0:00

It's been flagged as a possibility all

0:02

year, but AGL will follow the

0:04

orders of Viscan and Brooks and accelerated

0:06

retreat from coal fired power plants Cannab

0:09

Brooks has been pushing for a while for ADL

0:11

directed coal by twenty thirty five,

0:13

and that's what the company will do by shutting

0:15

down the Loy Yang a. power

0:18

station. The company will also develop

0:20

a strategy for twenty billion dollars worth

0:22

of zero emission generation. The

0:24

state of Victoria will increase its storage

0:26

capacity target renewable energy

0:28

to offset the shutdown of the coal fired

0:30

plant, aiming to provide enough renewable

0:33

energy to power half the state's current

0:35

homes at peak energy use. Just

0:38

quick aside on that, I know

0:41

someone in the union who

0:43

tells me that when this was talked about

0:46

around Vale's point.

0:48

And the government said, don't worry, we got you back.

0:50

They'll be jobs blah blah blah.

0:52

They were absolutely horrified at

0:54

the MIA of

0:56

government. With

0:58

AGL investors unhappy about the proposed

1:01

split of the company earlier this year, This

1:03

update is short to change their tune on the AGL

1:05

board. Let's see how that went down on the

1:07

market today. And now on Money News,

1:10

the market wrap on TikTok you

1:12

get to choose. Who your content?

1:15

Just you, friends, or everyone, out

1:17

more at TikTok dot com forward slash

1:19

safety. And after

1:21

taking a battering for much of the week, the ASX

1:23

two hundred surged to over two percent

1:26

one point today before closing up one

1:28

point four percent to six

1:30

triple five. The Energy Materials Communications

1:33

and consumer discretionary sectors

1:35

all outperformed with premier investments

1:38

being the standout on the day, jumping

1:40

over fourteen percent Also

1:42

sawing in the day coronado, up eight point

1:44

one percent. The gray finished up

1:46

seven point two percent. Sayona,

1:48

up six point seven percent New Hope,

1:51

up six point four percent. Eris

1:53

fell sixteen point eight percent after

1:55

announcing a guidance downgrade

1:58

after announcing its coal

1:59

shutdown.

2:01

IGL energy closed flat at six

2:03

dollar sixty. Joining me for the rest of

2:05

today's market gives Scott Phillips, chief

2:07

investment officer at the Motley Ford.

2:09

Good day, Scott. Good to talk and Mike. Okay.

2:11

Look, I was a pleasure to meet you, Mike. Thank

2:13

you. Scott, I much better die in

2:15

the market. Today, every sector was in the

2:17

grain so is there a little

2:19

less fear about global conditions? What

2:22

do you reckon? A little bit less today,

2:24

mate, a little bit less today. You know what you

2:26

know what I love about the question. You just last is,

2:28

fear is the right word. You know, when markets

2:30

we we kind of pretend sometimes markets are these rational

2:33

things that always make these cool calculated

2:35

level headed decisions And then you

2:37

look at the reality of it. And you see some I mean, some

2:39

of the stocks, even ones you've mentioned, some of the

2:41

the winners and losers, they are often in

2:43

this up and down list by four percent or

2:45

five percent day in day up four percent five

2:47

percent up three percent down six percent But

2:50

the market is supposed to be this rational

2:52

cool head of the thing as I said. It's often not. And

2:54

I think you're right. Look, fear is still very much a

2:56

near sentence, you might. Between the war in Ukraine,

2:58

between inflation, interest rates, the whole bank

3:00

of Inland Pilato, which we'll talk about a bit, I think.

3:03

The simple reality is that right now

3:06

no one knows what to think. And in markets,

3:08

people for short term traders, So

3:10

first and ask questions later, attendance to be the way it

3:12

goes. That's what we've said over the past few weeks.

3:14

Today's games are welcome. I

3:16

have a hunt that we'll be talking maybe in

3:18

twelve or eighteen months and look back and say, gee,

3:21

we're over a bit carried away then.

3:23

We're a bit too worried about what was going to go wrong.

