Property Hub - Investment Insights & Inspiration - Get Invested: Post-pandemic investment implications and opportunities

Episode Date: July 19, 2020

What is the future of investment in a post-pandemic world? Australia’s leading property and equities market veterans Kevin Turner and Chris Tate join us for their regular updates on property and shares, and to share their views on what is likely to happen and what this means for you moving forward. For those of you who haven’t listened to Kevin and Chris’s previous appearances on Get Invested in episodes 7, 47, 102 & 115, let me refresh you on their market leading expertise. Kevin is the longest recognised and trusted independent voice for property investing anywhere and anytime - as the host of the countries most popular shows on all things property realestatetalk.com.au and realty.com.au – if you’re not already listening to the realestatetalk.com.au or watching the very informative realty.com.au videos, then subscribe right now, as Kevin’s hosts the best collection of current property insights from every thought leader across the full spectrum of property all over the country.  Similarly, Chris Tate is arguably Australia’s preeminent expert on all things equities. He’s been a successful trader and investor for over 30 years.  He’s the best selling author of ‘The Art of Trading’ (a must read if you’re going to invest in shares) and he’s the co-creator of the number one trading mentor program in the world, which he and his business partner, Louise Bedford, have been running for the last 20 years. Check it out at www.tradinggame.com.au. And Chris is also a driver of the most popular and longest running share trading podcast in Australia, Talking Trading – so jump on Apple Podcasts or Spotify and have a listen, or subscribe via their website www.talkintrading.com.au. You can even have a listen to my recent two-part interview on talking trading which you can listen to at https://talkingtrading.com.au/know-how-wealth where I share the eight investing success principles of preventative wealth by stealth. Chris Tate is one of the few investors who truly understands what does and what doesn’t work in shares, commodities and foreign exchange across all instruments and every market condition.  And unlike many shares and equities commentators who have a vested interest in selling you something, Chris is completely transparent and objective.   And what I like about both he and Kevin is that they’ve both been around long enough to see it all before and they both call it straight in simple to understand and often humorous language, without the jargon and without the BS.  So if you really want to position yourself to know how to benefit from the emerging opportunities that are coming out of the contagion, you’re going to love the following chats with Kevin Turner and then Chris Tate. Get Invested is the podcast dedicated to time poor professionals who want to work less and live more. Join Bushy Martin, one of Australia’s top 10 property specialists, as he and his influential guests share know-how on the ways investing in property can unlock the life you always dreamed about and secure your financial future. Remember to subscribe on your favourite podcast player, and if you're enjoying the show please leave us a review. Find out more about Get Invested here https://bushymartin.com.au/get-invested-podcast/  Want to connect with Bushy? Get in touch here https://bushymartin.com.au/contact/  This show is produced by Apiro Media - http://apiropodcasts.comSee omnystudio.com/listener for privacy information.

One of the things that occurs with any sort of dramatic event is that people instantly think there'll be a watershed moment when it's over and from that watershed moment henceforth you'll know it's over. Unfortunately things like COVID-19 are not working out that way. We sort of thought it was over but now it's back again and so we've got this terrible low level of anxiety amongst people which is in some ways feeding into some of the world markets. I think the impact of this has been misread by many, many people. Now, I probably stand alone on that, Bushy. I don't know where you stand on that, but I always look for the opportunities,

and I think there are some great opportunities both for buyers and sellers right now. Welcome to the Get Invested podcast, where we share great conversations with experts from all walks of life to uncover their secret know-how on where they invest their time, their skills, and their money, and the benefits that this has created. You see, the truth is that everyone invests. Every minute of every day, we're investing our time, our skills, our energy, and our money in something. Some of us are investing consciously, some unconsciously, sometimes for good, sometimes for bad, sometimes for no impact. Get Invested will help you to start living by design, not by default. I'm going to help you to make it happen, not let it happen.

You'll hear the top tips on how you can live with conscious intent so that you can live more, work less, and leave a living legacy by investing now. Listen to the show to discover the top tips on how to get started, make the most of your investment journey, and ultimately to be living your dream, not someone else's. More episodes can be found on iTunes or at bushymartin.com.au forward slash getinvested. Thanks for listening and now let's get invested. Hi Freedom Fighters. Property prices are going to fall by 30%. The stock market's going to crash. The economy will fall off the fiscal cliff at the end of September. The second wave is going to kill us all. The sky's falling and the world's about to end. I'm sorry, I'm getting a bit carried

away now. These are the horrendous types of headlines that have dominated the news feeds over the last few months as a flow-on from the global COVID-19 response. But are the headlines fact or fiction? What's really happening and why? And what's more likely to happen? Strangely enough, despite all the news gloom and doom, property and share markets are proving to be very resilient and are acting contrary to the economic and employment downturn, as well as what many journalists and sensationalist intrusive commentators are continuing to predict. Why is this? And how do you make sense of it all?

What should and shouldn't you do? Where are the risks and opportunities? Not surprisingly, most of the answers lie in understanding basic human nature. In how we think, feel and behave, both as individuals and as a collective. And in times of shock, stress, uncertainty and rapid change, our perceptions generally speak much louder than reality. now the value of anything is determined by its relative scarcity based on the balance between supply and demand that's fueled by sentiment or how we think let's start by putting things in perspective so we can then trace our likely ongoing thinking responses as a precursor to the

impacts on the economy our communities our lives our livelihoods and how and where we invest now i'm not trying to or intending to underplay things here the reality is that never before has the threat of disease occupied so much of our thinking globally where every single one of us on the planet is affected simultaneously for months now almost every newspaper and tv channel has 24 7 stories about the coronavirus pandemic on its first page radio and tv programs back-to-back coverage and the latest case numbers and death tolls. And depending on who you follow, social media platforms are filled with frightening stats at one extreme, or conspiracy theories and gallows humour at the other. And I've no doubt that COVID-19 has become the most

used word ever, ever in the history of the human race. And it's become synonymous with fear. Barely a minute passes without being mentioned somewhere to continue those constant pinpricks to our anxiety. So it's no surprise that this constant global bombardment can and has resulted in heightened anxiety, stress and worry. But according to psychologists, this constant pervading feeling of threat is also having other more insidious effects on our psyches or how we think. Due to our deeply evolved responses to disease over the millennia, fears of contagion lead us to become more conformist and tribalistic, and less accepting of others and eccentricity. Our moral judgments become harsher and our social attitudes more conservative

when considering issues such as immigration, sexual freedom and equality. Daily reminders of disease are also proving to sway our political affiliations. The recent reports of increased xenophobia, which is the fear of others who are different from ourselves, along with increased racism, are likely signs of all of this, along with much deeper potential social and psychological shifts. Now, our responses to disease need to be understood in the context of our evolution. because before the birth of modern medicine, infectious disease was one of the biggest threats to our survival as a species. In times past before the early 1900s,

anything that reduced the risk of infection in the first place was therefore a distinct survival advantage. For this reason, we've evolved a deeply entrenched set of unconscious psychological responses which the psychologist Mark Scheller has termed our behavioural immune system. which he talks about in a recent blog by David Robson. Apparently, this behavioural immune system acts as a first line of defence to reduce our contact with potential pathogens. Since humans are a social species that evolved to live in big groups,

the behavioural immune system also modified our interactions with people to minimise the spread of the disease, leading to a kind of instinctive social distancing. As a result, our responses can continue to be quite crude, since our ancestors would have no understanding of the specific causes of each disease or the way they were transmitted. In this way, our behavioural immune system

operates on a better safe than sorry logic according to the university in Denmark's Lenne Aro. This means our unconscious protective fear responses are often misplaced and may be triggered by irrelevant information altering our moral decision making and our political opinions on issues that have nothing to do with the current contagion threat.

