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The Contrarians catchup

• Adam finally had a good Qantas international Wi-Fi experience on the way back from the US. “Pretty special. They finally started putting Wi-Fi on these international flights, which was a long time coming, like obviously the rest of the world did it 10 years ago.” Then domestically it failed both ways - “I was about to give Qantas this massive slap on the back, and then unfortunately didn’t work domestically, which was a bit frustrating.”

• Adam shared a quote from RFK Jr. describing Trump’s maths: “He’s got a different way of doing percentages. For example, if something goes from $600 to $10, he says that’s a 600% improvement.” The comment underneath it on YouTube: “Eventually the party says two plus two equals five and everybody agrees it equals five, which was the end of 1984.”

• A Group of Eight university has given 80,000 students a $50 gift voucher each to use on campus, costing $4M. Adir: “How can you on one hand say we need more money? And on the other hand, do that. It’s just completely bizarre.” Adam: “They need to be zero-based budgeting. Go back to zero and build it up again. Because they’re just so rotten to the core, these institutions. They’re not fit for purpose now.”

• Microsoft is reportedly removing Copilot branding from its AI products. Adir: “Brand equity can be negative. Would you pay more for AI knowing that it was Copilot AI? No, I’d pay less. You would all pay less because it’s so bad that Microsoft is taking the sticker of Copilot off their AI.”

• Intel is rocketing back. Adir: “Things went badly for them, but they’re in the right space. They’ve got a great brand. They’ll figure it out. There wasn’t much more predictable than that Intel would come back.”

Microsoft and the biggest bet in modern corporate history

Microsoft announced voluntary redundancies for 8,000 staff, the first time in the company’s history, as it continues to funnel its entire free cash flow into AI infrastructure. The stock is now off 23% from its high, trading at a PE of 26, levels not seen since the dot-com crash.

Adir: “I can’t think of a larger bet in modern history by established businesses than this enormous investment in AI. It’s possible it will pay off, but there’s no ultra high probability argument that it’s all gonna pay off. It’s gonna be one of the craziest, most dramatic bets in history for large companies.”

Adam: “It’s crazy how the market just accepts this bet. And so Microsoft’s off 23% of its high. It’s valued at $3T now. And it’s got a PE multiple of 26. This has been a long time since Microsoft’s been priced at these levels.”

Adam: “Satya Nadella 18 months ago was probably considered one of the best CEOs in the world. And I think if you look now, that was when ChatGPT was flying and Copilot was looking good. He’s fallen so far now.”

Temple & Webster: CEO out, tough times ahead

Mark Coulter stepped down as CEO of Temple & Webster after a decade, moving to executive chairman. Susie Sugden, a long-time team member, has been promoted to CEO. Adir gave Coulter enormous credit, but is clear-eyed about what lies ahead.

Adam: “A shout out to Mark Coulter, who’s been an incredible CEO. It’s worth $700M now. That was a business that was worth zero essentially when he came in. So he’s created an enormous amount of value for the shareholders. He has been probably one of the best performed CEOs in Australia in the last 20 years.”

Adir: “Temple and Webster does not have the differentiation of Nick Scali as a brand. Their brand is basically, I go online, I search for stuff, and if that bed or sofa or whatever the price is good, I’ll go and buy that one. My feeling is you’ll see in these results the beginnings of a pivot towards improving margins. All of this talk about we’re just going to keep growing the top line, my guess is this is going to be the beginning of a change.”

Adam: “I think Susie’s got a chance of really growing this business. I think she’s a really good operator. This is almost a business that probably should be private again, to be honest. Like somebody should take this business private, let them focus on making money, make twenty, thirty million bucks and just run it for profit.”

The fraud worsens at CTM

Corporate Travel Management admitted it had known since 2022 that it overcharged the British government, but chose not to tell the market. The overcharge quantum has now grown from $160M to $240M. The company has pinned the entire mess on one UK executive, Michael Healy, who was never a director and wasn’t even running the business when the alleged fraud started. New auditors uncovered what the old ones apparently didn’t.

Adir: “CTM is claiming that their UK managing director forged letters on behalf of the British government. Like that is a dramatic claim.”

Adam: “This whole excuse they made, that this is the Lee Harvey Oswald lone shooter on the grassy knoll, just makes no sense at all. But this whole thing just stinks to high heaven.”

Adam: “Every announcement these guys make seems worse than the next. It’s quite staggering. A public company is now ten months late on its reports. Somehow ASIC let these guys continue to trade, which itself is a disgrace. And now they’ve just announced, oh by the way, we didn’t rip off $160 million. It’s actually $240M.”

Adir: “My suspicions are that the previous auditors, I think they might have been PwC, I suspect they picked up on something here and they started panicking and putting a lot of pressure on. And so I suspect that may be what has happened.”

NDIS: a feather on an elephant

The Albanese government announced reforms to the NDIS, cutting the scheme’s growth rate from 10% to 5% a year, which will still see it cost $55B by 2030. Health Minister Mark Butler conceded that flawed design under the previous Labor government was the key culprit. Adam argued it barely scratches the surface.

Adam: “By 2030, Australian taxpayers are still paying $55B for this, which means $2,000 for every single Australian person. And bear in mind only about half Australians pay tax. Every taxpayer is paying $4,000 a year. So think about that. You’re listening to this podcast, you’re paying on average $4,000 a year to cover the cost of this disgrace.”

Adam: “Of the probably a hundred comments in The Age, 98 of them were saying it’s a rort, it’s a waste, it’s a fraud. This isn’t the Herald Sun readers. This isn’t just Contrarians listeners who think it’s a fraud and waste. The only people who like this thing are the 700,000 people who are rorting it.”

Adam: “They should get rid of the whole thing and seriously say people should get a great safety net like they need, 200,000 seriously disabled people, and build it properly. Not the way they built it. They stuffed it up. And start again. You can’t tinker with this thing. This thing is a dead dog.”

Mecca: Australia’s greatest retail story

Mecca reported revenue of $1.43B for the last year, with a profit of $126M and a dividend to founders Jo Horgan and Peter Wetenhall of $87M. For context, Sephora, owned by LVMH, reported Australian sales of $337M and lost $13M. Mecca is four times the size and makes money. It opened its flagship $50M Bourke Street store last year, which attracts 70,000 visitors a week.

Adam: “If you look at what Jo’s done, competing with Myer and David Jones who dominated this space. I actually rate the Mecca business story as probably one of the best retailers in the world in terms of what it’s been able to achieve in the Australian market. If they took this international, this could be a $50B business. They’ve smashed Sephora, which is a brilliant business. They’ve destroyed it. These guys are world-class. There’s almost no comparison in terms of what they’ve been able to build in Australia, in terms of the degree of difficulty and what they’ve built.”

Adir: “What is going to happen is you will see, Mecca is unique amongst large third-party retailers in that it absolutely does not compete on price. They’ve got exclusive deals with brands. And they do their own stuff as well, but the thing is if you have an exclusive deal with a brand that is almost like being vertically integrated. It means that you can control the discounting.”

Deep dive: Heidi Health

Melbourne-founded Heidi Health, an AI medical scribe business used by GPs and hospitals, has surged from US$1M to US$50M ARR in two years and is now valued at $660M after raising US$100M including backing from Blackbird. Adam gave the business a thorough technical assessment, contextualising its claims and comparing it to competitors.

Adir: “I think Heidi is fascinating. Is it worth six hundred and whatever million dollars? Heidi’s growing fast, but like if you’re in AI now, your revenue’s not your problem. Like, you’re rocketing.”

Adir: “Harrison AI has trained up a radiologist who reads films that is this good. It can identify 130 individual diagnoses on a chest X-ray. And it did the radiology test. If you give the radiology test to become a radiologist, if you give that to Claude, Claude will do about as well as like random guessing. Harrison AI scored eighty-five percent on that test.”

Adir: “When I get pitched AI businesses, everyone says yeah, we train the model. And so the thing is, are you changing the weightings? That’s the question to ask. If you’re using Anthropic or ChatGPT or Gemini as your foundational model, you’re not training it. The weightings are not yours and you don’t really know what they are. Mostly when people say they’re training models, what they mean is they’ve written really long and sophisticated prompts that they put into context before they answer a question.”

Adam: “What else can I buy for $660M? I can buy Temple & Webster. I’d rather own this business, to be honest.”

Five other stories worth following:

1. Startup Astor raised $5M to deliver AI-driven financial advice via text or voice, connecting to portfolios. With 4,000 users paying subscriptions, human agents verify outputs, blending automation with compliance in a tightly regulated industry.

2. Noscroll, built by former OpenSea CTO Nadav Hollander, uses an AI bot to filter feeds, avoiding doomscrolling and rage bait. It scans X and other sources, texting users relevant updates based on personalised preferences.

3. Scientists identified a mysterious golden orb discovered in Alaska’s Gulf as remains of a giant deep-sea anemone after years of DNA analysis, highlighting how little is known about deep ocean ecosystems and ongoing discoveries.

4. AI companies are recruiting from struggling software firms, poaching executives from Salesforce, Snowflake, Datadog, and Palantir. As enterprise demand rises, experience in sales and go-to-market strategy is becoming especially valuable talent in this shift.

5. Two runners broke the two-hour marathon barrier in London, led by Kenya’s Sabastian Sawe’s record 1:59:30, with Yomif Kejelcha close behind. Adidas benefits as running shoe demand continues strong growth, in the US market.

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The Contrarians catchup

• Adir was recognised by two stylish strangers while sitting in traffic - they knocked on his car window and held up the podcast on their phones. “I was very flushed. My car is very old. Like I do not drive an expensive car. And so they’re looking in and anyway, it was very... Thank you for listening to the two stylish gentlemen.”

• Adam reflected on watching cable TV in Canada with only 40 channels (10 of which were watchable). “William would watch Scooby-Doo, something he’d look forward to, ‘cause it was on at eight thirty and it wasn’t on at seven like everything else on demand. It really shows the value of scarcity and how scarce products make you like them more.”

• Adam recounted a nightmare experience with Air Canada - his nephew was nearly bumped from a flight before a crucial exam, and Adam and his son were separated into different seats with no explanation. “They just lied to me about the nomination. So obviously somebody must have complained and wanted row one or whatever.”

• Adir ran a LinkedIn poll on political cartoons after Adam dismissed them on a previous episode. Result: 34% are indifferent, 34% generally enjoy them, 23% don’t want them, and only 8% love them. Adir: “Forty-two percent of people get some enjoyment out of them. I think that’s way more than you could say about most individual journalists. So I think on balance, they’re actually a pretty good thing to have in a newspaper.”

The cybersecurity arms race begins

Anthropic quietly released a new model called Mythos to around 30-50 large organisations including JPMorgan, claiming it can find zero-day vulnerabilities in software by reverse-engineering source code from compiled binaries. Adir argued this signals a fundamental shift: cybersecurity, not productivity or creativity, will be the defining AI battleground of the next five years.

Adir: “The single biggest thematic of the next five years is going to be security. Much more than anything else that AI is doing.”

Adir: “The claim of Mythos is this. It will go and grab your source, for example, from your installation of Windows, and it can reverse engineer source code based on this extremely simplified binary, and then it will go and look for exploits inside that regenerated, like a reverse engineered source code, and it says it can find zero day.”

Adir: “The real scary thing about this is if it goes and finds a networking vulnerability inside a Microsoft’s networking part of the software, it will go and create this exploit and then it can go all the way to your domain controller server that runs your whole network. And that is like the greatest cyber attack. That’s what they all want to do.”

Adam: “I feel like quantum computing is the bigger risk than AI.”

The Iran conflict: Strait opens, oil tumbles

Iran’s Foreign Minister announced the Strait of Hormuz would reopen, with oil dropping 10% on Friday to around $87 a barrel, barely above pre-conflict levels. Trump declared a “great and brilliant day for the world coming.” Adam and Adir assessed the state of the conflict.

Adir: “Iran were just more willing to kill innocent people. And if the US is willing to, the US or Israel or anybody could have also blocked the Strait of Hormuz if they want. Iran has no advantage - the whole thing of Iran mining the strait is complete bullshit because the Iranian ships are getting through.”

Adir: “I think it’s turned out to be a lot less bad than people had feared. Like it is damaging the economy globally, but it’s not destroying the economy. A globalised world means that there is more capacity to adjust for these shocks over time.”

Adam: “Do you remember in Jurassic Park, Jeff Goldblum has this immortal line - he said life finds a way. And in this case, life finds a way. Like we build pipelines, we find other sources.”

Pope Leo vs Trump

Pope Leo XIV (born Robert Prevost, from Chicago) entered a public feud with Donald Trump after the President told him to “stop cutting to the radical left and focus on being a great Pope, not a politician.” The Pope hit back, claiming the world is being “ravaged by a handful of tyrants.” Adam noted the Pope had been conspicuously silent on Iran’s human rights record.

Adam: “I’ve got no issue with the Pope criticising Trump, by all means criticize all he wants. But I’ve got a big issue with the Pope criticising the US and not saying a word on the 30,000 innocent protesters who were brutally murdered by the same regime.”

Adam: “Bill Maher had his great bit on it last week when he said a week ago the left hated the Pope, he’s anti-abortion, he’s anti-gay rights. Suddenly they love the Pope - he’s turned around in the space of two days. Suddenly the Pope’s great. Forget about this abortion stuff. He doesn’t like Trump, so he’s good.”

Special guest: Steve Baxter - founder, VC, defence investor

Steve Baxter is a legendary Australian tech founder - he grew SE Net, one of Australia’s first ISPs, sold it during the dot-com boom, co-founded Pipe Networks (sold to TPG for ~$400M), spent a year at Google, appeared on Shark Tank, and now runs Beaten Zone Venture Partners, an early-stage defence fund.

On his time at Google: “It was a very, very entitled workforce. You’d have like no meetings Fridays because people wanted to work from home, and then you’d ring them and they’re getting their car fixed or they’re down the park lane with the kids. I should have just sort of taken my brain out of my head, put it on the table and enjoyed the ride. But I just couldn’t. I don’t like not providing value.”

On the data centre boom: “When I was at Google, they were doing 90 megawatt floor plates when I was there in 2008-2009. Which is massive. Maybe an Australian data hall wouldn’t be 90 megawatts even now. Very, very big data halls.”

On what’s needed to power them: “They’re talking ten cents Australian if you look at the price - you can burn this in an automotive plant as well, and you’ll only cost you 10% more less in efficiency.”

