Transcript QAV 429

Transcript for QAV 429 Club Edition

Cameron  00:05

Wel­come back to QAV TK, episode 429. How are you today?

Tony  00:14

Very well, Cam. A lit­tle bit bleary-eyed after watch­ing the British Open for the last four days at night, but no, good. Liv­ing the life in lock­down [laugh­ing].

Cameron  00:24

What hours is that on?

Tony  00:27

It was com­ing on about sev­en at night and then going through about four in the morn­ing, but I did­n’t stay up the whole time.

Cameron  00:32

How long do you stay up?

Tony  00:35

I was stay­ing up until around mid­night watch­ing it and then sort of check­ing things again about four in the morn­ing to see how it fin­ished.

Cameron  00:41

Four in the morn­ing? [laugh­ter] All right. Well, that’s good. So you’re hang­ing in there. It looks like your pre­dic­tion or Nor­man Swan’s pre­dic­tion last week in Syd­ney could be locked into. Christ­mas might be true the way it’s going.

Tony  00:43

Yes.

Cameron  00:44

You have to get up and do a four o’clock in the morn­ing pee break like I do.

Tony  00:47

[laugh­ing] I don’t know, I was just wak­ing up nat­u­ral­ly, got no idea. Just excit­ed. Yes it prob­a­bly was, it’s like you live in lock­down you just lose all sense of time any­way.

Cameron  01:00

[laugh­ing]

Tony  01:00

It’s like I’m get­ting up and going to play golf or some­thing, it’s just…

Cameron  01:03

Like being at Crown Casi­no.

Tony  01:06

It is a bit except if we get clocks on the walls here.

Cameron  01:08

Yes, [laugh­ing] you should take them down and then you [laugh­ing] just won’t know what’s going on.

Tony  01:13

Yes. So we had a cou­ple of bet­ting pools going under who was going to win the British Open and I man­aged to win them both which was good.

Cameron  01:22

Well done, lucky-

Tony  01:24

Yes.

Cameron  01:24

[unin­tel­li­gi­ble 01:25] that’s you name.

Tony  01:27

Yes, well anoth­er spread­sheet on golf tip­ping [laugh­ing]. God, I hope not.

Cameron  01:47

But yes, it could be Mel­bourne’s in lock­down. Yes,

Tony  01:50

[inaudi­ble 01:50]

 

Cameron  01:50

But any­way, peo­ple don’t need to be remind­ed about that. It’s all depress­ing. Let’s get into fun stuff.

Tony  01:57

[laugh­ing]

Cameron  01:57

Brent Sweeney, a QAV club mem­ber, post­ed on our Face­book page. Thanks QAV investor com­mu­ni­ty, Cameron and Tony. I just com­plet­ed my finan­cial year end cal­cu­la­tions and I achieved a 21.29% return with div­i­dends rein­vest­ed. I start­ed in Feb­ru­ary, so I only cap­tured five months of the finan­cial year. This is in com­par­i­son to the AXJOA, the All Ords Total return Index, which returned 8.44% from the begin­ning of Feb­ru­ary. So ter­rif­ic result for Brent.  “I found that 14 out of 19 stocks were in the green, 73% strike rate, which I’m very impressed with many thanks. I’m inter­est­ed to know what strike rate oth­ers have man­aged to achieve.” So any oth­er QAV club mem­bers out there… I’m actu­al­ly work­ing on like a lit­tle table. Lit­tle like a-

Tony  02:39

Yes.

Cameron  02:54

Table where peo­ple can post their results and we can have a com­pe­ti­tion. We’ll make it inter­est­ing.

Tony  03:05

Yes, like a league table.

 

Cameron  03:06

Yes, the win­ner each month gets to go and spend a week at Tony’s place.

Tony  03:11

In Lock­down.

Cameron  03:11

[laugh­ing]

Tony  03:14

At hotel Cal­i­for­nia [laugh­ing].

Cameron  03:16

[laugh­ing] Yes, that’s great. Andrew McLen­nan then post­ed I’ve owned 24 stocks in my 14 month QAV jour­ney with a 62.5% return­ing a pos­i­tive strike rate so…

Tony  03:30

Which is about what I get too so that’s pret­ty nor­mal. I think.

Cameron  03:33

Yes, 6 out of 10 you always say, right?

Tony  03:35

Yes. Cor­rect.

Cameron  03:36

That’s great. So well done, guys. It’s real­ly always great to see peo­ple post­ing the kind of suc­cess that they’re hav­ing.

Tony  03:46

Yes.

Cameron  03:47

Tony, can we go over the word­ing of the three-point trend line stuff in the Bible? Because I had a back­wards and for­wards with some­body the oth­er day and I got all dis­com­bob­u­lat­ed.

Tony  04:02

Sure.

Cameron  04:05

Because we’ve had a cou­ple of dis­cus­sions about this recent­ly in Face­book or emails or some­thing and I know it’s in flu­id flux. It’s a bit flu­id, the word­ing at the moment.

Tony  04:21

Yes, I don’t think the Bible has the fat bot­tom and fat top line and flat bot­tom and flat top lines in it yet.

Cameron  04:29

No, it does­n’t. Good point. I have to do that.  Yes, but this is just-

Tony  04:35

And yes…

Cameron  04:35

About- sor­ry, this is just about draw­ing the lines out­side of that.

Tony  04:41

Yes.

Cameron  04:42

So it says to draw a byline, this is on page 17 for peo­ple play­ing along at home, the rule on a 5‑year month­ly chart i.e. a chart which shows month end prices over 5‑years mark. The high­est peak after the last breach of a Sell-Line.

Tony  05:02

Yes.

Cameron  05:04

Is that true?

Tony  05:04

Yes, the Buy-Line fol­lows a Sell-Line.

Cameron  05:09

Right. But when I’m draw­ing a chart, I’m not usu­al­ly look­ing for the last Sell-Line. When I’m doing a Buy-Line I’m just doing the high­est peak, the high­est point on the chart. Am I doing it wrong? Should I be check­ing? If there’s a Buy-Line or some­thing?

Tony  05:31

Yes, so you should do what you’re doing and then draw the Sell-Line and then check to see if the Buy-Line is before the Sell-Line, if it is, you need to draw anoth­er Buy-Line lat­er on. So prob­a­bly bet­ter if we work through an exam­ple. What’s a good exam­ple?

Cameron  05:52

Let’s look at one of the ones that we’re going to have to talk about lat­er. Well CBA, you want to do CBA?

Tony  06:00

Let’s do CBA. I’ll tell you why.

Cameron  06:01

1. OK.

Tony  06:02

Let’s do CBA.

Cameron  06:03

Right.

Tony  06:04

So how would you start?

Cameron  06:06

OK, well, its high­est point on a 5‑year month­ly is end of June 2021. So I’m ignor­ing that to start with and I’m going…

Tony  06:17

Why is that?

Cameron  06:18

Well, because it’s been in a buy for a while. It’s dropped back just recent­ly, but I think it was a buy well before that. So I want to see when it became a buy. Before it went on its lat­est run from sort of cov­ed on up.

Tony  06:37

Yes, so you want the buy that comes after the Sell, the last Sell?

Cameron  06:43

Well, I would go back and find the high­est point before the lat­est runs. So that is April 2017, I think $87.40.

Tony  06:55

Yes.

Cameron  06:57

And then I would nor­mal­ly draw a line through the next high­est peak to the right, that’s not cut­ting any­thing else off, which I think is prob­a­bly Jan­u­ary 2020.  Yes.  OK. So that is straight for­ward and if I drag that out, it would have told me that it had become a Buy.

Tony  07:22

The only prob­lem is that’s a flat top?

Cameron  07:26

Oh yes, it is right, is it real­ly?

Tony  07:26

Yes. So well, is that you? Yes, well, just using the seg­ment tool on stock doc­tor. I’m see­ing minus 2.77%. between those two points.

Cameron  07:28

2.83%. Is that what you said?

Tony  07:32

Yes, I had 2.77.

Cameron  07:43

Yes, OK.

Tony  07:44

The points don’t always anchor on the peaks. Yes.

Cameron  07:46

OK, so that falls foul of the flat right line rules. So what do we do then? Do we take the last one as the first one?

Tony  07:56

We do, yes.

Cameron  07:57

Right and so then we’re draw­ing it through Jan­u­ary 21.

Tony  08:05

Jan­u­ary 21, yes. Peak to peak or you can actu­al­ly draw… You’re actu­al­ly draw­ing it before then, Cam. You’re doing it through July 2020. Oh, no, sor­ry. You’re right, no, the next one’s high­er. Sor­ry, Jan­u­ary 21. Yes.

Cameron  08:25

Okay, so Jan­u­ary 21. Then I have to work out what the pre­vi­ous Sell-Line was.

Tony  08:38

Yes. So I think this will be a fair­ly straight­for­ward when you don’t, you should do it. But I think you’ll find the sale hap­pened pri­or to Jan­u­ary 21. So pri­or to that, where it cross­es, sor­ry.

Cameron  08:51

Right? So the pre­vi­ous Sell-Line would have start­ed May 18 was at 69.3 but then Octo­ber 18, was at 69.23 and then Jan­u­ary 19, was at 69.1. So what’s that? Oh, that’s only one or 3%.

Tony  09:16

OK, so you could do… I’m not going to start where you’re start­ing. I think the again, we start with the low point on the graph, which is March 2020.