And according to university experiments, we become more conformist and respectful of convention when we feel the threat of disease. This leads to a tendency for us to follow the herd and for us to be swayed by popularity rather than going against the grain and asserting our own opinion. The ongoing nonsensical raid on the supermarkets for toilet paper is an absolute clear sign of this Or is this just our attempt to clean up the constant stream of verbal diarrhoea being perpetrated by the press?

And when we're worried about illness Apparently we also tend to prefer conventional or traditional individuals While we're less likely to feel an affinity for creative or artistic people Uh oh, looks like I'm in trouble here Apparently any signs of free thinking, even invention and innovation, become less valued when there's the risk of contagion. Under the threat of disease, studies show that we value conformity and obedience over eccentricity or rebellion. We become more respectful of traditional conventions in the face of a contagious outbreak. Apparently it's also why we become more morally vigilant in an outbreak.

Studies have shown that when we fear contagion, we tend to be harsher when judging a breach of loyalty, such as an employee who badmouths his boss or his company, or when we see someone who fails to respect an authority, like judges and the police. These types of incidents do nothing to spread disease in reality, but by flouting convention, these people give a signal that they may break other rules

that are instituted to keep disease at bay. And in addition to making us harsher judges of people within our social sphere, the threat of disease can also lead us to be more distrustful of strangers. The heightened distrust and suspicion also has a tendency to shape our responses to people of different cultural backgrounds. According to university studies, this may arise from our increased fears about non-conformity. In the past, people outside our group may have been less likely to observe the imposed norms that were meant to protect the population from infection.

And so we feared that outsiders would unwittingly or deliberately spread disease. But today, this is likely contributing to the flare-up in prejudice and xenophobia. In a recent article by David Lay in Psychology Today, he reveals that researchers Thornhill and Fincher have found that xenophobia is heavily influenced by the local risk of parasitic infections. In a survey of world values researchers found that people who lived in an area

with a high level of combined parasitic stress which is a measure of the risk of dangerous infectious disease were much more likely to report that they didn't want to live next to someone of a different race or even someone who speaks a different language. and importantly these researchers distinguish ethnocentrism from xenophobia where ethnocentrism is a central focus on the needs of one's own cultural race as opposed to violent or fearful rejection of those who are different countries experiencing food shortages for an example

are more likely to display high levels of ethnocentrism but not xenophobia whereas high levels of intergroup or tribal violence are likely to feed xenophobia. And I find it interesting that apparently xenophobia, based on parasite stress and fear of infectious disease, rests on some inbuilt basic biological principles. Namely, the people who look more like me are more likely to have a similar immune system as I do. Subconsciously, we're wired to interpret that their biology is expected to be somewhat similar to mine when it comes to their exposure to disease. and so if they look healthy they're not likely to be carrying something that will make me sick but we subconsciously feel that someone who looks different than me may have a different

immune system than I do and thus they may expose my family or myself to diseases which my body and immune system can't cope with. And higher levels of xenophobia, tribal conflict and rejection of out-group members are found in parts of the world where there are high levels of infectious disease and exposure to infection. And even in areas with lower levels of disease, xenophobia increases in the face of increased disease and infectious exposure. What's also interesting is that areas of the world with high levels of infectious disease also have more authoritarian in-group forms of government and are much more resistant to democratic form and much more likely to adopt racist and xenophobic governing principles. Hmm, I wonder who springs to mind here.

I don't know about you, but I've suddenly got an image of a really bad red hair comb over with the star-spangled banner playing in the background. What about you? On the flip side, as levels of parasite stress decrease in regions, for instance, through the introduction of antibiotics and increased access to medical care, peace follows. Even at an individual level, researchers have found that people who live in areas with higher infectious disease are less likely to be extroverted and much less likely to be open to new experiences, as both personality traits may be more likely to expose an individual to new, novel persons and diseases. Interestingly, it suggested that none of these are conscious thoughts, but reflect a narrative that characterises evolutionary adaptive

patterns of survival behaviour. Thornhill and Fincher research work suggests that rather than viewing xenophobia as an outpouring of intrinsic racism, selfishness, fear and bigotry, it may help put things into perspective to understand that throughout human history, xenophobia was actually protective and adaptive. It suggests that xenophobia was one way in which groups of humans tried to stay safe in a scary and dangerous world. Hmm, this all sounds interesting, but I don't know about you, but I'm not totally convinced on this. We may acknowledge that xenophobia has been adaptive in the past, but none of this justifies it or racism or any form of judgment in any way shape or form and maybe some of this just is more of our recent and growing tendency

to use our post-justification to explain away our lack of personal responsibility and acceptance along with our increasing tendency to judge and criticize others looking at another perspective professor kreglansky from the department of psychology at the university of maryland in his recent article in the conversation has suggested that the wide-reaching uncertainty induced by the crisis has created a greater need for a sense of safety and security. The combination of uncertainty and danger has fed an intense desire for certainty. Our need for certainty fosters the craving for reliable information, along with the acute desire to dispel the paralyzing ambiguity that's engulfing us.

We long for clarity and guidance and a light at the end of the tunnel. His research on the need for certainty also tells us that under conditions of what he calls diffuse uncertainty, we're drawn as if by a magnet to simplistic solutions and black and white reasoning. It's the time when authoritative, confident direction is much preferred over flexible, laissez-faire guidance. In simple terms, we need to be told what to do. This is no time for complex deliberations. When our need for certainty rises, we also become group-centric, which means we yearn for cohesion and unity.

This means that our level of patriotism is elevated along with our nationalism, the idea that our nation is better at handling the crisis than foreigners have created for us in the first place. And the pandemic has evoked an overriding sense of personal and group fragility and vulnerability. Professor Kroglansky further cites ample research that shows that when our feelings of personal control are under threat, such as infancy, in sickness or in old age, our dependence on others rises. This results in putting social relations at a premium, strengthening our attachment to those closest to us and boosting our appreciation of our close loved ones, family and friends.

In other words, we draw closer to those we know and further away from those we don't. On a slightly different angle, a recent article in the World Economic Forum by Dr Elke van Hoof reveals another study reporting on the long-term effects of SARS quarantine among healthcare workers that found a long-term risk for long-lasting avoidance behaviour. This study shows that even years after being quarantined, some hospital workers still avoid being in close contact with patients by simply not showing up for work. And this is supported with many other examples

ranging from absenteeism in military units after deployment in risk areas, companies that were closed to ground zero in 9-11 and medical professionals in regions that experienced outbreaks of Ebola, SARS and MERS. And this is no great surprise. In times of disease threat lockdown There's the risk of infection, fear of becoming sick or of losing loved ones, as well as the prospect of financial hardship. All these and many more are present and lingering in our current and post-pandemic world,

with the fear flames constantly fuelled by the media. And according to Dr Van Hoof's article, there's already a sharp increase in absenteeism in countries that have experienced lockdown. People are still afraid to catch COVID-19 on the work floor, and avoid work or work from home. So physical withdrawal, isolation and avoidance becomes a natural form of mental and health protection. All of this is revealing that little by little,

the stressful external forces of fear and uncertainty that the pandemic has unleashed, reinforced by forced isolation, stay home and social distancing measures, are exerting a deep internal effect. Little by little, it's changing who we are and how we relate to people and the world. Now, you be your own judge on all of this, but all of this certainly puts a different perspective on some very apparent changes in individual and collective behaviour that

I've been noticing in recent times. Now, I can hear you saying, yeah, this is all really interesting, Bushy, but what the hell's this got to do with getting invested? The answer? Everything. Why? Because changes in how we think, feel and then act are all predictors of the future.

And investing in anything is all about what's going to happen in the future, not what's happened in the past. And to reiterate, while the value of anything is determined by supply and demand, the fuel that drives both of these is sentiment. Our perceptions about things versus the reality, about how we read, interpret and react to situations and how this will affect our future actions.