On Beaten Zone Venture Partners and defence investing:

Steve: “People have the perception that if we don’t participate in defence, then obviously we’re kind. But you’re just weak. You’re not strong. And there’s nothing good about being weak.”

Adir: “People like to think we can talk our way through everything and be gentle and don’t realise, if there are bad people with weapons trying to hurt us, then we need good people with better weapons and training stopping that happening.”

On Australia’s defence readiness:

Steve: “We’re not spending enough. And I think actually using an accounting shift to actually pretend we’re now spending two point eight percent of defence is ridiculous, including the military pensions. The US doesn’t.”

On Ukraine’s Brave One Marketplace, an eBay-style platform where soldiers in the field can buy and rate weapons, with points awarded for destroying enemy equipment:

Steve: “This iteration curve, this innovation cycle, has now gone from in our society here, it’s gone from decades to years. They do it in weeks and days. They ran a test around incentives and outcomes and they changed the points for a Russian KIA, a soldier killed in action, from two points to six and in one week they doubled KIAs. That’s unbelievable.”

Adir: “Some people will listen to this and they’ll think it’s terrible that you’re gamifying killing people. My response to that would be, these people, whether they want to be on the battlefield or not, they’re trying to kill the Ukrainians. And unfortunately this is what war is about.”

Luxury brands: peak fake rich?

Hermès secondary market prices for Birkin and Kelly bags have compressed - bags that once sold at double retail on the resale market are now trading close to retail price. LVMH and Kering shares have been smashed, Ferrari is down slightly.

Adam: “People look at software businesses and say this is the greatest thing - no cost of goods, amazing margins. You can’t beat the margins of luxury brands. You cannot beat those margins.”

Adir: “So you’ve seen the secondary prices collapse to be not that much higher than the price, which means there’s much less demand for Birkins and Kellys now. Do you think we’ve passed peak fake rich credit card purchased insta luxury?”

Adam: “We want someone like Elon Musk who’s a creator being the richest person in the world. Forget the fact that Tesla’s grossly overvalued and whatever. But Elon being the richest person in the world is a much better signal of humanity than Bernard Arnault being the richest person.”

Five other stories worth following:

1. A San Francisco startup showed its AI helps robots perform unfamiliar tasks like using an air fryer by combining prior knowledge with instructions, moving closer to general-purpose robot intelligence guided by simple language commands.

2. SaySo, a new short-form news app, is launching in the US and Canada, allowing only vetted creators to post, requiring sources verified by human and AI moderators, with UK expansion planned.

3. QVC Group will file for Chapter 11 as shoppers shift to livestream commerce and discount platforms, with its stock collapsing from over $900 a decade ago to under $3 last week.

4. A US tariff refund portal called CAPE launches, letting businesses reclaim certain duties, though claims may take months or years, with some firms buying claims as alternative assets from those unwilling to file.

5. Trump signed an executive order accelerating psychedelic drug research, including LSD and ibogaine, with Joe Rogan influencing the push, despite ibogaine remaining illegal and some Americans seeking treatments abroad in Mexico.

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The Contrarians catchup

• Adam is skiing at Whistler with his son William, who had a fall on day two and was carted off the mountain. It turned out to be just a hyperextension, not a ligament tear. Adam: “If you look at the absolute heroes of the mountain of these ski patrols, these guys and girls who first they do like the avalanche bombing, so they make sure it’s safe to ski, and then if you get injured, they come often within like two minutes they’re on the scene.”

• Adir spotted an IREN ad on a Sydney light rail that said “For the next big thing.” Adam: “This reminds me of when Woodside sponsored Fremantle Footy Club. There is no better short signal than people burning cash in this way.”

• Claude was down for nearly three hours last week. Adir: “If you’re building on a platform that uses an LLM as part of its core, you gotta have fallback LLMs and you gotta have tested the output that’s being generated with those different LLMs because it is not the same with different LLMs.”

• Adir’s deep-dive on LLM hallucinations and why they’re not going away: the problem comes down to a fundamental structural issue - there are 40,000 tokens but only 4,000 dimensions, meaning information constantly overlaps. “According to this MIT study, very respected, that we’re not really gonna be able to do much better with these hallucinations than we are right now because of this fundamental structural issue with the way these models are built.”

• Anthropic has become the luxury brand of LLMs. Adam: “What Anthropic’s actually been able to achieve is branding power - it’s able to charge two, three, four times as much for tokens. It is the Hermès of LLMs, incredibly, for now anyway.”

A “decisive victory” in the war in the Middle East

With the US-Israel operation against Iran ongoing and Iran now selectively tolling the Strait of Hormuz, a media narrative has emerged that the US and Israel are “losing” because there is no decisive victory. Adir pushed back hard, arguing that decisive victories only come from total war or from a country defending its own soil, neither of which applies here.

Adir: “The more reasonable objective for the US and Israel is to say we need to make things significantly better for us than they were before this war - i.e. get rid of a regime or weaken it, stop nuclear weapons, stop Lebanon Hezbollah firing missiles into Israel. That’s the best you can hope for. And I think that the success or otherwise of this war should be seen through that prism, not through the prism of, is there a decisive victory where you can say mission accomplished.”

Adam: “The one thing that maddens me no end is people say the US and Israel have lost the war because Iran is now tolling the Strait of Hormuz. Iran slash Oman are letting Iranians through, they’re letting allies like China through. The Americans could bomb the hell out of those Iranian oil tankers in two seconds. So could the Israelis. Israel could toll the Strait of Hormuz if they wanted to tomorrow. They’d just have to kill innocent civilians, which they won’t do, despite what all the far left accuse Israel of doing.”

No more work-from-home rent deductions for employees

A landmark ruling, upheld on ATO appeal, has confirmed that employees working from home cannot claim a portion of their rent or household utilities as a tax deduction. The ruling appears to apply specifically to employees, with self-employed people potentially still able to make claims.

Adam: “It never made any sense in the sense that you already have your house, you’re already paying for all this stuff. You’re not generally paying anything extra if you’re working from home. Like the notion that you should be able to deduct it actually never made any sense to me.”

Adir: “This is incredibly problematic for Victoria’s push to let people work from home two days a week. I think part of the incentive that people saw was that they can claim some of this as a tax deduction working from home.”

Adam: “The other small point is we have a housing crisis. Like if people have been renting bigger houses to run as home offices, that doesn’t help the housing crisis. So you’d argue that you want people having smaller houses or more people in houses and less people using them as offices and using offices as offices.”

Atlassian down 87%, and now it’s Anthropic’s fault too

Atlassian shares slumped a further 15% last week, hitting a market cap of just US$15B, down 87% from its all-time high. The latest trigger was Anthropic launching Claude Managed Agents. Founders Mike Cannon-Brooks and Scott Farquhar have quietly stopped selling shares after collectively banking around A$10B, scoring 50% on what Adir is now calling the “IRE Index” (Insider Relative Exit).

Adam: “I definitely don’t think Mike should be running this business now. He shouldn’t be sponsoring 50 million bucks for Williams Formula One teams. Shouldn’t be flitting around on his private jet. He shouldn’t be doing these sort of half-ass firings over video. Like he’s not the right guy to be leading this business. He’s certainly not a wartime CEO. They need a wartime CEO in here.”

Adir: “There’s never been a better time to turn this business into a cash generator. I think it’s a great time to be involved in this business. There is every reward for doing something radical and dramatic and recasting the narrative.”

Adam: “Mike and Scott were at one point, very briefly, the richest people in Australia, I think, when the iron ore price dipped and these guys were worth thirty odd billion each. It’s pretty hard to go from the richest person in Australia that everybody looks up to and you’re a god in Sydney, and suddenly you’ve got John Stensholt writing books about you and the share price dropping 87% and you’re a laughing stock of the Nasdaq.”

SpaceX IPO: the Elon religion

SpaceX is telling bankers it will host a June IPO roadshow, pitching a US$1.75T valuation, up from US$800B on the private market just four months ago. The company is reserving 30% of shares for retail investors, well above the usual 10%. A potential merger with Tesla, valued at US$1.3T, has been floated.

Adam: “SpaceX and Starlink are brilliant businesses. But collectively these businesses might make ten billion or something like that. But it’s barely profitable and it’s worth three trillion. The 30% retail kind of just proves that insto money - I know there’s still obviously insto money in there, but it proves that the smart money realises this valuation is ridiculous. You’ve got to dump it onto idiot mum and dad shareholders who don’t who believe in this ridiculous Elon myth.”

Adir: “Elon is basically an amalgam of like Thomas Edison, Howard Hughes and P.T. Barnum. He’s got all of the marketing salesmanship of P.T. Barnum and the eccentric genius of Howard Hughes and the innovation of Thomas Edison and like people just wanna be around this. I absolutely agree with everything you say on fundamentals. It’s ridiculous these numbers. But this is like the closest thing to a capitalist religion that there is in markets.”

Guzman y Gomez proves skeptics wrong again

GYG reported third-quarter sales of $346M, up 20% year-on-year, with same-store sales growth of 6.6% in Australia, ahead of market expectations. The market responded by sending shares up 32% in a week to $21. The US division remains a drag with same-store sales up just 2.2%.

Adam: “The key to any franchise system is do the franchisees make money? If the franchisees can make money, you got a good business. Fifty years of McDonald’s franchise are literally a licence to print money. I think Guzman is similar levels of profitability per store at the moment anyway, certainly with drive-through.”

Adir: “This narrative that says this is going to be a rocket ship - I’m not a believer in that narrative. The narrative that says this might emerge to be a very significant player in Australia, which it’s like really on track to ,it is a significant player here, and like it’s a really good business. I definitely think that’s true.”

CEO and chair gone at DroneShield

DroneShield’s former CEO Oleg Vornik and chair Peter James have exited after both sold their entire shareholdings last year, netting $50M and $12M respectively. Hamish McLennan has been appointed new chairman and 36-year-old chief product officer Angus Bean has been promoted to CEO. The company also buried a $100M drop in its sales pipeline in a presentation shared at a closed-door Goldman Sachs event - the day after promising better institutional relations.

Adir: “The sales pipeline junk, put that in the bin. I don’t know why people look at that. Like, rolls of toilet paper in the bathroom would be a worse metric. But it wouldn’t be that much worse than that metric. Like this is a ridiculous metric, basically.”

Adam: “The issue is not that this is a ridiculous metric. We absolutely agree 100% that it is a ridiculous metric. The issue is this was the metric they used and instead of telling the market that the metric’s changed, they snuck it in this report given to private investors at the Goldman’s conference. That’s the issue.”

Adir: “There’s got to be something we don’t know here. Every time we go and see institutional investors, they pummel us and tell us they got no interest in investing. And like after you see 30 of them or 50, like it just becomes unpleasant and you don’t want that. And like they can be a bit nasty if they think that you’re a bit dodgy. And I think maybe they just decided, what the hell are we doing this for anymore?”

Five other stories worth following:

1. A University of Ottawa study found negative emojis in workplace messages reduce perceived competence and appropriateness, while positive emojis only help in positive contexts; when paired with negative messages, they make senders seem insincere.

2. The Masters Tournament triggered a surge in private jet traffic to Augusta, with operators reporting significant increases in flights, alongside hosting lavish events and pop-ups to attract wealthy attendees as demand for private aviation continues rising.

3. Hungary’s longtime leader Viktor Orbán conceded election defeat to opposition figure Péter Magyar after corruption scandals weakened support, marking a shift in power, though major policy changes may be limited despite promises of anti-corruption reforms.

4. This year’s WNBA draft features expanded opportunities due to new roster rules and franchises, with six UCLA seniors projected to be selected early, potentially making history as the first program with six players drafted in one year.

5. Asha Bhosle, legendary Bollywood playback singer and one of the most recorded artists in history, has died at 92, leaving behind a vast multilingual catalogue and a globally celebrated legacy defined by versatility, longevity, and enduring vocal excellence.

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The Contrarians catchup

• Adir finally visited a Costco in Western Sydney over Easter. The verdict: deeply underwhelming. “I was so excited to go there and the way I left was feeling I’ll never go back again. Not angry, just disappointed. The experience was much more Campbell’s Cash and Carry than the treasure hunt people promised me.”

• The Costco share price, however, is a different story. It has tripled since pre-COVID. Adir: “Maybe I should have bought the shares instead of the 2kg peanut butter.” Adam’s take: “It’s trading on a 50 times PE. That’s insane. Walmart’s the same. You’re basically getting a 2% bond.”

• Tech stock comparison of the week: Costco, Walmart, Apple and Microsoft have all roughly tripled since pre-COVID. Meta is on a 19 PE, lower than all of them and growing faster. Adam: “Meta to me is the most interesting of all of them.”

• The AFR has now published what Adir considers its third antisemitic cartoon, this one featuring Trump riding a missile and yelling “Torah, Torah, Torah.” Adir: “Can you imagine if someone created a cartoon today and someone was yelling ‘Quran, Quran, Quran’? They’d put security around that building. I publicly defended this cartoonist the first time. I can’t keep doing that.”

• The big tech reality check: Microsoft’s Copilot “doesn’t even work with its own Excel and Word, it’s a joke,” while Anthropic and Claude are “killing it at the enterprise level and building a real brand and price premium.”

Albanese’s fuel excise cut: economics 101 fail

As Australia faces a jet fuel supply crunch caused by the Iran conflict, Anthony Albanese announced a 50% cut to the fuel excise. Adam argued it is the single worst response possible, stimulating demand in a supply-constrained environment is the economic equivalent of fanning a bushfire. Meanwhile, every other affected country is doing the opposite: South Korea is telling residents to take faster showers, Thailand is banning air conditioning at work, the Philippines has civil servants taking the stairs.

Adam: “The market was doing its job pretty well. Traffic on the roads was much slower than I’d noticed historically. As soon as the excise was cut, traffic reverted straight back to normal. This is the exact opposite of what every other government is doing.”

Adir: “Are there not enough problems to be solved in the world that we have to manufacture solutions for a problem nobody had? Nobody is going to have cheaper prices as a result of this. It’s just all different forms of vote-buying. That’s my issue with it.”

The RBA bans card surcharges and makes everything worse

The RBA announced it will end merchant surcharging on debit and credit cards in six months, estimating it will save consumers $1.6B a year. Adam and Adir are in furious agreement: this is a disaster. Banks will respond by raising credit card fees, cutting interest rates on deposits, slashing frequent flyer rewards, and removing card insurance. The $660M annual hit to bank interchange revenue will be passed straight back to consumers, just less visibly.