Cameron  09:25

Oh, so I don’t need to go back before that first peak for the Buy-Line.

Tony  09:31

No, the point is we draw the Buy-Line as we have and then we draw the Cell-Line and see if the Buy-Line comes after the Sell.

Cameron  09:39

So you start unin­tel­li­gi­ble 09:43] March 2020. What are you going to use as your L2 Sep­tem­ber?

Tony  09:48

Sep­tem­ber, yes. How­ev­er, that’s a flat bot­tom, the 4% dif­fer­ence.

Cameron  09:59

3% I got yes, OK.

Tony  10:03

So then we use Sep­tem­ber as L1.

Cameron  10:05

Yes and then…

Tony  10:07

And then the next low­est pick to the right. It’s going to be Feb­ru­ary 21.

Cameron  10:13

Which is the Sell-Line that caused you to sell today? Or call a Sell today?

Tony  10:18

Yes.

Cameron  10:19

2020. So the Buy-Line that we drew start­ed in Jan­u­ary 2020. So that comes before the cur­rent Sell-Line, but-

Tony  10:33

Cor­rect.

Cameron  10:34

But there would have been a Sell-Line before that the bible says,

Tony  10:37

Cor­rect.

Cameron  10:39

Mark the high­est peak after the last breach of a Sell-Line. So OK , let’s go back a week. I know that you’ve decid­ed that you’re going to sell CBA today. But go back a week before that occurred? What would the last Sell-Line have looked like then? Is the last Sell-Line the last time it breached the Sell-Line or just the last Sell-Line, in the­o­ry, even if it has­n’t breached the Sell-Line?

 

Tony  11:08

No, it’s the last time it breached. So it would have been as you were start­ing to say before back around March 2019 and then prob­a­bly up through Decem­ber 2019. Although I have to check that because it looks like there’s a flat bot­tom going on there. So it starts with May 2018 and then goes through Octo­ber 18, Jan­u­ary 19, March 19. But if I draw a line through those, there’s only like 1.5% between all those points. I’m going to take the right most point there, which is the last one on that flat bot­tom.

Cameron  11:46

March 19.

Tony  11:46

March 19.

Cameron  11:47

Yes.

Tony  11:49

And then put it up through Octo­ber 19. Or actu­al­ly, then, Octo­ber 19, would prob­a­bly mean we want to use Decem­ber 19. Because there’s a trough after that.

Cameron  12:01

Yes.

Tony  12:02

So then I’m get­ting a Sell back in Feb­ru­ary 2020.

Cameron  12:05

Yes.

Tony  12:06

So our Buy-Line is fine. It comes after that Sell.

Cameron  12:09

But it starts before the sell. We’ve got h1 in Jan­u­ary 2020 in the Sell in Feb­ru­ary 2020.

Tony  12:16

Yes, that’s OK. We’ve got the last Sell would have been Feb­ru­ary 2020 and the cur­rent Buy that we just did before was March 21. So that comes after the last Sell.

Cameron  12:28

Yes. But the word­ing in the bible says, mark the high­est peak after the last breach of a Sell-Line. Then mark the next high­est price or peak to the right of the first price. But what we’ve done here is h1 one comes before the breach of the Sell-Line.

Tony  12:50

OK, yes, I see. I think the bible’s wrong, then. We’re just look­ing for us a Buy-Line that comes after that Sell-Line.

Cameron  12:56

Yes. Right. So what I think it should say is you mark the high­est peak, then you mark the next high­est price or peak to the right of the first price, which comes after the breach of a Sell-Line. That’s the sec­ond h peak that needs to come after the Sell-Line.

Tony  13:16

Yes, true.

Cameron  13:17

That’s what I thought that’s actu­al­ly as you put it to some­body in an email or a Face­book post or some­thing last week-

Tony  13:24

[laugh­ing] OK.

Cameron  13:24

I can’t remem­ber who it was. But you said that and. Right. OK, well, that was exhaust­ing. But… [laugh­ing]

Tony  13:37

Alright, then you’ve been in my life for last week or two like going through all the deal and try­ing to code it to oth­er peo­ple here. Yes.

Cameron  13:44

Right. OK. Well, let me just make a note in my revi­sion his­to­ry, that I changed that. OK. All right. Well, I’ll post that CBA chart up onto the web­site and peo­ple can have a look at it, and com­pare it with their own. But that’s instruc­tive. Thanks for walk­ing through that and shout out to- I think it was Andrew who picked up that there were some word­ing changes in the bible that he was con­fused by and good rea­son to be con­fused because there was prob­a­bly wrong I don’t know how that crept in there. Sor­ry about that. Andrew, and any­one else who has been con­fused by that sur­prise. No one else has picked it up and asked me about it actu­al­ly before now.  Paul, on MML he is talk­ing about your deep dive into Medusa min­ing last week. By the way, have you seen what’s hap­pened to its share price since then?

Tony  14:42

No. What’s hap­pened?  Noth­ing. It’s good. [laugh­ing]

Cameron  14:49

But HUM’s up 7% today GLE is up 9% today.

Tony  14:54

Oh, fan­tas­tic.

Cameron  14:56

Well, fan­tas­tic for me yes. It’s near­ly back to what I paid for it.

Tony  14:58

[laugh­ing]

Cameron  15:02

Yes, but you were talk­ing about you did your deep dive on MML last week and Paul says, Hi guys, real­ly like the analy­sis of MML. One thing that might fac­tor into the depressed price is their safe­ty record. I think there’s been a num­ber of deaths at their min­ing last year which makes it an unat­trac­tive ongo­ing invest­ment for many myself includ­ed. On the plus side, a quick perusal of ASX releas­es shows the CEO is pur­chas­ing shares under a super­an­nu­a­tion trust he shares with his wife, which would not show up on the stock doc­tor reg­is­ter. Although small pur­chas­es, it does appear to be a pos­i­tive pat­tern. Cheers, Paul. What do you think of all of that, Tony?

Tony  15:47

No, it’s good analy­sis from Paul, I was­n’t aware of it. I’d have to go and look at what their safe­ty record is and whether it’s a cause for con­cern. Obvi­ous­ly, it is if some­one’s died, but I just don’t know how bad it is and I’d expect for an ASX list­ed com­pa­ny that if they’ve had a death on the mine that they’d be doing a lot to improve their safe­ty pro­ce­dures as well.

Cameron  16:12

Right.

Tony  16:12

But yeah, I haven’t looked into it.

Cameron  16:15

OK, thank you, Paul. Tony, can I ask you a ques­tion about work­ing out my port­fo­lio per­for­mance for the last finan­cial years. I said ear­li­er, I was putting up this table for QAV club mem­bers to report the per­for­mance. So I thought I should work out my per­for­mance for last year.

Tony  16:35

Yes.

Cameron  16:35

And I bought and sold a lot of stuff last year had a cou­ple of stocks that did real­ly well, a cou­ple that did­n’t do so well, had to sell a bunch of stuff because I need­ed to pay bills and then right towards the end, like in ear­ly June, late May, ear­ly June, bought a bunch of stocks, add a lot of cap­i­tal to it and so if I look at my port­fo­lio report in share size, or stock doc­tor, it says some­thing like 5% for the year.

Tony  17:13

Right.

Cameron  17:13

But I know I mean, I had some stocks that went up 50% 70%, TRS, I had CCP both had real­ly good runs for the year. So it does­n’t seem to reflect what real­ly hap­pened. So I tried to break it out. I did a down­load or an export out of stock doc­tor into a spread­sheet and I remem­ber because we talked about this some time ago with one of our QAV club mem­bers and we were say­ing, if you have a lot of cap­i­tal going in and out, you need to look at each stock and work out what the per­for­mance was on that stock that you bought and sold, and then tal­ly up the per­for­mances to get an over­all per­for­mance. Is that right?

Tony  17:59

Yes, I don’t think so. I think if you’ve put lots of cap­i­tal in the last month, that’s going to depress your per­for­mance, because it’s going to give you the all the appre­ci­a­tions and less depre­ci­a­tions you’ve had over the year. Over that last cap­i­tal base, prob­a­bly-

Cameron  18:18

Yes, but…

 

Tony  18:19

But it depends on the method of cal­cu­la­tion, there is very dif­fer­ent meth­ods of cal­cu­la­tion. Some­times it’s the aver­age cap­i­tal base, some­times they just take this end­ing cap­i­tal away from the start­ing cap­i­tal, and then put that over the start­ing cap­i­tal to give you a return. But that’s not going to be a fair com­par­i­son. Because if you put a lot in at the end, it depress­es the return. Sor­ry-

Cameron  18:44

Right.

Tony  18:44

It improves the return. If you put up… if you start­ed off with $10,000 and you put $50,000 in the last month.

Cameron  18:51

Yes.

Tony  18:51

You haven’t made 40,000 you’ve just added more cap­i­tal.

Cameron  18:54

Yes, right.

Tony  18:55

Yes. So the I think what we talked about before was doing it month on month and then like you said on that last month, if you put all the cap­i­tal in and did­n’t have much of a return, it’s just going to be 1/12 of the final cal­cu­la­tion.

Cameron  19:12

Right, OK.

Tony  19:14

If you do start­ing amount of cap­i­tal, and at the end of the first month, you work out what the increase was, and then do it for the sec­ond month, third month, etc., and sum all those up. That’s prob­a­bly a bet­ter cal­cu­la­tion, but it’s a com­pli­cat­ed way of doing it.

