Father-Son Trek to Mt Kosciusko Summit

There is nothing quite like a father-son adventure. The youngest of our four kids, Will, is 22 and earlier in the year he went for a trek through the mountains of New Zealand. When he returned, we started talking about doing something together. A father-son trek to the summit of Mt. Kosciuszko seemed like the perfect place to start. We’re new to mountain trekking, so this felt like a challenging but achievable entry point. We decided on a date and booked it in.

One thing I’ve learned over the years is that taking action the moment you decide something is critical. Too many people talk about trips, adventures, or goals but never follow through. There’s always “later”, and later never comes. If we discuss something and we both say yes, my next step is to book it immediately. Not tomorrow. Not next week. Right now. I want to live life, not just dream about it. And I want my kids to think the same way too.

So, we set the date, made the plan, and last weekend we arrived at Charlottes Pass ready for the 18.4km round trip to the summit and back.

When we arrived early in the morning, the weather was shocking; strong winds, cold rain and an unfriendly sky. No one else was around. Then, out of nowhere, a man appeared and approached us. He told us he’d trekked the mountain many times and this weather was going to get nasty. Wind strong enough to blow you over. Hail the size of golf balls. He pointed to the dark clouds building across the range and said they are going to get worse this afternoon.

We already knew thunderstorms were expected but they were forecast to be late in the afternoon.

So, before our first step, we were faced with a decision to make.

Play it safe, turn back, drive 40km to Jindabyne, and accept that the summit wasn’t happening. Then five hours back to Sydney the next day.

Or press on and see how the conditions felt in the first couple of kilometres, ready to turn back at any point.

We definitely didn’t want to be the people on the news who ignored warnings. But we also didn’t want to walk away from something we’d been planning and looking forward to. So, we decided to start, stay alert, and pull the pin if things deteriorated.

We progressed well and the storms seemed to be holding off. We crossed the Snowy River (4.5km mark), past Seaman’s Hut (6km) before reaching Rawson Pass (8km). There we met a hiker who had been camping overnight in brutal conditions. As we talked to him, he had clearly spent a little bit too much time alone, but he did give us some critical information for the last 1.7km to the summit.

He told us the trail ahead had been snowed-in, but only one section. If we could get past that, the rest of the climb to the summit was straightforward. It was an incredibly fortunate and timely conversation.

We assumed the track would be covered in some light snow. But when we reached it, we realised the mountain had completely reclaimed the trail. A steep 100-200 metre stretch was buried under solid, icy snow. Only a faint, narrow line of footsteps showed where others had crossed. Without that, we would have turned back on the spot.

We stepped cautiously onto the snow. It was extremely slippery, and a stumble would mean sliding fast down the icy slope into rocks below. But knowing it was just one section, and that others had crossed it, gave us the confidence to continue. It was a slow, nerve-wracking traverse that felt like it would never end.

Once we got to solid ground, we were only one kilometre from the summit.

We charged ahead through the strongest winds I’ve ever experienced and eventually reached the peak. We took a few photos and sat for a moment to celebrate. But almost immediately, we felt the weather shift. We got up and it started to move quickly as the rain hit, within seconds we realised we were getting hit by hail.

We needed to get back across the snowed-in section fast in case conditions worsened and we found ourselves on the wrong side of the mountain and were blocked in. We jogged down the next kilometre bombarded by wind and hail until we reached the snow. Crossing it a second time was just as scary, but once we were across, we were safe.

From there, it was a wet and windy but straightforward descent back to Charlottes Pass.

There were 2 times we could have turned back: right at the start, and at the snowed-in section. Twice we listened to the warnings, weighed the risks, and ultimately made our own decisions. And we’re glad we did.

It was an incredible experience. The scenery was stunning, the adventure unforgettable, and the time together priceless. These are the moments that stay with you as a parent, the shared challenges, decisions made together, the doubt, the trust, the laughs, the uncomfortable parts and the moments you both know you will talk about for years.

We’re already planning our next father-son adventure: Mt Fuji, Japan, in 2026.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

The Scale Game

There is an uncomfortable paradox that plays out every time technology takes a leap forward. The companies that end up shaping the future rarely look sensible in the moment. Their valuations seem to be inflated. Their cash burn looks reckless, and their ambitions appear unrealistic. But history tells us that the biggest and best tech companies succeed because they win the scale game.

In the age of artificial intelligence, this dynamic becomes even more pronounced. Elevated valuations will feel normal because we are trying to price something that has not fully arrived. Much of the future value is bound to technologies and applications that do not yet exist. Productivity gains that have not yet been created let alone measured. Industries that have not yet been created. The market is being asked to look ten years forward even though most people struggle to see ten months ahead.

AI is a multi-year tailwind. It will be volatile. It will overshoot. It will disappoint at times. But over the course of the journey, it will lift both growth and productivity across the global economy. In that type of cycle, buying the dips will matter more than trying to call the top because the structural direction is up. The growth is exponential.

This is also why OpenAI, even as an unlisted company, keeps dominating headlines. People are fascinated by the numbers. A valuation in the hundreds of billions simultaneously burning billions of dollars in cash annually. The debate tends to stop right there. But the real question to ask is what those numbers actually mean.

A big number without context means nothing. Most people cannot conceptualise the difference between a million and a billion, let alone a billion and a trillion. One million seconds is around twelve days. One billion seconds is more than thirty-one years. One trillion seconds is more than thirty-one thousand years. The mind boggles. Investors backing OpenAI are not confused by this. They are not funding short-term profits. They are funding the race to scale.

We have seen the exact same story before.

Amazon lost money for more than a decade. For years investors rolled their eyes at the billions pouring into data centres, fulfilment networks, and cloud infrastructure. But Amazon understood what others did not appreciate. First you scale. Then you monetise. Profit is the final step, not the first. The benefit became obvious when AWS emerged as one of the most profitable business models in the world.

Meta followed a similar path. Heavy spending on data infrastructure, algorithm development, machine learning, and global distribution. Huge amounts of cash that looked irresponsible from the outside, some of it probably was. But from the inside it was the only way to win. The company that scales first becomes the company that sets the rules and controls the market. Monetisation becomes a strategic choice rather than a desperate scramble. Now Meta’s ad engine is a global monopoly.

OpenAI is not profitable because profit is irrelevant at this stage of the journey. They are building foundational infrastructure for a technology that will power the next decade of economic expansion. They are racing to scale because scale determines who survives. When the market shakes its head at the losses or scoffs at the valuation, what they are reacting to is discomfort because the future is difficult to value.

When the market cannot value something clearly, the instinct is to assume it is overpriced. But the early stages of a platform shift work differently. The pricing is not about current earnings. It is about capturing the optionality of every future application that can be built on top of the technology. That is why the smartest investors focus on the direction of scale rather than the quarterly burn rate.

This does not mean every AI company wins. Far from it because many will not. But the ones that do will define the next generation of productivity and wealth creation. They will pull forward years of economic efficiency, and they will reshape entire industries. That is why valuations look high today and why they may look cheap in hindsight.

If the next decade belongs to AI, then the next decade belongs to the companies that can scale faster than anyone else. That is the game right now. It is why buying the dips during a structural tailwind becomes one of the more rational decisions an investor can make.

Profit comes later. Scale comes first.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Do The Hard Yards

There are moments in life that remind you that time isn’t slowing down for any of us. Watching my youngest daughter, Rachel, and her partner of five years, Danny, buy their first home this week was one of them. Anyone with adult kids or grandkids knows the feeling. That first property isn’t just a financial decision; it carries their hopes and dreams for the future. It’s exciting, but it can also be overwhelming and emotional. As a parent, your role shifts. You’re no longer steering the wheel; you’re there to guide them along the way.

