Megatrends Shaping the Next Decade of Investing

This week on the Talking Wealth Podcast, Filip Tortevski and Pedro Banales explore the megatrends shaping the next decade of investing and what has changed. From shifting global dynamics to emerging opportunities, they reveal what investors should be watching now to stay one step ahead over the next 10 years.

• 0:01Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice. Enjoy.

• 0:20Speaker 01

  Welcome to the Talking Wealth podcast. You're on with Phil and Pedro and today we're asking a simple question. If you were starting your investment portfolio today, what would the world look like in 10 years from now? So markets spend far too much time worrying about what happens next week. Will the Fed cut rates? Will inflation rise? What will earnings be this quarter? But history shows that the biggest fortunes are rarely made by predicting the next month. They're made by identifying the biggest trends shaping the next decade. So today, we recognize the rise of smartphones, cloud computing, social media and commerce. And notice that we're not just buying stocks, we're buying

• 1:05Speaker 01

  and investing in structural changes that reshape the global economy. We believe another wave of long-term mega trends is already underway. Some are obvious, some are flying under the radar. So today, we're breaking down the biggest investment themes likely to shape the next decade, and more importantly, what that could mean for investors. So without further ado, good day, Phil.

• 1:27Speaker 02

  Hey, hey, mate. Very, very exciting and interesting. I love doing these ones, going big picture. But I'm gonna have to back, back my, my short-term people here. When we said we're not looking for the next month, you can make a pretty penny, mate, made a pretty penny picking the trade for the next month.

• 1:47Speaker 01

  I agree, I agree.

• 1:49Speaker 02

  That's just the cynic in me, you know, protecting the short-term guys and girls. If you're out there, I've got your back. But yeah, no, let's go big picture.

• 1:59Speaker 01

  Awesome.

• 2:00Speaker 02

  I'll invest for the next 60 years and get the money when I'm in a wheelchair or if I'm in a wheelchair. Not.

• 2:05Speaker 01

  Yeah, exactly. Well, that's the beauty about, about mega trends is like, you know that you've got this huge wave and there's like little waves in between those waves. So you're kind of, you're riding those little ones as it goes along.

• 2:20Speaker 02

  And, and sometimes like if you get in early enough on these mega trends and they blow up quick like semiconductors.

• 2:27Speaker 02

  Like you could make life changing, it could be a life changing situation in a very quick amount of time. Um, and we've seen it, we like, we've seen it with the semiconductors. Let's call it twenty twenty five and twenty twenty six. That takeoff has been bloody insane.

• 2:44Speaker 01

  Korea, two hundred percent in the last couple of months.

• 2:48Speaker 02

  Yeah, man. Yeah.

• 2:49Speaker 01

  The index, it's just unbelievable. Taiwan.

• 2:52Speaker 02

  We were talking about it on, um, you know, on the show on Tuesday about how literally every, every trader in Korea, like leverage is going through the roof, risk is going through the roof because that, that trend is flying. And unfortunately, there's people doing silly things and getting in at the wrong times. But nevertheless, when the opportunity is hot like that, it can, it can be quick. So mega trends aren't always something that you're gonna have to wait ten, twenty, thirty years for. It can happen fast.

• 3:25Speaker 01

  Exactly, exactly. And that's, that's actually one of the trends that we're going to be covering. Because like we mentioned, there's, these are mega trends over the next ten, twenty years. Uh, but they do have ebbs and flows and you need to know when to get in because like we recently saw, it, it, um, the Korean market actually had a quite significant pullback. So if you're getting in at the wrong time, there's no point on, on knowing these mega trends if you're gonna be buying at the highs and, and selling at the lows.

• 3:51Speaker 02

  Yeah.

• 3:51Speaker 01

  Um, so let's, let's first identify what a mega trade trend is. So it's basically a long-term structural change that influences economies, industries and consumer behavior for years, often decades. Unlike short-term market cycles, mega trends tend to persist regardless of recessions, elections or interest rate changes. That's quite interesting. So it's something that basically can't be stopped.

• 4:13Speaker 02

  Bulletproof, yeah.

• 4:15Speaker 01

  It's, yeah, it's bulletproof. Exactly. Uh, so some examples are the internet, smartphones, globalization and cloud computing. So these were mega trends that, you know, it doesn't matter, it could, they could have their ups and downs. I mean, internet itself, we had the, the shock in, in two thousand, the, um, the crash, the dot com crash. But now the internet is like, nobody can, can live without it. So it's um it's a good example of how that mega trend started, but it does have its um its edges and flows.

• 4:46Speaker 02

  Yeah.

• 4:46Speaker 01

  Uh so basically, the world today looks a little bit different than than it does it did ten years ago. In two thousand and sixteen, AI barely existed. EVs were niche, so electric vehicles. Interest rates were near zero, uh same with two thousand and twenty. Globalization was still dominant and geopolitics was relatively stable. But now, AI is driving capital expenditure, supply chains uh uh supply chains are being rebuilt, defend spending is surging, countries are prioritizing energy security, governments are spending aggressively on infrastructure, and global debt is at record levels.

• 5:24Speaker 02

  Um yeah, the world is different and and it's probably gonna get much more different with with the um with where AI takes us. Um I still think we don't know. Um and that's that's the big unknown coming into the next ten years. I think more than more than ever before, because we have this technology, and let's just call it that, but we have this shift in what where we're going. And honestly, nobody really knows how this ends up looking. Like, even to the point of, I remember a few years ago, they were talking to Jensen Huang, uh and the the head of Nvidia, right? Um the chip manufacturer.