Cameron  19:32

Right. What’s so what I did, as I said before, was I looked at all of the trades, and the ones that I sold, I worked out what the per­for­mance of them was dur­ing the dura­tion that I owned them. The ones that I did­n’t sell, I had­n’t sold by the end of the finan­cial year. I just did a mark to mar­ket for the end of the finan­cial year and cal­cu­lat­ed what the per­for­mance of it was. Then I had TRS, I had a cou­ple of parcels of TRS, which I owned before the begin­ning of the last finan­cial year, but sold dur­ing the finan­cial year.

So I did a mark to mar­ket on what they were worth at the begin­ning of the 2021 finan­cial year and cal­cu­lat­ed from that. So then I end­ed up with a table of indi­vid­ual per­for­mances for each stock and added those up and that said, my port­fo­lio was down 57% for the finan­cial year and I thought, well, that does­n’t sound right. [laugh­ing]

Tony  20:32

No, it’s because… if you’d worked out the vol­ume weight­ed sit­u­a­tion for each of those stocks, you’re still going to have the same prob­lem, you put lots of cap­i­tal in towards the end.

Cameron  20:44

Right.

Tony  20:44

So I think the best way to do it, if you’ve got lots of ins and outs is to do it month on month and add up the months.

Cameron  20:49

Like I been doing for the last cou­ple of years with the QAV port­fo­lio just month­ly results.

Tony  20:57

Yes, we’re doing a mark to mar­ket each month for sure. Yes.

Cameron  21:00

Yes.

Tony  21:01

Yes.

Cameron  21:02

Well, that’s…

Tony  21:02

Which is not quite what we were doing with the dum­my port­fo­lio. We were doing annu­al ones as well. Because the port­fo­lio does­n’t have all those ins and outs in it. We did­n’t intro­duce any new cap­i­tal.

Cameron  21:12

Yes. Right. But I was doing a month­ly end of month sum­ma­ry with the mar­ket to mar­ket and all that kind of stuff.

Tony  21:18

Yes.

Cameron  21:20

Well, that’s time con­sum­ing and annoy­ing, Tony, I don’t want to do that. Why? Why don’t these plat­forms like Share­sight and Nevexa and Stock Doc­tor do that for me?

Tony  21:32

We’ll prob­a­bly need to talk to them or an account because I’m not an expert in this field, but they prob­a­bly do. It’s just one of the options you can select. We’re get­ting into mon­ey weight­ings ver­sus oth­er wait­ings. So I’m just not sure what the option is.

Cameron  21:47

I’m sure one of our lis­ten­ers knows how it works. Some­body please tell me because it just did my head in this morn­ing. I hate spread­sheets, as every­one knows. [laugh­ing]

Tony  21:59

Yes, I can’t help you much more than that. Because over time, all that kind of ins and outs should even out to a cer­tain extent, I’m assum­ing.

Cameron  22:09

Right but it prob­a­bly helps if you add…you’ll always be adding more cap­i­tal. If you’re lucky.

Tony  22:19

Yes.

Cameron  22:21

Yes. So you’ve still got that sit­u­a­tion where you need to work out if you add a mil­lion bucks in, what’s the per­for­mance if you’re try­ing to keep track of it.

Tony  22:21

Yes, I guess the way I’ve done it for myself is to to ignore the cap­i­tal inflows and out­flows because if you have inflows in one year, it’s resets the base for the next year, you’ve got to get a return off that cap­i­tal any­way. So if this year looks good, because you put mon­ey in next year is going to look good as well, because of per­for­mance, not because that mon­ey, the mon­ey was already in there. If that makes sense.

Cameron  22:56

What if you add more mon­ey the next year as well? Well, not every year. Every year, yes. You’re going to look real­ly good [laugh­ing] If you’re using a dodgy cal­cu­la­tion, but if you’re actu­al­ly try­ing to work out the actu­al per­for­mance, it’s com­pli­cat­ed.

Tony  23:10

Yes, I’ve done it before using IRR cal­cu­la­tions, which is a for­mu­la in Excel, which takes into account each mon­th’s ins and outs. So it gives you a bet­ter cal­cu­la­tion of your inter­nal rate of return.

Cameron  23:25

Right.

Tony  23:26

But that’s kind of the­o­ret­i­cal.

Cameron  23:34

Tony  23:35

Only because it’s like, say it cal­cu­lat­ed, you had a 10% return for the year. What does that mean for you, you had so many ins and outs so it’s pret­ty hard to make any deci­sions based on that and if you took what’s out in the first month, that might affect the inter­nal rate of return and put lots in the last month and it will still affect the IRR.

Cameron  23:52

So how do you know if you’re doing a good job or not?

Tony  23:54

Stop tak­ing mon­ey out of your port­fo­lio?

Cameron  23:59

[laugh­ing]

Tony  23:59

[laugh­ing]

Cameron  23:59

It’s easy for you to say.

Tony  24:01

[laugh­ing] Yes, my guess would be to do it month by month and add it up.

Cameron  24:08

OK, I’ll have a crack at that. Thank you. All right. You want­ed to talk a lit­tle bit fur­ther about the ques­tion we had last week, we had a young fel­low 25 said, if you were 25? What would you do? How would you do it? You want­ed to expand on your answer a lit­tle bit.

Tony  24:29

Yes, so this is a bit like the arti­cle we wrote on pri­vate school edu­ca­tion and what it would be worth to you over a long peri­od of time if you took that mon­ey and invest­ed it using QAV. So the bench­mark answer to the ques­tion is to take your pot of mon­ey and let it accu­mu­late with­out touch­ing it for 30 years and I’ve com­pared that against some­thing that we’ve done our­selves, which is a blend of using prop­er­ty and gear­ing and invest­ing in the stock mar­ket, I just want­ed to run through that.  I has­ten to add, this is not in any way finan­cial advice for the per­son who asked the ques­tion, but I’m doing it to high­light a cou­ple of things. One is the use of gear­ing and two is, I think, one of the things which I found use­ful and moti­va­tion­al over the years and we spoke about briefly before is doing up a finan­cial plan and a spread­sheet for your own cir­cum­stances and play around with those num­bers and see what a peri­od of time that suits you and your hori­zons might look like.

So I’ve just done a quick one on my com­put­er and I assumed the per­son who was 25 could invest for the next 30 years until retire­ment at 55 and I put some oth­er assump­tions in which may be unre­al­is­tic for a 25-year-old, but they make the math easy, so we can talk about it and the assump­tion I use was that the per­son went out and bought a house to live in, which was worth a mil­lion dol­lars and I picked that num­ber, because it’s a one, so it’s easy to do the math, but that might be unre­al­is­tic that some­one could do that at 25. But inter­est rates are low.

So gen­er­al­ly, to buy a mil­lion-dol­lar house, you’d need a deposit of 200,000 and you’d bor­row 800,000, from the bank and I let that run just with­out doing any sums at all, let that run for 30 years, and which is pret­ty much how most peo­ple in Aus­tralia do their invest­ing, they go and buy a house when they’re young, as soon as they can, and they live in it and when they get to retire­ment age, they sell it, pay off the debt and go from there, work out their retire­ments, buy a cheap­er house, use the dif­fer­ence to invest for the retire­ment, but that house using a 9% infla­tor for the house would be worth about $13 mil­lion over after 30 years.  So the gear­ing does­n’t change. So that $800,000 of mort­gage, I guess it will get paid off over 30 years. But it nev­er got high­er than what it start­ed, which was $800,000, which means the equi­ty is now 12.2, which is a nice sum. I mean, you’ve got to take into account that that $12.2 mil­lion in 30 years’ time isn’t worth $12.2 mil­lion now.

So then the next base case to com­pare that to was to have $200,000 of equi­ty, instead of using it for deposit in your house to go off and invest in the stock mar­ket using QAV. In oth­er words, it grows at 19.5% and after 30 years, you get to $31 mil­lion. So that’s bet­ter than putting it into your house and then to get accu­mu­late over time and that makes sense because the house accu­mu­lat­ed at 9% and QAV’s accu­mu­lat­ing at 19.5 %.  But there’s kind of a blend, which worked for me and these aren’t my num­bers, but I just want­ed to share them as an exam­ple. So the thing to note, first of all, is if you go out and buy a house with 200 down on a mil­lion dol­lars over the first five years say the val­ue of the house grows to $1.5 mil­lion and that’s just 9% growth every year. But your equi­ty, because the mort­gage has­n’t gone up, it’s still $800,000 your equi­ty is grown to be $700,000, which is actu­al­ly about a 30% return because you had lever­age.

So that’s actu­al­ly bet­ter than QAV. So we kind of need to har­ness that, which turns out to be a blend of invest­ing in your own home, let­ting the equi­ty grow because of nat­ur­al growth and gear­ing and then redraw­ing down the mort­gage and putting it into shares. So, for exam­ple, after those five years the house is worth 1.5 mil­lion, but your equi­ty is worth 700,000. The gear­ing is worth 800,000.  So you’ve actu­al­ly got a lot of equi­ty, your house is worth 1.5 mil­lion, you can go back to the bank and say how much would you lend me now that my house is worth 1.5 mil­lion and the bank would say 80%. So you can increase your gear­ing, reduce your equi­ty.

So if you geared up again, you would have $1.2 mil­lion worth of gear­ing which is 80% of the new house val­ue after five years of 1.5 mil­lion, which means your equi­ty has dropped to be 300,000 but you’ve got an extra $400,000 there to put into the share mar­ket, that new gear­ing, if you like, again does­n’t change over time.