What made me proud was how Rachel really owned the process. Paula and I were there for advice when they needed it, but they drove everything. They saved their deposit. They liaised with the mortgage broker and negotiated with the real estate agents. They worked with the conveyancer on the details and reviewed and signed the contracts.

There are always government incentives and schemes in the background, but none of them replace the need for discipline and a genuine deposit. Banks still assess serviceability the same way. You still need stable income. You still need to budget. Anything happening on the policy front might help around the edges, but it doesn’t replace the habits that build long-term financial confidence.

The journey really starts with saving the deposit. My parents always told me, “We won’t give you money, but you’ll always have a roof over your head if you need it.” I passed the same message on to my kids. You make your own way. For Rachel and Danny, that meant moving out of their rental and moving in with Danny’s mum for almost a year so they could save more quickly. Over 12 months they were able to save a sizeable deposit.

That’s what building wealth for the future looks like. It’s a collection of decisions and even sacrifices that might not be very “Instagrammable” but really matter for your future. Whether you’re saving 5% or 20%, the behaviour is the same. Live below your means and build through saving and investing.

As they saved over the 12 months they started to become familiar with the property market in the areas they liked. It’s critical to understand what fair prices are. During this time they met with a mortgage broker to understand their borrowing capacity and obtain pre-approval. Pre-approval is one of the most underrated parts of the process. It gives you clarity around what you can borrow, what your real price range is, and what bank policies apply to you. Without it, everything else is guesswork. With it, every home open inspection and negotiation becomes real. This was an important process for Rachel and Danny to go through. Once they had pre-approval they went from dreamers to serious buyers.

Understanding the market is important because the more you inspect, the clearer the patterns become. Recent comparable sales. How long properties sit on the market. The gap between guide price and reality. The more time you spend listening and watching, the easier it is to understand what an agent says, what they don’t say, and what they really mean.

Understanding the process is just as important. Once it’s explained clearly, it isn’t complicated: save the deposit, get pre-approval, inspect properties, request the contract and strata, engage a conveyancer, negotiate or bid, exchange, and settle. The overwhelm comes from not knowing what's next. A good mortgage broker and a good conveyancer turn that uncertainty into structure.

Negotiation is where most first-home buyers feel out of their depth. It’s emotional for them and methodical for agents. That imbalance is where people overpay. The rules are simple: know your walk-away number, don’t negotiate against yourself, ignore noise you can’t verify, and move quickly when the right property appears. Rachel and Danny negotiated on multiple occasions and did walk away from properties when it would have been easy to let emotion take over.

Watching them navigate the whole process reinforced something important for me. Buying your first home teaches you discipline and sacrifice in a way nothing else does. It is great to see kids today doing the hard yards. Working hard. Saving consistently. Going without. Rachel and Danny did all of that, and the lessons they learnt along the way might be more valuable than the keys they’ll collect on settlement day.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Take the emotion out of it

Over the years, I’ve learned that some of the most costly investment mistakes aren’t caused by economic forces; they’re caused by emotional ones. The subtle emotion that shows up in the hesitation to sell, the urge to chase, or the fear of making the wrong call. Markets are indifferent to all of it, but your portfolio isn’t.

I see this most clearly with clients who become attached to the stocks that have treated them well. On 27 June 2025 I wrote that CBA was massively overpriced. Objectively overpriced. It had nothing to do with the quality of the company, just the valuation sitting way above where it made sense. While clients trimmed their holdings, very few cut as much as they should have. The emotional history was too powerful. When a stock has delivered for more than a decade, people expect it will deliver forever. With CBA falling to $158.38 on Tuesday, it’s obvious in hindsight. Bias feels safe, but it doesn't help the outcome.

Wesfarmers is another good example. Being from WA, I’ve had many conversations over the years with farmers who held outsized positions in WES for generations. Their families built their livelihoods alongside the company long before they had portfolios. When a stock becomes part of your life, taking profit starts to become a question of loyalty. Sometimes people just couldn’t bring themselves to sell it even when the price was stretched beyond logic, or the concentration risk was too high.

This emotional pull isn’t limited to financial markets. My daughter is in the process of buying her first property, and while she has handled the transaction herself, it's been great talking through the negotiation process with her along the way. There’s always a point where you fall in love with a place, but you need to stay detached enough to keep your power in the negotiation. I emphasised to her that the ability to walk away from a deal is everything. If you can’t walk away, you lose your leverage and end up paying whatever it costs. She took that onboard, and it clearly helped her as she progressed.

A different challenge emerges when founders decide to sell their company. The real tension isn’t just the valuation, it’s the shift in control. A founder spends years calling every shot, setting the pace, shaping the culture. Then suddenly a buyer or investor enters the picture, and the power dynamic changes. I’ve seen founders hesitate not because the offer was wrong, but because they weren’t ready for what came after: stepping back, letting someone else steer, or adjusting to being part of a larger machine. It’s not a financial obstacle, it’s a psychological one.

High stakes situations amplify this. In sport, the champions aren’t the ones who feel the most; they’re the ones who manage their emotions best. Final-quarter plays, last second shots and penalty shootouts aren’t won with adrenaline. They are won with calm under pressure. Politics is no different. Leaders who react emotionally get swallowed by the moment. Those who stay outcome-focused shape events rather than being shaped by them.

Investing requires the same discipline. Biases like the endowment effect, familiarity bias, loss aversion, and recency bias work against you precisely because they feel so natural. They offer emotional comfort, but not financial clarity. If they influence too many decisions they can gradually steer your choices away from what’s best for your long-term wealth.

Emotion is part of being human, so you’ll never remove it entirely. But in important moments like selling a stock, buying a property, negotiating a deal, exiting a business, you need to separate feeling from judgment. You can feel the emotion. You just can’t let it make the decision.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Pest Control

Jamie Dimon, CEO of JPMorgan Chase, raised eyebrows recently with a warning about cracks emerging in the private credit market. After the collapse of a few sub-prime car-loan lenders linked to private credit funds, he said: “My antenna goes up when things like that happen. And I probably shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be forewarned on this.”

Dimon’s point was deliberate, it was about awareness. When isolated failures appear in a system built on confidence, it’s rarely an isolated problem. Private credit has expanded at a breathtaking pace globally as investors chase yield in a low-rate world. In Australia, it’s now a $224 billion market. That includes $132 billion in corporate and business lending and $92 billion in commercial real estate. The sector’s rapid growth has now drawn the attention of regulators.

ASIC chair Joe Longo warned this week that private credit faces major problems if complacency continues. The regulator’s surveillance report found opaque fees, aggressive marketing, and inconsistent valuation practices, with some behaviour “close to illegal.” I’ve downloaded the report and read it today and it reinforces all the concerns I have about the sector. As Longo put it, “In times of prosperity when money flows freely, no one worries about liquidity. However, it’s the first thing everyone will miss in a crisis.”

The problem isn’t that private credit is inherently flawed. Done well, it fills a legitimate gap between banks and borrowers, supporting business investment and economic growth. But when the focus shifts from quality to scale, risk management becomes an afterthought. In too many cases, loans are made because they can be sold, not because they should be made. No one is incentivised to say no.

The real test comes when the repayments stop. That’s when investors discover what these portfolios are truly backed by. Some loans are secured by property, but many rely on looser definitions of “assets”, anything from invoices and raw materials to plant or machinery. They look great on a spreadsheet, but in a downturn, those assets can be difficult to value or sell. A theoretical asset is not the same as a liquid one.

Defaults are a normal part of credit markets, but in this corner of finance, the safeguards vary widely. ASIC’s findings revealed that some funds even define “default” differently, making true comparisons impossible. In a benign environment, that inconsistency is overlooked; in a stressed one, it magnifies contagion risk.

