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The Contrarians catchup

• The government spent $20M on a radio ad campaign telling Australians to pump up their tyres and remove heavy items from their boot to reduce fuel consumption. Adir did the maths: “If 2% of cars on the road pumped up their tyres from 28 to 32 psi and removed 50 kilos from their boot, it saves one million litres a week. Australia consumes a billion litres - 15M litres over 15 weeks. In the grand scheme of government wastage, it’s actually not too bad. They’re effectively buying petrol at a dollar a litre.”

• Glen Ira City Council wrapped one of its electric vehicles in about $10,000 of vinyl livery announcing it was “reducing emissions.” Adir: “I think that’s just indicative of the wasted money. There would be a million better things to spend that ten thousand dollars on.”

• Adam on removing the fuel excise: “Removing the fuel excise has the exact opposite effect. It obviously makes petrol cheaper so more people use it. They should actually be increasing the excise if they really want to reduce fuel use. But this is a government that cares much more about votes than actual economic policies.”

• Adir’s take on why centrist politics is impossible right now: “No one feels passionate about calmness and reasonableness. In an era where everything is extremely emotional, centrism and reasonableness and rational argument is super weak compared to one line emotional fighting. I think we’re leaving the age of reason. And if we’re going back to the age of emotion, which by the way caused both world wars, then being a centrist party today is fundamentally the problem.”

• SiteMinder is up 30% in a few months after both Adam and Adir flagged it as a buy. Adam: “SiteMinder’s been on a tear since we spoke about it. It was actually on a tear before we spoke about it, but it’s been on a real tear.”

The Victorian government: 35 seats and a crime wave

The latest polling suggests Labor could lose up to 35 seats at the next Victorian election. Victoria has entrenched itself as the crime capital of Australia, with insurance claims for car thefts surging 25% this year while every other state fell: WA down 15%, SA down 14%, Queensland down 12%. Victoria’s car theft bill exceeds every other state combined.

Adir: “People hate this government now. Enough people hate it. The question is who are they going to vote for? That’s the bigger issue. Historically the two most left-wing states in Australia are South Australia and Victoria. South Australia gave One Nation a big hug in their election. And if Victoria does the same, despite One Nation’s inability to have coherent policy amongst their leaders, people are becoming so upset with the far left they’re swinging far right, because they’re skipping over the top of the coalition.”

Adir: “The Victorian election will be a super interesting barometer federally. I think politically, electorally, at the federal level, the more interesting part of it is what becomes the relationship between the coalition and One Nation in Victoria after the election.”

Adam: “Dan Andrews has been the key proponent, but Jim Chalmers and Albo have jumped on it as well. We’re going to just massively increase the size of the public service. Who do public servants vote for? They vote for us. So we’re going to stay in power.”

The budget: hidden powers and a sleeper clause

The AFR revealed hidden provisions in the Federal Budget Tax Bill that give Treasurer Jim Chalmers massive powers to create additional CGT and negative gearing rules outside the legislation, bypassing parliamentary scrutiny. A separate “sleeper clause” could inflate tax bills by stripping the right to cherry-pick how capital losses are offset against gains.

Adir: “Albo just decided he’s not going to be swayed by pressure that he perceives is being pushed by interests aligned with the conservatives and the right. One of the things that’s incredibly similar between Albo and Trump, other than being populists, is they view concession of any errors as being a weakness. He will only flip if there’s a way that he can say, yeah, I meant to do this all along.”

Adir: “The primary driver of jobs creation in Australia in the last half decade has been public service jobs. Jobs where the money that people are paid depends on taxing wage earners in order to have the money to pay them. That is where jobs growth is coming from in Australia and in Western countries, and that enshrines this culture of entitlement.”

Adam: “We’ve got too much spending, whether it’s the NDIS frauds costing real disabled people the ability to get money, all the public servants, the ridiculous infrastructure like SRL that nobody wants. Then you’ve got a really inefficient tax system that effectively taxes income, not wealth. So that’s inherently unfair. And we’ve got so many younger people carrying the can for older people through the greatest tax rort of them all that nobody ever talks about, which is superannuation. Nobody talks about it because Paul Keating’s done such an incredible branding job on super, and you’ve got all the super funds who have their snouts at the trough and all the fund managers who get paid billions of dollars.”

Adir: “No taxation without justification. Every time the government is going to take your money, they should make an argument for why it’s better for society to take your money and put it elsewhere than to leave you alone with your money. The thing that’s horrified me about this debate is there are so many people whose starting point ignores this idea of taking half of someone’s money that they’ve earned, and they say, why should you get better treatment for your capital than we get for our wages?”

A deep dive into SkinKandy

SkinKandy, a 15-year-old body piercing and jewellery chain, listed on the ASX last month at a market cap of $245M, raising a upsized $160M at $2.20 a share. The company has 100 stores, does 650,000 piercings a year, and will do close to $90M in revenue this year. Gross margins sit at around 90%. CEO Dane Freeze previously ran Lovisa’s global rollout. Board member Trent Peterson was also involved in Lovisa, Adairs, Dusk, Universal Store, and Shaver Shop.

Adir: “I love this business. Like I think there are so many things to love about this business. This business basically says we’ll pierce your ears and make a ton of money. And by the way, we don’t have to employ extra people to pierce your ears, because we have to employ that person anyway. We’ll sell you jewellery and make a ninety percent margin on that. What does it mean? We buy something for two dollars and sell it for twenty on a piece of cardboard.”

Adir: “This is a business that’s basically running on ninety percent gross margins overall as a business. Like I’ve almost never seen that before. From FY24 to FY25, it grew 39% and grew its gross profit 1% more than that. It’s actually still getting margin expansion at the gross profit line. God knows how they’re doing that.”

Adam: “New stores cost an average $278,000 to open and generate $240,000 in EBITDA in the first year, making for a quick 13.9 month payback. I’ve got stores making $800K EBITDA and it costs them $300K, so you’ve got your payback period of four months for the best stores. These guys don’t need franchisees, they can do it themselves. It’s hard to think while these guys aren’t rolling out quicker. All they need to do is just rinse and repeat. Not just in Australia. You’ve got UK, you’ve got US, you’ve got other countries. Nobody’s done this really anywhere well that I know of.”

Adir: “The reason is it is such an impulse purchase that the more foot traffic in their target demographic they have walking past the store, the more sales they make. And so a big mall, you might not walk past one of their stores. It’s okay, we’ll have two of them to make sure you do walk past.”

Adam: “The CEO spent three years as COO during Lovisa global rollout. So he is the perfect guy to be running this business. I think there’s one where you buy and put in the drawer. You trust Trent and the team to execute again, because they have. I actually didn’t expect to like it as much as I did. I don’t think it’s expensive at 30 times PE at all.”

Adir: “This is my favourite kind of business. It is founder involved, it’s got good management, you can see a great long-term path. I believe in the business, I believe in the leadership, and I believe in the TAM. This to me is a business where you can potentially invest and say ring me in five years and then ring me again in 10 and tell me how the investment’s gone.”

Five other stories worth following:

1. University of North Dakota researchers are testing mobile wastewater treatment for NASA that turns astronaut waste into plant food. With three bioreactors handling toilet, shower, laundry and food waste, it beats Apollo’s moon bags.

2. Quilty says its AI can predict whether scripts will become hits, charging $50 per analysis. But after backing Sydney Sweeney’s Christy over Sinners, its box office crystal ball still looks pretty cloudy for now.

3. Apple is expected to show off a smarter, Gemini-powered Siri at WWDC after years of delays and AI stumbles. For Tim Cook, it’s a last chance to close the biggest gap in his legacy.

4. Pope Leo began a weeklong Spain visit with Mass for 1.2M people in Madrid, the first papal visit there in 15 years, as young Spaniards increasingly return to Catholicism despite Bad Bunny competition.

5. SpaceX is reportedly preparing a blockbuster Nasdaq debut that could value the rocket company at $1.77T, dwarfing previous IPO records and potentially making Elon Musk the world’s first trillionaire this week.

This week’s special drops a deep dive with Matt Heine — the CEO who has spent 25 years turning a bedroom startup into one of Australia’s most remarkable listed tech companies.

• Matt’s father Michael started Netwealth in 1999 from his bedroom. “It was a classic startup story — my old man started it in his bedroom. It was just that the bedroom happened to be in Toorak.” Before Netwealth: frozen dinners for Marks & Spencer in the UK, the Eon FM to Triple M radio roll-up, a listed property company, and an early investment in Seek.

• Matt joined as employee number five, pre-product. His first job: straighten the dropped “e” in the logo. His second: design banner ads in MS Paint for 9MSN. “You’d go on 9MSN and there’d be all these fancy agency ads and then there’d be my banner ads down the side in Times New Roman.” Adam’s note: every other business advertising on 9MSN is now dead.

• Matt bought his first shares at seven — a gold miner. His son has just bought his first shares too. Adir: “Now would be a good time to find gold.”

• IPO’d December 2017 at $3.70 a share. Came close to $10 billion at the pre-SaaS-pocalypse peak. Currently worth around $5.7 billion.

• Adir found the SiteMinder comparison worthwhile: Netwealth went after the 20% of advisors not captured by the big banks — just as SiteMinder went after independent hotels the big chains didn’t bother with. The Royal Commission then turned the entire market into their TAM.

From a bedroom in Toorak to $6 billion — the startup nobody would have backed

In 2001, with fewer than 20 staff and no external capital, Netwealth was competing against Commonwealth Bank, Westpac, AMP and Macquarie — each of them running platform businesses with $80–100 billion under management, and employing thousands of financial advisors who also distributed their platforms.

Matt: “We had never actually raised any external capital. The only money in the business was our family’s. Dad used to sit around the boardroom table, and for a long time people used to call it investing. He would just call it losses.”

The early business was a discount online broker — the cheapest in Australia for years at $9.99. When that channel proved too hard to scale, they pivoted in 2003 to servicing financial advisors — specifically the 20% not employed by banks.

Matt: “We worked really hard. Customers would say, ‘We love what you built, but you don’t have a super fund.’ So we’d go build a super fund. ‘You don’t have insurance.’ So we’d build insurance. For that first five years we really had to pedal very quickly.”

It took 63 months — just over five years — to reach $1 billion under management. That was also, to the month, the point at which the business first broke even.

Adir: “You don’t ask the next question, which is: how much cash do you need to pour into a loss-making business to get to month sixty-three? That’s the question.”

Matt: “We had invested more than we had under management.”

Michael Heine’s motivation for starting again at fifty? He retired for two weeks, tried to be a passive investor for fifteen seconds and hated it. He doesn’t play golf.

It’s a Wrap

Netwealth is a “Wrap” — a layer that sits across all of an investor’s assets and lets a financial advisor manage everything from one place.

Adir: “It’s like a wrapper that goes across the top of everything and lets people, instead of going and finding individual assets, access them all through a single platform.”

The product today lets advisors manage super fund accounts (Netwealth as trustee), SMSFs, trusts, companies and investment accounts. They can buy domestic and international shares across 16 exchanges, managed funds, bonds, term deposits, private markets. Netwealth handles reporting, tax reporting and client access.