• 6:05Speaker 01

  Yeah.

• 6:06Speaker 02

  And they asked him, it was just one of those, you know, panel type discussions, um podcasts, where he was in a really relaxed environment. And they said to him, they go, um, you know, how does this all look? You know, how does this all look three, five years out? And and he just came out, flat out and said, listen, if anybody tells you that they know, we they're lying to you. Nobody knows how this looks. Nobody knows how how uh how evolved AI gets. Nobody knows how it affects the how will it it will affect the economy, how it will affect.

• 6:42Speaker 02

  They're near everything in this world. Um, and because we have this huge unknown right now, uh, and such a game changing input in today's world. I mean, we haven't had something like this since the internet. And I would say the internet is, is not, is nowhere near, was nowhere near as powerful as I, at the time, it was like wall, um, connectivity, globalization, bang, here you go. The whole world's connected now through, you know, through, uh, the cloud. That's huge. Yes, I get that, um, for business and for everything. But, but this is on a whole nother level.

• 7:19Speaker 03

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• 7:44Speaker 01

  Um, yeah, yeah, definitely. It has the ability to change so much. And I, and I listen, listen to, and I read his books, Yuval Noel Harari, I think that, that's his name, if I, if I said it correctly, he authored, um, um, uh, what's it called? Uh, uh, multiple books, uh, Sapiens is, is, is a, is a notable one. So he's coming out and saying that AI, like, you have to watch out. People worry about immigrants, right? But they're not talking about AI immigrants because the AI immigrants, you could have a, a, an AI in another country being formed and created in, in the image of that country. And then suddenly it's just flooding into the internet and there's no borders,

• 8:26Speaker 01

  there's no border, uh, control, there's, there's no kind of, uh, you know, mitigation against that. So of course he highlights many other things that there's no regulation for at the moment. So I think that that's a big one. Regulation hasn't caught up with the advancement in, in technology. So.

• 8:42Speaker 02

  Yeah, I, I also think, I, I think another big one, and you're probably going to cover it, but another big one is for the first time in my life and, and, and probably for a long time.

• 8:54Speaker 02

  The globalization agenda is unwinding to some degree. You know, the US is going on their whole journey of unwinding from China, divorcing from China, if you will, in a nice, slow, as amicable as can be. They're basically breaking up parts of the world and saying, no, hang on, we're going to become manufacturers again. We're going to produce our own. We're going to shore up our own energy supplies. And I'm not even going to get into that discussion of the wars and all that. But there's a very, you know, they've gone to Canada for critical minerals and Australia.

• 9:37Speaker 02

  They're doing things a country would be doing if it's looking to be self-sufficient. That's not the globalization route. The past 20, 10, 20 years, countries were working with each other. We're using each other, most notably China for manufacturing. But that's different.

• 9:55Speaker 01

  Oh, yeah.

• 9:56Speaker 02

  That's different.

• 9:57Speaker 01

  And that is something.

• 9:58Speaker 02

  And that's something we need to, yeah, we need to consider because they're two big things that are very different in my lifetime, anyway, that have never really happened before that I've seen. They've happened before for sure, but funnily enough, the last time that happened was during the 30s.

• 10:17Speaker 01

  Yeah, before the Second World War.

• 10:20Speaker 02

  Yeah.

• 10:21Speaker 01

  Yeah, I heard that there was a lot of nationalism and deglobalization before then. And I'm seeing a lot of nationalism coming into play now. You know, countries may be more kind of a conservative and which is, it's interesting. But then at the same time, we've got that connectivity still with the internet where everybody, you kind of, people from other countries are no longer alien. Like back then in the 30s, you might be able to see, you know, know people from different countries, maybe from black and white TV or maybe from going there. But it's the enemy that you don't know that will make you want to support that war effort even more. But I think.

• 11:03Speaker 01

  Now, because we're kind of like a globalized network, you you you know, people from Japan, like, you know, that that was what what the war was against. It was America, Japan and and and Germany and all that. So I think that there are some differences without getting into too many.

• 11:20Speaker 02

  Yeah, the problem is now with so much information, it's easy to sway opinion from the other way with too much.

• 11:26Speaker 01

  Yeah.

• 11:28Speaker 02

  And the reality is wars aren't going to be fought by humans. They've got drones, they've got, you know, all that type of stuff. So I think now the the the flip side of too much information, you can easily, and what AI is doing in terms of

• 11:44Speaker 02

  putting up fake information. I mean, you know, we we even we even had it happen to us recently at Wealth Within where somebody was pretending to be one of us. And giving out all this saying, join my WhatsApp group and blah, blah, blah. And and

• 12:00Speaker 01

  Hmm.

• 12:01Speaker 02

  Like, imagine seeing an AI video that you think is real, insinuating. You know, you know, something derogatory or or violent tone or really something that would force you to to hate someone or to fight someone.

• 12:16Speaker 01

  Yeah.

• 12:17Speaker 02

  It can be done any second now, and these videos are getting better and better. So I think now it's even more dangerous. Before, maybe you didn't know, but and you got the the, you know, the newspaper telling you what to think here. And up until that point, now with all the connectivity, up until this point, yeah, we've had a lot of a different information flow, which has been awesome, because, you know, we we've probably never been more informed than ever, but at the same time, not all information is good information. So.

