July 28, 2026 • 34 mins
Inflation highs, SpaceX selloffs and IPO rumours. Welcome to our first market update for the new financial year, where Victoria and Bec take a closer look at inflation, its impact on the stock market and what predictions we might have for FY27.
If you feel a little overwhelmed by it all, we’ll be breaking down what various market indicators mean for your money, plus what to keep an eye on in the months to come. Tune in to hear how some of the more popular ETFs have performed as of June, and why the Great SpaceX Selloff might be a test run for more trillion-dollar launches to come.
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Acknowledgement of Country By Nartarsha Bamblett (nartarshabamblett.com.au)
The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 4451289.
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Speaker 1 (00:00):
She's on the Money. She's on the Money. My name's
Tatasha Bamblet.
Speaker 2 (00:11):
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acknowledge country. Hello, beautiful friends, we gather on the lands
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Speaker 1 (00:32):
Hello, and welcome to She's on the Money, the podcast
where we discuss all of the issues concerning your wealth
goals so that you can feel more in control of
your financial future. I'm Victoria Devine, and this week we're
taking a closer look at the market, from the economy
to inflation, to its impact on the stock market, and
what predictions we might have for the twenty twenty seven
financial year. If you're feeling a little bit overwhelmed by
(00:55):
it all, we'll be breaking down what various market indicators
mean and how it might actually affect different sectors of
your finances, from wages and employment to your share portfolio.
Joining me today on the deep dive couch is the
voice of the people, Miss Becsi ed Beck. How are you? Oh?
Speaker 3 (01:14):
Very well, I'm very excited to learn about tax and whatever.
We're not learning about tax, we're learning about the market
by end of financial year.
Speaker 1 (01:24):
Yeah, okay, I did mention the end of financial that's it. Yeah,
you did clock in on that. I got humbled. I'm
so sorry, and I took the helm today. I did
the intro because I feel like I'm navigating this.
Speaker 3 (01:36):
Ship, thank god.
Speaker 1 (01:37):
Honestly, today we're doing the market update. And for those
of you who have been playing along at home for
a little while, you know how excited I get to
do a quarterly market update. Now this stuff lives rent
free in my mind. And I'll be leaning on you
Beck a little bit to ask any questions that you
might have along the way, because sometimes I get really
(01:57):
excited talking about inflation, and I think get that some
people in our community are like the stop backtrack, what inflation? Yeah,
that's okay. Whether it's about a particular market indicator like
inflation or a particular share or stock, just interrupt me.
Don't be afraid to ask questions.
Speaker 3 (02:17):
But it's very sweet to watch you.
Speaker 1 (02:18):
Oh it is, thank you, but also it's sweeter when
you get it. Yeah, so fair.
Speaker 3 (02:23):
I know I'm not the only one who has questions,
particularly about specific events that have happened in the shear
market recently, which I know we'll get to later in
the episode, but please tell me what's going on in
the market. We're going to start sit down.
Speaker 1 (02:33):
We're going to start with inflation, okay, and end on
maybe a little bit of an investing takeaway. But before
we get there, before we dive in, and before I
tackle SpaceX, we're going to take a really quick break.
Welcome back to a deep dive episode of She's on
(02:54):
the Money, where we are just about to get into
the new financial year updates, starting with our olgnate inflation amazing.
Speaker 3 (03:00):
Okay, So I guess right off the bat, what actually
is inflation? If you could remind me, it's ups and
downs how to impact finances.
Speaker 1 (03:09):
I literally led you down the garden path earlier. I
was like, oh, well, if you didn't understand inflation, ask
and you're like, hey, I'm going to ask about inflation.
Speaker 3 (03:16):
P let woke up on that.
Speaker 1 (03:17):
Yes, So basically, inflation refers to the purchasing power of
your money, which is important, Beck, because I'm assuming if
you've got money, you want it to purchase as much
as possible. Sure, good deal, good yesterday, Beck, a coffee
might have cost you six bucks, which, like I mean,
don't want to talk about that. But when inflation goes up,
the value of your money goes down, which means that
(03:39):
it might cost you more to purchase the exact same thing.
Speaker 3 (03:43):
Hmm, okay, got you. So coffee might be eight dollars
even though it's the same being, same milk, everything like that.
Speaker 1 (03:49):
Exactly, So instead of six bucks, you're now paying eight bucks,
but you still earn the exact same amount, So your
money isn't stretching as far as it used to. And
these things are track and measured globally with what's called
the consumer Price Index or you might have seen it
referred to as CPI, which measures the percentage change in
(04:11):
an average price of regular goods and services consumed by
each household. So stuff in your standard grocery trolley, like
if you're going to go to Woolies today, put a
whole heap of stuff in your trolley, take it home,
look at the price of that, and then we do
the same thing in twelve months, I can almost guarantee
it's more expensive. You're still getting the same bag of flour.
Speaker 3 (04:29):
Yes, Oh my god, there's nothing more infuriating. But okay,
I got you. So when we say things like there's
a cost of living crisis because things like inflation have increased.
Speaker 1 (04:39):
Yes, and we'll loop back to this, but some things
which might impact inflation, so like, it's not just food,
it's property and transport and material costs like beck, how
much it costs for something to be farmed and then transported,
for example, does also play into it. And at the moment,
(05:00):
I meant, we're feeling the ongoing impacts of the fuel
crisis on inflation. And I think it's one of the
first times that the general public and I say that liberally,
but the general public has been really concerned about oil prices,
like not in the way and I mean, you and
I have been complaining about the cost of a tank
of fuel for forever, but now we're like, oh, what's
(05:20):
going on in the strait of her muz And nobody
had ever heard of that before. But I feel like
the conversation is increasing because we're like, hey, this is
actually a bigger problem than we thought it was. Because
while like and going back to you know, the farming
and the transport of it all, some things are becoming
even more expensive to deliver and transport due to that
(05:40):
fuel crisis. And like, let's say you're a business owner,
especially a small business owner, if things like your energy
bills or your rent arising, then you might have to
increase your product costs or you might not have as
much cash flow. And like, cash flow is important because
you pay your staff with cash flow. You have to
pay taxes with your cash flow, So you might be
(06:02):
cutting your staff's shifts, right because you're like, oh, well,
I can't really increase the cost of my coffee beans.
Maybe I'll just you know, have staff on less. And
obviously that's a role on effect in the economy because
people are then taking homeless money. And like, it just
is cicklical. And this might not be as big a
deal if we're all earning enough to buy things that
(06:25):
we need to maintain a standard of living. But if
prices are generally increasing faster than people's incomes are, then
it becomes even more difficult for us to sustain a
decent quality of life or like be able to buy
the same things that we were buying last year.
Speaker 3 (06:40):
Yes, that is so true. You can really see the
effects of that literally everywhere you go. So for a
word that's thrown around a lot, inflation is a pretty
big deal.
Speaker 1 (06:49):
It's massive, it's huge.
Speaker 3 (06:51):
So where are we at in Australia.
Speaker 1 (06:53):
So Australia's headline inflation was projected at four point eight
percent in June. But our target inflation so we always
want inflation, right, So inflation is indicative of a growing economy. Sure,
I want us to have a growing economy. Yeah, but
we don't want it to be growing so fast that
(07:13):
it's not keeping up with wages. Right, So our target
for inflation was somewhere between two and three percent, but
we were four point eight percent. So, as you can imagine,
this might explain why it's harder for people to get
buy And can you guess how that might impact our
finances back?
Speaker 3 (07:30):
Well, I guess no, actually, because it doesn't affect me.
Speaker 1 (07:33):
No, I'm just like no, I don't even care about money.
Speaker 3 (07:36):
It is hard to really do anything ever, all the time.