On the GFC tailwind nobody expected:

Matt: “There was a shift from advisors leaving the banks and institutions to go independent. And having left the banks, there weren’t actually many independent options for them. Our product was very broad — it was more about ‘we can work with you’ rather than telling you how to do your business, and that was resonating really strongly.”

The Royal Commission finished what the GFC started: it shredded the bank-owned advice model and sent tens of thousands of advisors independent. What had been 20% of the market became essentially all of it.

Why this is nearly impossible to beat

Adam ran through the Hamilton Helmer 7 Powers framework. The verdict: Netwealth has almost all of them.

Scale — obvious. Counterpositioning against the bank-owned model — the original thesis. Brand — built over 25 years with the advisor community. Process power — embedded in 4,000-plus advisor relationships built one at a time.

On regulation as the real moat:

Matt: “It is almost impossible for a new entrant to come into this market now. APRA is not handing out new trustee licenses — if anything they’re trying to consolidate the number of licenses in Australia.

On the flywheel (Matt prefers this to “network effect”):

Matt: “The more customers, the more advisors, the more we can invest into the tech — which creates better outcomes for customers. So you scale and network almost always cross over.”

Adam: “We’ve got almost every power, which is why investors love you guys so much. Almost impossible to beat.”

Matt: “I should come on the pod more often.”

The $1.8 trillion tailwind

Netwealth’s stated TAM is the $1.2 trillion platform market, where it holds 9.7%. But Matt argues that’s the wrong denominator.

Matt: “We’re probably sub-1% when we really look at our actual market share. What a great opportunity to be investing in growth — for what is one of the greatest opportunities I think we’re gonna see in a lifetime.”

The real prize: $1.8 trillion sitting in industry superannuation funds is moving from accumulation into decumulation. Large balances — which Matt said represent 4% of industry fund membership — are actively seeking financial advisors and, when they find one, moving to adviser platforms like Netwealth.

Matt: “All but UniSuper are now in net outflow — and all of the retail platforms are accelerating. That trend has dramatically shifted and it’s accelerating in our favour.”

The model: Netwealth earns 32 basis points on average across all accounts. Every new dollar coming off the industry fund conveyor belt is a potential basis point. Rule of 40 sits close to 70 — among the highest on the ASX.

Adir: “A profitable business with growth potential north of twenty percent — you’d always skew more heavily towards growth. If you play out the numbers, you can’t compare the trajectories over the long term.”

Matt: “Is our margin 50% or 49% or 48%? It doesn’t actually matter in the long term when you’re growing at 20% plus.”

30% more engineers without hiring a single one

Netwealth has around 1,000 staff, 400 of them in tech and product. Matt is targeting 30% efficiency gains across the team within 12–18 months — the equivalent of adding 100 engineers without adding a headcount.

Matt: “It’s not about cost out. This is about how we flatten the growth of headcount — so we’re not having to hire however many people every year. The point at which we can automate a process or find efficiency through AI, we move those people onto the next thing.”

On token costs

Matt: “I’m still getting over the shock of just our bills, and how quickly they’re growing. I’ve started hiring junior developers again because my token count’s too much. We’re doing this full circle.”

Adam: Luxury Escapes is spending $3 million annualised on AI — and they’re a much smaller team. Matt declined to confirm a number for Netwealth.

Matt: “There are different ways to code that use one-fiftieth of the tokens. That’s really where the focus needs to be.”

The destination: open-source model retraining, hybrid on-premise infrastructure, and a reversal of the ‘everything to cloud’ orthodoxy that defined the last decade.

Adir: “AI costs drive cloud costs. It’s a vicious cycle.”

Matt: “Microsoft’s the winner.”

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The Contrarians catchup

• Adam and Adir debated the OpenAI comeback narrative after Codex launched as a competitive developer tool. Adam: “I’m far more bullish on OpenAI now than I was a few months ago. Could it be a $500B business? Like if Anthropic’s making $500M now and the way it’s scaling, Anthropic could be making $20B a year pretty soon.” Adir: “I wrote them off. I’ve written them off.”

• Adir discovered that Coles resets Curtis Stone loyalty credits between promotions, wiping his 30 leftover fry-pan credits when glassware launched. “Don’t you think that is a bad customer loyalty move? How could they not retain the credits and give you some feeling that you’re invested in portfolio?”

• The guys dissected Sexyland, a private retailer with 17 stores doing $36M in revenue and $4.5M EBITDA. Adam: “Usually great margins with adult stuff.” Adir: “It’s much less profitable than I expected.”

• Richard Goyder is stepping down from Woodside. Adam: “This should have happened a couple of years ago. But no one goes forever.”

• Lime bikes network effects debate, continued from last episode. Adir brought in outside confirmation from his friend Tel Aviv: “Way more people using Lime means the person that uses it and lives a bit further north, they go and leave it further north. And then when I want to get the bike further north, I can. That is a network effect.”

The budget: the housing minister undercuts her own government

Housing Minister Clare O’Neil gave an interview in which she appeared to directly contradict the government’s stated rationale for the CGT and negative gearing changes. The guys argued she inadvertently dismantled the entire policy in a single sitting.

Adir: “She said the tax system should not create and drive investment decisions for people. At one point I thought it is possible that these Labour politicians periodically visit planet Earth, at least for a coffee. But that demonstrates that she hasn’t been here for a very long time. Because tax treatment is a huge driver of capital, of profitability.”

Adir: “Her argument is basically that, contrary to Anthony Albanese and Jim Chalmers’ pitch that this is designed to make the asset class of housing less attractive to investors, her pitch is no, no, no, no. It’s not. This tax will not make any asset class more or less attractive than any other asset class. It’s a complete undermining of the whole argument. And the journalist did not ask her a single question about this.”

Adir: “You’ve got a situation now where not only can they not explain the tax, but you’ve got a senior minister, a minister for housing, undermining the housing fundamentals that are stated as being the core idea of the policy.”

Adir: “Treasury Secretary Jenny Wilkinson came out and said there is no clear evidence that these tax changes will be detrimental to capital investment and capital flows in Australia. That is not a lie, but that is a political statement. The truthful statement is this: there is no clear evidence either way. However, there is strong evidence that these type of tax changes reduce the amount of intellectual property and patents registered by countries and significantly reduce venture capital investment. That’s the honest answer.”

Adam: “She should be a non-politicised neutral. Disgraceful. I think she should be fired, but she’s doing the bidding of the people who should be firing her.”

Special guest: Frank Greeff on the ALBO meme and the SMH hatchet job

Frank Greeff co-founded Realbase with his brothers, growing it from a four million dollar services business to a $180M exit. He created the viral “ALBO co-founder” meme after the budget and was then targeted by a Sydney Morning Herald piece that implied he had not shared equity with his team.

On first hearing the budget:

Frank: “We had been having this incremental momentum in the right direction. The VC markets in Australia had been growing. More and more young people that I’d been meeting were keen to get into the world of founding businesses.”

On the meme going viral:

Frank: “I started getting messages about like how this is ricocheting in the politicians’ world. Getting reached out to by so many media establishments. Hearing from politicians going, oh my gosh, this thing is going crazy in the four walls of Canberra. And that was like a little bit weird and wonderful. But let’s be honest, a lot of media is trying to cling on, trying to hold on to their once glory days. And so something that’s going off on social media, they’ll certainly jump onto and grab.”

On the SMH article:

Frank: “I received maybe on Wednesday last week a list of questions from the journo and immediately I was like, okay, there is a hit piece coming for me. Because the questions were all related specifically to me and the context of the business. It felt very different to the rest of the questions that any other journalists had sent me that week. Those were all like, what’s your view on this thing? These were all about me.”

Frank: “We started the business when we were 20 years old. I was a chef. My brothers had never had jobs or bosses and we had no idea what it was like. People have asked, how come you didn’t have a sophisticated ESOP? It’s like, we didn’t even know what an ESOP was. So when we gave out shares, it would just be straight equity and you just transfer shares to that person. The key is, okay, you learn a bunch of lessons and then you go, what do I take from those lessons to apply to the next? And that’s why the critical piece for me was in our new business, I know about an ESOP. Ten out of eleven people have ESOP and all the right structures.”

Adam: “A quarter of Frank’s staff had equity, which is a very high ratio. More would have been offered. Probably half would have been offered and a quarter took. That’s up there with anyone in Australia. So the whole framing that Frank and his brothers were villains for not giving equity is just a complete stuff up.”

Adir: “I really encourage you not to be dissuaded by this and to keep speaking. Because I think your voice is measured and it’s smart and it comes from a place of personal experience. It is every citizen’s right to be able to speak freely about things that the government is doing. And you were not even abusive or insulting.”

Anthropic: the fastest growing business in history

Anthropic raised $65B at a valuation of $965B, led by Altimeter Capital and joined by Dragoneer, Sequoia, D1, Bailey Gifford, Blackstone, Brookfield, and Fidelity. Revenue is reportedly doubling to $10.9B in Q2, having gone from $100M ARR in late 2023, to $1B a year later, to $4B six months after that, to roughly $10B now.

Adam: “10x, 10x, 8x. That is just unbelievable. In the first quarter this year, Anthropic spent 71 cents on computing power for every dollar. It’s down to 56 cents. That’s some real scale. That’s obviously why they’ve turned profitable. I’ve never seen a business grow like this.”

Adir: “I don’t think a business ever has grown like this. That’s why. Yeah, this is the first time ever. The question is, what would make it worth a trillion dollars? If a business was growing at 30% and making $20-30B in NPAT, you could probably say, that feels like a trillion dollar valuation.”

Adam: “If you want an LLM exposure, it’s gotta be Anthropic, which is why all these smart funds are doing it. They can’t afford to miss out because it could 2-3x. Anthropic’s now more valuable than OpenAI. Anthropic was like a tenth the valuation of OpenAI a year ago. It is now more. I’ve never seen a business grow like this.”

Adir: “A trillion dollar valuation is not ridiculous for this business in the way it is for Elon’s businesses. You can see how this could be worth that. There’s not many of these to get into, maybe at the moment there are two. And if you want to get into one of them, you pay the price.”

SpaceX IPO: $80B raise, $2T valuation, and mostly hot air

SpaceX lodged its prospectus with the SEC to raise $80B in June, eclipsing Saudi Aramco’s $26B as the largest IPO in history. Revenue was $19B in 2025, up 33%, but the company lost $4.94B, kept alive by $26B in financing. Starlink, responsible for $11B of the $19B in revenue, is the only profitable segment. XAI consumed $5.6B in capex.

Adam: “SpaceX is essentially an internet service provider that also explores space. The company’s extraordinary ambitions are fuelled by a much more ordinary product. The only way they can keep going is by doing this IPO. Clearly out of cash.”

Adam: “Starlink’s a great business. Two to three hundred billion dollar business? Because there’s so much TAM. Every plane will have it, every boat will have it. Anyone in rural areas. Caught three, four hundred billion combined with SpaceX. But xAI is burning seven, eight, nine billion dollars a year.”

Adam: “The kernel of truth here is Elon is a generationally incredible entrepreneur. He’s responsible for bringing electric cars into the mainstream. He’s responsible for Starlink. SpaceX is unbelievable. That doesn’t mean his companies should be worth 3.5 trillion. That’s where the brilliance of Musk has completely detached from any kind of financial reality.”