• 12:48Speaker 01

  Well, you know, I've I've actually got a good example of that that happened here in Taiwan. So um, this this lady, she ran over a police officer with her motorbike, and unfortunately, the police officer died.

• 12:59Speaker 02

  Oh.

• 13:00Speaker 01

  And there was camera footage of of that lady that ran her over. And then afterwards, when she was getting off the bike, and she had a quick look at her bike and then just kept on walking, right? But somebody created an AI video. Of her actually walking around her motorbike and checking under the tires and and checking the motorbike as if she was more worried about what happened to the motorbike than the person that she hit. And she got so much slack online. Everybody went after her. Uh. And then, you know, they had to come out and say, guys, thi- this is an A I generated video and, you know, could ruin somebody's life.

• 13:37Speaker 02

  Oh, yeah. Oh, mate. Forget about O J Simpson gloves. You could frame people these days with, you know, so much easier. Um. But but anyway, it's, we're probably going off track.

• 13:51Speaker 01

  We are, we are. And look, while we're on the theme of artificial intelligence, that was the first mega trend. And let's just touch on the key points because we do want to kind of frame this in an investment investor type of way. What should investors be looking at? So basically, it's not just software. As everybody knows, there's data centers, chips, networking, uh, you know, enterprise software, uh, robotics, uh, semi concerned, look at semiconductor companies, cloud providers. That's another thing. A lot of people don't don't look at those cloud providers, you know, A W S, Amazon is a big cloud provider itself. Uh, data centers, power generation, uh, which leads on to that next mega trend, number two, which is energy security.

• 14:32Speaker 01

  I think that this one is is huge. And this is one that I I remember talking about uh, a while back, you know, we've done many podcasts on this and and this is huge because you can't have anything without power. Uh, and basically, the countries are now caring about gas, so L N G. Nuclear would mean, you know, meaning uranium, uh, their electricity grids, upgrading electricity grids and all that, uh, and batteries. So look for, look at Russia, look at Middle East, look at China, but also look, I I mean, home as well. Because Australia needs the energy security, but they're kind of the the big players in that energy space.

• 15:12Speaker 01

  And and I know Russia's, uh, at the moment, they're having, I think it was eighty percent of their, um, oil refiners offline, a- and they refine diesel as their main product. So eighty percent is offline.

• 15:26Speaker 02

  Yeah, and I mean, we're, you know, on on that as well, recently we had, or today or yesterday, we had Tesla come out with the with the earnings. Um. And you made a

• 15:35Speaker 01

  Yes.

• 15:36Speaker 02

  You made a good comparison um about, you know, the the A W S for Amazon, which was the cloud infrastructure. Um. That's one of their biggest earners. Um. And if you go, if you go back to right now, uh like I I I put out a piece saying, why you're still looking at Tesla's earnings for? They don't mean anything. If you're pricing, if you're valuing Tesla on their car earnings, you've missed the point because you go back to Amazon twenty twenty tw- two thousand and five to twenty twenty. What were they doing? They were a drop shipping business or a, you know, um e-commerce business, right?

• 16:13Speaker 01

  Yeah.

• 16:13Speaker 02

  But that e-commerce was it was purely there to fund the A W S cloud infrastructure, to fund Prime, to fund all these digital um businesses under the under the surface, which were the the firsts, you know, the the the ones that would change the business. And if you were like Wall Street was valuing Amazon, they had periods where they weren't making that much money. They were pouring it all back into the business. And they were going to earnings a shit, um, you know, and Amazon had a rough time for a little while. Fast forward to Tesla today. Same things going on. Tesla's an A I and and robotics company. It's not a car company.

• 16:48Speaker 01

  Yeah.

• 16:48Speaker 02

  The car sales fuel the the Optimus, the A I, the um

• 16:54Speaker 01

  Yeah.

• 16:54Speaker 02

  the automated uh driving technology.

• 16:57Speaker 01

  All the data for that.

• 16:58Speaker 02

  Hmm. That's what the value of Tesla, that's what you should be valuing Tesla on. Are they going to hit the home run? Are they going to be first? Will competitor get there before them? That's what you're betting on. You're not betting on shitty car sales. The the cars are just to fund all of this. Um. That's why they're irrelevant. That's why the share price keeps going up even in light of of of poor earnings and forecasts of poor quarters of earnings. But anyway, going back to my point about what you're saying, energy security, because of what's going on in Russia and and um Ukraine. I- in Europe, B V car sales have gone through the roof, and that's one of the things Tesla released is that a lot of their sales are coming out of Europe. Um.

• 17:36Speaker 01

  Yeah.

• 17:36Speaker 02

  And on, you know what, to be honest?

• 17:40Speaker 02

  With where we're sitting today, maybe the next, maybe not this year. But if we get three or four more years, I think of, because the world's projected slow growth over the next, you know, medium term, short to medium term, global growth, GDP slowing down. Um, we're sure as hell know productivity is not, uh, not doing too great. We get to a point where we have inflation stickier for longer around the world. Um, and energy, energy costs increase. I think that's an avenue right now that, that is worth exploring over the next three, four, five years. Maybe not a massive mega trend, but E V cars.

• 18:22Speaker 02

  Um, if oil stays higher for, for, for longer, um, you might, might see people going, you know what? I've had enough of this.

• 18:33Speaker 01

  Yep.

• 18:33Speaker 02

  I'm just gonna go, go and, um, go and get an electric car and, and take the risk out of all of this craziness that's happening in the world. So.