History tells us these cycles rarely end neatly. A few isolated losses are rationalised, confidence holds, until it doesn’t. Then the feedback loop between leverage and liquidity tightens. The pattern may not mirror 2008, but the psychology is familiar.

At some point, private credit will face its reckoning. It will separate lenders built on discipline from those built on momentum. That’s why I’ve avoided the sector despite its popularity. In too many cases, investors are taking equity-like risk for bond-like returns, a trade-off that only looks good in fair weather. The bigger concern is the systemic risk presents to the broader economy. When growth outpaces governance, and confidence replaces caution, risk hides in plain sight.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Are we in an AI Bubble?

I first read about the singularity and Ray Kurzweil's predictions back in 2010. He spoke about a point in the future where artificial intelligence surpasses human intelligence leading to rapid technological advancement. I remember being fascinated by the concepts and how it would change the world. But I thought he was crazy, not so much because of what he predicted, which was mind blowing but plausible, but because of the time frame he outlined.

At the time there was no AI and nothing close to it. For Kurzweil’s predictions to come true, AI itself would have to be invented within a decade or so. Well obviously, that happened, and in line with his predicted timing. So, if his timeline is right then the AI revolution has only just begun. This is critical to understand because the scale of this is unlike anything we have seen before.

Now, as the boom gathers pace, we are hearing more talk of an “AI bubble”. Commentators are drawing comparisons to the dot-com era boom of the late 1990s where wild optimism ended in a spectacular collapse. But there are some crucial differences this time.

This is not a once in generation boom. Those were the personal computers, internet, mobile phones. This is an AI industrial revolution. A once in a lifetime shift that will reshape the course of human history in the same way the first industrial revolution transformed the world. This is not hyperbole. This is real.

What we are seeing now is an explosion in demand for semiconductors, data centres, and energy. We are in the foundational infrastructure phase of AI. We are building the roads, powerlines and factories of the digital age. Companies like NVIDIA, AMD, TSMC, and ASML are the new industrial giants. They are equivalent to the steelmakers and rail companies in the 1800s. What they produce isn’t visible to the naked eye, but it powers everything else. Billions are being spent not on end products but on the capability to create them.

Then come the architects, the platforms building on top of that foundation. Alphabet, Amazon, Apple, Meta, and Microsoft are spending tens of billions to construct the superstructure of the AI economy. Their investments in chips, data centres, cloud networks, and proprietary models aren’t just a corporate arms race, they are laying the digital plumbing the next century will run on.

When Mark Zuckerberg tells investors Meta will spend $70 billion in a single year, or when Microsoft and Amazon pour capital into global data infrastructure, they’re building for the long term. Investors are impatient, especially when they see large capital investment, they want to see returns. But this is critical infrastructure and those companies that don't invest will be left behind in the future.

The same applies to energy. Data centres are already account for 4.4% of all electricity consumption in the US and that share will rise sharply (within a range of 6.7% to 12.0% by 2028 according to the 2024 United States Data Centre Energy Usage Report). Nations and corporations are racing to secure the energy and cooling capacity needed to support AI infrastructure. It's not glamorous but it’s essential to power what’s to come.

If this were a skyscraper, we’re still pouring the concrete slab. The real transformation comes when applications begin to rise from that base. Today the market is being driven by infrastructure investment, but the next wave will be powered by what people build on top of it. It will be the Agentic AI systems that don’t just respond to instructions but carry them out. We’re entering an era where AI can complete tasks end-to-end. Scheduling meetings, building software, managing portfolios, designing products, all autonomously. That’s when productivity leaps, and entire industries are reshaped.

Innovation will expand to fill any excess capacity that’s created. Even if companies overbuild data centres today, history shows that technology quickly catches up. The same happened with railways, telegraphs, and broadband. Supply precedes demand, and demand then explodes.

The software revolution will soon meet its physical counterpart. Anything that needs to be moved will eventually be moved by a machine directed by AI. The distinction between digital and physical will blur. Companies across the world are now developing robots capable of performing manual and repetitive work. It sounds like science fiction, but the prototypes already walk, grasp, and learn. Amazon recently announced plans to replace 500,000 warehouse roles with robots which equates to half its current workforce. That’s not a headline about layoffs it’s a glimpse into the new labour economy.

This convergence of software and hardware, when intelligence and motion combine, is where the true scale of AI’s impact will be felt. The long-term economic gains will dwarf anything seen in previous tech cycles.

For long term investors, the question isn’t whether AI is overhyped, it’s whether the market is mispricing how deep and long this cycle runs. Valuations for major tech companies may look stretched in the short term, but the structural trend remains intact. The capital being spent today is building the operating system of the future. There will be market setbacks and pullbacks along the way. Some projects will fail. But these will be moments to add to core holdings, not reasons to exit. Each correction will likely prove a buying opportunity in hindsight.

The scale of change ahead is hard to comprehend. Kurzweil’s timeline may have sounded crazy fifteen years ago, but it’s starting to look prophetic. If he was even close to right, what we’re seeing today is not the peak of an AI bubble; it’s the first chapter of a story that will define the century.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Does the US Government Shutdown Matter?

Every few years the US government runs out of money. It’s not that America is broke, it’s that Congress has again reached the debt ceiling, the legal cap on how much the government can borrow. Both sides know it will eventually be lifted, but they use the process as leverage. The result is political theatre with real-world consequences.

The US spends far more than it earns. The budget deficit this year is roughly $2 trillion, with $5 trillion of income and $7 trillion of expenses. That shortfall adds to a national debt now above $36 trillion. Before the country can even start paying that back, it would need to balance the budget through higher taxes or lower spending. Neither is politically possible. Instead, the debt ceiling has been raised or suspended more than a hundred times since 1960.

Shutdowns happen when negotiations stall, and funding expires. Workers are stood down, services freeze, and government departments grind to a halt until a deal is reached. Economically, the damage is limited. Each week of shutdown shaves about 0.1% off GDP, but growth usually rebounds once back pay and spending resume. Markets barely react because they’ve seen it all before. The real risk isn’t the short-term disruption, it’s the erosion of confidence in the system itself.

That confidence used to be rock solid. US Treasuries are considered the safest asset in the world. But the world is changing. Governments everywhere are now competing for capital as debt levels rise and interest costs bite. When too many borrowers chase too little capital, not everyone will be funded on favourable terms. Although Fitch downgraded the US last year over fiscal governance concerns, many other nations face a similar problem. Bond yields show investors are quietly recalibrating the idea of “risk-free.”

What’s different this time is the intent behind the shutdown. Trump and his team have reportedly seen it not just as a negotiating tactic, but as a way to reshape the federal workforce itself. By letting agencies go unfunded and contracts lapse, they could use fiscal gridlock to force structural change across government. To his supporters it’s long-overdue discipline after years of bureaucratic expansion. To critics it hollows out the machinery that keeps the world’s largest economy running. Either way, it introduces a new kind of uncertainty: weaponising dysfunction for reform.

Viewed in isolation, a government shutdown doesn’t matter much. Viewed as a pattern, it matters a lot. It reflects a system where short-term politics consistently override long-term responsibility. America can still borrow easily because of its size, its credibility, and the dollar’s dominance. But every cycle of brinkmanship chips away at that credibility.

The rest of the world is watching. Many advanced economies now face the same problem of too much debt, too little discipline, and no political will to fix it. For now, markets still reward inertia because no one wants to believe the system could crack. The question isn’t whether the US can keep borrowing, but how markets will price that privilege in the years ahead.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

A Super Bad Idea

The government’s recent backdown on the $3 million superannuation cap tax was as inevitable as it was overdue. From the start, the proposal to tax unrealised gains and to leave the $3 million threshold unindexed was unworkable, unfair, and destructive to investor confidence. Yet it still made it this far. That should concern everyone.