Adir: “The era we’re living in is kings have been replaced by corporate tyrants. All of the capturing of countries, unless you’re Vladimir Putin, that inclination in human beings hasn’t disappeared, it’s just been replaced by corporate activity. And you’ve got large percentages of the population in Western countries that see no linear way to make any amount of money that lets them buy a house, but they see Elon, and these are like their own kind of savior. Someone who can bring self-financial salvation to people who otherwise couldn’t get there.”

Adam: “We’ve got an Elon premium of 600% here. This is at best a $500B business being valued at $3.6T.”

CTM: the car has driven off the bridge

Corporate Travel Management entered safe harbour, with directors refusing to sign a declaration that the company is solvent. Lenders including HSBC, CommBank, and Westpac are being asked for access to an additional $35M, without which CTM cannot pay the UK government’s $178M. The AFR obtained a confidential presentation to lenders described by attendees as “deeply uncomfortable.”

Adam: “Apparently the stumbling block is that lenders are demanding directors sign a declaration that the company is solvent, which the board is unwilling to do. Which kind of says it all really. The board’s unwilling to stand by the solvency of this business.”

Adir: “We’re watching a huge car accident in slow motion. All we’re seeing now is bits of the car flying in every direction as we watch the crash. What we don’t know is whether it’s a fatal crash or not.”

Adam: “My view is the car’s driven off the bridge and landed a hundred meters below in the river and you think, oh, this guy could still be alive. Pretty sure the guy’s dead.”

Five other stories worth following:

1. Typical CEO pay rose 5.9% to $17.7M in 2025, with median workers needing 200 years to match one year of CEO earnings. Welltower’s Shankh Mitra topped the list at $821.1M annually, an enormous gap.

2. Pop Mart’s website traffic has fallen since the holidays, suggesting the Labubu craze may be cooling, though some shoppers may have shifted in-store. Retailers say adult-focused blind-box toys remain influential across the category overall.

3. Chinese startup LinkerBot shipped 10,000 robot hands in 2025, meeting 80% of global demand. Its dexterous hands start at $600, but founder Zhou Yong expects prices to hit $200 within five years.

4. Berkshire Hathaway will buy Taylor Morrison Home for $6.8B in cash, adding site-built housing alongside Clayton Homes. Incoming CEO Greg Abel says the deal could expand homeownership and eventually combine operations.

5. The Trump administration may require USMCA-covered vehicles to contain 50% US-made components to access lower tariffs. Tesla appears best placed to qualify, with its cars already averaging 84% US content.

The Contrarians catchup

This week’s drop is a special bonus deep dive, replacing the usual Saturday Ask Us Anything. Adam and Adir are joined by their good friend Scott Middleton from Terem Capital — the software and tech-services fund that Scott has been building into one of The Contrarians’ favourites.

• Scott rolled in fresh off a huge win. “This past month we locked in our first 10 bagger. So we’re pretty happy with that one, and that’s a really active investment, not a passive one.”

• Terem’s hunting ground: $1–10M revenue software and technology services companies, mostly Australian, mostly active rather than passive.

• Adam: a 10x in this market for asset sales is “pretty incredible… it is stiff, tough out there.”

• Adir attempted to claim partial credit for the Kangaroos’ tear-jerking weekend win. Adam was unmoved.

• The real reason for the special: Adam, Adir and Scott wanted to deep dive SiteMinder (ASX: SDR) — a stock the three of them think the market has fundamentally misread.

The below is NOT investment advice.

What SiteMinder actually does

SiteMinder is a channel manager. If you’ve ever booked a hotel through Booking.com, Expedia, Trip.com or Luxury Escapes, you’ve used a SiteMinder-style middleware without knowing it. It sits between a hotel’s property management system (PMS) and the dozens of online travel agents that want to sell its rooms.

Adam: “Effectively it acts as a traffic controller between the hotel systems — what’s called a PMS — and travel booking websites like Booking.com.”

Adir: “I own a hotel and some people are gonna book. So I’ve got software inside my hotel that runs my hotel — that’s the PMS. But now I need people to book my hotel. If I’m a boutique hotel, probably most people are not gonna come and book directly… I need plumbing that pumps it all in there and a smart system that keeps it right. That’s what this business does.”

Where it sits in the market:

The enterprise tier (Marriott, Hilton, Accor, IHG, Hyatt) uses DerbySoft, which is a different beast. The mid-market (Shangri-La, Peninsula) tends to use SynXis or TravelClick. SiteMinder sits below all of that — boutique and independent hotels, B&Bs, anything roughly under 200 keys. About 650 integrations, ~53,000 customers, and the smaller boutiques use the Hotelier product, which Scott described as “the Shopify of hotels.”

Why this is hard to vibe code your way around:

Scott: “There’s a great framework I came across from a venture capitalist in the States — the eight moats around AI. Workflow, data, scale, ecosystem, regulation, distribution, network, and physical. When I look at this business, the ecosystem that it has with those 650 integrations — none of the large language models can do that, because you’ve got to go and sit down with someone from Hyatt, you’ve got to go sit down with someone from there. You’ve got to get access to the API.”

Adam: “You can’t just rock up to Hyatt or Hilton or Marriott or Accor and say, give me a connection. They’ll laugh at you. Wait in line, wait ten years.”

Two businesses, one go-to-market

SiteMinder used to be a pure subscription channel manager. Over the last five years it has bolted on a transaction business — payments, a hotel-side website builder, a mini-PMS for very small operators, and “Smart Pay” sitting underneath the whole thing. The transaction business is now growing 39% half-on-half; the subscription business 18%; revenue per user up 23%; revenue on platform up 12%; churn around 1% per month.

On COVID and stickiness:

Adir: “The crazy thing we experienced at Catapult — people stopped playing professional sport. Stopped. Who could ever imagine that? For years I used to say Catapult’s essential. I didn’t know if that was true — it was a good narrative. And then COVID came, no one was playing sport, and nobody cancelled their subscriptions. They fired staff. They didn’t cancel the subscription. I’m like, oh my god — I was telling the truth.”

Scott: “If there’s a piece of software you subscribe to that is essential to your organisation running and bringing revenue in the door, you’re not turning it off.”

The numbers nobody is reading

H1 FY26 results: revenue from $104M to $131M, statutory loss reduced from -$13.3M to -$4M. Cumulative reported losses since inception of $662M.

Adir: “Those retained losses — some shares have a massive $400M reserve on the balance sheet. I think they had convertible notes, and as the value of the company rose, the value of those convertible notes rises. Like employee equity. So I think they’ve more likely lost 200 or 250 mil. My point is more — it’s lost all that money, and now it’s basically at breakeven.”

Scott: “If growth kind of continues the way it’s going, they could be posting a profit this half.”

On reporting honesty — the bit Scott picked apart:

Scott: “I got a bit excited reading this one. Finally there’s some decent SaaS metrics in the opening. The LTV to CAC ratio was nice to see. Not everyone puts it in.”

Scott: “But then I got upset when I came to the way they talk about annual recurring revenue. And then under that, they have transaction revenue. That is not ARR. Even in their own definition, it says this only occurs when a transaction takes place. There was an ASX company two or three years ago that treated it like this — and when COVID happened, everyone stopped sending SMS, and their ‘recurring’ revenue fell off a cliff.”

Adir: “ARR is an unnecessary metric for this business. They have subscription revenue. They have usage-based revenue. The dream business is a subscription business that jacks up its revenue also with usage-based. That’s a great combination — they don’t need ARR as a metric.”

What’s the EBITDA tho?

SiteMinder claimed adjusted EBITDA of $11M for the half. Strip out roughly $15M of capitalised R&D (i.e. the cost of the people who built the software, parked on the balance sheet as an intangible) and the honest number is negative $3M.

Adir’s case:

Adir: “EBITDA — earnings before interest, that’s loans. Tax, money you pay the government to get no services. Depreciation — reducing value of tangible assets. Amortisation — reducing value of intangible assets. One of those intangibles is the tech developers you employ. They build software. You can’t just expense it, because it lasts a while, so it goes on the balance sheet. And then it hits the P&L as amortisation. But EBITDA excludes amortisation. So if you’re going to trumpet EBITDA, fine — but if you’re going to really factor in what it took to run the business, you’ve got to put in all the money you paid those staff this year.”

Adam’s pushback:

Adam: “Xero does exactly the same thing. WiseTech does it. SaaS does it. Just because other people are doing it I’ll put it in a good article — but I don’t see why these guys are any different. When you’re making $100M and you’ve got $20M in those extra costs, people kind of just look at the net profit.”

Scott referees:

Scott: “It’s not that Adam’s wrong. It’s common. Everyone does this. It comes down to R&D and the way R&D is treated. R&D being included above the line as income, getting money from the government — that’s a handout. This should be a tax offset, not revenue.”

Adir: “Basically, you’re right. It should be in the line. Like a tax. It shouldn’t be in revenue — it should be a reduction in expenses.”

The takeaway: ignore the adjusted EBITDA number. SiteMinder also publishes cash EBITDA, which leaves the R&D spend in. That’s the honest number, that’s the one to anchor to, and it’s the one Adir is comfortable with for FY26.

The bull case at $750M

SiteMinder IPO’d in November 2021 at $5.06, hit $7.10 days later (market cap ~$2.2B), fell to $2.96, rallied to $7.68 in October 2025, and has now been smashed in the broader “SaaS-pocalypse” to a market cap of $796M — an all-time low as a listed entity.

Adir: “This is why you can’t let the stock market shape your sense of self-worth.”

On what insiders did at IPO:

Adir: “There was, like, $500M plus taken off the table at the IPO by insiders. If you add Les Szekely’s sell-down to that, they’re almost at one times their current market cap on insider sell-down alone.”

On the SaaS-pocalypse mispricing:

Adam: “The actual SaaS part of this has almost no churn. You’re not gonna vibe-code something that costs you $200 a month, and you can’t vibe-code it because it’s actually too complex. The other part is transactional revenue, which isn’t really SaaS at all — it’s like a credit card processor. Visa and Mastercard haven’t been hit. So SaaS-pocalypse should not have impacted this business.”

What it could earn

Roll forward the H1 numbers and you get a plausible FY26 cash EBITDA of around $20M and an FY27 NPAT in the $20–30M range.

Adir: “If you had the same valuation as today, by the end of FY26 you’re looking at probably 30 times forward NPAT. That’s not crazy for a business like this at all.”

Scott: “I go straight to margin of safety. I don’t think it’s cheap today — you’re paying a forward multiple.”

Adir: “If they produce results at the end of this fiscal year that are just consistent with consensus, the market will remember — hang on a second, what the hell were we selling this off in the SaaS-pocalypse for?”

The verdict

Three buyers in the room.

Adam: “I’m actually a buyer of this business at this price.”

Adir: “I’m a buyer. At this price. I would buy this twice. Not investment advice.”

Scott: “Yeah. Buyer.”

The risks they could find: a deepening Middle East conflict that suppresses global travel, a US tourism slowdown (already happening — APAC has now been overtaken by EMEA, and US growth is decelerating “mostly the Trump effect”), and the cyclicality risk that grows as the business leans further into transactions. Nothing that would obviously halve the share price from here.

