EP 402 - Is the UK stock market dying or is it the biggest bargain in global investing?

This week we welcome back investor and author Andrew Craig who argues that British equities are deeply undervalued and overlooked by international investors. From political uncertainty to structural challenges, Craig explains why the UK is seen as “on sale” - and why that could be a once-in-a-generation opportunity.

We pack market misperceptions, long-term risks, and where savvy investors should be looking now. Essential listening for entrepreneurs, business leaders, and anyone questioning the future of the UK economy.

*For Apple Podcast chapters, access them from the menu in the bottom right corner of your player*

Spotify Video Chapters:

00:00 BWB with Andrew Craig

01:29 The Decline of the UK Stock Market

06:08 Impact of Passive Investing on the Economy

11:07 IPO Market Challenges

13:01 The Role of Equity Markets in Innovation and Growth

17:31 The Vicious Cycle of Economic Policies

22:38 Global Comparisons and UK Economy Future

34:45 The Importance of Entrepreneurial Wealth Creation

38:03 The Impact of Amazon on Society

39:30 The Role of Wealthy Individuals in Society

41:33 Government vs. Private Sector Efficiency

44:39 The Future of Technology and Innovation

50:00 Challenges in the UK Infrastructure and Economy

58:54 QUICKFIRE - Get To Know Andrew

01:02:22 !BUSINESS or BULLSHIT QUIZ!

01:11:16 Wrap Up

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Andrew Craig, author, investor and founder of Plain English Finance, is back on BWB and pulling no punches as he exposes the slow death of the UK stock market, the passive investing crisis and why British innovation is being strangled at birth.

From the collapse of active fund management to the exodus of great British companies, Andrew makes the case that we're in a vicious economic spiral and the and no one in power seems to get it.

If you care about capitalism, pensions or pubs, you want to hear what he says next?

Hello and welcome to Business Without Bullshit.

I am Andy Uri and today we are delighted to be rejoined by Andrew Craig.

Andrew is the founder of Plain English Finance, a financial service company whose aim is to improve the financial affairs of as many people as possible.

Andrew's work is based on delivering two core outcomes.

A massive uplift in true financial literacy amongst the general pop and improving the funding environment for small life science companies.

Both of which Andrew aims to deliver through Plain English Finance and is author of number one best selling finance book how to Own the World and his latest book, Our Future is Biotech.

Andrew, welcome to the podcast.

It's great to be back.

I feel very self conscious that you've just basically read out my immensely pretentious mission statement.

No, not at all.

I read it out so badly.

You got through it.

I got through it.

I'll just introduce myself next time and I won't need to read it.

Why don't you?

Well, there's been a lot going on in the world, Andrew, since we last met.

I think, you know, you've obviously been busy in your studio I think.

Give us a little update.

What have you been up to?

Well, last time we, we met and discussed things, it was just ahead of Rachel Reeves budget.

So it must have been September or October last year and we were kind of hoping that, you know, I was articulating just how challenged the UK has been and a huge part of that being the UK stock market in particular.

And we've lost half our companies in a generation.

We've had one and a half trillion quid for flow out of UK shares and there's this sort of chicken and egg problem whereby a lot of people say, well British shares are rubbish, British companies are not as good as American companies.

Why would I ever invest in British companies when I can make higher returns in American companies?

And as I was arguing last time, if you have a policy and regulator environment that structurally drives trillions of pounds away from British shares, which is what we've done, then of course British shares will underperform so there's a chicken and egg thing there and that's been hugely challenging and sadly, I don't want to be party political, but as I observe what Rachel Reeves and Kurt Starmer have been doing in the last few months, a whole series of policies that empirically are really challenging the uk.

We saw news earlier this week, and this is a theme I talked about last time, that the number of quite meaningful British companies that should be contributing to the British economy that are leaving and in arm holdings is one that happened a while ago.

The most recent news is that AstraZeneca are thinking of leaving, which is, I mean, on its day, one of the biggest FTSE 100 company.

Right.

Sometimes it's Shell, sometimes it's AstraZeneca.

It depends where their market caps are.

But that would be tragic.

And HSBC might follow and Shell might follow for all the reasons that we discussed last week.

I mean, we discussed before that a big aspect of that was regulation and that pension funds held a pitiful amount.

I can't remember, like half a percent or something, as opposed to.

Most countries have almost 50% of their pension funds in.

In the domestic equity market.

Yeah, yeah.

Even small markets.

You sort of gave examples of.

And if I.

Sorry to interrupt, but you know what I find really frustrating is how few people, and based on my LinkedIn feed, including fund managers at leading fund management companies and a lot of financial advisors, can draw the line between that reality and challenges to the real economy.

You know, I made a comment the other day like, oh, well, because I said something like, well, Australia is like 1 1/2% of global equities, but 40% of Australian domestic pension assets are in Australian equities.

And a fund manager came back to me on LinkedIn said, well, that's probably really bad for Australian nationals and an overallocation to their own market.

It's like, well, okay, but compare the pension experience of Australians compared to Brits.

And there are other reasons.

They have these fantastic things called super funds and they've had really enlightened policy since the 80s.

But also compare the trajectory of Australian GDP per capita in the last 30 years to ours.

So whilst we've gone from 50% of our pension funds money being in the London stock market to 2 or 3% depending on which numbers you look at in the last 30 years.

And GDP per capita in Britain is basically stagnant over 30 years, other countries that have much, much bigger allocations to their own domestic stock markets have had a much better trajectory.

Because this is what frustrates me because if you can fund innovation and growth, which is an equity market thing in the main, I mean, obviously debt and the bond market's important too, but for earlier stage companies that might not be able to use debt, for example, you need a thriving equity market, you need capital depth, you need many billions of pounds, dollars, whatever available to fund people trying to do things in the real economy.

And we've made that really hard.

And I think that that is a big part of why British GDP per capita has basically been stagnant for 30 years.

And GDP per capita in Ireland, America, South Korea, Denmark, Australia, Singapore and many other places has nearly doubled or is up 50 to 100% depending on which.

Country you're talking your points up.

At a meeting of bigwigs at lo London and Partners and there was sort of, you know, some very senior people around the table and actually interesting, it was interesting the response because the, I guess a slightly political response from London and Partners was kind of who I'm huge, you know, fans of members of.

And so, you know, was people aren't just list not listing on the UK stock market.

There's a problem globally now with stock markets.

And that's true to some extent.

Yeah.

And we also discussed this and a big part.

That's right.

And America's lost a lot of smaller companies as well.

But obviously the bigger companies become very disproportionately bigger and enormous and sizes that have been unprecedented in the history of stock markets.

A big part of the blame for that to my mind, lies at the door of the endless growth of passive investing over active.

So basically ETFs, if you want to put $100 million into American equities, the way that most institutional investors now do that is by buying AN S&P 500 ETF.

Right.

And that's market cap weighted, which means you're not putting a 500th of that money each equally into those 500 companies.

You're putting 30% into the top seven companies and 50% into the top 20 or whatever the stats are.

Now you put the, if you put £1,000 in, most of it is going to the big companies and the little ones don't get much.

And so if you look at what that's raw in the last, there are a few things to unpack from that.

So basically, so Vanguard and BlackRock and State street, the three biggest providers of ETFs, that's their business, have lobbied Congress so effectively that now, from a legislative standpoint, if you run a Fortune 500 pension fund in the it's almost more than your job's worth to try and put that money for your employees in anything other than inexpensive ETFs, passive funds.

Right.

And that's been changing for many years.

And I would argue that the reason that that's happened is largely to do with just how kind of financially illiterate a lot of us Congress people are, which is something we saw when Mark Zuckerberg went to testify in Congress.

I don't know if you remember that.

And this is some classic vignettes from Washington D.C. right.

They had these hearings with Facebook, hoikd over the coals about, you know, basically challenging him on.

On the negative impact on the electoral process in the states wrought by Facebook and Cambridge, what was it called?

Cambridge Analytica and all that.

And also the impact on teenagers and mental health and all that.

And it became clear in those hearings that the Congressman had no understanding whatsoever of like online advertising or how so, you know, it's just, it was toe cunningly embarrassing, like these elderly congressmen and congresswomen asking questions that Mark Zuckerberg just sat there like a rabbit in headlights.

What I mean, you just have no understanding conceptually of what we do or how it works.

And another classic I only heard the other day was there was a senior, like the chairwoman of such and such a committee in Washington was talking about how great it was that children in America in whichever level of grade school were all going to get education about A1, meaning AI.

She literally reading back from her briefing note and she was so ignorant about what AI is that she was calling it A one.