Regardless, it's worth considering how the coronavirus is influencing our psychological shifts that in turn are affecting our personal reactions and the flow and effect that this may have on the decisions we make around how we live, where we live and how we invest. When we're afraid, as many of us continue to be, we need more facts, not fiction. We need to cut through the overwhelming noise of negativity to reduce ignorance by improving our knowledge

as knowledge leads to understanding which dissipates fear of the unknown. So what does this move to drawing closer to the known and further away from the unknown mean? Between closer association to loved ones at the individual level and closer association to our traditional tribes at the group level. In contrast to the physical isolation and the avoidance from the unknown,

the different and the new. The subtle but significant psychological shift towards physical safety, security and space. How would this shift roll out in the short to medium term in terms of ongoing impacts on our economy, our communities, our lifestyles and how we invest in property and equities markets? How is this shift affecting the psyche and actions of investors and market makers? How has it affected our thinking and actions and how will this impact on how we trade and invest moving forward? What ongoing impact will this have on property and equities markets? And where are the emerging trends? What have we learned? Where are the opportunities and the risks? And what needs to be done to make sure that traders and investors come out of this

financially intact, so that we not only survive, but go on to thrive? To help you answer this myriad of questions, today we're joined again by Australia's leading property and equities market veterans kevin turner and chris tate for their regular updates on both property and shares and to share their views on what's likely to happen and what does this mean to you moving forward for those of you who haven't listened to kevin and chris's previous appearances on get invested in episodes 7 47 102 and 115 let me refresh you on their market leading expertise kevin is the longest recognized and trusted independent voice for property investing anywhere and anytime as the host of the country's most popular shows and all things property

realestatetalk.com.au and realty.com.au if you're not already listening to the realestate.com.au or watching the very informative realty.com.au videos then subscribe to them right now as kevin's hosts the best collection of current property insights from every thought leader across the full spectrum of property all over the country. Similarly, Chris Tate is arguably Australia's preeminent expert on all things equities. He's been a successful trader and an investor now for over 30 years. He's the best-selling author of The Art of Trading, a must-read if you're going to invest in shares. He's the co-creator of the number one trading mentor program in the world with his business partner, Louise Bedford,

which they've been running now for the last 20 years. And you can check this out at tradinggame.com.au. He's also a driver of the most popular and longest running share trading podcast in Australia, Talking Trading. So jump on iTunes or Spotify and have a listen or subscribe via their website, talkingtrading.com.au as their insights and top-notch guests

cover all aspects of investing that are relevant to shares as they are to property and all other investment classes. You can even have a quick listen to my recent two-part interview on Talking Trading, which you can listen to at talkingtrading.com.au forward slash know-how-wealth. That's know-how-wealth. Where I share the eight investing success principles of preventative wealth by stealth.

I really enjoyed the chat with host Caroline Stephen, who really knows how to get the best out of our guests, so I'd love your feedback. Now, Chris Tate is one of the few investors who truly understands what does as well as what doesn't work in shares, commodities and foreign exchange across all instruments and every market condition. And unlike many shares and equities commentators who have a vested interest in selling you something, Chris is completely transparent and objective. And what I like about both Kevin and Chris is that they've both been around long enough to see it all before. and they both call it straight and simple to understand and often humorous language without the jargon and without the BS.

And most importantly, I stress that neither of them is trying to sell you anything because they're both all about education. So their insights are both independent and objective. Kevin and Chris are now our resident and regular Get Invested Property and Share Market Industry experts. So you get to hear their updates on what's happening every few months now here on the podcast. So if you really want to position yourself to know how to benefit from the emerging opportunities that are coming out of the contagion, you're going to absolutely love the following chats with Kevin Turner and then Chris Tate. welcome back freight and fighters now as we all tentatively begin to emerge from the bunkers that we've been hiding in over the last few months it's become increasingly evident that the post

pandemic world has affected our thinking and our actions which will in turn impact on how we live where we live and how we need to invest moving forward so to find out how this may impact on property around the country the best person to discuss this is my favorite regular and get invested, Kevin Turner. Kevin is Australia's trusted voice of real estate. And as he talks to everybody every day, with thought leaders at every level across the full spectrum of property in the country, he's better placed than anyone to sift the wheat from the chaff and to help you to join the dots on the future of what is in store for property. So welcome and let's get invested, Kevin.

G'day, Bushy. How you doing, mate? Always good to have you on the show, mate, and appreciate your time. I know you're a very busy man ah never too busy to talk to you mate that was that was a that was a nice intro i'll have to send you the check i reckon it works both ways mate it works both ways mate uh we're certainly living in some pretty interesting times and and i think like me we both embrace changes as an opportunity rather than the reverse but uh it certainly is uh getting us all to think differently about the future of life as we know it. So I'd sort of like to start by just getting your general insights really on how you see things rolling out in the short to

medium term in terms of the ongoing impacts of the pandemic on investing in our lifestyles, if we can, please, mate. Such a really good question, Bushy. And I have thought a lot about this and you're right you know i've spoken to many many people and you get varying views so it's got to be confused got to be very very confusing for people who you know would listen but i think um and i i just want to catch this in in a correct way bushy because i don't really want to uh understate what many people are going through or the difficult times they're going through right now but i've got to say that um we've seen a resilience coming out in people that I could never even have imagined.

And, in fact, you know, we've, in some ways, there's always good coming out of everything, Bushy, and this is what I'm having difficulty explaining. But there's good coming out of everything, and I think the technology that's emerged through this crisis, particularly in the property industry, has absolutely staggered me. You know, our ability to get much more accurate information, to make investors and property buyers and sellers a lot more aware of what's going on.

I think this has really advanced the profile of investors quite enormously. And I'm really encouraged by the number of young investors who are taking, young people, sorry, who are taking a different stance when they're looking at property. First-time buyers now are not necessarily all buying with their heart, they're getting a great understanding about the principles of property investing. So, I think, you know, short term, I've got to say, I think there's been very little impact, but that's because we've had a tremendous buffer in place. There's been so much support. There's been support from the government to keep people in their homes, basically, not so much in jobs because there have been so many jobs that have

been lost. But schemes like JobKeeper, what the banks have done as well, I think all of these things have created a bit of a buffer. I think we're in for, that's the short term, I think medium term, it's going to be really interesting to watch what happens towards the end of this year when a lot of those buffers come off, when a lot more people are going to be exposed to the real situation. I'm in a little bit of fear about that. I think we need to be prepared for what is going to come. And hopefully there won't be too many people have been lulled into a sense of false security. But I hope that, I really hope that makes sense because I've really struggled with that question. And I don't know that I've got a definitive answer, but that's just how I feel

about it bushy yeah that's a pretty informed view mate and i i think there's a lot of doomsdayers that are talking about you know the the world falling off a cliff at the end of september because uh that's theoretically when a lot of the government support and the stimulus packages sort of tailors out but i i guess i have a different view uh which i'd love your commentary around and that is that you know the the australian government probably better than most governments in the world is very well placed. They've underspent on what they thought they were going to, so there's a fair bit of gunpowder left in the barrel.

And, you know, statements by the Reserve Bank and the Prime Minister and others have been talking about they'll do what it takes. So, you know, I don't see it ending in September. I think there'll be ongoing support for those that are most in need. And given the opportunity we've had to reposition ourselves and whatever, and the work that the bank's done that you've mentioned, I think it might be a softer exercise than what people are predicting.

What do you think? Yeah, and just on that point too, Bushy, I think we can't discount what's happened over the last several decades because if you look at just how strong our banking industry is in Australia, I know we've come into a lot of criticism about how supposedly overpriced property is in Australia. I just think the property market and the banking industry in Australia is very, very mature. You look at some of the overseas countries where they're so highly exposed to debt.