The idea of taxing unrealised gains is one of those concepts that makes sense to someone who has never built anything, but it falls apart in practice. It would have forced Australians to pay tax on increases in asset values they haven’t realised, money they don’t actually have. Imagine being forced to sell assets in a falling market just to fund a tax bill on a paper gain from the year before. It would have distorted investment behaviour, punished long-term savers, and turned a retirement vehicle into a speculative guessing game.

The failure to index the $3 million threshold compounded the problem. Inflation and compounding returns would have dragged more and more Australians into the net over time, not because they were super-rich, but because they had been prudent. The policy would have quietly shifted the goalposts every year, punishing success and eroding the principle of fairness on which the super system was built.

These were never minor oversights. They were red flags. Yet they were allowed to progress, right up until this week. Which raises a deeper issue. Increasingly, I see these extreme policy ideas being floated, almost as sacrificial pawns. Governments know the public will push back against overreach. By inserting unworkable elements, such as taxing unrealised gains, they create something to “give up” later, allowing the core legislation to pass with less resistance. There ends up being no opposition to the 15% additional tax because everyone has been distracted by smoke and mirrors.

This kind of political theatre might make sense in Canberra, but it undermines the integrity of the entire super system. Superannuation works because people can plan with confidence. Every time the rules change, that confidence is shaken. Investors begin to wonder not just what’s next, but whether they can trust the system at all. Constant tinkering turns a long-term savings framework into a short-term political tool.

It’s worth remembering that effective caps on super aren’t new. We’ve been here before. Back in the 1990s, the system had Reasonable Benefit Limits (RBLs) that capped how much individuals could hold in tax-advantaged super. The principle was clear. The limits were transparent, predictable, and indexed, so people could plan accordingly. The new proposals ignored that history and instead created confusion, inequity, and distrust.

The governments retreat is welcome, but the damage is done. The very act of proposing such measures sends a message that no rule is safe, no commitment permanent. It was a mean-spirited and opportunistic grab at retirement savings after years of government incentives to contribute to super. That’s a dangerous precedent for a system built on trust and time horizons that stretch decades into the future. Super is supposed to be the one part of the financial landscape Australians can count on. It deserves better than to be used as a bargaining chip.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Is Gold a Good Investment?

Gold has always had a unique place in the investment world. It’s tangible, timeless, and symbolic of wealth and security. In uncertain times, it often performs well. In 2025, when markets are volatile, central banks are recalibrating, and inflation and interest rates are moving in unpredictable ways, gold has been a great performer. The question for me though is whether gold still has a place in a modern portfolio.

The case for gold begins with its role as a store of value. When inflation erodes the purchasing power of paper currencies, gold tends to hold its worth. It has a long track record of protecting investors during periods of high inflation or when confidence in fiat money weakens. Beyond that, gold provides what investors want when uncertainty rises; diversification. It doesn’t move in lockstep with equities or bonds, and that lack of correlation can smooth the bumps in a portfolio during turbulent times.

Another key argument in favour of gold today is the strong demand from central banks and institutional investors. Around the world, central banks are buying record amounts of gold to diversify away from the US dollar and strengthen their reserves. That steady demand provides a floor under prices and signals a deeper structural confidence in gold as a reserve asset. There’s also the appeal of owning something real. Physical gold doesn’t rely on a promise to pay or a balance sheet behind it. It’s not someone else’s liability. For some investors, the ability to hold value in their hands is its own reassurance, especially when trust in financial systems is being tested.

The case against gold, however, is just as strong. Gold doesn’t pay interest, rent or dividends. It doesn’t compound. When interest rates are higher the opportunity cost of holding a non-yielding asset becomes more obvious. Investors could instead be earning 4 or 5 percent in bonds or term deposits while gold simply earns no income. There are also practical downsides. Physical gold needs to be stored safely, which means costs for vaulting, insurance, and security. While gold is often seen as stable, its price can be highly volatile. It can fall sharply after strong runs just as quickly as it climbs.

Then there’s the macro dynamic. When real interest rates rise, gold tends to struggle. Rising real yields increase the appeal of income-producing assets and reduce the relative attraction of gold. While real rates will likely come down in the short term, if central banks are forced to keep rates higher for longer, that could completely change the thesis for gold.

Another consideration is speculative behaviour. When prices surge, investors rush in, often late, which can inflate bubbles that eventually burst. The same fear and greed cycles that move stocks also exist in gold markets. There are many assets and areas that have been incredibly popular and delivered great returns but don’t meet the requirements to be included in our portfolios. We don't invest in crypto currencies or bitcoin, I consider Chinese stocks uninvestible, art and collectibles, most private credit and private equity are too high risk in my opinion. Gold’s appeal lies more in emotion than economics. It reflects fear, not fundamentals.

Gold may well continue to rise, just as other speculative assets might, but that doesn't make it a sound investment. Price movements alone don’t justify inclusion in a disciplined portfolio. Part of the core investment criteria for our portfolios is that the assets must create value and pay or earn income. Businesses, infrastructure and real assets that generate income and growth. It's not about chasing trends or what feels safe in the moment. Gold offers no earnings, no compounding and no productivity. It may have a place as a diversifier for some, but for me, investing with conviction means having clarity on what you own and staying disciplined throughout.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

The Power of Compound Interest

Albert Einstein once called compound interest the “eighth wonder of the world.” Whether or not he said it doesn’t really matter, the sentiment of the statement does. Nothing illustrates the quiet force of time and discipline in finance better than compound interest. It’s the snowball that grows bigger with every roll, turning small amounts into huge outcomes.

In a world that obsesses over quick wins and instant results, compound interest is a great reminder that the most powerful forces in life work slowly, quietly, and then suddenly all at once.

At its simplest, compound interest is interest on interest. Unlike simple interest, which is calculated only on the original principal, compound interest includes the accumulated interest from previous periods. Each cycle adds not just to your base, but to your base plus everything it has already earned. This creates an exponential effect. The more time you give it, the more powerful it becomes.

Here’s a simple example. Imagine you invest $10,000 at a 7% annual return:

• After 10 years: $19,671

• After 20 years: $38,696

• After 30 years: $76,123

In year 30, you earned over $4,700 in interest alone, almost half your original investment, without lifting a finger. That’s the essence of compounding. It’s not a straight line. It’s an exponential curve that rewards those who are patient.

People struggle with exponential thinking. Our brains are wired for linear thinking but exponential growth sneaks up on us. It’s why the pace of pandemics, technology adoption, and investment returns so often surprise us.

There is a classic thought experiment that captures this. If you place one grain of rice on the first square of a chessboard, then double it on every square. So, the second square has 2, the third has 4, the fourth has 8 and so on, until all 64 squares are filled. How many grains do you think it becomes? Well, by the 64th square, the total rice would be 18 quintillion grains. More grains than have ever been produced in human history.

The same principle is at play in your investment portfolio. The early years feel slow, almost frustrating. But with enough time, the numbers start to move sharply upwards. What begins as a trickle becomes a flood.

This is why starting early matters so much. A 20-year-old investing $500 a month until age 60 at 7% annual returns will end up with over $1.2 million. A 30-year-old doing the exact same thing will end with around $600,000 or less than half. The difference isn’t the contribution. It’s the time.

The hardest part of compounding isn’t the math. It’s the discipline. It’s resisting the urge to panic when markets fall, it’s resisting the noise of the daily news cycle or chasing the latest fad or hot stock. The great investor Charlie Munger put it simply: “The first rule of compounding is never to interrupt it unnecessarily.”