Jobs in it.

Yeah, jobs in it, you know.

Yeah, exactly.

But it was like, yeah, exactly.

All our, all our kids are going to learn about A one.

And that's a great thing.

And it's like, oh my God, like this is.

This is the level of our political class.

It's like one of my meetings that's gone really badly wrong.

Yeah.

So whilst you have politicians like that and you have really slick, sophisticated like lobbyists lobbying for these multi, multi billion or you know, businesses that control trillions of dollars, they've kind of won the argument intellectually that passive is better than active because it's cheaper.

And active fund manager, you would say that too.

You say passive is good, but the.

Problem is if all the.

So first let's look at how.

What a super turbocharged theme that's been, right?

So tons of American money, billions and millions of millions of dollars for many years has gone into the S&P 500 that has driven those turbocharged, the Magnificent Seven and Visa and MasterCard and JP Morgan and you know, all the big McDonald's and all the big businesses.

Right.

What that then means is American equities have been very successful.

You've had great performance.

Right.

Top line nominal performance of the big American index.

So if you're sitting in Zurich, London, Tokyo, Singapore, Sydney, whatever, and you're an asset allocator stewarding people's pension money or people or institutional money or your hedge fund, it's basically then becomes incredibly difficult not to also have a huge exposure because of all the momentum.

Then you can't beat them, join them.

Yeah.

Then you have more, you have basically the significant majority.

Something like 80% of all trades on the US stock market are algorithmic trades being done by hedge funds.

Right.

And a lot of those strategies are momentum driven.

So if the market's going up, the market carries on going up because those things are coming along behind.

So you've had this massive.

That more than anything is why US equities have been delivering such fantastic nominal returns.

Because America's disproportionately gone etf.

All that money's flowed into the big companies.

The big companies have kept on going up, which is why Tesla's on valuations that whatever you think of Elon Musk and whether a Tesla is a good car or whatever else, businesses shouldn't be rated on hundred times earnings.

That's only possible because of all these phenomena.

Right.

So just to take it slowly.

So passive investing, therefore no fund manager, therefore I buy S and P, therefore it's over allocated to the people who already.

So it's the rich get richer, it's the same old sort of monopoly.

Well, to be fair, because there are lots of good things about that because it gives inexpensive access, people should own equities.

Right.

And because America's got so much better an equity culture than us, lots of normal blue collar workers have got gearing into the success of.

No, I didn't mean it like that.

But it's more like, you know, the people with the money get more, you know, the fat cat shares get more money, you know.

Yeah, correct.

And so, but, so that's all been supercharged.

But so then what does that then mean in terms of your point that we started this with about people who know saying, well yeah, but the IPO market's challenged everywhere.

It's really hard.

You know, private investors, PE and VC are struggling to exit.

There's like $12 trillion I or thereabouts of private companies that need to IPO or need some kind of exit.

And it's like there's a huge concern about whether they'll be able to or not.

And then all the PNVC returns, wonderful returns that are theoretical aren't real because they can't exit.

But the IPO market stops working when you don't have a thriving active equity ecosystem.

So if you're an ETF and there's a new company coming to ipo, there's no mechanism by which those automated passive funds that just automatically own the 500 biggest companies, there's no real mechanism for them to decide, we should buy this IPO and we shouldn't buy that ipo.

And so if all the money's just gone into passive, there's no one left.

In the old days, you're either in.

The club or you're not.

Correct.

So this is why IPOs.

Because the other thing is, as I was saying a minute ago, if all that capital is just unthinkingly going to those top 500 US companies from all over the world, nobody can float a company.

Because to float a company, you need to go and see a lot of investors who control the pots of capital they have and think, right, I will support this ipo and I will not support that ipo because I've done an analysis of the business, I've looked at their growth rates.

I've formed a view.

So actually I wrote a piece for Investment Week.

I don't know, it was published like three or four weeks ago about the thing that I think the passive zealots people are like, oh, you should never invest in active fund management.

It's expensive.

You're just paying for some rich fund manager for have to have yachts and sports cars, which I think is so fallacious.

And what I said is, so you've got to go back to why equity markets were invented, right?

Equity markets originally, as we discussed last time, were basically, there are a load of stuff a small number of human beings or one person just could not afford to do, like develop an airplane or build a skyscraper or send fleets of ships to the other side of the world.

An enormous war.

Well, that's why the bond market developed originally.

So basically, equity markets originally developed to pool capital and spread risk over large amounts of people by selling them a piece of paper.

As if you put 1% of the huge cost of doing this really difficult thing in.

We syndicate that across 100 people by 1% of the company.

And then that means you can get stuff done that you couldn't otherwise have done that is absolutely foundational to the development of our species.

We wouldn't have a pharmaceutical industry, we wouldn't have an airline industry, we wouldn't have a global shipping industry, we wouldn't have a biotech, you wouldn't have any of the industry, you wouldn't have skyscrapers.

And I think that's really poorly understood and a really important point to make.

Modernity and human flourishing and our species being immeasurably better off today than it was 300 years ago, is hugely a function of that technology, of capital markets and the equity market.

So that's the first function of the equity market.

The second function of the equity market is to provide assets for people to invest in so they can build capital over their life.

And again, if you Google pensions and boring, you get like X million, you know, hits in nanoseconds.

Pensions are boring, right?

Which I think is one of the most fallacious positions anyone can take, because what are pensions?

They've enabled hundreds of millions of people to retire and spend several years of their life, in many cases decades of their life, hanging out with their grandkids, going to the pub, watching, watching too much tv, playing golf, whatever that is.

In contrast to the rest of human experience, for the whole of the rest of human history, which is you worked until you died, which was in a mine or in a field.

So the pension's amazing.

But the point I'm coming back to is the equity market providing something for people to invest in, which gives them dividends and capital growth so that they then can retire and live for many years, is one function of the stock market.

And the other function of the stock market is to fund growth and innovation and human flourishing.

And if all money goes to passive and is just thinkingly going into the existing mega cap companies or large cap companies, that's great for the pensions side of that equation, but it's terrible for the growth and innovation side of that equation, because then the only people left who can grow and innovate are the big companies that are already there, like Google.

And they do Google and Apple and Tesla do a lot of growth and innovation.

It's great that they have a lot of money to do that, but it means that you can't have new company formation and you're not going to have the same experience in the next few decades as you've had in the last few decades of, you know, entrepreneurs building a business.

Because basically you can't anymore.

The Internet has this huge effect of aggregation, doesn't it?

You know, there will only be one winner.

It's, you know, like Highlander or something, you know, Amazon wins or something just gets too big and that's it.

You know, Google controls.

That's inherent in businesses that have networks effects and network synergies.

Right.

Because like, like social media is the classic example.

Because there's no point in being on a social media platform that's got, got 10 people on it.

Yes, okay.

That's when it's particularly important and the Internet is particularly important at that.

And it's globalized it too.

Right.

So very few futurologists 30 years ago could have ever predicted that there'd be a business that would have like 2.2 billion users.

Like Facebook does.

So to the, to the point of like, people IPO less, they IPO less because it's harder to get an IPO away.

Literally.

Now in the UK smaller company environment, which I have been doing for 25 years, 10 years ago, if you were wanting to raise 100 million quid to do something software or airline company or retailer or, you know, I floated Carluccio's, the Italian restaurant group, right.

But I, I don't think you could do that today on the London stock market, because 10 years ago, it's only 20 years ago, you'd go and see like a hundred fund managers at 100, you know, Old Mutual and Bailey, Gifford and da da da da da.

And they all had pots of 200 to 800 million quid to understand the.

Machinery here, because people will be thinking, but hang on, I'm buying shares in the secondary market.

To do an ip, you've got to basically go to everyone and say to them, I'm going to list this company.

Do you want, you need 100 million quid to do this thing, right?

Yeah.

And then you, you go and see 100 people and some of them put a million in, some of them put 10 million and some put 5 million.

And some of them say, no, I think your business is rubbish, I'm not investing.

Right.

Those people don't exist anymore.

All of those funds are gone.

Like literally in the last couple of years, all of those big brand names have just shut down the small.

And that's not just in the uk, That's a no.

It's particularly bad in the UK particularly.

And it's because of the rise of passive.

It's because of crypto, because crypto's cannibalized away x billion pounds.

So, you know, a 40 year old doesn't invest in the Aberdeen smaller companies Fund anymore.

They invest in an Altcoin and some Bitcoin.

And that's just another structural thing which, and by the way, anybody in the crypto space has a huge structural advantage over people in the active equity space because they're not regulated.