Adam: “Jim Chalmers is really confirming himself as one of the worst treasurers in modern history. He ironically worked for Paul Keating, probably the best treasurer we’ve ever had. What a contrast. Keating was a man of steel who did what was right regardless of short-term opinion. Chalmers is the exact opposite.”

Adir: “This is a solution for a problem nobody had. We went through enormous pain to bring card surcharges in. Now we’re ripping them out. The banks are not going to absorb $660M in reduced income - nor should they. I cannot believe how dumb this whole thing is.”

KMD Brands deep dive

KMD Brands (owner of Kathmandu and Rip Curl) was forced into an emergency capital raise last week at a 70% discount to its last traded price, valuing the entire business at just NZ$62M (around A$50M). Its respected chairman David Kirk resigned shortly after. The raise comes despite KMD posting 7.3% sales growth to NZ$505M for the half. California-based Stokehouse has reportedly offered more than $110M for Rip Curl alone, roughly double the entire company’s market cap.

Adam: “Even if you give Kathmandu a zero valuation, which I think is harsh for a $400M sales business that’s nearly broken even, you’ve still got a Rip Curl business making $15-20M in EBITDA annually. And the whole thing is worth $60M. Something here doesn’t make sense.”

Adir: “The biggest negative is it had to do an emergency capital raising in the worst possible market. But what’s most amazing is this is a billion-dollar sales business with 55% gross margins, and it’s trading at basically zero. The bet you’re making is: can they stop burning cash before they have to do another raising?”

Adam: “This feels like a $20B sitting on the floor waiting to be picked up. It’s just a really hard business model - stores, inventory, expensive staff. You really need scale and brand to make it work. And Rip Curl still has that brand. Kathmandu needs to find it again.”

Five other stories worth following:

1. Stardust Solutions, an Israel-US startup, raised $60M for solar geoengineering, proposing aerosol spraying to mimic volcanic cooling. Critics warn of unknown risks, prior experiments were halted, and Mexico has already banned the controversial practice outright.

2. Archive of Our Own has exited beta after 17 years, with 10M users and 17M works. The fan fiction platform says the shift is largely cosmetic, with continued feature development and community-led iteration ongoing.

3. NeeDoh, a squeezable cube toy launched in 2017, has surged in popularity via TikTok and Instagram, especially among tweens. Demand jumped 10x, prompting its parent company Schylling to pause orders while struggling to keep up.

4. Investment in women’s sports has surged, growing 227% annually since 2022, driven by record fan demand. Revenues could hit $2.5B by 2030, though the category still represents under 2% of the US sports market.

5. The Masters tees off this week in Augusta, with Scottie Scheffler the favourite to win. Secondary market tickets for all four rounds exceed $26,000, highlighting the tournament’s prestige and continued strong demand among golf fans.

The Contrarians catchup

• Adir made it in despite a bout of food poisoning, and comes in hot with the prediction there will be a lot of flight cancellations coming because there is only 14 days of jet fuel currently in Australia, so flights will likely only take off if they’re 100% full.

• Adam was almost killed twice in one week on his bike - first by a golf buggy driver who ran him down at Albert Park Golf Course and drove off, then by a frazzled driver who did a U-turn, nearly hit another car, nearly hit Adam, and then blamed him for it. “The sooner we get to autonomous driving, the absolute better.”

• Waymo’s paid robo-taxi trips have grown tenfold in two years, from 50,000 per week in May 2024 to 500,000 now, expanding across Phoenix, San Francisco, LA, Austin, Atlanta, Miami, and Orlando. Adam: “Government should be prioritising this instead of all the other garbage they work on, like the suburban rail loop.”

• The guys make the case for high-speed rail to decentralise Australia’s population. Adir: “No one can afford a house in the city. Every cent of Victoria’s money is being spent on the suburban rail loop instead of a fast train to Geelong. That is the problem. And the people with the pitchforks and torches are going to burn everything down.”

• Catapult announced a market update: 27-28% ACV growth, management EBITDA expected to grow 50% year on year, and a Rule of 40 above last year’s 32-33%. Adir: “I take no credit, it’s all Will the CEO and the team. But I was really pleased. That’s maybe our most important metric.”

Capital gains tax: a masterclass in bad policy

The Albanese government signalled it would reduce the CGT discount from 50% to 33%, without confirming whether existing investors would be exempt. The move is being framed as targeting property investors, but the details remain scarce, and the guys argue it’s driven almost entirely by the need to secure votes from younger Australians who don’t own property, rather than any serious attempt at tax reform.

Adam: “If it’s talking about assets beyond investment properties, it’s a disincentive for people to start businesses and employ people. This is not the solution. The government should be focusing on the spending issues first, fifty billion on the NDIS, tens of billions on AUKUS, and then fix the tax system after.”

Adir: “We all know the order of politician motivations. One: get elected or stay elected. Two: get even. Three: everything else. You’re giving me two reasons in group three. The number one reason is they need votes from young people who don’t own property. That is the primary motivation.”

Adir: “I say this constantly and I hope I’m wrong. It is hard for me to see how the wholesale change required across Western liberal democracies happens before some episode of violence. Albo, instead of doing this political junk, should be focused on how do we save Western liberal democracy from itself.”

Smiggle: a cautionary tale

Billionaire retailer Solomon Lew flagged a turnaround plan for Smiggle, including introducing low-cost beauty items to arrest a dramatic slide. The kids’ stationery chain posted a first-half net profit of $101M, but strip out the disposal of Lew’s Myer stake and profits actually fell 13%. Smiggle sales peaked at $320M in 2023 and have since collapsed by more than 50%. Premier shares are back at $12, down from a brief peak of $27 in 2024.

The below gif represents what it’s like to walk into a Smiggle store.

Adir: “Smiggle never found the next thing. If you’re running a race and someone is catching you, in order not to be overtaken, you need to speed up. They never sped up. They had an opportunity to build long-term competitive advantage and they didn’t.”

Adir: “Sully should have sold it five years ago when it was worth something. Peter Alexander has a big opportunity, but there are real product quality complaints coming out of that business too. If you’re charging a premium, you cannot let the perceived quality of the product diminish. Trading at 14 times earnings, this is not cheap for a business delivering flat profit with one part going backwards and one part not what it was. This is a wait and watch.”

Canva’s not as profitable as we thought

Canva finally lodged its financial statements for 2023 and 2024. The headline numbers are impressive: revenue grew 45% to $2.1B AUD, with 220M active users and $700M in cash. But the loss was $241M in 2024, up from $232M in 2023, driven by $356M in share-based payments to staff. Co-founder Cliff Obrecht has been publicly claiming profitability - a claim Adam finds deeply unconvincing.

Adam: “Cliff’s been spending too much time with Scott and Mike. He’s trying to claim cash flow profitability is real profitability when it’s not. Atlassian ran that same line for years. Now the market has worked it out and marked them down 90%.”

Adir: “Most of us don’t get the luxury of running a business as great as Canva. When you are, you shouldn’t have to talk the way the rest of us have to talk. You should be so modest that whenever you say something, we assume it’s even better than you’re saying. That’s the mistake they make.”

Adam: “Canva is competing against Google and Microsoft, and they’re both formidable. If I could get $30B for this business, I’d be running for the hills. From a financial perspective, it’s looking a lot more like Atlassian than we thought it was.”

Five other stories worth following:

1. Prickly Pear Health is building an AI-powered platform focused on women’s brain health that uses voice analysis to help users understand how hormones impact cognitive and emotional health across life stages like pregnancy menopause.

2. An Oregon court fined an attorney $10K for submitting a legal brief containing AI-generated hallucinated citations and quotes after failed verification, highlighting risks of relying on AI search tools for legal research accuracy seriously.

3. Startup BioFluff is developing Savian, a plastic-free fur alternative made from plant fibers like hemp, flax, and nettle, reducing emissions significantly while biodegrading quickly, positioning it as a sustainable material for fashion brands globally.

4. Being a Crocs shareholder has been volatile, but high margins from proprietary Croslite foam and growing Jibbitz charm sales drive profits, with most customers buying accessories that boost revenue beyond core clog demand levels.

5. Eli Lilly struck a $2.75B deal with Insilico Medicine to access AI-driven drug discovery, securing rights to a GLP-1 diabetes treatment while leveraging China’s research ecosystem to accelerate development and future pipeline growth potential.

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The Contrarians catchup

• Adir’s predicted call on Hims & Eucalyptus came good. He said Novo Nordisk would settle rather than burn its biggest distributor. The shares popped, then drifted. Adam’s bear thesis on Hims remains: “There’s a massive overhang. They’ve got convertible notes out of the money, and they’re buying Eucalyptus with stock, which is going to hugely dilute shareholders.”

• Adir admits he got electric trucks wrong - he argued they’d never work due to charging times, then Tesla announced the Semi, capable of 800km+ on a charge with sub-30-minute charging to 80%. “I think in two years time we might see a lot of these prime movers driving around American roads.”

• Adam’s local councils rant: Bayside Council tore up the Elsternwick Golf Course (a public beginner’s course that Ruslan Kogan famously used to collect golf balls from) and after five years and tens of millions of dollars, it’s still a dirt construction site. “Do they go to the lobotomy ward, pick people from the bottom, and appoint them councillor the next day?”

• The guys discuss brand equity in politics, with Adir arguing One Nation is being overestimated. “They’re doing the political equivalent of discounting. It gets people’s attention in the short term but does material damage to your brand. The Liberal Party has lost both flanks - the moderates went Teal, and the right went One Nation.”

• Kirkland Ellis, the world’s largest law firm, has smashed $10M profit per partner. Adir: “This is not a good look. The people making the most money are the ones not contributing to productive output. And eventually it’s torches and pitchforks, and we kind of deserve it.”

Sydney Biennale: taxpayer-funded hate

The Sydney Biennale, one of the world’s largest contemporary art events, descended into controversy when headline DJ Haram used her opening night set to declare “long live the resistance, glory to all our martyrs” and attack what she called the “vile Zio-Australian Epstein Empire.” The event received over $3M in federal, state and council grants. Sponsors PWC and Minter Ellison promptly distanced themselves.

Adir: “These fringe events - the Adelaide Writers Festival, now this - keep making their way into the mainstream conversation precisely by being extreme. They’re achieving exactly the objectives the people controlling them have set out to achieve. There’s a strong argument to just ignore this stuff entirely.”

Adir: “I couldn’t care less about the Biennale. The stuff that worries me is when politicians tell lies because they think it’s going to get them votes in Western Sydney. That worries me. This DJ sounds terrible, by the way.”

Operation Epic Fury: Iran strikes

The US and Israel launched coordinated strikes on Iran - killing the Supreme Leader, IRGC commanders, and key regime figures in what is being referred to as Operation Epic Fury. The Ayatollah’s son Mojtaba Khamenei has taken over, though many suspect he is dead or being propped up “Weekend at Bernie’s style,” having made no public appearances. Oil spiked to around $120 a barrel before drifting, as markets price in a relatively swift resolution.

Adir: “We can’t let these people get nuclear weapons because they’ll shoot them. And that will be World War Three. Something had to be done. Even if Iran is only severely weakened, so that this is a problem in 30 years not five, that is worth an oil hike.”

Adam: “Oil in terms of gold price is the cheapest it has ever been, even now. If this was having a dramatic effect, it would be $250 a barrel, not $110. And in real terms, the US Shale Revolution means the world is in a much better position than the last time this kind of escalation happened.”

Adir: “This is a regime that’s been illegitimate since day one. It has killed Westerners for the better part of 50 years. I don’t understand how you could be a Western liberal democracy and not say we’ve got to put an end to this.”

The Rich List: John Stensholt deep dive

Special guest: John Stensholt, editor of The Australian’s Rich 250 and co-author of the upcoming Atlassian biography TechBros (out July).

The Australian’s Rich 250 is out: the biggest annual edition of the paper on a subscription basis. Total wealth on the list fell by $25B, almost entirely due to the Atlassian founders and WiseTech’s Richard White. On Atlassian: Stensholt confirmed what Adam and Adir have long argued, that the culture has fundamentally broken down, with mass unhappiness inside a company that once defined what a great tech workplace looked like.

John Stensholt: “It’s a tale of two decades. The first decade was this incredible growth story - great culture, won every ‘best place to work’ award. Now it’s just not a happy place anymore. And they’ll deny all this, but that’s their stock response.”

Adir: “The founders pivoted from a business so disciplined on profitability to the pin-up for burning other people’s money to grow. And of all the companies imperiled by the rise of AI, Atlassian is probably at the front of the queue in multiple ways. If you’d told me that five years ago, I couldn’t have seen a way for it to occur.”

Seek: a decade of nothing

Embattled Seek CEO Ian Narev came out swinging in the AFR, claiming AI would not disrupt Seek’s 750M data points on candidates and hirers. Seek investors aren’t convinced - the share price has been smashed 50% in six months, back to levels last seen in 2014. The ASX has more than doubled since then. In its latest results, Seek wrote off almost $200M from its disastrous Chinese platform Zhaopin, and grew Australian revenue 14%, but only by charging advertisers 17% more, with volumes actually down 2%.

Adir: “If you’d invested in Seek in 2007, your compound annual return has been zero. Zero. In twenty years. Meanwhile REA is worth $21B, car sales $9B. Seek was always way above carsales. Now carsales are double Seek.”

Adam: “You can only increase prices by 17% until customers say ‘hold on a second.’ There’s a limit to that strategy and they’re getting close to it.”

Five other stories worth following:

1. Cloudflare CEO Matthew Prince predicts bots will surpass human web traffic by 2027, driven by generative AI accessing more sites per query, requiring infrastructure like temporary sandbox environments to manage and isolate automated activity.

2. TikTok is testing vertical drama content in the US, following China’s success and a $1.4B market, with categories like crime and romance, some AI-generated, currently free unlike competitors that monetise after few initial episodes.

3. Danielle Boyer created SkoBot, a wearable robot teaching Indigenous languages using ethical AI and community voices, addressing rapid language loss while expanding access to STEM education through low-cost robotics initiatives for Indigenous young youth.

4. Chinese EV startups Nio, Li Auto, and XPeng have reached profitability, unlike US rivals where Rivian delays targets and Lucid cuts staff, though China’s market outlook remains uncertain amid intensifying competition and shifting demand dynamics.

5. Elon Musk is increasingly positioning Tesla, SpaceX, and xAI as a converging system, with SpaceX’s growth potentially offsetting Tesla’s slowing car sales, while a merger could strengthen Musk’s control and reshape the combined company’s trajectory.

