Luke: 0:00

Welcome to the curiosity crisis, we challenge ourselves to explore the world of business tech, investing in science, get curious and be part of our journey. As we discussed, learn and share. Today we're talking to Cush, the co host of the curiosity crisis podcast. He studied engineering, science and commerce. He's been investing for years. And hopefully we'll get some insight from him today. Cool. Che going very well. I'm

Khush: 0:23

keen. How are you?

Luke: 0:24

I'm very well, this should be this should be a lot of fun. I'm very excited. So I think we'll just jump straight into it. What's been keeping you curious recently?

Khush: 0:33

What's been keeping you curious is journaling. Actually, I got told to have a cracker this year, and you know, have gotten into it absolutely loving. It doesn't feel like a chore at all, doing it every week. And I find it's so good to just like, get your thoughts out there, articulate them. It's good for regulating yourself. And yeah, loving it.

Luke: 0:50

Nice. Um, so this episode is about investing. And so I thought I'd ask you, if we could get some context around your investing philosophy? And yeah,

Khush: 0:59

yeah, so investing philosophies, like I've heard a lot. And sometimes people just jump straight into what they invest in, and why and you're the particulars. But I think if I take it back a step, and what sort of underpins the whole, like, both my whole portfolio is to two main ideas. One is summed up by Ben Franklin's, quote, money makes money and the money that money makes, makes more money. And basically, that just means that compound interest works, it is the eighth wonder of the world. And if you just stay disciplined and consistent, you'll do very well over a long period of time. And the second one is more broadly about like, investing in equities. So essentially, what you're doing when you buy a company, buy a stock, you're buying a portion of the business. And rather than you know, going into the jargon and all the tricky stuff in the in the scary stuff of investing, just remembering that you're buying literally a part of a business at someone's best idea and the lights work. You know, it focus on what's important investing in and picking the really good companies doing awesome things, solving awesome problems.

Luke: 2:02

Now, you just mentioned a lot of financial kind of jargon. Do you have any, like practical ways of avoiding that if you're, you know, beginner investor or someone who has no idea what's going on?

Khush: 2:13

Yeah, absolutely. Well, first is there is some that make a lot of sense to know. So just reading a little bit, there's this book, get started investing, which sort of breaks it down and tells you a little bit about about them. And then, you know, listening to some introductory, investing, podcast gets out investing, and a couple of others are quite useful. But you know, at the end of the day, again, you're buying portions of businesses, literally just know, the companies that you're investing in and pick the best ones pick what you see out there in the world around you doing really good, good things, like chances are that they're pretty successful financially as well.

Luke: 2:52

So before you mentioned compounding, I was wondering if you could go a little bit more into detail about that. Are you referring to capital gains, for example, or dividends? Or, you know, where does the compounding fall in tourism more conceptual?

Khush: 3:08

Yeah, so combining, I think of it like as a whole of portfolio thing. So basically, what I mean is both capital gains, so the share price going up and dividends, what what you know, the company will give back to you but whole portfolio essentially, with your with have many holdings you have and whatever capital gains you make from those plus the dividends you get, say, overall, your portfolio one year returns 10%. So you've invested $1,000, and your agenne, 10%, you've got$1,100. Now, that's one year, the next year, even if you don't miss any more, and you make another 10%, or something around that ballpark, you're making 10% on, you know, $1,100. And again, it's not that much, you probably ending up with what $1,210. But that happens year, on year on year, and you know, 20 years down the track, you've made a lot of money just by sitting there doing nothing, and letting your letting compound interest do its thing.

Luke: 4:05

I was wondering if you could run us through some of the principles that you have for investing in terms of like, what are the guidelines that keep you on track for yourself?

Khush: 4:14

Yeah, okay, well, I'll keep it pretty simple here. And the number one biggest investing principle I have is invest in what you know, you like you understand, and you believe in. And the reason for that is, again, you're buying a portion of a business, right? You're owning that business. So you have to understand, you know, how they make money, what you like about them, why you think it's going to grow and be really successful over the long term, whatever you're planning to invest in them and for how long you plan to hold them, and just just understand them enough. So you can articulate that to anyone like your younger cousin, your mother, so just make sure you really know about the company.

Luke: 4:54

Yeah. So getting a bit more into the details then, What strategy do you You employ in investing? So we understand a bit more from the lens that you perceive investing. But yeah, what, what specifically do you do in terms of your investments?