My favourite investor, Warren Buffett often says his fortune is the result of “living in America, some lucky genes, and compound interest.” He built one of the greatest fortunes in history not through outrageous risk-taking, but through consistency and time. In fact, over 90% of his net worth was accumulated after age 60. Simply because compounding had decades to snowball.

The greatest mistake people make with compound interest is underestimating it. In the short term, it feels slow. In the long term, it is remarkable. But it isn’t magic, it is basic math, and it is available to anyone with the discipline to let it work. Compound interest is a philosophy of patience, and it rewards those who are not only consistent and disciplined but who also stay the course. Start early, stay consistent, avoid interrupting the process and think long term. The eighth wonder of the world is available to all of us.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

North Star

I watched an old Steve Jobs speech recently where he spoke about how the best companies in the world are built around values not products. He talked about how the greatest companies in the world, the ones that endure for decades, such as Nike and Disney, don’t talk about their products at all. They explain what they stand for. Their core values come through in everything they do. They have a north star guiding them. It's how he built Apple too. Nike's north star was celebrating the spirit of athletics. For Disney, it was being a storytelling company that connects with people's hearts. 

Every company begins with some version of a dream. It might be to solve a problem the founder couldn’t ignore, to disrupt an industry that had grown complacent, or to capture an opportunity others had overlooked. But dreams fade quickly in the grind of the day-to-day reality. Budgets, investor updates, quarterly earnings reports, staffing challenges all consume a leader’s attention. While a north star doesn’t remove these pressures, it anchors the business against them. It helps to define why we’re here, what matters, and what we will not compromise on.  

The great companies that endure almost always have this clarity. One of the best examples is Patagonia, whose north star is not to sell outdoor gear but to save the planet. Founded by Yvon Chouinard in 1973, that purpose threads through every decision at the company, from the materials they use, the campaigns they run, even the decision to give away the entire company to a trust dedicated to fighting climate change. It’s why people buy from them, why employees want to work there, and why the company matters to the people they serve.  

Just how meaningful this is hit home in a recent podcast interview I did with Barry Saad, founder of Truck Tech here in Sydney. He started the business with his wife and one service truck in 2007. Today the business employs over 140 people and services more than 7,000 assets, including trucks and buses. He talked about his industry and how he feels that the work they do is the most important and meaningful in the world. That comment struck me. I mean I’m all about being passionate but how important is servicing a truck or bus really?  

It turns out really important, and it didn’t take long for Barry to make me see things in a completely different way. What Barry and his team do, he explained, is make sure that the truck drivers get home to their families each night. They make sure that the kids on the buses are safe, so they too get home safely to their families. I’d read about great companies in business case studies who had brilliantly defined what they do and why they do it, but none had hit me quite like this. In the blink of an eye Barry made me understand the real power of a north star. 

With a north star everything becomes clear. A north star cuts through the noise. It’s the single purpose that everything else revolves around. When a company has a clear north star, it knows what to say no to as much as what to say yes to. Being clear about your values and why you exist leads to long-term decisions without compromising on standards. A personal north star is no different. Which is why it’s difficult for companies and people who have not yet defined one to truly flourish. 

We live in an era where distractions are endless, and the pace of change can be overwhelming. The companies that survive and the people who thrive will be the ones who know where they’re going and why. Everything else follows on from that. But this idea isn’t just for businesses. Life offers us an endless series of choices from which career to pursue, which city to live in, which relationships to nurture, how to spend our limited time. Whether it's for a business or personal north star, it is the answer to the question of what our values are and what we really want to do in life. It doesn’t have to be poetic or grand. It just has to be true. 

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Learning Not Lectures

Between 2007 and 2011, I completed my Master of Business Administration (MBA) at the University of Western Australia. It was a great experience, I learnt a lot and met some wonderful people. But an MBA can be an expensive and slow way to learn. Today, the same knowledge is available faster, cheaper, and often better. You can read the same books, study the same frameworks, and apply them in real time by starting a business or joining a fast-growing one. Learning by doing will often beat learning in a lecture theatre.

That said, my MBA taught me several things I still use today in business and to assess the industries and companies we look at investing in. What surprised me was how many case studies and topics were based on widely available business books, and how much of the learning was about memorising frameworks developed by big consulting firms. But those frameworks can be powerful if you know when and how to use them.

Here are three of my favourites:

1. Porter’s Five Forces

Michael Porter’s model is one of the best ways to assess the attractiveness of an industry. It forces you to look beyond surface-level growth stories and into the structural dynamics. It covers everything from the competitive rivalry, supplier power, buyer power, the threat of new entrants, and the threat of substitutes. It’s simple, but it sharpens your thinking before you commit capital or resources.

2. Blue Ocean Strategy

Based on the book by W. Chan Kim and Renée Mauborgne, this is about finding uncontested market space rather than battling competitors head-on. The Cirque du Soleil example still stands out: they didn’t try to be a better circus; they created something entirely new by combining theatre and acrobatics. Tesla didn’t just make another car, it redefined what a car could be, with software at its core. Apple did the same with the iPhone, turning a phone into a lifestyle platform. It’s a reminder that differentiation is often more valuable than dominance.

3. Kotter’s 8-Step Change Model

Implementing change inside organisations is difficult. John Kotter’s framework breaks it down into a sequence of 8 distinct steps. Create urgency, build a guiding coalition, form a vision, communicate it, empower action, generate quick wins, consolidate gains, and anchor the change in culture. It’s a blueprint for getting people to move in the same direction when the status quo is comfortable but no longer viable.

Today, there are so many ways you can learn these things, from books to podcasts, there are resources that let you learn on demand, you can even ask ChatGPT to design a course and test you on the content. If you dedicated a single week to reading Blue Ocean Strategy, Leading Change, and a good summary of Porter’s Five Forces, you’d have started accumulating the strategic foundation that often takes MBA students years and a lot of expense to collect.

An MBA will give you structure, deadlines, and a network. But in today’s world, curiosity and execution will get you further, faster. If you want an MBA’s worth of insight, start with these three frameworks and read all the case studies you can find from Harvard Business School, but for all the access to knowledge, what matters most is building something. The most important lesson in today's fast paced world is that building and learning go hand in hand. You must do both.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

The Company We Keep

Some people say life is about the journey. Others say it’s about the destination. I have spent plenty of time over the years thinking about both, but a recent reunion reminded me there is a third answer: the company. As I've got older and wiser, I’ve come to appreciate that the journey teaches you lessons, tests your patience, and gives you the small wins and setbacks that shape you. When I was younger, I was almost exclusively focused on the goal, the destination that gives you something to aim for, a reason to keep moving forward when the journey feels long.

It's interesting how we change over time. Nineteen-year-old Dion would have laughed at this discussion and declared without a shadow of a doubt, as only a nineteen-year-old can, that it's about the goal, lock in, focus and get it done. Cut out the philosophy and stop talking about your feelings and excuses and be relentless until you achieve your goal. In my younger days I’d set a goal, single mindedly pursue it and then go on to the next one. No fanfare. No celebration. It would be on to the next one with the same ferocity.

Fast forward 30 years. At 49, after the highs and lows of business, family, and life, I am far more philosophical. I would still contend that having goals and ambition is critical, but it is equally important to enjoy the journey. You only get one life, and there is more to it than simply ticking off a never-ending list of achievements. If you don't enjoy the journey, what's the point?

But there’s a beautiful quote I like that shifts the paradigm to what matters most in life:

“It’s not about the journey or the destination; it’s about the company.”

