Hello, and welcome to the Australians Money Puzzle podcast. I'm James Kirby, the world editre at The Australian, and I want to come aboard everybody. Well, we're into the final week of regular podcasts and today I want to open up the show a little. We want to talk about all things investing on the markets. Listed investments, banks, big companies, big industrials. Property trusts, which are folks, if you're interested in property on the listed side have become one of
the hottest areas of the year. The property trusts are up about twenty five percent this year on the market, which is quite a strong performance recovery performance. And two of the more interesting stocks of the entire year are the Goodman Group and also Digico, that big float, which both are property trusts. But there are also proxies of
course for AI. So now, my colleague, Associate Editor of Business, Eric Johnson's just emerged from the annual CEO survey that we do at The Australian, where you get an exceptional sort of line into dozens of leading CEOs from the top two hundred. He's just been through that and I thought it would be a great idea to have him on the show and talk about what are the key person the key CEOs in Australia and those same people who are presented both the risk and opportunity to us
as investors. What are they thinking at the moment, what are they thinking about the year ahead and what does it tell us as investors. Great to have him back on the show. How are you Eric?
Thanks very much, James, Really good to be here.
Good to have you on. Just in very broad terms, what's the mood? What's the mood with these people considering they've just had a fantastic year if they're listed.
Yeah, look, so we spoke to it's approximately seven, just over seventy of Australia's leading CEOs from every corner of the market that you could think of, so from property, manufacturing, mining, to banking, financial services, wealth management, super advisory, you name it, we spoke to them. If you were to sum it up in distill it in just to really pure form, I think the term would be cautious optimism going into
twenty twenty five. So the hardest period that they had, when I say they the companies themselves, so what they were seeing in their own businesses was pretty much the September quarter, coming out of the June quarter, September quarter, and they've sort of come through this period looking ahead and looking into twenty twenty five. And these are the CEOs thinking, okay, look what do we got ahead of its now. Some of them like, for example, like let's
start from the very top. Okay, one of the biggest companies in Australia, Comme Weth Bank. Like Matt Common, the CEO of common Wealth Bank. He's saying, so he's again that theme of cautious optimism. He thinks interest rates are going to start falling much quicker than many expect. He hasn't put a specific timing around it, but it's certainly
early in the new year. However, what he is seeing, this is Matt Common of Komon Weth Bank years of low growth, high costs, so inflation is really hurting his customer base and that's sort of knocked confidence around. So when we get some of that relief, which is inflation pulling back, which we're starting to signs of, when we get relief in rates, his expectation is that we'll bring back the confidence and therefore people will start borrowing again.
So another theme that we're really sort of seeing going into next year is also the idea companies now thinking we've had this inflationary environment. It is hurting our customer base. But they're also thinking about their own business and productivity measures for productivity, how can they how can they grow their business?
They're very weak by historical and international standards.
Yeah, so with that, they're thinking about the tools and the leavers that they can play, how they can play a role. So we have seen some quite large wage rises in recent years, so they're looking to capture that. And that's not and by all means, this is no one's saying we're going to whole cell cut costs or
anything like that. Everyone's talking about investing and people are companies are talking about investing in the tools, particularly technology, to allow their workforce to achieve more from what they have today.
And is an AI theme, Yeah very much.
And that is and everyone's talking about AI. Is you know this thing? But now it's what we're looking at this year is the rubber hitting the road on AI.
The conversion of the promise. If it converts from promise.
That's right, So how is it going to start impacting into my own business? So Australian Super. So that's just that's the nation's biggest super fund. Probably many of your listeners are members as well, just by default. The boss of Australian Super Paul Schroder, saying he believes that AI has some real productivity potential for the Australian economy. So the idea of automating processes this is like menial tasks
that are happening back officers. This unleashes people to do igh and value work, personalization of products and services and streamline compliance. All that's going to deliver productivity gains.
