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Podcast – Australian Stocks Education - Perpetual

Want to improve your trading and ultimately improve your wealth? This Education Session is designed to uncover how the best Investors in Australia search for and Find Stocks on the Australian Stock Exchange. In this Webinar, Stefan Angelini of Angel Advisory interviews James Holt, Investment Specialist from Perpetual Funds Management. As a business, Perpetual manage over $17.4 Billion. This Webinar will focus on their conviction to the ASX 200 with a particular focus on Consumer Discretionary, Financial and the Materials Sectors.


Stefan Angelini

Ladies and gentlemen out there in the live land. Good day. I'm Stefan Angelini. I'm your host for today and we're here getting an Australian Education event on Australian stocks or stock tipping. Thanks the Australia ASX Stock Tips Facebook group. We are lucky enough to be hearing from one of Australia's largest fund managers. So if you're in the trading space or you ever been interested in trading Australian stocks, this is gonna to be a good event for you.


Stefan Angelini here from the ASX Stock Tips Facebook group but also from Investor Types Podcast. If you're joining us live, you're joining us from everywhere, whether it be Facebook, LinkedIn, but we're here for a special event. It's an education event and we're gonna to get really educated on what it means to be a really good stock trader. When it comes to the Australian Stock Exchange. I'm lucky enough to be joined by James Holt, who's an investment specialist at Perpetual.


James, thanks for joining. But tell me Perpetual is one of Australia's largest fund managers.


James Holt

Yeah, that's right. Yeah, we've been around a long time, founded in the 1800s. In fact, the last sort of 50 plus years we've been a fund manager managing of just over 20 billion dollars,

but 21.4 billion.


Stefan Angelini

Wow. So big, big been there for a long, long time, obviously, how big would the team be here in Australia?


James Holt

Look, here we've got about 8 portfolio managers managing a variety of funds and non analysts, supporting them as well. So they're the ones who individually study each company and then determine which of the stocks are the best fit for their portfolio. So that's, that's probably the biggest team in Australia, if not, one of, if not the biggest.


Stefan Angelini

Beautiful. So we're in for a great event. You're gonna give us a bit of a market update. You're gonna tell us what your investment philosophies how you go about finding what you love, and you're gonna talk about some companies specifically which, which I'm really looking forward to. But also, we're gonna have some time for some questions. So for anyone out there in the live land, who wants to post a question and get James to answer it, feel free to mention it in the comment box, it should pop up.


But I don't get to it, there might be a lot of questions. So don't hate me if we don't answer it. But something will pop up. We are getting a comment that James your audio is very faint. So if you do want to speak a little bit louder when you can, that will be amazing. Thanks for that, Troy. Appreciate that comment. We'll make sure it's louder and very, very everyone can hear. Well, without further a do, we're here for a presentation. We're all here to learn. So James, if you wouldn't mind kicking it away. I'm going to bring up your presentation and talk to us to talk to us about Perpetual and what you guys do in terms of investing into Australian equities.


James Holt

Yeah sure Stefan look we've used today, a presentation pack for our Perpetual equity investment companies that's listed on the ASX under the ticker PIC so look a lot of what I'll talk about today will be you know, generally what we what we do from an investment point of view.


But obviously, panelists will also reflect it'll be with the background of the investment company that we run which is consistent with pretty much the way we manage all their money across the board.


So we move to that to the next slide. Stefan I just got here at general advice disclaimer and there is one across the top of its brain will lay with you can see as well. So look, the key thing I think to bear in mind is that you know, when I talk about things, I don't know any people individually in this studio on the call, you know, they may need to seek personal advice if they're looking to, to invest in things from our point of view, we offer general advice. Everything I say is a general nature only and, you know, people often have to seek personal advice to see the text and other consequences as things as they're as they're investing


Okay look, I'd say you can see here in terms of the Perpetual itself, you know, founded in 1886 and look at 1885 is when a committee of business and professional people first gathered to form a trust, a company amongst them was a person called Edmund Barton, and he later of course, became our first prime minister and so, look, 1886 has been Perpetual, was formed a little bit of trivia. You know, they couldn't decide who was going to become the first chairman of the Perpetual.


