Guidelines for Young Investors

Marty · 00:00Welcome to episode 185 of The Numbers Game, uh, Marty here, and Tommy is in the seat again, as Jase is still away, uh, but Nick, how are you, my friend, how are you going? Just,

Nick · 00:14yeah, just flying, you know, just cruising along without Jase, um, it's been a week now without him, so, I don't know, are you missing him?

Nick · 00:20I'm, I'm okay. Bye.

Marty · 00:22A little bit, but Tommy's just been so good that, uh,

Nick · 00:26I think he's got, dare I say it, I think Tommy's got better hair. It's very, it's very similar to Jace's. And I don't think he's been drinking on the weekend. No, no, no, no, he's, uh, There was far less of a drama when we logged on, he was ready to go, uh, wasn't shuffling papers around.

Nick · 00:47He was early. He was

Tommy · 00:49actually early. So, anyway. I will say I've got less on than Jason, um, well just from what I know of Jason, so. Yeah, yeah. I keep him

Tommy · 01:00busy. We do,

Marty · 01:00we do. We do love Jase. We love Jase. That's why we like teasing him a little bit.

Tommy · 01:04Well, yeah, I keep his team busy with my accounting. So, it's, uh, we keep it in the family, hence why I've got his seat warm today as the producer.

Tommy · 01:12So, thanks for having me, boys.

Marty · 01:14You're a good man, Tommy. You're a good man. And Jase, we do love you. Don't, uh, take that any other way. We do love you, we do miss you, and we'll welcome you back with open arms and, uh, big hearts. Big hearts. So, hope you're doing well, wherever you are. We still can't locate you.

Tommy · 01:31Well, Marty, uh, you've got a little update on, on, uh, your son and what he's up to. I'm always fascinated by him. Um, young Charlie, I feel like he's, uh, a part of the show, but his voice has never been on. And, um, I know you've tried to sort of do the deal with the boys and get the contract drawn up, but they won't agree on price.

Tommy · 01:50So he's, uh, he's not coming on the show.

Marty · 01:52Well, your, your son Bodie, I'm very impressed with as well as DJ DJ Dacca. I

Marty · 02:00think it is from memory and, uh, he's, he's running a little DJ business. So I'd love to see

Tommy · 02:05how old is your son, Tommy? Yeah, he's seven years old.

Marty · 02:08Seven years old. I mean, it's, uh, inspirational to see him, uh, really taking on his own little business and loving it.

Marty · 02:17So, you know, I'd love to see him doing his thing on, uh, on Facebook. It's been brilliant. Maybe,

Nick · 02:23I'm thinking like, maybe episode 201, I don't know, but we just, just let them go. Maybe we just get them both on, give them a microphone, step aside and just see what happens. Oh, I'm sure it'd be any

Marty · 02:39worse. I think it's an upgrade.

Nick · 02:42A son

Tommy · 02:43off. Yeah. Trade, um, trade us. Jase can manage the conversation and the boys, um, Charlie and Bodie can get involved. I'll think, um,

Nick · 02:53yeah, and I'm. I might be, um, overtaking the conversation here, but I, I think there's a,

Nick · 03:00I think there's the scope in that. I reckon we get both of them on, maybe not together, but I'd love to hear Charlie's story.

Nick · 03:07Um, particularly given the homeschooling Marty and how people are taking to that as in our listeners. And I think, um, the DJ Dacca story is awesome. So absolutely. Charlie

Marty · 03:19has been watching. DJ Dakar. He loves, he loves that he's doing something so invigorating. So, it has caught Charlie's attention, which is, which is always a good thing.

Tommy · 03:31Oh, good. Well, what's Charlie up to at the moment?

Marty · 03:33As you know, we've, uh, we've been doing the home education piece and Uh, Cole's been doing the majority of the work. He's doing a basic work around the English and the STEM and everything else. But I'm, I'm in charge of the business fundamentals and, and maths.

Marty · 03:48And for me, it's about applying it to the real world. So he's been learning fractions and yeah, I'm always thinking, how can we apply these methodologies into everyday life? And

Marty · 04:00it's been really interesting because I obviously do my own investing in my self managed super fund and he's been really keen to see me researching companies and stocks and tracking performance, uh, to the point he wanted to understand what it was to buy a good stock.