So if inflation keeps growing and stuff keeps getting more expensive,
people can't afford to buy stuff businesses cut their shifts
or worse, closed down, which means fewer jobs, less money
to buy basic grow throes, more housing and security.
Speaker 1 (07:53):
It's a big deal.
Speaker 3 (07:53):
So what can we do? How is inflation being managed?
Speaker 1 (07:57):
Just deny it, deny, I deny, yes, Like, just pretend
it's not happening. No, Well, the Reserve Bank of Australia
or the RBA typically raises the cash rate to help
cool inflation. So we've been talking a lot about the
RBA hiking prices and everyone's stressed about that, but there's
actually good reason for it. So when they see inflation
(08:19):
growing too quickly, which is at the moment, they make
the call to raise the interest rate and this impacts
things like property and housing. So despite the speculations around
rate rising happening again, the RBA closed the financial year off,
and oh my goodness, I breathed the biggest sigh of
relief because obviously I run a mortgage breaking business and
(08:40):
any of my clients would have had an increase to
their rates and that's not cute. But they close off
the financial year, hallelujah, with a hold on the cash rates.
So they didn't increase I mean, they didn't decrease it,
which would have been nice, but I didn't expect that
because it was like not financially feasible, to be honest.
But they held the cash rate for point three five percent,
(09:02):
which is still the highest it's been since twenty eleven. Okay,
so it's quite high. So if you pay a mortgage,
or you pay rent, or even if you're invested in
these types of assets in your share portfolio, you're going
to start to see the influence of the cash rate
on your investments. Now, I'm still.
Speaker 3 (09:18):
Relatively news to my own investing journey, as you know,
but can you explain how this might impact some of
the more popular stocks or like ETFs that our listeners
might be invested in.
Speaker 1 (09:28):
Yes, so it could be like twofold, right, So when
the cash rate goes up back, yeah, you're making more
on your savings account, and lots of people are like,
yay money, wein like, my savings are getting more interest. Yeah,
but if you have a mortgage, you're like, what the heck,
I'm paying more and I don't like the sure Okay,
But we need to keep in mind that while things
(09:49):
like inflation are impacting us here in Australia, things like
global inflation, trading, and geopolitics affect overseas markets, and it's
it's not just a cost thing either. Like these things,
they impact our mindset when it comes to investing as well,
or what we call market sentiment if you're a professional
(10:09):
in the industry, and market sentiment is just basically how
comfortable people are to invest, Like people aren't that comfortable
to invest when life is really really expensive, when they
can't afford it, they're selling down their portfolios. But I
got some quick stats that I would like to share
with you please. These are of late June this year
(10:30):
when it comes to really popular ETFs here in Australia.
So across the board we have seen the impact of
the US Iran war from February this year. Like I
don't think that's going to be surprising to anyone, but
specifically we're seeing a disrupted oil supply and elevated global
energy prices which have prompted increased inflation across all three markets,
(10:52):
which has been driving sharp early quarter sell offs. Right,
so people are selling because stuff's just expensive and it's
really stressful. But weirdly enough, the SMP five hundred, which
is the top five hundred companies in the US actually
rows ten percent, like it increased in value by ten
percent since the US Iran War began. And this is
(11:13):
mostly due to the exponential investment in AI infrastructure. So
you've seen it everywhere. Everyone's talking about data warehousing, including
semiconductors and chips, so the things that are helping build AI.
So it's not necessarily just like AI in general, which
is like the operating system, but it's you know, the
things that actually create it in the background, because you
(11:33):
need really really strong powerful computers. I suppose to where's
the AI live beck, Yeah, right, So top performers like Navidia, Micron, Intel,
and Alphabet are all being publicly traded under this umbrella.
In fact, these companies are over indexing when it comes
to earnings per share, like they're killing it. Then the
(11:56):
Nasdaq Composite, which is again top one hundred cupmpanies also
referred to as the Nasdaq one hundred, it closed at
and that this might not mean a lot to you,
but I'll contextualize it twenty six one hundred and sixty
seven points, which is up thirty five percent right year
on year, which honestly is wild, Like to me that
(12:19):
is an insane amount of growth given we're in the
middle of a warback, there's so much going on. We're
in a cost of living crisis. I know it's hard
on us, but it is arguably even harder in the
US where they don't have the same types of infrastructure
and support. But it's still growing, Like, isn't that creep
You would think that maybe logically these things would be
(12:42):
growing at a slower rate because people aren't as excited
about these things because the cost of bread is just
too much. Yes, right, So we're a bit stressed. While
we're seeing like huge waves of investment and growth in AI,
we've also seen a growing culture of layoffs. Like everyone's
being made made redundant. I feel like we all have
a mate who's just been made redundant. And we're seeing
(13:04):
internationally as well, so like tech giants, Oracle, Amazon, Meta, Microsoft,
where there seems to be like a trend and I've
seen it all over TikTok of token maxing. I don't
know if you've seen this, but it's essentially the performative
overuse of AI to signal productivity. So people are like, oh,
(13:27):
we're using heaps of AI, We're placing lots of like
you know, stuff with aio live love or something. I
don't know, but hilariously, and I think this is kind
of funny people. And in Australia, this is happening. They're going,
We're going to replace things with AI. That's great. We've
just you know, budgeted one hundred million dollars for this
(13:48):
AI thing, but they actually haven't taken into consideration the
tokens that are necessary for performing specific tasks. And they're
blowing through their entire hundred million dollar budgets in like
the first three months of the year. But that budget
was meant to last for twelve months, right, Okay. In
a way, I'm like, serves you, right.
Speaker 3 (14:08):
It's kind of satisfying.
Speaker 1 (14:10):
It's kind of satisfying because I'm like, haha, like it
didn't work out the way that you thought it would
replacing humans. Did it work as well for you?
Speaker 3 (14:18):
I guess better?
Speaker 1 (14:19):
Yeah, exactly. And like, personally I love to see it.
I mean, I'm also really interested in AI because I'm like, oh,
how could this benefit our community? But they doesn't seem
to be And this is like a side note, There
doesn't seem to be a lot of conversation about like
adding value, Like how can we take Beck and her
role and use AI to make her uber like performative
(14:40):
or how do we make her super like productive and
like the best version of Beck? Yeah, but instead the
conversation is like, Okay, how do we take Beck's role
and replace it with a robot?
Speaker 3 (14:51):
Yeah?
Speaker 1 (14:52):
Fully like and yeah, anyway, I just have a lot
of conversation that I want to have about that. And
also like if you're using AI at your job and
you're like, you know, turbo charging what you're doing at work,
and you're like, you know, you're managing that whole process
and you're saving like six hours a day, does that
mean you're meant to work another six hours a day
for that employer or do we have to change the
(15:13):
way that things are working right? I don't know. I
just have a lot of questions. Oh yeah, I didn't
think about that anyway. We saw a really huge drop
in assets, like in the asset when it goes back
to like the tokavaxine conversation because ive got derailed. Apologies.
We saw a huge drop in assets in April due
to tariff changes because our old mate Trumpy Trump decided
(15:36):
to tariff everybody, So I feel like anything can change.
Vanguard is a very popular conversation in our community, and
Vanguard shareholders have seen a bit of growth this year
with a general trend of value building over the last
twelve months, which proves our time in the market beats
timing the market philosophy again and again and again. So
(15:57):
I guess here the story was one of stability. People
wanted ongoing dividends during a time of tech uncertainty and
market volatility. Like, volatility is just where the market's going
up and down, and when things are more volatile, it's
happening more often. It's like more rough seas, and when
things are not so volatile, like it's just a general
(16:18):
lap of the ocean. Right, Does that make sense? That
does make sense. So then if we go to like
some more flashy tech ETFs and have a chat about those.
