Welcome to the Fear and Greed Business Interview. I'm sure and al Mark. Fear and Greed is working with the team at trading platform Moomoo on a series four Investors. Every Friday, we're bringing you an episode exploring how to use technology and data the smarter investing. Today, we're going deeper into investing strategy and it all comes back to research, in particular how to navigate an industry's value chain, including its upstream, midstream and downstream companies, in order to find the right opportunities. Remember, the information in this episode is general in nature and doesn't take into account your own circumstances. Michael McCarthy is the chief commercial Officer and market strategist at training platform Moomoo, which is a great supporter of this podcast. Now a regular guest, Michael, welcome back.

Welcome to the Fear and Greed Business Interview. I'm sure and al Mark. Fear and Greed is working with the team at trading platform Moomoo on a series four Investors. Every Friday, we're bringing you an episode exploring how to use technology and data the smarter investing. Today, we're going deeper into investing strategy and it all comes back to research, in particular how to navigate an industry's value chain, including its upstream, midstream and downstream companies, in order to find the right opportunities. Remember, the information in this episode is general in nature and doesn't take into account your own circumstances. Michael McCarthy is the chief commercial Officer and market strategist at training platform Moomoo, which is a great supporter of this podcast. Now a regular guest, Michael, welcome back.

Thanks very much, So I have to get my regular dose of Fear and Greed podcast.

Thanks very much, So I have to get my regular dose of Fear and Greed podcast.

Ah, fantastic. When we talk about an industry's value chain, I'm sure many of us broadly understand Dan what we're talking about, but can you perhaps explain what it is well.

Ah, fantastic. When we talk about an industry's value chain, I'm sure many of us broadly understand Dan what we're talking about, but can you perhaps explain what it is well.

I'd like to give an example of how important understanding industry change can be. Now many people will be familiar with the work of Michael Lewis. He wrote Moneyball, which became a great movie. He also wrote Big Short and a number of other great books and articles about markets. But his first ever book was called Liar's Poker, and it was one of the first books on markets I ever read. Now, there are some real people involved, the former chairman of Solomon's, the former chairman of Lehman's, but there's also some characters that he made up to give people anonymous talking points in the book, and in one of them describes a character he calls Dash Riprock, and Dash is a trader, and Dash explains his view on the markets globally. He said they were all interconnected like a spider's web, and when you pluck on one strand of the web, the vibrations go throughout the markets throughout the world. And he gave the example in the book book of what happened when there was a nuclear explosion at a place nobody had ever heard of at that time, caused Chernobyl in Russia. Of course, now, the immediate market reaction was to buy wheat. It was known that Cherobyl was not far from Ukraine. The Belarus key food producing areas. But dash rip Rock went one step better, and he realized that wheat's a storable commodity, but things like fresh fruit or not. And so he bought apples, and he made a small fortune out of anticipating where the ripples on that web would turn up in the market, and buying apples was a much better trade than the very crowded buying wheat trade. And it's the same idea with the industry chain. When something happens with a company or in an industry, sometimes the best play is not the immediate one. It's not necessarily buying Tesla, but perhaps looking down the chain to buy into lithium producers, or to buy into car and parts resalers and retailers. So understanding the industry chain gives in es and traders more options, more ability to pick the key sweet spots in an industry that might be most affected by an event.

I'd like to give an example of how important understanding industry change can be. Now many people will be familiar with the work of Michael Lewis. He wrote Moneyball, which became a great movie. He also wrote Big Short and a number of other great books and articles about markets. But his first ever book was called Liar's Poker, and it was one of the first books on markets I ever read. Now, there are some real people involved, the former chairman of Solomon's, the former chairman of Lehman's, but there's also some characters that he made up to give people anonymous talking points in the book, and in one of them describes a character he calls Dash Riprock, and Dash is a trader, and Dash explains his view on the markets globally. He said they were all interconnected like a spider's web, and when you pluck on one strand of the web, the vibrations go throughout the markets throughout the world. And he gave the example in the book book of what happened when there was a nuclear explosion at a place nobody had ever heard of at that time, caused Chernobyl in Russia. Of course, now, the immediate market reaction was to buy wheat. It was known that Cherobyl was not far from Ukraine. The Belarus key food producing areas. But dash rip Rock went one step better, and he realized that wheat's a storable commodity, but things like fresh fruit or not. And so he bought apples, and he made a small fortune out of anticipating where the ripples on that web would turn up in the market, and buying apples was a much better trade than the very crowded buying wheat trade. And it's the same idea with the industry chain. When something happens with a company or in an industry, sometimes the best play is not the immediate one. It's not necessarily buying Tesla, but perhaps looking down the chain to buy into lithium producers, or to buy into car and parts resalers and retailers. So understanding the industry chain gives in es and traders more options, more ability to pick the key sweet spots in an industry that might be most affected by an event.