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The Contrarians catchup

• Atlassian bought Loom 18 months ago and, in Adam’s words, ruined it. Adam spent ten minutes in a doom loop trying to get it to work for his board video. Adir’s suggestion: do what Ruslan Kogan did for his AGM - use AI to speak on your behalf.

• Adam heaps praise on Justice Michael Lee after his Star Casino judgment, calling him the standout judge in Australia. “He doesn’t bring politics or personal biases into his judgments. He’s not ideological. You’d think that would be a prerequisite for a judge, but it isn’t.”

• Adir declares business intelligence software dead. “Short the entire category. Tableau, Microsoft BI, anything you’re dumping data into and saying ‘help me analyse this’ - put it all in the rubbish bin. Claude is so natively good if you know how to prompt it.”

• The guys weigh in on whether it should be legal to burn the Australian flag and yell “Death to Australia” on the streets of Sydney. Adam: “I think you have to be disproportionate in the penalty and then deterrence will kick in. Whoever wants to say death to Australia definitely doesn’t think it’s worth five years in jail.”

• Former Labor premiers and ministers, including John Brumby and Martin Foley, are collecting plum government board roles. Adam: “Martin Foley oversaw the quarantine disaster. Could you find a more incompetent person to give $200,000 a year? They find the most hopeless people and give them every role they can find.”

Grace Tame and the Australian of the Year

Former Australian of the Year Grace Tame drew fierce condemnation after leading a Sydney rally calling for a “global intifada” and defending the term’s meaning in a piece published in Crikey. Adam delivered a full monologue dissecting her claims, calling out factual errors and what he sees as a fundamental betrayal of the values she was honoured for - having refused to be silenced as a victim of child sexual abuse.

Adam: “Grace Tame claims to be a victims advocate for the rights of young girls, yet she’s calling for a global intifada - an uprising that led to the murder of a 15-year-old innocent Australian girl in a pizza restaurant in Jerusalem.”

Adam: “One cannot claim to be an advocate of women’s rights and girls while remaining silent (or even worse, supportive) towards a force that used sexual violence as a systematic tool of terror on October 7. This isn’t about politics. It’s about fundamental consistency of character.”

Adir: “She should go and meet the parents of Malki Roth. The reason this is so ironic is that the very thing she received the award for was her courage and her refusal to be a victim. And she has now sunk so deeply into false victimhood. I think a lot of it is relevance deprivation syndrome - the only way to get attention now is to be extreme.”

Koala IPO: a rare good news story

Online furniture retailer Koala is heading to the ASX at an enterprise value of $260M (10.5x forecast EBITDA) targeting $330M in revenue for FY26, representing 20% growth, and $25M in EBITDA, up 111% year-on-year. Of the $68M raised, $20M repays debt. The company previously attempted to list at $500M and was rejected by the market. CEO Danny Milham is not selling a single share.

Adam: “It’s hard to say anything bad about this. They’ve come back at half the price with a much better business. The market said $500M was too much, they listened. And the underlying business is performing really well.”

Adam: “I don’t even know how they get 65% gross margins at such low prices. It’s actually astonishing. This could be a billion-dollar business in four years if they keep growing at 20-24%.”

Adir: “You don’t have to race into the IPO, buy it in the aftermarket. The risk is that brand strength doesn’t equal pricing power. If you’re known for being cheap and cheerful, you can’t charge more. That caps the margin ceiling, and I think they’ll struggle to get beyond 10-15% EBIT margins.”

Atlassian’s 1,600-person reckoning

In a stumbling 20-minute video call, Mike Cannon-Brooks told 1,600 Atlassian staff they were fired - including the company’s CTO, Rajeev Rajan. Some 480 cuts hit the Australian workforce. Atlassian shares have fallen 80% from their 2021 peak of $458.

A separate report revealed a crisis meeting at Scott Farquhar’s $130M Point Piper mansion preceded the announcement, with Cannon-Brooks dialling in remotely because of a sick child. A leaked quote from an Atlassian employee: “I am in absolute shock they did this via email. I can’t understand how they fell so far.”

Adam: “Had they simply stopped hiring three years ago and let natural attrition run, they’d be at 5,000 people now. They’re at 10,000. This doesn’t go far enough. They need to get to 5,000 to justify even a $20B valuation.”

Adam: “The greatest bait and switch was ‘you can work from anywhere.’ Employees took scrip instead of cash, and now those same people have been given dud stock that’s down 80% and are being fired. That’s the ultimate shafting.”

Adam: “The $50M a year Atlassian Williams F1 sponsorship, for a business losing hundreds and hundreds of millions a year, is just unforgivable. Mike should not be running this business. He was a great leader up to 2015. This was an incredible business. These are people who have just lost their way.”

Five other stories worth following:

1. Melbourne startup Magic Valley has launched Rogue Pet, dog treats made with cultivated pork and plant ingredients. The company hopes entering the pet food market first will build trust, experience and revenue before introducing cultivated meat to humans.

2. US gas prices have jumped $0.60 in under two weeks amid the Iran war, boosting interest in electric vehicles. Car retailers report rising searches and orders for EVs, hybrids and plug-in hybrids as fuel costs climb.

3. One Battle After Another dominated the Oscars, winning six awards including best picture and best director for Paul Thomas Anderson. Rival film Sinners won four, while Jessie Buckley took best actress and KPop Demon Hunters won animation.

4. FCC chair Brendan Carr threatened to revoke broadcasters’ licenses over alleged “news distortions” about the Iran war. Free speech advocates criticised the move, noting the FCC lacks authority over newspapers, internet outlets and networks.

5. The S&P 500 is down only 3% this year, but the surface calm hides sharp volatility. Fifty-seven stocks have surged over 20% while 47 have fallen at least 20%, led by energy winners and struggling SaaS companies.

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The Contrarians catchup

• It’s Grand Prix week in Melbourne - Adam’s least favourite week of the year. Hotels are reporting no-shows and last-minute bookings, and Victorians are now on the hook for another $115M after asbestos was found at the pit facilities. Adam: “It’s got to be an inside job.”

• Adir overheard a man loudly discussing the financial vulnerabilities of Hamish Douglas’s investments on his phone in a Melbourne cafe. “If Hamish Douglas is listening to this, I’m not going to tell you who it is, but just have another look at the people you’re dealing with.”

• Adir is reading Winston Churchill’s My Early Life (1930) and cannot recommend it highly enough. “You would be shocked at how much crazy stuff he did at such a young age, and how close he came to dying so many times.”

• Trump called UK Prime Minister Keir Starmer “not Winston Churchill” after Starmer declined to support military action against Iran. Adir: “That’s one of the best burns I’ve ever heard. Every UK prime minister thinks they’re kind of Winston Churchill.”

• Adam’s first quiz this week: Top 10 countries with the highest household debt as a percentage of GDP. Listen in to hear the “unbelievable scenes”.

• Adam’s second quiz: The world's most valuable sporting teams.

• Adir’s son started university, and the experience did not disappoint: the only logo options for student IDs are a plain blue background, three indigenous backgrounds, and a pride background. ‘The Socialist Alternative’ was the most aggressive club recruiting on O-Week. “They’re the most capitalist, just selling 100 different bits of paraphernalia.”

Block sacks 4,000 and blames AI

Jack Dorsey announced that almost half of Block’s 10,000-strong workforce would be cut, blaming AI-driven efficiencies. The market loved it - shares surged 28% in a single session. But Adam and Adir aren’t buying the AI narrative. Block’s revenue sits at $24B, operating profit at $1.7B, and growth has been virtually flat. The cuts follow a disastrous expansion to Melbourne and an advertiser boycott campaign targeting Dorsey’s other venture, X.

Adir: “Is it in any way possible, based on the tools available in the world of AI today, that you could get rid of 4,000 of your 9,000 staff? The answer would be not if you actually need those functions performed. It is absolutely AI-washing.”

Adam: “At the same time, Jacinta Allen is trying to push through two days compulsory work from home, and Jack Dorsey is sacking 4,000 mostly remote workers who were stupid enough to fall for his garbage.”

Adir: “So whatever culture existed there is now dead. Because of that one move. Employees found out via Twitter, not even through company channels. That’s terrible.”

Victoria’s two-day WFH mandate

Victorian Premier Jacinta Allen is pushing through a policy mandating two compulsory days of work from home per week for public servants, in what Adam and Adir see as a cynical pre-election vote grab. The move comes at the same time global companies are aggressively cutting remote workers.

Adam: “This is going to be the absolute death knell for the state if she’s successful in this. It’s the ultimate bait and switch - you vote for me and you can work from home. It’s like a doctor prescribing McDonald’s.”

Adir: “Working from home two days a week leads to not working five days a week. It just leads to unemployment.”

Adam: “If I’m a boss and I’m not seeing someone ever come in, I’m going to cut them. Who am I going to cut - the kid who’s in at 7am every day, or the one working from home five days a week? We know that answer.”

OpenAI’s economics are getting worse

A prominent blogger’s analysis of OpenAI’s financials revealed that for every $2.5B in revenue, the company spent $6.7B in training costs, and that’s before factoring in the $23B spent on training models.

Meanwhile, SoftBank’s $30B commitment is yet to arrive, with payments to be initially financed through bridge loans. Adam and Adir say the economics of AI broadly remain deeply broken.

Adir: “The big problem is: no matter how much revenue you deliver selling your services, there’s some multiple of that expenditure behind the scenes to train up the next model. And it doesn’t stop.”

Adam: “Pick a company that’s involved in AI - their economics can’t work in the real world. There is no part of the stack that I think is economically sound. The least bad might be Anthropic. And I’d still go for the hyperscalers if you forced me.”

Adir: “There’s an important rule about creating a bubble: if you’re going to create a bubble, you have to sell before it bursts. I think that might have been a little bit lost on Sam Altman.”

Kyle & Jackie O: the $200M fallout

Australia’s most lucrative radio deal (a 10-year, $200M contract between ARN and Kyle Sandilands and Jackie O) is unravelling after Jackie walked off the show following an on-air incident with Kyle. ARN has issued a breach notice; Kyle’s camp has reportedly leaked that his contract explicitly permitted his loose-cannon behaviour.

The pair’s Melbourne expansion flopped, an advertiser boycott hammered Sydney revenue, and now the entire business model, built on two people who must appear together, is in free fall.

Adir: “This deal was like a massive wealth transfer to them. ARN’s market cap is about $110M and they paid $200M to two people.”

Adir: “The problem is, you have two founders who’ve had a falling out, but the entire asset is them being together. It’s an asset base that only exists if they’re in the same room.”

Adam: “I think the best course of action for Kyle is this: it’s the Kyle and Jackie O show. No Jackie O, no Kyle. He needs her as much as she needs him.”

Life360: deep dive

Barrenjoey analysts almost halved their price target on family-tracking app Life360, cutting from $50 to $27 per share, after the company’s growth guidance disappointed and concerns mounted that AI could allow customers to replicate its core product themselves.

Life360 has nearly 100M users, owns Tile (which rivals Apple’s AirTag), and is listed on both the ASX and in the US. Its share price has fallen 62% from its $55 peak to around $22, giving it a market cap of around $6B.

Adir: “The investor presentation had 30 pages of product documentation before you got to a single financial number. When you see that, what it says to me is that investors have been communicating a concern about the longevity of this product suite and the company is trying to allay those fears.”

Adam: “This could easily drop another 80% and not be that cheap. Even if you gave it 40 times EBIT on a generous set of assumptions, you’d get to about a $2B valuation. That’s a 60% drop on the current share price.”

Adam: “The two real red flags for me: marketing costs going up 25% versus revenue growing at 3%, and the financials being genuinely hard to follow.”

Five other stories worth following:

• OpenAI is retreating from plans to embed shopping and travel checkout inside ChatGPT, opting for third-party apps. The reversal follows feature delays, Pentagon-contract backlash, falling US downloads, and a surge in Anthropic Claude installs.

• Pixar’s Hoppers opened at number one with $46M, but worries remain about the studio’s struggling original films. Chief creative officer Pete Docter said earlier leadership gave filmmakers too much freedom recently after setbacks.

• Apple introduced lower-priced iPhones and a USD $599 MacBook, aiming to win back younger and budget-conscious buyers after losing ground to Chromebooks. Cheaper devices could expand since many consumers want iPhones but buy refurbished models.

• Surging oil prices linked to the Iran war are squeezing airline margins. Analysts warn jet-fuel costs could force carriers worldwide to ground thousands of aircraft, while financially weaker airlines risk suspending operations entirely temporarily.

• GoPro’s stock has collapsed nearly 99% from its 2014 peak, but the company hopes AI demand for video data will revive growth by licensing users’ footage for training, sharing revenue equally with contributors starting.

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The Contrarians catchup

• The guys open by discussing the war that’s broken out at the time of recording and its reaction by certain Australian politicians, including “the ultra far left who are cheering on terrorists - these people are the scum of the earth, they should go live in Gaza.”

• Adir: “The bottom line is that terrible regimes acquire weapons - that is their fixation. All they want is the worst weapons they can get their hands on, to oppress their own people and to attack us. If you believe in liberal democracy, we don't get the luxury of deciding where the terrible people get weapons. We just get to decide if we also have weapons.”

• Adir also says “there is still such a thing in this world as good and evil” and that the “Greens and other people on the left should not be so morally confused as to be unable to identify which side in this conflict is good and which side is evil.”

• Adir had a surprisingly good experience checking into a hotel, and was even more surprised by a recent positive experience in a car park. Asking Mike about his opinion on car parks, Mike responded with “I’ve never thought about it as much as you.'“

• Luxury Escapes are sponsoring the Melbourne Fashion Festival and Adam spoke highly of the vibe of the event, its operational excellence, and how it makes people better together.

• Adam despises what the Australian F1 grand prix does to Melbourne’s roads this time of year: “I've never seen a more clear example of the rich just creating rules for themselves".

Jacinda moves to Sydney

Former New Zealand prime minister Jacinda Ardern is temporarily relocating to Australia with her family for work, joining a growing number of Kiwis moving across for higher salaries and opportunities.

Jacinda said her family has been travelling for a few years now “and being based in Australia brought the added bonus of more time back home in New Zealand.”

The guys are skeptical.

Adir: “If you want more time back home in New Zealand, an even better option that puts you even closer to your home in New Zealand is New Zealand.”

Adam: “I would’ve thought she’d belong in Melbourne. Surely Melbourne supplies everything you need for a rabid socialist, for shut-the-door Jacinda.”

Eucalyptus, Hims and GLP-1 wars

Sydney health tech startup Eucalyptus was acquired by NYSE-listed Hims & Hers for $1.6B, creating one of Australia’s biggest staff share windfalls. Over 100 employees become millionaires, including CEO Tim Doyle, while early investors and executives celebrate significant payouts from the telehealth giant’s expansion.