There are a number of flashy tech ETFs that make
up the NASDAQ one hundred or the SMP five hundred,
there was a lot of volatility. Vanguard funds saw a
steady rise, completely outperforming the SMP five hundred. So VDA,
(16:41):
which is Vanguard Energy, saw an increase of sixteen percent duh,
because of like the Iruan US War Pressures VYM, which
is the Vanguard High Dividend Yield ETF, saw an increase
of eight point one percent, and that comprises of like
just to give you some context, that's a little bit
more conservative, and they are more incompaigning companies and AI chips,
(17:08):
which kind of makes sense as to why that's increased.
And then VO which is a very popular one in
our community, which is the Vanguard SMP five hundred ETF,
that was up by four percent. And that even though
that is the Vanguard SMP five hundred, that still beat
the SMP, but not by as much as the other
(17:28):
Vanguard funds, okay, And I think that that was interesting
because lots of US are looking at those ETFs at
the moment. And then closer to home, so we've been
talking about the SMP five hundred which is America closer
to home, the ASX two hundred, which is the Australian
Stock Exchange top two hundred companies. They closed at eighty
(17:49):
eight hundred points, which is actually down zero point nine percent,
which is year to date. So I've just got like
late June statistics in front of me. Over the last
you know year, like since the start of the year,
it's awesome, Like peak growth in about February. That was
energy driven, so like that was energy driven inflation with
(18:12):
three consecutive Like the RBA was increasing the interest rates,
so that obviously then filtered into the general market, and
I reckon the RBA interest rate hikes might have weighed
down overall gains because people are getting a bit stressed
and like we're being a little bit more conservative and
not investing as much. So obviously that's going to mean
that the top two hundred companies in Australia aren't going
(18:35):
to have seen as much growth.
Speaker 3 (18:37):
Got you? Okay, So it sounds like we aren't getting
the same sort of growth here in Australia maybe because
we aren't like Silicon Valley.
Speaker 1 (18:44):
Yeah, Silicon Valley is like big dog. That's like the
tech hub in the US. Like if you're a tech
company and you exist in America and you exist not
in Silicon Valley, they like you look down their nose
at you. Got you. Yeah, it's like the fancy tech hub.
It's like where Apple is, It's where Microsoft is, It's
where all of those big companies like live. Yeah, that
(19:07):
makes sense.
Speaker 3 (19:07):
Too, Okay, So just somebody keep in mind maybe when
you're like considering your next move.
Speaker 1 (19:12):
Yeah, we're definitely not getting the same amount of growth
in Australia as we're seeing internationally. Yeah, and do you
know what that's okay? Because like slow and steady wins
the race Beeck, Like we love consistency, Like I don't
need something super super shiny and super exciting, because every
time you've ever chased a share for its return, most
(19:33):
people will be like it backfired, I e. SpaceX. Anyway,
I think that's where it's so important to talk about
your money values and how they might impact your choice
to invest. Like, for example, you might really love Beck
the idea of space, but you really don't like Elon Musk,
which is so fair absolutely, Like I love space, I
(19:56):
do not love Elon Musk. No, Like, can you imagine
Beck being a trillion and having the ability to change
the entire world? You could eradicate global poverty, yeah, I know,
you could eradicate global hunger, Like, you could do so much,
and you just don't. You just buy a yacht.
Speaker 3 (20:14):
That's crazy.
Speaker 1 (20:16):
That makes me sick, I know anyway, But that's again
another story for another day, Like, I just trillionaires shouldn't exist.
I've written before, as you know, but I don't know
if everyone in our community knows. Every week I write
a column for The Age and the Sydney Morning Herald
and it comes out on a Sunday, and a while
ago it's still one of my most popular articles on
(20:37):
the website. I wrote about how I don't think billionaires
should exist, like nobody needs to be a billionaire. Nobody, nobody. Anyway,
that's a side note. Let's jump back into market recap.
But yeah, I just I've got a lot to say
on Elon Musk. But if you don't like Elon Musk
and you do love the idea of space, maybe something
(20:57):
like a company called rocket Lab in New Zealand is
a company that you might be looking at, or you
could consider because they're trading under the Nazadaq one hundred
now too. Or maybe if you only support AI, if
it's being used to like benefit healthcare and medical research,
so those kind of companies might take your fancy. You
(21:17):
could look at something like that because you might go,
I don't want general employees being replaced, but I also
see a lot of benefit for AI being used in
the healthcare space, because better healthcare, better outcomes, better everything, right,
So it kind of pays to be aware of what's
out there and then find a situation that works for
you personally.
Speaker 3 (21:35):
Just on that. Our community has been asking about this
SpaceX thing, and I always worry because if I say
too fast, it sounds like SpaceX, SpaceX, SpaceX.
Speaker 1 (21:43):
I mean, he probably likes that. So we know that Ela.
Speaker 3 (21:47):
Musk is behind it.
Speaker 1 (21:48):
But what's the what is the I guess like big deal.
Speaker 3 (21:51):
I think I get it, But what Why was it
valued at trillions of dollars and why were so many
people racing to buy it?
Speaker 1 (21:57):
Okay, so SpaceX wasn't I. That happened recently, and an
IPO is an initial public offering, So SpaceX was a
private company and an IPO is the first time it
appears on the general share market so that you and
I can buy it, so the general public has access
to it, right, And it was a big deal because
it was one of the largest, if not the most
(22:19):
valuable offerings in an IPO to date. So they were
looking to offer around five hundred and fifty five million
shares and raise approximately seventy five billion dollars to help
continue to fund their exploration and AI computing partnerships and
plans and all of this. Then once it launched, brought
(22:42):
this company's value up to around to get this one
point seven trillion American dollars. Wow, like that is way
too many zeros to put on this podcast. And so,
for better or for worse, the infamy around I guess
elon musk SpaceX itself like starlink as well as you
(23:03):
know the words the biggest IPO in history, Like this
thing popped off Beck Like everybody was like, are you
in on SpaceX? Have you bought SpaceX? Are you buying SpaceX?
To be very clear, I did not purchase SpaceX. It
didn't align with my values, Like it didn't you know,
it didn't fit with me. But even Gina rian Hart
bought a very big amount of shares in this, Like
(23:25):
she she publicly came out and was like, I bought,
you know, a billion dollars worth of shares. It's crazy,
but she doesn't play. There was so much speculation around
the valuation of this because it was so big and
after looking at the structure of the company, like it
wasn't going to be earning one point seven trillion dollars
anytime soon. Like that was just market optimism. That was
(23:47):
people being excited about being in on the next big
thing and buying something and pushing their value up really quickly.
But that doesn't mean beck it's sustainable. That number was
built on a projected value, Like they aren't profiting from
chips or semiconductors in the same way that a company
like Navidia is. Like Navidia is doing good stuff and
(24:10):
we've talked about it on the show before, but like
what SpaceX did was profit on potential and that's why
it literally push like it has in the last few days.
Slash weeks absolutely plummeted, Like yeah, people got excited, it
went up. There's market optimism. There's market optimism. The smart
(24:32):
investors that got into the IPO at the start and
they were like, I see people, I see they're going
to be really excited about this. I'm going to buy
it at the very beginning, and I'm going to sell
it at the top and watch everybody flounder. Wow, people
started selling off and getting rid of it and these
like the share price absolutely crashed and like I think
it was a big deal even if you didn't buy
(24:54):
because the SpaceX ipo. It shook up the market. People
were looking like people were like everybody had their finger
on the pulse, including me. Just because I wasn't buying
it doesn't mean I wasn't reading everything about it. And
it caused people to sell their chip stocks in order
to make their funds liquids so they could put more
money into SpaceX. So there was like a lot of
movement in the market. I see beck after one week
(25:18):
of trading publicly, we heard of people breaking even with
sell offs happening in the first few days. So not
only did we see the biggest valuation, but we also
saw the biggest instantaneous loss over one trillion dollars in
value of one uset.