Okay, so I remember reading about data centers in the last couple of weeks, and someone was investing in air conditioning companies whose main clients were data center builders because they figure the more data centers, the better the air conditioning supply will do. So it's that kind of thing. Tell me how did the industry chain tools on the Moomoo platform work? Then with that as background, well.

Okay, so I remember reading about data centers in the last couple of weeks, and someone was investing in air conditioning companies whose main clients were data center builders because they figure the more data centers, the better the air conditioning supply will do. So it's that kind of thing. Tell me how did the industry chain tools on the Moomoo platform work? Then with that as background, well.

There's a whole component area of the app that has the industry change in it, and there are dozens of them, and they built around different ideas. So some are built around companies I mentioned Tesla. There's another one built around in Vidia, another popular trading stock, and people wanted to know who the downstream retailers and users of their tips were and who were supplying them with their raw goods. And those who are able to look up and down the industry chain possibly spotted better opportunities than getting into an already frothier in Vidia. Right, So we've got dozens of changes I mentioned. They do everything. Obviously, tech is a bit of a focus. So there's a chat, GPT chain, electric vehicles chained, semiconductors chains, all the ones you would expect, but you might not expect to see a drone or cloud computing chain. You might not expect to see a gold chain or coal chain. There's travel and transportation, cancer, drugs, all of these different industry chains, and they all are backed up by the companies that are involved in those different parts of the chain. Whether they're upstream, whether they're midstream, or whether they're downstream parts of the industry train, they're all there, and when you click through the chain, you can click through and see which companies do what in that industry chain, So you very quickly get an idea of who's interconnected and how an event might ripple up and down an industry chain and make it much easier to sleep. The better way to get exposure to that idea or.

There's a whole component area of the app that has the industry change in it, and there are dozens of them, and they built around different ideas. So some are built around companies I mentioned Tesla. There's another one built around in Vidia, another popular trading stock, and people wanted to know who the downstream retailers and users of their tips were and who were supplying them with their raw goods. And those who are able to look up and down the industry chain possibly spotted better opportunities than getting into an already frothier in Vidia. Right, So we've got dozens of changes I mentioned. They do everything. Obviously, tech is a bit of a focus. So there's a chat, GPT chain, electric vehicles chained, semiconductors chains, all the ones you would expect, but you might not expect to see a drone or cloud computing chain. You might not expect to see a gold chain or coal chain. There's travel and transportation, cancer, drugs, all of these different industry chains, and they all are backed up by the companies that are involved in those different parts of the chain. Whether they're upstream, whether they're midstream, or whether they're downstream parts of the industry train, they're all there, and when you click through the chain, you can click through and see which companies do what in that industry chain, So you very quickly get an idea of who's interconnected and how an event might ripple up and down an industry chain and make it much easier to sleep. The better way to get exposure to that idea or.

Theme, Yes, that's a better way. So it's kind of a more holistic approach to a theme like AI. What about I mean, what other benefits does it have as opposed to throwing all your money at end video, which at the moment is well as of a couple of days ago, was actually the largest company in the world just for a few hours. I mean, what's the advantage of not just putting in an end video but thinking broader than that.

Theme, Yes, that's a better way. So it's kind of a more holistic approach to a theme like AI. What about I mean, what other benefits does it have as opposed to throwing all your money at end video, which at the moment is well as of a couple of days ago, was actually the largest company in the world just for a few hours. I mean, what's the advantage of not just putting in an end video but thinking broader than that.

Well, we know that one of the most powerful tools that every investor can use to spread their risk is diversification, and diversifying up and down a chain can allow investors to take exposure, particularly if they're longer term holders, to a good idea or an industry they believe has superior growth without it all being concentrated in one company. If you're in one stock and the company secretary runs off with the company funds, it doesn't matter how good the industry therein is, that company's share price is very likely to plummet. So by spreading through an industry will remove a lot of the company specific risk that can come with the exposures to a single large player in an industry chain.