Khush: 5:11

Yeah, good question. So, it's pretty simple. To be honest, I have a core and satellite portfolio. So essentially, my core portfolio is your long term, you know, chip away type investments. So for me, there are ETFs, and managed funds that they just will do the compound interest, you know, year on year, I don't really pay too much attention to them. I do a little bit of research before I buy those. But typically, I'll buy them every quarter, and then just let them do their thing over a long period of time. And they're going to get me modest returns, but over a long period of time, do really well. And then the satellite, which is where the exciting stuff is the really interesting stuff, where I hunt for hunt for returns, invest in those companies that are really thinking to grow well do their thing, and I believe are better than the market and will give me some really good returns.

Luke: 6:07

So I guess the satellite portfolio is probably more interesting to most people. It's a lot more fun. Yeah. What do you have your eye on right now? In terms of those? Yeah, so

Khush: 6:17

not not a hell of a lot. You know, I try and keep it a high conviction portfolio, which just means fewer investments, my these are my best ideas, and I believe in them a lot. But, um, a few few things that have my own. At the moment, I am looking at at Coinbase I already own it. But um, I think, you know, there's there's a few opportunities popping up because it's pretty volatile stock. And, you know, it's changing every day. So if if the the opportunity comes up to reinvest, I'm all about that, again, our conviction that that is, yeah.

Luke: 6:51

So in a lot of people's kind of opinions, they would see crypto as a specie, or a speculative bet. Do you see Coinbase? Obviously, the more you don't see Coinbase as a speculative bet, because high conviction. So why is that? Why do you think it's it's a good company? And then what's your opinion on spec ease as well?

Khush: 7:12

Yeah, a couple things there. Firstly, I don't see it as a specie, because crypto, you're much more into, like into crypto and I understand a lot more deeply and more particularly as me, but where I see crypto is essentially it has a place going forward, it is going to only grow in increasing use cases. I mean, I'm not paying for a beer with Bitcoin. But I am seeing the networks of big networks like Aetherium. I think last year made, I think 11 or $14 billion worth of transaction fees, which is a huge, huge amount. I'm seeing central banks in Australia, or Lego and all technology adopt digital coins based on your crypto projects and the blockchain. And I'm seeing, you know, buying to crypto from massive companies, massive fund managers like BlackRock, Google, and they're all going through through Coinbase. So I think, you know, crypto is here to stay. That's the overarching philosophy behind behind Coinbase. And then the company itself is actually really sound.

Luke: 8:22

Is there any? Yeah, any other kind of picks that you have your eye on? I think Coinbase is a fantastic example of something that hasn't done particularly well, since its IPO. But I think it's been recovering significantly. Since so, yeah. Do you have any other kinds of stocks or, or better you've you keeping your eye on? Um, well, there's

Khush: 8:47

probably a couple others that are a bit like coin base in the sense that, you know, they're in volatile, they're volatile stocks, but essentially behind them, they're really, really sad businesses. The other one that I like, and it's in the headlines all the time, which I don't really like, but whatever. Not everyone has to agree, is Tesla. I really like it, I think, you know, at the end of the day, it's, it's a phenomenal company. And you've seen sort of come from, you know, grassroots pioneering into EVs into a company that's profitable, it's got a vertically integrated supply chain, you know, they're, they've got partnerships to mind on the theme, but then they refine it all the way through to produce electric vehicles all the way through to charge electric vehicles. So the portions of revenue that are going to come through that and the value they'll see is just going to continue to increase they've got that first mover advantage that I don't think it's gonna go away. So yeah, I think it's a it's a great company, you know, again, in a volatile industry, but will do will good things to come.

Luke: 9:56

Do you have any opinions on Elon Musk buying Twitter? though, does that suddenly pique your interest? Because, you know, same CEO in, in both companies? Oh, actually, I don't think he's the CEO of Twitter anymore. But does that interest you at all? Look?

Khush: 10:13

I cannot for Elon, to be honest, I don't think that, to be honest, I think the positive thing for me as an investor is all of this is noise. And people get caught up on that. It's in the headlines, they read, like, Oh, my God, he's doing this and that. But really speaking, that doesn't change the value of Tesla, the people, the real people running Tesla, are continuing to deepen those supply chain benefits. And, you know, its profitability, and all that sort of stuff. So if you know Elon doing stupid things, and making noise and tweeting silly things, provides good entry points for me into Tesla and go do it. I don't care. But yeah, no, no, no thoughts on him buying Twitter and rampaging social media.

Luke: 10:57

Yeah. So getting a bit more into your story. How did you get into investing? And what was the catalyst?