Marty · 04:18And he has saved about 1, 200 cause he's been running his eBay store, the coin store next door and doing well. And he said to me, Uh, look dad, I'd like to keep 600 aside because times are tough, which I think it's important in these economic environments to have liquidity. Well, that's right. You never know when you need your next comic book, right?

Marty · 04:43So it's, um, so that's good. And he wanted to invest 600 Australian into the share market. And he was working through a number of principles that I gave him. So there's one thing to be able to. You know, purchase a share and hope that it does well. But for me, it's more

Marty · 05:00about explaining fundamentals that he can rely upon regardless of if the share makes money or not.

Marty · 05:06It's how do I give you the structure? And I thought when we were going through it, um, it actually probably would have relevance to the listeners and it might help the listeners work out what they're interested in and finding specialized knowledge around what they're interested in. And, you know, rule number one.

Marty · 05:24Buffett's principle, don't lose money, rule number two, don't forget rule number one. So, you know, I, I reminded him that he worked very hard for that twelve hundred bucks and the six hundred he's going to invest. So it's really important that, you know, If he's investing money in a company, that it's going to work as hard for him as he did to make that money, uh, initially because he wants his money to continue to grow.

Marty · 05:50So, and I also explain inevitably in investing, occasionally you'll lose, you know, you will lose money here and there, but you don't want it to be due to a

Marty · 06:00lack of your own effort and diligence and research and reasoning. Um, that's the thing. So, so, If something does go amiss, at least you understand why it's gone amiss and you can, you know, you can rectify a situation.

Marty · 06:12Uh, Nick, what about yourself? Have you obviously, you know, financial planning background? Um, yeah. Am I on the right track with that as a, as a first principle?

Nick · 06:22Yeah, a hundred percent. And I think, um, it's very difficult to not lose money though. So it's a, it's an interesting thing from Buffett to say, don't lose money.

Nick · 06:31Number two, don't forget lesson one. But I think with Buffett's knowledge, of course, that's probably easier to do than most of us, um, for him because he can research and he understands companies and what should and shouldn't be happening. So I think, I think the lesson that I've learned over the years is if you don't know.

Nick · 06:48Then you go into something that you do understand, or you try and look for, um, risk mitigation. So, whether that's something like an ETF, Um, you know, if you don't understand the share market or a

Nick · 07:00particular company, there's, there's products out there that you can invest in where you don't have to worry about that stuff.

Nick · 07:05And the methodology is far easier than understanding what you're, um, teaching Charlie. But yeah, like you just think about how hard it is to earn a dollar. Plus you pay tax on that dollar, but then you can lose it all with, with one wrong decision. So I think we've all learned that, um, and then not to, you know, hijack the conversation, but then, and you start to talk about buckets and you start to go, well, okay, well, if there's a possibility I'm going to lose it, how much can I afford?

Nick · 07:31to lose and how much can I allocate to that, um, to that particular stock?

Marty · 07:36That's a great point right there, because he wanted to keep 600 aside, so he never had to panic about it, but he also, yeah, it was clear that if he did lose money, it wasn't because of his lack of effort in the research and putting in the work.

Marty · 07:51It was because that's what's happening in the market, rather than, how many times do you hear people, they buy a stock hoping it's going to go up.

Marty · 08:00You know what I mean? How often? Oh, all the time.

Tommy · 08:04Um, Marty, just on the nuts and bolts of, you know, someone investing, especially a child, I've, I've kind of looked into a few things because you hear, you know, it's like, Oh, if you put X amount away for your child at this age, you know, they'll have this amount by the time they're.

Tommy · 08:21You know, 25 or they start, well, they can access the money. And I've always thought like the numbers do obviously stack up if you're looking at compound interest and where it's invested. But the challenge is for a parent like mine, who's a parent like me, who's got a young, successful seven year old DJ, who's making a bit of money.

Tommy · 08:38Where do we park that cash? How do we do that? Like, where do you actually start from a kid investing in, uh, stocks or, you know. I

Marty · 08:47think Nick hit it on the head. It depends how much you want to go into it. Right. So they say, you know, if, if it's something where you just want to make your, you know, your seven or 8 percent return and it'd be comfortable year on year, the more

Marty · 09:00diversified you are, the better.

