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Hello and welcome to the midweek edition of the Shoes of Five Podcast.
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The gang's all here.
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James and Steve, how are you, chaps?
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Yeah, goodie.
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Um suffice to say, uh interesting week.
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Markets are definitely back on the sort of on the risk-on, uh risk-tolerant mood.
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And it's not so much bond yields going down and oil going down, although that's helping.
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This is all down to meta, isn't it, Steve?
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Yeah, I mean it's it's uh it really set fire to share prices uh over in the US on uh Monday, Monday's trading session.
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Um and and largely this was driven by the progress it's made with its AI agent called Muse.
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So this is being perceived as a real proper direct comparator to Jet GP uh GPT, etc.
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And so we see um we've already had several um big US corporates talking about integrating um uh Muse AI into their own um uh AI programs, etc.
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So uh it gave the whole sector a big lift and and meta share price rallied about 12%, which which for a company value well over a trillion dollars is is is no small thing.
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But it was the wider, the wider ecosystem as well.
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So we had things like arm holdings, the big um chip design company uh rallied nearly 20%.
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It was incredible, and right across the chip space, um we've seen um some very strong share price reactions earlier this week.
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So we'll wait to see later today whether that's those kind of rallies prove sustainable or not.
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And uh of course you wrote about semis on how to invest.
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And if people don't want to pick an individual stock, they can go for one of those uh either the iShares or the Van Eck semiconductor ETFs, can't they?
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Yeah, I mean there's there's you know we've we've been trying to push some some educational material here at Sharesify.
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Um it's really aimed at um anyone from a beginner up to people who just want to know a bit more information.
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So this is really trying to be very specific.
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If you're looking to invest in around the kind of semiconductor space, there are very specific things to understand about um what that industry means, how it operates.
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So we've tried to put out this this quite in-depth feature that kind of arms you with the kind of tool set to say, okay, if I want to invest in this, what are the things I need to look look out for?
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What are reasonable valuations?
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What is a normal kind of economic cycle look like for a semiconductor stock?
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So understand uh what you're going into before you actually go into it, and that's what we're trying to provide.
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And we're gonna be doing more of these features over time, looking at different little niches in the market, different indexes, different subsectors, etc., just to try and arm you the um the user effectively with more tools so you can make better better investment decisions.
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Yeah, well, as I say, also that you know these thematic ETFs are really taking off.
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And um, if you like that, if that's the way you want to go, they're very low cost, give you exposure to the whole sector, and um it avoids you having to try and pick the individual stocks.
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Um, James, what's uh been grabbing you this week?
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Yeah, another busy week for consumer-facing stocks Ian.
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So ones that have grabbed me, Kingfisher raised four-year guidance.
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So I think you know, this is the home improvement giant really benefiting from that diversified portfolio.
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So screw fix, Castorama in France going well for a change.
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That more than offset a trickier time for B and Q where like blights were down in Q2.
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Um, big ticket spend, you know, consumers reigning that in.
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JD Sports managed to hold guidance, which I guess was a bit of a relief following the Q2 uh warning a few weeks back.
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But this week they announced a move into the Mexican market.
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So seems the logical next step.
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They've already got a big footprint in the States.
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Mexico's got some very favorable demographic demographics, excuse me.
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Um, and of course, the consumer's kind of sports mad, so some very interesting stuff.
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Today's big casualty was war paint, so uh a revenue warning.
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They sort of trotted out those dreaded words second half waiting, which always makes investors very nervous, means they got a lot to do in the months, you know, running up to Christmas to make their numbers.
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Yeah, tough one.
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And a little bit of investment trust news as well, wasn't there?
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Yeah, there was.
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There's one that you wrote up on the site was Pacific Horizon, so outstanding NOV return in uh FY26, really made um bets on AI stocks, AI sectors.
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That's paid off handsomely.
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Um, the other one is Foresight Solar, which is considering all strategic options.
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So that one is the solar fund, the battery uh assets as well, really struggling, wide discount to nav, struggling to sell assets.
