing, but you know, it's just growth. And so you actually expect the price longer term to go up. So I I tend to things get overbought for sure, but the challenge with taking a profit is you got to get back in again, but it's way and a lot of us take profits too readily. And we get off just forgetting about it. So we bought this for a reason and as they always I know it's tempting, you know, and and and that's look, if you get a trade, great, but you got to be accurate about it. And you so you've got to be disciplined. I just got once you make really great profits grief say a 10% stop in. Cuz you might a good stock won't fall much more than 10%, but if it does fall, there's probably something a big change. You probably got to get out. I mean they're they're they're they're two anxious ones and I think they're quite contradictory. And one of course is you never going to take profit too early. The other was let your profits run. I think the deep let your profits run is actually more important than the foot the foot. Okay, well last question. What mindset shift would you recommend to someone wanting to get better at investing? Apart from Janice with Swiss report, um uh patience. Um I think there is an adage about cutting your losses is is correct. It's hard. Yeah. But and we bought something is not really relevant to what what should be in your portfolio. Um and then I do think there is you know, be be the best but be disciplined, right? So if you if you're going to have a core set, like make sure your core is is spread to some extent across the sectors because you do know that it is there will be rotation at some stage. Doesn't mean you have to be naive about sectors, but I think you you can be you know, you can be a lot more disciplined about how you structure say the core of your portfolio and then use that as a mindset. I think And then finally, just be really wary of fads, right? It's just very tempting, but you're not going to get everyone, right? And don't be upset if you missed out. And sometimes you just have to say okay, I missed out and um Yeah. It's like gold. A lot of people missed gold cuz they they wanted income. Paul, thanks for joining us. And if people want to know more about what Paul thinks, he he writes twice twice a price a week? Well, at least once. Uh Should be twice, been lazy. In the Swiss report. Thanks for joining us, mate. Thanks.
