My Favourite ETFs? Where's my Tesla? (Q&A September 2020)

[Music] Hey guys, welcome back to the channel. In this video, we are going to be doing a Q and A video. I haven't done one of these in a very long time, so thought why not today? Let's sit down. I asked you if you had any questions over on Instagram, so if you don't follow me on Instagram, what are you doing? The username is new money official. I think new money was taken. God damn it! Anyway, so let's get stuck into it.

Lots of questions today, so I'll see how many we can get through. So let's start off with this question from Ben. Predictions for the market for the rest of the year, man? Hit me with the hard ones first up! Predictions for the stock markets? Well, I think if typically—I just like to look over in America because that's where I do a lot of my investing—but I think when you look at the stock markets, they're so overvalued right now. They're so overvalued, but at the same time, I also think it's going to be hard for the market to crash just because, you know, the Federal Reserve has basically stood up. Jerome Powell has stood up and said, you know, if there's any sign that anything's going wrong, we're going to step in in as, you know, as much of a way as we need to, and we're going to support business, we're going to support the economy.

So, like, obviously when we talk about the stock market, like, I could have said that and then, you know, the stock market could have crashed by the time this video comes out. When it comes to the stock market in the short term, no one knows. It's impossible to predict, so we could see a crash. But when I think about, you know, just business—yes, there have been a lot of businesses that have been impacted throughout this year. However, it seems like, especially with the U.S., they're very much opening up, so things are kind of getting back to normal. Business activities have resumed and with the Feds standing there saying we got your back, we got your back, we got your back. I don't know, I just feel like it's going to be—I would like to see stocks be a lot cheaper, at least come down to fair value please, but in reality, I just can't see it happening. I just can't see it happening. But anyway, that's just a prediction, take that for what it's worth. But yeah, who knows? That's the thing with the stock market in the short term—who knows? I could be totally wrong, we could see the stock market crash tomorrow.

Anyway, okay, moving on to the next question from Jack. Jack asks, "Best Australian brokerage options?" I think overall, like, I haven't used a whole heap of brokers, but from my personal experience, I mean, if you're already banking with one of the big four banks, then chances are it's going to be relatively cheap for you to just do your investing with that same big bank. Like if you're with Commbank, you can go with Comsec. If you're with NAB, you can do NAB Trade, that sort of stuff. But if you're looking for other brokers, like personally I've used CMC Markets before—they've been great; I think they're like $11 brokerage. I've had no issues, but the one that always pops up in comments and whatever is SelfWealth. A lot of you guys are using SelfWealth, and from what I can gauge from all of the reviews and the feedback and the conversations I have just with people generally is that people really like SelfWealth and $9.50 trades as well. So it's pretty cheap, at least it's cheap for Australia, I suppose. So yeah, they're probably the ones that I would look at: CMC, you know, SelfWealth. There are heaps of options out there, but maybe those two or just whoever you bank with as well.

So that's the next question. Uh, third question: Do you like NDQ ETF? NDQ is an ETF, an Australian listed ETF that tracks the NASDAQ 100, so the 100 largest companies on the NASDAQ. So that's basically just the American tech companies. Like, most of the big tech companies are on the NASDAQ, and for this ETF, I actually really like it. Like, it's one of my favorites, not gonna lie, because a lot of my interests are in these U.S. companies, these technology-based companies. That's obviously just kind of my circle of confidence and my interests. So although, like, it may be say horrifically overvalued in terms of an ETF, I actually really like it because it's got, you know, the Facebooks, it's got the Amazons, it's got the Teslas, you know, all of those different stocks. It's got them. So I should—yeah, I actually really like NDQ. It's one of my favorites. If you have Comsec Pocket, if you have that app, then that is the ETF that you are investing in if you pick the tech-savvy option. So if you read about the tech-savvy option, you'll find that it's actually the NDQ that's the ETF.

Okay, next question. Um, is, "Are you excited for Tesla Battery Day?" Yes, I am! In fact, I'm recording this the day before Tesla Battery Day. Um, so by the time this video comes out, you guys will have seen everything that got announced at Battery Day. Oh, I don't know, but I think this is going to be amazing! I think it's going to be really something else. I think we're going to see a very big master plan from Tesla as to how they're going to make their own batteries and how they're going to scale to that next level of battery production because we've known for a long time that that's really what's holding Tesla back—the battery production side of things. So yeah, I'm really excited for Tesla Battery Day; that's from the time I'm recording this video— that's tomorrow. So I'm really excited! I'm going to be watching along as much as I can tomorrow. Um, yeah, I'm really excited for it!