Speaker 3 (25:34):
Wow.
Speaker 1 (25:35):
That is meant it was actually crazy and like completely predictable.
But so many people were so optimistic and like if
you think about the people that were purchasing it, like
obviously like Gina Ryan Hart, sure, but the average Joe
blow Yeah was talking about it the pub. They were like,
oh my god, did you see SpaceX? So you're going
to buy SpaceX? That's sick. I bought SpaceX. I put
(25:57):
five hundred bucks in and then someone goes home and
they go, maybe I should put five hundred bucks in?
Speaker 3 (26:01):
Yeah.
Speaker 1 (26:01):
Yeah, is that because you valuated the share? No it
was not.
Speaker 3 (26:06):
So what's that saying? Is that like, like we shouldn't
be scared of every single share that's valued high? Like
does it mean like the bigger they are, the harder
they fall?
Speaker 1 (26:15):
Exactly? And look, we don't know what the long term
picture on this looks like. Sure, but if SpaceX wasn't
aligned to your investing habits and goals before, maybe reassess
the market and the paperwork before leaping in on hype,
like literal hype that's all that's driving this good core exactly.
So we're going to go to a really quick break.
(26:36):
But after the break, we're going to be covering what
we predict might happen over the next few months and
what you might be considering based on this information. Don't
go anywhere, all right, Beck? Knowing what we know now
about the market this year and about recent events, what
things do we see popping up on the horizon.
Speaker 3 (26:57):
So like, is there a kind of stocked harrow maybe
that we can do to figure out our next move?
Speaker 1 (27:04):
Yeah, like you just head down to the South Melbourne market. Yeah,
when under the stairs is going to give you all
the stock tips. No that's not true. She'll just tell
you about your life and it's oddly confronting. But we're
going to continue on with this like AI and tech
story because I think everyone has heard rumors about both
Open AI and Anthropic joining the party late last year.
(27:26):
Ah so for those playing at home, they're the companies
behind your friends Chat, GPT, and Claude, respectively. So following
some series funding rounds and early vetting by the SEC
or the Securities and Exchange Commission, which is generally like
that's generally a sign that a company is gearing up
to be publicly listed, they might join the fold of
(27:47):
companies with a potential trillion dollar valuation, which is kind
of crazy, like these companies feel like they're coming out
of nowhere, but also they're just big, Like that's crazy.
But after what just happened with SpaceX, I guess we'd
strongly recommend a grain of salt. With all the hype
around these valuations, so fair like it just makes sense
(28:11):
to be having maybe a really big shake of salt.
Speaker 3 (28:14):
Yeah, totally, And like people were going crazy for like
a space company, you know that's not in everyday life,
not well known about, like among every single person in
the world. But can you imagine the mania around the
AI assistance.
Speaker 1 (28:26):
Yeah, it's actual madness, Beck, and I can only expect
more madness.
Speaker 3 (28:31):
So how long can our listeners remain cool? Especially if
they're feeling tempted by these headlines in the coming months?
Speaker 1 (28:37):
All right? So disclaimer, this is general advice only you
hold a general advice license. But I cannot and will
not tell you what to do. I can put information
on the table and I can share it with you,
and you can go away and make your own decisions, right, Yeah,
And all I ask, Beck, is for you and our
community to return to your money values and your investment goals.
(28:57):
And that sounds so lame, but like, if they are
long term, will buying this share or SpaceX or anthropic
or chat GPT or a different etf genuinely support your
long term growth? And if you aren't sure, my friend,
what research do you need to do to be really
confident in the decisions that you're making? Or are you
(29:19):
just hearing media and instagrams and TikTok about SpaceX and
making decisions on that? Please stop that? Like, how much
do you actually Beck know about semiconductors and chips, not
a lot, but like easily you could be convinced via
peer pressure to purchase into a share or into an
asset just because your mates are comfortable with it. Absolutely,
(29:40):
but you actually don't know a lot about these things,
and that doesn't make a lot of sense. So who
are the companies behind them? What's their story, what are
they doing? And I know it's so easy to be
swayed by headlines and then analysis paralysis, but truly understanding
what you are really investing in, whether it is a
product or it's a service or sheer potential like SpaceX,
(30:03):
it's gonna help you understand what it means to make
the right choice for you or feel better about the
wrong choices even when things dip.
Speaker 3 (30:11):
Yeah, okay, that's so so fair, so nice. I think
that all sounds quite responsible, and honestly I trust it.
Speaker 1 (30:19):
Go forth, go forth and prosper, but be very cautious
when people are excited about things, Because our mate Warren
Buffett says, be fearful when people are greedy, and greedy
when people are fearful, And I think that that is
a very good place to leave this episode, because when
you are seeing other people in the market be greedy
(30:40):
and buying up lots of stuff. There is the very
real possibility, and I say possibility because it's happened every
single time, that it's being driven by hype not by substance. Yes, Like,
there's actually not a lot of substance to it. And
whilst SpaceX Beck space is cool, Yeah, is so fun,
(31:02):
but they actually haven't done anything and they haven't sold
any product. We are buying that with potential. Yeah, I
cannot tell you how much I do not want to
grow my wealth based on someone's potential, let alone. Elon Musks.
Speaker 3 (31:17):
Yeah, that's like so true.
Speaker 1 (31:19):
I don't I just can you just prove it? Like
I'm just like the type of girl try it and true,
Like I love a bank share and I do so
personally because they just do what they said they were
gonna do. They're like, we're gonna, you know, keep people's
money safe, Well, do some loans, We'll make some profit
and then you know what we'll do, We'll share that
profit with you, Beck, Hell yeah, and you go thank you.
(31:41):
It might be small, but SpaceX, I think people get
really excited about things because of the potentially huge upside,
Like you see SpaceX and go, oh my god, trillions.
I want to be in on that. Yeah, but it's
not reality. Is that it's like gambling. That's why people
in the share market to gambling as opposed to going
(32:03):
Oh yep, a bank share They've existed in Australia as
long as you know, almost Australia has existed, and they've
just done what they said they were going to do.
And I've shared this example on the podcast before and
again it's not a recommendation, but NAB the bank has
never not paid a dividend. Yes, they've never not paid.
There's shareholders, they've never not paid the people that have
(32:24):
invested in them.
Speaker 3 (32:25):
Yeah, yeah, I got SpaceX.
Speaker 1 (32:28):
Dont just promised you all we're going to go to space?
Speaker 3 (32:31):
Yeah?
Speaker 1 (32:32):
You put Katie Perry on a spaceship? What a waste
of money?
Speaker 3 (32:36):
Like random?
Speaker 1 (32:37):
Yeah, she paid for that privilege, Like she got to
go into space at what cost? Like I just there
are so many ethical questions that pop up, So we
need to wrap this up same time next quarter. Hey,
let's do it.
Speaker 3 (32:52):
I really don't know what's gonna happen between now and then,
but I can't wait to see all right.
Speaker 1 (32:56):
Well, thank you, my friends, for joining us for another
She's on the Money market update. We hope that you
feel sufficiently informed, if not more, curious, about your own
investments and the investment world at large. We would love it,
Beck and I would love it because we have like
egos that need to be inflated. If you left us
a review, if you really loved this episode and found
it helpful. Otherwise, please feel free to follow us up
(33:17):
with any questions and make sure that you're subscribed so
you never miss an episode. Take care, my friends, and
we'll catch you on Friday.
Speaker 3 (33:24):
Bye, guys.