So we end with a rarity - not only something The Contrarians agree on - but a stock they’d all buy as well.

Not investment advice.

There can be no better example of how our tax system damages young people’s financial future than the argument this week between Treasurer Jim Chalmers and The Daily Aus podcast.

That argument centred on the percentage of young Aussies who currently own shares. Chalmers’ quoted Treasury numbers that report 10%, The Daily Aus used survey numbers that are closer to 20%.

To be fair, Chalmers is probably right. But the debate is a sideshow because the real question is this: why are aren’t all young Aussies able to invest in shares or other assets to grow their wealth?

And the answer is very simple. They have no money left to invest after the government extortionately taxes their wages. The tax rates on income in this country leave young people, and older middle-class earners, without any spare money to invest.

It is our ridiculously high income tax rates that cause the most damage to wage earners in Australia.

The top tax rate in Australia is 47 cents in every dollar once the Medicare tax is included, and it kicks in at $190,000. That may sound high to many Australian wage earners, especially younger ones. But it is less than twice the average full-time adult salary. Not that long ago, the top bracket started at three times the average.

Let’s compare it to some other countries. In the UK the top rate is 45c and it starts at more than three-times the average wage. In the US it’s 37c (although there can be some state taxes) and it starts at over US$600,000 which is over ten times the average. In Singapore it’s a maximum of 24c but you need to be making one million Singapore dollars! Even in NZ caps their rate at 39c and while it commences in at NZ$180,000 that’s still 2.6-times the average salary.

So, Australia has a higher top income tax rate that starts at a lower relative salary. As a result, Australia is much more reliant on income taxes than the average across the Organisation for Economic Cooperation and Development (OECD). In fact, Australia is close to twice as reliant! It feels confiscatory to work so hard and keep so little.

Consider that around ten percent of all workers are sitting at the 39c or more bracket, which is about 1.5 million Australians. That is far too many and most are certainly not wealthy.

Even worse, a person earning $60,000 is deep into a tax bracket taking 32 percent of every dollar they earn. This wage is significantly below the average, and in other countries people earning this relative equivalent would be in much lower brackets: UK at 20%, NZ at 17.5%, US at 12% (federal taxes), and Singapore at 7%.

The CGT debate is a huge straw man because the fundamental problem crushing young and middle class wage earners in Australia today is not the capital gains benefits. It is not even the negative gearing benefits that are distorting and elevating Australian house prices.

It is the inordinately high income tax rates that have been exacerbated by a lack of inflation indexing. And this in turn is further worsened by the increasing government spending that drives inflation even higher.

Inflation is a global problem, but the combo of excessive government spending and high income tax is a major cause of the current cost-of-living crisis amongst wage earners right now.

Increasing the quality of life of young Australians whilst also increasing productivity can both be simultaneously achieved via a significant reduction in income tax. Leave more money in the average wage earner’s pocket.

Of course, there will also need to be spending cuts to facilitate an income tax reduction. Other parts of the tax system will also need to be modified. Our GST is about half the average of the OECD, which is also why state-based payroll taxes still exist. But that is a discussion for another time.

Reducing income tax rates will leave young Australians with enough money to buy capital assets, hopefully including a primary residence as well as shares and other investments.

We should not be debating capital gains tax by arguing about whether 10% or 20% of young Australians will be impacted by it.

Rather, we want that debate to include the vast majority of young people, who will have the funds available to invest more purposefully for their own financial future. That requires income tax reform.

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The Contrarians catchup

• Big news: Will Hayward has come on board as co-founder and CEO of The Contrarians Co. Will brings a career spanning The Wall Street Journal, The Economist, and BuzzFeed UK, and most recently helped save Private Media from near-collapse.

  • Adir: “I said to you, it feels like this pod is reaching quite a large number of people, but I feel like it could be something much bigger. And we should get the best person in media to come in and build this out as a media business.”

  • Will: “I look at The Contrarians and I think, could I imagine this being a much bigger thing? Could I imagine this being something that’s got hundreds of thousands of listeners and we take it on the road and it’s got a great subscription product? Do I think that the way you two talk about business is something that a lot of people get value from? Like, absolutely.”

• Adir went to see physicist Brian Cox at the Melbourne Convention Centre. His take on the economics: “He’s got 500,000 people on this tour. Let’s just say $100 USD. He’s making 50 million. And he’s got to be keeping half. It turns out that’s how he makes like a hundred million dollars by being a physicist. It’s actually an incredible bit of physics.”

• Luxury Escapes held its first live event at the Melbourne Exhibition Building, attracting over 13,000 people against an aspirational target of 10,000. Adam: “I think we can do 20,000 next year.” The event was followed 24 hours later by Luxury Escapes’ first Maldives charter flight, which was essentially full.

• Australia Post has a billboard in Albert Park that just reads “Delivering for 3206.” Adir: “Basically the question is, what happened that they needed to implement this? Does the ambulance advertise saying when you have a heart attack, we’ll come and get you? No, because there’s not a lot of competition. This is how they’re spending their money when they’re cutting services.”

• Will’s take on the future of media: “The central unit would not be a website and a masthead. No one’s going out and setting up a thing and saying, look, this is the new version of The New York Times. The central unit would be a pod. What people want to hear is things that they wouldn’t be able to hear elsewhere. The hosts need to be opinionated, which obviously is pretty tough for Adam, but we’re doing our best to kind of encourage them.”

The budget: six days later, it’s still a disaster

A full debrief on the Albanese budget. Both Adam and Adir remained scathing, widening their analysis beyond founders to the full picture of intergenerational inequity embedded in the changes.

On who the real winners are:

Adam: “If you look at all these advantages, the primary residence exemption remains. The negative gearing remains if you own the assets, which of course you have to be old to own already. And people get their CGT value grandfathered. Every single thing has been tilted. We already had the most unfair tax system you could imagine for older people. And they just made it worse.”

Adir: “Retirees have long structured their financial affairs to qualify for an aged pension and get access to a lucrative pension concession card. This provides discounted doctor visits, medication, utility bills. Bear in mind, 63% of Australians over 67 get the pension. So it’s not like it’s a few people, it’s the majority of old people get it.”

On the super loophole:

Adir: “Super all of a sudden has a totally changed risk profile because of these tax changes. If you want to go and invest in riskier assets that are more likely to generate higher growth, but also might lose your money, the only logical place left to make that investment is inside super. Any asset that grows substantially over a period will be taxed at a higher rate of tax than a poorly performing asset. It’s pretty absurd really.”

On how much it will actually raise:

Adir: “Thirty-five percent of capital gains tax in Australia is paid by 1% of transactions. Whatever the government has forecast it is going to collect from these new taxes, it will be collecting much less than that. Because people will rearrange their tax affairs and not pay. People just won’t sell. They’ll just borrow off their holdings.”

On the path to recession:

Adir: “Australia has 1.1% GDP growth at the moment. It’s going backwards in real terms. Inflation is 5%. There’s increased spending. Unemployment’s just gone up. Property prices are going to go down. Rent is going to go up. What I suspect is going to happen in two years’ time at election time is there’ll be a massive cost of living crisis with people not finding places to rent and possibly a recession.”

On what they should have done instead:

Adam: “If you’re gonna tackle intergenerational inequality, do it properly. Put some tax on the primary residence, not 50%. Get rid of negative gearing completely, not the grandfather garbage they’re doing. Actually make it fair so older people don’t have these benefits. There’s so many things they could have done that actually would have been brave, harsh moves that may you or I may not have liked, in terms of personally, but were the right thing to do. This is the wrong thing to do and it targets the wrong people. Targets the young, not the old.”

GYG is a masterclass in knowing when to quit

Guzman Y Gomez co-founder Stephen Marks announced the closure of its US operation, just months after claiming it was on the verge of a breakthrough. Investors sent shares up 26% in days, with the market cap back above $2B. RBC analyst Michael Toner had noted the US business was not expected to break even until 2037.

Adir: “I will say something very positive about Stephen Marks. CEOs often fall in love with their own ideas, and the more that people disagree with them, the more enamoured they become. He accepted the reality. That’s very hard to do. He’s been very honest about it. He’s done this mea culpa that said we’ve made lots of mistakes, this is one of the mistakes, I’m shutting it down. Founders can look at the way he’s handled this for some lessons.”

Adam: “He gave it a real shot, which is great. He copped the personal fallout, and then eventually it became so obvious he had to pull out. The short-term vicissitudes of the market shouldn’t be determining your business strategy. I think he gave it a real shot.”

Adir: “GYG is more profitable for franchisees than McDonald’s in many cases. As long as your franchisees are making money, you’ve got plenty of TAM because you just pop up new stores. If your franchisees are making two and a half, three million bucks at a GYG store, that’s unbelievable.”

Adir: “If you really believe in this business, you think it might 5x plus off the IPO price, maybe more. Form a view, have a thesis, invest in it. And unless something changes with the thesis, like the founders leave or they do something crazy, I think you should just form a thesis on the business and the founder.”

EY parental leave clawback: sensible policy, woke outrage

EY announced it would require employees to repay two months of their six-month parental leave if they resign within a year of returning. The move was immediately condemned by commentators including Carol Schwartz, who called it “a conditional loan.” Adam and Adir had a different read.

Adir: “I play this game with my kids, we find funny signs and we have to say, what happened for them to need this sign? There’s no sign without some disaster that preceded it. Basically the question is, what happened that they needed to implement this policy? Like it didn’t come out of nowhere. Obviously this was some kind of problem.”

Adam: “Carol Schwartz claimed that if people are walking out within a year of returning from parental leave, something’s broken. That may be the case, but much more likely is someone’s gone, show me the incentive. I can get my six months pay. I can get a bigger pay rise at PWC across the road. I’m just going to get paid double. That’s what that does.”

Adam: “We have a clawback by the way, hundred percent. I’ve only used it once. But do you have a return-to-work bonus? Because I actually like supporting working women. I don’t give people a payment not to work, a payment to work. So you come back to work, we’ll give you a bonus.”

Five other stories worth following:

1. Oil slid and global stocks rose as investors bet the US and Iran are edging toward a deal to end the war, reopen Hormuz, and ease energy-driven inflation pressure across markets in recent days.

2. The UN cut its 2026 global growth forecast as the Middle East energy shock drives oil, gas and inflation higher, with developing economies most exposed and Europe facing especially weak growth through 2026 overall.

3. Kevin Warsh has taken over the US Federal Reserve as inflation, gasoline prices and Treasury yields climb, tying Trump’s economic credibility to a divided central bank with limited room to cut rates decisively anytime soon.

4. Pope Leo XIV used his first encyclical to demand tougher AI regulation, warning autonomous weapons and corporate concentration could destabilise society, while Anthropic’s Chris Olah said oversight must extend well beyond Big Tech itself.

5. Russia and Ukraine traded fresh missile and drone strikes after one of Moscow’s heaviest attacks on Kyiv, killing civilians, damaging infrastructure and showing US mediation has failed to meaningfully reduce battlefield escalation this week.