So after anoth­er five years, so 10 years into this sce­nario, your house has gone up in val­ue again, it’s now worth $2.3 mil­lion, your gear­ing has­n’t changed at $1.2 mil­lion. So you now have equi­ty of 1.1 mil­lion. If you’ve invest­ed the share into the share mar­ket, and the 400,000, that went into the share mar­ket, when you re-geared is now worth a mil­lion dol­lars, you’ve now got $1.75 mil­lion, or $1.7 mil­lion of equi­ty after 10 years.

So you’ve turned that $200,000 into $1.7 mil­lion over 10 years, which is quite a high return on equi­ty, and CAGR, cumu­la­tive appre­ci­at­ed growth.  And then if you sort of let that con­tin­ue on, at the end of 30 years, you would then have $48 mil­lion in equi­ty, because the house keeps appre­ci­at­ing at 9%. But the shares keep appre­ci­at­ing it 19.5% and your gear­ing has­n’t changed, and you prob­a­bly paid it off any­way over that time. Bear in mind, you need a job to pay for the gear­ing and but bear in mind as well you’re get­ting some income from the div­i­dends. At a cer­tain point dur­ing that invest­ment process, the div­i­dends get large enough to pay for all the gear­ing.

Cameron  31:32

Right.

Tony  31:33

So you can stop work­ing if you want. For this cal­cu­la­tion, I haven’t worked out what it was. Any­way, if you did it again, if you re-gear again and invest it in the mar­ket. After 15 years, with­out going through all the num­bers, it gets to $64 mil­lion as your total equi­ty, which is bet­ter than start­ing off with 200,000 and putting it in the share mar­ket where you end­ed up with 30 and it’s all because of the pow­er of lever­age and the fact that the gear­ing does­n’t increase over time, but the house appre­ci­ates in val­ue and the stocks appre­ci­ate in val­ue and even­tu­al­ly as we said the stocks can pay off the mort­gage and keep going.

So I think it’s worth­while for any­body ready to sit down and do this kind of cal­cu­la­tion for them­selves put their own fig­ures in work­ing out their own time hori­zon, know­ing their own cir­cum­stances work­ing out when they’re com­fort­able re-gear­ing and putting the increased equi­ty into the share mar­ket and doing this cal­cu­la­tion for them­selves. It’s quite moti­va­tion­al, and for some­one who’s got 30 years to go can become quite a big sum.

Cameron  32:45

Wow. Can you share your spread­sheet with us?

Tony  32:49

I knew you’d ask that. [laugh­ing] I’d prob­a­bly pre­fer to… Yes, I can, I’ll tidy it up. It’s just notes for me at the moment and share it with­in a week or two.

Cameron  33:00

OK.

Tony  33:01

But I’ll share it as basi­cal­ly a tem­plate for peo­ple to do their own plans with. So they can punch in the num­bers that they think suit them and then they can see what it comes out with at the end.

Cameron  33:11

And what about for peo­ple who are 50, Tony? Where do we..

Tony  33:16

We can punch­ing num­bers in…Well, how long do you plan to invest for? Well, the rest of my life?  20 years? 30 years?

Cameron  33:22

I’m not sure how long I’ve got.

Tony  33:24

So these num­bers still apply to you.

Cameron  33:26

So the same thing works whether you’re 25 or 50.

Tony  33:30

Cor­rect? Yes . You’ll have to put your dif­fer­ent assump­tions in there about gear­ing, because if you don’t have a job to pay it off, that might be because you’ve retired. It might be dif­fi­cult. But yes, you can play around with the num­bers and come up with your own pro­jec­tions.

Cameron  33:46

Ter­rif­ic. Yes, I had­n’t thought about that before the pow­er of the gear­ing.

Tony  33:51

Yes and that’s the real ben­e­fit of own­ing prop­er­ty and of course, a cou­ple of oth­er com­ments to make was this is basi­cal­ly what I’ve done over the years. The num­bers aren’t real for me but we’ve bought and sold prop­er­ty along the way we’ve kept prop­er­ty and neg­a­tive­ly geared it and then bought anoth­er prop­er­ty. So all those things mud­dy the waters.

Cameron  34:16

Yes.

Tony  34:17

But they can all be they can all be spread sheet­ed and planned and a cou­ple of oth­er things to point out is when in this mod­el, I’m just using an inter­est only loan. So you’ve got to take into account that these days inter­est only loans aren’t as easy to come by. So again, just delays the peri­od of time until the shares are big enough to pay off both the prin­ci­pal and inter­est for the line. Where­as when I did it, you know 20 odd years ago when I start­ed, you could pay off just the inter­est com­po­nent, which was cheap­er to do. They’re still avail­able today. I still have one. But after the Haine inquiry The bank has cracked down on them and how much they’ll lend inter­est on it.

Cameron  34:59

Right.

Tony  35:00

But in my prin­ci­pal and inter­est mort­gage, I still have an off­set facil­i­ty, which means if I put mon­ey in the bank, it off­sets the inter­est and I have a redraw facil­i­ty, which means if I have paid as the vari­able nature of inter­est rates change, but the repay­ments don’t. If I’ve got ahead and my repay­ments, I can redraw it.

So, there are oth­er ways of doing it. But I think also too, no one laid out this map for me 20 years ago, so I had to sort of prob­lem solve this and game it along the way, and spread­sheet and plan­et and that’s the chal­lenge I’m throw­ing out to the 25 year olds out there is you may not be able to do exact­ly what I’ve done, but work­ing out for your­selves, maybe invest­ment prop­er­ties allow you to gear and when they increase in val­ue, you can put the mon­ey into the share mar­ket at a bet­ter rate of return and maybe you start off in the coun­try and buy prop­er­ty in the coun­try, which you know, is a lot cheap­er than in a city, that might be the way you get your foothold in the mar­ket. Why not? Peo­ple have already tried… Sor­ry?

Cameron  36:06

It won’t all be under­wa­ter in 30 years, like prop­er­ty in the city.

Tony  36:10

[laugh­ing] Yes, maybe you want to take on a mar­gin line as some of our sub­scribers have told us they do, at least to get you going, maybe you do QAV until you get to a $200,000 deposit, and then you start buy­ing prop­er­ty and then you can gear it after five years, or what­ev­er the peri­od of time is. But yes, cer­tain­ly, you’ll need to solve your own prob­lems going for­ward. But I just want­ed to get peo­ple to think about this men­tal­i­ty of doing, A of doing a plan for them­selves and B of using the gear­ing that’s avail­able with prop­er­ty to boost their returns.

Cameron  36:42

The most 25 year olds prob­a­bly think they’re just going to put it in Bit coin and get rich like that in five years.

 

Tony  36:50

Yes, that’s I mean, that’s prob­a­bly one of the- I would­n’t say a regret. But one of the hid­den learn­ings for me was that I did­n’t start doing this until I was 35. So-

Cameron  37:01

Yes.

Tony  37:02

If I start­ed when I was 25, the order of mag­ni­tude of our equi­ty would be a lit­tle high­er now than it is, but any­way, but that’s why I’ve decid­ed to share this and that’s why it’s great for 25-year-old to be able to do it because the end num­bers are so much high­er after 30 years, or 40 years or 50 years.

Cameron  37:20

So you did­n’t get this from any­where when you were-

Tony  37:23

No.

Cameron  37:24

30. You just worked it out. 35, you just fig­ured it out at some point.

Tony  37:28

Cor­rect, yes. And-

Cameron  37:29

Wow.

Tony  37:30

Along the way, like, it goes against con­ven­tion­al wis­dom. I mean, I had a boss at work, who said, What the hell are you buy­ing against the house to invest in the share mar­ket for and I just fig­ured that if every­thing went south, I just had a mort­gage on the house, which should take longer to pay off. That was the sort of fall­back. But as it turned out, it worked. Well.

Cameron  37:48

I won­der if we keep doing this a few years. At some point few years from now, I think peo­ple will be able to go into a bank and say, I just want to bor­row mon­ey to invest in shares and they’ll say what are you talk­ing about, you’ve got QAV and they’ll g… banks will go, Oh, QAV, OK, that’s fine. Yes. How much do you want?

Tony  38:05

[laugh­ing] Yes, right. Yes.

Cameron  38:09

Proven, it’s more sol­id than real estate. Oh, thanks, Tony. Well, there you go. 25 year olds lis­ten­ing to this. Good luck.

Tony  38:19

35 year olds and 50 year olds, yes, get out there and plan and see what you can get to…

Cameron  38:25

Yes.

Tony  38:25

And play around with it. Play around with gear­ing.

Cameron  38:27

Yes, alright. Mov­ing right along, you want­ed to talk about 3PTL lines and alerts.

Tony  38:37

Oh yes, just the brief com­ment. I think I spoke a cou­ple of weeks ago about what I do Between report­ing sea­son. Like I said, I raised alerts in Stock Doc­tor and then just recent­ly, as I was going in look­ing at the banks, I noticed the alerts were out of date. So it’s impor­tant to prob­a­bly every month, go in and just check your cal­cu­la­tor against those alerts and upgrade them if you need to.

Cameron  38:59

Right. Redraw­ing the 3PTL’s because things may have changed.