• 18:44Speaker 01

  Or it might be mandated by the government. I think there's a few countries in Europe that are saying by a certain year. They tried.

• 18:51Speaker 02

  They tried, yeah.

• 18:52Speaker 01

  Didn't come through.

• 18:53Speaker 02

  I mean, look, if, it could, you, you, you can, anything that you mandate, you can, but they seem to be, like America did it for a little bit and then Trump came in and said, what are you talking about? Get out of here.

• 19:03Speaker 01

  Yeah, get out, yeah. And even gave incentives to, to, to buy big trucks.

• 19:11Speaker 01

  It went completely opposite.

• 19:13Speaker 02

  Yeah. So, you know, it can, every four years it could change, put it that way.

• 19:18Speaker 01

  Yeah, yep.

• 19:20Speaker 02

  Yeah.

• 19:20Speaker 01

  Depends who's in, in, in power. So.

• 19:23Speaker 02

  Who depends, well, depends who. Depends who put them there, the, the oil company or the climate change people.

• 19:29Speaker 01

  Exactly. Right now we're at drill, baby, drill.

• 19:34Speaker 02

  Yeah.

• 19:34Speaker 01

  I'd be looking at, at the Asian countries more, more for the E Vs as well because they're, they're, they've shown a huge adaptation to that. I've been to Korea, um, Japan and Thailand. Uh, you know, notably, and they have a lot of E Vs there. Uh, their, their uptake has been incredible. So.

• 19:53Speaker 02

  I think it's also good for them because you're talking about countries where pollution is high too. China.

• 19:58Speaker 01

  Yeah.

• 19:58Speaker 02

  Air pollution. I mean, it makes sense.

• 20:02Speaker 01

  Yeah, yeah, high density.

• 20:04Speaker 02

  Yeah.

• 20:04Speaker 01

  Sure. Um, all right. So we'll go to our next mega trend, which is deglobalization. And we touched on this before. So basically, you know, for thirty years, companies chased the cheapest labor. Uh, but now, and this is an argument that we've made before, I know, um, and now they're chasing security, reliability, resilience. Uh, so they're moving away from China. They're going into other countries, diversifying the China plus one strategy, going into Vietnam, India, Mexico. Uh, more domestic manufacturing. Um, so what are the investment applications? Well, industrial automation, ports. That's, that's one that not many people talk about, investing in, in, in the ports, uh, infrastructure and logistics.

• 20:49Speaker 02

  Hmm. Oh, yeah. Yep. Um, anytime you, you see that automatically, you start looking industrial sectors. You know, government, government contracts, those types of companies. For sure.

• 21:01Speaker 01

  Yeah.

• 21:01Speaker 02

  I think that, that, and our industrial sectors, actually, I mean, we're not in that conversation in what you said, but our industrial sector has held up pretty good.

• 21:10Speaker 01

  Oof. It has, hasn't it? Yeah, it's been going off.

• 21:13Speaker 02

  Well, we've, we've got, I mean, we're, we're not an America, but I think that's part of the benefit of, of being an Australia in that we're still young. We're still expanding. We're still growing out the, the land. Um, there's so much land available. There's so much, we can, so many more people we can bring in here. To, and, and that's been one of the, uh, I guess, uh, tactics or, or, or ways we've kept Australia. You know, I, I think riding through recessions pretty, pretty smoothly. I mean, anytime we've

• 21:45Speaker 01

  Out of recession, yeah.

• 21:46Speaker 02

  Right? I mean, at any time, we, we, we could have been a lot worse had it not been for being able to stimulate through, through migration. Um, so

• 21:55Speaker 01

  Yeah. Because our productivity isn't there, unfortunately.

• 21:59Speaker 02

  Yeah.

• 22:00Speaker 01

  Uh, but anyway, that's a, that's a whole different conversation and

• 22:05Speaker 02

  What about Barnaby Joyce?

• 22:06Speaker 01

  Some good friends. Oh, yelling at his dog.

• 22:12Speaker 01

  I saw this video of him. It, it showed him doing that. And then, uh, it went to the video of Albanese falling down. And then he comes back to, um, to Barnaby and he goes, sorry, it was a dog.

• 22:27Speaker 02

  Oh, that's funny.

• 22:29Speaker 01

  Oh, yeah, they're coming out already.

• 22:31Speaker 02

  That's the best thing about, I reckon, AI and and the technology revolution, the comedy.

• 22:38Speaker 01

  Yeah.

• 22:38Speaker 02

  The comedy has been, mate, next level.

• 22:43Speaker 01

  For sure. Good use of of energy and and and water, right?

• 22:47Speaker 02

  Absolutely, absolutely. Mate, you make humans laugh, the world's a better place.

• 22:53Speaker 01

  Yeah, yep, I have to agree.

• 22:55Speaker 02

  Yeah.

• 22:55Speaker 01

  To agree. Um, all right, so let's get through this. We've got a few more to cover. We'll we'll work through them fast. So we've got the globalization, defense and national security. Uh, it's a massive shift. This one's massive. Uh, countries for for uh forced to spend basically over five percent. Uh, Trump has gone to Europe and said, you guys are on your own. If you want to protect yourselves, spend more than five percent of your GDP. And they've toed the line, I think it's except for Spain.

• 23:25Speaker 02

  Yeah.

• 23:26Speaker 01

  Um, who's a.

• 23:28Speaker 02

  Yeah, they're they're on their own. They're on their own. And funny how they how they actually won the World Cup in America. That was a.