Today I am joining Adam Schwab and Adir Shiffman as cofounders of The Contrarians, launching the pod as a standalone media business. We’re going to expand the show, investing more in new features and formats, with the ambition to take our already significant reach and become the biggest audio/visual business media brand in Australia.

What a terrible, terrible idea.

Who would want to launch a media company in 2026?

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Trust in the media is extraordinarily low. In Edelman’s 2026 Australian Trust Barometer, media remained the least trusted of the four major institutions surveyed, behind business, government and NGOs.

Perhaps as a result, traffic is also at record lows. Half of the top 50 news websites in the US have seen their traffic fall by 20% or more year on year, according to Similarweb. News and information was the worst-performing of any category in April 2026, down 6.2% in a single month. In Australia, almost every major news site is now smaller than it was a year ago.

As a result of the loss of trust and traffic, the numbers look even worse. The Unmade Index, which tracks Australia’s only publicly listed media businesses, was launched four years ago on a nominal 1,000 points. The highest level it has ever reached was the day it launched. It has declined every year since, and in March 2026 it hit a new all-time low of 353.6 points — down 64.6% since day one.

Could there be a worse time to launch a new media company?

As Adir says — success comes from making a contrarian bet, going all in, and being right.

Here are the reasons why I think we are.

What is The Contrarians?

Launched three years ago, The Contrarians started as a reason for two friends to discuss the latest business news, and everything around business that might be impacting it. Fast forward to today, the pod did almost 60,000 downloads in April, with an audience measured in the hundreds of thousands across social.

There are a few different reasons the pod has attracted such a big audience without a single employee, and only a few hours invested in it each week.

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The Mega-Trend of Podcasting

It seems clear to me that the platform trend for the 2020s is podcasting plus clips.

Overall podcast consumption keeps surging. According to the most recent Infinite Dial Australia, 52% of Australians now consume audio or video podcasts every month — up from 40% three years earlier. Listenership has grown 16% in the past two years alone. Australia has the highest podcast awareness in the world (91% of the population). And Australians who do listen, listen a lot — an average of seven hours and seven episodes a week.

But this is more than just podcasting. What AirPods did for audio, YouTube, Instagram and TikTok did for short-form video. Measured in terms of total reach, most podcasts today are really just efficient recording sessions for short-form video. The potential reach of those clips can be measured in the millions.

It’s also one of the few formats that is genuinely defensible against AI. The thing eating news traffic — generative search — has no real answer for two hours of conversation between two people that audiences actually want to hear from.

Decline of the Institution

I have written about this before, and I think there is a great deal more to say about it. But the defining trend across all categories over the last decade — sport, politics, and most certainly media — has been the decline of the institution and the rise of the individual.

Many initially thought that the rise of influencers was a lightweight trend confined to a couple of platforms and low attention span teenage brains. But we now have billion-dollar brands shifting real products, launched off the back of one person’s social reach.

And in media, I’d argue almost every interesting “new” media brand over the last few years has been based on well known insider personalities. The Rest is Politics, hosted by a former politician and a former politicians adviser. New Heights, a sports pod hosted by former professional sports players. All-In, hosted by a selection of professional tech investors.

I think this is connected to the overall loss of trust in institutions and the fragmentation of media.

Where mastheads had to win the trust of everyone, or at least one side of the political aisle, media brands built around individuals can reach smaller but deeply loyal audiences. The old rule — leave your personal perspective at the door — is reversed in the podcast/clip/personality media sphere, where audiences want to know exactly what the hosts think. Declaring bias, whether that be to a political party, sports team or the businesses you’re invested in, is better than pretending it doesn’t exist at all.

A Unique Pair

Which brings us to the specifics of The Contrarians. If you agree with me on the above, what is needed to build a successful media company in 2026 is a podcast-driven multimedia brand, hosted by well-known category experts who have strong, informed opinions.

Adam and Adir’s successes speak for themselves. I don’t think anyone who’s listened to the show would question how prepared they are to share their views. And certainly one of the most common bits of feedback I’ve seen is how much the listeners enjoy their rapport and humour.

I would add another point on this, though I’m not sure it’s strictly necessary to reach big audiences. Whether it was their position on Cettire, Atlassian, or WiseTech — or the extraordinarily ill-conceived federal budget — Adam and Adir have (largely) got it right every time. That explains the 60,000. And, for me, it explains why I’ve been so keen to join.

So I don’t think there are many in Australia who fulfil this criteria. In fact, I think Adam and Adir might be the only two.

One more thing

And one final point that it feels disingenuous not to make. Many of the brands in Australia that we’ve seen follow the above trends have been on the progressive side of politics. Lamestream Media. Cheek Media. Ette Media. None of these would claim to be conservative. All would comfortably identify as left of centre.

What we have not had is a more centrist, and certainly fiscally conservative, voice in this format. Whilst I don’t agree with them on everything, like many, I agree with them on many things. I think this is a big part of the success so far, and a big part of the potential.

What next?

First — nothing fundamental will change about the direction of The Contrarians. Adam and Adir are the show, and the show stays the same, though we will be investing more in it. We want to bring more of Australia’s most interesting and informed voices, particularly on business, onto the show.

We will also invest more time in everything around the show.

We will invest more in multimedia. Audio remains the spine, but the growth is in clips. We are putting real production resource into our two key social channels - LinkedIn and YouTube - and particularly into shorter formats that let new audiences find us. The 90 mins episode and the 60-second clip aren’t competitors — they are the same content, distributed sensibly.

We will use Substack as our primary platform. After podcasting, email is the most defensible distribution channel left in media. Owned audience, no algorithmic intermediation, no AI Overview eating your traffic. Substack is where we will build the deeper relationship: a weekly newsletter with our take on the business stories that matter, full show notes, and direct access to the community of listeners the show has already attracted. If you have not already, subscribe below!

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We will take the show on the road. Live podcasting is one of the most underpriced parts of the modern media business. The audience is hungry for it, the production cost is comparatively low, and the revenue per attendee is multiples of any digital format. Expect Contrarians live shows in Melbourne, Sydney and beyond in the second half of 2026.

Longer term, there are plenty of options. A broader podcast network. A sponsorship and partnership business that can scale beyond a single show. Original video formats. Conferences. There is no shortage of places we can go. But the focus is on the three above first.

A terrible, terrible idea?

Let’s see how it goes.

With the Federal Government’s blazing budget dumpster fire showing no signs of flaming out soon, perhaps the saddest scene to witness has been the downfall of two well-known figures, one from politics and the other from big business.

Paul Keating and Daniel Petre both staked their reputations on defending Albanese and Chalmers inequitable budget mess. Neither have come out well.

Let’s start with Keating, once a deeply loathed Treasurer and even less popular PM, whose legacy was justifiably burnished in the fullness of time. Keating’s accomplishments were extensive – from floating the dollar, to deregulating the lazy banking and aviation sectors, to removing tariffs, the ACTU Wages Accords and the Disability Discrimination Act.

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Alas, Keating is now more like a 20 year-old former champion racehorse en route to the knackery than a respected elder statesman. His intervention in the CGT debate (and his suspected role in the maligned policy settings) has capped off the downfall of his once great, legacy.

PJK rambled:

“The simple fact is that income is taxed too heavily while capital is taxed too lightly…John Howard and Peter Costello thought they could do their used car selling and dodgy accounting mates a favour by jacking a 50 per cent discount on to the taxation of capital profits – destroying the inflation discounting system I had set up to tax the ‘real’ gain only.

And that distortion has made housing unaffordable for a whole generation. The point is, a society that fails to house its children is a society in decline – this is what Jim Chalmers and his prime minister are seeking to arrest.”

Keating seems to have forgotten his own CGT policy was very different from Jim Chalmers’ Frankenstein legislation. Chalmers’ CGT has a 30% minimum, regardless of what tax bracket you’re in – Keating’s did not. Also, Chalmers neglected to recognise that CGT event will force multiple years of income into one year - the erudite Keating shrewdly adjusted for this with a five-year averaging mechanism.

Chalmers’ policy is so bad it’s even managed to be misogynist as well.

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As Mint Partners founder Genevieve Taubman noted: “it is already harder for women to access capital, secure loans, raise investment, and attract senior talent…many female founders begin with fewer resources, smaller networks, and more family responsibilities than their male counterparts. The proposed CGT changes would make an already difficult path even harder.”

Keating would effectively compare these brilliant, risk-taking female founders to “used car selling and dodgy accounting mates” - as if that’s literally the only type of entrepreneur the old man thinks exists.

But leaving aside the sexism, we also have the hypocrisy.

Keating neglected to mention he collected $40m in 2024 year from the sale of Boost Telecom to Telstra. He paid a maximum 23% of CGT on that windfall – if the shares were in his superannuation, given his age, it’s likely Keating paid far less tax on the $40m. (If that were a young person in five years, they’d pay almost $20m in tax).

Aside from the tax breaks, the former PM also collects a massive taxpayer funded pension of $350,000 annually, has taxpayer funded private staff, a taxpayer funded luxury office in a lavish Sydney CBD tower, a chauffeur driven COMCAR and free business class flights. That’s upwards of $1m a year of taxpayer largesse being hoovered up by this great charlatan who has the audacity to compare young founders dining on ramen noodles to used cars salesmen.

And now we’re at superannuation – alongside sycophantism about China, Keating’s great legacy. Or is it?

A month ago, superannuation was a largely ignored tax rort which served to quietly enrich Boomers at the expense of young people (while having the secondary purpose of making every other Joey-bag-of-donuts index hugging fund manager a billionaire).

Super enriches old people in many ways - when you put money into super you pay only 15% tax (essentially a salary sacrifice) – that massively reduces your income tax level – it has a similar effect to negative gearing.

Then (up to millions of dollars in assets), all your dividends, interest and rental income are taxed at a maximum flat rate of 15% - versus as high as 47% for young people. Even better for Keating’s boomers, they also only pay 10% CGT (versus 30-47% for everyone else). This is for up to $3m in super (which doesn’t include the family home of course which always remains tax free).

The rort doesn’t end there – when you move into the retirement phase, up to $2.1m, you pay absolutely zero tax on earnings. The entire superannuation scheme was already a farce, with younger people being smashed – now with Jim’s great big tax on everything it’s basically legalised theft.

It’s no wonder Keating supports the changes – he amassed upwards of $100 million in barely taxed wealth and will likely pay little tax for the rest of his life - the 30 year old struggling founder, they can pay for PJK’s business class flights.

Now for Daniel Petre, who attacked anyone who dared criticise the plan to make turn Australia into the highest taxing country on earth, claiming:

“I call complete bullshit that founders or employees are saying they are going to move overseas because of tax.

You’ve got your kids in school, you’ve got the benefit of Medicare, you’ve got your degrees in Australia, you’ve got your family and friends, and you are leaving for a seedy tax haven because of about 10 to 15 per cent more tax on your shares? Cool the f--- down and take a Valium.”

Petre seemed to forget he literally left the country to work for the maligned Bill Gates at Microsoft, collecting tens of millions of dollars in the process. Apparently moving overseas was fine for him, but for anyone else, they’re going to a seedy tax haven.

Petre continues to idolise Gates, notwithstanding the Jeffrey Epstein revelations, which is of course his right.