So they they solved that by way, the people who were run who were gonna be chairman of the company and the heaviest man was James R. Fairfax, who became chairman of Perpetual. So just a bit of trivia there in terms of the background. So the Perpetual today run by Rob Adams who joined us a couple of years ago, Perpetual Investments is very talked about, sum of sort of twenty one point four billion dollars you can see there on the left hand side we also have an advice business as well, Perpetual private, and also Corporate Trust Business, which manages about about nearly 800 billion dollars worth of trustee money. So you can see there quite a few different parts of the business that we that we have today.


And moving forward a slide and this shows, Stefan at the start, you talked about the team. So look, the manager this portfolio is Vince Pezullo, who's our deputy head of equities. He manages a number of funds within the Perpetual universe,but also this listed investment company as well. And you can also see that the other portfolio managers Paul Skamvougeras is their head of equities, Jack Collopy. Nathan Hughes, Anthony Aboud, Anthony Cay, Maryanne Drewe and and also just James Rutledge, who've been with us for many, many cases, many, many years, and of course, supporting them of the analysts on the right hand side. So they're the people who individually look after about 30 or 40 stocks in Australia. Every year, they've just been busy during reporting season, they're busily out there looking at company results, and and bringing them to back to the portfolio managers to see which companies we want to invest into, is essentially the way it works.


Moving forward one slide just in terms of philosophy. Look, there's probably a couple of things I'd say here. First of all, what we want to do generally with the investment company, of course, the perpetual investment comp, equity investing company is providing a growing income stream. We want to provide long term capital growth as well which lead investing in the stock market is all about. a look we're active managers so at the end of the day, we're looking to buy, you know, 20 to 40 stocks that we think we'll do better than the share market over time. We you know, sometimes we'll hold those, you know, Ideally, we'd hold them for a long time, sometimes they rise very quickly to the price we think they're worth. And we can change them over and put new ones in. But that's essentially what we're trying to do at least 50%. And as much as 100% of the portfolio should be in Australian stocks, we can buy up to 35% in global stocks and up to 25% in cash. And, and also, you know, in terms of our process where two things were what we call quality and value.


So the first thing is we want to establish a quality universe of stocks. We do screen out companies, which we think are lot quality. And then from that remaining pool of what we determine the quality companies, we want to pick what we think in good businesses at a reasonable price, you know, so those give us a value orientation over time, we would categorize as a bit like Warren Buffett as value investors, and that's what we're trying to do and achieve across all of our fans but also with this investment company as well.


And on the next slide, I just sort of elaborate a little bit on what we mean by quality. So look a few things here, there's sort of four main filters we look at, first of all, what is you know quality business and that that means a company where the, you know, barriers to entry might be high, it's got great products and services, those sort of things. It manages issues very well on the social environmental front. It's ahead of the curve.


We we also look for conservative debt. So we don't like companies with lots and lots of debt, because during downturns, recessions, they're the ones that tend to go bust. You know, we've seen that through many cycles hasn't sort of mattered so much the last few years, but I think it's about to matter, obviously, as we do with the Covid. I think eventually, the banks will want their money paid back. And those companies that owe too much money, a bit luck, some unfortunate households will probably wind up in financial trouble. And we don't want to own those sort of companies, because in the end, they're the ones that have got most of the risk. Sound management is obviously going to be something we want as well. So by this, we mean companies that you know, managers will do the right thing at the right time by our shareholders. So that's it. There's something they're looking for, and then recurring earnings.


So it's it's got to have a history of making money or an ability to make money in a very short period of time in the period ahead, what a contrast is to companies that don't plan to make money for next five or 10 years. Again, a bit like the high debt companies, they're very high risk, they can be great concept stocks. There's quite a few of them out there at the moment, of course, but our worry is always that these sort of companies tend to get caught out during a downturn or you know, at the banks decide they just they need to become more conservative, they can't find risky ventures anymore. Investors have the same attitude from time to time and they pull your funding from these organizations. If they're not making money, then there's no other place for them to go. And often they don't survive. And we've seen this many times in history. And again, it's another sort of key criteria, we need to be sure we're investing at the end of the day, investors money for a long period of time often retirees when they can't necessarily afford to take a big capital if on some of these sort of concept stocks, they might be good ideas, but then goes on, they gonna be profitable at some point as well.