Whereas if I did that as an active equity fund manager, I'd be in prison.

It is regulated now though, isn't it?

Google, you know, life changing returns from crypto and you'll still find hundreds and hundreds of.

Yeah, yeah.

When I was just with someone this morning and we were talking about it and they were talking about, you know, it seems to be, it's like, wow, okay, you can still do a lot of this stuff, can't you?

And it will be a foreign company and it's in Telegram, you know what I mean?

It's all invisible anyway.

Have you seen that Stephen?

Poor old Stephen Bartlett, you know, massive success of Diaries CEO, but one of the things he's dealing with right now, and I see it every day on Twitter or X, sorry, you know, there are people purporting to be Stephen Bartlett who then sell you, you know, I'm Stephen Bartlett and I'm saying it's, it's all AI.

Oh, it's AI generated.

AI generated.

It's totally nefarious.

They're based in where, you know, somewhere overseas where the FCA or the long arm of the British.

I mean we're going slightly into crypto.

But that's the Ponzi scheme effect, isn't it?

A little bit of crypto because, because I have clients, you know, very long bitcoin.

I'm, I think I'm probably long bitcoin, to be honest.

I probably have been for a while.

It's in like, I can see a use for this reserve, reserve currency and.

You know, hedge against fiat monetary expansion.

You can't quantively ease it.

You know, there's some stuff there that makes a lot of sense.

But yeah, you know, I think, I think as at the same time there's, there's the Ponzi effect of like the trains going up, isn't it?

I mean, and I'm exactly the same, I Don't necessarily.

I mean, I get a rep as being a big crypto bear.

But if anybody actually reads the letter of what I wrote in the most recent.

Well, I read your most recent.

You update it and you say, yeah, I think you should.

I think it's interesting.

I just think the problem is we now have.

Well, there are loads of problems.

Firstly, people, you know, putting all of their money in crypto and they have no conventional investments.

That's mad.

And it's mad for them as an individual.

It's terrible for society.

Because here's the point, you know, if everybody's got all their money in crypto projects, there's no money left for people to, like, build buildings or open retail outlets.

It's such a vicious circle, though.

I don't, you know, a wealthy chap I work with says, yeah, but you look at bitcoin, you know, I've had all.

He's had all his money in that for ages.

And he's like, just keep looking at it.

It just keeps going up, Andy, better than any other investment.

Bitcoin is absolutely a law unto itself.

I get that.

It's its own asset class.

It's very interesting, the whole intellectual argument.

It's a digital goal.

I get all of that.

A hedge against.

I mean, why have Trump and Musk just fallen out, right?

Fundamentally, because Musk is trying, was trying to sort of limit the expansion of government debt in the United States.

The whole point is Trump paid a lot of lip service to the fact that the US has got like $36 trillion of outstanding government debt and they need to roll over how many trillion of that in the next few years.

And Ray Dalio is the founder of the biggest hedge fund in America, and he wrote a book called the Changing World Order about how the Dutch had the financial empire first, then the British took over the mantle, then America took that over in the 20th century and now could it next be China?

Because each of those empires basically overextended themselves massively and got themselves massively into debt.

And many voices, more conservative voices in America are like, we can't have a 2 1/2 trillion dollar annual interest bill.

Even the American economy can't fund that.

And there's a real problem.

And I think that's broadly why when Trump, then I think the bill's going to have like a 5 trillion increase in debt, right?

So he might have paid lip service to draining the swamp and trying to deal with make America, but.

Exactly, he's puffing up.

But don't they just print the money.

Isn't that the point?

They did.

And that creates much as the modern monetary theorists, who by the way, I think have failed to take care of two centuries of real world evidence will tell you, no, you can just print money as much as you want, it'll all be fine.

Bitcoin and gold and inflation and asset price inflation, which has not captured the inflation numbers, are telling you that you can't because it creates inflation.

Why is every single property market in the world at or near an all time high?

Why is every single stock market in the world at or near an all time high?

Because if you print loads of money, stuff goes up and so does pasta and milk and eggs and agricultural stuff.

The performance of financial assets would have to be a function of actual real economic growth.

Now you have to disaggregate how much of it's a function of inflation and the money supply and how much of it is real.

Because some of it's real.

Because Apple is selling hundreds of millions of iPhones and iPads and imacs every year.

That's real economic stuff.

But Apple being a $3 trillion company has got an awful lot to do with, with all of the money going into passive ETFs like we were saying earlier, you know, just billions and billions and billions of dollars and the fact that the dollar is worth 90 less today than it was in the early 70s.

Okay, so do you have some solutions to this?

How are we going to fix it, Andrew, in 20 minutes, make some money.

And move to Switzerland?

I mean, yeah, yeah, sadly, like the UK stock market.

Your point, and I think you would say this is we can't afford for it to fail.

It drives me absolutely crazy that clearly very, very few politicians understand that.

And I would say, including the Chancellor, in all seriousness, why is British GDP per capita the same today as it was 30 years ago?

Roughly.

Why is GDP per capita in, I don't know, a dozen other OECD countries up a lot and in some cases up 2x.

Ireland has probably doubled in that time and on and on.

And there was this brilliant, is it the Resolution foundation piece, I forget the name of the guy about why Britain?

Why do we spend 260 million quid on batch surveys before we can build a tunnel under the Thames when France has built a whole high speed rail network for the.

It's just crazy.

And there are a whole load of structural challenges around that which are very complicated and people have to read like a 50 page piece to understand that that's there too.

But a huge part of this economic malaise and the fact that we're not creating wealth is because we've eviscerated our stock market.

So it's already coming home to roost.

Right.

Last year, the London stock market, formerly the crowning glory of British capitalism.

Right.

Which the London stock market is a huge part of why we became really wealthy.

Right.

Yeah.

Last year, the London stock market raised less from IPOs than the Omani stock market and the Malaysian stock market.

Wow.

And it raised something like a twentieth of what the Indian stock markets raised.

Wow.

Like, if we went out in the street right now and interviewed 100 passers, by what percentage of people would you think would know those stats?

A lot of financial advisors don't know those stats.

A lot of fund managers don't know.

We can't force the pension funds to put their money in it because this is where Rachel Reeves is supposed to be trying to do a good thing like, like, like deregulation.

And then there's all this pushback about, oh, you know, the government should never mandate pension funds to choose where to put them.

And that's true, except for the fact that it's legislation and regulation over the last 30 years has got us to the predicament.

Yeah.

It's told them not to.

Well, exactly.

It's very hard to draw a straight line and say it was this piece of, you know, you can lay the blame at this specific thing.

It's been a slow motion car crash and over 30 years.

Exactly.

But so that Mansion House record.

I was actually at a thing in the City the other week with the Lord Mayor and, you know, Poppy Gustafsson, who's the founder of darktrace, who's now in the.

She has a role in the treasurer.

I forget exactly what.

But they were all presenting about the Mansion House of Gordon.

They were the signatures to the Mansion House of Gordon.

It's almost entirely focused on VC and PE stuff.

And by the way, it's absolutely the wrong time for us to be forcing our pension funds to invest in VC and PE for all the reasons I'm articulating.

Oh.

So they're trying to force the pension.

To put more money in private companies.

And the argument is because that will mean we can support nascent British businesses.

All the challenges are.

But there's a little bit of money for aim for the alternative investment market, the very smallest and most challenged bit of the UK market.

But in the grand scheme of things, and I genuinely think that Rachel Rees and her advisors have been nobbled by very slick, a bit Like Vanguard and Blackrock have nobbled the US Congressman and convinced them that all money should go into ETFs.

All the discussions that Rachel Reeves and her crew have been having the last few years, the people who've won the argument are the slickest, wealthiest, most successful obvious, who represent the private equity and VC world.

And it's like, what?

No, you want a flourishing UK smaller company scene, but again, it's a really tricky one for anybody philosophically, who's kind of a capitalist.

Red and Tooth and Claw.

The government should not be.

You shouldn't have edicts saying you must now invest your money in these companies.

But what you do need is a sort of playing field that allows British companies to sort of.

That we didn't have this death spiral because it's really hard to pull out now.

It's like a play field.

I was about to say it's a vicious sell.

Yeah.

Because the changes made from Blair and Brown onwards, basically, until now, and it's just this death by a thousand cuts, is that if British equities start to sort of smell and the trend is the wrong way, then hedge funds start shorting British companies and people start pulling money, then Brexit, then it's just boom, boom, down, down, down.

Although, as I said to you before, we click record, because I hate being like Mr. Curmudgeonly.