But what isn’t his right is to deny younger founders the massive tax benefits he happily received.

Petre is a co-founder of Airtree, alongside the popular Craig Blair (although Petre appears to have left the business in recent years, taking the unusual title of Partner Emeritus). Airtree has been one of Australia’s more successful VC firms, mainly through its Canva investment, alongside bets on Linktree and Employment Hero. The Canva investment alone will reap Petre personally, potentially, hundreds of millions of dollars (depending on Airtree’s entry price).

The kicker? Petre’s Canva’s investment (and his Linktree and Employment Hero carry) are on his capital account and will be valued as at 30 June 2027 - any gains to that point will receive a 50% discount – that means virtually all of Petre’s upside will be under the lower tax rate.

Petre claimed it was “tone deaf for already wealthy technology investors and entrepreneurs to be so vocally calling for special treatment in a policy designed to make the taxation system fairer for those who had less opportunity to accumulate wealth…I’m just so over rich people who’ve made money complaining about tax rates.”

It’s not just me who noted that a boomer who made literally hundreds of millions of discounted capital gains is so keen to deny the same opportunity to others.

Petre defends these double standards by (often) pointing to his charitable giving. That giving is laudable and more wealthy people should do it - but if I steal $100 from you and then give you $20 the next day when you’re begging on the street for food, that doesn’t make me a good guy.

Aside from the hypocrisy, Keating and Petre appear to have little understanding of the commercial realities facing young founders. The notion of taxing income and capital at the same rate is bizarre. There are many well-known reasons that every country on earth taxes capital at a lower rate of income.

Capital is laden with risk (often going to zero) so requires a higher after-tax return to justify the investment, income is steady and mostly risk free.

Plus capital mostly comes from income that has already been taxed, so there’s the dreaded double taxation effect. Then there’s the disincentive to sell if you’re taxed at too high a rate (which acts a handbrake to new investment and job creation). Finally, capital is highly mobile – if you tax capital too highly, it will simply move to a different jurisdiction.

Keating and Petre represent a thankfully bygone area – where old white men could put young female founders in their place for daring to question their wisdom. It’s time to stop listening to these hypocritical millionaires.

The capital gains tax mess (perhaps better referred to as an Aspiration Tax) created by the Federal Government is largely a diversion. A moronic diversion to be sure, but a diversion nonetheless. Tax policy melded with culture wars aimed at penalising ambitious Gen Zers in the name of intergenerational equity. The real issue has been ignored by everyone – who should pay for the rapidly increasing costs of Australia’s aging population?

Let’s start breaking this down into real numbers.

The Government has total expenditure of $833b – of this around $25,000 is paid via income tax for every taxpaying household (albeit a lot of revenue also comes from GST, company tax and excises).

Now let’s get more specific – around 7% of Australia’s population is older than 75 (this number is also increasing so the problem is worsening). As people get older they understandably become more costly to the economy – roughly $115b is spent annually on people aged over 75. This is just for the aged pension, aged care services and a proportion of indirect health costs for hospitals, the pharmaceutical benefits scheme and Medicare. In short, the cost for the 75+ cohort is 15% of total government expenditure spent for around 7% of the population (and this doesn’t include infrastructure everyone uses).

This article doesn’t seek to blame older people for these costs but simply to state facts. We live a lot longer than we used to. The 75+ cohort costs an extra $50b a year relative to younger people.

Now, this is where it gets tricky. Instead of raising more revenue from this costly segment of the community, the Government is doing the exact opposite. It’s choosing to tax younger people more.

Consider the recent controversial budget:

Capital Gains Tax – If you already own an asset, any capital gain up to 30 June 2027 is grandfathered, that is, you will only pay 23% tax on the gain up to that time. If you’re too young to have accumulated assets, you will be charged between 30-47% of your gain in tax. To be sure, this is a monstrously bad policy and means Australian innovators and job creators are paying the highest tax rates anywhere in the world, but it’s even more bizarre that the old and rich get such a benefit.

Primary Residence – If you own a primary residence you never pay any capital gains tax on that property. You could make a $50m profit on the house sale and still, zero tax. Only 20% of Australians under 30 own a house, they don’t benefit from this almighty tax holiday. 83% of people aged 75 own a house. Even worse, the Government completely ignores the value of a primary residence when determining eligibility for the aged pension. So you could live in a $3m house and receive a weekly pension partially paid for by a 25 year old renter on minimum wage.

Negative Gearing – Allows a taxpayer to reduce their taxable income by any losses made on assets (usually investment property). The Labor Government is removing this unusual benefit (which is almost unique to Australia) – with a catch. If you already own a negatively geared property you can continue to claim the tax deduction indefinitely. But if you’re a young aspirational investment property buyer, you can’t access the benefit.

Superannuation – Arguably the greatest rort of them all. Superannuation allows you to pay only 15% tax on earnings (versus 47% for anyone earning $190,000 or more) and only 10% on capital gains. Incredibly, the tax rate drops to 0% (up to $2.1m) in the retirement phase (around the time people start getting really expensive). Perversely, the Government makes you pay less tax as you become a larger cost to the Government.

Medicare – Senior couples pay a $0 Medicare levy below $60,000 in income – young people pay 2% of their income to Medicare. This is as close as you get to theft from the young towards the old.

The Labor Government correctly diagnosed intergenerational inequity – but instead of fixing it, they made it worse.

There are a swathe of obvious changes that would be largely uncontroversial which would rapidly fix the inequity. Most older Australians are happy to pay their fair share and aren’t to blame for the grotesque policy settings. For example:

• Increase tax on superannuation earnings to 25% (still below non superannuation levels) – this would raise $12 billion, more than double the revenue being raised by the CGT changes

• Remove the Medicare concessions for older Australians – this would raise another $2 billion

• Impose a 10% tax on gains on primary residence sales – this would raise around $10b annually

• Remove Grandfathering of Negative Gearing on Existing Properties – This would raise another $5b annually

Without removing the incredible waste and fraud in the NDIS and public service (that’s another talk show) those really easy and controversial changes would raise $29b annually.

With that money you could drop CGT to 15% (making Australia broadly globally competitive with most countries, albeit still higher than New Zealand, Singapore and Dubai at 0%) which would cost only around $12b a year and index personal income tax brackets which would cost around $3b in year one and reduce the deficit by $14b annually so we don’t leave younger people with a mountain of annual interest to repay.

The Government is gaslighting younger Australians into thinking this is a budget which fixes intergenerational theft. In reality, Jim Chalmers is a reverse Robin Hood – stealing from the poor and giving to the rich.

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The Contrarians catchup

• The budget fallout dominated the week. Adir’s read on the mix: “10% good intentions, 50% incompetence, and 40% malice.”

• Xero suffered five straight days of outages, with CEO Sukhinder Singh Cassidy forced to issue a personal apology. Adir: “It’s still an incredible business. I’m going to say we have to have a category of business, Atlassian is very much inside it, which is: you’re a really good business making lots of revenue. Stop spending it, generate profits and give it to your shareholders.”

• Speaking of which, Atlassian announced it will make a profit next year, ending a run of losses dating back to 2016. Revenue grew 32%, margins expanded. But the number of customers paying $10,000+ per year went effectively flat for the first time in the company’s history. Adam: “All that revenue uptick was expansion revenue. There’s only so long these guys can keep pushing customers to pay more.”

• Alphabet’s search business is up 9% year on year despite years of predictions it would collapse. Adir: “Two years ago I’m like, well, search is over. Everyone’s just gonna AI the answers to everything. And like their search business is growing at 20%.”

The budget

Six days on from Jim Chalmers’ budget, Adam and Adir delivered a full post-mortem. The headline changes: removal of the 50% CGT discount on all assets, replacement with an inflation-indexing scheme, and negative gearing restricted to new-build properties only. The verdict was damning on almost every front.

On who this actually hurts:

Adam: “This is a budget that is absolutely smashing anybody under the age of 50. It is taking a knife to their throat. You could not have had a bigger suite of policies that is making rich people richer and poor people poorer. And you can literally go through them.”

Adir: “They walk up to you and they say, are you wealthy enough, or probably old enough, to already own property? Yes. Did you benefit from a special tax concession to build your wealth with property? Yes. Okay, we’ll let you keep that forever. Are you aspirational to buy property? Are you too young to have already owned a property? Well, when you own a property, we’re not going to let you have that benefit. Why not? Because you were kind of born 20 to 40 years too late. I mean, that is ultimately the pitch that they’re giving to the electorate.”

On founders:

Adir: “There’s a 28-year-old and they’re working in a cafe as a barista. They go and do that and over the course of five years build up three cafes. They sell that business for a million dollars. Under the old system, they would have paid $250,000 tax and kept $750,000. Under the new system, instead of getting paying 25% tax, they now pay 50% tax. Instead of having $750,000, they have $500,000. That is an enormous difference. That is not a rich person.”

Adam: “If you’re a founder, at least with product market fit, and you don’t need to be in Australia for running this business, you absolutely should not be a tax resident in Australia. As soon as you realise you’ve got product market fit, you flee. And Australia will just lose all that upside. Everybody’s gonna do that. People aren’t stupid.”

On the lying:

Adir: “Whatever you think of the Labor Party, if you vote to re-elect them, what you’re effectively saying is: we are going to reward you for directly lying. This was a straight repeated lie under direct questioning. And what that means is, the crime pays message, there is no point having integrity in politics, because we will only punish you for it.”

Adam: “They broke, as you say, incredible election promises by removing negative gearing on established homes and creating what is literally the world’s highest capital gains tax regime. We now have basically the highest capital gains tax, the highest individual tax, or very close to the highest individual tax, and one of the higher company tax rates, unless of course you’re a foreign-owned company which you pay virtually no tax.”

On the revenue it actually raises:

Adam: “After all this destruction that’s going to cause, it barely raises any money. The amount they’re going to raise in this tax is about half as much as they spend on autistic kids through the NDIS. And you know what? We’re gonna destroy startups.”

On the rental market:

Adir: “I went and spoke to some real estate agents today. The rental stock in Melbourne apparently has already fallen through the floor because of the land tax changes. There’s a whole lot of people that have put their properties on the market and are selling them. Because after you pay for the land tax increase, the rent is not worth collecting. And now, a whole lot of these people that were about to sell have now put them back on the rental market. Because they can still keep the negative gearing if they rent them out. My point is not that it’s good or bad. My point is the law of unintended consequences runs deep. This government has come along and said ‘let’s just go and break everything and see what happens’.”

Temple & Webster played out exactly as predicted

Temple & Webster revealed underlying EBITDA for FY26 of $20-22M, well below analyst consensus of $30.2M. Revenue guidance came in 6% below forecasts. The company pointed to its most profitable April ever and guided to $40M EBITDA in FY27, 13% above consensus.

Adir: “Four weeks ago, like I was ultra explicit on what I thought was gonna happen to Temple and Webster. It’s played out exactly as expected. A new CEO was gonna change the narrative away from growth at all costs. That’s what’s happened. But the lack of revenue is not going to make up the profitability hole that they’re going to have.”