Tony  39:04

Well, because the graphs, yes. There’s two things that can hap­pen the graph moves to the right and that might change your peak an L1 or a H1, peak or trough, so you might need to redraw it, but even if you don’t the lines are going to extend that extra month which means the price is going to rise for a Sell and drop for a Buy.

Cameron  39:24

Yes. Good point. All right, thanks. You picked up a bug? Not the COVID, a Cal­cu­la­tor Bug.  Right.

 

Tony  39:35

Yes, look, I picked it up for myself. It’s not in the tem­plate that’s on the web­site or any­thing like that, but it just may have got­ten into oth­er peo­ple’s spread­sheets as well. I picked it up I was look­ing at CBA.

So I’ve tak­en the tem­plate for the three-point trend cap code per com­pa­ny, and I’ve copied it 20 or 30 times since then maybe even more 50 times for dif­fer­ent com­pa­nies. When I went back and looked at CBA to update its Sell-Line, there was a part of the cell that does the cal­cu­la­tion for the ratio of how many days in the month we’ve gone through, was hard­wired into that CBA cell. It was­n’t in any of the oth­er cells.

So some­how it got over­writ­ten. But it should be a cal­cu­la­tion of the… There’s a for­mu­la to go some­thing like, equals today, brack­ets over num­ber of days in the month or some­thing like that and works out the ratio of days into the month. So just check that for me, please and before you go too much fur­ther with your own cal­cu­la­tors and make sure it has­n’t copied from any­one else’s-

Tony  40:41

Spread­sheets.

Cameron  40:42

Well, I think the one in Drop­box is work­ing because I was using it recent­ly and I had anoth­er issue, but I don’t think I had that issue. I did­n’t pick it up if I did, but I’ll check again. Thanks.

Tony  40:53

OK.

Cameron  40:53

Stock of the week.

Tony  40:56

Yes, so I we’ve already men­tioned that I’m plan­ning to sell out of Comm­Bank and we’re record­ing this on Mon­day at the 19th of July. So I won’t do it for… We put it out of stock jour­nal today. So I may do it tomor­row if Comm­Bank keeps drop­ping quick­ly. But I’ll wait till Wednes­day oth­er­wise, at this stage, I haven’t done a down­load today. If I was sell­ing it today, I’d be buy­ing Sun­corp SUN which is fur­ther down the list and it’s big enough for me to buy.

So we can talk… I’d like to talk about Sun­corp.  And I make those two dec­la­ra­tions just so I’m not front run­ning peo­ple who have also worked out at CBA as a sell today and they want to sell their shares and then we’ll buy some­thing, their cir­cum­stances will be dif­fer­ent. I’m not say­ing go out and buy Sun­corp. I’m say­ing it’s well I’m look­ing at for myself. So these aren’t rec­om­men­da­tions, they’re just dec­la­ra­tions. If some­one wants to buy sun­corp, they have a chance of doing it before I do so I can’t be seen to be prof­it­ing off of them. If I had abort­ed already and then talk about on the show it would look bad. So that’s why I do it.  So fol­low­ing on from Paul’s com­ment that when we talk about a stock of the week, we should prob­a­bly just pull a part of it. I want­ed to go into Sun­corp and talk about it. Inter­est­ing one over­all, I think peo­ple would know that Sun­corp is a Queens­land based bank and insur­ance com­pa­ny.

So inter­est­ed that Sun­corp had recent­ly crossed its Buy-Line, it’s sell­ing pret­ty close to its Sell-Line, but it’s been going up where­as the banks have come down. So all I can gath­er is that the insur­ance side of the busi­ness is doing okay. Because it should be fac­ing all sorts of prob­lems and issues that the oth­er banks have been fac­ing since the COVID has come back into Aus­tralia but also around the world. We’ll talk about that in fur­ther detail when we get to that one of the ques­tions about banks.  Any­way, Sun­corp has a QAV score of point 0.12, the cur­rent price was .1131 when I looked this up before the record­ing, it’s large in its ADT.

Let’s have a quick look at what it’s ADT is two years. But it’s… just have a quick look at ADT for Sun­corp. Aver­age Dai­ly Trade of what’s that? 25.9 bil­lion. So it’s quite large. It’s slight­ly less than the Stock Doc­tor QAV, sor­ry, slight­ly greater than the Stock Doc­tor QAV, so scores no points there has a good yield of 3.19%. So scores a point there, which is above the 2.5. I think we use 2.6 we use in our check­list.  Finan­cial health is strong, price oper­at­ing cash flow 5.5 P of 17, which is its aver­age for the stock mar­ket, but prob­a­bly start­ing to get up there for bank.

The QAV to cal­cu­la­tion is $11.79. So the price is below that. So it gets a point for that and has good equi­ty. So it gets a point for being less than book plus 30%. Growth is rea­son­able but not enough to give the point. So growth over P/E is less than 1.5. Part­ly because the P/E is up at 17. It’s a bank so it does­n’t have the does­n’t have a founder own­er or large hold­ings by the board in any indi­vid­ual case or aggre­gates so scores noth­ing there. It’s a bor­der­line star income stock.

So it gets one point, gets half a point for each. As you’d expect being a big bank does­n’t have a qual­i­fied Audit so no red flags.  Con­sis­tent strong finan­cial health, it’s a new upturn. As I said before, it’s just turned up again, even though it’s sell­ing close to its Sell-Line. So it scores 10 out of 50, or 67%, for qual­i­ty, and the QAV of 0.12. A cou­ple of risks with banks. Same as the banks, and we’ll talk about those when we get to the bank­ing ques­tion, in gen­er­al, but this com­pa­ny also has insur­ance.  And so there are risks with insur­ance com­pa­nies, which peo­ple may or may not be aware with.

So we’re all sor­ry. So first of all, there’s a nor­mal risk that there are more cyclones than pre­dict­ed for this year or there’s a flood, or lots of hail storms can affect the prof­itabil­i­ty of insur­ance com­pa­nies. They tend to try and man­age that risk when they arrange insur­ance, but some­times you get out­liers, which can hurt prof­itabil­i­ty, and also to COVID-19. So, inter­est­ing­ly enough with this, with the Aus­tralian insur­ers, a lot of Aus­tralian insur­ers were hit by a court deci­sion recent­ly, so although insur­ance poli­cies exclud­ed COVID-19 from pay­outs, but a court has ruled in a lot of cas­es, that was­n’t the case, and the con­tract should be enforced for COVID-19 pay­out. So the insur­ance com­pa­nies took hits, that hap­pened last year.

So most of that’s washed through and they’ve pro­vid­ed for it this year. So I think we’re through that, but it will obvi­ous­ly cause some con­cerns. If when there’s more claims aris­ing from the lat­est lock­down. So that could be a risk as well.  Yes, so that’s some Sun­corp and that’s a bit of a pull apart for peo­ple, they can com­pare it to their own analy­sis on Sun­corp.

Cameron  46:35

Pull apart, I like that. It’s like a pulled pork.

I have to come up with the name for that.

Cameron  46:42

Did you drill down into why the courts ruled against the insur­ance com­pa­nies?

Tony  46:48

I did but I’ve for­got­ten but it’s some­thing like there was pol­i­cy word­ing. No, I’d have to look at it. The pol­i­cy word­ing was some­thing like excludes epi­demics and there was no…

Cameron  46:59

I did read up on it a few weeks ago, it was a pol­i­cy, the pol­i­cy word­ing that they’ve been using in their con­tracts referred to a piece of gov­ern­ment pan­dem­ic leg­is­la­tion referred to the name of the gov­ern­ment led leg­is­la­tion. So it says-

Tony  47:14

OK.

Cameron  47:15

We won’t cov­er any­thing that’s cov­ered by this piece of gov­ern­ment leg­is­la­tion. But the gov­ern­ment changed the leg­is­la­tion 10 years ago, changed the title of the leg­is­la­tion. But the insur­ance com­pa­nies did­n’t change their boil­er plate. So they were all refer­ring to an exemp­tion refer­ring to a piece of gov­ern­ment leg­is­la­tion that had changed 10 years ago, and they nev­er changed their con­tracts. So the court went, well, you said it was this one and that does­n’t even exist any­more and the new pan­demics cov­ered by this one-

Tony  47:49

Right.

Cameron  47:49

So you’ve got to pay up.

Tony  47:52

Yes.

Cameron  47:53

I just thought it was iron­ic, because insur­ance com­pa­nies always don’t pay because of, some sort of archa­ic piece of word­ing in the con­tract that the signee missed.

Tony  48:05

Yes, we [inaudi­ble 48:05]

Cameron  48:06

We couldn’t believe that they all got caught. They all had the same thing. They all had the same word­ing in it, though.

Tony  48:12

Was it all of them? or most of them?

Cameron  48:14

Well, all the ones that the court rul­ing was against, I think it was more than one com­pa­ny.

Tony  48:18

Yes. it was a fair num­ber. I know and you’re right, yes. This works against them. But that exam­ple and forum finan­cial exam­ple, which there was more cov­er­age on over the week­end. It’s the same sort of thing, isn’t it? No one’s pay­ing atten­tion, right.  The detailed changes in a con­tract, and no one picks it up for 10 years. Same with the fraud, that’s going on with the alleged fraud that’s going on with for­eign finan­cial.

Cameron  48:43

What we need, I think what we need is a pro­fes­sion of peo­ple whose job it is to check legal con­tracts. I don’t know what you would call that pro­fes­sion, what that would look like but just a high­ly paid… [laugh­ing] I was going with lawyers, but yes, white-col­lar pro­fes­sions that get paid a lot of mon­ey to check con­tracts. I think that’s what we all need.