I just think this country is in a really good position to come through COVID, much better than many other countries because of the great economy. We've got Australians, by and large, you know, are quite sensible about their spending. If anything, we're not as – I don't even know what the word is, but we're not as greedy as some other countries or some other people. But I just think we're in a really good position to come through this quite well, Bushy. Yeah, likewise, mate. I totally agree. So if we sort of roll that down into the psyche of property owners, buyers and sellers, what impact do you think it's having on them and how will this sort of then fold out into impacts on property itself as you see it? Well, I think if you look at the market now, I mean, listings are down.

We've heard that. Confidence seems to be really strong. I mean, the auction numbers are certainly up on what they were this time last year. Week after week, we're finding bigger numbers than this time last year. We're finding success rates are still holding quite well. There was some criticism just recently about how success rates are falling. That's not what I'm seeing at all. In fact, I'm seeing really good confidence.

And where we found the lack of confidence was in all the negative press really scaring a lot of sellers who were thinking, well, now's not a good time to be selling. And I think the really smart ones actually seized on the opportunity, whether they realised it at the time or not, but they actually will have really won on that situation because listings are so low, which has actually increased the demand from buyers, which has actually put a lot of pressure on prices. So I think there is really good opportunity. I was disappointed just this morning to read the number of so-called experts around Australia who were saying this is not a good time to be selling your house. That's not the evidence that I'm seeing at all because all of my instincts say when listings are low and when buyer demand is not so much high but normal and maybe reasonable, that is a good time to sell. The last thing you want to do is be in competition with more and more people, which is going to put downward pressure on prices. So, you know, I think the impact of this, you know, has been misread by many, many people. Now, I probably stand alone on that, Bushy.

I don't know where you stand on that, but I always look for the opportunities, and I think there are some great opportunities both for buyers and sellers right now. 100% agree with what you're saying, Matt. And just to give you some quality of the evidence around that, because in our business with KnowHow, we're dealing with buyers every day of the week. And what sort of surprised us almost, and it comes back to the comment you made around the limited supply, there are so few properties on the market that we've had buyers that are paying more than they expected above the range that the seller's agent has put on the property to secure it. So I think you're absolutely right, and it's no rocket science. It's a demand-supply equation where you've got limited supply, but you've still got people that need houses or need rental properties, then that's going to put upward pressure on it.

It's created this ceiling, and I think just another reason why, you know, if you look back through history, the only times that property values are affected is when credit gets squeezed. so when you're really you know choking the supply of access to money then yes you have an impact but this is a this is the recession that we decided to have you know we had the recession we had to have back in the early 90s this is a recession that we've decided to have in response to the pandemic so a very different circumstance with lots of government money supporting it all i'm with you and i as a contrarian but i am a bit of a contrarian and you know quick example of that

I jumped on a plane and went to the States back when the GFC hit and picked up properties at, you know, lifetime low values for that very same reason. And the interesting thing is those same opportunities aren't presenting themselves in the current market because of the fact that the government has been so supportive and the banks as a flow-on from that. So I think it's a very different situation, mate.

Would you agree? Yeah, I totally, mate. And I think you've got to be very careful who you take notice of too because I, once again, also read from what was supposed to have been a fairly reliable source about how the number of properties going to auction are actually being sold at a price that's well below the reserve. Now, I don't know where those figures came from, but I can tell you that's not what I'm hearing. And I talk to a lot of agents as well as consumers, and I can tell you that the experience on the ground is that, in fact, if you're going to be selling your property

before auction you're probably going to get less than if you take it all the way to auction there is evidence to say some of the research out of you know one of the big franchise groups they've come out and said that you know by selling prior to auction there's a likelihood you're going to get nine percent less than what you will if you sell on the day now it takes a lot of guts to go all the way through to auction particularly in a climate like we've got now but the evidence is strong so there you've got two varying views um you know from two supposed at experts. So I think you've just got to, you know, just back yourself in a lot of these decisions and then when you make a decision to do something, stick with it. Don't be swayed because you're

going to hear varying views all the time. Do your homework, make your decision, stick to it, make a plan and stick to it. I 100% agree. And I think that the danger in property is that we treat it as a market. Now, you and I have talked about this before, but there is no property market. every property in every street in every suburb is different from every other one and you know we'd like to keep things simple by lumping it up into into groups but it actually doesn't if you apply those averages it doesn't actually make sense at the individual level and you know if i if i thought that putting a property to auction was the best strategy to sell the property i wouldn't be selling it beforehand because if i've got a good agent a good auctioneer

he's going to make sure that the the buyers that are there on the day are going to be paying as much as they can make them pay to secure that property so yeah that's right yeah no that's that's that's interesting mate and i guess this is the this is the challenge for uh you know anyone that's looking to buy or sell property at the moment is the the confusion that they are hearing because you get getting quite contrasting views depending on who you're listening to which probably leads us into a related subject mate in your view given that level of noise and confusion that's out there where should and shouldn't you be getting your information to make good decisions at the moment well do you mind if i address another thing before we go into that

which may lead us into a bushy i think yeah because i i just wanted to um make a couple of comments because i think the really interesting thing about what we're going through right now is not what we're going through right now where it's leading us to and i i think we've been headed in a direction where we've seen a change in where we're going to live and how we're going to live for quite some time. And if COVID has done anything, it's accelerated the thinking around that. And I think we're going to see, and this will help, you know, hopefully many people make a decision about where they want to invest. But I think we're certainly headed for a change in how we live in that our houses are probably going to become a lot smaller and we're going to have

to live in a lot more density if we decide to live in inner city areas however with technology the way it is and with transportation being so um so advanced now we've got wonderful opportunities to live in some of the regional areas around australia if there's one country in the world that has tremendous expansion capability in the regions, it's this country. And I think we're going to see a lot more diverse housing coming into some of these regional areas, which is going to give a lot more opportunity for investors.

For those who want to live in the city, we're going to have to get used to living more in apartments. I think there's going to be a lot more apartment-style living. It's going to change because of the need to do a lot more green style you know we can become a lot more sustainable about how we live so i i think this has really um expanded those opportunities and brought them on at a much faster pace than what what would have happened if we didn't have um the coronavirus so i know that probably wasn't answering your original question but i just wanted to make that point because i

think that's one of the one of the trends that we're seeing is you know much more diversity in where we live and how we live and a lot more density in a city. Yeah, I totally agree. And I think the challenge in the cities, Kevin, I'll be interested in your thoughts on this as well, is that with a lot more move to remote working and working from home, the need to be in an office building in the CBD five days a week is going to dissipate, and it already has.

That'll put some challenges on commercial real estate and potentially put some challenges on the value of properties in the close sphere to the CBD in preference for stuff that's now a little bit further out and orientated around lifestyle, shopping, et cetera. What's your read on that? On commercial property? Yeah.

Yeah, I share your view. I think a lot of people resisted, a number of people resisted having to work remotely initially but then all of a sudden not only the workers but some of the business owners then realised just how good it was and in some cases productivity, many cases productivity went up, not down. And I think more and more people, well, I've spoken to a number of people, our son in particular who said now that he's working at home,

he can't see himself going back to an office environment So I do wonder what's going to happen with all of the office space. You know, maybe getting back to my earlier point, that's what we're going to see in a lot of the inner city areas is a lot of these commercial spaces turned into more short term or even, you know, smaller space living for people who want to live in a New York style apartment. So we might see a lot of conversion, some of the areas, you know, the older style areas in a city that were converted, you know, warehouse spaces converted into units. Maybe we're going to see a lot more of that occurring as well. Yeah, 100%. And the flip side that you've mentioned as well I think is important to note in that regionalisation and decentralisation that's going to naturally occur. And it has been – I mean, I'm one of those, Kevin.

When I live in a rural property, it's only half an hour from the city, so I can be there when I need to if I want to. But we own and operate and run our business totally remotely and do it for lifestyle. I think some of those regional hubs that have the right sort of transport and the technology connections are really well placed to take advantage of it and will be good places potentially to invest moving forward. Your thoughts on that?