Adam: “The Contrarians were a couple of years ahead of what pretty much the entire market thought. We both said this at least two or three years ago. We said it was a brilliantly run $300M business, and this was when the business was worth three billion. Since then the share price has slumped by 80% and it’s now worth just under $600M.”

Adir: “Well, I think they can grow. I think this business should happily grow fifteen plus percent. This revenue miss is the market’s fault. They’re still growing. I just think this is what we thought it was. Just took a while to get there. God, I wish I would have shorted this in actuality all the way down.”

Deep dive: Lime

Lime, the global e-bike and scooter rental business, filed its S1 last week ahead of an IPO targeting a $2B valuation. Revenue has grown from $521M to $887M over three years. The company has a debt bomb: $846M in convertible notes with $700M due by end of 2026 and only $260M in cash. The IPO is essentially a necessity.

Adir: “They say we are the largest global shared micromobility business. Their footnote is: we define global operators as businesses with micro mobility solutions available in cities on at least three continents. Well that doesn’t sound arbitrary at all.”

Adir: “They report adjusted gross profit margin, which means, imagine if we got to make a gross profit, but imagine we didn’t have to buy the actual bikes. And the problem is if you’re a scooter and bike business and you decided not to have scooters and bikes, it would be probably difficult to earn the rest of the gross profit. You have just undermined your credibility with me completely with that single action.”

Adam: “If you believe in powers, they’ve got scale, they’ve got brand, they’ve got a bit of counterpositioning, if you’ve got three and a half powers, it’s pretty rare when a business doesn’t do well.”

Adir: “Do you think this business can 11x in size from what it did in 2025? That’s $10B in revenue. And do you think they could make a 20% margin? Probably. And so that’s two billion dollars in NPAT they could achieve in the future. This could be a $50B business.”

Adam: “If I was Uber, I’d buy this tomorrow and pay three or four billion. There is no more logical fitting business for Uber than this.”

Five other stories worth following:

1. Claude is reportedly nudging some users to sleep or rest, prompting mixed reactions. Fans call it charming self-care; critics find it intrusive, especially since Claude can misread time. Anthropic is investigating the quirk now.

2. An advisory jury in Oakland begins deliberating Musk v. Altman, though Judge Yvonne Gonzalez Rogers decides liability. A remedies phase also starts, weighing consequences if Musk prevails over OpenAI’s shift from nonprofit to for-profit.

3. Berkshire Hathaway’s new CEO Greg Abel is already reshaping the portfolio, pausing Buffett’s Apple sell-off, boosting Alphabet, and cutting Amazon, Visa, Mastercard, Domino’s, UnitedHealth, and nearly all of Constellation Brands.

4. A federal judge has paused Anthropic’s $1.5B copyright settlement with authors, seeking more clarity on why some class members objected to the deal and chose to opt out before approval proceeds.

5. Drake surprised fans by releasing three albums and 43 songs, boosting his odds of overtaking Justin Bieber for May 2026 Spotify listeners, though both artists still trail Bruno Mars in prediction markets.

It’s not overstating things to describe Jim Chalmers as the most rotten Treasurer of our lifetimes. And this Government as the most duplicitous and inept.

But while many commentators have pointed out that the Prime Minister repeatedly promised that the Government wouldn’t change the tax rates on capital gains or remove negative gearing, that lie was a sideshow. Election fraud would be tolerable if the result was positive for society.

Alas.

The great disaster of Albo’s great big lie is that a budget ostensibly pitched at helping young people is instead placing a dagger through their financial hearts.

Dagger #1 – the debt time bomb

If the Federal Government was genuinely interested in fixing intergenerational equity, the first thing they’d be doing is running genuine budget surpluses (Javier Milei in Argentina proved it was not a difficult task). A deficit is paid three ways – through inflation, higher future taxes or default. In all cases, that cost is being borne by people aged under forty. The Federal Government already owes a trillion dollars – while this is relatively low compared to Japan or the US, it is historically high for Australia, which has benefited from a generational resources boom. Chalmers is increasing this debt by 25% in the four years alone.

A better way to explain this debt is the one trillion current amount is equal to $66,000 for every taxpayer (there are around 15 million). The Government is adding another $20,000 or so per taxpayer. This money won’t be repaid by Boomers (who will be dead when the interest bill becomes really meaningful), but by young people through higher taxes or higher prices on everything.

Dagger #2 – negative gearing

I’ve always hated negative gearing – while it is available for all asset classes, since the GFC and spate of margin calls, it has largely been confined to residential property. This has led to Australia having among the highest property costs in the world (relative to income). The only more expensive countries are tax havens like Monaco or Hong Kong (where lower tax rates are capitalised in housing costs). We have the bizarre combination of the world’s highest taxes and the world’s most expensive property.

So removing negative gearing is on the face of it, a decent idea.

But the Government isn’t doing this at all.

It’s only removing negative gearing for young people. If you’re already negatively gearing a property you can continue to minimise your tax, no problem. Who will benefit? Yep, older and richer people who already own investment property. Chalmers talks a big game but in reality, he was too gutless to really remove negative gearing and has left a reverse Robin Hood monstrosity.

Dagger #3 – the death of new business

In February, the Prime Minister floated what appeared to be a controversial idea – removing the 50% capital gains tax discount for residential property. Perhaps surprisingly, the idea received a very positive reaction from all sides of politics. Even the Financial Review supported the move. Boomers who have gotten rich off residential property since 1997 understand the need for generational fairness and paying their fair share.

The response led to some sort of political Dutch courage. Albo and Jim Chalmers, the arts graduate, dusted off Bill Shorten’s failed 2019 CGT policy and announced, days before the budget, that the CGT cut will apply not only to residential property, but also to other asset classes like shares and small business. It appears this policy went from concept to announcement in three weeks.

It quickly became clear that the economically illiterate Chalmers had no idea of the implications of this rushed policy.

Australian governments have a terrible history of policy made on the run – the $60b NBN fiasco was written on a napkin by the widely loathed Kevin Rudd. The $100 billion SRL was concocted by Luke “Dick Pic” Sayers and Dan Andrews for the dual purpose of increasing the wealth of CFMEU officials who bankroll Victoria’s corrupt Government and fees for Luke’s dud consultancy business. The Coalition’s rushed Job Keeper program cost $70b and gave millions of dollars to profitable firms because Josh and Scott forgot to add a clawback.

It appears lessons haven’t been learned.

The CGT removal means Australia will become the highest taxing region for capital in the world. Higher than the practically socialist Scandinavian petro states and higher than bougie France.

Every founder, large and small, will reconsider starting their business. When a startup hits product market fit, they will get a low valuation and quickly redomicile in New Zealand or Singapore (with their zero tax rates).

And of course, this will only impact younger founders. If you’ve already got a business, you get to keep the discount on your capital as at 30 June 2027. If you’re a boomer with millions in super, you will continue to pay a meagre 10% or 15% tax rate. If you’re a 21 year old barista starting your own café – that will be 47% you’ll be paying to the rapacious Federal Government so it can pay for Annika Wells’ $70,000 first class fare to New York or Victoria’s hated Suburban Rail Loop.

And for all this destruction what do we get? A lousy few billion in annual revenue – less than half the amount we’re spending on mildly autistic kids’ $36,000 annual payment.

We rarely get good governments in Australia. There haven’t been many Bob Hawkes and Paul Keatings (or early years John Howards). But we’ve largely been lucky enough to avoid total disasters like Jim and Albo.

Alas, we’ve reached our Eva Perone moment.

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The Contrarians catchup

• Adir’s 16-year-old daughter auditioned for the school talent show with a bit where she responds to Adele’s “Hello” as if she’s the other half of the conversation, having been wronged by Adele in a falling out. “It was actually very funny. I’m in a very good mood.”

• Adam ran the Mother’s Day run on the Tan, barefoot. His best lap: “About 4:50/km. So it wasn’t my best time, but it was a better time than probably expected.” Adir: “I wouldn’t want to run 3km. If someone said that’s 3km away, my first thought would not be, I’ll just jog it out.”

• Adam was in Adelaide for a travel conference and can’t speak highly enough of Peter Malinauskas. “Watching him speak, he came and did it live, no notes, just bang. Imagine if he was prime minister, how good it would be. And we’ve got Albo, that bumbling fool, as Prime Minister. And we got Jacinta Allen running Victoria. Like, could you get a worse situation?”

• Adam: “We are literally a socialist communist state in this piece of shit state that Dan Andrews has taken over. And Jacinta Allan has ruined. They should be hanged. Literally, these people are an absolute disgrace.”

• Sebastian Sawe ran a 1:59:30 marathon at London, breaking two hours without pace runners or special course conditions. A first-time marathon competitor from Ethiopia also broke two hours and still didn’t win the race. Both were wearing Adidas’s $700 ultralight shoes. Adam: “Adidas share price went up 10% after the marathon.”

• Adam’s verdict on the Sam Bankman-Fried investment portfolio: “Sam should have made a VC fund. He shouldn’t have done this crypto thing. Had he done it in a genuine VC fund, he would have been one of the richest men in the world. His problem was his structure. He shouldn’t have stolen the money. He should have legitimately got the money like VCs do.”

SBF’s portfolio is the greatest VC fund that never was

FTX’s liquidated investment portfolio, sold off to repay the ~$10B owed to investors, turns out to have been the most successful investment fund in history, had it been held. The $4.7B invested across six companies would be worth $114B today. The investments: Genesis Digital (3.5X), Robinhood (7.5X), Solana (26X), SpaceX (75X), Anthropic ($500M invested, now worth $82B), and Cursor (seeded at “minimal” cost, now worth $3B, or 15,000X).

Adir: “If we just say out of 10, what’s the hotness factor of these investments? Anthropic, 10/10. Cursor, 10/10. SpaceX, 10/10. Robinhood was super hot and everyone thought it died, but it didn’t. Solana; yeah. Genesis Digital? Well, you thought that was dead. It’s still worth three and a half billion dollars. The guys basically three years ago picked pretty much the hottest stocks in the hottest sector that you possibly could. It is crazy.”

Adam: “I didn’t realise he had Cursor as well. That’s phenomenal. This is like the best Sequoia fund ever. None of them come close to this. Even that great Sequoia fund, it took them 10 years to get there. And they still didn’t get this.”

Adir: “I don’t know what this guy did in a previous life, but he must have done something terrible. Because not only has he gone to prison, but he has to watch this immense fall. This could be one of the richest people on planet Earth.”

Fibre optic drones are a problem

Fibre-optic-tethered first-person-view drones, pioneered by Ukraine, are becoming increasingly dominant on the battlefield. Because the signal travels down a physical cable rather than wirelessly, they cannot be jammed electronically. DroneShield’s entire business model is jamming drones electronically.

Adir: “The reason they use these fibre optic cables is because it means that you can’t jam them electronically because they’re getting the signal down a cable. DroneShield’s business is jamming drones electronically. The rise of this I think means that for the time being, increasingly what you’ll see is DroneShield’s type of technology ineffective against battlefield drones.”

Adam: “I don’t think DroneShield investors think about anything to be honest. I think it’s retail gamblers. It’s Robinhood-style investors.”