Speaker 1 (33:29):
The advice shared on She's on the Money is general
in nature and does not consider your individual circumstances. She's
on the Money exists purely for educational purposes and should
not be relied upon to make an investment or financial decision.
If you do choose to buy a financial product, read.
Speaker 4 (33:45):
The PDS TMD and obtain appropriate financial advice.
Speaker 1 (33:48):
Tailored towards your needs.
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Speaker 2 (00:11):
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Speaker 1 (00:32):
Hello, and welcome to She's on the Money, the podcast
where we discuss all of the issues concerning your wealth
goals so that you can feel more in control of
your financial future. I'm Victoria Devine, and this week we're
taking a closer look at the market, from the economy
to inflation, to its impact on the stock market, and
what predictions we might have for the twenty twenty seven
financial year. If you're feeling a little bit overwhelmed by
(00:55):
it all, we'll be breaking down what various market indicators
mean and how it might actually affect different sectors of
your finances, from wages and employment to your share portfolio.
Joining me today on the deep dive couch is the
voice of the people, Miss Becsi ed Beck. How are you? Oh?
Speaker 3 (01:14):
Very well, I'm very excited to learn about tax and whatever.
We're not learning about tax, we're learning about the market
by end of financial year.
Speaker 1 (01:24):
Yeah, okay, I did mention the end of financial that's it. Yeah,
you did clock in on that. I got humbled. I'm
so sorry, and I took the helm today. I did
the intro because I feel like I'm navigating this.
Speaker 3 (01:36):
Ship, thank god.
Speaker 1 (01:37):
Honestly, today we're doing the market update. And for those
of you who have been playing along at home for
a little while, you know how excited I get to
do a quarterly market update. Now this stuff lives rent
free in my mind. And I'll be leaning on you
Beck a little bit to ask any questions that you
might have along the way, because sometimes I get really
(01:57):
excited talking about inflation, and I think get that some
people in our community are like the stop backtrack, what inflation? Yeah,
that's okay. Whether it's about a particular market indicator like
inflation or a particular share or stock, just interrupt me.
Don't be afraid to ask questions.
Speaker 3 (02:17):
But it's very sweet to watch you.
Speaker 1 (02:18):
Oh it is, thank you, but also it's sweeter when
you get it. Yeah, so fair.
Speaker 3 (02:23):
I know I'm not the only one who has questions,
particularly about specific events that have happened in the shear
market recently, which I know we'll get to later in
the episode, but please tell me what's going on in
the market. We're going to start sit down.
Speaker 1 (02:33):
We're going to start with inflation, okay, and end on
maybe a little bit of an investing takeaway. But before
we get there, before we dive in, and before I
tackle SpaceX, we're going to take a really quick break.
Welcome back to a deep dive episode of She's on
(02:54):
the Money, where we are just about to get into
the new financial year updates, starting with our olgnate inflation amazing.
Speaker 3 (03:00):
Okay, So I guess right off the bat, what actually
is inflation? If you could remind me, it's ups and
downs how to impact finances.
Speaker 1 (03:09):
I literally led you down the garden path earlier. I
was like, oh, well, if you didn't understand inflation, ask
and you're like, hey, I'm going to ask about inflation.
Speaker 3 (03:16):
P let woke up on that.
Speaker 1 (03:17):
Yes, So basically, inflation refers to the purchasing power of
your money, which is important, Beck, because I'm assuming if
you've got money, you want it to purchase as much
as possible. Sure, good deal, good yesterday, Beck, a coffee
might have cost you six bucks, which, like I mean,
don't want to talk about that. But when inflation goes up,
the value of your money goes down, which means that
(03:39):
it might cost you more to purchase the exact same thing.
Speaker 3 (03:43):
Hmm, okay, got you. So coffee might be eight dollars
even though it's the same being, same milk, everything like that.
Speaker 1 (03:49):
Exactly, So instead of six bucks, you're now paying eight bucks,
but you still earn the exact same amount, So your
money isn't stretching as far as it used to. And
these things are track and measured globally with what's called
the consumer Price Index or you might have seen it
referred to as CPI, which measures the percentage change in
(04:11):
an average price of regular goods and services consumed by
each household. So stuff in your standard grocery trolley, like
if you're going to go to Woolies today, put a
whole heap of stuff in your trolley, take it home,
look at the price of that, and then we do
the same thing in twelve months, I can almost guarantee
it's more expensive. You're still getting the same bag of flour.
Speaker 3 (04:29):
Yes, Oh my god, there's nothing more infuriating. But okay,
I got you. So when we say things like there's
a cost of living crisis because things like inflation have increased.
Speaker 1 (04:39):
Yes, and we'll loop back to this, but some things
which might impact inflation, so like, it's not just food,
it's property and transport and material costs like beck, how
much it costs for something to be farmed and then transported,
for example, does also play into it. And at the moment,
(05:00):
I meant, we're feeling the ongoing impacts of the fuel
crisis on inflation. And I think it's one of the
first times that the general public and I say that liberally,
but the general public has been really concerned about oil prices,
like not in the way and I mean, you and
I have been complaining about the cost of a tank
of fuel for forever, but now we're like, oh, what's
(05:20):
going on in the strait of her muz And nobody
had ever heard of that before. But I feel like
the conversation is increasing because we're like, hey, this is
actually a bigger problem than we thought it was. Because
while like and going back to you know, the farming
and the transport of it all, some things are becoming
even more expensive to deliver and transport due to that
(05:40):
fuel crisis. And like, let's say you're a business owner,
especially a small business owner, if things like your energy
bills or your rent arising, then you might have to
increase your product costs or you might not have as
much cash flow. And like, cash flow is important because
you pay your staff with cash flow. You have to
pay taxes with your cash flow, So you might be
(06:02):
cutting your staff's shifts, right because you're like, oh, well,
I can't really increase the cost of my coffee beans.
Maybe I'll just you know, have staff on less. And
obviously that's a role on effect in the economy because
people are then taking homeless money. And like, it just
is cicklical. And this might not be as big a
deal if we're all earning enough to buy things that
(06:25):
we need to maintain a standard of living. But if
prices are generally increasing faster than people's incomes are, then
it becomes even more difficult for us to sustain a
decent quality of life or like be able to buy
the same things that we were buying last year.
Speaker 3 (06:40):
Yes, that is so true. You can really see the
effects of that literally everywhere you go. So for a
word that's thrown around a lot, inflation is a pretty
big deal.
Speaker 1 (06:49):
It's massive, it's huge.
Speaker 3 (06:51):
So where are we at in Australia.
Speaker 1 (06:53):
So Australia's headline inflation was projected at four point eight
percent in June. But our target inflation so we always
want inflation, right, So inflation is indicative of a growing economy. Sure,
I want us to have a growing economy. Yeah, but
we don't want it to be growing so fast that
(07:13):
it's not keeping up with wages. Right, So our target
for inflation was somewhere between two and three percent, but
we were four point eight percent. So, as you can imagine,
this might explain why it's harder for people to get
buy And can you guess how that might impact our
finances back?
Speaker 3 (07:30):
Well, I guess no, actually, because it doesn't affect me.
Speaker 1 (07:33):
No, I'm just like no, I don't even care about money.
Speaker 3 (07:36):
It is hard to really do anything ever, all the time.
So if inflation keeps growing and stuff keeps getting more expensive,
people can't afford to buy stuff businesses cut their shifts
or worse, closed down, which means fewer jobs, less money
to buy basic grow throes, more housing and security.
Speaker 1 (07:53):
It's a big deal.
Speaker 3 (07:53):
So what can we do? How is inflation being managed?