Oh, everything's rubbish.

I genuinely do.

I write a lot about negative press bias and how actually the world's the best it's ever been empirically, and we should all be a bit more excited.

And what I wanted to say is, we were talking earlier is that stock markets recover several years before real economies recover.

Right.

There's actually, at best, there's a long time lag between Main street, like the real economy, and Wall street or, you know, Threadneedle street in London or whatever.

But so.

And that's a really important point because UK shares have started rallying because they're so cheap.

Because they're so cheap.

And because.

And.

And there's a.

So Bank America, used to be Merrill lynch, one of the biggest investment banks in the world.

They do this portfolio manager survey.

I think it's.

Yeah, it's every month, basically, where they survey all the hundreds of people all over the world sitting in all the major financial centers who run billions, or if not trillions of dollars between them, right?

And they say, which stock markets do you like, which do you hate, Blah, blah, blah.

They take their temperature and it's all consolidated in a big report.

And Britain was the least Loved.

Developed stock market in the world for like five years, every month or something.

Not quite, but not far off until either March or actually, I think it was April where it went from being the least love to being the number one, most loved.

Just because it got so cheap.

Because it's so cheap.

Because it was Liberation Day.

It must have been at the end of that month.

So Trump's tariffs.

Oh, my God.

Now everybody's got the fear about America.

You know, what the hell's this madman in the White House doing?

Is it a good idea?

You know, everybody realizes now from the theme I was talking about earlier, all our money's in America.

Is that a good idea?

Where else can we put it?

Yeah.

And so they look around the world.

And they're like, well, Shell's not bad.

You know, Rolls Royce is up.

Yeah, massively.

Exactly.

And they're like, okay, sort of rule of law.

Great position in the world, geopolitically relatively stable.

You know, Britain's got, you know, as we said before, Britain's got a hell of a lot to recommend it.

It's just so sad we don't capitalize on it properly.

I mean, the stock market's one thing, but it's like the entrepreneurial stuff, how we get it so wrong, but we have so many of the fundamentals that make, you know, I don't know if, if any, how many times people have set up companies in other countries, have a crack at it, and if it's not a former British country like New Zealand or Singapore, you're going to find it an absolute unmitigating nightmare, you know, how much our law is okay with.

It, but we've slid so far down the league tables in terms of the ease of getting a business up and running and crucially, growing it to scale.

Yeah.

And so that's the other.

The other sort of canary in the coal mine that tells you that British equities really are cheap, is all our companies are being bought.

Yeah.

And Wise just went to New York and, you know, I mean, it's like.

And that's because of all these structural challenges to the fund management industry in the uk.

I mean, it's a shout out to Alex Dupledge, who's now Rachel Reeves personal advisor.

Alex, I've discussed.

You've got to get Andrew in front of Rachel Reeves to try and help with these things.

But, I mean, if you were in front of Rachel Reeves right now, what would you tell her?

I think we need to look at the countries in the world that are demonstrably the most successful and emulate their policies.

Right.

Not do the 180 degree opposite of what they do.

Right.

And so, you know, tax.

I mean, I know.

Oh, we should tax the rich.

There's so many rich people.

It's like.

It's clear that.

So the changes she made to National Insurance in October, whenever it was.

Put a lot of people out of their jobs.

Yeah.

And it's just gonna.

And it's only just beginning.

Yeah.

The employment.

But Angela Reeves Employment Bill is just gonna turbocharge it.

We're about to destroy the private rental sector.

Rents are going to go up.

We're going to make it a two tier system.

Like every single policy is just, just.

They have no grasp, no nuanced understanding of the law of unintended consequences.

And you know, something as simple as who is it the like national association of British Innkeepers or something.

It's one of those, you know, government pub keepers.

Yeah.

The agency reputants publicans.

After that change to the National Insurance stuff, basically estimate that.

Estimate that 80 of British pubs are now structurally unprofitable.

Wow.

And we're losing thousands.

You eloquented it very well about.

You know, and wrote some articles about it.

But it sounds so small to the man on the street, doesn't it?

Well, 13.8.

50.

Yeah.

And we, and we see just how mathematically illiterate people are because it's like the difference between 15 and so it's 1.2.

There's only 1.2.

No.

But the percentage difference between 15 and 13.8 is not 1.2%.

Yeah.

Right.

It's interesting.

And, and it's also the.

But every single, every single company in the country that runs at or near being loss making.

So every startup, every startup that's raised some.

Most companies, I would say.

Correct.

And, and so, and I wrote this in a piece that I was lucky enough to have published in the Telegraph shortly after the budget.

But like.

So when, when it was pointed out to Rachel Reeves, there wasn't like the people who are going to suffer are, as I just said, 80% of all pubs.

It's also care homes, hospices, dental surgeries, GP surgeries and one of the British Medical association or whichever is it, the bma, the senior person there said it was clear that Rachel Reeves and her team had not considered the impact on GP surgeries of this policy because it's seriously problematic for them as well.

And charity shops and all these areas of the British economy.

And I can't remember somebody asked her a question about it in Question Time, when she was presenting it and it was clear, it was clear from her body language that she had not realized that that would be the impact on these areas of the economy that presumably she cares about, like GP surgery.

Are they not bound, though?

Because it is counterintuitive.

Lower tax, get more take.

So is it not the public drives the.

Yes, that's the direction, but this is where the government's job needs to step in and say 10 minutes a week that the Prime Minister is going to stand there and explain some shit and say, I know this is going to make no sense to you and I know you think we're the Labor Party and that we should put taxes on.

But that's what make lives better.

But we will have more jobs and a better and more money for the nhs.

Here's the proof.

We're going to bring in, just like they did in Covid, we're going to bring in Mr. Scientists.

You know, you could come out with a couple of graphs and say, look, here's Singapore.

This is why Singapore's flying.

Here's Europe and what's going on?

We don't want to copy Europe.

That's not a good plan.

It's a very simple, very simple stat that I put in that article, which is.

And you just find the evidence from many countries over many decades is legion.

It's so easy.

Right.

But here's one from Britain.

Corporation tax in the UK was 28% and then under the Tories, they reduced it gradually over a period of a few years to 19.

19.

Right.

Yesterday we were going to go to 17.

We never did.

So it's 29.

28 to 19.

Yeah.

So the tax rate came down from 28 to 19%.

What happened to the tax?

Take the number of billions of pounds, it increased by £30 billion.

Wow.

Well, I remember, I remember dealing with it.

I was an advisor during the time, as it all started coming down and more and more people would be like, but, you know, I'm from overseas, I've, you know, brilliant.

19, that's fantastic.

And you're right, what we need, you know, maybe I should say to veterans, employ the best PR company in the land and do a series of lectures, you know, based on actual factual stuff about what will make the country better.

Yeah.

That's the frustration, isn't it, is that it's not not understood, it is subtle, it is counterintuitive.

It's not necessarily like some of the stuff you've been explaining here, you've been studying for decades.

And you can now sell it and.

Also being involved with actual companies.

That's the other problem is there's a difference between economics, like macroeconomics and economics get a bad name.

And economists have predicted 10 of the last three recessions.

And all these jokes, economists exist to make astrologers look sensible or all these jokes, right?

But there's interesting that in company economics, at the level of a company that's trying to do something like open restaurants or launch an airline or whatever, or build software.

And I think that we have a political class who absolutely do not understand company economics and what makes companies thrive and succeed and profitable and employ people and pay tax revenues based on their behavior.

And I think that's clear.

So the other thing about the tax take and wealth that's so poorly understood with this whole Gary Stevenson eat the rich, they should pay more tax is like, so Jeff Bezos owns eight and a half percent of Amazon, right?

So, okay, so let's just call it 10% to keep the maths easy.

And let's just say that Amazon's worth 3 trillion.

I think it's like 2 point.

So I don't know what it is today day.

Let's just say it's 3 trillion.

Okay, so Jeff Bezos created 300 billion of wealth.

What a wanker.

He's got 300 billion quid.

Asshole.

He's just spent loads of money in Venice.

But the point is, okay, so he's made $300 billion.

What's the rest of the world made if he owns 10%?

Like $2.7 trillion.

And where is that money?

This is what people don't understand about wealth.

Where is that money?

It's in the pension funds of millions and millions of people all over the world, right?

I get stuck at the first stage that it's just that politics of.

It's just easy to be angry with the person who's doing well.

It's a prejudice, be selfish about it.

Do you want a better life?

Do you want a higher percentage chance of having a good job?

Do you want your government to have more tax receipts and be able to fund the waiting lists at the nhs?