Marty · 09:02And, um, And Nick, you know, you, you probably just reiterate your first point on that in regards to, you know, having, having a bank of different stocks in one vehicle that's, uh, going to give you safety because you've got someone managing it. Um, Nick, do you want to elaborate on that? Yeah,

Nick · 09:19well, I guess Tommy, there's a, probably the easiest one to, um, unpack is an ETF.

Nick · 09:24Um, so, um, It's, it's basically a group of businesses rolled up into, into one stock. So you can buy it on the ASX. Um, it might have, you know, the, I'm just picking numbers here, 60 Australian companies in it, uh, 60 US companies, 30, um, from the UK and maybe some property and some bonds. So it's just a way to, um.

Nick · 09:51to hold an entire market or a number of different markets without having to worry, uh, worry about choosing a stock, um, such as, Oh, I'm going to

Nick · 10:00buy BHP because, you know, their price to earnings ratio is this, and they've got this coming up and, you know, the, um, the economy is doing this. So I can see BHP really leveraging off that.

Nick · 10:10You don't have to worry about any of that. Um, you just hold an entire market and all it means is pretty much what the market does is what you will do. Um, and you know, the, I guess this is from Warren Buffett, but you just buy a market or you buy an index is another word for that. You continue to invest in that market all the time.

Nick · 10:27Um, you reinvest your dividends when they come and you should, you know, you should move in line with the market, which it could be over time, anywhere from 8 to 11 percent year on year, depending on your risk profile. So, um, Yeah, look for a, um, for, for a business like Vanguard, um, who, who will package those up for you.

Tommy · 10:47I've seen that Vanguard have a Vanguard kids. Have you seen that? No,

Nick · 10:52I haven't, but that's a great idea.

Tommy · 10:53Yeah. And I guess it's like funny cause the barrier. To entry, I guess you've got to have a real

Tommy · 11:00interest in what you're doing. Otherwise you are actually just betting you're throwing money around. And so, I mean, that's why hearing Charlie's story and his interest, I'm curious, how much are you pushing on your son versus his curiosity?

Tommy · 11:16Cause I know he is a chess master. Um, so

Marty · 11:19he definitely is a strategic head and it needs to be stimulated. He loves it, but you know, he's, he's had the experience of running So I think everyone, you know, I always look for entrepreneurs that ran a lemonade stand when they were young, or I ran the bread stand at the milk bar because you get the understanding of fundamentals of customer service, what you buy for, what you sell for, you know, costs, and then what you get to keep.

Marty · 11:45So I think. You know, business owners can be very good investors as long as they're looking at stocks in the same way as they look at their business. You know, and I think that's what I'm teaching. Charlie is going, how do you bring the methodology of what you learned

Marty · 12:00into in your business to that made you 1, 200 to now look at, look at stocks in the same way.

Marty · 12:06Now he's driven that because I wasn't. bringing this up, he sort of just watches what I'm doing and, and wants to know more about it. And now we're having to look up Google finance every night and see what companies are doing. So I gave, gave him, so it's very self driven. I'm very much about what are your interests and, you know, we're playing cricket, you know, we're in the middle of winter, we're playing cricket cause he loves cricket.

Marty · 12:30So I'm going to where the hand wants to go and teaching him from that perspective. So the couple of the principles that I've given him. Um, on a stock in his research is number one, is the company going to be around for the next 10 years? And I'll elaborate on those principles as we go. Does the company have a competitive edge in the market?

Marty · 12:52Is the company increasing its revenues and profit over the last five years? Is the company good to fair value to

Marty · 13:00buy? You know, is the company financially disciplined? Like, is their management strong? Are they making strong decisions? And is there a strong future opportunity in the next five years? So I've given Charlie a set of principles to go away with and to do some research.

Marty · 13:17The fact he enjoys it I said, knock yourself out, but come to me with a recommendation. So he's looked at around about 20 to 25 shares. He broke them down into a top three, and then he came up with one particular share. Which I will share with you. Uh, now again, this is not financial advice. I don't want our listeners going and buying, you know, a 10 year old, you know, share recommendation who's being advised by a golden retriever in the background.

Marty · 13:47So do not, for goodness sake, go and get your own, uh, uh, independent advice. Thank you. Tommy. Thank you for the drum roll. Uh, the share is.

Marty · 14:00The ticker symbol is PHM and he purchased it for 115. 36 US and he purchased three shares. And this was his thesis. He goes, is the company going to be around for the next 20 years?