The acquisition remains contentious as Hims shares have slid, Novo Nordisk is suing, and debt markets are cautious.

Adir has three “bits of M&A speculation”:

1. Chemist Warehouse should’ve bought Eucalyptus.

2. Novo Nordisk should partner with Hims.

3. Could OpenAI acquire Canva?

Adir: “What if I said to you, if I’m Novo I change my attitude towards Hims. Instead of suing them for the next two and a half years… I just use them as an amazing channel to market.”

Adir: “Wouldn’t it be interesting if OpenAI said, what we want is the world’s best distribution on a specific use case for AI.”

Adam: “SaaS has gone from being everyone's favourite sector six months ago to now being hated. It's been just the most remarkable transition. It's gone from, in my view, SaaS was massively overpriced and now it feels like it’s been taken to the woodshed too much.”

Corporate Travel Management: unaudited chaos

Corporate Travel Management says an accounting review into UK overcharging will finish in March, with shares resuming in Q2. While strong half-year earnings and 98% ANZ retention offer reassurance, the scandal has slowed renewals and new business, with some customers reconsidering providers amid ongoing uncertainty.

Adam: “Part of the challenge is there's no real assets in this business. It's a virtual business in many ways.”

Adir: “You’re the Novak Djokovic of business commentary. The more people who turn against you, the better you perform.”

Deep dive: Cettire and going concern risk

This week’s deep dive focused on Cettire’s dramatic deterioration.

Cettire shares plunged 26% after its auditor warned of “material uncertainty” about its ability to continue, citing liabilities exceeding assets by $51.6M. Falling US sales, tariffs and higher costs pushed the luxury retailer to a $1.1M loss, despite management insisting it remains solvent.

Listen in for the deepest of dives into a company’s woes.

Adir: “You might say how can a business that loses $2M before tax increase their cash and cash equivalents by $24M? And I think inside that story is a lot of what you might want to worry about with this piece that was slightly beyond beyond the profit and loss.”

Five other stories worth following:

1. Croissant wants to turn resale into a default shopping behaviour by embedding guaranteed buyback offers directly into online checkouts. Its AI sets resale prices, turning purchases into one-click liquid assets, driving repeat spending and retailer loyalty.

2. Honor unveiled a concept smartphone featuring a swiveling robotic arm with an AI-powered camera that photographs, analyses surroundings, and even sings lullabies. While eye-catching, it’s unclear whether the product will launch - or if consumers actually want it.

3. Idaho’s Bogus Basin stored winter snow under insulated blankets through summer heat, preserving 80% for early-season skiing. The $120K experiment reopened slopes before snowfall, offering a cheaper climate workaround than multimillion-dollar snowmaking infrastructure expansions.

4. Prediction market Polymarket saw $529M wagered on timing of US strikes on Iran, with six new accounts reportedly profiting $1M. Analysts warn anonymity and conflict-linked bets may incentivise informed trading or raise ethical concerns.

5. Developers have proposed a $1.2B, 32-storey apartment tower above a redeveloped Mandarin Centre in Chatswood, Sydney. The project would add 325 apartments and refreshed retail, aiming to boost housing supply and revitalise the ageing shopping precinct.

The Contrarians catchup

• Adam is uncharacteristically working from home to record the podcast, though he can be forgiven since it’s a Saturday. And Adir said the podcast isn’t work anyway - “this is pleasure, this is a leisure activity.”

• Adam’s quiz was a simple one this week: which company was dethroned last week? For the first time since 2012, Walmart is no longer #1 on the Fortune 500 revenue list. The new king? Amazon. Only three other companies have ever topped the list (ExxonMobil, General Motors, Ford Motor Company).

Victorian Labor, $15B and the election question

Jacinta Allan is having a rough week. Fresh allegations, amplified by lawyer Geoffrey Watson, suggest the Victorian government may have wasted up to $15B, effectively through corruption linked to the CFMEU and “Big Build” spending.

The bigger debate wasn’t just corruption, it was whether voters will actually punish it. Polling still shows Labor competitive, despite 16 seats needing to flip for the Liberals to form government.

Adir: “At the beginning of an election, no one has any vote. Everybody gets to decide afresh.”

Adam: “What do these people need to do to get voted out of office? Like, could they do a Donald Trump style ‘shoot someone on the street’ and still no one cares? That’s $4,000 for every single person in Victoria… If you’re a family of five, that’s 20 grand in your pocket.”

Adir: “Any government… that is promising you no new taxes and no cuts… is either completely dishonest, or it’s going to make Victoria irretrievably destroyed.”

Uber v Waymo v Tesla: who actually wins?

Autonomous driving is heating up. Waymo continues expanding in US cities, while Tesla pushes Full Self-Driving as a mass product. Meanwhile, Uber has lost almost a quarter of its value in six months.

If autonomous vehicles commoditise supply, pricing power collapses. But if Uber owns the customer relationship, it may simply swap human drivers for robots and improve margins. Markets tend to price in collapse long before collapse is actually imminent.

Adir: “The human imagination is problematic in stock markets. But the incumbency is a huge advantage and Uber’s primary asset is the side of the marketplace that has the consumer.”

Adir: “The companies that make the cars, it's not obvious to me that they will vertically integrate and also own the network, and I think the network, might be a scarcer resource than an electric autonomous vehicle. So I think that Uber will find a way to integrate these autonomous vehicles into their network and it'll continue business as usual with better margins and maybe lower average basket.”

Adam: “It’s inconceivable that you lose a monopoly and you don’t lose a huge amount.”

Pauline Hanson, Lakemba, and reality

Pauline Hanson recently claimed: “It concerns me greatly that people can’t go into certain suburbs in this country.”

She specifically named Lakemba, in Sydney’s west.

Adir went there. He didn’t see Palestinian flags lining the streets. He didn’t experience hostility. At the same time, he acknowledged complexity, fear exists on multiple sides, and political rhetoric amplifies division.

Adir: “It certainly feels very much still like the heartland of Lebanese/Muslim Australia, but it is also full of Asians. The place is completely clean… it feels as safe as anywhere else. I actually feel like there is a much better chance to return to social cohesion in Australia than it seems.”

The $1.6B Eucalyptus sale: what’s really going on?

Eucalyptus agreed to be acquired by Hims & Hers in a headline US$1.15B deal (AUD $1.6B). But the structure matters - the deal breaks down into:

• US$240M upfront cash

• US$710M over 18 months (cash or stock)

• US$200M earnout

The complication? Hims’ share price has fallen ~75% in recent months, largely due to a lawsuit from Novo Nordisk over compounded GLP-1 drugs. The key question: How much of that “$1.6B” will ultimately be realised in cash vs volatile stock?

Adam: “Hims and Hers is a business growing revenue but not growing earnings and the problem is, marketing spend continues to go up, so this is a business that’s not performing particularly well.”

Special guest: Chris Janz on rebuilding media

We were joined by arguably Australia’s most accomplished financial publisher and founder of Capital Brief, Christian Janz.

After leading Fairfax through its digital transition, Chris launched Capital Brief with a clear thesis:

• Australia’s media market is highly concentrated

• Advertising-driven models distort incentives

• Subscription-led journalism better aligns with readers

He explained why Capital Brief focuses heavily on enterprise subscriptions rather than chasing mass clicks: “The minute you introduce advertising into the equation, you almost introduce a reason to gamify for reach.”

Five other stories worth following:

1. Amazon’s recent AWS outages were reportedly triggered by its own AI coding tools after engineers allowed an AI agent to fix issues without oversight. Amazon blamed user error, not AI, though some employees question that distinction.

2. Microsoft announced the departure of gaming chief Phil Spencer and Xbox President Sarah Bond after struggling to keep pace with Sony and Nintendo. CoreAI product head Asha Sharma will take over, despite not being known as a gamer.

3. Etsy is selling secondhand fashion app Depop to eBay at a steep discount, marking the end of its “House of Brands” strategy. The deal underscores how sharply pandemic-era e-commerce winners have diverged since demand cooled.

4. A Sheffield co-op grocery store has gone viral for freezers emitting a soothing, symphonic hum likened to an “electrical gong bath.” A Guardian reporter confirmed the calming drone, inspiring impromptu meditation in unexpected modern spaces.

5. World Labs, founded by Fei-Fei Li, builds AI “world models” that understand 3D environments. After releasing Marble to generate 3D worlds from prompts, the startup raised $1B to pursue robotics and scientific applications.

The Contrarians catchup

• The episode opens with one of Adam’s favourite hobby horses: injurious falsehood - the weird legal workaround companies use because, in Australia, large companies can’t sue for defamation. This week’s case study: Judo Bank

• Adir’s take: “The measure of truth in injurious falsehood rests in the eyes of the individual making the claim. Is that not a bizarre law?”

• Melbourne councils are fining residents for parking infringements within minutes while allowing 7.6-metre caravans to sit untouched for days. Adir is “okay with that, by the way.”

• Adir on jaywalking: “The problem with jaywalking is that it takes away all decision making and judgment from the individual and makes you totally trusting these lights and I’m not in favour of anything that removes judgment and replaces it with law.”

Winter Olympics: equality, maths & political spin

The Sports Minister, Anika Wells, proudly noted that 62% of Australia’s Winter Olympic team is female. Adir wasn’t impressed. His argument: overall Winter Olympic participation globally is roughly 53% male/47% female - moving toward 50/50.

So if Australia is 62% female, are men now under-represented?

Adir: “I’m all in favour of women having equality in sports, as you know, like selfishly for Catapult, and also just because I think it’s right. But I’m not in favour of twisting the truth.

Adam: “You don’t solve sexism with more sexism.”

Destanee Aiava: social media & athlete abuse

Australian tennis player Destanee Aiava has stepped away from tennis at 26, describing the sport like an “abusive boyfriend.” Body shaming and online abuse were major factors.

Being top 200 in the world should feel like winning. Instead, online mobs make elite athletes miserable. The guys advice is simple: “stay away from social media… these people are all jealous.”

Adam: “That’s why I stopped writing on Twitter, because of the abuse you get from people who think it’s okay to insult people, it’s just bizarre.”

Adir: “Turn this stuff off and find happiness in your own endeavours.”

US vs China: what things actually cost

A quick-fire quiz compared everyday prices in the US vs China. Some highlights:

• US monthly salary (after tax): ~$5,000

• China monthly salary: ~$1,000

• Cappuccino: surprisingly similar

• Public transport: vastly cheaper in China

• McDonald’s combo: $12 US vs ~$5 China

• Mobile plans: dramatically cheaper in China

The takeaway? Consumer luxuries cluster in cities, but essentials are often subsidised differently - and some assumptions don’t hold.

Adir: “Usually your quizzes are junk, to be honest. This quiz is actually something that you can wrap your head around, not just me guessing which country has 32 letters with a J in the middle and has the smallest company that makes feet.”

The Big Interview: Joe Aston

Three-time guest, still number one (in frequency and, arguably, appeal), Joe Aston joined to discuss his new venture Rampart, the subscription journalism platform he launched after leaving the AFR.

Joe revealed he’s already surpassed his initial subscriber targets by ~50%, is profitable, and has signed a major naming sponsor for his video interview series.

Rather than compete head-to-head with traditional mastheads, he’s building around personality-driven journalism. His strategy: “Start as small as possible. Don’t raise capital. Bootstrap it and grow incrementally.”

Joe: “If you incrementally add other really compelling voices, then that 10,000 might become, over time, 15, 20, 25, 30,000 and with the price prices we have, I think the economics can be quite attractive.”

CTM: the slow-motion car crash

Joe has written extensively about Corporate Travel Management and CEO Jamie Pherous.

The issue: retained refunds owed to clients (particularly UK government contracts) and years of accounting questions dating back to short-seller reports. The stock remains suspended. Joe’s view: “Every corporate fraud in history had an auditor.”

The debate turned to boards, auditors and whether directors truly dig deep, or rely too heavily on management assurances.

Adir (from the inside of boardrooms) offered a candid counterpoint: it’s easier than people think for executives to mislead boards - unless someone is actively probing.

Adam: “How is it not a crime to retain refunds that were due - in my view, it’s no different to getting paid money in your bank account by mistake and retaining and spending all this stuff.”

Luke Sayers: soap opera or systemic problem?

Joe has long scrutinised Luke Sayers (former PwC Australia CEO). Recent headlines involve explicit photo allegations and AFL governance issues.

But Joe’s bigger point isn’t the prurience - it’s credibility: “He said things that have been contradicted by all of the other evidence… and yet he just still charges on.”

The underlying theme: networks, parochialism, and how reputations persist in tight business communities - until they don’t.

Joe: “To me, the only thing that’s interesting about the dick pic scandal is how similar it is to his previous scandal in that people seem to believe what comes out of his mouth, and then get really surprised when it turns out not to be true. He’s just a hilariously false individual.”

Temple & Webster: growth at any cost

Temple & Webster fell 32% in a single day after missing expectations. Revenue was up 20%; margins weren’t. CEO Mark Coulter told investors that “in our eyes it is not a miss.”

Adam’s breakdown:

• Revenue growth required sacrificing margin.

• Contribution margin barely improved.

• EBITDA expectations were missed.

• Growth and profitability remain mutually exclusive (for now).

The stock has fallen sharply from its highs, but the debate remains whether it’s still materially overvalued.

Adir: “We could have written these half yearly results three months ago. I think we picked the revenue number and we picked the EBITDA margin.”

Five other stories worth following:

1. Memory chip demand from AI data centers and gadgets outstrips supply as Samsung, SK Hynix, and Micron recover from pandemic boom-bust cycles and underinvestment. New factories take years, so phones, PCs, consoles, and routers likely keep getting pricier.

2. OpenAI hired OpenClaw founder Peter Steinberger, creator of autonomous AI agents like Clawdbot. Sam Altman praised him and said OpenClaw will become an open-source foundation project that OpenAI supports as it pursues more capable agent technology.

3. Warner Bros. Discovery may reconsider talks with Paramount Skydance after new offers aimed at blocking Netflix. Some board members see potential for a better deal, but no decision has been made about pursuing negotiations.

4. IBM plans to triple US entry-level hiring, shifting junior roles toward client work while AI handles routine tasks. Dropbox is expanding graduate programs too, even as entry-level job postings overall remain sharply lower since 2023.

5. China’s Lunar New Year begins a massive travel surge, with a record 9.5B trips expected over 40 days. The festival launches the Year of the Fire Horse and drives major spending across travel, food, and gifting sectors.

