This week on Equity Mates

Hey there Equity Mate,

We hope you’re our podcast Summer Series.

On Equity Mates Investing Podcast we’re deep diving into 12 stocks with 12 expert investors to understand their research process and how they build an investment thesis.

Over on the Get Started Investing Podcast, we’re taking a journey to financial independence and discussing the pro’s and con’s of the FIRE movement.

Plenty of content to keep you listening and learning however you’re spending your summer.

Here’s what will be dropping this week:

• Monday: Equity Mates (Apple | Spotify): Does Google have any growth left? - Alphabet

• Tuesday: Get Started Investing (Apple | Spotify): From debt ridden to debt free

• Thursday: Equity Mates (Apple | Spotify): Australia: the land of the packaging giant - Orora

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Your questions, answered

Zane asked via email:

As a finance professional, what do you use in your daily life to budget?

We put Zane’s question to Patrick Malcolm, from GFM Wealth Advisory:

I use a tool called Pocket Smith. The app is, okay, it's not amazing, but it applies a business-like process to your personal budgeting. So you can generate profit and loss, balance sheets and those sorts of things.

It's really hard to budget without looking at the past as a reference for the future. I know that sounds very vague, but if you don't know what you've spent on certain things, I don't know how you then make an assessment of how you move forward.

It’s called top-down budgeting. Once you get that right, you've got a really good sense of, okay, well this is what I can set myself. And from a budgeting perspective, if you are then looking to save and you've realised, well actually I don't have a savings capacity, it gives you a reference point to say, well what are the categories can I pull back on to get to my spending goal?

If you have a question you’d like answered, hit us up at ask@equitymates.com

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What we’ve been reading

Hyperloop One to shut down after failing to reinvent transit

The hyperloop was one of Elon Musk’s more out-there ideas, first proposed in a white paper he published in 2013. Essentially it was a transportation system where passengers or cargo would sit in capsules inside a tube and would be transported by air pressure or magnetic propulsion at speeds above 100km per hour (in fact, the hyperloop speed record is 463km/h set in California).

For any fans of the TV show Futurama, that may sounds familiar:

Musk, busy with SpaceX and Tesla at the time, allowed the idea to be adopted by other entrepreneurs. And from there the company Hyperloop One was born. The company has raised more than $450 million since founding in 2014 and has built a test track near Las Vegas. However, a decade into its journey, the company has folded and one of its key investors, logistics giant DP World, appears to have taken over the remaining assets.

The question becomes, is this the end of the hyperloop experiment? Will it remain in the realm of science fiction and cartoons?

While Hyperloop One was the most high profile hyperloop startup, it wasn’t the only one. Several other hyperloop companies continue to operate including Hardt Hyperloop, Hyperloop Transportation Technologies Inc. and Swisspod Technologies. However, a decade since Elon Musk first published the white paper, it appears none of these companies have made much progress. And as a result, the excitement around the hyperloop is well and truly waning.

The rise and fall of podcasting

Now this is an article that hits close to home. It essentially makes the argument that we have lived through the golden age of podcasts and have passed into a new age.

It argues that the golden age ended in 2019. Before then, anyone could start a podcast relatively cheaply (ala Equity Mates) and good podcasts grew by word-of-mouth. All that changed in 2019 when Spotify opened its chequebook.

This article labels 2019-2023 the ‘big money era’ of podcasting. In 2019, Spotify announced they would be investing $400m into an industry that was only worth $400m the year before. In that same year, Sony, Amazon and SiriusXM also announced they were opening the chequebook. And as a result we saw a flood of celebrities move into the space. The Obama’s signed their Spotify deal in 2019, Harry and Meghan followed in 2020 and celebrities from Conan O’Brien to Kim Kardashian all launched their podcasts.

At the same time, all of this money sucked up airtime and bid up the price of marketing channels. It made it near impossible for new podcasters to follow their pre-2019 peers that started with no audience and grew by word-of-mouth. Podcasters that made it in the post-2019 big money era almost all had some existing profile, some audience on another platform or had the backing of a large podcasting company.

But all the while the audience for podcasts continued to grow.

And now, as we enter 2024, we have entered a new era of podcasting.

Many of these big companies have cut back on their spending. Spotify spent more than $1 billion on podcasts between 2019 and 2023, but announced they were cutting back last year and cut 1,500 jobs in the process. Google is shutting Google Podcasts, and Amazon and SiriusXM slowed down their dealmaking. As a result, we are entering the post-big money era.

This era opens the door for smaller creators as the velocity of new podcasts from the big players slows down. But the medium remains crowded and hard to navigate (at least until someones develops a YouTube-like recommendation algorithm for audio). As a result, it is likely podcasts hosted by those with existing audiences or that are launched with the backing of larger podcast production houses will continue to do well.

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