Anyway, okay, moving on. What gear do you use when you're recording your YouTube videos? That is the next question. Um, so the camera that I'm recording on is a Canon EOS R. I think it's a great camera, looks—pictures really, really sharp. Like I'm not a huge photography guy, but I really like the EOS R. And then in terms of mic, I've just got this little lapel mic on. This is a Tascam DR-10L. I think that means anything to anyone? DR-10L, I'm pretty sure. Yep, DR-10L. So there you go. Uh, this is a really nice mic, I really like it. It's got its own little recordy thingy, so you just stick it in your pocket and it goes with you. So it's real handy—still wired. I decided to go the wired option as opposed to the wireless just because I didn't want any potential connection interruptions and having to re-record videos or anything like that.

And then basically what I do is I take the video file and the audio file and I use Adobe Premiere Pro and just match them up and then edit my videos. Uh, okay, so next question—I like this one—is Port going all the way this year? Yes, we are! Go the Power! Come on! I love it! Actually, funny little story—every time I wear a Port Adelaide t-shirt or I wear a Port jumper in one of my videos, guaranteed to get at least a couple of comments saying I'm unsubscribing because of your jumper. But no, Port! We finished minor premiers! That was yesterday; that game was so good—win over Collingwood—and I hope Port Adelaide can go all the way this year!

Okay, next question is from Joel. Joel asks, "What is your best advice for staying rational in the stock market?" This is a really good question because it's a very important question. If you want to have long-lasting ongoing success through your investing, you have to stay rational, but it's also really, really hard to do. It's one of—it's probably the biggest challenge of investing, of long-term investing is staying rational. But I think from what I've learned about investing over the years, the best advice I could give—the best advice I've ever got—is to just have a solid strategy. So know what you're doing, know your process. You know, if you find a new stock, you make sure you read the annual report, you understand the business, then you check for the competitive advantage, then you check the management team, then you run the different valuation models. Okay, do your discounted cash flow, you do your margin of safety, you do your owner's earnings, and you check are these shares undervalued, are they overvalued? You make your decisions from the research you do, from the process that you follow. Because most investors do terribly because at the end of the day, they're way too speculative, okay? And that means that essentially they just—they just end up gambling, they don't do their due diligence, they do get very speculative, they don't stay rational, and that's where the mistakes creep in. That's where you go, "Oh yeah, look, Tesla, Tesla's looking hot. You know it's gone up 10X in the past year. It seems like it's not stopping." At the same time, Tesla currently has a P/E ratio of about 1,100. So that's kind of my top tip to stay rational is to just have a strategy and stick to it.

Okay, let's go into the next question here. Do you think the U.S. election will have a big impact on the stock market? I mean, potentially! This is kind of just pure speculation. I mean, obviously the argument's been made by the media that, you know, the stock market's done so well because, you know, Donald Trump is the president of the United States and blah blah. You know if Joe Biden gets in, then that's going to be the end of business as we know it and the stock market's going to crash. But at the end of the day, like, I don't know, I've got no idea. I mean, it's because it's been played up so much like that in the media, maybe there will just be a kind of a psychological effect that if Biden wins, then maybe the stock market will go down. But I don't think there's—I mean, I don't look at this stuff. At the end of the day, that really doesn't influence my investing patterns at all because at the end of the day, I'm looking at individual businesses. So I'm thinking about—I'm not thinking about politics and the macro, I'm just thinking about: right, okay, um, pick a company, Facebook for instance. Is Facebook, you know, doing well? Are their future growth prospects great? Are they undervalued right now? That’s the sort of stuff that I'm looking for. You know, what's their cash flow? How much money are they going to return to me as an investor over the next 10 years? I'm not worried about, you know, who the president is at that specific time.