• 23:34Speaker 01

  Yeah, exactly. But then the the the guy that scored, I think he's the captain, he was, he made, he had a cap saying, make Spain great again. It was a big red cap.

• 23:45Speaker 02

  Yeah, yeah, it's it's interesting. But on your point about defense and national security, um. And I I think it's important to to say, I mean, we've obviously seen Drone Shield, we've seen E O S, we've seen companies here really take off. Um, and have that initial boom once, once the war started. We have so much availability now through ETFs. I know, you know, the whole talk about index ETFs and you can get slammed if you, but if you think passively and all that. But all of these countries that you mentioned, NATO, Europe, all the Asias. Don't be afraid to go and look in in their market or try to find Australian uh products like Aussie ETFs that have exposure to that, to European defense, to.

• 24:29Speaker 01

  Yeah.

• 24:30Speaker 02

  To Asian defense, like, um, because you might find that one country that is lagging what we, what our market has just done. Um, you may find a, you know, I don't know, like a Vietnam or something about to take off. Um. So, yeah, I think right now in terms of investing, you have the world. At your fingertips in terms of opportunity. So keep up to date with all the new products that that get listed because if you're going to trade these mega trends, there are always, there's always someone creating a product for something new and and yeah, you don't, you don't have the, the benefit of, of history if you're trying to trade, but this, we're not necessarily talking about

• 25:10Speaker 02

  the trading, trading here. We're talking about getting involved in the trend, trend. And sometimes if it's new, a new ETF and you're just getting it off the bat, that, that's in my opinion, it's okay if you, if you, if you're doing it for a purpose and a reason, and obviously you have good risk controls in there, but um.

• 25:28Speaker 01

  To back you up.

• 25:29Speaker 02

  Yeah, I think just some practical points around this because like, I think last was it last year or this year? The amount of new ETFs that went on the market were the highest ever on record.

• 25:43Speaker 01

  Yes. Yeah. Not surprised at all. There's, there's an ETF coming out every, every week and uh, I think one, you know, to highlight perfectly what you've just said. Uh, because one, a part of the fence and security, huge aspect of it is cybersecurity.

• 26:01Speaker 02

  Yeah.

• 26:01Speaker 01

  Right? Cybersecurity sits at the, at the forefront of that because if there's going to be a war, the first thing that's going to happen is going to be a cybersecurity hack. Get all the infrastructure down, get all the energy down and then send in the drones.

• 26:15Speaker 02

  Well, that's what they did to, um, isn't that what they did to Venezuela?

• 26:19Speaker 01

  Yeah, there was, yes.

• 26:20Speaker 02

  They shut, they shut everything off?

• 26:22Speaker 01

  They shut it down. Yep. And then they had some, uh, Sona type things.

• 26:26Speaker 02

  Sonic, yeah.

• 26:28Speaker 01

  Sonic, uh, Sonic Boom.

• 26:29Speaker 02

  Sonic Boom, Street Fighter.

• 26:33Speaker 01

  But what I, where I wanted to go with that is in terms of cybersecurity, and you mentioned ETFs. There's an ETF called HAK, H A C K, right? It came out in two thousand and sixteen at, uh, it opened at five dollars. This is one of those IPOs that just continued to go up. It did not

• 26:53Speaker 02

  Yep.

• 26:54Speaker 01

  Trade below that price ever. Now it's trading at sixteen dollars. So that is a rise of around two hundred, you know, just over two hundred percent.

• 27:03Speaker 02

  Well, I think you have to treat ETFs, some ETFs, you have to treat different to a stock because the stocks that will come on the market like you saw with SpaceX. With companies, there's, there's the, you know, the underlying individual. And yes, some of these ETFs are invested, they were invested in companies, but they're a lot more, they're, how do I put it? Not that the risk is gone, but it's, it's, it's subdued to some degree from what you would get as a normal company risk. And more times than not, you will find, unlike stocks that in the first six months, they'll rise and then fall below the IPO price, ETFs you'll find they can sustain, like you just said with that hack thing, because, because there's more going on underneath it. So I just wanted to make

• 27:48Speaker 02

  that point because I've seen that over the last year. If you, if you're trading an ETF like a stock and thinking, oh, it's just listed, it's going to fall soon, you, you might be surprised, be wrong quite a bit.

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• 28:32Speaker 01

  All right. Our next mega trend is data centers and electricity. So that's another thing that might be targeted is, is data centers with cyber security. But basically, there's going to be more data centers. Every eye needs power, cooling, data centers, fibers, transformers, transmission lines, and all of that. And one important note that I wanted to make here, because I, I saw this, this video the other day, it was actually from Peter Zeihan, and I think that he made an excellent point about why data centers may not necessarily work in space. Because, you know, he made the argument that, I mean, one of the the arguments that he made was that there there's there's replaceable parts in there. What happens if if something fails? Are you gonna send the astronaut up there?

• 29:14Speaker 01

  Every time you wanna fix it, you know, the

• 29:18Speaker 02

  Well, maybe.

• 29:20Speaker 01

  That's

• 29:20Speaker 02

  Unless

• 29:21Speaker 01

  They're gonna have to have a space station next to it or something.

• 29:24Speaker 02

  Well, there's that, or he's already thought about it, Elon, and he's gonna send one of the Optimus Prime robots. Or have him or have him on there, the the Prime Robots already on there to and to be the human labor force or the the labor force for um, I would think he would have thought of that already.