I totally agree on this. The point I was making earlier was I think those regional areas are really going to come into their own. You know, I think it's good for people to be able to do that, but it's going to be tremendous for the regions. And, you know, a lot of them have suffered fairly dramatically because people were just not able to travel to them in recent times. But you go to some of these small regional areas now, their whole psyche's changed in how they deal with consumers. They've had to sharpen their game as well. And I think a lot of these regional areas are going to be very, very desirable. We've got some friends who love to just do nothing more than travel around to some of these regional areas, and they've noticed the differences.

You know, there's a lot more, you know, really good commercial activity happening in some of the regional areas that we used to traditionally see in the inner city areas. So, you know, I think it's going to become a whole new landscape. But interesting, though, that I think we've got to start thinking a lot more long-term about our investments, Bushy. You know, gone are the days, I think, when we're actually able to go in. Well, they're not gone totally, but they're a lot more difficult in terms of flipping. I think flipping is going to become a lot harder than it ever was before. So I think we've got to take, for investors, they've got to take much more of a long-term

view as opposed to a short-term view. Mate, you're talking my language there, Kevin. I've been a believer for many years now about the benefits of long-term investing because, you know, you're avoiding all the changeover costs. And as long as you're doing your homework and you are anticipating, you know, what type of property where is going to be in short supply but big demand, then it's actually an easier ride because you can get out of the way and let the property do its work, you know,

so you can get on with what you're good at. but we've been guilty of doing that in the past where you know carol and i have thought well you know and we've done reasonably well out of it bushy but i could tell you i wish i had held on to all the properties that i chose to that we chose to buy do up and then flip because you know i'd be a lot wealthier nowadays if i was if i still had those properties and sometimes that the pain of trying to hold it past four or five years comes back 10 times if you can actually get through that barrier but it's short-term thinking and like the bait is there you can see it if you buy well do it do it up even in this market you can still make good money but by the time you

look at all your costs and getting in and out then you weigh it up and say well short term that may have looked like a good deal but long term it was a shocker you know like if i'd held on to the houses that we owned in Sydney. All those years ago, you know, well, I don't know. I don't know. I don't know where I'd be right now, Bushy. You might be drinking more of my heaters on the beach, I reckon, mate. Yeah, maybe. Maybe. Yeah, it's interesting. I've sort of been looking at property for a long time now, and what I normally suggest to people is that a property cycle in your location, and they're

all out of sync, they all operate differently, normally takes about 15 years to flush its way through. You might get lucky then a bit less than that. You might do it in 10, but on average, if you go in investing in a property thinking you're going to have it for 15 years and there's a fair chance you'll go through a full cycle over that timeframe and therefore really reap the benefits it's the the ones i feel sorry for the ones who go in expecting to make money straight away and you know four or five years in it hasn't and it won't and they throw their hands up and and uh they've also haven't put a good team around them so they're they're trying to manage a tenant themselves and do the maintenance themselves and so they've they've

created a second job for themselves in the process and then uh get out of it lose money and never go back to property i think uh they're the real losers in the equation but but talking about winners and losers mate then if you sort of to summarize that situation in terms of of the types of properties and where we've sort of touched on it but uh if you were to pull that together what are they mate i you know it's strange enough bushy i don't know that it's changed all that much. I still think you've got to, you know, be very cagey about where you go and it's going to depend on your risk profile, how much of a risk taker you are. You know, as I get older, and we're all getting older, but as I get older, I've just become a lot more risk averse and I think, you

know, would certainly do a lot more homework. It gets back to what you were saying earlier about whose advice do you take? Well, you've got to take your own advice. You know, you've got to listen to what people say, but then you've got to make up your own decisions. You cannot abdicate that responsibility. You might want to delegate some of it to some of the experts, but at the end of the day, you are going to have to make the decisions yourself about where you invest. So where would I invest if I were looking? I'm not looking right now, but if I were, I'd certainly, I'd still be looking for uh house land uh i wouldn't be buying in a city i'd look more out on some of the fringes i still do like um i still do like city um only because it's what i'm used to and i you know i

look at some of the major cap cities and i'll look out on some of the um the outer suburbs and make sure that you always buy um something that's got a bit of a twist to it i know see this is what i'm saying blue blue none of this is none of this is new uh but i don't think there's there is nothing new you know it's just it's the it's the same old same old but quite often we tend to deviate yeah and that's it's so true mate i mean the fundamentals remain the same we just think that because it's a new world then we've got to take a new approach and and i guess the mainstream media to some degree has a bit to answer for there because A lot, a lot to answer, mate.

Let's talk about that because there's some shocking headlines, you know, 30 or 40% falls in property values and all the hoo-ha that goes with it. What's your feeling around all that? Well, mate, you know, we tend to say, oh, the media's doing the wrong job. Unfortunately, the media's made up of people who just think that it's all about the sensational headline and they're being fed these headlines by some people who just want to do nothing more than, you know, get their photograph in the paper or get on television. Many's the time I've, you know, I've been asked to make a comment

about, you know, some outlandish claim that's been made only to try and give it some balance and it never gets any airtime. It's not the balance that people want. It's more about the sensationalism. Now, blame the media for that if you like, but I do think that there are many, many journalists who just simply don't have experience enough to know to cut through what the BS is.

And I think there is a lot of BS that's spread around. So I'm not blaming the media for that. It's what they get fed. Yeah, and it's what people love to lap up. We seem to be attracted to the horror stories and not the good news. Yeah. What is that? I can't work that out.

Bizarre, isn't it? I heard a behavioural economist talk the other day, and he said that we are twice as likely to react to bad news than we are to good news. And he drew it back to our old survival instincts, the old flight or fight routine, where if we're in danger, then all the sensors are attuned and ready to fire. If it's good news, well, it's okay.

We get a bit complacent and we don't worry so much. So it's probably feeding into that, I guess. And you're right, I mean, the media is only a vehicle to translate communications and there's a lot of people lining up to make these rash claims so that they do get a bit of their five seconds of fame. I think the challenge is being able to know what is rubbish and what's not and to avoid the noise and just focus in on the facts rather than the fiction. yeah very hard mate it's extremely hard to know what is you know what you should be taking notice of isn't it i mean i still believe that you've got to make your own decisions and be responsible for that and accept responsibility for it certainly listen to all the things that are going on but have the bs antenna up um so that you you do pick it up because it can be quite confusing

you can even pick up a newspaper and on the left hand side you can see where there's going to be you know a massive property crash someone's talked about a 30 crash in the market and then on the other side you'll see about how well the market's going in certain areas it gets back to the fact that so you at the point you made earlier there is there is no one market there's a whole bunch of different markets and that's really where i think the confusion comes from and that's why you've got to do your homework do your own homework um look property investing is not a part-time game. It's a full-time business. And like anything, you've almost got to go to university to learn it. So, you cannot pick up, you cannot go to one course and learn it all.

You've got to go to, you know, in other words, you can't, if you buy into a program where someone has said, these are the secrets to investing in property, it may work for some people, but it's not going to work for everyone you've got to work out what is your formula now you know what what's going to work for you and what will you stick with but quite often many people will go in and try something for five minutes decide it doesn't work and then go looking for the next big bright shiny toy you've got to take responsibility you've almost got to build your own platform that's made it just so true it's uh as you've picked up so well it's it's matching your own risk uh profile and personality to the opportunities that are that occur at a

certain time at a certain place and and it it does change with time uh so you really do need to bring those three together and and for those that keep following the the secret source uh exercise that the instant gurus uh keep pumping out and you keep chasing those shiny things and going to keep getting into strife but uh but if we if we sort of go around the country briefly just in terms of your views on uh you know the flow-on impacts of the pandemic uh on the the states and regions do you have any any feelings or insights on that that are worth sharing yeah well i would have said to you about you know how how good victoria is looking uh until we got the news recently about you know what's happening down there with the pandemic and i

So, but look, I generally think, yeah, there is, here we go again, Bushy, I'm sorry, but there is no one market. I think if you look long term, Sydney and Melbourne, it's like a roller coaster ride. You've got to be in it for the long term. You can't think short term. I'm taking a very conservative view and I would much rather look at some of the more conservative markets, I wouldn't be looking at Sydney and Melbourne. I probably

wouldn't even be looking at too many of the regions in those states, although some of them are pretty good. I'd look more towards, say, Queensland, where, you know, the market has traditionally grown, albeit very, very moderately compared to the highs and lows of markets like Sydney and Melbourne. Canberra's, just have a look at what's happening in Canberra right now. I mean, they're pretty much isolated from the impacts of COVID because of the employment situation. So there's a good lead for you. You know, where is employment robust? Where is it looking good?