So, next question here is from Annabelle asking, "Have you ordered your Tesla?" No, I haven't! Oh my gosh, oh my gosh, there's such a long story about this. Like, I'm gonna buy a Model 3 and it's probably going to be a white Model 3 performance. I'm really sold on that car. The problem is, like, at the moment, here’s my story, right? I said that I was gonna buy one when I hit 100,000 subscribers, and now I've hit it, I still haven't bought one. But my reasoning is, right, so I need a place to put it. At the moment I just live in a townhouse, and I've just got a carport which is basically backing onto the street. It's not enclosed, it's not locked, it's not anything! So I really just want somewhere to put the Tesla when I buy it. So I know this is completely crazy, but one of the reasons that I'm currently looking to buy a house is so that I can have a house with a locked garage so that I can buy a Tesla. As crazy as that sounds, that's actually my thought process at the moment! But then there’s the problem of trying to buy a house and, uh, complicated, because I have a very complicated—I shouldn't get into it, but essentially I'm—because I work for myself, because I run this YouTube channel, banks don't like lending money to people that work for themselves. And even though, you know, my income over the past year has been pretty decent from YouTube, most banks take the average of the last two years of income from your self-employed ventures. And because not last year, but the year before, I was only doing YouTube part-time because I was working full-time as a physio, that obviously dragged down my business income because I really wasn't spending too much time on it. So overall, they take the average of the last few years, and I can't get a massive loan. So that's—that’s the issue that I'm working through so that I can get the house, so I can have the garage, so I can put my Tesla in it. Yeah, so that's where I'm at at the moment. But it's definitely coming; it's definitely coming, I can promise you that and I'm going to make a lot of videos about it when I get it! But anyway, okay, moving on to the next question: What is the best website to find economic moat numbers?

Economic moat numbers that I like to look at, so we're looking at revenue, we're looking at earnings per share, we're looking at equity, we're looking at free cash flow. You can find, like for instance, Yahoo Finance will—when you look at a company on Yahoo Finance, it'll take the last three or four years of those numbers, so you can kind of look over time. The Rule One Toolbox, of course, that's where I learned the Rule One method to look at those numbers to try and assess whether this company has a competitive advantage or not. Phil Towns actually made the Rule One Toolbox, so you can log in, I think you can make an account for free still for like a month or something, and you can have a look at your company and you can have a look at what their, you know, growth has been in earnings per share over the past 10 years on average and all those sort of numbers. But at the end of the day, I actually don't look at a particular website to find these numbers. At the end of the day, I like doing it manually because doing it all manually, going back into the financial reports, plotting it out in Excel. You know, 2011, 2012, 2013, and just putting in those numbers and working out what's been the average growth over time. You know, is it growing, you know, undisrupted? I like doing that manually because it makes me feel as though I have a much better understanding of where this company's come from and where it's going. So that's why personally, even though it's a nice shortcut, say using the Rule One Toolbox or whatever, I always do everything manually before I make an investment just to really cement it in my own head that I know exactly what's going on and I can predict exactly what's going to happen into the future. So that's kind of my two cents on the economic moat numbers.

Should we do a couple more? Maybe this is probably going to be quite a long video. How do I resist the urge to invest in speculative stocks? It's very similar to the last question that we had about staying rational—just follow a process, block out the noise, don't listen to what your mate Jonno's telling you to buy or sell. Just block out the noise, stick to a strategy.

All right, here's a question from Jacob. Jacob asks, "What are your top three ETFs on the ASX?" So top three ETFs? Obviously, everyone's different, so just because I say this, that doesn't mean you should go buy them or anything. But for me personally, when I buy an ETF, I'm all about passive investing, right? I just want to track the market and I want to track it for a long time. So I track the Australian market, the U.S. market, and the Global 100. So for me, there are a couple of different options, but for me personally, it's like VAS for the Australian market and then IVV for the S&P 500, and then IO for the Global 100. And I find that for me, anyway, for my personal objectives, my personal investing goals, that's a pretty good combo for, you know, passive investing over years and years and years and years. So they're probably my three favorite. But as I said before, like I really like the NDQ as an ETF—the NASDAQ 100—because it's got so many companies in there that I love, but at the end of the day, it doesn't fit the strategy that I'm implementing with the ETFs because it tracks the NASDAQ 100, but it doesn't track, say, the S&P 500, which is a better, broader collection of U.S. companies—the top 500 U.S. companies. It's not just the top 100 on one of the U.S. stock exchanges. So that's why I like NDQ, but when it comes to my personal ETFs, because of the strategy I follow with the passive investing tracking the market over time, that's why those three are different.