So there's two big themes there then, one being the if you like, the revival perhaps of the economy to some extent, and the revival of financing of the economy and lending to the economy by the major financials. And then also this idea about productivity. And most investors don't necessarily care about productivity, it's not something they obsessed about, but the CEOs that run the listed companies certainly do because because basically you have to get more value for
the wages that you pay. So I'm just thinking just going back on looking at these two areas then, as from a listed perspective. From an investor perspective, we think about the banks. So they mentioned Matt at the Combank looking out over at this economy which is somewhat subdued, though even there as very low unemployment rates. His own bank then is flying right. It's fifty percent over priced according to the consensus targets in the market. It's running
at about one hundred and fifty dollars. The brokers are saying it's worth about one hundred. This stock itself surprised everybody because not so much that the Australian economy smashed it out of the park. But it wasn't as bad as they thought, so the bank was able to write back some of the provisioning and that underpin the better earnings and people expected for the big banks. Just ticking out that layer, Eric, if we could just talk about
bank stocks for a moment. We have Combank, which is sort of the King Kong of the bank sector and would seem to be the most overpriced according to the analysts. And then there are three other banks making up the Big four, and a new broom growing through those banks, new CEOs coming in at Day and Z of course, and a Z and Westpac, And so what do you think the outlook for bank stocks might be coming off what the CEOs are saying. It would be very hard for them to do that all over again next year.
You'd imagine, I mean, o the stocks, i'd regardless of their performance on the street, if you know what I mean.
And CBA, as you pointed out, is a really interesting case, and that was just flying. It's been one of the hottest stocks in the world. But that in itself means that CBA is also one of the most expensive bank stocks in the world. There are no stock market analysts and has a buy recommendation on CBA, not because I think it's a it's not because I think it's a bad business. They just say it's too expensive. It's way too expensive for the share price, is too expensive for
the earnings to support what it is. However, they have been wrong the entire way up for CBA.
They've been wrong. They've been wrong from one hundred dollars to one hundred and fifty.
That's right, So they've been wrong at one hundred and ten. There are wrong at one hundred and twenty and so on. So there's soul surgeon going on in analysts look with CBA, there is a bit of crowding out. CBA is a play on Australia. It's safe, it's a safe investment because just the shiit size of it. It represents almost like twenty percent of the economy in terms of mortgages and business loans and so on. And you've seen a lot of index funds also so back CBA, but also just
a lot of passive money just sitting in CBA. So the real action going into twenty twenty five is going to be in the non CBA banks. And as you pointed out, so we've got each of these banks have got new CEOs, So Westpac, NAB and aan z Ainz's new CEO, Shane Elliott, will step down in July, so it's a little bit further down the track.
The change of the guard are then at the big banks.
Yeah, two of those appointments at west Pac and NAB they're virtually internal. Virtually they are internal appointments. So the strategy, all things being equal, when you look as an investor, you know what you're getting that the strategy is going to be the same. Maybe some tweaks here and there, but you're not going to see any shifts, any changes.
Westpac is an interesting story because it's been It's Anthony Miller started this week as new CEO, and it's been really through this period of introspection since it had its ods Track scandal leading into the COVID pandemic. So it's been sort of thrown off its balanced for those years, totally internally focused, competitive where it can, but it's coming out of the other side of that. It's winning over regulators,
which means there's a potential for it to. It's been operating under a capital penalty so that that potentially comes off, so it might get a little bit of a bump there. So there's more potential in a company like Westpac. Then you see, I can get the settings right because it hasn't had that surge up the Combank has. It's not going to be another combank that's just been a remarkable run. Combank is like that because it's also well run. It's
highly efficient, it's well run. You know what you're getting, and it's predictable.