Marty · 14:17Well, it's the third largest home builder in the USA. And I'm pretty sure when we were talking about, DR Horton, um, the stock that Buffett purchased as a home builder, got him sparked on this, uh, in one of our episodes that, uh, Nick brought up previously. But, uh, they've been around since 1950. Their market cap is 24.

Marty · 14:3968 bill. Um, the company's very profitable. It's growing and it has a low turnover of people. So a lot of the management have been around for the last 10 years. So. He, he believes they're going to be around next 10, 20 years for sure. So that was the big tick, um, and then it moved on to the next question.

Marty · 15:00Does the company have a competitive edge in the market? Now they're a general home builder. They also take care of prestige markets. They do builds for seniors as well. They also have, Nicky be interested in this, Pulte Mortgage as a part of their brand. So we like that because we've got a little bit of inside information on that.

Marty · 15:20And another interesting, um, facet of the business is they sell prestige furniture. So you know how, Some homes will have furniture displayed in their properties. So they actually manufacture the furniture that they put on display. So when people build those prestige properties, they can actually buy the furniture as well.

Marty · 15:42Very, very clever. I like that. Hadn't heard of that before, but very clever. And their gross margins are 29. 55%. Um, when I look at D. R. Horton, um, which is the Buffett Purchase one, their gross margins are

Marty · 16:0025. 62%. So generally with a building company, that's actually very strong. If you're looking at tech software companies, gross margins can be 80%, a whole different business, 60 to 80 percent is good, but that's pretty strong.

Marty · 16:14So initial thoughts?

Nick · 16:16Well, firstly, I think, I think we track it. I've just had a look, um, it's done very well, mind you, um, even in the last day, so I'm not sure if, uh, Charlie's, you know, Charlie's out there spooking it down at the valley, uh, down at the, I know you went to the cricket, the indoor cricket centre on the weekend, he wasn't, he wasn't spooking it, it's up 1.

Nick · 16:3634%. So no doubt Joe's had an influence on that. Um, but it's absolutely flying. So I reckon we keep an eye on this. Marty, is this

Tommy · 16:46a long play? Is this the strategy he's going for?

Marty · 16:49Yeah, this, this is a long play and it's also to be reviewed every six months. To ensure that, um, there's no significant changes, so it's one you just, uh, you just

Marty · 17:00keep until, um, the fundamentals change or there's, you know, a major change in the company to the negative, but his goal is to keep this for 10 years, that's his aim, so he wants a long term, you know, Play that he can look back on and um, yeah and and but he'll review it every six months And he'll probably he'll probably hit me up every night to see how it's going.

Marty · 17:23So just to

Nick · 17:25uh, just if it's a 10 year play, um 2013 So let's say that's roughly 10. Oh, here we go 2014 the stock hit a high of 21 dollars and 41 cents Uh, as of today, the stock is 117. So that's a pretty good return. And if we go back 10 years prior to that, no doubt, you know this Marty. Um, but around the early two thousands, the stock was only, uh, 14.

Nick · 17:59So not a

Nick · 18:00big jump in the previous 10 years, but the last 10 years it's done really well. And I love what, what I love is, um, obviously. He's learning the numbers and you know, what's a good business and how does that, um, you know, how does that look on paper as in a good business? But what I love is the future opportunities, because I think that brings in so much more learnings.

Nick · 18:21It's more awareness of what's happening in the world. You know, if you talk about housing, you're talking about, well, what's, is there a housing shortage or not? You talked about, um, building, um, age care, I think, or something similar to that. So yeah, straight away, I think about the, the aging population that's been driven by, uh, the increase in health options that we have and, you know, we're all living longer.

Nick · 18:45So I think when you go deeper on it, it's a deeper understanding of what's happening in society and the world and what opportunities are going to exist from that. And that, that brings in so many more learnings than whether or not, you know, It's a good stock to buy. Um, so that's something I

Nick · 19:00pick up from it.

Marty · 19:00And that, and that's something I'm trying to teach about the fundamentals, which is relevant to business and life, but also, you know, almost the psychological side of business as well. Like, you know, the management's been around for 10 years, the stability in the workforce, uh, within their workforce, what are future opportunities and, you know, You know, that's the sort of thing.