Western Australia, some stage they're going to come out of, you know, the hibernation that it's been in for some time. And I talk to agents over there and they'll say, oh, we're finally starting to see some green shoots. Only a month or two later, they'll be telling you that, well, they weren't quite green shoots. They were probably just a bit of a false start or, you know, maybe there's a kick in a certain part of the market. Yeah. So where would I be looking right now, Bushy? In a roundabout way, I'm saying some of the regional markets are looking pretty good. I'd be looking at Queensland.

I quite like South Australia. I think South Australia's got some good potential. Don't know that I share the view that Tasmania's got a lot more juice left in it. Me either. It's been a good market for some in some areas, but overall I don't share that view. Likewise, it doesn't have the critical mass and it's been in catch-up mode if you actually look at it retrospectively.

You take that long-term view again, and it's sort of catching up to where everywhere else is. So I totally share your view, mate, and it's follow the infrastructure and follow the jobs. That's about as simple as it gets. If you're following where the employment and the money is, that's where the property exercise will benefit. But the old population question is getting the rounds at the moment, mate,

because, you know, effectively we've turned off the tap in shutting the borders down, and there's been a lot of people, again, saying how critical population growth is to property and property values. What's your view on all of that, mate? Yeah, I agree with that. And I think if you look in a world environment, the areas that are considered to be safe

are the areas that I think are going to attract a lot more attention. And I'm talking countries, I'm talking regions, I'm talking states as well. And if you look around, you know, what are the states that have got the most stable government? What are the states that have got really good infrastructure happening? What are the states with fairly good economy? They're the states, I think, that are going to do well

both on, you know, people wanting to live there. You know, what are the desirable locations? Where is it safe? What's the infrastructure like? So I think all of those things are going to add to things like, you know, interstate migration and um and and the economy of each of the states yeah no well said mate to sum up mate your your overview of the the outlook moving forward uh can you give some final thoughts around that yeah i will mate i'm i'm very happy to do that i think you know property

once again has proven to be you know very strong very resilient we've come through some pretty bad times and property seems to always hold on and and i think this is this is going to be exactly the same i i believe if you've got confidence in property and you're a long-term investor then hold on because the one thing i do know mate is that we've all got to live somewhere there's got to be a house there's got to be a roof over your head and while ever that is the case we may be able to do away with a lot of the luxuries in life but you can't do away with you know needing to have a roof over your head and having that security so to me bricks and mortar is where i'll keep my dollars and i think it's you know we may go through some rough patches but i think at

the end of the day it'll always be good enough for me bushy yeah i'm right there with you mate mate always very sage advice mate and uh very impartial and independent that's why i love having you on mate because you do get to see the good the bad and the ugly and you've got this ability to uh see you've got a very good bs indicator mate that you mentioned about before mate uh tell us you're always busy kevin and there's a lot happening a lot of changes you've been through in recent times would you mind sharing with the the audience what's next and you for yourself and re talk etc yeah sure mate um one of the things that um concerned me a bit when you asked me and i'll always be happy to talk to you anytime but you but when you

asked me to come on to show i i really did wonder what i could contribute because i've never put myself out there to be an expert i just i've got a fascination about property and i just love to ask questions about it um and i don't always i don't always understand uh you know what i'm told so my passion is really just picking up a whole lot of information not necessarily making any decisions about what's right and what's wrong. I'll simply put it out there and try and help people with as much information as possible so they can make up their mind. That's a long-winded way, Bushy, of telling you where I'm at right now because one of the things that I struggle with, and I've been doing this sort of media stuff now for close on 20-odd years, I think. It'd be

something like that anyway. And I've just got a passion for the dissemination of information. and i was somewhat concerned um you know from a health point of view a little while ago when i realized that you know we're never here when none of us are here forever so what what's going to happen and i i'd like to think that i can leave a bit of a legacy um because if kevin turner fell off his pouch tomorrow uh what's left uh unfortunately not a lot because there'd be a lot of history there but no one to take it forward so i've really been looking in the last couple of years that there's a long-winded way of giving you an answer to your question i'm sorry bush this is good but but you know so what what do what do i do um anyway i think i've finally

cracked a solution and there's a we've got a new platform which is called realty.com.au Because when I first started about 15 to 20 years ago, I had a vision that if I could talk to real estate agents or the industry and I could talk on another platform to consumers, at some stage, I'd get enough intelligence to be able to bring the two of them together and maybe merge these two areas of information so that it would be helpful to both parties. and so that's why I started Real Estate Talk many, many years ago and I started another program which is called RE Uncut which talks to the industry and those are now the two longest-running podcasts in the country and I'm rather proud of that and I've taken both of them into video

and so the transition has been they're now coming together in realty.com.au, we're talking to agents, we're talking to consumers, all of our shows are going on that platform. We've now got I think 31,000 listings around Australia that we brought onto the platform. We've got about I think close on 3,000 agencies and probably you know I think 12,000, 14,000 real estate agents who are constantly on the platform now and consumers around about 200,000. So we're looking at communicating to them differently. It's not a platform like REA, realestate.com.au or Domain,

even though we've got listings on it. It's more an ecosystem where we're talking to people socially. So it's a social platform. We've got about 400 different Facebook pages around the country where we're talking to consumers in those areas. So we're able to deliver content directly to them that way. So it's a whole new learning game for me. It's, yeah, so that's really what I'm doing. It's a website called realty.com.au, long-winded way of telling you.

No, very good to understand the journey, mate, because what the take-home there is that this is a one place to go, whereas previously if you were a real estate agent, you'd be tapped into RE Uncut. If you're on the other side, it's Real Estate Talk. Well, now there's one central meeting place and then a whole spider web of dissemination of that information through all of those network contacts and whatnot you've got.

So pretty exciting stuff, mate. let's uh yeah we're conscious of both of those audiences they both need to be spoken to or dealt with differently but there is some cross flow of information we've started a new program too called the property show uh which is it sounds like it's all about property but it's all about a particular property so we're looking at um you know delivering content to someone in a particular area about a new listing that's just come on we talk to the agent about it and try and identify for people what's what you know what are the take-homes about that particular area so it's very very granular and uh you know i'm quite enjoying the journey uh it's exciting mate

you're always a busy and a very interesting man kevin and and your wealth of wisdom i just love listening to you uh every week in your own shows but uh again very humbled and thankful that you're happy to spend some time hanging in the chat today thanks it's been great man i really enjoy my time with you thank you good on you mate we'll talk to you again soon thanks kevin thanks buddy Cheers. Welcome back, Fred and Finers. Now, as we tentatively emerge from the bunkers that we've been hiding in over the last few months, it's becoming increasingly evident that the post-pandemic world has affected our thinking and our actions,

which is potentially likely to impact on how we trade and how we invest moving forward. And to find out how this may impact on you and markets generally, The best person that I know to discuss this is our now regular resident here on Get Invested, Chris Tate. And for those of you who know him, Chris is an investing trading veteran of over 35 years, during which time he's seen and traded all types of markets and practically every available instrument. And he's shown many people how to profit from every market condition. So in his normal, irreverent and down-to-earth format, welcome and let's get invested again, Chris. Bushy, how are you?