Okay, I just what do I do? Might hold it right there? We take a short break and we'll come back and we'll take a look at outside the banking sector. But listeners, I'm sure that was useful to you on the four banks. So interestingly, internal appointments being being particularly popular with these banks because they are conservative and investors
like certainty. And there is, if you like, the role model of that common who was taken internally some years ago at a time when it was a very debatable thing to do, because Combank, from a reputation point of view, very low at a very low eb around the time of the Heyin Rold commission, and his chair quite bravely stuck with an internal appointment. So this is why the banks do that. Now. The only issue, as Eric is saying, is that there's nothing wrong with our banks. They're perfectly fine,
and their numbers are perfectly fine. Their problem is that they've been so enthusiastically bought up by investors that it's going to be very hard to justify the price levels there at all. Right, we'll be back in a moment and we're going to take a look at outside the banks. We're going to take a look who's who in among the big miners and some of the bigger industries. Back in the moment, Hello, and welcome back to the Australian's
Money Puzzle podcast. I'm James Kirby, Wealth editor at The Australia talking to a colleague from The Australian, Eric Johnson, Associate Business Editor. He has been running the knobs and talking to many dozens of the top CEOs in the country and I thought would be really good idea to take a look at who they are and what difference they make at stocks. I suppose are we talked about the banks there, that's an area of the market where the personality of the CEO is least important. By that,
I mean a good blue chip company. The theory is that the boss should be able to be run over by a bus and the share price shouldn't be affected. I mean that was traditionally inside big blue chip companies, the sort of brutal concept. But the idea was obviously that the company was more than a single person. Now that's less so as you move away from banks and you go to other parts of the economy, even the
big miners. Now the big two, the very big two obviously being Rio and BHP art to that extent, the blue chip in that manner as well. And though we're all very fond of the CEOs and we like them. They could be run over by a bus and they would be replaced, and you would hope that the share price wouldn't go off the rails. Now that wouldn't be the case necessarily a fortescue where forest is still very important, or minrais for Chris Ellison is very important. This was
very important. I tell us what the big mining CEOs have been, what their view has been or energy and resources in that area? Is the view cautiously optimistic? I would expect that they might be hoping for a better year because they were the weakest part of the market last year in terms of the overall return of stocks. We had terrific year on banks, consumer discretionary, marvelous year for it though it's a relatively small part of the market in terms of market cap. But when you look
at the energy and materials it was quite weak. I mean energy was substantially down by about twenty percent, which were certainly not used to at all. But they had a very weak They had a very weak year, and materials weren't much better minus thirteen percent. This is a market, by the way, folks that went up eating so keep that in mind. So is there an elevated optimism from the mining and resource energy people compared to the rest of the market. Have you any sense of that.
Oh, look, when we started off talking about the term cautious and with the miners, the emphasis, if you want to draw a line, is probably more on the cautious part of that phrase, particularly with those two big material stocks. So it's BHP and RIO, they're pretty much like for like, except Rio has the aluminum play and that's a big differentiator. BHP is probably more exposed to copper. In coming years,
it's going to have it's going to have potash. That's a fertilizer play, which RIO doesn't have, which would be an interesting one. How that changes going into this year. And often it's funny when you speak to the CEOs of these companies and they're thinking so long term, they're not even thinking about You ask them, wow, what do you think about the outlook? How's the coming year? And they think what they are think.
They're thinking about minds. They're going to build an eye of time ten.
Or fifteen years time. They're thinking kilometers ahead, but where it is. But the theme is obviously China is the driver of that, and China there is no doubt it's not troubled, but it's certainly slowed. It's aiming for about five percent growth this year. Whether it's sort of whether it sort of hits that remains to be seen. But look, activity is coming off in China, in particularly in the consumer sector, and you can see the authorities they're trying
to pull some different levers. Nothing's really going to start to happen until there's going to there's a change of president in the US, So Trump comes in China starts seeing what the landscape is, so it'll be a bit premature for China to move before that. Then the other thing, to the other factor which really complicates things is this idea of Trump putting tariffs in and then there's retaliation. That trigger is a trade war. That trigger is a
slow down in activity in the global global world. So again that may mean that players like b HPN, rio sound sell less copper, sell less iron or But you don't buy these You don't buy these stocks for what they're going to do in twelve months time. You buy these stocks for what they're doing in five years time. So if you speak to them, what are they thinking about,
what are they really thinking about? It's copper. It all comes down to copper, and they just see this huge right, they just see a huge deficiting copper from the end of this decade and the world not having enough accessible copper supplies, and that's where they're trying to get onto. Okay, your listeners are very big fans of gold. I'm sure you've got a lot of gold. Yeah, well, look Northern Northern, Northern Star Stuart Tonkin of Northern Stars Resources a gold
This is kind of interesting, so let's talk gold. He said, we saw a bit of a pullback in the gold price shortly after the US election, which was right. However, he doesn't see that lasting for long over time. He says Trump presidency likely leader trade tensions and increased US government spending, which is likely to support a strong gold price in both US store and Aussie dollar currency. So he's trying to equate gold with bitcoin. So he's saying that he reckons an ounce of goal will be worth
at least zero point one bitcoin in coming years. So I'm not sure what that equation is, but I want to watch.