Don't do that.

You're literally, you're shitting on your own doorstep.

There you go.

So, okay, so Beezer's got.

So we go unpack this a bit further.

Bezos got 300 billion.

The rest of the world has 2.7 trillion.

And he's been a vector for the creation of that.

That now along the way him, other billionaires, center millionaires, multi Millionaires and plain old millionaires.

He might have built a restaurant group or something much smaller than, you know, a big global behemoth like Amazon.

If you disincentivize them to go on that journey, you don't get that.

You don't get the 2.7 trillion you get.

You're like, okay, Bezos, just think, I can't be asked for this.

I'm giving all my money to the government to spend on.

I'm gonna go live in Dubai and I'll do it there.

Exactly right.

And it's the, like, the aggregate impact of entrepreneurial wealth creation for everyone is massive.

But so few people understand equities.

They're like, they don't see the 2.7 trillion, they only see the 300 billion.

And the other thing about wealth creation in the private sector is that.

So anything that government does is basically by edict, right?

They force you, they take tax, they decide to spend X billions on a stealth bomber program or all the other.

How much does do governments all over the world spend on really terrible shit that's bad for mankind and it's causing horror all over the world.

In Ukraine, in Gaza or whatever.

Lovely 30,000 pound bomb.

Bombs to drop.

Exactly right.

And I mean, I don't want to get, we need to get into the merits of defense and defense of the realm and all that's important.

But, but the private sector, what has Amazon given the world, apart from the $2.7 trillion that I just talked about that's in everybody's pension funds, it's given the world the best online Internet infrastructure ever seen.

Like, how many companies run on Amazon Web services?

Right?

I think, does Zoom run on aws?

I think pretty much everything.

Right?

So, so everybody who hates Jeff Bezos, right?

Okay.

Do you, do you ever shop at Amazon?

How many people do you think Jeff Bezos, he's got so much money.

What a wanker.

He said, you know, do you shop at Amazon?

Everyone shops, right?

Why do you shop at Amazon?

Because you get shit cheaper, right?

Yeah.

And quicker.

Is that good?

Yes.

Is that valuable?

Yes.

Has he created an incredible infrastructure of, you know, and by the way, we can come back to the whole his employees are treated like shit and poorly paid thing, because that's another thing to come on to.

Right?

But okay, so he's created $2.7 trillion for everyone else.

Even if he's created $300 billion for himself, he's created an amazing thing in the world and he's allowed billions of products to be delivered to everyone.

Far more Cheaply, which is pretty valuable for our species and for mankind.

And it's not all shit plastic shit.

Because the other thing he's done is.

And as a published author, Amazon has been a vector for the sharing of ideas.

And how many more billions of books have been bought because of Amazon in the last 30 years?

Like billions, right?

How many more people have learned about nutrition or finance?

Well, I could argue how much time have you got back too?

Because when you watch that weird light bulb in your house blow, you would have spent the whole weekend at a hardware store going around going, you got one of these.

Oh, it's an EW5.

You know, I think it press a.

Button, it's there in the morning, it's injected massive efficiency.

It's also been a huge part of the dematerialization Trend, right?

So 30 years ago you either bought an LP or a DVD or a CD or whatever, right?

Which required loads of terrible chemicals, magnetic tapes and plastics and whatever, billions of records and CDs and everything else that's now on your iPhone.

Plucked from the air on the Internet network that they built as well as I was just talking about, right?

So that's been hugely good for the environment.

That dematerialization trend.

The fact that Amazon's injected unbelievable efficiency into the logistics of all their warehouses and the distribution is just in time delivery.

So now companies need to keep much less inventory, so they need much less warehousing space.

And, and, and, and I would contend that.

So if you focus on the fact that Bezos is a rich wanker and, and, and don't realize that he's been a vector for unbelievable good for our species, as hyperbolic as that sounds, the fact that most people think that way is, is our biggest problem.

It's an easy, it's a nice prism with which you can look at from They've, but they focus on the individual because businesses have become about the individual, haven't they?

Is that part the problem?

I mean, you know, Daniel Priestley talk that you, you, it's the person that you go to to buy.

It's not a company that is from somewhere that you buy something from.

It's the person.

So now it's about this individual.

I think, I think that's true of a lot of areas of the economy.

But I think you know how many.

But you don't look at Amazon, you look at, you think of Bezos.

I mean I find it ridiculous that Tesla gets affected by what's Musk up to Because I think to myself, well, if the CEO of BMW or Mercedes was caught shagging seven different people.

And you know, and in some drug ring empire, I don't think I'd care.

I'd still buy a Merc.

I'd be in the shop, buy it, go, oh, have you heard that he's a pedophile?

You'd be like, right, great.

Am I getting that?

You know, the leather suits.

Exactly.

I'm buying a Merc.

What's that got to do with me?

I mean, I think obviously the whole musk situation going into the government with Trump is a pretty unique one.

No, but I was just thinking is part of our.

We've become so about the individual that we can't see your point that how do you build a skyscraper or how do you do these giant things?

You need these giant companies that everyone gets behind and they're, they're forced to positive.

We focus on that.

Oh yeah, but that one bloke got rich or, you know, and that becomes like, oh, well, I don't want anything to do with them.

You know, it's this sort of.

Yeah.

I mean, I don't know.

So Amazon Bezos, right?

And wealth generally and billionaires and all the way down to senimillionaires, millionaires, whatever.

These people do not lie around onto piles of gold like Smag the Dragon.

As I've said before, right.

The fact that what, what wealthy people do is they want, they want control and agency over their capital allocation to do things that in the main are very good for the world or very done very good for the world.

Right.

And I would contend an awful lot better for the world than what a hell of a lot of things governments do are.

So it's like philosophically like this idea that they should all pay more tax because the government spends money incredibly badly on a lot of really, really bad things.

I mean, obviously they spend money on good things like health care and you know, supporting the elderly and whatever else.

But they're very wasteful, they're very inefficient, they do things very, very badly.

We know that from like defense procurement, whatever else.

So who is spending a dollar or pound better for the benefit of mankind as a whole?

A billionaire that's trying to cure cancer or build an incredible Internet infrastructure or dematerialize loads of CDs and DVDs and make more books get sold because you actually sort of unpick what many, many corporates do in 180 degrees contrast to what a lot of people think who've never had any exposure to those corporates and Never met any of them and couldn't name three of them or 10 of them.

There are thousands of companies, tens of thousands of companies in the world doing really, really good things.

There's a discomfort there that they don't want them to have more power than the government though, isn't there?

You know, there's a sort of feeling of like, I mean, but they're not in government, they're making stuff.

Yeah, but the control exerted on private companies is nobody buys your goods if they don't want them.

Yeah.

And there's also a hell of a lot more control than people realize in terms of like, you know, Environmental Protection Agency.

And they've always been bad actors.

I would say there are far fewer bad actors today.

Why?

Because most people who work for these companies aren't bad actors.

Yeah.

You know, like go back 30 years and there are loads of greedy Gordon Gekko y people running these companies.

Go back 100 years.

You know, children were losing their arms in machines in Mancunian factories.

Right.

You know, most of the people who work for a lot of these big companies and mid sized companies and smaller companies, you know, they're us.

They're like fundamentally good people.

And if you come along long and take so much money away from these businesses to fund the egregious inefficiency of a lot of state systems, they die.

Because there are also these tipping points because if Bezos had confronted the capital structure of the British economy, and I use Uber a lot as an example of this, we wouldn't have Amazon all those things.

We wouldn't have $2.7 trillion.

They would have died many, many years ago.

And so think how many.

That's the counterfactual.

Too few people in this country think about is, is how many amazing British companies doing amazing things would have existed if we had a better capital market.

How do we spot this?

We never quite.

Do you have any ideas how to stop the death spiral?

I just used the example.

We took a corporation tax from 28% to 19%, got massively more tax, massively more economic activity, massive more employment, like bring taxes down.

Well, what's Ireland done?

Had the lowest tax rate.

12 and a half percent across Europe's had the lowest tax rate.

And actually Europe said, said, we don't like you having that low tax rate.

You.

There needs to be a lot of substance to it.

So they got sort of the double whammy that they've had to stick.

Like loads of people in Ireland working in Ireland.

We have the power to do it now we've left Europe.

If we declare tomorrow we're going to have a tax rate of 11, you'd suddenly find, well, you know, it might then lead to listing, who knows?

Wouldn't be unprofitable.

Yeah, yeah, there'd be more pubs, there'd be more restaurants, there'd be more, there'd be more jobs, there'd be better jobs.