I was reminded of how important this is recently at a reunion dinner I hosted at home with the young men I coached to a basketball grand final win in 2019. Back then, they were 17, full of energy, and that teenage mix of overconfidence and uncertainty. Now they’re 23, carving out their own paths in work, study, and life. We laughed over old stories, retold moments from that season that have grown funnier and more exaggerated with time, and shared updates on where life has taken us since.

The real magic from that year wasn’t just the hard-fought win in the grand final or the grind of the training during the season that got us there. It was the time we spent together, and the friendships we collectively formed. Getting to know the personality quirks of each individual, the jokes that made no sense to anyone outside the team, the moments after training when we’d stay back shooting just because no one wanted to leave.

Those are the memories that hold their value. Achieving the goal of winning was awesome. The growth and experiences throughout the journey were great. But it was who we got to experience all of that with that transcended both the journey and the destination. It’s the people we shared the journey with that brought us back together 6 years later.

Life has a way of moving fast. Careers, families, and commitments start to pull people in different directions. But when you get the chance to sit back at the same table years later and pick up like nothing’s changed, that’s when you realise the company you keep isn’t just part of the story. It is the story.

If you strip everything else away, most of what we value in life comes down to the people we share it with. Journeys end. Destinations change. But good company makes every step, and every stop, worth it.

Long End of the Curve

Markets are moving into unusual territory. Over the next 6-12 months, I expect US interest rates will be cut significantly, probably more than they should be, on the back of political pressure. Jerome Powell’s speech at Jackson Hole a couple of weeks ago seems to demonstrate a more dovish Fed. These rate cuts will support equity markets if not drive them higher. For investors, it's a clear tailwind for the AI theme and growth stocks more broadly.

My concern is the combination of tariffs and artificially lower interest rates. On their own, either might be absorbed, but together they risk sparking a return of inflation. I do think this is a serious problem ahead, although it will take time for these indicators to flow through the system. At the same time, we need to overlay the deflationary effect of both AI rapidly lowering prices and reducing jobs and many countries now with declining populations. However, that deflationary effect is a longer-term story in my opinion.

The American consumer sits at the crossroads of these forces. For years, US households have surprised economists with their resilience, continuing to spend despite higher interest rates and tighter conditions. But the recent reporting results from big retailers are starting to tell a different story, that all is not well for the consumer. Rising costs from tariffs and increased uncertainty across the board are beginning to weigh on sentiment. This can easily lead to weaker business conditions.

That leads us to the labour market. Any weakening in business conditions elevates the risk that the jobs market deteriorates more quickly than people expect. If that is the case, it's plausible that the potential cuts in interest rates are in fact warranted. Interest rates may be cut to accommodate Trump's heavy-handed approach to the Federal Reserve. Though there is a potential scenario where they end up being needed, and the move will be seen as a pre-emptive stroke of genius.

So, at this point, I am alert to the prospect of inflation in the future, but I am not yet positioning our client portfolios for it. I think that would be premature. There are many forces at play that will influence the outcome. That said, the massive budget deficit and increased spending from the US government, combined with tariffs and much lower interest rates, really are all the fuel inflation needs to run away.

Although the continued rise of the share market would have you believe all is well, there is a clue for what may lie ahead in the long end of the bond market. Despite rates almost certainly coming down in the short term and Fed Chair Jerome Powell bending to pressure on rates with his dovish rhetoric, long term 30-year US bond yields are creeping up closer to 5%. That tells us that the longer-term direction of inflation and, in turn, interest rates may well be higher.

Long term bond yields are rising to multi-decade highs in many parts of the world. The US 30-year is 4.90%, the UK 30-year bonds are at 5.6%, France and Germany are at 4.49% and 3.4% respectively. Even Japan is at 3.3%. With many of these countries all facing massive deficits, the prospect of raising money to fund their budgets not only becomes more expensive, but the competition between nations for funds will push bond yields higher too. That is a discussion for another day.

So, while central banks are likely to cut interest rates over the next 6-12 months, I don’t think it will be long before inflation resurfaces. The bigger risk then isn’t simply an overheated economy with higher prices, that's painful but manageable. The real danger is inflation reemerging as the economy weakens. That’s stagflation, and it leaves government and central banks with no good options.

So, while the prospects for interest rates at Central Banks across the world are lower in the next 6-12 months, I don’t think it will be long after that inflation does rear its head again. The biggest risk I see ahead is not an overheated economy with inflation, which is painful but manageable. Rather, a far worse outcome would be for inflation to rear its head at a time when the economy is weakening despite the rate cuts. Stagflation leaves governments and central banks with no good options.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Deflation’s Perfect Storm

The AI revolution is under way and it’s not just about ChatGPT writing emails faster or image generators producing ad campaigns overnight. Artificial intelligence is on track to become the most powerful deflationary force we’ve seen since the industrial revolution. AI is moving rapidly from new potential to infrastructure. As it progresses and becomes more integrated, it will drive down the cost of producing almost everything. Not just goods and services, but knowledge and even decision making itself. That will have massive implications for the economy and business, as well as investors in the future.  

AI’s influence will be a persistent tailwind for productivity, removing inefficiencies from business models and supply chains in every sector. Design, engineering and testing can now happen in days instead of months. Manufacturing processes can optimise themselves in real time with minimal human oversight. Customer service can operate around the clock without the cost or fatigue of human staff. This is not a theory for the future. It is already happening in parts of the economy today. The longer-term effect is lower costs across the board, bringing prices down.  

Historically, the deflationary pull of new technology has been masked by population growth, rising demand and loose monetary policy. But AI is arriving at a moment when many of the world’s major economies are entering demographic decline too. Japan has been living with it for decades. China’s population has already peaked and is set to shrink by hundreds of millions over the next 25 years. South Korea and much of Europe are heading the same way. What was once a demographic tailwind for growth is becoming a headwind. More than that, when falling demand in areas with declining populations meets rapidly falling costs, the deflationary impact will be magnified, creating the potential for a significant economic shock. 

AI will affect all industries and skill levels, from blue collar manufacturing roles to white collar professional services, through to creative work. Its reach is so broad and so fast that its impact on prices will be more profound and more global than past innovations. In industries where AI commoditises operations, margins will be compressed as competition intensifies. But there will be areas where it not only reduces costs but opens entirely new markets, and the winners will achieve extraordinary growth. These will be the businesses that use AI to create products or services that were not previously possible, or that own unique data sets that AI models depend on.  

This is where it starts to get tricky because reducing costs will translate into many job losses. We are at a point where almost everyone you talk to is starting to feel some concern about job security in the future because of AI. Either their own job or someone’s in their family. As exciting as the advancements in AI technology are for future productivity, it won’t be long before the psychological shift around job security is felt in the economy. This is not good news for an already weakening economy and job market. If fear around job security starts to become embedded in the economy, then we risk a self-fulfilling spiral downward to much higher unemployment as people slow their spending and businesses suffer. This will compound the actual impact of job losses as AI starts to scale up.  

But deflation on its own is not inherently bad. For investors and business leaders, it will create a bifurcated world where incumbents with legacy cost structures are under constant pressure, while more agile operators with lower fixed costs thrive. The challenge will be working out the sectors where AI driven deflation destroys profitability and those where it fuels entirely new growth. Major technological shifts usually create more wealth over time than they destroy, but the distribution is uneven. The opportunity is in identifying where value will emerge as costs fall, whether that’s in platforms, data ownership, or in the service companies that evolve from and around them. 

AI’s deflationary power will reshape the global economy in ways that are both exciting and uncomfortable. We’re entering an era where capital will matter more than labour, and adaptability more than scale. But its impact won’t unfold in isolation. In the decade ahead, while AI drives costs lower, we will also see demand growth slow as populations age and shrink. That convergence will be disruptive, redistributing wealth and changing the rules of competition. For investors, the winners will be those who understand that the world will be shaped almost as much by shifting demographics as by AI’s technological progress. 

