This week on Equity Mates

Hey there Equity Mate,

Today marks a huge moment for us here at Equity Mates. We have released our 1,000th episode across Equity Mates Investing and Get Started Investing.

For us, this is a chance to pause and reflect on how far we’ve come. From recording our first episode on a balcony, with one microphone between us, to a network of 12 podcasts, with 9 in the team, 2 books and almost 20 million downloads. It’s been a huge journey. And none of it would be possible without the Equity Mates community that has come along for the ride.

So thank you for your support - however you’ve engaged with Equity Mates over the journey. We hope we’ve helped.

Word of mouth remains the biggest driver of growth in the podcast space, so if we can ask one thing for our 1,000 episode celebration please share Equity Mates with someone.

And if we could be so bold to ask a second thing - please give us a rating and review in your podcast app of choice. Those ratings and reviews do help get podcasts in the Apple and Spotify recommendation algorithms.

That’s enough about our 1,000 episode celebration. Now we begin our journey towards our next 1,000 episodes. That all starts with what we’re releasing this week:

Equity Mates Investing (Spotify | Apple | YouTube)

• Monday - We’re celebrating 1,000 episodes

• Tuesday - Expert: Roger Montgomery - 5 ASX growth stocks

• Thursday - Industry Deep Dive

• Friday - Expert: Cameron Blanks - View from Australia’s largest Private Equity player

Get Started Investing (Spotify | Apple | YouTube)

• Monday - We’re celebrating 1,000 episodes

Your questions, answered

Charles asked via Instagram:
‘Do you think ‘short-term’ stock trading is gambling?’

We put Charles question to Luke Laretive, CEO & Portfolio Manager Seneca Financial Solutions.

Book a call with Luke for professional investment advice.

Not always.

There are lots of successful high-frequency trading or high turnover, short-term trend-following strategies from around the world. Generally, they are systematic (i.e. driven by algorithms), but some are more discretionary (usually with a fair bit of computer assistance in execution.) If you execute trades on the market every day like I do, you see these ‘algos’ in the depth screen for 90% of ASX-listed companies. Some look to exploit ‘spread’, others prey on how humans think and subsequently, execute trades (i.e. buying/selling round lots, i.e. 1000 shares, in a single line).

If you want to go read about one of the best to ever do it, read this book on Jim Simons and Renaissance Capital.

In terms of ‘regular people’ - yes, it is probably gambling. No program that you can afford, no system that you have access to is ‘the secret to success’. Don’t get sucked into thinking there’s a ‘silver bullet’ out there… only a bloke from Twitter selling you a bs-course on ‘technical analysis’ and ‘day trading’.

If you have a question you’d like answered, hit us up at [email protected] 

This email is thanks to Magellan

Magellan focuses on investing in the world's best companies to grow and protect the wealth of their investors. They search the world for high-quality companies that they believe have a sustainable competitive advantage and will compound returns over the long-term.

‌Visit: magellangroup.com.au to explore their global equity and infrastructure strategies managed by their team of highly qualified and experienced investment professionals.

What we’ve been reading

How they make money: Formula 1

The world is in love with Formula 1. Beyond the documentaries and the glamorous locations, this article takes a deep dive into just how the sport makes money. And now that Liberty Media owns Formula 1, we all have a chance to invest in it and become a part-owner in the Formula 1. This articles helps us understand whether we should.

At a high level, the revenue mix for the Formula 1 breaks down as follows:

• Race promotion (~30%): cities around the world pay to host a Grand Prix

• Media rights (~30%): F1 sells the right to broadcast their races to TV networks and streaming giants in each different country

• Sponsorship (~20%): Companies can sponsor anything from the side of the track to events surrounding the actual race

• The remaining ~20% is made up of ticket sales, hospitality packages and VIP access, payments from teams for managing shipping and logistics and other licensing deals

Since Liberty Media acquired the Formula 1 in 2017, they have almost doubled the revenue of the sport.

What we’ve covered is just a high-level look at Formula 1’s business. If your interested in it as a sport or as a potential investment, this article goes deeper on how that revenue flows through Liberty Media’s operations and ends up as profit and where Liberty Media sees the next opportunities to grow the Formula 1.

Four Pillars: The TDM Investing Framework

Over the years, we’ve become big fans of the team at TDM Growth Partners. We’ve spoken to many of the investment team on the podcast - check out their appearances here - and have enjoyed watching their investment process at work with Mineral Resources, Block, Rokt and Guzman y Gomez amongst others.

So when TDM co-founder Hamish Corlett shared this article breaking down the four pillars of TDM’s investing framework, we were excited to get into it.

The four pillars for TDM are: growth opportunity, structural competitive advantage, people and culture and valuation.

This article from Hamish breaks down each of these four pillars and outlines how TDM have developed a common language and analytical framework for their growing investment team.