• 29:43Speaker 01

  There's also that he was talking about the to be able to get all that tonnage up there. How many trips off of that rocket it would take? And it's like something like two hundred and fifty trips just to get all the infrastructure and things up there. And then another two hundred and fifty to get uh liquid, because you still need liquid to go there. And even though the space is a vacuum and it's cold, it's still an insulator, so it may not be best for for cooling.

• 30:12Speaker 02

  Yeah, well, that's if you you gotta get past the firmament and the um.

• 30:17Speaker 01

  Oh, yeah, the the Antarctic Wall.

• 30:20Speaker 02

  You gotta get you gotta get, you know, because really it's flat, isn't it? That's uh.

• 30:23Speaker 01

  Yeah, that's right. Just chuck them in in Antarctica over in there. What do they call it? Uh, there's some country there that they they say Asgard or something.

• 30:33Speaker 02

  Yeah, no, you don't wanna go there, mate. That's where the rest of them live. You gotta be careful.

• 30:38Speaker 01

  But I think the point is like, look, even if he's wrong, there is still a lot of hurdles to get there. And I can't see that being sorted in like five, even ten years. So I think data centers on earth is our best bet. And they're going to continue to be receiving funding for at least the next ten years.

• 30:56Speaker 02

  Yeah, it's a good point. It's a great point um for sure, for sure, because you you're right. If you only have one option for now, and the second option is like

• 31:08Speaker 02

  it it's not an easy task for by any stretch. It's never been done before, put it that way. We've not even put a uh, I don't know, we've put some stuff um in space, yes, space stations or whatever, but not that. So

• 31:23Speaker 01

  Yeah.

• 31:23Speaker 02

  So let's see, like when you you're betting on something a first and that, like you said, that

• 31:30Speaker 01

  Exactly.

• 31:30Speaker 02

  That may take time or it may never happen.

• 31:33Speaker 01

  Yep, and they're not gonna say, oh, look, we're not gonna build any more data centers here because it's more efficient in space, but we haven't even figured out how to get there. So we're just gonna stop. There is, yeah, there's definitely an AI race, yeah. So, um, so that's, that's definitely something for you guys to look at. Um, then finally, critical minerals, actually not finally, we've still got another few. So let's just quickly run through these, uh, critical minerals. I mean, rare earths, copper, graphite, nickel, antimony, tungsten, uh, galanium, germanium, all the aniums, uh, basically, and, and I think that Australia is well positioned. And we've talked about the material sector.

• 32:14Speaker 02

  Yeah.

• 32:14Speaker 01

  Uh, many times.

• 32:16Speaker 02

  Uh, yeah.

• 32:17Speaker 01

  Definitely. Australia is the place to be for all of that.

• 32:20Speaker 02

  Yeah, yeah. And, and, uh, you know, the, the easiest thing to do is just watch the demand. I mean, watch spending, watch AI spending, watch data center spending. If you start to see a slowdown in it, okay, well, you know, maybe, maybe I'll pull the reins in a bit. But if that spending continues, which by the nature of these things, it just chews more and more and more energy. It just needs more and more, the more people use it, uh, it, it, it's only going one way. Right now, um, unless the cost becomes something that, um, that halts it really. Um, and we don't know. I mean, there, there's a turn into one of those scenarios where you, it becomes a product that prices out the most, most people and just goes back to businesses

• 33:05Speaker 02

  or, or only a handful. Who knows? We, we don't know. Um, but, but nevertheless, um, while it is in its current form, the, the demand is, uh, or the, the churn is so far outweighing, um, our capacity and, and those data centers are, well, those critical minerals are, um, that demands are slowing down.

• 33:27Speaker 01

  Yeah, yeah, for sure, for sure. And that leads us to the next, uh, megatrend, which is another commodity. I mean, people don't usually think of this as a commodity, but it's water.

• 33:36Speaker 02

  Yeah.

• 33:36Speaker 01

  Uh, it's

• 33:38Speaker 02

  Mad Max.

• 33:39Speaker 01

  Mad Max, yeah, the five, four, for the water. It's, uh, uh, I mean, it's really unappreciated.

• 33:45Speaker 02

  You, you look at, you know, the, the billionaires buying land, like Bill Gates is one that they often talk about. And he's not buying land for land. He's buying land for water rights.

• 33:57Speaker 01

  Yep.

• 33:58Speaker 02

  Um. And, and you know, water, water is also something that um you can turn to energy.

• 34:07Speaker 01

  Mm hmm.

• 34:07Speaker 02

  Um.

• 34:08Speaker 01

  And, and for cooling, for data centers, they take up so much water.

• 34:12Speaker 02

  Yes.

• 34:13Speaker 01

  And it needs to be desalinated water. I can't just, they can't just like pump it from the ocean.

• 34:19Speaker 02

  Which is scary. You don't want to start ripping the balance out, you know. I mean, I know there's a lot of water, but at what point does, that's how tidal waves happen and, and earthquakes and all that stuff.

• 34:31Speaker 01

  Mm, mm, when you start playing with it too much, eh?

• 34:34Speaker 02

  Hmm.

• 34:35Speaker 01

  Yeah. I mean, the, the, the drivers of it is, is climate change, agriculture, industrial demand, which is a data center as well. So fresh water becomes increasingly valuable.

• 34:45Speaker 02

  And we, we, we did a show on this um on our Talking Wealth and we looked at some water. Australia's got about six or seven, I found, that are not bad. And still.