Marty · 19:22It just brings more enrichment to the, to the, um, the proposal. And that's what, that's what I want it to be. An education, not just it's a stock and that's, that's all it is. So, and the next principle. is the company good to fair value to buy? Now it has a price to earnings ratio of 9. 38%, so for anyone that doesn't know what a price to earnings ratio is, it's the market cap, so the total value of the company, Divided by the net profit.

Marty · 19:56So the market cap is 24. 68 bill

Marty · 20:00divided by the net profit of 2. 6, which gives you a good market cap. So in those industries, anything under 10 is, is really good. Um, tech companies sometimes, you know, because their growth is so experiential that, you know, 20 to 25 times is okay, but the lower the PE ratio, obviously.

Marty · 20:19Um, the better in a lot of occasions. So, so how did I get him started looking at value? There's a great app there called Jitta, J I double T A dot com. And it overall gives a company ratings based on the fundamental strengths of, of the company and compares it to other, uh, other companies. And yeah, and for Jitta, it comes up as rank two on consumer discretionary.

Marty · 20:45Um, self wealth is an Aussie app you can go into. And that gives you, uh, sort of value to undervalued ratio. Um, and that was 12 percent undervalued on self web. Well, JIT is 64 percent undervalued, but we

Marty · 21:00only use that as a tool to go, interesting. Maybe we'll have a little bit, we'll look into it and look at the numbers and see what we can come to.

Marty · 21:08So it's a good starting point. Um, from there we go into Google finance and get, um, you know, get more of the numbers around the company. So, so good starting point, something for DJ Dacca to get around. Tell me. I'll listen. I'll send him the

Tommy · 21:24episode, mate. But while, um, while you're checking the stocks at night with your son, I'm watching some DJ set from Tomorrowland with my son, so, chalk and cheese there, chalk and cheese, Matty.

Marty · 21:39Well the next, the next part is, the next principle, is the company increasing its revenue and profit over the last five years? Just to get a read. of how it's going. And just to give you some insight, 2019, the revenue was 10. 21 bill. Um, as of 16. 06.

Marty · 22:00So really nice growth there. And then of course, we relate this to the profitability and the profitability five years ago in 2019.

Marty · 22:09Was a 1. 02 bill in net profit. And in 6 bill net profit. So really nice net profit growth, which means their expenses are being held down. You know, their revenues are going up and they're keeping more of it. And then I got Charlie just to have a look at the last four quarters, just to ensure that it's still trending upwards.

Marty · 22:33Which it was at 2. 73 bill. So he's done a lot of great work around this and the profit margin from 2019 was 9. 99 percent to 2024. It now sits at 16. 8%. So lovely growth. And to again, compare DR Horton, the one Buffett was buying in the same. Um, their profit margin was

Marty · 23:0012. 87%. So steady, consistent revenue growth expenses in check and two and a half times profitability from five years ago.

Marty · 23:10Very nice. Fine Charlie on that one. Very nice.

Tommy · 23:13Bloody oath. And how often are you looking at these? You know, is it something you set and forget if you are doing a 10 year strategy?

Marty · 23:21He's going to look at it every day for sure. Cause he loves it, but it's like, but I think you just come back to every quarter, having a look at it and just making sure the fundamentals are still going to how you would want them to be, you know?

Marty · 23:34So for us, our premise is let's have a look at it once a quarter. Cause I don't want him ruminating over it every week and every day. Um, at the end of the day, It's based upon the, of what we've conducted here, it should over time do well. So again, we can't, we can't worry about whether the market's up or down in a day.

Marty · 23:55It's a long term play. We've done our numbers. We've done our work to the best of our ability

Marty · 24:00and let's see how it plays out. So yeah.

Nick · 24:03Yeah. How did he get down to a certain amount of companies? Is that something Jitter will do? I know he said, how did get down to 20? There's so many companies out there. I think a lot of people will be thinking, geez, where do you start?

Nick · 24:16But he's obviously gone in with a narrow view. There's Jitter.

Marty · 24:20Yeah. He started on Jitter. He's been looking up a few YouTube, um, people speaking about it, but what's great is he goes to YouTube and someone's talking about a Specky stock. He goes to the numbers on you. finance and go, we're never buying that.