The Contrarians catchup

• Adam and Adir revisit last episode’s unexpectedly long IREN conversation, joke about meme stocks, and briefly touch on the ongoing Firmus saga, including whether anything meaningful has actually changed despite the share price chaos.

• Adir called Firmus a meme stock and said that was “being generous”.

• The guys discuss the defensibility of two-sided marketplaces (because competitors have to dislodge both sides) like carsales, SEEK, and Rokt, and whether Rokt is actually a two-sided marketplace.

• Adir: “A revenue multiple is a proxy for the promise of tomorrow’s cashflow”.

• The guys do a mini deep-dive into Atlassian, which if you’re new to the podcast, is a weekly tradition. Adam is worried about their marketing costs continuing to go up - a sign that they’re not growing efficiently.

• Their take on Atlassian’s valuation: “They couldn’t do what was right (make money) because it would destroy their valuation. Now the valuation is destroyed.”

• Adir on the line between Bitcoin and a Ponzi scheme: “Some smart people look at these things sometimes and see how dumb they are and what they say is, well, I think I can make a lot of money before people realise how dumb this is.”

AI isn’t killing SaaS (valuations are)

Investors are selling SaaS stocks amid fears AI will erode pricing power, automate workflows and undermine growth, triggering sharp share drops and “SaaSocalypse” talk - though some leaders call these fears exaggerated.

The counter-argument is that investors simply stopped caring about cash flows during the boom.

Adir: “When you run a big SaaS company, coding is the easy part. The hard part is the strategy and compliance and getting sales and servicing customers - like all of that is much harder.”

Adir: “There’s no better sign of a bubble than when people start using revenue multiples instead of cash flow. “

Adam: “I think the reason these SaaS businesses are being smashed is because is because people realise: holy sh*t, these valuations are ridiculous, why am I paying so much for these services.”

Is Dan Andrews okay?

Former Victorian premier Daniel Andrews is reportedly seriously debilitated after a neurological medical episode, and has been hospitalised since late 2025. He’s struggling with speech and movement but is said to be improving under intensive rehabilitation. Adam had two trusted sources say it was a very serious stroke.

Adam: “This sounds significantly more serious than the media had portrayed. I think the reason it’s come out the last couple weeks is that he has recovered somewhat.”

How much is Canva really worth?

Canva has been swept into a brutal tech sell-off as investors fear AI platforms like Anthropic will replicate core software functions. With peers collapsing, markets are questioning whether Canva’s private valuation should be marked down sharply, echoing heavy falls in Adobe, Figma and broader software stocks across global markets today.

The guys discuss: how much is Canva really worth?

Adir: “I don’t think it’s controversial to say Canva is going to suffer the same consequences as every other business in the current SaaS crash. I think Canva is one of the most susceptible businesses to the rise of AI and vibe coding - their entire business is effectively a workflow business.”

Xero gets a li’l defensive

Xero’s CEO says the accounting platform can’t be easily cloned by AI because its proprietary transaction data, bank integrations and infrastructure create durable advantages. Despite investor sell-offs and AI fears, Xero argues AI will expand its market, enhance products, and support long-term growth, with Melio tracking ahead of expectations.

Adir: “Making the focus of an entire presentation the most defensive argument I've ever heard might not be great, right?”

Five other stories worth following:

1. Hims & Hers briefly launched a $49 compounded Wegovy pill, then withdrew it after FDA warnings. Regulators signaled enforcement against GLP-1 copycats, as Novo Nordisk and Eli Lilly defend patents amid legal gray areas.

2. The Seattle Seahawks beat the New England Patriots 29–13 at Super Bowl LX, while Bad Bunny stole the spotlight with halftime show featuring Lady Gaga and Ricky Martin, ending with message of love globally.

3. Japan’s prime minister Sanae Takaichi secured a landslide snap-election victory, giving her coalition control of parliament. She says the result mandates higher defense spending, stronger manufacturing, and a deeper alliance with the United States.

4. Washington Post CEO Will Lewis resigned days after mass layoffs. Owner Jeff Bezos emphasized a data-driven strategy, saying reader data would guide what matters, as CFO Jeff D’Onofrio became acting CEO and publisher thereafter.

5. UK Prime Minister Keir Starmer’s position looks shaky, with Polymarket pricing only a 34% chance he lasts through 2026. Angela Rayner and Wes Streeting are seen as leading potential successors inside the Labour Party.

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The Contrarians catchup

• Adam and Adir kick things off in peak Melbourne mode: tennis season, clear skies, and the Australian Open as arguably the country’s last remaining cultural flex. Adir reminds listeners that “Melbourne is the only city in the world that has an F1 Grand Prix and a tennis Grand Slam.”

• The guys discuss why tennis has quietly replaced horse racing as the preferred corporate signalling device, and why women’s tennis may now be the better product - “The serving power just isn’t the same, so you get more rallies, more drama.”

• And then, inevitably, the conversation turns to pyramids - specifically, how brutally steep they are in global professions like tennis, acting, and music. Adir said “if you are the 88th best person in the world at something, and the top 30 are rich… is there anything worse than being 88th?”

Gen X, One Nation, and the collapse of the political middle

New polling data has revealed a surprising voting pattern across generations. Roughly one-third of every generation still vote Labor. The real outlier is Gen X, where Coalition support has collapsed and One Nation support has surged.

Rather than a simple left-versus-right story, the data points to fragmentation, weak party loyalty, and elections increasingly being decided by preference flows rather than primary votes.

Adir: “Only 12% of Gen X vote for the coalition. Thirty-five percent vote for One Nation. The most remarkable thing is that about one-third of every generation votes Labor. Baby boomers, Gen X, millennials - it’s basically the same.”

Adam: “Labor is the centre now. And it’s being squeezed from both sides.”

AI agents and influencer economics

Moltbook, a new AI platform where autonomous agents interact with one another, has gone viral, triggering familiar fears about runaway artificial intelligence. But Adam and Adir argue the behaviour isn’t new, it’s a mirror of the existing influencer economy.

The bots quickly learn that outrage, drama, and exaggeration generate engagement, just like humans do on social platforms. The real lesson isn’t about AI risk, but about what social incentives reward.

Adir: “They learn very quickly that being more dramatic and controversial gets more engagement from other bots. What they’ve created is basically a replica of the influencer economy.”

Adam: “This doesn’t tell us something scary about AI. It tells us something scary about social media.”

Adir: “If you give an AI full access to your email, WhatsApp, and APIs, and it ruins your life - don’t blame the AI. Blame yourself.”

OnlyFans, gambling, and the oldest business models on earth

Reports that OnlyFans could be sold for around $5B reignited debate about stigma, regulation, and why certain industries reliably print money across centuries.

Despite eye-watering margins and global scale, businesses tied to sex and gambling often trade at discounts - not because the economics are weak, but because many buyers simply don’t want their name attached.

Adir: “If you want to make money in this world, whether it’s today or 5,000 years ago, it’s gambling or porn. These things are regulated because people would spend unlimited amounts of money on them if they weren’t. It’s not an economic discount. It’s a stigma discount.”

Adam: “A business doing $600M in profit at almost 50% margins selling for $5B feels cheap to me.”

Why sudden wealth is one of the most dangerous things in the world

The conversation turns to extreme wealth creation after news around tech billionaires and founders who made vast sums very quickly.

The core issue isn’t money itself, but speed. When wealth arrives faster than a person’s psychology can adapt, it often destabilises relationships, incentives, and decision-making.

Adir: “If you want to curse someone, don’t wish poverty on them. Wish extreme, sudden wealth on them. Multiply how fast the wealth comes by how much of it there is. That’s the danger. Before the tech era, nobody built a billion-dollar fortune in five years. That world just didn’t exist.”

The neo-cloud boom and a $10B short on GPUs

The episode’s deepest dive focuses on a fast-growing AI infrastructure company, IREN, valued around $25B, built on leasing enormous amounts of compute capacity to hyperscalers.

Adam’s concern isn’t demand, it’s structure. The business depends on massive capital expenditure, fast-depreciating hardware, and contracts that effectively lock the company into future GPU availability it doesn’t yet control.

Adir: “This business takes a regulated resource, electricity, and turns it into a market-priced resource. That arbitrage never lasts forever. There is no reason whatsoever to report EBITDA for this business. It is a capital-intensive furnace. When you call recurring revenue ‘illustrative’, you’re literally saying: this is not real.”

Adir: “They’ve sold $9.8B of compute they don’t have yet. That is a short position on the global GPU market. What terrified me wasn’t the business. It was how interlinked everything now is with this AI bubble.”

Five other stories worth following:

1. Ford filed patents for in-car ads using cameras to mirror billboards and microphones to parse conversations. With 400M connected cars, researchers project $100–$120 annual e-commerce per vehicle by 2030, implying a $50B market.

2. Walmart promoted lifer John Furner after his Sam’s Club run, while Target elevated insider Michael Fiddelke amid falling sales, boycotts, DEI backlash, and staff unrest - two CEOs entering starkly different momentum as 2026 begins globally.

3. Bitcoin slid 11% in January, extending four losing months, then dropped below $76,000 - about 40% off October highs. Bloomberg says ETF optimism was front-run, and fund manager Richard Hodges predicts no peak for 1,000 days.

4. Kendrick Lamar and Bad Bunny dominated the Grammys; Lamar won five, Bad Bunny took album honours. Billie Eilish and Finneas claimed song of the year, while Trevor Noah hosted for a final time again.

5. Alphabet leads a packed earnings week as AI hopes face scrutiny, alongside Palantir, Disney, AMD, Pepsi, Uber, Qualcomm, Amazon and Toyota, with pharma giants also reporting across markets as investors brace volatility this quarter.

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The Contrarians catchup

• While cancelling Virgin flights, Adir discovered that cancelling via Velocity returns points instantly, while Virgin’s own site doesn’t. Same ticket, wildly different experience. Lesson: brands don’t just compete externally; internal platforms can quietly destroy goodwill.

• Adir on Qantas: “Qantas is still the Spirit of Australia. That emotional connection does an unbelievable amount of work. People don’t choose it rationally - they choose it because it feels Australian.”

• That rolls neatly into a broader brand riff: Qantas as the ultimate case study in “forgiveness as a moat”. Despite ghost flights, baggage chaos and peak-Alan Joyce energy, Australians have mostly moved on. Strong brand equity buys you an extraordinary amount of grace.

• Which leads to Adir’s hot take: the strongest brand on Earth isn’t Apple, Nike or Coca-Cola. It’s the United Nations. A brand so powerful people cling to it even when the reality repeatedly contradicts the story. Endless forgiveness, infinite cognitive dissonance.

• A quiz on the world’s most visited websites (Wikipedia still quietly dominant), with a joke about Mike being the UN of the podcast - permanently forgiven, regardless of behaviour.

• A new favourite metric: Founder cash-out ÷ current market cap. When that ratio blows out (think Afterpay, Adore Beauty), it’s usually a sign the market massively overpaid - not that founders did anything wrong.

Are private school fees actually worth it?

Private school Year 12 fees in Sydney are now pushing ~$50k a year, with projections suggesting $100k within a decade. Inflation-adjusted, that’s almost double what parents paid 20 years ago.

Adam and Adir wrestle with the real question: not whether private schools are “good”, but whether they’re good value.

Key tensions:

• Public vs private quality varies wildly - a great public school changes the equation entirely

• Academic outcomes don’t necessarily translate to life outcomes

• The “network effect” of elite schools is massively overstated

• $200–400k invested instead could meaningfully change a child’s financial future

The darker undercurrent: private schools increasingly clustering wealth, accelerating social stratification, and quietly normalising a semi-aristocratic education system - often subsidised by grandparents via tax-free super.

Adam: “If you take the total cost of private schooling from Year 7 to Year 12 and invest it instead, you’re talking about $300–400k in today’s dollars. If you gave an 18-year-old that choice, private school or the cash, I think most would take the money.”

Adir: “The ‘network effect’ of elite schools is massively overstated. People love telling that story, but when you actually look at who stays in touch, who builds businesses together, who creates real opportunity, it’s surprisingly thin.”

Adir: “What worries me isn’t academic outcomes. It’s that private schools are increasingly just full of other rich kids. That’s how you end up with social bubbles that don’t understand how the rest of the country lives. We’re quietly recreating an aristocratic education system. Not intentionally, just through pricing.”

Netflix: overpriced, misunderstood, or fine?

Netflix’s share price is down ~40% since its mooted Warner Bros Discovery ambitions spooked markets. Yet fundamentals remain solid: ~16% revenue growth, rapidly accelerating earnings, clear category leadership.

The key insight: Netflix has quietly become a utility. It’s the default subscription, with everything else layered on top. At ~$17 a month, it’s arguably the cheapest entertainment in modern history, massively deflationary compared to Blockbuster-era economics.

Adam: “Go back 20 years. You paid six or seven dollars to rent one movie overnight from Blockbuster. Adjust that for inflation and compare it to what Netflix gives you for the same money - entertainment has been deflated by about 90%.”

Adir: “At 35 times earnings, Netflix isn’t screaming cheap, but it’s not expensive either. It’s priced like a business that’s won its category and is going to be around for decades.”

Koala IPO: this time it might actually happen

Koala is again circling an IPO, reportedly seeking ~$400M after delivering 42% revenue growth and a huge EBITDA rebound.

The guys discuss whether Koala’s brand can ever translate into real pricing power, or whether it remains structurally capped. Compared with Temple & Webster at similar valuations, Adam and Adir lean toward Koala: simpler economics, clearer control, fewer moving parts.

Adir: “Koala has a great brand, but it doesn’t have luxury pricing power. You don’t buy Koala to feel rich, you buy it to feel clever. What Koala has done well is prove that vertically integrated retail can actually make money at scale. That wasn’t obvious five years ago.”

Adir: “They’re never going to be Nick Scali margins. But you don’t need to be luxury to be a great business. If I had to choose between Koala and Temple & Webster at similar valuations, I’d take Koala. Simpler model. More control. Fewer moving parts.”

AI, vibe coding, and the SaaS reckoning

SaaS stocks have been smashed as investors panic about AI, “vibe coding”, and tools like Cursor making software easier to replicate.

Adir lays out a framework for separating real risk from noise. Key questions every SaaS investor should ask:

• Do you service software developers?

• Are you in a complex space? Slash, are you vertical SaaS?

• Do you have proprietary data?

• Is there a meaningful service layer?

• How high are switching costs?

• Is the product mission-critical?

• Is it cheap enough to ignore?