Khush: 11:06

Yeah, I think so back in the day, this is the original start, I suppose, you know, I was always Easter in the paper, me and dad. And pretty soon after I got through the sports section, I was over to the business section and reading about reading about companies and going back and forth. But then, I sort of got into it, when I realized probably the value of investing and my why. And that was that, you know, at some point, if we want to be financially free, which basically means, you know, you're not relying solely on an income to live off, you're getting potentially passive income or multiple streams. So investing is a very good avenue to do that. You know, on the, on the speculative side of your portfolio, you've got the companies with asymmetrical upside, which means, you know, one company you can buy can go to zero, but on the other side, it can go, you can buy it and go to 2,000% up, or something like that, you just got to stick with it. So I think that's, that's one, it's about building wealth, but it's also about understanding the world using it as a tool to really, you know, understand different industries different, like what's going on in the broader economy around you. So that's sort of like the why. And then I got into it, I just got deeper. When I was in at uni, I joined a club called Smith, student managed investment fund, and then just kept learning and building, you know, my portfolio, which I'm Robin,

Luke: 12:28

nice. And what did you do at Smith? What was the purpose of it? And what was your role there?

Khush: 12:35

Yes, Smith was so cool. It's a club that essentially, my university that we got given a granted a small fund like$20,000, that we were able to manage as students, literally as as fund managers. So what we do is we'd research stocks, real assets, listed small gaps, and then in groups of like four to six, we, you know, research company, go deep develop, like a thesis on the company, develop a pitch deck and evaluation and put it together literally, in a pitch deck a book, and then present that to our sponsors, that the providers that the 20 Grand to invest. And essentially, you just you just learn the ins and outs of analyzing a company. And yeah, absolutely loved it. And I thought it was really a really good challenge. And at the end of the day, you know, if you, you're putting all this effort into it, and then, you know, you can see the company that you've bought, like, fulfill the thesis that you thought it would. It's very, very rewarding. And I think that was just a catalyst to grow and get more into it.

Luke: 13:41

That's awesome. Do you have any advice for young aspiring investors, or any advice for people to get involved in investing?

Khush: 13:51

Yeah, I think initially, what are the first bit of advice? Absolutely, just to get into it, like, you're not going to understand whether you like it or not. And whether you you see a feature and yourself investing, without doing it. When you got your money online, your skin in the game, you're going to take a lot more seriously and understand how you how you sort of fit in you'll develop your investing philosophy. So that's the first thing and then to get over that hurdle of absolutely not knowing anything, I'd say, you know, just read a couple of books and do your your background research on it. So I think I mentioned earlier, get started investing was a great book for me, it was just a base level, base level understanding and then read and talk to people and challenge others, you know, the whole thing was investing in you don't have to agree with everyone. Essentially, you probably won't make more money than the market if you if you agree with the market and it agrees with you because you're not gonna have any fresh ideas. But you know, develop those sorts of those opinions on on companies positions, and then you know, sort of test them against other people talk to people about Then and get get into it. Good.

Luke: 15:03

So in terms of future propositions, do you have anything that you're looking to incorporate into your portfolio that you don't have currently? Or is there something that you think will expand that you might touch on later? Is there anything like that?

Khush: 15:18

Yeah, I think I'm looking forward, there's a couple of things we're looking at. I mean, I'm pretty interested overall in the whole decarbonisation space, helping the world and the economy get to net zero. So I think there's a lot of potential for investing in that space, just thinking about how much money governments have thrown at social conscience, around ESG, investing in companies doing the right thing. And literally just physically getting to lowering our emissions. So I think it's a big space, and a lot of companies doing some pretty exciting things there. There's a lot of change going on in our industries, literally, from how we make things, how we grow things, how we power ourselves, how we move around, all of that is changing if the world's gonna get to net zero. So involved in that is hundreds of companies. And I'm passionate about I read on it for fun bit of a nerd in that space. So I think there's going to be some real potential for for some wins, there is also going to be some losers, and some hype, you know, in the bubble of things. But then otherwise, you know, AIS is a big thing. I'm not I'm don't really know about it too much. I'm going to stay clear until I learn from you potentially more about that more about that. So yeah, I think there's there's some spaces that I'm probably looking into. Yeah.