And moving forward on to the next slide. So where are we at today? Look, I'd say, you know, a couple of things. First of all, the market itself, you know, COVID was a shock. I think many people were expecting, you know, sort of a tech wreck again to 2000 going into this year. I'm certainly we were cautious. We had a lot of cash about 70% cash at the beginning of the year, in this particular investment company, and in our portfolios were quite cashed up as well. We thought you know, that COVID obviously hit first and and obviously did a lot of damage to the market, but it allowed us but then enabled us to have spare cash to deploy into stocks at very, very cheap prices in February and March and that's exactly what happened.


So, look, the portfolio held up well during the downturn, but then also, but being able to use the cash and buy stocks that really bargain investment prices, were able to invest all that money and then recover as the market recovered from sort of the 23rd of March onwards, that portfolio recovered very strongly with then it actually beat the market quite strongly. So that was, I think, a really good position for us to be in, you know, we're able to buy a whole bunch of companies at that point in time. And, look, we don't have a lot of tech, even even despite tech, dipping a bit during March, we do find that a lot of the tech space trades at really, really expensive levels. And as I said, before, you know, every 10 to 20 years, the market goes wild, the tech, and then you have some really serious consequences that come after that.


So, you know, 20 years ago, there's some people on the call who probably never heard of one till, or certain software or dev net, and yet they were absolutely hot stocks 20 years ago. And of course, a lot of them went broke. They just ran out of money or they had too much data. They just made their own money in the first place. And same thing happened offshore. 20 years ago. The really hot stocks were Enron, WorldCom, Cisco Systems, Cisco Systems are still around. But you know what the share price after 20 years has never got back to the levels of 20 years ago. So sometimes I think there's two ways of losing money. You buy a stock that goes broke, obviously, no one wants that. We try to avoid that.


But secondly, you buy a stock, it's so expensive, that when it falls, it can never quite get back to where it used to be. And that's something I think, again, we've got to be wary of today, even in a lot of the winners, you know, there's a lot of great companies around that has survived the price lines and the Amazons and so forth, but did go through a long period of being underwater, about 15 years after 2000. I think history tends to repeat it sort of stuff quite a lot. You know, 12 years ago, ABC learning centers in the bedrocks and brands so they're the sort of companies again, you've got earnings, you've got to have low debt, good balance sheets, we think to sort of get through especially if we're going into a pretty tough period like we are today.


And, and in terms of sort of, you look at some other companies around the world, you know, I use Netflix and over and over again, but sometimes just because you use them doesn't mean necessarily make a great it investment. So I'd be be wary about that as well. And looking at the tech sector in Australia, again, you know, there are some great ideas, there are some winners that will survive and thrive. But there's a lot of companies that probably won't survive. And we just got to be careful, we want to do one avoiding that tech index as a whole, because we think you're buying potentially some of the winners, but also a lot of the losers that that won't survive. And at the moment Tech's training about 60 times in Australia, you take out computer share, which is the biggest sort of earner in the tech sector, and that's half of the sector's earnings.


Even though the company is only a better seven or $8 billion company, it's only about 15% of the tech sector, you think got a huge amount of tech. That's better at about 100 times earnings in Australia, and we think that's a lot of money to pay, especially because it might surprise you. But the last 5 10 years earnings in tech have been going down, not up. And the only thing driving up tech as a sector has been the enormous expectation that there's going to be more and more earnings coming down the track which is yet to sort of re-improve so, economically, obviously, it's a difficult stretch ahead, especially as stimulus has withdrawn.


So clearly the process of beginning to take reduce job keeper has began. And eventually we're gonna have to read it, we're gonna sort of kickstart our economies, and clearly that that's going to be a painful period ahead. I think eventually we'll get a strong recovery sometime in 2021 22 economies will do really, really well. But it's getting across that valley. From where we are now to to switching back on I think you'll see a lot of companies that will be in trouble potentially, but it's got to be worried about us.