This explains why tools like Jira look exposed, while platforms like Shopify, SAP, and deeply embedded vertical SaaS businesses remain far more defensible.

The mistake markets are making: treating all SaaS as equally vulnerable. In reality, AI will compress weak moats and strengthen strong ones.

Adam: “What the market is doing right now is throwing great SaaS businesses out with the junk. There is real risk from AI, but it’s being applied indiscriminately. AI will absolutely kill bad SaaS. But it will also make good SaaS stronger. The idea that everything is equally vulnerable is just lazy thinking.”

Adir: “You can vibe-code Jira. That doesn’t mean Jira is dead - but it does mean its growth multiple deserved to come down. The presentation layer isn’t dead. Enterprises don’t want infinite flexibility - they want predictability. They want to know where the button is. People who don’t work inside large organisations massively underestimate switching costs. Incumbency is one of the strongest moats there is.”

Five other stories worth following:

1. Super Bowl LX is set: Seattle Seahawks face New England Patriots on Feb 8 at Levi’s Stadium. New England beat Denver 10–7; Seattle beat Rams 31–27. Bad Bunny headlines halftime, Puth performing.

2. Trump threatened Canada with a 100% tariff if it strikes a China trade deal, after PM Mark Carney’s Beijing visit and Davos comments about “great powers” using tariffs. Carney denied talks; Trump rescinded Carney’s.

3. Four Magnificent Seven giants report this week: Meta, Microsoft and Tesla Wednesday, Apple Thursday. Investors want robotaxi updates from Tesla and clearer AI returns from Meta, Microsoft and Apple, as Alphabet leads artificial-intelligence race.

4. Trump-driven policy shocks are rattling Wall Street, disrupting trade and corporate planning as tech no longer props markets up. Magnificent Seven stocks are down 0.4% year to date, S&P 500 up 1%, amid volatility.

5. China removed top general Zhang Youxia, investigating alleged nuclear secrets leaks to the U.S. and bribery. Analysts say Xi is decapitating military command to crush corruption and patronage, signaling Taiwan ambitions, with former CIA.

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The Contrarians catchup

• Adam was in a Healthscope hospital to have the rod removed from the leg he broke 10 months ago. The American-owned Australian company was placed into receivership last year by lenders over $1.6B in debt.

• Adam was flawed that the process to renew your passport has improved so dramatically, going from a long form to a single page you need to sign - “I can't believe that the government actually did something that improves efficiency.”

• Adir’s latest bull case: Nvidia and their new Vera Rubin chip, which is designed to think faster, use less power, and respond instantly.

• Adir’s latest bear case: OpenAI has a new role in ‘CEO of Applications’ (Fidji Simo). “When I read that, I thought ‘last person, turn out the lights’. If you are going down that road and have to start dishing out the CEO for this, CEO for that titles. It feels like a massive bear signal of hype.”

• Atlassian’s share price dropped 28% the last 30 days. Adam: “This is just a remarkable drop. I haven’t seen a company of this scale drop like this outside of a massive market-wide crash. This is a catastrophe.”

SXSW stays NXNE

Organisers confirmed SXSW Sydney ends after 2025, closing its Asia-Pacific expansion. Despite strong attendance and $276M impact (Adam: “Although that number appears to be fictional”), changing global conditions, sponsorship pressure and competition made the event unviable. SXSW continues in Austin and London.

Adam: “Having been there, I found it completely soulless. Nothing against marketing, but it felt much more marketing than it was tech. Like a big marketing circle jerk.”

Adir: “You’ve got an event run by the biggest event business in the US and they predominantly just want to make money. That’s fine. I like capitalism. Then you’ve got a New South Wales government - what’s their motivation? They want to be elected.”

Adelaide Writers’ Week cancelled

The 2026 Adelaide Writers’ Week was cancelled after organisers removed Palestinian-Australian author Dr Randa Abdel-Fattah from the lineup, sparking a mass boycott by invited authors and board resignations. Abdel-Fattah has launched legal action against South Australia’s premier over his comments about the controversy.

Adir: “Those people who disagree with everything I say and think she should be allowed to spout what I think is hate speech and she should be given a platform for doing it. Those are exactly the type of people that we should be having to writers’ festivals. There’s good news for those people. The Adelaide Writers’ Festival is back on for 2027, and she’s the first invitee.”

Adir: “The views that are being held here are ‘I hate people based on their identity’. And if you happen to hate a different group of people based on their identity, that in fact is the same view. It’s not a different view. Just substituting the name of the group whose identity you hate.”

Adam: “I'm very much in favour of free speech. Have your free speech, just don't have it on my dime. That's the issue. If you want to have a writers’ festival with every leftwing writer in the world, have it. Just don't get taxpayer funding for it.”

RBA spared ‘gangland-style pressures’

Former RBA insiders say Australia has avoided the “gangland-style” political pressure facing the US Federal Reserve, but warn risks remain. Partisan appointments, rising government debt, and the Treasury secretary’s voting role could undermine RBA independence, highlighting the need to protect central bank autonomy.

Adir: “I think what we’re seeing in the world today is how much of our societal structure is held together on the basis of a handshake agreement. And the reason I say that is because you look at politically elected leaders in Australia and in the US, they get to appoint the judges of the highest court in the land. But after that, you’re supposed to be independent and don’t be influenced by the handshake agreement.”

Labubu tumbles on resale market

Once-hot Labubu collectible figures from Pop Mart have seen resale prices plunge as hype fades, with rare editions tumbling from thousands to mere hundreds. The shift has left resellers cautious, while fans are split between lamenting losses and welcoming lower prices, reflecting how speculative trends quickly correct.

With Labubu being old news, the guys go deep on Jellycats.

Adir: “I have to say this business is amazing in terms of the numbers, but what’s most incredible to me is that this is not a vertically-integrated retail business. You saw people buying them in Selfridges. That means they’re giving a wide margin to the retailer in order to sell.”

Adam: “They’re doing $17M in market cap per employee. It’s actually insane. Obviously there’s Nvidia and Microsoft in terms of businesses that are making money that are kind of accessible consumer businesses. But there can’t be that many better businesses than this out there.”

Five other stories worth following:

1. Trump’s renewed push to acquire Greenland and impose tariffs on European allies risks reopening a transatlantic trade war, with the EU considering up to $108B in retaliation using its powerful “anti-coercion” economic tool.

2. Global demand for South Korean “K-food” surged in 2025, lifting exports to a record $13.6B as instant noodles boomed, driven by US and emerging-market consumers seeking affordable, interesting meals amid slowing domestic population growth.

3. China recorded its lowest birthrate since 1949, marking a fourth straight annual decline and accelerating a demographic crisis. The population fell to 1.4B in 2025, shrinking by three million year-on-year, according to data.

4. OpenAI announced it will begin testing targeted ads for ChatGPT’s free and Go tiers in the US, aiming to fund free access. Paid tiers remain ad-free, with users able to limit personalisation and control.

5. Data from Similarweb shows Meta’s Threads now surpasses X in daily mobile users, while X still leads on web. Growth reflects longer-term trends, as controversies and investigations hit X over recent months, globally observed.

The Contrarians catchup

• Adam is preparing for another leg surgery, this time to remove the rod he had inserted about 10 months ago. Of course, he’s been running every day before he’s out for another six weeks post-operation.

• Adir says the citizens of Japan are dreading the upcoming Tokyo Marathon because they’re over having tourists invade their country.

• The guys discuss the growing popularity of Australians visiting Singapore and Dubai, not just flying through them on the way to other destinations.

• Adir on the upcoming Royal Commission into antisemitism and the Bondi attack: “It might be disastrous, but you can’t have everything and this would’ve been a very unexpected win three weeks ago. So we should just take the win.”

• Listen in for Adir’s masterclass on private health insurance.

Writing off the Adelaide Writers’ Week

The Adelaide Writers’ Week future is uncertain after organisers cancelled Palestinian-Australian author Randa Abdel-Fattah’s invitation, triggering dozens of high-profile withdrawals, sponsorship losses and board resignations. Critics call for her reinstatement and warn the festival’s viability and reputation are at risk amid legal and political fallout.

Adam: “If you pull out of the writers’ festival on the basis of Abdel-Fattah being withdrawn, then you effectively support the denial of the rape of women and the mass murder of young children. So every person who pulled out needs to know what they’re supporting.”

The 2025-26 Iran protests

Iran’s government declared three days of national mourning as nationwide protests over economic woes escalate, leaving hundreds dead and thousands arrested. Tehran blames foreign influence and warns the US and Israel, while Washington weighs responses and Trump threatens “strong options” as unrest persists amid internet blackouts.

Adir: “We can just hope that Iran flips and it becomes democratic. I think that’s the biggest news story of the year at the moment and it’s been barely reported on.”

The incredible business of Costco

Costco Australia lifted sales to $12.6B, up $1.2B, paying its US parent a near-$300M dividend. Profits rose to $389M as it quietly gained share. Growth came despite fierce competition from Woolworths, Coles and Aldi, as an intensifying price war and regulatory pressure reshapes the supermarket sector.

Adir: “Why was the market totally empty for Costco to come and do this? I do find Australia a bit of a sleepy place often. It’s just astonishing to me in this country there are some big industries where the cost of capital is less. Woolworths and Wesfarmers are constantly looking for ways to grow. I mean, I would have thought this would have been a better bet.”

Adam: “Costco came to Australia in 2009 when it was a $20B. It’s now over $400B, growing 20x in a pretty short time. I can’t believe there’s not a Trader Joe’s in Australia. What I think Costco and Trader Joe’s both do really well is the surprise and delight aspect.”

Five other stories worth following:

1. Trump proposed a one-year 10% cap on credit-card interest, arguing Americans are overcharged. Banks warn caps could restrict credit for risky borrowers. Research suggests savings, reduced rewards, and less access for low-score consumers nationwide.

2. KPop Demon Hunters energised the Golden Globes, winning best animated feature and song. TV winners included The Pitt, The Studio, and Hacks, while Timothée Chalamet and Paul Thomas Anderson claimed directing and screenplay honours.

3. Netflix launched video podcasts, adding 34 shows and hosting a live Bill Simmons broadcast, aiming to boost daytime viewing and challenge YouTube. Exclusive deals pulled major shows like The Breakfast Club from rival platforms.

4. NASA will return SpaceX Crew-11 early after a health incident, the first such ISS case. The crew member remains undisclosed. The Dragon capsule is expected to undock Wednesday and splash down Thursday, weather permitting.

5. Some Silicon Valley firms now offer nicotine pouches as productivity perks, citing focus benefits. Experts warn nicotine is addictive, may harm gums, and risks normalising stimulant use at work, echoing debates over coffee perks.

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The Contrarians catchup

• Adir went into this week’s world-famous annual predictions episode hoping to stay awake and terrified at how badly he probably predicted 2025.

• The guys discuss the pros and cons of particular hotel loyalty programs. Hear from the best in the biz (Adam) on where to get the best deals.

• Adir talks about the journeys of EatClub and ShopBack and whether the two high-growth Australian tech startups are going to start encroaching on each others’ territories.

• Adam finds the UK’s compulsory service charges “repulsive”, with around 90% of dining venues now “banging on a 13.5% service charge and say it’s discretionary because you can ask for it to be removed.”

• Adir gave his review of which stores were busiest as he walked around a shopping centre (Mecca, Lovisa, Peter Alexander), with only one luxury brand having a line of customers (Chanel).

2025 predictions: A recap

The guys made some bold predictions for 2025 - let’s see how accurate (or early) they were.

• Adam predicted a rapid end to the data centre boom, Adir said it had another year in it. With the continued rise of DiGiCo and Nvidia (the world’s most valuable company with a market cap around $4.5T), Adir was right here but said 2026 is harder to predict.

• Adam correctly called the IPO of Chemist Warehouse, but predicted a valuation under $10B (it’s trading at 58x earnings, sitting at around $34B).

• Adam predicted Waymo going mainstream in the US, Adir said he was going too early. With 20M trips in 2025 alone, the reality was somewhere in between the two.

• Adam thought 2025 would be the year of mainstream drone deliveries, Adir predicted no change (“I thought that was a ridiculous prediction you made, to be honest”).

• The guys took a stab at Tesla’s 2025 performance and Musk’s relationship with Trump. Adam nailed Trump but not Tesla, Adir was the opposite - “Tesla is a religion and religions do not follow economic logic”.

• If you’re a regular listener, you could guess Adam and Adir’s predictions for Canva and Virgin in 2025 (some right, some wrong).

Listen in to see how Adam and Adir performed with the rest of their 2025 predictions when it came to Australian politics, retail, mergers and acquisitions, and interest rates.

2026 predictions: A preview

• Adam predicts the AUD will creep up above 70c USD for the first time since COVID and the RBA will have to lift rates, giving us a bigger interest rate differential. Adir thinks China’s economic problems keep the AUD sub-70 and says he’s “more politically cynical this year”.

• Adam’s best performing stock will be Amazon - “you’ve got automation hitting their warehouses, AWS is performing well, they’re coming off the lowest base of the Mag 7”. The worst performing? Apple. “They’re such a badly run business on the product side, that Apple magic has been snapped away”. Adir says “Nvidia is a mirror of what the world thinks about AI, so they have another year of innovation from the rest of the Mag 7 before the pressure is on them”. Adir predicts Alphabet will be up, Apple will be down.

• Adir predicts OpenAI will have a new CEO by the end of 2026. Adam: “You mean Scam Altman. I’d love to see that, I think it’s a better business without him”.

• When it comes to the ASX tech index, Adam says it’ll go down 25%, Adir said it’s going up 25% (it’s not called The Contrarians for nothing).

• Bitcoin finished 2025 around 11% down, at $89k USD. Adam predicts it’ll continue its downward trend to $75k. Adir: “It feels like it’s getting old to me. There’s no utility in it, so I see it spending more time staying under $85k than over. The era of Bitcoin tanking is not upon us yet, but the era of Bitcoin flying is behind us”.

Listen in to hear how the guys predict podcast-favourite Corporate Travel Management, gambling stocks, aviation stocks, autonomous vehicles, Grand Theft Auto VI, the Victorian election, and the future of The Contrarians franchise (“there's some very cool stuff that we've got planned that I think people will love”).

Five other stories worth following:

1. FAA flight restrictions during a US operation targeting Nicolás Maduro stranded Caribbean travellers, briefly halting civil aviation. Airlines added capacity, including American’s 43 extra flights, as disruptions ease. Leonardo DiCaprio missed a festival appearance.