I think your gold CEOs will always be of the opinion that God is going to go up. Everyone Gould says that, but they were. I mean, certainly Northern Star did. It had a very good year, as gold did. Then there was some real surprises. There was that amazing story during the year of Resolute and the CEO Toal hadn't been being detained in Wizambique. So you have this surprises,
don't you. Even if we take it that the outlook for gold is good, even if we take it that it is the perfect setting for continued rise in the gold price, particularly with the arrival of Trump, where we could safely assume that his second and third year won't be quite as won't be the honeymoon, that maybe his first and second month will be as that any Republican president or any president would face. That. So on that basis,
instability arrives. On that basis people refer to gold. But the issue for gold is really it's operational risk, isn't it. With these guys, with these different miners and these different CEOs, that seems to be that the real differentiator for Australian miners. At least I can ask you something about stock's been taken off the market. I really I wasn't joking about Newcrest. I mean if you think about it, until people are
kicking themselves. They had this superb opportunity, the biggest gold stock in Australia, and you know, they come in and the Americans basically come in and buy at the perfect time, just as goes about to steam along. Similarly, we have the private equity They just take one private equity player,
just one bain. So they come in, they buy Virgin Airlines, then they buy STA and the hcare outfit and this week being the last working week of the year, they snap up Insignia, the old IAF which has all sorts of assets, but it also has things like chad Forth actually the dominant, the biggest player on our top one hundred and fifty advisors list. Part I'm making Eric is that we're investors. We're looking and we're listening to these CEOs about their outlook, and we're very They're very important
because they drive the companies. And then there's them, and then there are private equity operators sitting in New York, and nor do they look at the Australian market and the cherry pick there's no seems to me, there's no particular theme an airline and hecare operator, a wealth Manager, they just and Sydney Airport of course a big loss once upon a time, along with the Newcrest School. These are big absences when the when the market loses them, will we lose more in the in the new year?
And how can a private investor, how do they? How do they faces? Are they any sense of what's coming down the line? Will there be more of it? Of the private equity arming if you like, just basically carving useful chunks out of the ax.
I think you and when you talk about there's no theme about about which which areas hot or not? But I think that the theme is value and the thing time and time again, your listeners have to remember much most of the value happens when people go in when people are running the other way. And that's the theme that that keeps repeating through time. I remember as a junior journalist going up to Secutor Road, to the old New Crest head headquarters when they announce her results and
no one was interested that. And this was when gold was trumbling along and write two hundred dollars an ounce or something like that, and no one had any interest in it. But as an investor in over time, you have to ask is this the way that the world is going to stay forever? And also with companies as well, Ampcor which is still listed, but now it's moved. It's listing to the United States, one of the worlds now
one of the world's biggest packaging companies. Again, in the early two thousands, no one wanted to go near this thing because it had a lot of internal troubles and a lot of internal problems. Every broker had a sell recommendation on it. Likewise, you've seen a massive turnaround in a company called ZIPC that's the buy now, pay later company. It's been one of the best performers on the ASEX. And again two years ago, no one wanted to go near these stocks, and rightly so. There were some really
unusual business models going on there. But if you can sort out and this is where the private equity often looks for value, if you can sort out what the value is, then your way. And then we're talking about rec respects. So even in airlines, you ask yourself about thematics. Will Australia be a one airline country? Now? Why it's a big economy. We do a lot of travel, do a lot of domestic travel, so that's if you can trade the trough, you can ride the top.