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So those are the ones that caught my eye.
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Yeah, and you wrote up Kingfisher, and of course, we were hoping that they might raise guidance.
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So that's all good.
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We also wrote up Renishaw, which said probably wouldn't be any surprises because they'd already flagged their results, but uh they came in very slightly ahead.
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Uh, that was their fully 8 July numbers, which came out today.
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I mean, incredibly high quality business, and funnily enough, semiconductor equipment manufacturing is what's driving all you know most of the growth there.
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Um, because that's just absolutely rocketed.
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So record pre-tax profit, record order book.
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Can see analysts raising their forecasts for that one.
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Um, yesterday we had Smith's, another quality industrial, but really slimmed down in the last couple of years.
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They sold off the detection business, so the scanners that you walk through when you go and get your flight at the airport, sold those those things off and the things that check your baggage and so on.
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Um sold off the Interconnect business and they raised 3.3 billion pounds, which they've been gradually paying back to people.
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Um, numbers were pretty good.
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I mean, not spectacular, but the news that they're going to carry on buying, but I think there's another billion and a half of um cash to return to people from those sales.
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So, you know, pretty good actually.
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Um, but I think the highlight, James, for you and I was uh it's got to be the chat with Richard Penny, um, who manages uh the Oberon Core Fund and the Oberon Smaller Companies open-ended fund.
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That was just great, wasn't it?
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Yeah, really interesting chat.
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So uh Richard Penny, well-regarded stock picker, the fund's smashing it.
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It's like it's number one over one and two years in the sector.
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Now he sees a historic opportunity in UK small caps, even this sort of big sell-off.
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Um, and a lot of the fund, I think it's about 85% of his book, has got some identifiable near-term catalysts.
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So it's it's definitely uh a portfolio to take a look at if you're interested in that part of the market.
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Chaps, I'm just I'm just uh I I always find it a bit interesting to to get different people's views about um what they mean by say a small cap.
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Um do we are we talking about a fund that's invested across AI, presumably, but also in the fit uh footy two fifty as well.
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Do they have quite a kind of flexible terminology or are they really into the kind of very small uh stuff?
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He's what sub 500 million, isn't he, James?
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That's right.
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Right, that's that's way below 60 years.
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And I tell you what, his track record is phenomenal.
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I mean, as you say, not just good over one and two years, um, second over three years, but his real his real skill is picking the lows in the market.
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So he did it in 80 uh 98, he did it again in 03, he did it again in 2008, and he did it again in 2020, and he's got you know clear form.
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You can go back and check what his um you know how he was investing.
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The thing is the investment opportunity is huge because we mentioned AIME.
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AIM's 87% behind the FTSE 100 over five years, it's down 40% and the FTSE's up 50%.
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So, you know, there's and there is a huge range of there's some amazing companies out there, but you know, what uh the message that I would get across is go with an experienced manager like Richard Penny, because we all think we're great stock pickers, but actually the you know, in that market, it's it's pretty hard to you know, it's pretty hard to consistently win, and and Richard Shoney can do that.
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Yeah, I mean it's that's really good advice here because I think ultimately we've we've all worked in this business for a long time, and and you get into a very small uh company sphere, there are so many things that can go wrong or just come out of the blue and and knock a business sideways.
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And when a small company gets knocked sideways, it can be existential.
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It's not a case of necessarily just a big sell-off and then we move on and regroup.
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It can often be existential.
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So you really do need to know what you're doing when you get down to those small cap perfect.
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Yeah, absolutely.
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Um, what what else have we got to come, Steve?
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What is on your radio?
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Well, later today, uh uh uh Syntax will be out, the company I flagged up in the US.
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Reading kind of dull but super quality business uh provides those of work with stuff.
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It's really, really boring stuff, but it does such a great job.
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It's a really big company.
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Um, it should be reporting something like about low double digits uh earnings growth, I believe.
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Uh we'll see what the market um uh takes on board with that.