• 34:54Speaker 01

  Yep.

• 34:54Speaker 02

  And the market hasn't caught on.

• 34:57Speaker 01

  Yeah, yep. I remember looking at some of them as well. Yeah.

• 35:00Speaker 02

  You know.

• 35:01Speaker 01

  This, um, there's definitely, and I'll just highlight, I did have one um uh here. I think it's R I V. R I V is one that, that I think is looking interesting. It's, it's a pure play.

• 35:14Speaker 02

  Yeah.

• 35:15Speaker 01

  Um, uh, it owns water rights in Australia. So it's a company that's actually buying water rights. Uh, I think that one's looking interesting right now if it does manage to, to break a bar. So, um, that's one that you guys can have a look at. Uh, now for the last, the last ones, uh, healthcare longevity. You know, aging populations, that's a mega trend. Uh, think of Japan, Europe, Australia, US. Demand rises for medical services, diagnostics, aged care, biotechnology, weight loss drugs, and preventative healthcare.

• 35:47Speaker 02

  Yeah, that, the macro theme is not changing. The, the aging population is the big macro theme here. And in Australia at least, a lot of really. Strong healthcare companies have depressed prices. So for me, when I, when I look at the healthcare space, a few things need to happen. If you're going to play, if the prices aren't depressed like they were, like they are now, you would have to really look at, okay, where is, is the situation favorable in terms of the economic environment for a lot of the, the newer healthcare players? Like, I think AI is going to have a big impact in healthcare.

• 36:25Speaker 01

  Yeah.

• 36:25Speaker 02

  And I think it's going to create a lot of opportunity for those companies that are going to be first with some kind of technology in the healthcare space, or how they can revolutionize the healthcare. But those companies only really perform well if they've got access to money. And if we, if we end up in a situation where, you know, interest rates start to go down, and they can get access to, to cheap funding, that's often when you see the biotechs do really, really well. And, and, and the rest. But we have seen share prices get slammed. So even now, they look pretty attractive, just from that aging population dynamic for things like obviously Cochlear, CSL and those big boys. So.

• 37:09Speaker 01

  Yeah. And Sonic Healthcare, Ramsey Healthcare as well, they're, they're, they're big ones for the aged space. So, yeah, we've got a very good healthcare market here in Australia. And like you said, under, underperformed. So one for you guys to look at. Another one is, we touched on it briefly, the space economy. So we are moving to that space kind of, you know, race, satellite, internet. We've got, what's it called? What's Starlink? Starlink is now dominating, it's huge billion dollar industry, obviously for military and GPS purposes, communications, earth observation. Now you can go to websites and you can actually see live views and zoom into countries and things like that. It's unbelievable.

• 37:54Speaker 02

  That's crazy.

• 37:56Speaker 01

  Yeah.

• 37:56Speaker 02

  It's, it's.

• 37:59Speaker 02

  Look, it's one, it's one that I, I think for me, um. You, you, you don't wanna be, when you're talking about these mega trends, I think the trick is you wanna be there close to right on time. You don't wanna be there too early, cause if you're there too early, you could be sitting there for a very long time, like lithium, for example, you know. So many people were in lithium way too early.

• 38:24Speaker 01

  Yeah.

• 38:25Speaker 02

  And, and got slaughtered. Um, and it was only until Rio came out and started buying lithium where, where I was like, okay, now there's some real interest from, from serious money and then the lithium price took off. But I think with the space economy, if you're gonna invest in there, just be careful you're not too early.

• 38:42Speaker 01

  Because you can.

• 38:43Speaker 02

  Because you can be, um.

• 38:45Speaker 01

  Yeah.

• 38:46Speaker 02

  Uh, uh, that's my only reservation with that, um, because they're even talking about mining like minerals and diamonds of, of asteroids and it's like, we, we're still blowing up rockets, like.

• 38:59Speaker 01

  Yeah, fuck.

• 38:59Speaker 02

  Yeah, exactly. We can't even get that, that perfect yet, um, and you're talking about mining s- stuff of, of, of a moving rock that could, you know, wipe you out. So it's like, well, okay, maybe, but.

• 39:14Speaker 01

  Mining.

• 39:15Speaker 02

  Let's get, let's get, yeah, let's get the first part done. Let's prove we can get those rockets, uh, not blowing up. And before we start talking about this, this stuff.

• 39:25Speaker 01

  Yeah, and you would expect that it'd be the mining companies investing in that. And why would miners be investing in, in trying to catch a target in space when they can, so many resources available still here on, on, on earth.

• 39:37Speaker 02

  Yeah, yeah.

• 39:38Speaker 01

  It's like, yeah, I totally agree. The, the space race is very early stages. Yes, they're slowly transitioning into it. We've got, um, uh, America had the, what was it? It's called the space, uh, space troopers or something. I don't know.

• 39:53Speaker 02

  I don't know. Oh, yeah, the Space Force, the new Space Force.

• 39:57Speaker 01

  Space Force, that's right, yeah.

• 40:00Speaker 01

  Uh but you know, that's more for, I think, security and satellites and

• 40:03Speaker 02

  Yeah.

• 40:04Speaker 01

  Things like that, trying to to govern space.

• 40:08Speaker 02

  Hmm.

• 40:08Speaker 01

  Um, but let's go on to our last one, because this one is very much in play at the moment, and that is India.

• 40:16Speaker 02

  Ooh.