Marty · 24:37So he's not, and I said, look, Specky stocks could be a value in time. And he goes, well, I'll wait till they're a value before I buy it and waste my time. So it's like, it was, it was a really, but Jitta was what he was, what he was finding, uh, uh, finding the initial stocks on, and then he was digging into the stocks from there as a first point of call, but it was handy because you're

Marty · 25:00You know, some, some evidence up front as to dig deeper.

Marty · 25:03But yeah, that's the answer on that. The, the other, um, interesting thing on a valuation metric that he's learning, which brings in fractions a little bit as well, um, is price to book. Now price to book is the market cap of the company, 24. 68 billion. And then they have a book value of equity. So this is where your fractions come in.

Marty · 25:27So the book value of equity, which, which comes up in Google finances, BVE is the total assets of the company minus the total liabilities. So in this situation with Pulte Group, Uh, the assets are 16. 5 billion, and the liabilities, minus the liabilities, 5. 73 billion, so they've got equity of 10. 76 bill. So, that number's important to remember.

Marty · 25:56Now we take the market cap, 24. 68

Marty · 26:00bill, divided by the, um, book, to value equity ratio of 10. 76, which gives us a 2. 29 book to value ratio. Now, anything under one is exceptional value. Two to three is okay. So it's kind of, it's kind of fair price, little bit on the high side. Um, Anything three and above tends to be overvalued.

Marty · 26:28So it's a really nice way to get a learning piece in when he's looking up a company that he can do these types of divisions, look at the subtraction of liabilities to assets and finding a book value in the end to make a decision on that. So, That was, um, some good maths. We did this on the whiteboard. Um, and he really enjoyed going through the process of working out what the book to value ratio was on the numbers and whether that matched up to theirs.

Marty · 26:57So you could get the info right

Marty · 27:00up front, but he wanted to understand the dynamics of why that is, uh, you know, why that is a really good thing. So, yeah. So interesting from a maths point of view, right?

Tommy · 27:09Is this something that you're doing if you're a public list company? Of that scale. Like, could you guys do a book to value ratio?

Tommy · 27:16Or it's not, we could, we could

Nick · 27:19just, we just don't have to, Charlie hasn't ordered you yet Charlie is not giving us any money. Yeah yeah. And saying that though, we might need to hit him up by the sounds of it. Yeah. It's um, sounds like he's flushed. Well, I've got no doubt he'll be flushed with cash in the next 10 years.

Nick · 27:34So,

Marty · 27:34yeah. Well, and like I said, we could, we can monitor it over time, um, uh, You The next principle, a couple more principles, uh, is the company financially disciplined. So, you know, that's a really important thing. If you're going to put your money into it, you want to know that it's in decent shape. Um, so the assets have grown from this company in 2019 from 10.

Marty · 27:5672 billion to 16. 09

Marty · 28:00billion in 2024. Really good. Liabilities have held steady. So all their debts, the 2019 was 5. 57 billion, and it's only gone up to 5. 73 billion in 2024. So the net profit increased by 1. 02 billion to 2. 6 billion. So that's really important because they're not leveraging on debt.

Marty · 28:28They're making really good profits and injecting that capital back into the business to grow further. So that's a really, really good sign and, um, you know, that, that's something that I think all businesses could relate to as working well. And then we asked the question, what is the return on those assets?

Marty · 28:47What are they getting out of it? out of those assets in investing for the future. And they're at 13. 87%. Anything over 5 percent is very good on a return on assets and their

Marty · 29:00return on capital injection return of, of their money making more money is at 17. 28%. Anything over 15 percent is excellent, and they've got cash in the bank.

Marty · 29:12996 million free cash flow, so nearly a billion, um, so they're injecting the rest of those profits back into growth instead of leveraging up on more debt. So really, really, really, and strength. The business is getting stronger as it goes. And the final thing to take us out and I'll get your boys to comment is looking at the strong future opportunity of the business in the next five years.

Marty · 29:43And that's a, there's a huge under supply of homes in the U S like in fact, five to 7 million, um, that need to need to be built to deal with the existing population. Uh, there's a lack of existing dwellings in the US to purchase because

Marty · 30:00everyone in the US, very different to Australia, are on 30 year low fixed rate loans with no incentive to move.

Marty · 30:06So a lot of these people that got in on the low rates at 2. 99%, um, they're not, they're not going anywhere because then they have to jump to a six or 7 percent interest rate if they sell and purchase. So little bit of a different market there, but it sort of tells you where, where the opportunity lies for new dwellings.