So whenever you have a recovery, recession like this and recovery, you know, it's always sort of flawed business models that get caught out and you got to be careful about about having those and in terms of obviously, as well with the other thing on our mind, though, is that clearly policy makers gonna throw a lot of money. They have been throwing a lot of money the Fed Reserve Bank, the federal government will continue to throw a lot of money at the problem which is great on the one hand to sort of smooth the process and but also from the investment point of view, it's quite difficult because how do we invest in this process.


Well for us we want to try and keep our portfolio pretty balanced. So we've got some deep undervalued cyclicals things like the retailers which are clearly struggling people do great when economy reopens, the builders were just struggling.

But clearly they'll do great once the economy fully reopens and construction starts again. So they are sort of cyclicals you want to own they can go up a lot from where they are now.

But you want to still balance it with a lot of those high quality companies that done well through but then, lotteries, lottery, businesses, things like that, which do well in recession and recovery, and which might have already rallied quite a bit but you just want to have, you know, good exposure to those on the portfolio, just in case something goes wrong with the rally. And then lastly, in terms of performance, clearly look, one struggle for us.


If you move to the next slide, this is investment portfolio performance, you know for five years We've had we've had, we've been around for a long time, this perpetual investment company equity investment company, PIC, has been around for about six years.


During that whole period, that's been, tough place to be. And so value I think, does really well, long term. You can see, you know, look at Warren Buffett has a long periods of struggle, you know, we have long periods of struggle, but in the long term value comes through quite well. Five years, it has not done that well, but we're starting to see now, a lot of those sort of quality and value stocks really do quite well you can see that they're in the performance numbers over six months, six months, one year, we're again, we were able to have that cash there buy stocks at the bottom, they rally back up and I think that's really done quite well for that for the portfolio.


And lastly, in terms of just a couple of ideas around positioning, so if you move to the next slide there portfolio positioning, you know, things like Crown Resorts, Iluka, AUB those sort of businesses. You can see there a Iluka which a lot of people haven't heard of but it's it basically mines, zircon and rutile, which are important commodities that they're exported to China and go into various products.But also with Iluka, we love these sort of companies where there's a hidden asset has not been fully reflected in the balance sheet. So in Iluka's case, they are iron ore iron ore royalty, which is about to spin off and that's probably worth a lot of money. Well, you know, but you know, could could wind up with a capitalization almost as big as Iluka eventually one day so that's a great business, we think that there's a lot of value unlocked there. Once that spin off takes place.


OZ Minerals is more exposed to copper and gold and those sort of assets coppers a fantastic commodity that's really well exposed to the market recovery. So I think once a matter recovery occurs, you'll find copper will do well, but of course, if things go down, gold will do well and OZ Minerals has both they're sort of businesses. So there's a sort of secret penalty if you like. And then you've got also companies so Crown Resorts, which have always been a high quality business suffered a bit during COVID. But, you know, I think we'll we'll bounce back but once recovery takes place. The thing we've always liked about a Crown is that that's probably more the quality sort of company, which has actual property, you know, sort of website, has physical assets. Once COVID you know, eventually clears, people will want to come back I think and, and go to those properties, but but also has brought little debt, and Crown Sydney opens in about, you know, in the next year or two, which I think will be will put them in a good position as well. So a lot of upside.


And lastly, in terms of global on the next slide there, you know, a couple of, you know, again, you don't have to necessarily buy you know, there's a lot of hidden tech stocks out there. So Flutter owns, you know, a lot of Paddy Power and Betfair and they sort of businesses that have done very well as the economy has, has gone into into shutdown about 80% of business online, but a lot of a lot of IT businesses, we know you got to pay but now you got to pay a hundred 50 times or 100 times or 150 times earnings. The company like Flutter is only on sort of 20 to 30 times earnings. About 27 times at the moment. So quite an attractive business, online business be like the people don't think of it online business. 80% of it is online. But it's a, except on that exposure quite well.


