The Contrarians catchup
STOP THE PRESSES: The next The Contrarians Live is on December 8 at the BlueRock offices in Melbourne from 3pm. Will: “We will have some amazing guests that I think we probably will announce in advance this time.” Tickets are available here.
Adir spent a Sunday in Springvale. His verdict: “I think it should be a Melbourne tourist attraction. It feels like you’re in another country. It really does.” The entire experience was cash or PayID only, no credit cards. “I started using a payment technique when I was in Springvale that I haven’t used before very much at all.”
The Springvale Homemakers Centre, meanwhile, was a ghost town. Nick Scali: two groups in the entire store. “Everything was 40% off, 50% off, everything.” Adir’s prediction stands: “I think a lot of businesses won’t be able to hold on past February. Not listed businesses. Like just single store owner businesses.”
Victoria’s new property auction reserve laws require sellers to disclose a reserve seven days before the auction. Adir’s verdict: the law will kill auctions, not fix them. “If your objective was to dramatically reduce the number of auctions in Victoria and shift things to a private sale, I will say mission accomplished. ’Cause that is what I think the consequence of this is going to be.”
Adir spoke at the Austbrokers conference on the Gold Coast and came home with stories of devoted listeners. One attendee: “I drove up from Sydney and all I listened to on my entire drive from Sydney was The Contrarians podcast episodes.”
The surcharge ban: the government knew all along
Secret documents obtained by the AFR revealed that Jim Chalmers and Anthony Albanese knew for months that the ATO was preparing to stop accepting credit cards, and backed the decision before being forced into a humiliating reversal. Chalmers had publicly claimed they only became aware of the ATO’s stance in September.
Adir: “The sheer idiocy of a concept that says there are users and they’ve all been fine with the idea of a user pays system. And now we’re gonna move from a user pay system to a non-user pay system. So five percent of people have their fees removed and the other 95% percent fund it.”
Adam: “We had hard data that people were very happy to pay this fee because they thought they were getting great value in return. They were. And now we don’t have that and everybody’s losing out.”
Adir: “Who is the government to tell business what they can and can’t charge for? Like it’s capitalism. If I want to charge a fee if you use credit card, I can charge that fee. I can say if you wear red shoes into my store, it’s an extra $10. It’s my business.”
Adir: “It just comes in tiny increments, right? It’s just the creeping barrage of government control over private citizens.”
A preview of Australia’s future
Seven million Britons, more than 10% of the population, are on sickness or disability benefits. Among working-age people, that number surged 60% in six years, from 2.9M to 4.7M. Mental health claims, including depression, anxiety and ADHD, have risen fourfold since 2017. Britain’s borrowing costs are now the highest in the G7.
Adir: “I think about how does what’s happening in England and France relate to Australia? And I think Australia is earlier from this. The first is that before we even talk about the debt side of things, there’s this idea of what does it really mean to be an Australian. And I think that is one of the reasons, the lack of a clear answer to that question or even a willingness to have the discussion, is one of the reasons for the rise of One Nation.”
Adir: “The far left just paves the way historically for the far right to come to power. That is what happens in Western countries. And so the real terrifying thing, if you look at France, is all of these protests, which are being led by far-left politicians, they are not the real problem. They are just a step on the road to the far right seizing power.”
Adir: “I’ve got bad news for you. No one’s gonna wake up to this. Like basically history marches to the beat of its own drum, and there’s not really anything that human beings can do to change the trajectory. And whatever historical moment we’re in just picks the leader for that moment. And Donald Trump did not create this US. This US was created and it chose Donald Trump.”
The most important company nobody’s heard of
Adam ran a quiz on the largest listed company in each major European stock market. The answers, in order: ASML (Netherlands), HSBC (UK), L’Oreal (France), Santander (Spain), and Novo Nordisk (Denmark), down 69% from its peak.
Adir: “ASML is the company that effectively is making the machines that are essential to make the chips that are being used for all of AI. And they were the most obscure company ten years ago. And now they’re the biggest company. They make like whatever it is, forty machines a year or some tiny number. And so a company that makes a few dozen products a year is the largest listed company in Europe. Welcome to the AI bubble.”
Adir: “But they’re not even in it, it’s not even a real bubble that one, by the way, because they actually have lots of earnings. Funded by the bubble.”