Tony  48:58

[inaudi­ble 48:58] [laugh­ing]

Cameron  49:07

HUM, yes. Well, I don’t know what hap­pened to HUM today, apart from the fact that it jumped back up 7%. So maybe peo­ple fig­ured out that the whole Forum finance expo­sure was­n’t as big a deal as they thought it was.

Tony  49:23

Yes, that would be my guess. But I haven’t checked the announce­ments from HUM. Let me just have a quick look.

Cameron  49:31

Bumped it, bumped right up.

Tony  49:35

Oh they put out a busi­ness update today. Let’s have a look. Fourth quar­ter 21 trans­ac­tion vol­ume is up 57%, well over the pri­or peri­od or PCP. What’s that?

Cameron  49:39

It’s a kind of drug that you get in clubs in New York-

Tony  50:01

[laugh­ing]

Cameron  50:02

Out­side of that, I don’t know. [laugh­ing]

Tony  50:05

[laugh­ing]

Cameron  50:10

Record quar­ter­ly BNPL seg­ment trans­ac­tion vol­ume up 68.7% on PCP.

Tony  50:18

So that’s their venue buy­ing now pay­load their prod­uct. So that would have been com­ing off a very low base because it was only launched last year. So that makes sense and poten­tial­ly the trans­ac­tion vol­ume was down last year because of COVID, too, but I’m not sure.

Cameron  50:32

Right.

Tony  50:34

But yes, it looks like it’s a quite a good update on trade.

Cameron  50:38

Based on an audit­ed accounts cash net prof­it after tax of 68.4 mil­lion up 121.1% on PCP.

Tony  50:50

Yes, so basi­cal­ly then they’ve prob­a­bly got their accounts in and they’re announc­ing them to the mar­ket ahead of their actu­al update after they’re audit­ed.

Cameron  51:00

Right. Pre­vi­ous cor­re­spond­ing peri­od Google is telling me is what PCP stands for.

Tony  51:07

Thank you. Good.

Cameron  51:08

Jamie Oliv­er’s lis­ten­ing some­where in a car just shak­ing his head going, Oh, my gosh, you guys.

Tony  51:16

I’m just scrolling through try­ing to find if there’s an update on forum in the

Cameron  51:21

Con­trol F, Tony. FY 21 cash end pad includes 1.5 mil­lion pre-tax of impair­ment loss­es due to bal­ance sheet expo­sure to for­eign finance, poten­tial expo­sure from sol­id receiv­ables is con­sid­ered to be a con­tin­gent lia­bil­i­ty.

Tony  51:36

What does that mean? Does that mean? They said it was 12 and now it’s only 1.5 I guess it might…

Cameron  51:42

Con­tin­gent lia­bil­i­ty is a lia­bil­i­ty that may occur depend­ing on the out­come of an uncer­tain future event.

 

Tony  51:50

I must admit, I thought the 12 mil­lion expo­sures sound­ed like a con­tin­gent lia­bil­i­ty because they’d sold off the busi­ness that had the lia­bil­i­ty.

Cameron  51:58

Right.

Tony  51:59

But… Yes. I don’t know.

Cameron  52:01

Speak­ing of James Oliv­er, I did the tran­script of the episode where we had James on and post­ed that up late last week and real­ly enjoyed lis­ten­ing to it again and going through what he was say­ing, line by line word by word. I mean, I under­stood it a lot more the sec­ond time around so if any­one is inter­est­ed in read­ing that you can go up to the blog post page for the James Oliv­er inter­view, whichev­er one that was, I can’t remem­ber, a cou­ple of weeks ago and you’ll see a link to the tran­script and you can go through and get all the word­ing. Just chuck­ling to myself because I remem­ber after we were fin­ished the record­ing I said that was real­ly good and you were like what was an order? [unin­tel­li­gi­ble 52:46]  [laugh­ing] [laugh­ing] That was a qui­et moment between you and me. That’s bed­room con­ver­sa­tion, Tony. You can’t share that.

Tony  52:58

You can edit me out then, sor­ry. [laugh­ing]

Cameron  53:03

It was a lot for my brain to take in. I think it was at the end of a two-hour episode too or no, that’s when we edit­ed i in any­way. It was big. Any­way I appre­ci­at­ed that change. I took it in a lot more. You were get­ting quite excit­ed in that inter­view too; you were like… I could tell, it was almost like a US Mas­ters Tour­na­ment for you. You were all excit­ed. [laugh­ing]

Tony  53:26

[laugh­ing] Maybe Jamie and I can go to the British Open next year to get away.

Cameron  53:26

I’m sure he’d love that. OK, banks being close to the three PTL’s. You want­ed to talk about that. Well, there’s a ques­tion about it. So you want to just plow through the ques­tions and we’ll come back to that.  Oh, OK.

Tony  53:46

Yes.

Cameron  53:47

Ques­tion Doug. Hi, Doug. has Tony test­ed or con­sid­ered the idea of not sell­ing that is hold­ing a stock if it is still scor­ing well on the QAV score­card but has dipped below its 3PTL Sell-Line. Case is cur­rent­ly in point CBA WBC ADH etc. All are still scor­ing well, but sen­ti­ment seems to have turned against them for now. It seems to me slight­ly fool­ish to sell out when the num­bers are still good and report­ing sea­son so close. Sure­ly it could go either way. But the flip side is you’d be in again on the next three PTL Buy sig­nal. So why jumped ship and pay tax­es and bro­ker­age VUK is anoth­er recent exam­ple.

Tony  54:34

Yes, look, it’s a good ques­tion, cou­ple of points. So gen­er­al­ly with the banks and I’ll address them first. The banks have come out again, which they should and said things like are we’re not going to.… We’re going to give peo­ple loan hol­i­days again. Now that the COVID shut­downs hit Syd­ney and Mel­bourne. We’re not going to evict peo­ple if they haven’t been able to pay their mort­gages or their loans or repos­sess cars if they’ve got a car loan, that kind of thing.

So I think what’s hap­pen­ing with the banks at the moment is the ana­lysts are say­ing, hang on, we fac­tored in all this, all this right back of pro­vi­sions in the last half, because we came out of COVID and it did­n’t hurt as much and so the banks either pro­vid­ed for bad debts and loss­es, and they’re going to be rewrit­ten back into the prof­it and loss.  And then the ana­lysts were also say­ing and count­ing on the fact that they would then flow through to increase div­i­dends or share buy­backs and there’s var­i­ous reports out there about what those num­bers might mean.

Now the brakes are back on Syd­ney and Mel­bourne. The ana­lysts are say­ing, hang on, maybe they’re not going to write back the pro­vi­sions. At the lev­el we thought they would, which means maybe no div­i­dend increase, which means maybe no share buy­back, at least in the short term, or it’s all pushed back six months and that’s what’s depress­ing. I think all the banks share prices in the last cou­ple of weeks.

So that’s the banks, on the oth­er ones like Adair’s. And, well Adair’s is still way above its Sell-Line. So I would­n’t con­tem­plate sell­ing Adair’s yet. Even though it’s in a down­turn at the moment. I think what I said last week is I would­n’t be buy­ing Adair’s at the moment, because it’s going through a down­turn with its share price. So that’s Adair’s.  So it’s fun­ny that we’ve start­ed this con­cept of a fat bot­tom that the Sell-Line fol­lows the lat­est upswing.

So it’s new. It’s not I mean, I did some research on it his­tor­i­cal­ly, and it works and it was part of my inves­ti­ga­tions into what we do with com­mod­i­ty shares, like FMG to get us out if there was a big down­turn, so I think it’s kind of serve us well, but it’s new. So this sit­u­a­tion with the banks might be a case which does­n’t work for this kind of new fat bot­tom Sell-Line. But time will tell. But giv­en the fact that we’re in COVID again, I don’t see the banks up turn­ing any­time quick­ly from where they are now and if you look at VUK. Anoth­er case in point, if we have a look at that. It crossed its Sell-Line, its fat bot­tom Sell-Line a cou­ple of weeks ago, and we sold and I sold out of mine and it’s dropped from there.

So to answer the ques­tion, from Doug, yes, that might be short term, maybe in six months’ time, when we get through COVID. Again, and we’re all vac­ci­nat­ed and what­not, the banks will start to write back more from pro­vi­sions and do more div­i­dends or increase their div­i­dends and do share buy­backs. But, a lot can hap­pen between now and then. So I’m still com­fort­able sell­ing those shares now, rather than wait­ing for new fleet. Well, it’s in some cas­es, the banks don’t report next month any­way. So you’re wait­ing until Sep­tem­ber for some of them. So I think Comm­Bank does, I think the UK might but the oth­er ones don’t. So fac­tor that into your own deci­sions.

The oth­er point to note here is that with the banks in par­tic­u­lar, we’re using fat bot­toms to draw new Sell-Lines. So if we go back and look at Com­mon­wealth Bank as an exam­ple, that we called up before, before we talked about fat bot­toms, the Sell price for Comm­Bank will be much low­er than what its cur­rent share price is. It’s only since we start­ed this con­cept of look­ing at a trough as not just being a one-month event, but it might be three or four months and there­fore using the full sort of trough to draw our lines that we have start­ed get­ting… I’ll call them hug lines. I start­ed to get Sell-Lines which go up steeply and fol­low the upward slope for the recent trends. Just look­ing at Comm­Bank, if we weren’t using the fat bot­tom, then the sale price is going to be around $66 and the cur­rent share price is at 97 odd dol­lars.  So if you look at the graph of the VUK and draw a Sell-Line and it’s gone, it’s con­tin­ued to drop is my point from that Sell-Line rows, if we use the old Sell-Line we’d still be hold­ing and we would­n’t be sell­ing until about $1.40 and the share price is cur­rent­ly 340.