There'd be.

And so for example, look, look at, so AI, biotech, machine learning, quantum computing, right?

All the industries of the future.

Britain's going to be nowhere in any of them because of the cost of our power and because we can't raise money.

There's two things.

Because our electricity costs are the highest in the world, because of abominably stupid policies which aren't even good for the environment, by the way.

We can get into that.

Is that what it's about?

It's just that we've gone after this sustainability agenda too hard and therefore that's why our powers expensive.

That's another piece of the jigsaw puzzle.

Like you know, part of the death spiral of Britain is that you can't build any kind of.

And by the way, and actually I have a genuine belief having just spent three years writing a book on the biotech sector.

Right, what are the technologies that are actually going to sort out the environment?

Yeah, okay, they are biotech, AI, quantum computing.

There's a DNA based storage technology being developed on the other side of the world by American billionaires because they're the only people who can have the capital.

Which could mean that you basically, basically remove the need for power for all storage.

You can store something in a DNA based medium where you just configure the medium.

You can put 200 million gig on a gram of it, put it on a shelf, no power, come and read it later.

Right, so you basically get rid of tons and tons and tons of power hungry service.

How exciting is that?

Right?

Those are technologies that are nascent that exist.

To get those technologies developed, you're going to need to consume a load of power and you want the lowest power cost possible.

So my belief is the real tangible impacts on environments, mental degradation and sorting that out and whatever your views on climate change, the things that are going to engender that and actually deliver that are these technologies which right now are really power hungry.

And so the more we place obstacles and the more we make it expensive, we make it possible, we won't have a biotech industry, we won't have an AI industry and we'll have to buy all that IP from the Americans or whomever else develops it and actually comes up and says, hey, we figured out how to biologically coat photovoltaic cell and build a super efficient solar panel system.

The base is going to be fantastic for power generation.

No, I hear you and I hear so many people who hear you.

There's such a sort of frustration amongst those of us, I guess, who are, you know, vaguely patriotic and not planning on leaving the country.

And I, I spend my days.

Today, I had two meetings, I spent my days helping people leave the country at the moment who've got money and they're just like, nah, I'm just sort of done with where this country's going.

They can't see that it's going to get better.

They've got to that sort of conclusion that they're like, nah, you know, and there's things like an educational system which we're also having a good go at screwing up.

But, you know, I mean, you know, do you think something like the reform is, is, you know, because you.

I get to the point where I went and read reforms, tax plan.

Right.

It's not bad plan, is it?

Right, yeah, yeah, it's all right.

I mean, I, you know, I don't agree with all of it, but actually it's exactly what we're talking about.

Cut the taxes, go for it.

You know.

Are you getting to a point?

I can't believe I'm saying this.

You're starting to sort of think, well, maybe we need to some someone who's just going to come in and blow the hinges off.

Yeah.

Think about, if you go back to Thomas Hobbes and Leviathan, the original, the genesis of parliamentarian democracy and states.

The main role of the state was defense of the realm, you know, police, magistrates, law.

And then it just grew and grew and grew and grew and exploded under, you know, Roosevelt in the states.

And the government just got bigger and bigger and bigger and bigger for all sorts of structural reasons.

Reasons.

And I think we're now in an era where at least in some parts of the world, that sort of structural trend of government getting bigger and bigger can go into reverse because an awful lot of, as I've been arguing, a hell of a lot of things that we need as a species are a lot better done not by government.

And just to defend, because I get hit up a lot about the fact, well, government was instrumental in development the aviation, airline and the Internet.

And I completely concede that R and D Being supported by governments has absolutely been a huge part of the genesis of an awful lot of really important technologies.

But the thing that supercharged them, made them ubiquitous and taken them to billions of people has been the private sector, because the private sector does 80 plus percent of that stuff right in.

In actual fact.

And I think we need a lot less government and a lot more private sector because the world will be better.

We had Lucy Parker, who was brilliant, doing a podcast with us, and she deals with sort of big business in the government.

And she was just saying how shocking it is how much disdain there is between them that these, you know, she kind of thought originally, well, these people get on collaborate, know the government can't stand big business and big business can't stand government.

And she's there trying to sort of get them, sit down and have a conversation, you know.

But I think you were gonna perhaps say, I mean, the feeling is, I think that's the huge frustration, the feeling of sort of sliding backwards when the knowledge is there.

You know, it's the sort of we're doing dumber and dumber things, you know.

Do you know, I hope that the exponentials will be.

That is why I've just written this book about the biotech sector is the.

It's almost getting to the point where no matter how rubbish, how imperfect, the exponentials are going to be so powerful and the technology is going to be so amazing in terms of what it's going to deliver in terms of wealth creation and solving human problems and rolling back environmental degradation, sorting out power generation and sorting out therapeutics and all this amazing stuff and AI and quantum.

Does all of that fall under biotech?

Yeah, yeah, biotech's working on all of that stuff.

Okay, well, very structural, kind of intractable reasons just to do with the fact that they're all problems of biology.

Right, okay, okay.

But it's, but it's also, it's convergence.

It's tech allied to biotech.

It's a.

You know, you're not going to have all the biotech excitement without AI because the, the data sets are so big, they're like exabytes and yachts.

Why is it so hard for them even to get a nuclear reactor built, though?

You know, in terms of, you know, got to sort out the energy.

That's that.

Is it the Resolution foundation or.

Yeah, it is the Resolution foundation, but.

They wrote the piece about this, why Britain Can't Build Infrastructure.

Or maybe it wasn't the Resolution foundation there, because I think you'd love this piece.

But yeah, Basically saying it is like eye watering how like France has managed to build like 20 tram systems in like 20 sort of second tier cities in France, smaller cities like of the size of Lincoln or whatever.

In the time we've built like five miles of track in Edinburgh.

I think the joke is correct.

You know, if you want to get to Birmingham 20 minutes earlier, catch the earlier train.

But I do think that getting to Glasgow would, would change the country.

If you could get to Glasgow in two and a half hours or whatever.

It is, wouldn't it be great if we just had as good a rail system as the whole of the rest of Europe?

But Madrid, I was literally reading the other day in this report, it's like the cost per mile of Madrid's underground system compared to the Elizabeth line.

It was like a 60th or something.

Wow.

Something like that.

And similarly like they built this incredible high speed rail network in however many years, like a decade basically that's was way better than what we have in the uk and it was again it was, but because with the UK has.

The thing is this is really intractable because it goes back to the whole UK legal system versus the, you know, Napoleonic system in France or wherever else, but.

But it's essentially like, you know, this tunnel under, under the east in the Thames, underneath the Thames.

Lime.

Lime, yeah, yeah.

They want to do a new one and they spent, I think they spent 260 million quid and it's like a 200,000 page document before they've even started building it on like bat surveys.

And you know, it's just like you can't make it up.

You know, the biotech is obviously huge.

Have you.

Are you thinking about how AI is really going to change us or, you know, is that a book that you would write because it doesn't fit under biotech AI or does it?

So.

So when you read a genetic sequence, it creates billions of bits of data, right?

So which is part of what's so exciting because you can only do that now because processing power is developed to where it's developed to and chips are as powerful as they are and you know, storage is as powerful as it is.

So it's only.

This is a sort of several things developing in tandem that now are all exponential together and are going to explode.

All this understanding of all sorts of things, right, Whether that's cancer or how the microbiome works, you know, the bacteria in and around us and how that affects our health and all these smoking guns like the rise of autism or ADHD or Mental health challenges and depression and there are so many diseases in modernity that we, we are just beginning to really get a handle on because of this tech.

But to do that, the what gets thrown off by that analysis, by that genomic analysis.

We're looking at epigenetics and all sorts of stuff is so complicated that no, you can't have the old sort of bench, you know, a bench scientist just going, oh, let's look at these seven compounds.

And this is like way, way too complicated for that.

So you need machine learning.

Oh, then you need the AI to get it set around it.

Yeah, exactly.

I've had this wonderful thought when I found out I was asking my chat GBT about it, that killer whales brains, I think are three times the size of humans.

And then you think, then it's, oh, but you know, we're still clever.

No, their brain's also a third more dense in terms of layers than humans.

So they're pretty much definitely cleverer than us.

Or they have latent ability to be cleverer than us.

But we can't talk to them.

But AI could talk to them.

And then I was like, once AI talks to them, maybe we can put them in charge.

Maybe the next government could be the next super being, could be like, I'm voting for killer whale John.

He's brilliant.

British Columbia, you know, can you just put on a tux?

I've got one on already, mate.

You know, but that's it.