3:25

even if there is a coming downturn, I think if

3:27

there is a recession, you're going to look at the

3:29

long term track record of the market to

3:31

see that even when those things, the

3:33

COVID crash, the GFC, the dot

3:35

com crash, the Asian financial crisis, like,

3:37

all of these things happen. They actually did happen,

3:39

and they had it hurt at the time. But the long term

3:41

trajectory is still up. And I I do think when

3:43

when fear takes over, Warren Buffett said famously,

3:46

be greedy with others fearful. And that's

3:48

probably good advice right now. And the market up today,

3:50

maybe some bargain on this out there. finding some

3:52

buyers or maybe looking around and saying, you know what?

3:54

This is a bit overdone and seeing some opportunity.

3:57

Craig, stuff. Bank

3:59

of England, there's

3:59

a bond crusade. Is that

4:02

going to frighten us? I have any impact on

4:04

us. It's a well, it's this extraordinary

4:06

reason.

4:07

It is it is bizarre. You

4:09

know, it It covers

4:11

so much ground. It covers politics, it covers economics,

4:13

it covers central banking inflation rates, everything

4:15

we just talked about. the

4:17

U. K. government, there's braven,

4:19

there's crazy braven. I think they

4:22

are pursuing a particular approach for

4:24

reasons that probably best known to them

4:26

because even people in the financial

4:28

markets who are going to do well over these tax cuts are

4:30

looking around saying that would have been it's

4:33

in the pound and it's all time low against the

4:35

U. S. dollar, all time low. And these are not

4:37

357 ten year lows. This is all

4:39

time low. so desperately why it is the

4:41

financial sector about what the UK

4:43

government and the Bank of England might have to do.

4:45

And this bond buying, as you say, every

4:48

bank around the world, every serious central bank

4:50

around the world is actually removing

4:52

money from circulation to try and clamp down

4:54

on inflation. The Bank of England was trying to

4:56

do the same thing except the government spending money

4:58

doesn't have. So the Bank of England has got no

5:00

choice, but the guy didn't actually buy some of those government

5:02

bonds just to fund the program

5:04

that Lis trust's government is putting in place. So

5:06

it is a very, very strange situation.

5:09

I've got to say our governments with both drives doing some

5:11

strange things from time to time. probably the

5:13

strongest I can remember in a long time from

5:15

a major, you know, world government.

5:17

I don't think we know where this finish is

5:19

quite honestly. Good time, by the way, for all these to travel

5:21

to the UK. the well, a thousand

5:23

dollars, like, sixty p. I was there. It

5:25

doesn't also use the hour. I got forty two p

5:27

for my dollar. So I'm a bit jealous, frankly, a bit

5:29

we're going there at the moment, but -- Yeah. Yeah.

5:31

There's a lot left to play out for that one.

5:33

Miners will once again

5:35

stand out, desire for the Australian way to rely

5:37

on mining to get us out of a hole,

5:39

no pun intended. what's causing their

5:41

success at the moment? Is it global prices? What

5:43

does it mean?

5:44

Yeah, it is. It's global prices to a

5:46

large degree. You mentioned you

5:48

hope coal in that in that what have calls done

5:50

exceptionally well. It's a remarkable thing with

5:52

-- you spoke with AGL. At

5:55

one point, we're saying AGL is moving down a

5:58

path of renewables the other point we're seeing

6:00

all time highs on the coal price. It's

6:02

a strange all time we're living in, but you're

6:04

right, iron ore is doing well. Gold was up

6:06

today. coal continues to

6:08

be strong. And it's been great. Honestly,

6:10

look, so the U. S. market at multiyear

6:13

lows, the OSX is about a three month low.

6:15

And the difference largely is while

6:17

our coal mines and our iron ore mines

6:19

and our banks aren't the most

6:21

impressive performers, they're not going to necessarily

6:23

change the world like an Amazon or a Facebook or

6:26

one of those companies might do. But

6:29

what has been over the past couple of years is

6:31

when those tech companies, those growth companies

6:33

are on the nose, our miners keep

6:35

digging, our banks keep, you know, clicking

6:37

over and and and unfortunately charging us are pretty

6:39

penny for using their services, but it's doing

6:41

great things for the market and great things for their

6:43

share prices. Yeah. I mentioned

6:45

AGL today, will there be a lava

6:47

thon amongst investors and board

6:49

members after that? What do you think? Right.