Speaker 1 (07:57):
Just deny it, deny, I deny, yes, Like, just pretend
it's not happening. No, Well, the Reserve Bank of Australia
or the RBA typically raises the cash rate to help
cool inflation. So we've been talking a lot about the
RBA hiking prices and everyone's stressed about that, but there's
actually good reason for it. So when they see inflation
(08:19):
growing too quickly, which is at the moment, they make
the call to raise the interest rate and this impacts
things like property and housing. So despite the speculations around
rate rising happening again, the RBA closed the financial year off,
and oh my goodness, I breathed the biggest sigh of
relief because obviously I run a mortgage breaking business and
(08:40):
any of my clients would have had an increase to
their rates and that's not cute. But they close off
the financial year, hallelujah, with a hold on the cash rates.
So they didn't increase I mean, they didn't decrease it,
which would have been nice, but I didn't expect that
because it was like not financially feasible, to be honest.
But they held the cash rate for point three five percent,
(09:02):
which is still the highest it's been since twenty eleven. Okay,
so it's quite high. So if you pay a mortgage,
or you pay rent, or even if you're invested in
these types of assets in your share portfolio, you're going
to start to see the influence of the cash rate
on your investments. Now, I'm still.
Speaker 3 (09:18):
Relatively news to my own investing journey, as you know,
but can you explain how this might impact some of
the more popular stocks or like ETFs that our listeners
might be invested in.
Speaker 1 (09:28):
Yes, so it could be like twofold, right, So when
the cash rate goes up back, yeah, you're making more
on your savings account, and lots of people are like,
yay money, wein like, my savings are getting more interest. Yeah,
but if you have a mortgage, you're like, what the heck,
I'm paying more and I don't like the sure Okay,
But we need to keep in mind that while things
(09:49):
like inflation are impacting us here in Australia, things like
global inflation, trading, and geopolitics affect overseas markets, and it's
it's not just a cost thing either. Like these things,
they impact our mindset when it comes to investing as well,
or what we call market sentiment if you're a professional
(10:09):
in the industry, and market sentiment is just basically how
comfortable people are to invest, Like people aren't that comfortable
to invest when life is really really expensive, when they
can't afford it, they're selling down their portfolios. But I
got some quick stats that I would like to share
with you please. These are of late June this year
(10:30):
when it comes to really popular ETFs here in Australia.
So across the board we have seen the impact of
the US Iran war from February this year. Like I
don't think that's going to be surprising to anyone, but
specifically we're seeing a disrupted oil supply and elevated global
energy prices which have prompted increased inflation across all three markets,
(10:52):
which has been driving sharp early quarter sell offs. Right,
so people are selling because stuff's just expensive and it's
really stressful. But weirdly enough, the SMP five hundred, which
is the top five hundred companies in the US actually
rows ten percent, like it increased in value by ten
percent since the US Iran War began. And this is
(11:13):
mostly due to the exponential investment in AI infrastructure. So
you've seen it everywhere. Everyone's talking about data warehousing, including
semiconductors and chips, so the things that are helping build AI.
So it's not necessarily just like AI in general, which
is like the operating system, but it's you know, the
things that actually create it in the background, because you
(11:33):
need really really strong powerful computers. I suppose to where's
the AI live beck, Yeah, right, So top performers like Navidia, Micron, Intel,
and Alphabet are all being publicly traded under this umbrella.
In fact, these companies are over indexing when it comes
to earnings per share, like they're killing it. Then the
(11:56):
Nasdaq Composite, which is again top one hundred cupmpanies also
referred to as the Nasdaq one hundred, it closed at
and that this might not mean a lot to you,
but I'll contextualize it twenty six one hundred and sixty
seven points, which is up thirty five percent right year
on year, which honestly is wild, Like to me that
(12:19):
is an insane amount of growth given we're in the
middle of a warback, there's so much going on. We're
in a cost of living crisis. I know it's hard
on us, but it is arguably even harder in the
US where they don't have the same types of infrastructure
and support. But it's still growing, Like, isn't that creep
You would think that maybe logically these things would be
(12:42):
growing at a slower rate because people aren't as excited
about these things because the cost of bread is just
too much. Yes, right, So we're a bit stressed. While
we're seeing like huge waves of investment and growth in AI,
we've also seen a growing culture of layoffs. Like everyone's
being made made redundant. I feel like we all have
a mate who's just been made redundant. And we're seeing
(13:04):
internationally as well, so like tech giants, Oracle, Amazon, Meta, Microsoft,
where there seems to be like a trend and I've
seen it all over TikTok of token maxing. I don't
know if you've seen this, but it's essentially the performative
overuse of AI to signal productivity. So people are like, oh,
(13:27):
we're using heaps of AI, We're placing lots of like
you know, stuff with aio live love or something. I
don't know, but hilariously, and I think this is kind
of funny people. And in Australia, this is happening. They're going,
We're going to replace things with AI. That's great. We've
just you know, budgeted one hundred million dollars for this
(13:48):
AI thing, but they actually haven't taken into consideration the
tokens that are necessary for performing specific tasks. And they're
blowing through their entire hundred million dollar budgets in like
the first three months of the year. But that budget
was meant to last for twelve months, right, Okay. In
a way, I'm like, serves you, right.
Speaker 3 (14:08):
It's kind of satisfying.
Speaker 1 (14:10):
It's kind of satisfying because I'm like, haha, like it
didn't work out the way that you thought it would
replacing humans. Did it work as well for you?
Speaker 3 (14:18):
I guess better?
Speaker 1 (14:19):
Yeah, exactly. And like, personally I love to see it.
I mean, I'm also really interested in AI because I'm like, oh,
how could this benefit our community? But they doesn't seem
to be And this is like a side note, There
doesn't seem to be a lot of conversation about like
adding value, Like how can we take Beck and her
role and use AI to make her uber like performative
(14:40):
or how do we make her super like productive and
like the best version of Beck? Yeah, but instead the
conversation is like, Okay, how do we take Beck's role
and replace it with a robot?
Speaker 3 (14:51):
Yeah?
Speaker 1 (14:52):
Fully like and yeah, anyway, I just have a lot
of conversation that I want to have about that. And
also like if you're using AI at your job and
you're like, you know, turbo charging what you're doing at work,
and you're like, you know, you're managing that whole process
and you're saving like six hours a day, does that
mean you're meant to work another six hours a day
for that employer or do we have to change the
(15:13):
way that things are working right? I don't know. I
just have a lot of questions. Oh yeah, I didn't
think about that anyway. We saw a really huge drop
in assets, like in the asset when it goes back
to like the tokavaxine conversation because ive got derailed. Apologies.
We saw a huge drop in assets in April due
to tariff changes because our old mate Trumpy Trump decided
(15:36):
to tariff everybody, So I feel like anything can change.
Vanguard is a very popular conversation in our community, and
Vanguard shareholders have seen a bit of growth this year
with a general trend of value building over the last
twelve months, which proves our time in the market beats
timing the market philosophy again and again and again. So
(15:57):
I guess here the story was one of stability. People
wanted ongoing dividends during a time of tech uncertainty and
market volatility. Like, volatility is just where the market's going
up and down, and when things are more volatile, it's
happening more often. It's like more rough seas, and when
things are not so volatile, like it's just a general
(16:18):
lap of the ocean. Right, Does that make sense? That
does make sense. So then if we go to like
some more flashy tech ETFs and have a chat about those.
There are a number of flashy tech ETFs that make
up the NASDAQ one hundred or the SMP five hundred,
there was a lot of volatility. Vanguard funds saw a
steady rise, completely outperforming the SMP five hundred. So VDA,
(16:41):
which is Vanguard Energy, saw an increase of sixteen percent duh,
because of like the Iruan US War Pressures VYM, which
is the Vanguard High Dividend Yield ETF, saw an increase
of eight point one percent, and that comprises of like
just to give you some context, that's a little bit
more conservative, and they are more incompaigning companies and AI chips,
(17:08):
which kind of makes sense as to why that's increased.