Okay, can I ask you one thing about people, and you're talking to CEOs, to what extent do you, as someone who corpors it very closely, to what extent do you believe or take on board how important the key person is. You mentioned a couple of companies there that
really came around. You mentioned Acre, which, as you say, was drifting, and then Ken McKenzie came along and he was just amazing and he got fantastic operational numbers out of that company, which transferred to Fantastic ship Press Performance. You mentioned ZIP, which has leaved very much with Larry Diamond. We have other companies on the market, and then in the next apport we're going to talk about the property trust.
But how important is the CEO? Is the CEO at the average Australian listed company more or less important than they used to be? How crucial are they on But if someone looks at a company, they can analyze the numbers. But ultimately that's the that's the quant part. The qualitative part is it's run by people. How important is the CEO?
I think? And you put it out like the aim of a top company is for the CEO, although it's bad for them if they fall under the bus or the or the Swanston Street tram. That then then the company keeps taking along as though nothing happened. There was a saying, and this is about comm Wealth Bank too. So the thing about com Wealth Bank is it's a
big engine. It's a big it's a big train going down the tracks and all you've got to do as a CEO is just keep the oil topped up, an eye on that and he'll just keep going and going. And so that's the thing. So does the CEO have an influence? Well, look, the CEO sets sets the tone and sets the culture. Is responsible for the culture and so is it a high performance culture? Is it a
culture that is focused? And they do have a role in doing that to do the people that turn up to the building every day do they know what their job is? And I think that's a really important thing. And then there's a separate thing to this as well that we and I know that your listeners would be
really thinking about these. A lot is founder lead companies and there's quite still quite a few founder lead companies with founders involved on the AX and they and they certainly are performed, but we always have this disruption when it's time for the founder to hand over the reins. So even in Fordescue, when we saw Andrew Forrest to your forest build up Ford Toescue build up magnificently, he
stepped back handed it over to CEOs. It was moving for quite a while, and then with sort of succession of troubles and Andrew Forrest jumping in and trying to manage it as well. So it's still his company. And then obviously the min res when there is issues, like the CEO still drives it as a very entrepreneurial company. But then sometimes when companies get big, they need different skill sets, they need managers that can manage, they can
need predictability. We spoke about these big mining companies. These CEOs are thinking years out, so they're not thinking about today. So really interesting one to watch founder led companies. There's two of just to point out to your listeners, both Melbourne based companies. One pro Medicus based in Richmond. The biggest company you've never heard of in Australia, which it's.
Probably favored by institutions.
I think it's now to about fifteen or sixteen billion dollars in terms of market cap. It shares it just gone. It sells imaging software, which sounds pretty pretty dull, but just ruthlessly targets high end health networks in the United States and radiology imaging software that it develops.
And there's no CEO. There's a CEO obviously there that is Integrant, and.
There's a CEO. One is a is a commercial director. The other one is interesting to watch is ARB. You would have I know that when you drive around the streets are brighton with your with your Toyota high Likes.
I have never been in. I've never been in a high Lox, but I have a spin in one. But anyway, yes, I know what they are. I know what a r BR I get your jok.
Yes, so they supply all the accessories for full drives and newts like the one that you have when you drive around the streets are.
Brighton stock great Stock. Deny it for a moment.
This was started in in a garage in Melbourne's eastern suburbs, I think in Ringwood, and now it's sort of you know, sells it's it's products around the world. Still operates in kill Sithe for all of Melbourne's East and it has managed to do the succession quite smarisly too in recent years. So just so it can happen m M.
Okay, So a r B is not led by the it's not led by the original person that that built them anymore.
Nope, I see they are on the board. They are still involved in the board and obviously it's shareholded.