2. A proposed California ballot initiative would levy a one-time 5% tax on billionaires’ assets, potentially raising $100bn for healthcare. Even before qualifying, it’s prompting backlash, relocation moves, and opposition from Governor Gavin Newsom statewide.

3. Recovr tackles gym member churn by using AI to predict disengagement early and automate personalised outreach. Rapid Australian growth saw 322% adoption growth, with US expansion planned following a recent seed raise.

4. A viral debate compared a $120k remote job with a $240k office role. Opinion is evenly split, weighing higher pay against flexibility and mental health benefits, with a Business Insider poll decided by one vote.

5. Clicks Technology is launching the Communicator, a $500 smartphone accessory with a physical keyboard. The product targets users nostalgic for tactile typing, aiming to blend modern smartphones with old-school productivity hardware.

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The Contrarians catchup

• Adir continues to up-skill The Contrarians audience, this time through the origin of the phrase “turn over a new leaf”: where “leaf” referred to a page in a book, symbolising starting fresh by writing a new chapter in life.

• The guys discuss the economics of airlines operating on Christmas Day, taking into consideration marketing costs, lounge access, the cost of labour, and the many religions who don’t celebrate the holiday.

• In case you didn’t notice, The Contrarians don’t take a break over Christmas, but that’s not true for a growing number of Australian businesses. Adam: “I’ve never understood why they shut over this time. Business owners don’t understand the brand damage caused by not serving your customers, but you’re also sending a customer to a competitor, who is taking your customers with a free CPA.”

• Adir quizzes Adam on the most-travelled airline routes, which are all domestic, and most are within Asia. Listen in to find out where the Melbourne-Sydney route is ranked.

• Adam returned serve with his own quiz: the world’s most popular e-commerce sites (with the caveat being Amazon’s regional domains are considered separate entities). It’s no surprise that the US Amazon website is number one, with around 2.7B visits per month, but the rest of the list is a surprise.

• The third and final quiz: most popular movies based on number of tickets sold. Despite claiming to know nothing about movies, Adir guessed #2 out of the box.

Albo kinda cuts business class

Anthony Albanese proposed tightening MPs’ family travel entitlements after expense controversies, forcing economy flights, limiting destinations to Canberra or electorates, and restricting partner travel to official events. The changes aim to meet community standards and will be reviewed by the remuneration tribunal in January.

Adam: “I think there should be a cash limit. They should say you’ve got ten grand, or whatever it is, and you can spend it however you’d like. If you want 10 business class tickets, or 40 economy tickets, it’s up to you. Everyone should get a certain amount, maybe based on level.”

Corporate Travel Management survives for now

Corporate Travel Management secured lender support, extending bank guarantees and credit facilities, holding $177M cash despite a $160M overcharging scandal. Reporting deadlines were pushed to June 30 as investigations continue. Shares remain suspended, investors wary, but funding stability allows operations to continue while forensic reviews progress nationwide globally.

Adam: “I get these travel agent publications daily and every 2-3 months, you see Johnny Smith, travel agent in Manly, is going to jail because someone got a refund and took it to their own bank account. CTM is a big public company but they’re doing the exact same thing, they’re stealing money that should’ve been paid back to the customers.”

Adir: “It’s got a name in business. It’s called ‘too big to fail’. All of these investors, they don’t want this to go to zero. It’s not the same as banking, so it’s not going to bring the whole system down, but this will cause enough damage to enough people with vested interests that they want to keep it going almost at any cost.”

HotDoc sale bonanza

Potentia Capital has agreed to acquire HotDoc, Australia’s leading GP booking platform, outbidding Pacific Equity Partners in a $250–300M deal. HotDoc handles 25M appointments annually, serves 13 million Australians, and holds about 70% market share.

Adir: “It takes special founders to find a way to merge with a competitor for the benefit of everyone when they’ve dedicated so much of their life to trying to destroy that other competitor. It’s always been clear to many people that HotDoc and Healthengine belonged together, and the fact it wouldn’t happen, I thought would’ve been value-damaging for those two businesses.”

Adir: “You’ve got a business here that is sub-scale. The core business isn’t growing like a rocket. It’s got a competitor that’s equally as large and well run. I think good private equity operators with a strong track record like Potentia, they figure out ways to make money. But, it’ll be very interesting watching them make money here.”

Five other stories worth following:

1. AI startups attracted $192.7B in VC funding through September 2025, largely flowing to giants like Anthropic and xAI, fueling over 1,300 $100M+ firms and 500 unicorns, raising questions about bubble risk and infrastructure investments.

2. Trump said Ukraine and Russia are closer to peace after talks with Zelensky, but his plan requires territorial concessions without a referendum; Putin rejects a ceasefire as U.S. and Ukraine plan negotiations next month.

3. Nvidia and Groq signed a licensing deal to speed up and lower AI costs by improving inference, a bottleneck for Nvidia; investors see inference chips as crucial to moving AI from experiments into applications.

4. Gold is the strongest-trending asset, holding above its 200-day average since November 2023, while bitcoin trades 20% below. The bitcoin-gold ratio peaked after inauguration and has since fallen sharply, highlighting diverging market sentiment trends.

5. SpaceX is expected to go public eventually, with banks competing to lead its IPO. Traders assign Morgan Stanley the highest odds, followed by Goldman Sachs and JPMorgan, reflecting Elon Musk’s longstanding banking relationships historically.

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The Contrarians catchup

• The guys start by discussing the horrific events that took place in Bondi. If you want to hear their first thoughts following the terror attack, they recorded an extra episode last week (listen here), but the first 30 minutes of this episode is a must-listen.

• Adir on social media: “I think social media is fundamentally the greatest sadness machine that could ever be invented. And I think it's going to make society sadder. It’s delivered more sadness to society than anything outside a world war. I wish it all disappeared. And I would even be happy to sacrifice LinkedIn if we erased all social media.”

• The guys are shocked that Taylor Swift’s merchandise sales were 20% of her total revenue from The Eras Tour, bringing in around $500M from branded gear, making around $400M in profit. In total, she made around $700M from $2.5B in revenue.

• Adir shares a graph that shows the Australian Tech Index and the Nasdaq mirroring each other until August this year, when the Nasdaq bounced up and the Australian Tech Index dropped around 25% - “you’d have to say the Nasdaq is going to have to plummet down, or the Australian Tech Index is going to have to rebound.”

• Adam is in the UK and can’t believe the price of everything, citing $16 donuts and $250 two-hour train journeys.

• Luxury Escapes now offers Australia’s first direct Melbourne-to-Malé flight to the Maldives, cutting travel under 12 hours without stopovers. Adir was convinced Adam got himself a private jet.

Netwealth fail

Netwealth will repay nearly $100M to about 1000 victims of the failed First Guardian fund after admitting it inadequately assessed risks before offering the product. ASIC secured an enforceable undertaking and will not seek penalties. APRA imposed licence conditions and independent reviews amid wider investigations into fund misuse allegations.

Adir: “Unlike social media platforms, Netwealth is responsible for what is on its platform and it is seen as a curator, not an impassive provider or just a platform. Netwealth owes a duty of care to the investor to ensure that there is a credible and reputable investments. I think it’s a pretty significant call.”

Adam: “I think it’s terrible. It’s ASIC absolutely losing the plot as they tend to do. They do nothing about criminality for 20 years, they let incompetent businesses prosper, they let dodgy directors escape.”

Puppygate WFH

A tribunal overturned compensation for a council worker who tripped over a pet gate while working from home, ruling private household hazards may fall outside employer liability. The decision narrows WFH injury coverage, though a dissent warned employers still owe broad safety duties. The case will be reheard again soon.

Adir: “Thank God sense prevailed but is this really where we have gone with work from home?”

Shayne Elliott’s $13M cash grab

Former ANZ CEO Shayne Elliott is suing the bank for $13.5M in withheld bonuses, an unprecedented move that revives scrutiny of ANZ’s scandals and culture. Critics argue it reflects Elliott’s poor judgment, while also exposing inconsistent accountability by the board and deeper cultural failures within the bank.

Adir: “Running a bank is a weird job, right? There’s a contract and nothing else matters. There’s words in the contract. Work out what the words say. If the words say you got to give him his money, then give him his money. If the words say you can get out of giving of this money, then don’t give him the money.”

Lululemon deep dive

Lululemon is overhauling its strategy as sales slow and its share price slides, shifting to athlete-led marketing while activist Elliott Investment Management pushes leadership change. Despite compressed margins, Elliott sees value in the brand, betting new management can restore cultural relevance and growth at a discounted valuation.

Adir: “As tech goes bananas in the US, a lot of retail businesses are trading on vastly lower than average peers. This has obviously been pummelled but 14.5 times earnings says not quite that investors have given up, but that they don’t think this is going to return to significant growth anytime soon.”

Adam: “If you look at Lululemon, it’s had some headwinds. US sales dropped 2%. International is up 33% but doesn’t make up for the US sales obviously dropping. Its net revenue was up but its profit was down, so there’s some higher costs in there as well. It’s not a terminal business, but it’s getting hit by competition from all angles.”

Five other stories worth following:

1. Waymo halted San Francisco robotaxis after a citywide power outage knocked out traffic lights, freezing vehicles in place. Service resumed Sunday, but experts said the predictable blackout exposed limits preventing robotaxis from widespread readiness.

2. Thousands gathered at Stonehenge for the winter solstice, the year’s shortest day. Parking sold out, crowds arrived before dawn for spiritual rituals, and organisers noted the milestone marks steadily lengthening days until June 21.

3. As Stranger Things ends, marketers are farewelling a decade-long brand platform. Since 2016, nostalgic integrations with Eggo, Coca-Cola, Doritos and others delivered careful, culture-shaping partnerships now hard to replicate as the final season releases.

4. Warner Bros Discovery agreed to sell much of its business to Netflix for $83B after rejecting Paramount’s $108B bid. Paramount added a Larry Ellison personal guarantee, backed by partners and debt financing.

5. Australian shares are set to rise after a broad US rally pushed the S&P 500 near record highs. Falling volatility and seasonal Santa Claus Rally optimism have lifted equities toward a potential 7000 ceiling.

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The Contrarians catchup

• The guys waste no time picking up where they left off last week: Anika Wells and her expensive (taxpayer-funded) travel habits.

• Adam’s latest quiz covers the world’s most valuable brands: (spoilers) Apple, Microsoft, Google, Amazon. Adir vehemently disagrees with Facebook being ranked higher than Nike when you ask “what percentage of the motivation for using the product is driven by the brand of the product?”

• Adir on measuring net promoter score: “The thing about NPS is that it is attitudinal loyalty. It is not predictive of repurchasing, which is behavioural loyalty.”

• Adir does a mini deep-dive into Maggie Beer’s Hampers. The ASX-listed company that carries her name, and of which she is still a director and a shareholder, has fallen on hard times.

• Adam gives a shout out to the amazing male teachers out there who are important role models for young men. Adir asks if he were to start a school where the best teachers in the world were paid $500K each, whether you could get 500 parents to pay $500K per year.

• Adir discusses Melbourne-founded Operoo, a school automation platform that was acquired by SchoolStatus.

The divorce of King & Wood Mallesons

King & Wood Mallesons’ 14-year Australia–China merger is ending after partners overwhelmingly backed a split, citing cultural misalignment, strategic drift and changing capital flows. The firm will separate into China-focused King & Wood and Australia-based Mallesons, leaving many Australian partners relieved and upbeat.

Adir: “Lawyers are not the value creators of capitalism. And so frankly, they should not be earning $20M a year. The big returns should come to the value creators of the economy. Because the only way you can get people to take risk is to make returns commensurate with that risk. And there is no risk in being a lawyer.”

Adam: “Just how stupid it was to ignore the cultural differences between an Australian firm and a Chinese firm is just insane. And for Mallesons, from being the the best firm at the time to do it. Just what an error.”

Interest rates to the moon

Rising bond yields driven by inflation and the end of the RBA easing cycle are set to lift federal interest costs by an estimated $7.5B over four years, complicating Jim Chalmers’ mid-year budget update and intensifying pressure to rein in debt and spending.

Most economists believe Australia’s rate-cutting cycle is finished as inflation re-emerges and supply lags demand. Critics argue the RBA eased too early, raising the risk of renewed hikes in 2026, though defenders note cuts followed a sharp inflation fall and balanced inflation control with employment.

Adir: “The challenge is we might be able to sustain all of this spending growth if we were getting more efficient in producing output. But we’re not. I think this is why we see the rise of extremist parties, because an extremist party comes out and says, stop spending money on all this rubbish and letting people immigrate and take all our money. And you might say that’s extreme, but that’s that’s resonating with people who are scared and get poorer.”

Deep dive: Corporate Travel Management

A secret government audit warns travel management companies can overcharge clients through hidden commissions and airfare mark-ups. The findings surface as Corporate Travel Management faces massive UK refunds. Auditors detailed opaque supplier contracts, incentives to upsell, and past eight-figure settlements, raising broader concerns about industry transparency.

Listen in for a deep dive into Corporate Travel Management and all their woes.

Adam: “Let’s look at this business with first principles. The business wasn’t making money in the last three years. When you factor in refunds, it’s probably breakeven to loss, making it maybe slightly profit on a good year. So if you had a business that’s turning over its money and probably getting worse because earnings have dropped off, what would you do? Forget all the stuff happening in the background. What would you value this business in good times. And we’re in really bad times right now.”

Adir: “We can say many negative things about where this business finds itself and how it found itself here. But fundamentally, I don’t think the founder has shown a lack of conviction in his own business.”

Five other stories worth following:

1. Trump’s AI executive order limiting state regulation has drawn bipartisan criticism, exposing unusual alliances. Supporters want a single national framework; opponents cite states’ rights, consumer protection, and job risks, signalling messy legal fights ahead.

2. Time named the “Architects of AI” its 2025 Person of the Year, honouring figures like Musk, Zuckerberg, Altman and Huang, recognising AI’s outsized influence on global news, power, and economic direction for better worse.

3. AI-linked stocks slid as Broadcom’s earnings and reports of Oracle delaying OpenAI data centres dented sentiment. Despite denials and Nvidia production rumours, losses spread across data centres, big tech, and AI bets globally.

4. Markets give Avatar: Fire and Ash little chance of topping Wicked: For Good’s $150M opening, assigning 98% odds against it, though James Cameron’s history suggests underestimating him has often proven risky before release.

5. AI adoption is far higher in knowledge jobs than blue-collar roles, with tech and finance leading usage. Gallup shows overall workplace use surging year-on-year, especially among senior employees, though daily use remains limited still.