The killer whales will say, by the way, guys, this is how you have unlimited clean power.

Yes.

Electricity for everyone.

This is how we've been working on.

Figured out we've got a lab down.

Here, you know, what do you think we're idiots?

I think it's an excellent tangential, how.

Did you as an author do?

But, you know, as someone who's from economics, from the city, quite a big thing to go and say.

Right.

I'm going to really have a look at Biotech.

So 10 years ago, I joined a biotech Invest investment bank.

So I went from being a generalist smaller companies person to being a specialist life sciences person in December.

Does it always feel a bit.

Do you have to understand the science?

Well, I hope not.

Okay.

Okay.

I mean, I mean, basically I was on a very steep learning curve and it was probably the sector I'd done the least of before I made that crazy decision to take that job.

But the reason I did that was basically because increasingly you need a proper specialism in that career.

Because to my point, the UK stock market's going Backwards people are losing their jobs left, right and center.

You need a specialism.

And I had the, a chance to get that specialism.

I reckon you amend your book to so many people, the how to Own the World.

You know, it comes up all the time because, you know, someone starts talking to me about it as an accountant and I'm like, let's just go.

And like, I could try and explain it to you, but you do a better job, you know, And I think it just, you know, gives people, empowers people to really sort of sort this stuff out, you know, I can't fault the book.

I thought it was just brilliant, you know, very much.

I mean it's just such.

It's just the stuff, it's the real stuff you're missing at school and it doesn't take that long to read it.

In February I delivered 80, 000 words, words of the under 30s version of that book.

Oh, it's coming?

Yeah.

Published in November, hopefully.

So this new version, firstly it's aimed at under 30s because it's basically the insight is compounding is the biggest, most powerful thing.

Right.

Yeah.

You can get somebody to actually sort this stuff out at like, at least in their 20s, it will be life changing.

Yeah.

Huge impact on their 60s.

Right.

And the rest of their life along the way as well.

But then the other thing we've done with it is my first book was very much a, you know, Ices and Sips and it's very much a British focus book, which are partly why it's fairly successful, because I think there basically weren't any books, you know, they're all for Americans.

Right.

Whereas this one, I've tried to distill it down to the most evergreen fundamentals of capital markets and investment and you know, things that have been true for like two centuries.

Like why is gold important?

What is gold?

You know, why is that?

What's its role in the financial system?

What is the stock market?

What is whatever aimed under 30s, but so that anybody in the States or Canada or South Africa or frankly Germany or what, you know, so because we want to.

Because, because we're mission driven.

I want us, you know, I want.

I mean, obviously people in America do a better job than people in Britain, but there are a lot of places in the world where people don't do a good job and they need to know this stuff.

So, yeah, so that's been a labor.

Of love, constant feeling of missing out, isn't it?

You know, you constantly feel like, you know, I think that sort of drives this you feel like you don't understand and then you've kind of missed the boat.

Yeah, but it's never too late to a certain extent.

But what drives me nuts, I don't think I did say this last time we spoke about it and I do say it a lot when I do podcast interviews, but I call it the automotive analogy.

So something like 75% of British adults have a driving license.

Like 42 million British adults have a driving license.

And people think it's entirely normal to know how to drive a car.

And how many hours does it take to learn how to drive a car?

20 or 30 hours.

My point is like, it is my genuine belief that making a life changing difference to your finances, getting enough information to be confident about how you sort your pension, nicer actually out is no harder than learning how to drive a car.

40 million 42 million British adults can drive a car.

I reckon fewer than 420, 000 British adults are, have that level of understanding of finance.

Literally.

It's like I, I'm constantly meeting people who are super high powered, have great degrees, you know, and they do whatever job they do and they like, I have no idea about pensions, I've no idea about investment, what's gold or.

And it's like to me it's like the most ridiculous blind spot in our society because it's, it's the smoke, it's like the silver bullet, like so strange.

Many more, millions of people know this stuff.

As if everybody who can drive a car knew how to drive their finances.

We'd live in a much, much better country.

It's just, you know, maybe, maybe my sympathy would be that it would be nice if someone in charge worked out on a couple of these big problems, you know, made the list of like these things are going to really change our society.

But it feels like they just get hit with a hose of bullshit that just sort of knocks them around the room by the time they get weird.

It's such a weird blind spot because like, yeah, I don't think, I think like fewer than 5% of the MPS in parliament understand this stuff.

Yeah, like genuinely.

Yeah, I bet.

And then there are a few enlightened places in the world like Singapore and Australia are great or great examples where they've, they've sort of taken the bull by the horn.

Have they?

Do they teach it as long as going there?

Well, they just have systems that they just force it.

Yeah, yeah, yeah.

And they have for like 30 years.

Which why people in Singapore on $100,000 a year instead of $40,000 a year.

The, the problems are almost simple, the solutions are complicated, it's getting by in.

That's why I believe the education.

You know genuinely if, if 10 million more people understood what I'm talking about, they'd be willing to accept things like low corporation tax.

Yeah, they understood how equity, how value is created and how wealth is created and how good that is for the world.

Because the other thing is like they say, oh well everybody, if there was loads of wealth then we're going to destroy the planet.

No, that's totally wrong.

Then we're going to have, then we're going to have all the capital we need to develop technologies that sort the planet out.

So we're going to ask you some personal questions, get to know you a little bit better.

De's queuing some music.

What was your first job, Andrew?

Well, I'll give you the same answer as last time because if anybody diligences our last conversation be like he's changed all his answers.

It was factually a paperboy.

And what was your worst job?

Well, last time I said data entry and I was thinking about it actually on the way here and I say I did a summer internship when I was 16 in Germany which randomly involved me working for a company called Mervenpick Scheller Ice, which make ice cream cream.

And so I was on an ice cream factory floor which was like Charlie and the Chocolate Factory.

It's awful when you see what happened.

Hundreds of six liter tubs, plastic tubs of ice cream going literally through every minute on these big conveyor belts.

And our job, I'm not kidding you, it was, honestly it was like Oompa Loompas, Willy Wonka Chocolate Factory.

One would be slightly out of alignment, get stuck and all these klaxons would go off and red lights and alarm and we'd have to hoik like you know, literally hundreds of liters of ice cream off and then clean it all up afterwards.

Wow, sounds like they need to fix the machine.

To be honest it sounds like German engineering, mate.

It was, they, they, you know, 99% of the time they produce a lot of ice cream so it's all good.

And your favorite subject in school, maths or something?

No, no, God no.

Economics.

Last time I said history but yeah, and I didn't do that for a level.

I sort of wanted to, but yeah, economics, history, politics, you know, anything that involves learning about the history of our species basically.

Special skill playing the piano and singing.

Oh yeah, very impressive.

Well you haven't heard me yet?

Yeah, I try.

What did you want to be when you grew up?

A film director, originally.

Well, that's a new answer, I think.

No, no, that's what I wanted to write my own screenplays and then, you know, put the project together.

And I just think it's.

It's basically like being the CEO, you know, if you do a $200 million Marvel film, you're the CEO of a $200 million business, basically, and you bring together all these people, and it's really creative.

And I just thought that would be an amazing thing to do.

Pretty amazing.

Did your parents want you to do anything?

No, they were.

I think my dad did not want me to go into the city.

He was unimpressed when I just decided to do that, given what he thought of city folk at that time point.

Actually, probably still does think of city folk, but no, no pressure from them to do anything in particular.

And as a pianist and a singer, what's your go to karaoke song?

And can you play the piano as well?

Yeah, well, yeah, you're right.

We did all these ones.

I mean, like, I play lots of cheesy, sort of U2 and, you know, Van Morrison and the Eagles and whatever.

Like, you know, Hotel California.

Would you sit at the piano and play it and sing along?

Yeah, yeah.

California.

That's a cracker.

Yeah.

Done that a lot.

And office dogs.

Business or bullshit?

Well, as I said last time, if you're going into the gherkin or, like, a large office building in wherever, and there's 400 people who own dogs, I think that would be quite a logistical challenge to get them all in and out each day.

But if you are an entrepreneur with your own cool, lofty office, then why not?

And guilty pleasure.

Wine.

And actually probably some level of watching crap TV with my wife that people would be horrified if they knew.

Yeah, there's nothing like crap tv.

So we'll just.

We'll just have a little bit of fun to end off with with our three and a half minutes or something we got left.

Excellent.

Get your paddle out.

You know how to play this?

Where's the cat?

Yeah, yeah.

Camera's there.

Okay, so here we go.

Dee's Cues of music.

I'm gonna name some terms.

Business or bullshit, please.