And then VO which is a very popular one in
our community, which is the Vanguard SMP five hundred ETF,
that was up by four percent. And that even though
that is the Vanguard SMP five hundred, that still beat
the SMP, but not by as much as the other
(17:28):
Vanguard funds, okay, And I think that that was interesting
because lots of US are looking at those ETFs at
the moment. And then closer to home, so we've been
talking about the SMP five hundred which is America closer
to home, the ASX two hundred, which is the Australian
Stock Exchange top two hundred companies. They closed at eighty
(17:49):
eight hundred points, which is actually down zero point nine percent,
which is year to date. So I've just got like
late June statistics in front of me. Over the last
you know year, like since the start of the year,
it's awesome, Like peak growth in about February. That was
energy driven, so like that was energy driven inflation with
(18:12):
three consecutive Like the RBA was increasing the interest rates,
so that obviously then filtered into the general market, and
I reckon the RBA interest rate hikes might have weighed
down overall gains because people are getting a bit stressed
and like we're being a little bit more conservative and
not investing as much. So obviously that's going to mean
that the top two hundred companies in Australia aren't going
(18:35):
to have seen as much growth.
Speaker 3 (18:37):
Got you? Okay, So it sounds like we aren't getting
the same sort of growth here in Australia maybe because
we aren't like Silicon Valley.
Speaker 1 (18:44):
Yeah, Silicon Valley is like big dog. That's like the
tech hub in the US. Like if you're a tech
company and you exist in America and you exist not
in Silicon Valley, they like you look down their nose
at you. Got you. Yeah, it's like the fancy tech hub.
It's like where Apple is, It's where Microsoft is, It's
where all of those big companies like live. Yeah, that
(19:07):
makes sense.
Speaker 3 (19:07):
Too, Okay, So just somebody keep in mind maybe when
you're like considering your next move.
Speaker 1 (19:12):
Yeah, we're definitely not getting the same amount of growth
in Australia as we're seeing internationally. Yeah, and do you
know what that's okay? Because like slow and steady wins
the race Beeck, Like we love consistency, Like I don't
need something super super shiny and super exciting, because every
time you've ever chased a share for its return, most
(19:33):
people will be like it backfired, I e. SpaceX. Anyway,
I think that's where it's so important to talk about
your money values and how they might impact your choice
to invest. Like, for example, you might really love Beck
the idea of space, but you really don't like Elon Musk,
which is so fair absolutely, Like I love space, I
(19:56):
do not love Elon Musk. No, Like, can you imagine
Beck being a trillion and having the ability to change
the entire world? You could eradicate global poverty, yeah, I know,
you could eradicate global hunger, Like, you could do so much,
and you just don't. You just buy a yacht.
Speaker 3 (20:14):
That's crazy.
Speaker 1 (20:16):
That makes me sick, I know anyway, But that's again
another story for another day, Like, I just trillionaires shouldn't exist.
I've written before, as you know, but I don't know
if everyone in our community knows. Every week I write
a column for The Age and the Sydney Morning Herald
and it comes out on a Sunday, and a while
ago it's still one of my most popular articles on
(20:37):
the website. I wrote about how I don't think billionaires
should exist, like nobody needs to be a billionaire. Nobody, nobody. Anyway,
that's a side note. Let's jump back into market recap.
But yeah, I just I've got a lot to say
on Elon Musk. But if you don't like Elon Musk
and you do love the idea of space, maybe something
(20:57):
like a company called rocket Lab in New Zealand is
a company that you might be looking at, or you
could consider because they're trading under the Nazadaq one hundred
now too. Or maybe if you only support AI, if
it's being used to like benefit healthcare and medical research,
so those kind of companies might take your fancy. You
(21:17):
could look at something like that because you might go,
I don't want general employees being replaced, but I also
see a lot of benefit for AI being used in
the healthcare space, because better healthcare, better outcomes, better everything, right,
So it kind of pays to be aware of what's
out there and then find a situation that works for
you personally.
Speaker 3 (21:35):
Just on that. Our community has been asking about this
SpaceX thing, and I always worry because if I say
too fast, it sounds like SpaceX, SpaceX, SpaceX.
Speaker 1 (21:43):
I mean, he probably likes that. So we know that Ela.
Speaker 3 (21:47):
Musk is behind it.
Speaker 1 (21:48):
But what's the what is the I guess like big deal.
Speaker 3 (21:51):
I think I get it, But what Why was it
valued at trillions of dollars and why were so many
people racing to buy it?
Speaker 1 (21:57):
Okay, so SpaceX wasn't I. That happened recently, and an
IPO is an initial public offering, So SpaceX was a
private company and an IPO is the first time it
appears on the general share market so that you and
I can buy it, so the general public has access
to it, right, And it was a big deal because
it was one of the largest, if not the most
(22:19):
valuable offerings in an IPO to date. So they were
looking to offer around five hundred and fifty five million
shares and raise approximately seventy five billion dollars to help
continue to fund their exploration and AI computing partnerships and
plans and all of this. Then once it launched, brought
(22:42):
this company's value up to around to get this one
point seven trillion American dollars. Wow, like that is way
too many zeros to put on this podcast. And so,
for better or for worse, the infamy around I guess
elon musk SpaceX itself like starlink as well as you
(23:03):
know the words the biggest IPO in history, Like this
thing popped off Beck Like everybody was like, are you
in on SpaceX? Have you bought SpaceX? Are you buying SpaceX?
To be very clear, I did not purchase SpaceX. It
didn't align with my values, Like it didn't you know,
it didn't fit with me. But even Gina rian Hart
bought a very big amount of shares in this, Like
(23:25):
she she publicly came out and was like, I bought,
you know, a billion dollars worth of shares. It's crazy,
but she doesn't play. There was so much speculation around
the valuation of this because it was so big and
after looking at the structure of the company, like it
wasn't going to be earning one point seven trillion dollars
anytime soon. Like that was just market optimism. That was
(23:47):
people being excited about being in on the next big
thing and buying something and pushing their value up really quickly.
But that doesn't mean beck it's sustainable. That number was
built on a projected value, Like they aren't profiting from
chips or semiconductors in the same way that a company
like Navidia is. Like Navidia is doing good stuff and
(24:10):
we've talked about it on the show before, but like
what SpaceX did was profit on potential and that's why
it literally push like it has in the last few days.
Slash weeks absolutely plummeted, Like yeah, people got excited, it
went up. There's market optimism. There's market optimism. The smart
(24:32):
investors that got into the IPO at the start and
they were like, I see people, I see they're going
to be really excited about this. I'm going to buy
it at the very beginning, and I'm going to sell
it at the top and watch everybody flounder. Wow, people
started selling off and getting rid of it and these
like the share price absolutely crashed and like I think
it was a big deal even if you didn't buy
(24:54):
because the SpaceX ipo. It shook up the market. People
were looking like people were like everybody had their finger
on the pulse, including me. Just because I wasn't buying
it doesn't mean I wasn't reading everything about it. And
it caused people to sell their chip stocks in order
to make their funds liquids so they could put more
money into SpaceX. So there was like a lot of
movement in the market. I see beck after one week
(25:18):
of trading publicly, we heard of people breaking even with
sell offs happening in the first few days. So not
only did we see the biggest valuation, but we also
saw the biggest instantaneous loss over one trillion dollars in
value of one uset.
Speaker 3 (25:34):
Wow.
Speaker 1 (25:35):
That is meant it was actually crazy and like completely predictable.