6:52

It is a really strange one. So I looked at some numbers

6:54

before coming on to the IMO. The AGL

6:56

share price is down seventy one percent

6:58

over the past five years. Wow. So, you know,

7:00

the the start the starting point, honestly,

7:02

is and the reason why Cannebrook's got

7:04

to basically do what he wanted to do with AGL

7:06

was investors were like, we've

7:08

been, you know, we've we've been waiting for

7:10

managers to fix this thing. And they just

7:12

haven't and so a large number

7:14

of their just kinda went, well, okay, Mike,

7:16

do you do you work? Right? Yeah. There's there's no

7:18

so much you can you either hate it. This

7:20

wasn't a high flying super successful

7:22

business that Mike kind of looks to try and take out cheaply.

7:24

He was paying up for a business that had

7:26

been a serial disappointment. And you're

7:28

right, the share price didn't change at all today. I think

7:31

the market knows AGL's

7:33

plans. This is the thing. Share prices tend to move

7:35

when the market gets surprised, positively or negatively,

7:37

major about premium investments earlier. a

7:40

good set of numbers, you said the share price jump iris,

7:42

that's the number of the price falls. I

7:45

don't think this is a price for anybody. And

7:47

so it's a political issue, it's an energy

7:50

grid issue, and those things need to be resolved.

7:52

At a company level, I think the market's

7:54

saying, well, yeah. I mean, if, you know, if you've got to

7:56

spend billions of dollars to keep Loy YangA

7:58

open for those extra ten years and you

8:00

don't know what the ROI is going to be the return

8:02

on investment. If you don't know what you're going to

8:04

get out of doing it, would you put the money up?

8:06

If you say to me, look, Scott, hey, help? How about you

8:08

fund this, you know, this next

8:10

fifteen years operation at L'Oreal. I would

8:12

say, well, okay. But what the price is going to

8:14

be? What's the profit going to be? How long

8:16

is it going to make a dollar? If you don't know

8:18

the answer, you're going to say, let's actually not spend the

8:20

money. And I think honestly, for all of more of

8:22

my kind of books environmental kind

8:24

of crusade, I think there's obviously a lot

8:26

there. I think part of it is just

8:28

it's just super unclear whether you would

8:30

actually go and spend that sort of money without

8:32

knowing what the return might be within those ten

8:34

years. Yeah. I just quickly made premier

8:36

investments, big numbers today. We

8:38

had the indicative in inflation

8:40

numbers today, we're gonna spend,

8:43

like, mad fire up until Christmas,

8:45

Humbert. Yeah. And this is the

8:47

RBA's challenge. Yeah.

8:49

So the the problem here's the problem. We started

8:51

the new the new year. We were saving twenty

8:53

percent of our income. almost

8:55

unparalleled high. And this was because we

8:57

got so freaked out by COVID, and frankly, we

8:59

couldn't go where you were doing anything. So we're

9:01

getting all this money because if we are

9:03

filling your bank accounts, no one was spending it.

9:05

Over the past 689 months,

9:07

we've actually been spending down. The last

9:09

number we I think it was eleven percent national savings. So down from

9:11

twenty percent to eleven percent The best thing is we're

9:13

spending nine percent more than we're earning because we're emptying

9:15

out the bank accounts. So the RBA is this, we're

9:17

trying to round us in. And we're kind of saying,

9:19

well, okay. Yeah. We're gonna pay off the mortgage. We should've got cash

9:21

in the back pocket. So we're gonna go and buy

9:23

that couch, buy that TV, go overseas,

9:25

go out dinner. It makes the RBA's

9:27

job really, really hard, but I think

9:29

we're getting close to the end of that cycle. But

9:31

you're right, I think the the retail numbers are being good

9:33

and look, I can't blame you. The retailers had a really tough

9:35

couple of years from twenty twenty to twenty twenty one.

9:37

So -- Yeah. -- good luck doing. But it makes the

9:39

RBO's job really, really hard. It

9:40

does. Scott Phillips, Chief Investment

9:42

Officer of the Motley Foods. Your beauty, Mike, talk

9:44

to you again soon. Thanks so much. You are

9:47

welcome. Thanks, Luke. Good on here.