Okay, very good. Look, we're going to take you short break, folks, and we're going to come back and look at the property scene and Property Trust in particular, and some pretty big personalities there. I can tell you that that are integral. Would almost underestimate how important they are to the wider stuff. Back in the moment. Hello, welcome back to the Australian's Money Puzzle. I'm James Kirby talking to Eric Johnson. Hey, Eric, two stocks have been just aching to ask you about.
One is Goodman, the amazing Goodman Group and Greg Goodman, who has personified this company. And it would seem though no company is run by one person, but they certainly can be led by one person, and he has led Goodman through thick and thin and early in the game rebranded this Property Trust as a logistics player and a player that was able to harness, if you like, or exploit the move to online that it was an advantage rather than a disadvantage. And that's of course, it's just
been one of the best stocks in the market. It's also a stoffwhare that is so closely identified with the leader. I mean, we have Jerry Harvey at Harvey Norman with Greg Goodman at Goodman Group. Is that a situation where the CEO is almost too important for the company.
It is, and you would hope that he builds a structure around him, so every say, I should be thinking about it their exit from day from day one, how to build that structure around them so he can hand it over and by seeing his company through good and good and bad. And it was really knocked around during
the GFC Goodman Group. It had too much it was holding too much debt as a property trust and that really changed the direction that Greg Goodman took on that company on the journey he and now it has this incredible moat around it in terms of the infrastructure that it builds, the warehousing and they just developed these big warehouses and they're very hard to replicate and they.
Had to have the Warren Buffett Molt the of the infrastructure, their own infrastructure.
And they're not just tin sheds out in the paddic. These are like because there's power. There's also there's also automation inside them as well that Goodman provides. So from a company X, I can just turn up and there's my warehouse and it's got all the automation ord ready to go, and Goodman manages all this and it's really really out there. They're a really important company transition. I think so because the business model is predictable now, so
he's not out there making the deals. He's certainly crunching the numbers, but it doesn't trade on his name on He doesn't need to open doors anymore because the model has proven, the model is established, and I think that's a difference. There's always an entrepreneurial streak with founder CEOs and they use that to open doors necessarily because that's what they've been doing all their life, trying to open doors. I think that's a difference now with Goodman.
Okay, it's become institutionalized in the best sense of the word. I want to look to questions because the first question I want to pick out is smack on a most delightful segue into the questions. This week, it's from George. George, I'm sure and this is never advice, it's only information and observation. But you might be relieved rather than nooid. Now anyway, George is an original piece of corresponding which
is probably oh ten days old. Lets it's about Digiico, which was the biggest float of the year folks, as you'll probably know, and that was a property trust Digico. So here's George's question. I'm extremely annoyed, to say the least, the country's biggest bank has deliberately chosen to shaft retail
investors in favor of the big end of town. And he mentions comsec here, we're appointed joint lead co managers of the upcoming Digito IPO tip to be the biggest float on the AX for years, And indeed that is true, George. The only problem was, of course, it floated. We're talking on Tuesday. It floated last Friday, great expectations. I think it was midday. I actually remember I tuned in at Miday, Justice se because it was coming on of five dollars
and guess what it went nowhere. So anyway, in Georgie's case, he says, being a client, I thought I could access the float, but I was told retail clients like myself missed out because the broker allocation was all farmed out to sophisticated investors maybe concept, consect and advice. How many of those sophistications investors took up only the prospectus minimum application of two thousand borth of shares and amount set sufficiently low that it was obviously aimed at retail investors. Okay,
two things here. One nine times out of ten, the Georges of this world are correct. You would be furious when you want to be in an ipo, you know it's coming down the line, you think it looks good, and you don't get stuck. Now, I'm sure, comes secor Anni Broke, we'll have an explanation for why one person didn't get stuck. And there is a procedure in how
you lay out these IPOs. But what's particularly interesting with George's question is that on this occasion, it would seem so far he would have been better off that he didn't get the stop, because he would have been a loss straight away. And in fact, that the Digico is still below its IPO price, which was five bucks. I think it is still below.
Eric for fifty.