Adir: “I would be very interested to hear the new DroneShield CEO come out and explain, is the rise of this fibre-optic based-drone really the future? I’ll be shocked if the answer’s no. Israel is struggling to deal with these drones right now coming from Lebanon. So this is the country most adept at shooting stuff down that’s struggling to deal with it. And if this is the future, what are they gonna do to keep their products relevant?”

Is the federal budget the worst since Whitlam?

Recording the Monday before budget night, Adam and Adir dissected what was being backgrounded to journalists: the removal of the 50% capital gains tax discount on all assets, replaced with an inflation-indexing scheme, combined with restrictions on negative gearing for new investment properties. Both were scathing. Adam called it the worst budget since Whitlam.

On CGT and founders:

Adam: “We already have a very high CGT regime. We have one of the worst in the world already. And they’re gonna double it. The worst place for founders to start their business or to run their business is Australia. Thank you, Jim Chalmers. You’ve made Australia the hellhole of world startups.”

Adir: “If you’re a founder, at least with product market fit, if not starting a business, and you don’t need to be in Australia for running this business, you absolutely should not be a tax resident in Australia growing your business. Go to Singapore. And that has to happen. We have to have a flight of productive enterprise.”

Adir: “If this is what happens, I’m gonna do an Adam Schwab. This is without doubt the worst budget. And there have been some bad budgets. The worst budget of the 21st century.”

On what the tax system should actually do:

Adir: “What you’d want is a tax structure, if you were trying to align risk and return, where starting your own company gave you the most favourable tax treatment, all the way up to your own house. You don’t need great tax treatment for your own house because it’s a pretty low-risk asset. This country exactly flips the risk treatment of the taxation system, to make the most attractive asset your own house, the second most attractive asset an investment property, and the least attractive asset, starting your own business.”

On what happens to renters:

Adir: “There is such a thing in markets called the supply and demand curve. I know this government doesn’t like the idea of supply and demand curves, but if there’s less supply of rental properties, then the price of rentals will go up to the upper limit that people can stretch to pay. And so I think that this is going to be a disaster for renters.”

Adam: “So when I come to an auction, if you can’t afford a house, if you’re a renter who can’t afford a house, see you later mate, because you’re at an auction where there’s an investor and an owner-occupier. And now the investor’s price they can pay is much lower because no negative gearing.”

On who actually gets hurt:

Adam: “It’s like Jim Chalmers has tried to punch this rich guy. The rich guy’s ducked and has punched the poor 21-year-old behind him.”

Adir: “That is a perfect analogy. That is absolutely what’s happened. No young person should be voting for these changes because they are voting against their own self-interest. They will not have the opportunity to accumulate wealth over the next 30 years that previous generations did.”

Five other stories worth following:

1. Janitor AI, a sexy roleplay chatbot platform, now has 2.5M+ daily users and ranks tenth among consumer AI apps, with some users building wildly elaborate fantasy worlds through detailed prompts and characters.

2. Gen Z is embracing cyberdecks: custom portable computers built for specific uses, retro aesthetics, privacy and creative control. The trend blends Y2K nostalgia, DIY culture and resistance to Big Tech sameness.

3. AI chip fever is reshaping markets, with Intel, Sandisk, Samsung and South Korea’s Kospi soaring. Some warn of dot-com bubble echoes, though today’s chip giants have huge profits behind them.

4. More than 46 passengers left the M/V Hondius in Tenerife after a hantavirus outbreak. Seventeen Americans are headed to Nebraska for evaluation, including one mildly symptomatic passenger and one asymptomatic positive case.

5. India’s Diet Coke fans are facing a can shortage after Strait of Hormuz disruption hit aluminium supply. Entrepreneurs are capitalising with soda-themed parties, raffles and “Coke-tail” events for desperate drinkers.

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The Contrarians catchup

• Adir gatecrashed the sold-out Blackbird Sunrise side event in Sydney and when he arrived and gave his name at the door: “She just looks at me thinking like, what’s an Adir. So all of my self-confidence just dissipated instantly.” Gen Z at the free bar: “They don’t drink alcohol unless there’s a free bar tab, but they sucked down that bar tab in 10 seconds flat.”

• Adam reminisced about being a nightclub promoter at Redheads in the late ‘90s: “I could stand out the front of Redheads and there’d be a queue like a hundred people clamouring to get in. I’d stand next to Teddy who was the bouncer and point to like these three people and they’d wade through the crowd and get in. Like that was the best moment of my life.”

• Atlassian surprised the market by announcing it would finally be profitable. Adam: “The share price should be double what it is if it was run properly. So this is a start. It jumped 20% after dropping and it’s still 75% down in the last year.”

• The Victorian government is running buses through Fisherman’s Bend every 8-10 minutes - two routes, multiple buses, and nobody on them. Adam: “The effectively bankrupt Victorian government, that can’t afford to do anything, can’t afford to pay teachers, can’t afford to pay nurses, is running buses to this place where no one lives and no one works at nighttime, with no one on them, and spending millions of dollars. It’s just such a symbolism of the unbelievable waste and fraud that exists in this government.”

• Australia’s east coast electricity costs fell 12% in the first quarter as renewables hit 47% of generation. Adir: “The main problem I’ve always had in Australia and globally is that it moved from a science- and technology-based discussion to a religion. And like you had two opposed religions. And all of a sudden, once you have religion and you have the ultimate truth, and you know the truth, and there’s only one truth, the other side is all heresy.”

Firmus IPO: the bank robbers who stayed too long

The most hyped float of 2026 (Firmus, the AI data centre business backed by Oliver Curtis and Tim Rosenfield) has deferred its planned June/July listing to “later in the year.” The company last raised at a $6B AUD valuation and is seeking $8B at IPO. Nick Curtis, Oliver’s father, has already sold $100M of shares, to James Packer.

Adam: “It’s peak AI, peak bubble, peak everything - stock markets at record highs, AI bubble still fermenting, NVIDIA still flying. If it can’t get away now, I can’t see this ever getting away.”

Adir: “Does anyone look at this thing and say, yeah, this is a long-term viable generational business? Who’s saying that? No one’s saying that. People are basically saying, we can make money. It’s like salivating, right? And so then the greed kicks in. There’s a balance in booms, bubbles, about how greedy you can be. And I think Firmus is maybe pushing that a bit past the line of greed.”

Adir: “There is literally no price at which you would buy stock in this business if you were forced to hold the stock and run the business for the next three years.”

Adam: “It reminds me of bank robbers in a bank and they take all the cash out of the vault. And then instead of taking the million dollars in cash and just leaving, they start, oh let’s get the safety deposit boxes as well. And the cops are coming. So they gotta get out of that vault ASAP. These guys have hung around, they’re hitting the safety boxes now, they want that $8-12B. It’s too late. Like people are onto this now.”

The data centre backlash is coming

Twenty-nine US municipalities have already passed ordinances banning data centres in their jurisdictions. One US state is now looking at passing that legislation. Adam argued Australia is not far behind.

Adir: “The country has got to make this tricky decision, which is do you wanna do the continued pathway to renewables or do you wanna host data centres? And I don’t think it can do both, basically.”

Adam: “What the right side of policy historically does is do that for their corporate donors. So in this case it could be data centres, could be hyperscalers, whoever it is. Eventually you push it too far and you get too greedy and people will start realising, oh actually hold on, this doesn’t actually work for me. Why am I paying double for power so someone else can make money?”

Adir: “I wouldn’t want to, if I’m a Tasmanian resident, be underwriting Firmus’ data centre in Launceston. Firmus runs a sales pitch that says we’re a data centre provider that runs on one hundred percent renewable energy. That will be true. But the bit that’s problematic, in the fine print, is that we didn’t go and generate any new renewable energy for our data centre. We just sucked the hell out of Tasmania’s renewable energy.”

Self-driving cars v. the Sydney-Melbourne flight

A viral post on X described a man driving his Tesla on full self-driving from Miami to Nashville (900 miles) taking calls, replying to emails and FaceTiming family, at a fraction of the cost of flying. Adam used it to launch a debate about whether autonomous vehicles could eventually kill domestic air routes.

Adam: “The only person who claims you need a pilot are the pilots’ union because pilots get paid $500K a year to be effectively a reassurance to passengers. They absolutely don’t need pilots to fly these planes.”

Adir: “You have to have self-driving in a car that’s equivalent to the level of safety of having no driver today. And so today, are we at level five? I think Waymo’s four and Tesla’s three. And this guy in his Tesla, the fact that he was writing emails, this is really not an activity that people should be encouraged to do right now in a self-driving Tesla at its current level of tech.”

Adir: “If you say to me, do I think the probability of what you just described happening in a decade, what do I think that probability is? I think it feels to me, unless something dramatic happens, it’s close to 100%. Like that feels like an almost certainty in the next decade that that sort of thing will be happening. And then the question is, how do you feel about airline stocks?”

Deep dive: Cochlear, a blue chip in free fall

Cochlear shocked investors by slashing FY26 underlying net profit guidance from a midpoint of ~$450M to ~$320M - a ~30% downgrade, sending shares down 74% from their 2024 peak of $338 to around $92. The company cited a “small reduction” in US implant surgeries, a strengthening Australian dollar (costing ~$25M), and higher expenses. The business was founded in 1981, listed in 1995, holds 60% global market share and spends $300M a year on R&D.

Adir: “There are more than a million people in the US that could have this surgery and would benefit from it. And like 10% of them have been implanted of qualifying patients. So you’d say the TAM looks amazing for this business. But one of the reasons Cochlear says, and they’ve flagged this themselves, is there’s actually very low awareness amongst patients and doctors that this is an option. And I think awareness amongst doctors and patients has always been problematic.”

Adir: “This is in no way a cigar butt. But on the flip side, a business that is growing top line 6 to 8%, trading on mid to high teens enterprise value multiple, that’s not a bargain. You can’t call that a bargain. But I think a business of this quality trading on these multiples with this much of a competitive moat - I think this might be, you might look at this and say, if ever you wanted to buy a really high quality med tech business, this feels like a time to buy it to me.”

Adam: “This is why I love share market crashes. You can buy Cochlear shares for 75% less than you could three months ago. That’s an amazing thing. Like whether you do it, you don’t buy it, who knows, who cares? But at six billion, like that’s really interesting to me. I’m highly bullish on this business long term.”

Five other stories worth following:

1. Colossal Biosciences is targeting the bluebuck antelope, extinct since the 1700s, after its mammoth, dodo and dire wolf projects. It says reviving the species could support broader African antelope conservation efforts across future work.

2. Light Phone will open LightOS to outside developers in May, with vetted tools launching in its Tool Library this fall, letting users add narrow functions like transit, wallets, document scanning or QR codes themselves.

3. GameStop CEO Ryan Cohen has made an unsolicited $56B offer for eBay, arguing a merger could challenge Amazon. He says eBay is undervalued and could become worth hundreds of billions under his plan.

4. Greg Abel impressed investors at Berkshire Hathaway’s annual meeting, while Warren Buffett warned against AI hype and likened markets to “a church with a casino attached,” calling one-day options trading outright gambling.

5. Ask.com has shut down after IAC exited search operations on May 1. The former Ask Jeeves had long since retired its butler branding, but IAC said “Jeeves’ spirit endures.”

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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.