Marty · 30:26Um, new entrants to the, to the property market, they don't want the headaches of doing renovations with any potential problems and costs that arise from them. They just want something new that can be custom built and it's more affordable to actually build a new home there than sometimes by existing. So demand is huge.

Marty · 30:46Um, new sales, new home sales compromise of around about 10 to 12 percent of the market traditionally in the U. S., but the demand and need sits at 10%. 30 percent nearly three times, um, what,

Marty · 31:00in regards to what they need to produce. Um, so, so Charlie thinks that's a really good thing and I think he's right.

Marty · 31:07So he's, um, he's done all that investigation and, uh, Yeah, it's, uh, what do you think you like that future premise, uh, Nick in regards to his,

Nick · 31:17his findings? Yeah, I do because it makes you think outside the box and yeah, you can carry that into so many other aspects of your life, whether it be, you know, uh, what industry you're thinking about pursuing when you get older, um, yeah, I think there's, there's so much you can learn from that.

Nick · 31:33So I don't think it's really cool. Um, to Tommy's point, it's not for everyone, but I think the, the, the The genuine, um, well, I think the principles, uh, can, can, can go across numerous things, not just stocks, right? It's correct. Um, yeah, you're teaching him to understand the decisions that he's making. Uh, be careful with what he's earning, whether he's, you know, whether you're deciding on what to, what stock to invest in or, or not.

Nick · 32:00I think the principles are still really good and, you know, even DJ Dacca can use them, you know, maybe when he's rich and famous, he comes to Charlie to manage his money.

Marty · 32:09This is all about, yeah, foundations of learning really, yeah. I think, um, all people could take something out of it.

Tommy · 32:17Absolutely. Well, we need to, um, check back in.

Tommy · 32:20I'll remind you boys and Jase to come back in. I like it. How Jase brings up split screen of, you know, the competitor and he brings those numbers. So I couldn't bring that today, Jase. And that's why I'm only allowed on the show every now and then.

Marty · 32:34So should, should we buy this stock? Finally, I've, I've got it scorecarded for Charlie out of, uh, Out of 60 points.

Marty · 32:42Uh, is the company going to be around the next 10 years? He scored it a nine out of 10. Does the company have a competitive edge in the market? We think there is, but there is competition because they're the third largest home builder. So he's marked that at 7. 5. So I think he's been fair. Um, is the company

Marty · 33:00increasing its revenue and profit over the last five years?

Marty · 33:03He gave it a 10 because it definitely is doing that. Uh, is the company good to fair value to buy? He's given that a nine. He thinks it is. Is the company financially disciplined? He's given that a nine. And is there a strong future opportunity in the next five years for the company? He's also given that a nine.

Marty · 33:20So he scored the company 53. 5 out of 60, which is good. So then he had to execute. So he's, uh, put the shares across into the U S market, purchased his first three shares. And he's up 1. 53 percent in two days and made 5. 84 while he was sleeping. And so again, what a, what a great 5. 84 lesson. That's what it's all about.

Marty · 33:50It's all about the lesson of specialized knowledge that if you want to learn something and you have an interest, you know, how do you set yourself apart? And Nick was

Marty · 34:00right. This is not just about the share market. This could be anything. This could be about DJing. You know, again, DJ Dakka is going to know more about DJing the most seven year olds out there.

Marty · 34:10I guarantee you that, and he's going to be rewarded for that in pure joy initially, and then obviously in compensation at some point in time, but that's what it's all about. He would know more about DJing. You know, and I'm 52. So it's, uh, it's great to see the kids of tomorrow, the kids of the future, uh, out there having a crack.

Marty · 34:32So I hope that is useful for a number of different business principles, um, as well as, you know, share market principles as well. And again, no, not financial advice.

Tommy · 34:42Love it. Thanks Marty. We'll keep us updated, mate.

Marty · 34:45Well, again, if you've liked the episode, uh, share, subscribe. Uh, let your friends know if you got kids out there and you want to get them excited about shares or DJing.

Marty · 34:54Uh, make sure you hit us up and until next time, may your money come back to you with friends.

Marty · 35:00Game over.

Jason · 35:01This podcast is for educational and informational purposes only. The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional.

Jason · 35:14Individuals on the podcast may hold positions in the companies discussed. Transcribed ---