And Ferguson a bit like race in the UK, but a lot of value, building stocks, we've got in there as well, a person or those sort of company. So a bit of quality, a bit of exposure, the cyberware comes it's just a sort of balance the portfolio quite well. So that's what we're trying to achieve here really, if you if you move to the summary slide there is, you know, build a secure income stream, make sure that those quality stocks at a reasonable price, they're gonna sort of give you a smoother ride through the cycle, we think and we think that it's happened this year for our portfolio, we hope it'll happen ongoing as well. And you've got to you've got to actively manage it you know, sometimes there are stocks that reach their full potential, we've got to exit out of the portfolio and, and buy new ones that are relatively more attractive.


We're very, very active in March, February March to help buy because we just didn't know when we're going to get that opportunity again. And in fact, I think people waited and thought they might get that opportunity in May or June, and it just didn't materialize. So we've just got to constantly be ready to move quite quickly to take advantage of opportunities when they pop up. So I hope that's been of benefit and we've also got some investor details that you can certainly get feel free to connect with me I'm on LinkedIn as well. We've got Investor Relations people as well that the consumers people if they need to, and and yeah, hope that's been of benefit in terms of how we sort of see the world and I'll hand back to the stage to Stefan


Stefan Angelini

Beautiful James Thanks a lot mate, I really appreciate that. Some really great insights there. And it looks like in terms of reallocation, you're looking at both companies that will benefit following when when lockdowns are ended and things like that like Crown Resort, but also, you know, some companies that are really taken advantage of the existing situation and especially a lot of that online play. Now, as a Facebook group, we get a lot of talk around, buy now pay later, and almost not how the buy now pay later, overtaking credit. Now I've read a bit their credit card, the average age of credit card users is somewhere in their 50s. Whereas the average age of Afterpay users or buy now pay later schemes somewhere in their 30s. What's your view on these on buy now pay later in the tech sector around the buy now pay later



James Holt

a little bit comes we'll come down to the regulator I think so. Just to give you a sense of that. You know, the regulator has given the banks have very tough time over the past few years. For appropriate lending. And I know at the moment Afterpay video you can use, you can use many different examples charge of fee rather than interest rate. But if you calculate the interest rate on afterpay, it's a lot higher. And if the banks would charge it at a very different story, I think from the regulator's point of view, so it's hard to know a little bit does depend on what what the regulator necessarily does. And also, even if the regulator doesn't move, you've got to bear in mind does, you know if it's sort of if it's sort of treated as a bank, and where does the credit risk line and all those sort of things. I think that's sort of a bit of a bit of a mystery to us.


And maybe lastly, as I said, I sort of touched on in the presentation, often you can have a really good idea, and I I very careful to knock things 'cause I think buy now pay later makes a lot of sense. You know, people want the point want the consumer good. But often what happens one of the biggest problems in the stock market is that it might be an idea that's worth $5 or it might be worth $10 a share it might be worth 50 cents. Everyone's got different view but once it hits sort of 50, or 80, or hundred dollars a share. But the actual natural valuation through the full cycle is lower than that. It's hard to make money if you buy too high.


And that's why I use the Cisco example because Cisco, you know, enterprise software, a global company always well managed a high quality business, as you know, was was trading it was about a 550 billion dollar business in 2000. And today, it's about half that or they're even less than half I think of what it is what it was back then. And it hasn't stopped being a great business in 20 years. But when people drove the share price up to such a high level 20 years ago, it can possibly make us money. But that was that's been the big problem. Maybe it will eventually one day, but you know what, if you were 65 in 2000, and put your money to Cisco, and you're 85 now and you've sort of got half the money you had 20 years ago, you'd be you'd be rubbing your fingers on the table, wondering when that's going to come true again.


So I think the big challenge for Afterpay today is great concept. It's a 25 billion dollar business so it wasn't till trading opened. It's it's a it's bigger than many, many businesses that have been around 100 years and have been very successful and, and it still is yet to make money. You know, so there's a, there's a there's a lot of hurdles to jump through before you can sort of say this has been a great concept that's become a great business eventually. It's not only not as easy as it looks.