Luke: 16:35

Now awesome. I think something that I've learned from some much older, wiser people than me is that predicting the future is really hard. But predicting what won't change in the future is much easier than predicting what will change. Do you think there's, is there anything that won't change? Something that you don't think will change? That could be a potential investing opportunity? Hmm,

Khush: 16:59

I love that. And you've obviously been speaking for, which isn't very wise people. But, um, yes, I completely agree. And I think there's a couple of things around that, for one is with investing, obviously, there's a lot of noise out there's a lot of chat, there's a lot of headlines, a lot of fear, and greed and emotion in markets, and you literally see like the tickers of the stocks, you're probably interested in changing, you know, 234 percent up and down, day or across, like up to 10% across a week sort of thing. But if you really think about the reason you bought the company, and and the fundamental business itself, is not changing that much value day on day, week on week sort of thing. You know, ideally, if your, like a sound strategy is being put into place, you know, the company is growing in high single digits, or double digits, in terms of revenue, so, or, you know, its asset base or something. So, that's the actual value of the company changing year on year, but in terms of the stock price is going up and down on different macroeconomic factors be different opinions, and fear or stuff that you can't control. So essentially, just understanding the company isn't changing value that much each day, takes a lot of angst out of investing. And then yeah, so that's why I try and stick to a pretty high conviction portfolio of only a few companies that I know well, that I know, it doesn't matter if the company drops 5% in a day, overall, it's pretty good. Yeah, there's a couple of other things around that, like, you know, the leader in the industry is there for a reason. They're not going to get knocked off its perch. A good thesis is not Oh, it's like the third largest company in its industry. If you can just gain some market share, it'll do really well, you know, the leaders are there for a reason. So things like that, like, they don't change like that overnight. I'm not saying that. companies can't lose value and be beaten. But yeah, I think there's a lot of inertia in the world in economies. So yeah, you shouldn't take that for granted.

Luke: 19:00

That's good. Is there anyone that you look up to, not necessarily in the investing space, but even just in the way of critical thinking or coming up with potential investments? Is there any anyone that you look up to in particular?

Khush: 19:15

So this is an interesting question. I don't know if it's really regarding investing. But what I do do sort of look up to is some of those broken repeat myself a little bit, but like, some of those leaders that, you know, go ceviche, go say stuff that sounds outlandish, sounds ridiculous, you know, in Australia, this treaty forest, you know, whatever in in the States as Elon Musk sort of thing that they make bold claims, but back in, in putting actions to sort of back Debbie claim. So to year, the moment in Australia is trying to decarbonize why I don't know like, he's his whole company's Fortescue Metals. And he's trying to start whole green hydrogen supply chains and stuff like that. It's there's nobody doing it. It's hard. And he's making bold claims, and he's copying criticism, but people like that with a big idea. I think it's pretty exciting. So I sort of look up to that, that ambitiousness. And that vision, and then I like to, you know, really critically think about it like, is this going to, you know, turn into reality? And obviously, in a couple of cases I have, because I've invested in Tesla. And yet, I think that that's really exciting. I look, look up to that big vision.

Luke: 20:32

And what advice would you give to your younger investor self? Is there been any key mistakes that you were trying to avoid? Or? Yeah, any any simple hints, even that would that would make it a lot a lot smoother? I

Khush: 20:46

love this question, actually. And I could, I could give you the easiest ones, which I've already, which I've probably already touched on in this podcast, where I'm saying, you know, invest only in what you know, and like and believe in and think's going to do really well and have high conviction and back the leaders. And keep it simple and all that sort of stuff. But to be honest, like I wouldn't be at this point. Now, had I not made all the mistakes that I had initially, I wouldn't wouldn't have this sort of framework and thinking about investing and not lost money on spec ease and just taking a bit of a pipe and got into it. So the real advice is get just just get into it. Have a crack, invest, put a little little bit of money in and understand how you hate sort of deal with investing lose, like if you lose that money, why did you lose it? And yeah, just develop your your thinking with by actually doing? The doing is where you definitely learn the most. So that's probably the advice I give.

Luke: 21:42

Yeah. Do you have any kind of final closing thoughts on investing? You know, if our listeners are zoned out for this entire podcast? Is there any key points that you'd say? If there's one thing to take away take away this is there anything like that?

Khush: 21:58

I look at the whole point is I suppose that that advice, like get into it have a crack. I'd say the reason I invest is essentially it allows you to build your asset base, build your wealth. And these these, like investing allows to earn for you you know where you sleep, work or play and allows you to to learn about the world. So you just are more curious and you figure out how things work a bit better. So I'd say get into it. Have a crack. definitely worthwhile and enjoy the journey. Awesome. Thanks for chatting. No worries.

Luke: 22:34

Thanks for listening. Find us curiosity crisis.com and curiosity crisis on Instagram, or on all major streaming services so you can listen how you lie. Catch you on the next episode.