Yeah, four fifty. Well, that's I'm disappointing, isn't it. What does that tell us about property to us? And in this case it had the CEO figure. The person behind the float certainly was a man called David de Pillow, who has had great success so far. But this has not been a great success in its initial phase of the float. And who knows, this time next year we may be sitting here saying, well it was even better by at four fifty, but we don't know. What we
do know is that it was a failure. The biggest float of the year appears to be a failure. What's that tell us about the market and the whole enterprise of Digiko?
Yeah, look, I think this is more stock specific. And although George points out about the sophisticated investors, it was interesting with this one. It wasn't sold to institutional investors. So in a perfect world, when you take a company to market, you want big institutional investors, a mix of big institutional investors as well as retail shareholders. So and this one didn't for whatever reason, it didn't seem to be marketed among the big institutions, so there's the big
fund managers. So it was became a real retail stock. And it's the institutions can are the ones that can sort of shift the dial in terms of support. Digit Co was is looking at trying to capitalize on the booming data centers that is around at the moment. This is we have heard about mcquarie by selling its air trunk business, you know for incredible.
Next DC of course always been mentioned on the show here, yeah, yeah, yep.
So so you know there's a real there's a real thing going on and all the data that we're demanding in AI is going to pull into it. Not all data centers are the like. Not all data centers of the same summer commodities, and we spoke about Goodman. Goodman are and obviously in data centers as well, but they provide all the power and all the infrastructure around it as well. So so Digico with with that. So it's interesting what the real business is underneath. Look, who knows.
I think for your listeners, they've got to do their homework and saying and really get into the into the depths of it. And saying what are the contracts?
Like this was a rapid rule up basically of corect center assets, wasn't it? And to some extent it came to the market quickly, and I think without doubt it was timed to get in before the end of the year. It was literally the last what are the last rocking.
Days that in terms of like analyzing it, you look at who are there, who is Digitico's customers, when are their contracts renewing? What it will there be a step up in contract or you know, let's say they do I don't know, let's say they do have a contract with Microsoft. Will it just roll over in five years time? Or will Microsoft go to the next person? What's their point of friends from the likes of good Men or
Amazon also find the same thing or even next day. See, so that's what That's what I'm work.
You have to do instantly, Okay, okay, terrific And I suppose look, one of the lessons here, folks is and we always say it on the show that there's a difference between investing and speculating, and there's an invest and there's a difference between investing in trading or betting and to some extent in IPO, and I'm not talking about Digito and in particular im talking about any Ipo IPO.
With Blue Sky Ipo, there is there is no trading history because it hasn't been a stock and it's a different, very different world when you enter into the public space. And some entrepreneurs and CEOs that we've talked about the importance of CEOs to do. Some CEOs are terrific as long as the company is private and they are smart enough to know that they shouldn't actually ever go public. And sometimes you question why people go public if they
if they've been perfectly happy for many years. Sometimes it's a way to get cash out. Sometimes it's a way to let other people in the business get some skin in the game, which is probably the healthiest way you see. And sometimes it's just an opportunity for people to say, look, ah, from here on, you know, I want to maximize what's left of my time in the business and what I've
built up. And it's a way for them to have what the brokers I like to call a liquidity event, which is a lovely word which really means everyone gets PiZZ of money liquidity event. But the liquidity event didn't really happen at the Digitco, but maybe it will. Hopefully it isn't a sign that the cautious optimism for the year ahead is too enthusiastic and not sufficiently cautious. We'll find out. We'll find out in the months ahead. For the moment. Thank you very much, Eric Johnson for coming
on the show. Great to have you on.
Thanks James, great to be here.
Great to have Eric on. Eric. As you know is it talks to the top people all the time and it's very important to know what they are thinking because they are running big stocks.
Before you go, we'll just encourage you all listeners. It's all online on the Australian dot com some of their responses for this CEO survey, So if you have a specific company you're interested, you can click right through and find their responses.
Oh yeah, and you want to know what the CEO has to say? Okay, very good, all right, and the emails please the money puzzle at the Australian dot Com dot AU. Today's show was produced by Lea Samog