So just want­ed to raise that point as well. Fat bot­tom Sell-Lines is new, there might be issues with it, but it didn’t come out of any sort of back test­ing on this. But hav­ing said that, I think it’s work­ing for the VUK and might work for our banks as well. So I’m hap­py to sell. Now the rec­om­men­da­tion of Doug, Doug might want to go back and not use fat bot­tom shares and hold them I ful­ly respect that and take his point about trans­ac­tion costs but yes, I’m sell­ing.

Cameron  1:00:05

I’m just look­ing at the VUK chart here I noticed that it’s still a buy from a MACD per­spec­tive. I know right, we’re talk­ing about MACD, we’re say­ing that there’s a lag between our Sell-Lines and MACD. This looks like a case in point. Yes, exact­ly.  Mark, hi Cam, I was look­ing at Kingrose Min­ing KRM today my QAV scores 0.24 and noticed in their lat­est quar­ter­ly ASX release, they’ve announced the ces­sa­tion of gold pro­duc­tion and they are tran­si­tion­ing back to explo­ration only. This would pre­sum­ably mean the ces­sa­tion of cash flow also maybe they should come off the top scor­ers list. Cheers, Mark. OK. Thank you, Doug. Thank you, Tony.

Tony  1:01:00

Yes, real­ly good pick up there, Mark. Cou­ple of points, it’s like­ly that they’ll come off the top scor­ers list when the results come out, because the oper­at­ing cash flow isn’t there, as Mark said. But as we know, if some­thing comes, drops down the list and falls off the top scor­ers list, we still might hold it and just look­ing at KRM, it seems like going back to explo­ration has been a good thing because the share price is increas­ing over the last cou­ple of months.

So my take on KRM is that peo­ple have worked out that the mine life was com­ing over the last cou­ple of years, and the share price has dropped from sort of 15 cents to a low of about three cents back in Decem­ber 2019 and that now peo­ple are get­ting com­fort­able with that and get­ting com­fort­able with the explo­ration pro­gram and the amount of cash they’ve got to do that and the like­li­hood of find­ing anoth­er scene etc. and start­ing anoth­er mine so would ful­ly sup­port Mark, if he decid­ed he did­n’t want to be in a gold explo­ration com­pa­ny and there­fore sold the stock, I under­stand that com­plete­ly.

But the way I would do this from a QAV per­spec­tive, and I don’t know Kingrose Mine, but the way I would do it is to fol­low sen­ti­ment from now on.

So the oper­at­ing cash flow might go away and will but if the stock keeps going up, then I’d still hold it until sen­ti­ment turned down on this one.  Anoth­er point to make about the cash flow going away is if peo­ple are using Stock Doc­tor and go into the state­ment of cash flows for KRM or any com­pa­ny across the top of that the num­bers is a head­ing and it’s got two box­es, one says as report­ed, and or two but­tons, sor­ry, as report­ed or annu­al­ized and we always use annu­al­ized and that smooth’s out the oper­at­ing cash flow force. But it means that if there’s cash flow in this half and next half, there isn’t any you’ll still see cash flow in the June 20, col­umn.

So you might want to look in this par­tic­u­lar case at as report­ed and click on that but­ton and you’ll get the f act that the cash flows pos­si­bly ran out because they’re not export­ing gold any­more and you might want to use that in this one instance any­way-

Cameron  1:03:28

Right.

 

Tony  1:03:28

In your cal­cu­la­tions for the check­list.

Cameron  1:03:31

Right.

Tony  1:03:32

Does that make sense, Cam?

Cameron  1:03:34

It does. Yes. But look­ing at their cash state­ment. It looks like they’re sit­ting on- Well, as of the end of Decem­ber ‑they were sit­ting on 31.5 mil­lion dol­lars in cash. Cor­rect?  Which is a lot of cash for them going back June 16. At the end of the peri­od, they had one and a half mil­lion, then 2 mil­lion, 6 mil­lion, 5 mil­lion. 10 mil­lion, 5 mil­lion, 4 mil­lion 19 mil­lion, 23 mil­lion, 31.5 mil­lion. So they’re cashed up and they can prob­a­bly do a lot with that cash if they’re clever lit­tle kit­ties.

Tony  1:04:07

Yes.  Yes. A cou­ple of oth­er com­ments, I guess. Like I don’t know this com­pa­ny that well or where it’s explor­ing or what­ev­er. Gen­er­al­ly explor­ing for mines won’t cost a whole heap. It’s a per­son with like… It’s maybe a team of a cou­ple of peo­ple out with a drill wher­ev­er

Cameron  1:04:28

They are met­al detec­tors, just mess­ing around with met­al detec­tors on the beach.  I saw some­one doing that yes­ter­day. Yes.

Tony  1:04:33

[laugh­ing] Oh yes, were they drilling for gold or dig­ging for for gold?

Cameron  1:04:38

Min­ing for gold, look­ing for gold.

Tony  1:04:39

But explo­ration… Min­ing for gold, yes.

Cameron  1:04:40

Yes. They’re just going to hire a mil­lion peo­ple with met­al, that’s what they’re doing with their 31 mil­lion, mil­lion peo­ple with met­al detec­tors just to cov­er the land. That would be fan­tas­tic.

Tony  1:04:54

But any­way, my point was the explo­ration-

Cameron  1:04:56

Alright.

Tony  1:04:56

Won’t be that expen­sive. But if they do strike it and need to devel­op a mine they’ll need to cash it down and they may even do an equi­ty raise to fund set­ting up a mine again. So that’s just some­thing to bear in mind.

Cameron  1:05:09

OK, thanks for the ques­tion, Mark. Last ques­tion of the day, Petra, she post­ed this on Face­book today. I noticed that C6C- round of applause I got it right first time. First time ever I got that right first time-

Tony  1:05:21

[laugh­ing]

Cameron  1:05:22

Has dropped approx­i­mate­ly [laugh­ing] like 9.5% today. Not sure- I prac­ticed that before we went to it- Not sure why, can some­one shed some light on the Sell-Line? I’ve tried to draw it but I’m not sure if it’s right. Looks like it might have breached a while back and I pulled up the cop­per com­modi­ties price, but I think I did the wrong one again. But it looked like it was com­ing back as well. Did you look at the looked at the right the cop­per phys­i­cal price? I prob­a­bly [unin­tel­li­gi­ble 01:05:52]

Tony  1:05:51

So first of all, just look at C6C. We’ll address the Sell-Line with C6C first of all.

Cameron  1:05:57

Tony  1:05:58

I’m get­ting Petra drew a line that hugs the upward trend a lot more than what I’m get­ting. I’m get­ting a sell price of about 69 cents.

Cameron  1:06:10

Where are you [unin­tel­li­gi­ble 01:06:12]

Tony  1:06:10

Start­ed using March 2020?

Cameron  1:06:13

Yes.

Tony  1:06:14

And then I’ll go across to may 2020.

Cameron  1:06:18

Yes.

Tony  1:06:20

The price in March was 42 cents. The price in May was 50. Or sor­ry, the price in March was point 0.42. Yes, 42 cents. The price in May was 50 cents.

Cameron  1:06:32

Yes. So it’s a lot more than 8%.

Tony  1:06:35

Yes. That’s actu­al­ly… that’s about 8%. I’m just look­ing at it now.

Cameron  1:06:43

14% I get.

Tony  1:06:45

Yes, you’re right. Stock Doc­tor is giv­ing me some­thing real­ly strange. Stock doc­tors giv­ing me-

Cameron  1:06:51

That’s telling me 14%.

Tony  1:06:53

Is it?

Cameron  1:06:54

Yes, but it’s kind of rough.

 

Tony  1:06:55

Yes 11%. So that’s the line I’m using.

Cameron  1:06:57

More than eight.

Tony  1:06:58

Yes, more than 8.

Cameron  1:06:59

So that comes about 82 cents if you drag that across.

Tony  1:07:04

Yes, cor­rect.

Cameron  1:07:06

And it’s cur­rent­ly a $3.62. So it’s long way off its sell price if we’re using that, which is a… looks scary. I know. Peo­ple look at that and go, Oh, my God, it’s already come off from top of $4.57 down to $3.62. I’m not going to wait for it to drop all the way down 80 cents?

Tony  1:07:24

Well, that’s the next point I want to make is that a graph like this can be a lit­tle bit decep­tive in that drop from, say 450 to 360 is on a per­cent­age terms? Let’s say it’s dropped about 25%?

Cameron  1:07:42

Yes.

Tony  1:07:42

So if you go back, it’s head drops, which are more than that. So back in, say Jan­u­ary, it was 77 cents, it dropped back to 42 cents in March, that’s a drop of about 40%. But it looks a lot small­er, because the num­bers are small­er. So what am I try­ing to say, if the share price was 20 cents and it dropped two cents, that’s a 10% drop and looks quite small on the graph. If the share price has risen to be two bucks, and it drops 10%. That’s kind of like a big drop, even though they’re both 10 per­cents, one’s 20 cents and one’s two cents. So that ampli­tude gets mag­ni­fied on the right hand side of these graphs some­times.

