Episode 114: RBA Gets it Right (finally), Bumble Trouble, ASX Dual Class Voting Cage Match, Hermes Record, Lime Bikes Too Popular, World's Biggest Companies, BA Shocker and Adir's Rules of Capitalism
The guys discuss interest rates, online dating shark jump, ASX dual voting fight, Birken record, index dominating businesses, Adam's horrific British Airways experience, and Adir's capitalism rules.
The Contrarians catchup
Adam famously ripped apart WeWork last week on LinkedIn when he was in London, saying the place was buzzing but their priorities are out of whack (beer: yes; wifi: no).
The guys discuss their preference for riding Lime bikes around busy cities like London (or Vélib' in Paris), but because there are more consistent work-from-home days (Monday and Friday), you either can’t find a bike or “it’s like Christmas weekend riding around the city”.
Adir recommends two podcasts: Wisdom From the Top and Cautionary Tales with Tim Harford.
Speaking of other successful podcasts, The Contrarians’ very own Mike Liberale is the producer of Australia’s number-three podcast: Swag on the Beat. Conveniently, Mike goes on to talk listeners out of starting their own podcasts.
Adir quizzes Adam on the largest stock percentage weight per country.
The guys grill Mike on what sold for a record price last week, which turned out to be the original Birkin bag ($10.1M).
Adam discusses a horrific British Airways business class seat, not hesitating in saying that “Chinese airlines are better than this”.
After a 91-year-old driver killed a pedestrian, Adam says there needs to be driving tests for people over 70 every 1-2 years.
RBA gets it right (finally)
Despite the RBA keeping the cash rate at 3.85% (which Adam tipped his hat to), banks like NAB and ANZ have cut term deposit and fixed home loan rates. Seventeen banks reduced term deposit rates, signalling expectations of future rate cuts and an easing cycle. NAB’s top term deposit rate now sits at 3.80%.
Adam: “The lower interest rates are, the higher inflation is and inflation benefits the rich significantly because asset prices inflate and the rich are able to protect their wealth and in many cases grow their wealth and it's the poor who get absolutely squeezed. So the lower the interest rates, the better for the rich, the worse for the poor.”
Adir's golden rules of capitalism
Adir has four rules of capitalism that he instills in his kids.
Adir: “The thing about capitalism is, it's a game, and the most important rule is in the name, capital. And so in life, you're gonna be labor (do work and get paid for it) or you're gonna invest (be capital).
“Rule #1: If you're working for someone else, you have to save as much of that money as possible and not just put it in the bank. That money has to become capital to invest in other businesses or in some kind of assets because money is made in capitalism by people with capital. Be the capital.
“Rule #2: When you're young, you've got to optimise for risk. You can believe in long-term economic growth. If you're going to make riskier investments, they'll give you better returns if they're appropriately matched risk return. But you need time on your side. So you should look for investments that will give you a higher return because you're taking more risk.
“Rule #3: Harness the power of compound growth. Put as much money into these investments as early as you possibly can and give yourself time. And your main focus should be what can I invest in, where I'm not trying to get 30% today, I'm trying to get 10% over the 30 years that I've got on my side to invest this.
“Rule #4: Use debt wisely. That means not buying depreciating assets with debt. Don't use debt in a way where you buy stock and you leverage it up and then if the stock goes down, you're going to get all these margin calls and it's going to destroy value.”
ASX dual class voting cage match
The ASX’s proposal to allow dual-class share structures has divided major investors, who fear it could weaken shareholder rights despite potentially attracting more IPOs. While some support the flexibility to lure founders, others warn it risks empowering controlling shareholders too much, recalling past controversies like Rupert Murdoch’s 1993 “super voting” attempt.
Adir: “I think in general, investors should be allowed to choose to invest in anything within reason. This is certainly reasonable. It's transparent. You know how it works. Investors should be able to invest in anything that's reasonable and make their own decisions about whether they want that exposure.”
Bumble trouble
Bumble CEO Whitney Wolfe Herd defended cutting 240 jobs (about 30% of its global workforce) as necessary to save the struggling company, warning it could collapse without drastic action. She criticised staff for “freaking out,” urged them to “be adults,” and announced a strategic shift to the US amid declining users and falling market value.
Adam: “I think the reason is that a good customer churns because a good customer finds a partner and doesn't need the app anymore. So the question is, are these real businesses that are worth investing in? Like one of those value-capture, value-creation quandaries where they create lots of value for you, but it’s just really hard to monetise it?”
Five other stories worth following:
President Trump announced 30% tariffs on imports from Mexico and the EU, effective August 1, after negotiations with both trading partners failed to reach agreements. Posted on Truth Social, the move aims to pressure new deals but rattled markets, causing US equity futures to fall on Sunday evening following the announcement.
The new Superman film starring David Corenswet and Rachel Brosnahan earned $122M in the US in its opening weekend, marking the third-largest debut of 2025. The strong box office performance signals renewed momentum for DC Studios under co-CEOs James Gunn and Peter Safran, offering hope after a series of previous superhero flops.
A new tax provision will limit professional gamblers to deducting only 90% of their losses starting next year, potentially making them pay taxes even with net losses. Previously, they could fully offset winnings. Critics say the change, hidden in Trump’s 900-page tax bill, threatens the industry and complicates tax reporting for bettors.
Apple is close to securing exclusive US streaming rights for Formula One races starting in 2026, reportedly offering at least $150 million, which ESPN will not match. This move expands Apple’s growing sports streaming portfolio, which already includes Major League Soccer and some MLB games, reinforcing its push into live sports content.
Bad Bunny’s 30-day residency in Puerto Rico is projected to generate around $200M in economic impact, according to Discover Puerto Rico. About 600,000 visitors (double the usual number for this time of year) are expected to attend, significantly boosting local tourism, lodging, and related spending throughout the month-long concert series.