Yeah, awesome, mate. Always good to have you on the show. And it's, you know, if you believe what we're hearing about on the media, you'd think the world's about to end. But given the sort of interesting and continuously changing times that we're living in, how do you see things continuing to roll out in the short to medium term in terms of its impact on the economy and the markets generally? Well, there's probably a few things to unpack there. Yeah, unfortunately, I think one of the things that occurs with any sort of dramatic event is that people instantly think there'll be a watershed moment when it's over.

And from that watershed moment, henceforth, you'll know it's over. Unfortunately, things like COVID-19 are not working out that way. We sort of thought it was over, but now it's back again. and so we've got this terrible low level of anxiety amongst people which is in some ways feeding into some of the world markets and I say some because the US market has completely ignored it in that wonderful sort of strange way of thinking that Americans have

134,000 dead let's put the share market through the roof because that's just the way it is but there's a caveat in there And the caveat is things like the US market are literally being driven by a tiny handful of stocks. They're being driven by Facebook, Apple, Amazon, Netflix, Google, and that's it. The broader market itself has stalled. Now, within the segment of the broader market, though, over there, there is this new notion of a new round of speculative investors.

All these bored peanuts sitting at home during their version of lockdown have discovered the share market, and it seems to be much more fun than sitting there watching something you've seen 15 times before on Netflix. And so there's a dichotomy in the market. In terms of our market, there's not really been a catalyst to drive us back towards the February high. If you look at most of the stocks in the ASX top 20,

they're all well below their uh february high yeah if you look at the banks all bar cba are half what they were three four years ago yeah but we are seeing some movement and it's very specific it's it's really interesting in that it does seem to be covid specific it is things like Fisher and Paykel. People are staying at home and buying fridges off the internet, apparently. It is Ansell who make rubber gloves and personal protective equipment. It's these new versions of sort of lay-by, such as afterpay and openpay. And within that also, because we're seeing a movement in base metals, we're seeing a movement in some of the mining stocks. So things like Saracen, Evolution, what else have we got?

Fortescue, Mineral Resources and St. Barbara are among the top performing stocks of this year. So there's little pockets of things happening, but they are only little pockets. Yeah, you make a very interesting point. And, you know, people can't go to the races at the moment, so what's the next best thing? Stick it into the stock market.

Yeah, and that's what we've seen. We're seeing particularly what you'd call, to use investment speak, the shitty end of the market. You're seeing a lot of people blowing their JobKeeper allowance. I mean, when we had the baby bonus, people went out and got tattoos, cocaine and prostitutes and a big TV. Now that with the JobKeeper allowance, they've discovered attempting to day trade,

to which I say good luck to that. Good. Very scary, mate. And we all know where that's going to end up. But there's such a small fraction of the overall market. It's tiny. Yeah, a few get their fingers burnt. But, I mean, you're someone who diversifies your trading and across commodities and indices and the foreign exchange

as well as the equities markets. If we look broader across those and given your approach, let's assume you're a long-term investor rather than a short-term trader. What's your feelings on that sort of thing? In terms of one of the things that we need to do is to disconnect the economy from the market because they are different. and they do have a profound disconnect and the mistake people make is they look for economic reasons for something happening there is sometimes a nexus but the nexus is very tenuous

and markets will go up as we have seen particularly in the u.s in the light of a weakening economy a catastrophically weak jobs market leadership by mentally retarded ginger gibbon and 134 000 debt and so there is this disconnect yeah and in terms of what's actually moving particularly for local investors gold is still holding at 1800 yeah but it's holding sideways and that's a frustrating thing because the australian share market is literally almost split in two or it used to be banking and finance mining yeah and the base metals have started to move so zinc lead aluminium have moved copper's been on a wonderful tear now for several months yeah so what people are at what the presumption is if if i was to give a sort of a post-dictive

rationalization for that i would say that what people are perceiving is that in 12 months time the handbrake on the world economy will have been lifted and we will start to return to normal but i don't sometimes wonder whether they're falling into the same trap of believing that the handbrake just comes off and we go to full power once again no without there being some interregnum some recovery some slow grind forward where people go god thank thank god that's over uh i'm still a bit shell-shocked i might sit still for a bit yeah it's not going to be an on-off switch there's no no question on my mind around that and and the the fear and anxiety that permeates the the general populace uh will have ongoing economic effects there's no question

about that because it will affect spending. Oh, without a doubt. Which will have its roll-ons in that regard. The interest in your thoughts, because you're right, what's happening in the US market would appear to be contrary to the connectors, and I agree with you, whether it be equities or property, people love to draw correlations that don't exist

between unemployment and a whole bunch of other indicators that really have no bearing whatsoever because, as you and I know, investment of any degree is built by demand and supply but also by perception. Yes. And I think we're being driven much more by perception than we are by fundamentals. What's your view around that?

Undoubtedly. One of the things that people forget is that there's a wonderful old quote about economists and it goes along the lines of economists have managed to predict nine of the past two recessions and and i believe it was sir harry truman the former u.s president who once wrote in one of his diary entry for god's sake somebody send me a one-handed economist because his economic advisors would also always say to him we think this is going to happen but on the other hand and in his desperate attempt to get some sort of conclusion or statement from them uh he was completely exasperated but the percept the perception is from my market that

there are always pockets of opportunity because COVID doesn't kill every sector of the market if we look at something like Kogan the online shopping facility it's had an extraordinary run this year simply because people have realized that a they're bored b the easiest way to get things is online and so there are these little pockets of things happening but the overall perception is one of anxiety and the unfortunate thing i think for people who are planning who are using this time now to plan for the time when it ends is that a lot of them are making the mistake that 2021 will be a repeat of 2020 not 2018 or 2019 and people have this issue they don't understand that a crisis always ends if we put it into

historical context and all these things only exist within historical context yeah the first world war ended and the market continued spanish flu killed almost 50 million people after the end of the first world war markets still continued and in fact the 1920s was one of the greatest markets in history the second world war ended and markets continued the game continues to play irrespective of your feelings or your anxieties and you have to get used to being uncomfortable and making any sort of large investment decision is an exercise in discomfort. I've just had my backyard renovated and the pool moved

and all sorts of crap done. And before I signed off on it, the work was to begin as COVID broke. I had a fair degree of anxiety about such a large commitment during such an event, but because I'm used to being uncomfortable, It was just simply a matter of going ahead. Yeah. Unfortunately, the only thing we learn from history is we don't learn from history, is the old great quote.

That's basically it. And you're so right, mate. And if we look back through history, though, as you've touched on, in all of those occasions, markets, whether it be equities, whether it be property, have actually been very resilient. And I saw a graph the other day that tracked the performance of property and shares since 1926 when they first started making records in the country. And if you look at the average growth over both of them, they're both over 11%.