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

First Mover Disadvantage

We’ve all heard of first mover advantage, the prime position earned by the company that innovated before the others. Whether it’s launching a product, claiming market share, or pioneering a new technology, being early is often equated with being better. It's what everyone aims for from company founders through to investors. But history tells a more complex story. There are plenty of examples where being first has effectively been a disadvantage. Understanding this is important for companies, but even more so for investors as they allocate capital for the long term.

What people often forget is that many new technologies, especially those that transform or create new industries, require huge amounts of capital simply to build the underlying infrastructure for the technology to scale and reach the mass market. It means that along the way many of the most exciting companies building towards the vision of mass adoption of a technology fall by the wayside, make too many mistakes or run out of money along the way.

One of the best examples of this in recent times is the rise of the internet. I remember in early 2000, as the massive hype was building, it became clear that this technology was going to be transformative. It was, but the amount of capital needed to get the industry to where it needed to go in those early days was massive. Of course, the dot-com boom helped to ensure that the capital and total investment in aggregate needed to build out the foundations of the industry were raised.

In many of the most transformative industries, from airlines to automobiles, there is a similar pattern. Where the biggest rewards often go to the later entrants. Being first means more risk, more uncertainty, and more cost. It means making many mistakes with no guarantee of a path forward. Meanwhile, fast followers are sitting back, watching, learning, and preparing to strike with better timing, better economics, and fewer mistakes.

This isn’t to say that the first movers never win. They do. But surprisingly, the success stories are the exception, not the rule. Amazon, for example, was an early mover in online retail. By the time traditional retailers caught on, Amazon had already established dominance in infrastructure, logistics, and customer trust. Similarly, Netflix made the leap from DVD rentals to streaming before anyone else was even thinking about it seriously. These companies gained scale, users, and built moats that others struggled to create.

However, there is a much longer list of first movers who never made it. Friendster came before Facebook. AltaVista came before Google. Netscape came before Chrome. Myspace came before Instagram, and Palm Pilots and Blackberry came before the iPhone. First movers have to spend more on R&D and infrastructure, educate the market at their own cost, and make the big mistakes others can learn from as part of building towards mass adoption. Conversely, fast followers can analyse what worked, avoid what didn’t, and capitalise on a more informed and receptive market.

This dynamic is even more pronounced in industries with large capital requirements and slow adoption curves. When the Wright brothers took flight at the turn of the century, they changed the course of history. But it wasn’t until decades later that air travel became a commercial business. Hundreds of airline startups burned through capital before a few major carriers found sustainable models. The same was true with automobiles. Dozens of early manufacturers came and went before Ford revolutionised production with the Model T.

Technologies like the internet, mobile networks, and AI are no different. Being first to market often means bearing the costs of infrastructure, educating consumers, navigating regulatory grey zones, and building products that may not yet have viable markets. Fast followers will have more data, more capital, and the benefit of watching early failures. In many cases, the third or fourth wave of players win by building for a world that’s finally ready.

For investors, the key takeaway is that you don’t have to find the next big thing first. You don't have to rush. You have time. Take that time to understand the industry and where it will be best to invest in the long term. While there will always be companies that garner hype and headlines as new technology emerges, you don't need to rush.

There will always be opportunities throughout the adoption cycle of a new technology. Early-stage companies may deliver great returns when they win, but they also carry immense risk. The middle of the cycle, where demand is more certain and adoption is accelerating, can be just as lucrative with less downside.

AI is a great current example. Dozens of companies are rushing to launch models, tools, and applications. Some are burning through cash just to claim a spot in the conversation. But many of the future winners may not yet exist or will emerge as the business case is clearer and the infrastructure is more robust. Investors need to be patient and remember that being early is not the same as being right.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Inflation Cocktail

From tariffs and trade deals to his conversations with Jerome Powell or Vladimir Putin. It seems that Donald Trump has made himself the centre of attention when it comes to almost everything going on in the world. Having recently announced trade deals with Japan and the EU, it's been fascinating to watch Trump’s approach to international trade and his negotiation tactics.

Trump’s method of appearing unpredictable in escalating and de-escalating in seemingly random ways has helped land him a clear victory.  Ultimately, he’s worn everyone down to the point where countries and investors alike are happy with 15% tariffs, an outcome that just 4 months ago was sending markets into a meltdown. In effect, markets just want the issue solved so everyone can move on. The psychology here is interesting.

So, in a matter of months, Trump has delivered his ‘One Big Beautiful Bill’ and set the framework for redefining international trade. The next stop for Trump is getting interest rates lower. But while Trump’s deal making may well prove to be a masterstroke for the US economy in the short term, the road ahead is more precariously positioned.

He’s made no secret of his desire for lower interest rates in the US. He’s demanding lower rates from the Fed to create cheaper debt and stimulate investment in the US. He’s also made it clear that the independence of the Federal Reserve is a lower priority than getting rates lower. This is a problem in many ways, but how it will alter the landscape for markets and investors in the years ahead is particularly concerning.

Trump is pushing for interest rates to drop to around 1%. He wants to reduce the short-term cost for the US to borrow the trillions of dollars they need each year to fund their deficits. But history tells monetary policy is a balancing act. If you raise rates too high, you risk choking growth. If you cut them too low and you overheat the economy.

The interplay between tariffs, deficits, and interest rates is where the risks multiply. Tariffs are already pushing consumer prices higher, while Trump’s fiscal policies are injecting more money into the economy. If interest rates are forced lower than is prudent, the risk is that inflationary pressures re-emerge far sooner than expected.

For investors, the near term picture looks positive, and markets usually celebrate rate cuts. Share markets may very well continue to rally in 2025 on the expectation of cheaper borrowing and a softer Fed stance. But the outlook beyond that is less comfortable. Artificially low rates, combined with structural deficits and tariffs, create a setup where inflation could return with force. This would push bond yields higher and potentially lead to more volatile equity markets.

While Trump’s current policies might deliver short-term economic momentum, they are potentially sowing the seeds of a more complex and unstable environment ahead. So, as share markets react positively to the prospects of much lower interest rates in the months ahead, investors should keep in mind the prospect of inflation reemerging next.

General Advice Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Car Wars - The Battle Ahead

There is an interesting battlefield emerging in the race to control the next big tech device. Apple saw it coming but shut their project down. Elon Musk was in the lead for a while with Tesla. But it is China who is clearly emerging as the massive winner.

I'm talking about cars.

The humble motor vehicle has been transformed from an analogue machine into the most critical new connected device, combining computers with sensors, microphones, cameras, and remote software controls. Whoever controls this industry will not only shape the future of transport but potentially the future of national security and geopolitics.

China’s BYD is forging ahead with incredible pace, surpassing Tesla in sales and rapidly scaling globally. With more than 4 million vehicles sold in 2024 and a growing foothold in export markets, BYD is forecast to become the world’s leading car manufacturer by the early 2030’s. According to an article in the Australian Financial Review recently, Chinese car brands are projected to account for 43% of vehicle imports into Australia by 2035, up from 17% today.

This is not business as usual. It will be a very different competitive landscape that emerges. The motor vehicle industry has traditionally been fragmented with dozens of manufacturers across continents. But electric vehicles, with their centralised software, battery platforms and connectivity ecosystems, more closely resemble the technology industry in my view. It’s more likely that a handful of dominant players emerge, in a similar way to Apple and Samsung with smartphones or Uber and DiDi in rideshare, to capture the entire market once scale is achieved.