But so many people were so optimistic and like if
you think about the people that were purchasing it, like
obviously like Gina Ryan Hart, sure, but the average Joe
blow Yeah was talking about it the pub. They were like,
oh my god, did you see SpaceX? So you're going
to buy SpaceX? That's sick. I bought SpaceX. I put
(25:57):
five hundred bucks in and then someone goes home and
they go, maybe I should put five hundred bucks in?
Speaker 3 (26:01):
Yeah.
Speaker 1 (26:01):
Yeah, is that because you valuated the share? No it
was not.
Speaker 3 (26:06):
So what's that saying? Is that like, like we shouldn't
be scared of every single share that's valued high? Like
does it mean like the bigger they are, the harder
they fall?
Speaker 1 (26:15):
Exactly? And look, we don't know what the long term
picture on this looks like. Sure, but if SpaceX wasn't
aligned to your investing habits and goals before, maybe reassess
the market and the paperwork before leaping in on hype,
like literal hype that's all that's driving this good core exactly.
So we're going to go to a really quick break.
(26:36):
But after the break, we're going to be covering what
we predict might happen over the next few months and
what you might be considering based on this information. Don't
go anywhere, all right, Beck? Knowing what we know now
about the market this year and about recent events, what
things do we see popping up on the horizon.
Speaker 3 (26:57):
So like, is there a kind of stocked harrow maybe
that we can do to figure out our next move?
Speaker 1 (27:04):
Yeah, like you just head down to the South Melbourne market. Yeah,
when under the stairs is going to give you all
the stock tips. No that's not true. She'll just tell
you about your life and it's oddly confronting. But we're
going to continue on with this like AI and tech
story because I think everyone has heard rumors about both
Open AI and Anthropic joining the party late last year.
(27:26):
Ah so for those playing at home, they're the companies
behind your friends Chat, GPT, and Claude, respectively. So following
some series funding rounds and early vetting by the SEC
or the Securities and Exchange Commission, which is generally like
that's generally a sign that a company is gearing up
to be publicly listed, they might join the fold of
(27:47):
companies with a potential trillion dollar valuation, which is kind
of crazy, like these companies feel like they're coming out
of nowhere, but also they're just big, Like that's crazy.
But after what just happened with SpaceX, I guess we'd
strongly recommend a grain of salt. With all the hype
around these valuations, so fair like it just makes sense
(28:11):
to be having maybe a really big shake of salt.
Speaker 3 (28:14):
Yeah, totally, And like people were going crazy for like
a space company, you know that's not in everyday life,
not well known about, like among every single person in
the world. But can you imagine the mania around the
AI assistance.
Speaker 1 (28:26):
Yeah, it's actual madness, Beck, and I can only expect
more madness.
Speaker 3 (28:31):
So how long can our listeners remain cool? Especially if
they're feeling tempted by these headlines in the coming months?
Speaker 1 (28:37):
All right? So disclaimer, this is general advice only you
hold a general advice license. But I cannot and will
not tell you what to do. I can put information
on the table and I can share it with you,
and you can go away and make your own decisions, right, Yeah,
And all I ask, Beck, is for you and our
community to return to your money values and your investment goals.
(28:57):
And that sounds so lame, but like, if they are
long term, will buying this share or SpaceX or anthropic
or chat GPT or a different etf genuinely support your
long term growth? And if you aren't sure, my friend,
what research do you need to do to be really
confident in the decisions that you're making? Or are you
(29:19):
just hearing media and instagrams and TikTok about SpaceX and
making decisions on that? Please stop that? Like, how much
do you actually Beck know about semiconductors and chips, not
a lot, but like easily you could be convinced via
peer pressure to purchase into a share or into an
asset just because your mates are comfortable with it. Absolutely,
(29:40):
but you actually don't know a lot about these things,
and that doesn't make a lot of sense. So who
are the companies behind them? What's their story, what are
they doing? And I know it's so easy to be
swayed by headlines and then analysis paralysis, but truly understanding
what you are really investing in, whether it is a
product or it's a service or sheer potential like SpaceX,
(30:03):
it's gonna help you understand what it means to make
the right choice for you or feel better about the
wrong choices even when things dip.
Speaker 3 (30:11):
Yeah, okay, that's so so fair, so nice. I think
that all sounds quite responsible, and honestly I trust it.
Speaker 1 (30:19):
Go forth, go forth and prosper, but be very cautious
when people are excited about things, Because our mate Warren
Buffett says, be fearful when people are greedy, and greedy
when people are fearful, And I think that that is
a very good place to leave this episode, because when
you are seeing other people in the market be greedy
(30:40):
and buying up lots of stuff. There is the very
real possibility, and I say possibility because it's happened every
single time, that it's being driven by hype not by substance. Yes, Like,
there's actually not a lot of substance to it. And
whilst SpaceX Beck space is cool, Yeah, is so fun,
(31:02):
but they actually haven't done anything and they haven't sold
any product. We are buying that with potential. Yeah, I
cannot tell you how much I do not want to
grow my wealth based on someone's potential, let alone. Elon Musks.
Speaker 3 (31:17):
Yeah, that's like so true.
Speaker 1 (31:19):
I don't I just can you just prove it? Like
I'm just like the type of girl try it and true,
Like I love a bank share and I do so
personally because they just do what they said they were
gonna do. They're like, we're gonna, you know, keep people's
money safe, Well, do some loans, We'll make some profit
and then you know what we'll do, We'll share that
profit with you, Beck, Hell yeah, and you go thank you.
(31:41):
It might be small, but SpaceX, I think people get
really excited about things because of the potentially huge upside,
Like you see SpaceX and go, oh my god, trillions.
I want to be in on that. Yeah, but it's
not reality. Is that it's like gambling. That's why people
in the share market to gambling as opposed to going
(32:03):
Oh yep, a bank share They've existed in Australia as
long as you know, almost Australia has existed, and they've
just done what they said they were going to do.
And I've shared this example on the podcast before and
again it's not a recommendation, but NAB the bank has
never not paid a dividend. Yes, they've never not paid.
There's shareholders, they've never not paid the people that have
(32:24):
invested in them.
Speaker 3 (32:25):
Yeah, yeah, I got SpaceX.
Speaker 1 (32:28):
Dont just promised you all we're going to go to space?
Speaker 3 (32:31):
Yeah?
Speaker 1 (32:32):
You put Katie Perry on a spaceship? What a waste
of money?
Speaker 3 (32:36):
Like random?
Speaker 1 (32:37):
Yeah, she paid for that privilege, Like she got to
go into space at what cost? Like I just there
are so many ethical questions that pop up, So we
need to wrap this up same time next quarter. Hey,
let's do it.
Speaker 3 (32:52):
I really don't know what's gonna happen between now and then,
but I can't wait to see all right.
Speaker 1 (32:56):
Well, thank you, my friends, for joining us for another
She's on the Money market update. We hope that you
feel sufficiently informed, if not more, curious, about your own
investments and the investment world at large. We would love it,
Beck and I would love it because we have like
egos that need to be inflated. If you left us
a review, if you really loved this episode and found
it helpful. Otherwise, please feel free to follow us up
(33:17):
with any questions and make sure that you're subscribed so
you never miss an episode. Take care, my friends, and
we'll catch you on Friday.
Speaker 3 (33:24):
Bye, guys.
Speaker 1 (33:29):
The advice shared on She's on the Money is general
in nature and does not consider your individual circumstances. She's
on the Money exists purely for educational purposes and should
not be relied upon to make an investment or financial decision.
If you do choose to buy a financial product, read.
Speaker 4 (33:45):
The PDS TMD and obtain appropriate financial advice.
Speaker 1 (33:48):
Tailored towards your needs.
Speaker 4 (33:50):
Victoria Divine and She's on the Money are authorized representatives
of Money sheper Pty Ltd ABN three two one six
four nine two seven zero eight a f s L
four five one two eight nine,
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