Well, we know that one of the most powerful tools that every investor can use to spread their risk is diversification, and diversifying up and down a chain can allow investors to take exposure, particularly if they're longer term holders, to a good idea or an industry they believe has superior growth without it all being concentrated in one company. If you're in one stock and the company secretary runs off with the company funds, it doesn't matter how good the industry therein is, that company's share price is very likely to plummet. So by spreading through an industry will remove a lot of the company specific risk that can come with the exposures to a single large player in an industry chain.

Stay with me, Michael will be back in a minute. I guess this morning is Michael McCarthy from Murmur Okay, I just we talk about upstream downstream. Is one better than the other when you're using these tools or is it just what you prefer or how does that work? Yeah?

Stay with me, Michael will be back in a minute. I guess this morning is Michael McCarthy from Murmur Okay, I just we talk about upstream downstream. Is one better than the other when you're using these tools or is it just what you prefer or how does that work? Yeah?

I try to be agnostic about things like this, Sean. The reality is that it can happen anywhere in a chain. It depends very much on the event that's possibly driving the analysis or the theme that an investor is trying to explore as to whether or not they want to go upstream or downstream. It depends on the industry as well, of course. And you know, some people, for example, prefer not to be in commodity markets. They don't want to suffer the vagaries. So even though they might have a view on car manufacturing the amount of steel and copper required, they prefer not to be in the miners that are digging it out of the ground. They might look at a step in between in the chain, the refiners who produce the shells that the car manufacturer might use. So it depends very much on the personal views and experiences of the investor.

I try to be agnostic about things like this, Sean. The reality is that it can happen anywhere in a chain. It depends very much on the event that's possibly driving the analysis or the theme that an investor is trying to explore as to whether or not they want to go upstream or downstream. It depends on the industry as well, of course. And you know, some people, for example, prefer not to be in commodity markets. They don't want to suffer the vagaries. So even though they might have a view on car manufacturing the amount of steel and copper required, they prefer not to be in the miners that are digging it out of the ground. They might look at a step in between in the chain, the refiners who produce the shells that the car manufacturer might use. So it depends very much on the personal views and experiences of the investor.

As a long time trader and investor, myself.

As a long time trader and investor, myself.

I will go wherever the opportunities present themselves, But people have their own views as to whether it's better to be upstream, downstream, or midstream.

I will go wherever the opportunities present themselves, But people have their own views as to whether it's better to be upstream, downstream, or midstream.

Are we talking about specific investors or is this for everyone? Memoo's platform being able to use these tools, is it for everyone?

Are we talking about specific investors or is this for everyone? Memoo's platform being able to use these tools, is it for everyone?

Well, this importantly puts key information in front of investors who might even just be starting out and might help them formulate ideas. But the more sophisticated the investor or a trader using the industry chain tool, the more sophisticated the trading that comes from it, and so understanding where chains interconnect, for example, can be a next order level of understanding of those industries for those who've studied it. So it's certainly available to those who are new to trading and want to understand industries better. And it's new of course for new investors who want to understand where the company they're thinking of investing in sits in its industry. But it's a very powerful tool for more sophisticated traders in investors. And the thing about it is they're pre built so that when an event occurs, you can go straight to that industry chain get an idea of where you want to be.

Well, this importantly puts key information in front of investors who might even just be starting out and might help them formulate ideas. But the more sophisticated the investor or a trader using the industry chain tool, the more sophisticated the trading that comes from it, and so understanding where chains interconnect, for example, can be a next order level of understanding of those industries for those who've studied it. So it's certainly available to those who are new to trading and want to understand industries better. And it's new of course for new investors who want to understand where the company they're thinking of investing in sits in its industry. But it's a very powerful tool for more sophisticated traders in investors. And the thing about it is they're pre built so that when an event occurs, you can go straight to that industry chain get an idea of where you want to be.

Well, perhaps other people are still digesting the news.

Well, perhaps other people are still digesting the news.

Are the particular industries where these work best or is it across the board?

Are the particular industries where these work best or is it across the board?

Well, it's very event driven.