And that's the thing. I think people unfortunately presume that their circumstance and mindset is the same as everybody else's. so whilst they're sitting there thinking the world is going to end and the sun's never going to rise again there are people out there who are going yep at present it's crap it's horrible this is a horrible disease that's wreaked in a terrible toll across the world but the planet hasn't been split in two by being hit by an asteroid so come come the first of january 2021 the sun will come up and there's nothing you can do about it and markets be they property or shares or commodities or whatever will go along and do their thing whether you're involved or not your involvement

is meaningless yeah you just have to get yourself mentally to a point where you're prepared to be involved yeah exactly right and what do you say to people who who continue to be glued to the television or the newspaper and and rub their nose in the agony uh yeah what's your thoughts around that mate uh outside of slapping them and telling them to get a grip there is this old thing in programming anybody who's done any computer programming starts off with a very very very simple statement of philosophy garbage in garbage out yeah and the intriguing thing about that is that's a universal philosophy for everything put crap food into your body guess what happens yeah put crap material into your brain guess what happens yeah it should not be a surprise to people

and also given that mainstream media and you don't want to sound like a conspiracy crank or anything like that but if you take let's say six o'clock news the evening news the maximum time allocated to a story is what 45 seconds yeah you're not going to get much nuance and depth in 45 seconds particularly off some sort of young pimply faced dweeb straight out of media studies who doesn't even understand what they're talking about. And so if you're linked to that, if you're stuck in that, and by extension I would say social media as well, if you're stuck in that morass,

then it shouldn't be a surprise that your life and your attitude is the way it is. Spot on. Absolutely spot on. And your thoughts then on where people should be getting their information and probably more importantly than that that goes hand in hand with a systems approach to your investing. I'd love you to touch on that because it's something that you do intuitively and have done for many years and you certainly opened my eyes to that very early in my investing days.

Are you able just to share a little bit of that? So for those that are thinking about getting involved, what their approach should be and where they should be getting their information. Okay. First things first, in terms of information, information should be raw. That is, it should be sort of first principle information. Now, that often sounds very disconcerting for people, but let me put it, say, in property parlance. If you live in a certain area and you see houses going up for sale and being sold very very quickly that's a piece of raw information that's actually telling you something yeah if you see a board go up and a year later the same board is

there or even a different board from a different agent that's telling you something yeah people actually know a lot more about investing in terms of its raw components and then they actually let on because they seem to forget that common sense applies to all forms of investing. It just does. So you need to start getting used to getting your information from raw sources. It sounds intimidating.

It sounds something that's too hard for people. It's not. You need to stop listening to talking heads on business channels, on God knows where, I mean... The post-justification, I don't know about you, mate, but it's like the comedy hour when I see these guys talk about what's happened in the market today, how they draw the links between what's happened

and the justification for it just leaves my head spinning at times. Yeah, what it reminds me of is I had a conversation many, many years ago with a friend of mine who was a criminal barrister and I said to him how do you do what you do and he said look under the law everyone is entitled to a defense and I said yeah but you get up there and there's all this bullshit about he's dropped on his head as a baby and he didn't own a dog and all that and he said well look if I rocked up there and went I got nothing he's an idiot I wouldn't be doing my job and my view is of talking heads is they get up there and they've actually got nothing so they attempt to

backfill and draw these false connections where they don't actually exist and the good thing about or the interesting thing about humans is we see connections and patterns everywhere even where they don't exist and so we look to try and justify something that occurred in the past with something we've thought of now not realizing that might be a complete and utter irrelevancy and the hardest thing for people to come to terms with is the notion that, for example, my market, stock markets might actually just be chaotic, which means there is no reason for anything happening and they just do their thing. And you have to accept that and be on board with that. You can make up all sorts of stories and all sorts of narratives that tell wonderful tales about, you know, the company's

doing this and I chatted to the managing director and we both had lunch at the Savage Club together and he's a really good bloke. But it might just be random chance that things are occurring. And we really struggle with that. But if you default to raw information, then in some ways you begin to manage that and deal with it as it occurs. Yeah, and then you put some trading rules around it

that you've then tested to a point where at least you've got a probability that's going to flop on the side of positivity over time. And that, yeah, that's the word, probability. It is, this is a probability game. And every form of investment is a probability-based game. It doesn't matter what it is. Even people who buy property will sometimes go, crap, that's a dud.

Filled all the rules, still a dud. What the hell? Is there anything we can learn from that? Well, if you followed the rules, then probably not. It's probably just one of those things. And it's the same in investing. If you have followed your rules that says, right, my rule is, let's make it a simple one. I'm only going to invest in stocks that are in the ASX 200 that are valued between, let's say, $5 and $10, which have made a new 52-week high.

There we go. Really easy. Yep. And you can see over time whether that works. And because it's a trend-following methodology, chances are it probably will. Yeah. But it is the methodology that is the important point.

It's a little bit like buying real estate. I know nothing about real estate, but if I was to quickly build a model for buying real estate, it would be, well, using Melbourne as an example, people are aspirational, they move from the other side of the arrow to this side of the arrow, Don't buy anywhere that has a really big police station or a really big Centrelink, and it's within 8km of the CBD.

There we go. And that would be pretty close, mate. And that's what I love about you, is that a lot of people like to jargonise and make trading, investing and property sound way more complex than it is. But the reality is that if you just follow human nature... yeah and that's it it's about as simple as it gets really and and i think the the good news for me and i'd love your thoughts on this as well but uh people like to think that the times we're

going through are unique and you and i are old and scarred enough to know that uh that's not the case it might have a different shape and a color but the fundamentals are still the same the catalytic event is different this time but the impact of the event no different from the gfc no different from the dot-com bust no different from 1987 mid 70s early 60s all the way back to i think what about 1901 yeah there's nothing different markets in all their guises go up and they go down yeah and That's simply the way it is. And the trick is to avoid being absolutely pole-axed when they're going down and to be fully on board when they're going up.

And you don't even have to make any predictions about what date in the future they'll go up. You just have to look around you and go, well, it seems to be going up week after week after week. That's telling me a story. I just have to listen to the story, and that's all I need to do. And so there is nothing new under the sun at all. Look, I'll be blunt, as my usual manner is. If I manage the financial plan of stockbrokers,

we'll try and convince you that it is immensely hard, in fact, too hard for you to do, so you better leave it to me. Well, that's complete and utter rubbish. If you've managed to get up today and put your underpants on first and then your pants and not stick a fork in the toaster, you're more than smart enough to invest in any market I know of. Yeah, exactly the truth. And the scary thing there as well is those very same gentlemen

and professionals that you just spoke about are also keen to make sure you're churning those decisions so that they're collecting their fees on the way through rather than adopt a long-term approach. But we won't go there today because we'll be here for another half an hour, I reckon, Chris. But it's a little bit like the fund manager. Superannuation funds carry on about people who are drawing their super to pay their mortgages. They're not making that statement on the basis of they think it's a poor investment decision. They're making that statement on the basis that they're paid on the amount of funds they have under management.

So if their funds under management drop by 25%, their income drops by 25%. percent yeah they're taught it's the old expression they're talking their book yes that's the self vested interest creeping in again yeah exactly right so bringing that to a close uh the uh any sort of final comments and words of wisdom then uh as you see it in relation to how traders investors need to be approaching uh what we're going through i i think we come back to that point that you made earlier there's nothing new if you've got a methodology or an idea that deals with the fact there is nothing new you've got a system you've got risk control you don't bet the farm on the first thing you see then that's really all you need to take into

account that there's nothing special about what anybody who trades markets does it's not it's not black magic and certainly not rocket science as it's presented it's follow the trend don't bet everything on red and you'll probably be okay yeah yeah and i very calming words in in the in the face of the deluge of negativity that uh people are exposing themselves to i mean i i've just i think i mentioned to you before chris i stopped uh tuning into mainstream media event any format about 20 years ago uh it's it's just not good for your mental health no no it's the old story if you swim in a septic tank you're gonna gonna get a mouthful of poo it's about as simple as that yeah without a doubt so uh mate uh always love your words of wisdom uh very calming

voice in the in the storm of mediocrity that we are swimming in at the moment uh looking forward to getting you on a regular basis to put a voice of common sense back into people's investment decisions. So I appreciate you coming on again today, mate. Thank you. Thanks, Chris. Well, Freedom Fighters, how good was that? To get a summary of all this investment gold in the show notes,

just email me on hello at khgroup.com.au. That's H-E-L-L-O at khgroup.com.au or check us out at www.bushymartin.com.au forward slash GetInvested. I look forward to joining you next week for another episode of the GetInvested podcast. So thanks for listening. And as always, dream as if you live forever

and live as if you die tomorrow. Thank you.