Stefan Angelini

Well, they certainly have been rockets recently we know that. Look, the markets down today 2.2%. And that's the ASX 200. That's almost like a diversity approach. We're looking at your portfolio you like to focus on having between 20 and 40 stocks. Now when someone's just starting to build their portfolio in their equities portfolio there might not have that many stocks, but you'll find it as you start trading more and more and buying more and more assets. And if you're focused on that long term approach, your portfolio might become the 20 to 40 stocks believe whether you believe it or not. But I think I love that diversity play.


Diversity is something free markets and when markets they go up and down. You will have some that benefit. You will have some lose, but at least it sort of cushions the blow a little bit, rather than being allocated to one sector. And why I'm why I'm asking this is because I love to talk about asset allocation because people normally get sort of stronghold into one asset class and you spoke about how you're not really loving the tech sector at the moment just because it's a bit overpriced. And how is your portfolio positioned and what sectors you're loving the most? Or are you most exposed to?


James Holt

Yeah, look, I'd say at the moment, we've still you know, as a group and for the, for the company I'm sort of talked about as well, I'd say, overwhelmingly, we we like consumer a lot of consumer names. So you know, consumer discretionary is one of the most important sectors in Australia, we've always tended to find a lot of our good long term companies, you think about a good management, a great brand, a great set of concepts has been turned into reality. So that's pretty well most of our consumer. Most of our portfolio is sort of overweight if you like this is the share market. A little bit in financials but not too much of the banks.


And, and you know, sort of, you know, positions like that we don't tend we don't have it we have and we're not really that big in healthcare. We find you know, CSL again, great business but really with very, very high price, but a handful of names there but not necessarily that. And also we're property trusts tend to be a little bit too expensive for us as well, unlimited cash as well as some aside just in cases one sector that sort of, you know, or one part of the share market that blows up you're not forced into, into selling things you really like and you want to own and you can actually, you know, draw on your cash allocation at that. So I'd say consumers is the start bit a bit of materials exposure as well which is where the miners and the building, those sort of things coming.


Stefan Angelini

Yeah, and obviously not loving property trusts, as you just mentioned at the moment. One thing I did like seeing is that property trust came into this, this downturn with very low debt levels. And you spoke about how you do like, lower debt levels, and that's a lot of a lot of the companies were saying they're trying, you might see a lot of companies trying to raise funds at the moment or you're issuing new shares or and basically what they're trying to do is raise capital to get debt levels down. Sydney airports did it recently and infrastructure infrastructure company raised $2 billion to try and get their their debt lower. I'm pretty sure they feel that allocation because the discount fairly big discount to their existing trading price. Just how important is that low debt level as you're coming into a market downturn or, or an or an uncertain future I could say as caused by COVID-19.


James Holt

Yeah, yeah, exactly. It's sort of, I mean, you can see, I mean, look at look at the sort of road toll businesses, you know, as well, you know, where the debt levels can be really, really high. And normally in a perfect world, that that level of debt might seem fine, because you've got people driving every day to regular annuity stream and so forth. But of course, you take COVID people stop moving. It's always the things you don't expect, you know, you expect maybe there might be another tech downturn at some point, what happens if you have something that stops people coming into a business stops your shopping or stops people moving around in their cars. Because sometimes these things are seen as so secure, companies have been prepared to borrow lots of money to, you know, 20- 25 billion dollars to to have that debt sitting against the expected cash flow from cars traveling every day.


But if suddenly traffic drops by 10 or 20, or 30%, it's a different proposition. So a lot of these utilities, the airports that the road companies have suddenly had to be forced to raise capital at a fairly steep discount to try and, you know, to try and, you know, reduce their debt levels quite a bit, and you still want to do it at the wrong time. Because the more you know, the worse the timing, the more the bigger the discount that shares has to be to attract people to come in. And that's, that's something that obviously sort of companies have to have to consider all the time.