The neo-cloud collapse accelerates
Firmus’ failed IPO has now caused real damage across the entire neo-cloud sector. Coreweave bonds are yielding 15%, up from 9.5% in July, a level signalling significant distress. CoreWeave shares are down 67% from their June peak. Iron is down 43% since June. AirTrunk has quietly shelved plans to list a Singapore data centre. Maas Group is down 50% in a fortnight, with founder Wes Maas a no-show at the Morgans Investor Conference in Noosa.
Adir: “I did not give Firmus enough credit. I thought they were just gonna be a blip. But they’ve actually caused some high quality damage to the industry. Which was unpredicted. I did not think that was gonna happen.”
Adir: “The true neo-cloud owns nothing. They are basically an infrastructure middleman. That says on one side is the data center, one of life’s great infrastructure assets. On the other side is the customer, and we’ll sit in between them. And what economic value are they actually providing? Minimal.”
Adam: “There’s only one thing that causes booms and bubbles. Too much debt. If you’re just using equity to do stuff, you can’t have a bubble. If you start imbuing all these trillions of dollars of debt, that’s what causes prices to make it.”
On Maas Group and Wes Maas:
Adir: “This guy’s not a dummy, that’s for sure. But what business is there inside Maas Group? Because I think it’s a terrible contract. So they’re pummeled.”
Adir: “What an amazing situation where a bubble business, is what I’ll call where it was, gets turned into a value transaction in the space of a week and a half. Like if they weren’t propping up this share price, you could basically say I’m buying cash for less than a hundred cents in the dollar and getting an operating business for free. As long as you didn’t pile more money into Firmus.”
Adir: “I think Wes Maas may well be the most honest person involved in this entire episode. There is no bigger believer in Firmus than Wes Maas. He might believe in it more than the founders.”
The most overvalued business in history
Anthropic is preparing for a $2 trillion USD IPO, having grown quarterly revenue from $11.6B to $16.8B in Q3, a 45% increase. But annualised growth has dropped from 3,500% in Q2 to 2,040% in Q3, and token prices have fallen 50% in three months. OpenAI, open source models like DeepSeek and small specialist models now account for more than 80% of token usage globally.
Adam: “I’m so bearish about this business. I don’t know how this isn’t the biggest story in business this week. This is a business that everybody said it’s gonna 10X. And it’s not going to now.”
Adir: “If Anthropic was three times the price of OpenAI, no one would buy them. And vice versa.”
Adam: “Can Anthropic ever get to $400B revenue? The growth’s slowing. How do I get from $65B revenue to two, three hundred, four hundred billion on a commoditised product when you’re getting smashed from OpenAI, smashed from from DeepSeek?”
Adir: “I think AI, that is real and amazing, and it’s gonna be more and more amazing in the future. But all the accoutrements of this AI, which is basically the bubble, I’m opposed to all of those things. I think it’s madness.”
Adam: “You called it really well probably a year ago when you said AI feels like the airline business. One of the most transformational things we experienced, but every airline bar a couple has lost money for their entire life. So great for consumers, but the value gets snatched away to consumers, away from the enterprise.”
Adir: “The safest bets if you believe in AI: Alphabet. Amazon, probably. Meta. I mean that’d be my stuff. Like I don’t think our view on this has changed. Despite all of the noise and all of the whatever, our view hasn’t changed on who the winners become in this space.”
Five other stories worth following:
Over 500,000 people protested across France over rising living costs, fuel prices and school conditions. Demonstrations turned violent, with 1,500 businesses damaged or looted. President Macron promised accountability for those responsible for violence.
Anthropic pledged 5% of its shares to a new public benefit fund, potentially supporting research into AI driven job disruption. The fund could grow alongside Anthropic’s valuation, pending shareholder approval, with political spending prohibited.
Berkshire Hathaway invested another $330 million in Bending Spoons, taking a 4% stake in the $30B tech company. The move signals CEO Greg Abel’s growing appetite for higher growth technology investments.
Tesla unveiled its next generation Roadster, demonstrating a dramatic airborne flip powered by thrusters. The two seat sports car offers three configurations, with the thrust version requiring a $250,000 deposit and rocket trim invite only.
Abby Care raised $82M to train and pay family members caring for loved ones. The Medicaid provider certifies relatives as home health aides, addressing caregiver shortages while improving support for vulnerable patients.