Well, it's very event driven.

Some of our investors do use them to identify thematics they have a long term thing they want to gain exposure to.

Some of our investors do use them to identify thematics they have a long term thing they want to gain exposure to.

But the way where we often see a spike.

But the way where we often see a spike.

In usage of the industry changes when there's an industry specific event. So you know, if there is a tariff introduced on a coal in one of the major buying countries, or if there's a natural disaster that.

In usage of the industry changes when there's an industry specific event. So you know, if there is a tariff introduced on a coal in one of the major buying countries, or if there's a natural disaster that.

Effects the supply of a good.

Effects the supply of a good.

Let's hope not, but if it does happen, traders who are on the ball can go straight to the industry chain and understand what the impacts of that might be up and down the chain and across national borders.

Let's hope not, but if it does happen, traders who are on the ball can go straight to the industry chain and understand what the impacts of that might be up and down the chain and across national borders.

Yeah, okay, so that's the point. It's not just Australian or Wall Street here. These chains can go very broad, presumably at least in a geographic sense.

Yeah, okay, so that's the point. It's not just Australian or Wall Street here. These chains can go very broad, presumably at least in a geographic sense.

Absolutely.

Absolutely.

At the moment, we've got a focus on the Hong Kong and US stocks that are interconnected. Clearly, the trade between China and the US. It's one of the most important trade relationships in the globe, and so understanding the companies on either side of that can be a very powerful tool. Over time, we will be rolling that out to include as many markets as we can.

At the moment, we've got a focus on the Hong Kong and US stocks that are interconnected. Clearly, the trade between China and the US. It's one of the most important trade relationships in the globe, and so understanding the companies on either side of that can be a very powerful tool. Over time, we will be rolling that out to include as many markets as we can.

It's interesting. This is our fourth in a series with Mumu, and it is amazing the power of technology or AI or whatever you want to call it to actually create these new strategies, because what you're talking about, having that at your fingertips is much easier than a few years ago having to find a Bloomberg screen or a Rotter screen and do all the research yourself.

It's interesting. This is our fourth in a series with Mumu, and it is amazing the power of technology or AI or whatever you want to call it to actually create these new strategies, because what you're talking about, having that at your fingertips is much easier than a few years ago having to find a Bloomberg screen or a Rotter screen and do all the research yourself.

Well, so, I hate to admit it, but when I first came into the market, part of my job is to take a ruler of free colored pens every day and go to the drawing room on the side of the dealing room and add to the daily charts of the seven major currencies that we traded. We did it by hand. Markets have come a long way, and so has the technology. But they're just tools, Sean. That's the idea. They're therefore investors and traders to use to better enhance their activities in the market and to give them a better chance of successfully realizing their goals. Their tools, and we can get a bit carried away with how powerful they are. The reality is they serve investors and traders. That's what they're for.

Well, so, I hate to admit it, but when I first came into the market, part of my job is to take a ruler of free colored pens every day and go to the drawing room on the side of the dealing room and add to the daily charts of the seven major currencies that we traded. We did it by hand. Markets have come a long way, and so has the technology. But they're just tools, Sean. That's the idea. They're therefore investors and traders to use to better enhance their activities in the market and to give them a better chance of successfully realizing their goals. Their tools, and we can get a bit carried away with how powerful they are. The reality is they serve investors and traders. That's what they're for.

Michael, thank you very much for talking to Fear and Greed.

Michael, thank you very much for talking to Fear and Greed.

Thank you.

Thank you.

That was Michael McCarthy from mumou, a great supporter of this podcast. For more information on the Moomoo platform, follow the link in today's show notes, and remember that information in this podcast is general in nature and you should seek professional advice and make sure a product is right for you before percent. This is the Fear and Greed Business Interview. Join us every morning for the full episode of Fear and Greed Daily Business years for people who make their own decisions. I'm Sean Elmer. I enjoy your day,

That was Michael McCarthy from mumou, a great supporter of this podcast. For more information on the Moomoo platform, follow the link in today's show notes, and remember that information in this podcast is general in nature and you should seek professional advice and make sure a product is right for you before percent. This is the Fear and Greed Business Interview. Join us every morning for the full episode of Fear and Greed Daily Business years for people who make their own decisions. I'm Sean Elmer. I enjoy your day,