So that's we're always worried about those businesses that we are internal filter, as I said, that debt filter, it's about three times interest cover, you know, that 50% debt to equity or it's about three times interest cover So if you think about, think about a client who's got a mortgage debt, they might earn $1,000 a week, if they're putting more than $333 towards the, their mortgage, they're putting $400 towards their mortgage or $500 towards their mortgage, and they lose their job, you know, where's how they're going to fund that? You know it's the same with companies you know. So those was really high debt levels were more than a third of their earnings go to debt. That seems to be that the the line between companies that are fine, and those companies that that will find themselves in strife.


Stefan Angelini

One of the questions that's come up is a so Crown, obviously bullish on Crown got a good allocation there and you believe it will be a benefit benefit. Once everything's done. In terms of opening up the borders, obviously, you got a pretty big, pretty big team there. And obviously, you've got the ability to invest a lot into Economic Studies. Where do you see economic borders? When when do you? When do you I guess, I guess they will open up or what's your view on borders opening states opening and Crown making some more money.


James Holt

Yeah, yeah, it's it's a really tricky one. Right? I mean, one one good thing, just on that previous comment. Because Crowns balance sheet is so good, because they've got, they have virtually very little debt. And in fact, once they finished selling all their apartments for ground Sydney, they had no debt at all, basically, you know, so that that's a wonderful position to be in plus they get job keeper and other things as well. So there are some companies that can actually afford the shutdown a lot more than others, which is what I was sort of referring to before.


So there's that benefit, and then we don't know exactly when the reopening will occur. But I'd say I would, you know, it's I think there's politics has obviously got a lot to do with it. You know, there's a couple of elections coming up. I think maybe once those elections are out of the way, especially the one in Queensland, which is only next month, you might find that there's greater pragmatism coming after the election, who knows, but I'd say that might be fairly reasonable. And then international borders, I'd say, look, it probably won't be until next year and that's been the case for sometime.


But remember, I think you this can happen very quickly, we may move from a situation where I think when people first go into COVID, they think what, you know, this, this, this, there's no good news here. And then when they get to the bottom, they think well, things are never going to get any better. And then in reality, the things do improve. And then they start to they underestimate how quickly things can improve. And I'll give you one data point there is that you've got a lot of companies, a lot of a lot of countries where the reopening is now occurring. The reopening is now occurring. It's not open it is not occurring as of yet. But it might occur a bit further, quicker than expected because they're already getting community in many cases, so they were discovering more and more about COVID.


One thing in Europe is that for example, maybe half of people can't get COVID you've already had a shocker there through 2020 where maybe 10-15 20% of people who were got COVID that said people thinking it won't be able for 12 months for some of these countries who might be over in two to three months, who knows it might be over Christmas.


So all I'm saying is that the bias is that maybe we're getting further through COVID than people realize, for those that you know, and therefore the market because it always works 3 - 6 - 12 months ahead. Eventually can start to say hang on, this is not something we're going to wait until late 2021 to see run vaccinated maybe the vaccinations won't have to occur in parts of America, or occur in parts of Europe. And and even in Australia, you know, you can we can start to safely revenue's borders because it had COVID most of them added and weekly have further spread from here.


So yeah, it's it's all purely speculative, but maybe that's that's what's something that find is that people always look at the glass half full, then they look at it too empty and they're getting sent away again


Stefan Angelini

Hundred percent. James, look thanks so much for giving your talk today for all you out there that have been listening. Thank you for joining questions. If you're building a portfolio, build a diligent portfolio do your research. Most importantly, if you did listen to what we had to say today, just remember that all the information that we talked about is just general generally nature. And please don't consider it as personal advice. And if you are considering personal advice, go speak to a financial professional.


James want to say thank you again, for giving up your time, some special mentions today, to McDonald Legal for sponsoring today's event. Thank you very much. And for Angel Advisory. I'm a director and financial advisor at Angel advisory so we help build portfolios. And in saying that, that's the end of the show.


Thanks a lot for tuning in. We'll have another one in two weeks time with Watershed talking about more more emerging companies. James, thanks so much again, mate, and everyone out there. Thanks so much for listening.


James Holt

Absolute pleasure. Thank you.


Stefan Angelini

Thanks a lot. Bye, everyone.


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