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Um it has a long history of not disappointing and surprising on the upside.
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So we'll see what that plays out like as well.
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And there's a few other small cap companies um uh said to be coming out, um reported to be coming out later this week as well.
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We've got a Raspberry Pi, I think that's tomorrow, and Bango, it's uh a billiard carrier, sorry, carrier billing service.
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Um, it's been around for a long time now.
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It'd be interesting perhaps to have a glance and see where they where they've got to.
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Absolutely, yeah.
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Um, and I noticed actually talking of carry billing, there's a mobile company, Airtel Africa's Airtel mobile business is coming to market soon.
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And we got an email about an aim-listed cyber security company coming to the market.
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So, you know, interesting, maybe the tide's turning.
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Yeah, actually, James, what are you looking out for?
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Yeah, so we've got a DFS full-year results tomorrow to see you know how that part of the market's performing.
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An update from AO World is expected, and the other one I'll be keeping on is on the beach.
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I think that's Friday.
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So just to see how the kind of package holiday market is is performing, the whole Middle East turbulence, etc.
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etc.
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Hey AO's been great, hasn't it?
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Though AO and Curries, yeah, absolutely.
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Yeah, definitely curries.
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That's just been amazing since they uh spurned that bid a few a few years ago.
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They really sort of uh proved their um that was the right decision since the remaining standalone.
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Yeah, yeah, absolutely.
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Um we've got a few more interesting.
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Well, another quality compounder, um, Helma comes out tomorrow.
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Shares a flat year today.
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I mean, it's had a funny old, it ran up to 48 quid in June and it's now down back to 36 quid.
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So it's basically flat on the year, but it it gained 30% and then lost 25%.
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Um, we've got Mercia coming, which is very interesting.
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Mercier Asset Management lends to now we're talking about small companies.
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This lends to tiny UK companies, but it's got a couple of billion pounds on the books of of business loans backed by the British Business Bank, very under-researched.
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I'm actually hoping that I can get these guys on the pod.
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Um, then we've got Tiny Build software stock, um, and software companies are generally delivering, yeah, game software stock, I should say, generally been delivering good news.
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I left it out when I did my roundup in January because the market cap was so small.
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It's more than doubled.
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So, yeah, that'll teach me.
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It's now a nearly 60 million quid company.
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Um, and the other one is um Vistry, which is out uh tomorrow, I think.
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I don't think we'll be expecting much.
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You remember how last month there was a lot of excitement because they were nominated as one of the 30 odd contractors on the government's affordable housing scheme.
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She has leapt, giving all that up, absolutely all that.
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And I noticed today a tiny company called Nexus Infrastructure, which I know and I've followed, very downbeat about the UK uh new build market.
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And the guy said to me, the chief exec said to me in the past, we were we are the first people on site.
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When when houses start to get built, we are the first people there.
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So I've always that's kind of litmus test for me.
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Uh they were very, very downbeat today.
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So I think you know, maintain my view.
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Can't see any reason to get too excited.
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Um, I suppose it's close to wrapping up, really.
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Just another reminder to listeners.
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Um, we've got our um ShesiPi wealth and retirement show coming up on the 6th of November.
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Um, we still have tickets available, they are going fast though, so they won't be along uh around for too much longer.
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Um, we've got a promo code, is that right?
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Yeah, podcast Steve, rather fittingly.
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So if you're listening to this or watching this, um go to the website, go to the events section, um, and the code is podcasting block caps.
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Yeah, I mean it just means that when you go to buy the ticket, you'll get a voucher space and you put that voucher code in and it will discount your ticket to 15, 10 pounds.
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I can't remember which what what the price raise, but it's a big markdown from the the 30 pound headline um ticket price.
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So well worth doing.
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Um, I guess that's about it for for the rest of the TV.
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That's about it for us today.
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So we'll catch up with you, uh you you guys, the listeners, on Friday.
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On Friday.
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Uh bye for now.
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Cheerio.