Okay, are your first two courses about investing still a bundle package? Yes! Profitable courses—I actually had a fair few questions on here about profitable courses. Yes, there's still a bundle. You can still go and get them: Stock Market Investing for Beginners, Introduction to Stock Analysis, that's bundled together as well if you want to save a bit of money if you want to do both of them. And the same thing as well with the tax courses. The two tax courses are in a bundle as well. So just head on over to Profitful—there are links down in the description, as I say in all my videos. They're really, really good resources. That's the thing. We're struggling with at the moment: we're struggling to get people to actually leave reviews because, obviously, because we're a new kind of company, we've got some really, really good courses like I will stand up and defend those courses for days and days and days because they are really helpful. The two on investing are really in-depth, and then the two on tax that are done by Scott—they are just unbelievably helpful if you don't really know what you're doing when it comes to tax and you need to know tax on your investments, you know how the tax system works if you run your own business. There's such good courses, but we need—we need more people to understand that, you know, that essentially that they're not a scam because how many—how many courses do you see on the internet right now that are just complete rip-offs, just absolute rip-offs? They're complete scams, and you know, you buy it and then you go through some of the content, you're like, "Man, I paid how much for this?" So we're trying to, like, one of the kind of—I don't know, mission statements behind Profitful is we want to try and combat that stigma that, you know, these investing courses are just complete scams, so we're trying to right that wrong, I suppose. But it's going to take time. So if you've done the Profitful courses and you enjoyed them, please, like, leave us a review—I don't know, Google review or, you know, send some feedback to me, there's an email down in the description—and I don't know, we just need more people to know that they're out there and they're actually pretty helpful.

All right, let's do one more question. Is it better to buy shares slowly, bit by bit, or is it better to save big money and then buy once in a while? Okay, so is it better to buy shares slowly over time or do you just save up and plonk it in all at once? Again, it comes down to your strategies. There are two things—there are two thought processes. If you invest very, very frequently in small amounts, then you're going to have to pay a brokerage fee every single time. But then again, if you just save up for a couple of years and you've got, say, I don't know, $50,000 and you want to sink that into the market at that one time, then you're locked in at that one market price, whatever that price of the investment was at that specific point in time. So say the stock market's gone flat and then it spikes up, and then you save your $50,000, and then that's the time that you're going to invest—well, you've plonked that $50,000 in when the stock market's really expensive, and then maybe in a couple of months, the stock market will crash back down. So it could work like that; it also could work the opposite. If you had a whole bunch of money and the stock market crashes, then you could plonk it in and that could work out brilliantly for you. However, for me, there's a balancing act between the two. So for me personally—and I'm not saying you should follow this strategy because it's obviously very individual—but for me personally, I come back every three months and I just invest a little bit more into my passive investments because then over time, every three months means I'm not getting killed with brokerage, right? Because if you've got $10 brokerage, you can save up a fair amount of money in three months to invest, so you're not getting killed with your brokerage costs, but it's also frequent enough that you're going to capture almost the average of the market over time. So they're the two thought processes—they're the two things to think about as to whether you save up more money and plonk it in at one point or whether you invest smaller amounts more frequently, but take into account how much of a percentage of your investment amount is going to brokerage and try and keep that very, very low. But still, don't leave it so long that you're only investing, say, once every year or two where you've got this whole bunch of money and then you're just at mercy to whatever the market price of that investment is on that day that you decide on.

So anyway guys, I think that's where I'll leave it. Thanks very much for submitting your questions! I'm sorry I couldn't get to all of them, but maybe I'll do another Q&A video. In fact, I think I'm going to try and do a Q&A video every month—just unscripted, sit down, and just have a chat to you guys and see what you guys are asking about, and yeah, we can kind of just work through some questions like what we did today. But anyway guys, thanks very much for watching if you made it through all the way to the end. Um, and thanks very much for submitting your questions. Remember, follow me on Instagram, new.money.official. I'm pretty sure that is—I don't even know if that's my username to be perfectly honest. Uh, I need to check it right now. Yep, new.money.official because new.money was taken.

All right, well, let's finish it up there. Thanks very much for watching guys! Uh, if you like this video, if you want to see more like this, please leave a like on the video. It helps me, it really helps me understand kind of what content you guys are responding to. I always look at how many views I get on different videos, how many likes, how many dislikes, and that just kind of helps me gauge what sort of content you guys want to see. So if you want to see more Q&A videos, make sure you leave a like on the video and subscribe to the channel. A lot of the viewers on my channel, I can't believe it, but so many viewers that watch my videos aren't subscribed—it's crazy! It's like 70% of people aren't subscribed. So if you're one of those people—yep, that's you, that's you—then click the subscribe button, stick around. We've got plenty more content coming out on investing, on personal finance, on money, you know the deal. Thanks very much for watching guys, and I'll see you all in the next video. [Music] Um [Music] you