Equal paternity leave.

That's business.

Equal paternity leave.

Because they have.

In Scandinavia, I think, I might say, certainly in Sweden, and I assume in all the other ones, because they.

And empirically, it has been really good for, like, the mental health outcomes of.

Families basically, I mean they certainly in Iceland, they force their father to take.

I would have loved to be.

I think it would have been rapidly changed.

My current relationship with my wife, where she feels so much of it is on her shoulders, you know, I mean it came up again the other evening when she was just like, and it's all right for you and you can do the.

And actually the truth is she couldn't do what I do, but I definitely couldn't do what she does.

Do you know what I mean?

I was so lucky because to the extent you could be lucky during the COVID crisis.

I know it's a bit of a hot potato thing to say, but I just had our daughter in Jan18 and then we had our son in February20 and so I was like forced to be at home whilst my children were at that age.

We were exactly the same, almost identical.

The birth time we were locked down anyway, weren't we?

So I was locked down.

Oh no, I'm locked down with my two lovely kids that I now get to be a dad with all day.

And it was super.

And I, you know, I contrast that with the experience of my younger friends who were single and I also had outside space and I live really near Wimble and Common so we could go for a walk like every day in a lovely place notwithstanding lockdown.

Whereas my friends living in like one bedroom apartments in central London with no outside space, who couldn't date.

Yeah.

Gosh, like, I mean it's amazing you had different experiences of the same problem.

You know actually that wasn't just, that wasn't just an experience of poverty versus wealth.

It probably an experience of urban life versus non urban life and life stage.

It's pure, I mean like you know, teenagers not being able to see their girlfriend or boyfriend for months on end.

It's very different to a married couple with kids living together.

You know, it's really, really affected different people so differently.

And I just, you know, I'm very grateful.

We were just so lucky and the timing of it.

So that's definitely.

Yes.

Crowdfunding.

Well look, we need, we need all sorts of model.

We need anything that can help people raise money to do business.

I do worry a bit that the crowdfunding environment, you know, there are very poor outcomes because I mean, look, I tell you what would be better would be a functioning smaller company, stock market getting AIM working.

Yeah.

Because the rules, because you have more protection than minority.

There'll be a lot of people have very bad outcomes from crowdfunding.

Right.

But and you know, there's this Pisces thing that they're developing, by the way, which is this basically a stock market for private companies and all sorts of concerns about it.

Like companies don't have, have, have to have audited numbers.

It's like, seriously, what about.

What's the other one?

Aquarius or something is Aquarium.

Aquis.

Aquis.

That's.

That's a bit.

That's.

That is sort of a stock market.

But yeah, that's where they're.

All the bitcoin treasury companies are like, oh, you own a million quids worth of bitcoin, you're now worth 50 million quid.

It's like, what is going on?

Yeah, yeah.

It's so hard, that push and pull between sort of regulation or not, isn't it?

I don't think it is.

I think we've had a system that worked for 200 years.

We just like blown it all up.

Yeah.

Like we used to be more thoughtful about why it blew up and build up, you know, sort of sort it out.

Do you have any, you know, if you had pictures up with the dartboard.

Is there any particular.

Actually, no.

What I'd rather say is one of the people in my community pointed out to me that for years I've been saying if you put £5,000 in stock market investments, it returns 10% when a child's born, they'll have a million quid on their 55th birthday because that's how powerful converting is.

And somebody said to me, there are 600,000 live births in the UK every year.

So 5,000 times 600,000 is 3 billion quid.

So you could give every single British child born born 5,000 quid from the government, which is only allowed to be invested in UK smaller companies which average.

So the government give.

Every time you have a birth, they give you £5,000 and you have to invest.

It goes in.

They do it right.

It just is a system and then you get it.

Like we decide we can get it near 30th, but.

Or whatever, like.

Right.

Look at Games Workshop shop.

I used to be a geek and paint little Orcs and dragons.

I loved all that stuff.

Games Works was a multi billion pound company.

Today that's a great British success story of a quirky little thing that there are lots of private companies, sorry, small companies that have done that over the years until we destroyed our smaller company market.

But my point being is, so if you had 3 billion quid a year going for every child born in the UK and then they're not allowed to touch it.

It has no tax, it's tax sheltered account like an iron nicer and it's only allowed to be invested with British smaller company funds.

There's a very, very good chance that that five grand will be a lot of money by the time people are older, which solves our pensions crisis.

Which 10 years in would give 30 billion quid to UK smaller companies which is like, you know, 30 billion pound IPOs or 300, 100 million pound IPOs.

Right.

Which means loads of money for entrepreneurs to do.

So.

That's an amazing policy and I, you know what, why don't we, why don't we do stuff like that?

That's on the list for Rachel Reeves chat?

Yeah, please.

Yeah, yeah, csr.

I think that people are getting more esge and CSRE just naturally, like societally, like people care more about the environment.

People care about, you know, people don't care about gay marriage.

People like to have a multi ethnic workplace.

You know, we are just like I used the example last time, Erin Brockovich, you know, that basically took a chemical company to task in the 90s.

You couldn't have done that in the 70s or 80s.

In the 70s or 80s lots of corporate access was fundamentally bad.

Oh, we're polluting the environment.

Just keep quiet about that.

Let's make more money.

I don't think the world's anything like that anymore because the people in the businesses, the people who run the business, the people who work in the businesses care about these things much more.

So I don't think you need to impose it.

That's my view in the enlightened west, basically where this might be the same.

Same ESG investing, same thing.

Yeah, same.

Oh, no, I, yes, yeah.

I don't put it this way.

If you look at the annual reports of FTSE listed British companies that are claim that's going in ESG index now, it's like another million quid of cost to fulfill the reporting obligations, to have an ESG bit which no one reads.

And probably is full of, full of.

Horror and it's nonsense.

And I reckon that is again, that's just another burden on, on companies trying.

To do good stuff and finally, I mean, bless them, the labor government.

I mean you, you know, unfortunately, I.

Mean, look, I just, I think it's this simple.

We've got two centuries of evidence from dozens of countries about what makes society wealthier, fairer, you know, safer, whatever.

And Pretty much every policy I've seen since they've come in and does the 180 degrees opposite.

It's making Britain much, much worse.

And we've got to get over this addiction to get closer to Europe.

I think everyone wants to undo Brexit.

So they're like, well, let's get closer.

Let's.

Let's keep aligning.

And if we.

They're their biggest.

Yeah.

I mean, to extend.

They're the biggest trading partner.

We have to align with their standards so we can buy and sell goods.

So, you know, I get some of that, but we've got to actually do something as well.

You know, I. I couldn't have a view on Brexit because I believe in the free movement of peoples, but I also believe in small government.

So, like, I can't.

Can't get my.

You got stuck.

I can't get a mix.

I can.

Either way, I don't get what I want.

Like, you piss away billions and billions of pounds on idiots sitting in Strasbourg making, yeah, regulations.

But then my Swedish mates can't work in London.

And you know what?

It's like, I just can't.

But.

But I just, you know, what we didn't do after it happened is capitalize on the opportunity that it engendered to the extent that there was one, you know, to become Singapore on Thames or to actually really push the envelope.

Envelope on lower taxes and attracting foreign capital.

Yeah.

With the regulations.

Couldn't we.

But we could go low tax.

So.

So I know people who work in the wine industry and the British regulation of alcohol and labeling on alcohol and how it's all important.

Apparently.

It's just unbelievably complicated.

Blowing people.

Like, people are going out of business left, right and center again.

It's the entertainment, you know, pubs and people who sell booze.

It's just like all.

And that regulation is not European regulation, it's British regulation.

That's even worse than what we had before.

Even though we've left, it's like, what are we doing?

It's sort of counterintuitive because we don't regard ourselves as bureaucratic, but we literally.

We are.

We took the opportunity to lower taxes and become globally competitive.

Like, we were talking about Ireland, which.

Which Brexit gave us and to get rid of tons of bureaucracy in red tape and to make the city less, you know, straight Jack.

And we've done the opposite and we've done the opposite and made it even worse.

So, of course Brexit's rubbish because everything we did since is rubbish on the positive.

To end on your positive note, UK.

Stock market is a massive buy.

It is a massive buy.

It couldn't be a better time.

Thank you so much, Andrew, for doing this.

You're absolutely brilliant and I think it's really important, the stuff you're saying and just hopefully your message continues to spread.

Thank you very much.

It's lovely to be here.

So there you have it.

That was this week's episode of Business Without Bullshit.

We'll be back next Wednesday.

Until then, it's ciao.