Winning this race isn’t just about cars. It's the future of logistics, automation and surveillance. Modern EVs are rolling data centres. They collect real time geolocation, driving behaviour, voice data and have over the air software update capabilities. In the next decade these vehicles will form the backbone of supply chains, autonomous freight, drone deliver coordination, and potentially military logistics.

This is playing out against the backdrop of deepening US-China tensions. It’s important to be mindful that, despite the noise in the short term around tariffs and trade, the long-term trajectory is economic decoupling and the growing risk of open conflict, be it economic, cyber or military. The recent Microsoft hack, widely attributed to Chinese state backed organisations, highlights how fragile the relationship remains and that these are ongoing risks.

As tensions escalate, Western nations will need to make a decision. Do they continue importing Chinese EVs and risk systemic vulnerability or ban them outright for national security. Regardless of their price or popularity, the risk will simply be too high.

We’ve already seen a preview of this with TikTok. Initially dismissed as a harmless social media app, it has become a flashpoint in debates over data sovereignty and foreign influence. Cars are far more integrated into critical infrastructure. If governments are concerned about a Chinese app on teenagers’ phones, they should be far more concerned about a Chinese operating system embedded in the national transport network.

If China controls this infrastructure in rival nations it creates the potential for coercion, disruption and outright sabotage. Its today's version of controlling the oil supply. Imagine a future where western nations logistics networks are powered by Chinese made electric vehicles, all run on software built and updated in Shenzhen. A single firmware change could bring entire sectors of the economy to a halt. It is a massive strategic risk that is already being embedded in countries around the world.

This is a modern day Trojan Horse. We are welcoming low cost, high tech vehicles into our homes, businesses, and transport systems. These are devices that could one day be switched off, surveilled, or potentially weaponised.

Western carmakers are years behind and without a coordinated industrial strategy, similar to what China has executed for the past decade, there’s a real risk of not being able to catch up. This isn’t a trade issue. It’s not about emissions or consumer choice. It’s about sovereignty. It’s about control. We need to understand that the motor vehicles of the future are not consumer products, but critical infrastructure.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

Trump's Tightrope

President Donald Trump has been vocal in his criticism of US Federal Reserve Chair Jerome Powell for some time. Trump wants US interest rates cut significantly and has called for them to be reduced to 1.00% but Jerome Powell has held firm, and interest rates remain in a range of 4.25%-4.50%. Ordinarily, Trump would not hesitate to fire anyone who stands in the way of what he wants in place. But this situation is very different and there are significant implications for global financial markets, the US currency and its institutions if he oversteps.

For background, Powell was handpicked by Trump in 2017 and has served as Fed Chair since 2018. His second four-year term will end in May next year. There are two main concerns. The first is that there are real questions over whether Trump has the legal authority to fire the Chair of the Federal Reserve in the first place. More troubling for investors and global markets is the uncertainty of what comes next, as the Federal Reserve’s credibility hinges on its independence

If Trump removes Powell, especially over policy disagreements like interest rate decisions, it will set a dangerous precedent. Markets will begin to view future Fed decisions as politically motivated, not data driven. Future Fed Chairs aligning with political goals rather than long-term economic stability is a recipe for disaster. Central banks are independent precisely because it enables them to make the hard decisions needed to control inflation. If you undermine this independence, the result is likely long-term inflation fears and less effective monetary policy.

In many respects, this door has already been opened regardless of whether Trump fires Powell or not. There are reports that Trump may announce Powell’s successor much earlier than normal, perhaps in September, in a deliberate attempt to flag to markets that rates will be coming down. While Powell may or may not drop interest rates, it's clear that whoever Trump ultimately nominates will be chosen specifically because of their position that interest rates need to be much lower. The idea here is that markets being forward-looking will understand that, soon enough, low rates will be delivered.

The US has massive debt (over US$36 trillion) and deficits (around US$2 trillion annually). There are huge amounts of borrowing needed to fund the deficit and refinance maturing debt. It’s trillions of dollars each year, and interest costs are massive. Trump’s plan is for interest rates to be dramatically lower in the short term so that it’s cheaper for the US to borrow. In simple terms, that makes sense. But financial markets and the machinations of the economy are more complex than that.

The immediate concern if Trump fires Powell would be the destruction of the Fed’s perceived independence. However, the greater risk lies in the likely consequences: market instability, rising inflation expectations, a weaker dollar, and long-term damage to U.S. economic credibility. Even if short term interest rates fall, the unintended consequences would likely leave the US economy and financial system worse off. There would be lower global demand for US treasuries, and it would be detrimental to the US dollar as the world’s reserve currency.

Trump is going to get his way simply because he is relentless. But how he handles it will matter. Powell is under attack, and the campaign to remove him seems to be going into overdrive. They have called for his resignation, leaked reports that he will be fired, denied the reports and started an investigation in relation to mismanagement in relation to the renovations at the Federal Reserve building. This seems designed to break Powell and make him resign. This is clearly their preferred strategy over firing him, which would potentially create a legal and constitutional crisis that would have far reaching implications.

Yet for all the turmoil, markets seem to be taking everything in their stride. The US economy still appears to be strong. Employment numbers recently were solid, with unemployment lower than expected at 4.1% which is incredibly low. Inflation is in check, so far, but a spike from tariffs is coming. The irony of all this is that as it unfolds, equity markets are likely to initially rally at the prospect of a return to a lower interest rate environment in the next 12-18 months. However, that will soon be followed by fears that the inflation genie is once again out of the bottle, and this time it will not be so simple to fix.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.

What is success?

It’s a question I’ve asked dozens of high achievers on my podcast, founders, CEOs and investors. People with stories that others would love to learn from and replicate. But the more I ask it, the more layered the answers become.

One of my recent guests, Amanda Rettig, founder of Mimco and A-ESQUE, raised a point worth thinking about. For her, success isn’t the outcome, it’s the process. The work. The habits. The discipline. She said that while the outcomes were usually very positive and rewarding, they were almost a byproduct. She explained that while they were not achieved by accident, they were not the focus. However, she added a layer by noting that her definition of success had evolved over the years.

I had another interesting conversation with Ben Thompson, co-founder of Employment Hero, when he was on the show about the strengths and weaknesses as a founder. He talked about being curious and determined from a young age. When I suggested these might be two of the most important traits for success, he stopped me and said he has one strength that he places a higher weight on than those. It is the most interesting answer and the first time I have heard it. He wants adventure.

I spoke with Colleen Callander, former CEO of Sportsgirl and Sussan. As a rising star in the world of fashion retail, she reached a point in 2007 at the age of 36 where she was burnt out. Understanding that enabled her to take a step back and reassess. She used the analogy of racing a Ferrari but not wanting to ever get off the track for a pit stop. Inevitably, in a race, that car will simply not finish the race. She emphasised the importance of sustainable success.

I spend a lot of time talking with high achievers, both clients and podcast guests. So, I get to talk to people about their success, how they define it and hear how they did it. We all get the same 24 hours in a day, and it’s incredible to see the difference in what some people can do in their days compared to others. Those days stack up and compound over time.

Now, the people I'm talking with are very successful in the field of business. But there are similar insights that can be transposed from all fields, be it business, sport, politics and life more broadly. So, while I am interviewing people who have successfully created huge businesses, often it isn’t their best skill or what drives them. They might simply love solving problems or creating products. They tend to do what matters most to them.

While success tends to be measured in outcomes and achievements by people on the outside, many of the most successful businesspeople I have met are motivated by their own definition of success.  There’s often a gap in what success means to the individual and what everyone else thinks success is. More money in the bank or wins on the board are fantastic, but they are simplistic measures society uses to mark success. Real success in life happens when people understand and pursue their own definition of success.

General Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.