• 40:17Speaker 01

  So, so basically, they are industrializing like like crazy. They are the the what China basically was back in in in in their day, when they were just, you know, getting into that that long term uptrend and um, so basically their population, they've got a huge population, uh, good, good, um, birth rates. Uh, they more and more are going into that middle class

• 40:42Speaker 02

  Uh huh.

• 40:42Speaker 01

  Uh, sector, uh, they're going into manufacturing, there's more consumption, there's more financial kind of, um, maturity. So many investors are heavily still concentrated in the U S, but Asia could become one of the defining investment stories of the next decade. So I do agree that India, but I more more agree on Asia as a whole.

• 41:05Speaker 02

  Hmm.

• 41:05Speaker 01

  Um, I think that that that area i- is is very, um, promising when it comes to, uh, productivity moving forward.

• 41:14Speaker 02

  Their stock market is, um, their stock market is is flying at the moment as well. The only risk that a country like India has, that also a country like China had, is is and especially one that is not communist, because under communism you can control it a lot better, is

• 41:33Speaker 01

  Yeah.

• 41:34Speaker 02

  is, um, the number of people becomes a problem if you if it's not managed right.

• 41:40Speaker 01

  Yeah, I think that's especially prevalent in India. I was I was reading something the other day that they're not one just in in like one whole Indian people. There's so many, uh, different religions and they've got conflicts of interest within their their their country. So it's not like they're all just uh, you know, like, like China, that it's it's all Chinese, um, all working towards the same goal.

• 42:08Speaker 02

  Yeah.

• 42:08Speaker 01

  It's it it's segregated.

• 42:10Speaker 02

  You you need, you need, you need enough demand to have a middle class. You you a middle class only works when demand is is is high enough, um. And once you pass that middle class stage, you end up in America with the haves and the have nots. But if if you have too many people, not enough demand, or not being able to to satisfy all of those people, there is no way that you can't, you can get rid of poverty um quick. And the more and more people, like you said, that, you know, the birth rates are strong. They need to replenish that with opportunity.

• 42:46Speaker 01

  Um.

• 42:47Speaker 02

  And I'm no expert.

• 42:48Speaker 01

  Education.

• 42:48Speaker 02

  Yeah, I'm no expert on the Indian market for for for any matter, but I just know their share their share market is going really high. But um.

• 42:56Speaker 01

  Hmm.

• 42:57Speaker 02

  Yeah, I I I'd be I'd be uh careful on where and how I do it. Because you've got to remember, the Chinese stock market, bar the last year or two, uh had been pretty crap for a long time.

• 43:14Speaker 01

  Yep.

• 43:15Speaker 02

  For a real long time.

• 43:15Speaker 01

  Sideways.

• 43:16Speaker 02

  And that was the thing that was affecting it.

• 43:19Speaker 01

  Hmm.

• 43:20Speaker 02

  How do you get growth when when you've got, you know, an over old populated um,

• 43:29Speaker 02

  what's the word, country? Um.

• 43:31Speaker 01

  Hmm hmm.

• 43:32Speaker 02

  Under communism, you can control it.

• 43:37Speaker 01

  Yep.

• 43:37Speaker 02

  But but let's see, let's see, I mean, it's not like they're.

• 43:41Speaker 01

  What happens with with India?

• 43:42Speaker 02

  They're not staying in India, they're um going across the globe, you know?

• 43:48Speaker 01

  Yeah, yep, yep, that's uh uh it should be interesting anyway, the the growth that um that that we're seeing in there. I know that they're spending a lot in in um, you know, infrastructure, like I said, a lot of, you know, metal demand and all that. And I had a quick look, I I searched it up. Uh, you know, what exactly uh does Australia export to India? Because I know that we've got a very good relationship, Albo is always hugging uh their their prime minister and giving them, he giving him kisses and things like that. So they must be pretty close.

• 44:22Speaker 02

  Yeah, yeah.

• 44:24Speaker 01

  Uh, so I mean, we our main commodities are that we send over are coal, copper and gold, apparently. Uh, so also luminol and agricultural goods. So some of the the companies to be looking at are BHP. You know, it's one of the world's largest met coal producers of met coal and also

• 44:46Speaker 01

  obviously iron ore and copper. Whitehaven Coal as well. So Whitehaven Coal is a thing. I don't necessarily agree that BHP is one of the world's largest producers of metallurgical coal, but it's something to to look into. I'd question that. But Whitehaven Coal, yeah, that's one that that exports some sand fire resources. Actually, I had a look at the chart of that the other day. That's looking quite nice. That's consolidating sideways and it's in a long term up trend. Also, some uranium miners, Paladin Energy, Boss Energy. And then in terms of their rare earths, Arifura rare earths, because we they recently apparently signed an off tape agreement to supply some rare earth materials for for them to create

• 45:31Speaker 01

  permanent magnets. So we definitely got that relationship and our mining and and energy sector seem to to benefit from them.

• 45:41Speaker 02

  Awesome.

• 45:42Speaker 01

  All right. So I think we've we've covered a fair bit in this episode, a lot to take in. You know, you guys might want to write these down and then do a little bit more further research into it. At the end of the day, the individual stocks will tell you where they're going anyway. So pleasure as always, Phil.

• 46:00Speaker 02

  Thank you. Yes, good.

• 46:02Speaker 01

  All right. Well, if you enjoyed that, please give us a five star review. Always appreciated and we'll catch you on the next one. Bye for now.

• 46:10Speaker 00

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