So just bear that in mind when you’re look­ing at a drop. At the right hand side. It’s poten­tial­ly per­cent­age-wise, that’s still through a drop. But some­thing which has hap­pened before, but you don’t see it in the graph that way.

Cameron  1:08:39

Right. That does­n’t help. That does­n’t help if your port­fo­lio is los­ing mon­ey. I mean, peo­ple still freak out.

Tony  1:08:46

Yes, but I think peo­ple freak out when they see that sort of, I see the share graph going down and it looks quite dra­mat­ic, but it’s not. Per­cent­age-wise, it might not be as big as peo­ple are think­ing, like the graph is a bit mis­lead­ing. That’s the first point. Sec­ond point is yes, I think what’s hap­pen­ing with these cop­per pro­duc­ers is that the under­ly­ing for the com­mod­i­ty is going down, I’m just going to look at what that is.

So I’m using Stock Doc­tor, if you go to the Stock Doc­tor and type in cop­per. So I’ve opened the graph already. I’m typ­ing in cop­per and I’ll see a whole heap of cop­per mines. But I’ve got cop­per futures, down towards the bot­tom, which is H G hash, and then cop­per phys­i­cal, which is X C U under­score and so as point­ed out by one of our sub­scribers, prob­a­bly cop­per phys­i­cal is the bet­ter one to use, the cop­per futures tends to be a bit more opti­mistic. But cop­per phys­i­cal show­ing.

Cameron  1:09:52

Sor­ry, where are you find­ing this again, I’m in the com­mod­i­ty sec­tion.

Tony  1:09:58

No. So if you use the Sock Doc­tor com­modi­ties- ‑You’re going to get the futures graph, which is H G hash.

Cameron  1:10:01

Yes. Where do I get the cop­per phys­i­cal?

Tony  1:10:09

Cop­per phys­i­cal?

Cameron  1:10:09

Yes.

 

Tony  1:10:09

So you need to…

Cameron  1:10:10

Just typ­ing com­pa­ny search.

Tony  1:10:11

Com­pa­ny search isn’t work­ing, because it’s not a com­pa­ny. But where I’m find­ing it is when I’m in advanced chart­ing for say, C6C-

Cameron  1:10:20

Yes.

Tony  1:10:21

Over on the left hand side of the graph at the top, it says enter code or name.

Cameron  1:10:26

Yes.

Tony  1:10:26

And if you type cop­per in there…

Cameron  1:10:29

Right

Tony  1:10:31

Yes.

Cameron  1:10:31

I typed X C U in there and I did­n’t find it. But I see it.

Tony  1:10:36

X C U under­score is actu­al­ly what it is.

Cameron  1:10:39

Yes, right. OK. I’ve got it. Thanks. Good.

 

Tony  1:10:42

Yea and so if I draw a Sell-Line with that graph, I’m get­ting a sell price about 9181 and the cur­rent price is 9309. So it’s get­ting close to itself.

Cameron  1:10:59

Does it have a flat bot­tom?

Tony  1:11:00

No, I don’t think so.

Cameron  1:11:02

So low point. I’ve got August 2016 at 4602. Next low point- [unin­tel­li­gi­ble 01:11:13]  4797. Yes.

Tony  1:11:16

You’re talk­ing about X C U under­score here.

Cameron  1:11:19

Yes.

Tony  1:11:21

I’ve got low point [unin­tel­li­gi­ble 01:11:23]

Cameron  1:11:24

You got to…

Tony  1:11:25

Say March 2020…

Cameron  1:11:26

You’re look­ing at a five year chart?

Tony  1:11:28

Yes.

Cameron  1:11:29

My 5‑year chart. It’s got one at August 2016. What’s your August 2016 close price?

 

Tony  1:11:38

I don’t even have August 20, I’ve got 2016. My start­ing price is June 17. Let me just refresh and make sure that’s right.

Cameron  1:11:48

That’s our five years, right? That’s four years.

Tony  1:11:50

Cor­rect, no you’re right. Sor­ry, I had to refresh that for some rea­son.

Cameron  1:11:54

But it’s alright because it’s a flat bot­tom.

Tony  1:11:56

Yes, that’s right.

Cameron  1:11:58

So it’s about 4% dif­fer­ence, 4 or 5% dif­fer­ence. So we’re actu­al­ly using the covert cough to start off as it’s L1. Right. Sor­ry, for all that and go to the cen­ter.

Tony  1:12:02

No, that’s OK. No, you’re right. So I for some rea­son, I’ve lost that left hand cou­ple of months on my graph.

Cameron  1:12:14

And then you’re draw­ing it through May 2020, is that right?

Tony  1:12:19

Cor­rect.

Cameron  1:12:21

Yes, OK so that gets us around. 8997?

Tony  1:12:25

Yes. 8997. unin­tel­li­gi­ble 01:12:27]

Cameron  1:12:29

Yes. So it’s a lot steep­er than the C6C Sell-Line.

Tony  1:12:39

Yes.

Cameron  1:12:42

What would you do if the cop­per price breach­es the cop­per Sell-Line? [unin­tel­li­gi­ble 01:12:53]

Tony  1:12:53

Because I’d have to go back and ana­lyze the C6C in detail. But what can hap­pen with com­modi­ties com­pa­nies is a whole heap of things that are affect­ed by the price, obvi­ous­ly. But like, if a com­pa­ny- I’m not say­ing if this is the case with C6C ‑if a com­pa­ny is mak­ing a small mar­gin on cop­per or iron ore or what­ev­er. When the share price drops, when a cop­per com­mod­i­ty price drops down, that could wipe out their prof­it, which has a big impact on the share price.  [unin­tel­li­gi­ble 01:12:53] Even just FC6C is mak­ing a lot of mon­ey on cop­per, which is prob­a­bly more like­ly that sort of prof­itabil­i­ty is being mul­ti­plied by its P E ratio and that affects the stock price and if that prof­itabil­i­ty is reduced, because the cop­per price is going down, and the sort of give that mul­ti­ply­ing effect on the share price because of the P E ratio, which acts like a force mul­ti­pli­er on that.

So there’s those two things.  There’s also… I’m not sure again about C6C, it could also be explor­ing and peo­ple extrap­o­lat­ing from the known reserves while it could be worth and there­fore the price will go up and down a lot more with the com­mod­i­ty going up and down. But gen­er­al­ly, when the under­ly­ing com­mod­i­ty goes down, the share prices go down for these com­pa­nies, which is hap­pen­ing now with C6C. In this case, I’d use the cop­per Sell-Line to sell out of C6C.

Cameron  1:14:21

Right.

Tony  1:14:21

Yes, OK. Thanks, Petra. Thanks, Tony. I think Doug then went on the Face­book group chat today to ask about oth­er com­pa­nies and some and I guess, para­phras­ing Doug’s some of the com­pa­nies on our list that both gold and cop­per pro­duc­ers. So what hap­pens to those. I’d have to go case by case and look at them, but with the gold gen­er­al­ly with the gold price going rea­son­ably side­ways in a cou­ple of price going down and if it breached that Sell-Line, I’d prob­a­bly think seri­ous­ly about sell­ing some of those cop­per gold com­pa­nies as well. But- Right. It’ll be cours­es for cours­es if one’s only got a small amount of cop­per and a large amount of gold, you prob­a­bly hold it but oth­er­wise, sell it.

Cameron  1:15:07

1. Thank you, Tony. Thank you, every­body for your ques­tions. That’s full lid. You were read­ing any­thing good this week. Take in your lock­down.

Tony  1:15:18

I’ve just been watch­ing the golf and work­ing. [laugh­ing]

Cameron  1:15:25

All right. I’m halfway through the first Matt Helm nov­el, type of books on Chi­na I’ve been read­ing. Nev­er any Matt Helms books?

Tony  1:15:38

[inaudi­ble 01:15:38] had starred Dean Mar­tin.

Cameron  1:15:40

Dean Mar­tin. Yes, well, in the Taran­ti­no nov­el of once upon a time in Hol­ly­wood. He says that the Dean Mar­tin movies were ter­ri­ble. Of course, Sharon Tate was in one of them. That’s how it ties into the book. The Wreck­ing Crew, but he said the books were fan­tas­tic. So I’d nev­er read any of Matt Helm books. So I start­ed read­ing the first one. Death of a cit­i­zen 1958 it takes place and it’s good. Yes, real­ly good. Real­ly pret­ty. Very good. [laugh­ing]

Tony  1:16:09

It’s because of James Bond [inaudi­ble 01:16:09] Yes.

Cameron  1:16:09

Yes.

Tony  1:16:09

And Dean Mar­tin was fan­tas­tic.

Cameron  1:16:09

But the books. The books are spoofs. They’re hard­core, grit­ty spy, Pulp Fic­tion nov­el types.

Tony  1:16:09

I think I saw the Wreck­ing Crew about a month ago.

Cameron  1:16:11

It was pub­lished in 1960. Oh, yes, it was good.

Tony  1:16:14

It was just ter­ri­ble. But yes, it was fun­ny.  What’s the one I should read first though?

Cameron  1:16:34

Yes. Death of a cit­i­zen. Yes, it’s pret­ty good. He starts off. He’s like a retired assas­sin, he’s been retired for 15 years or some­thing, mar­ried, kids. He is in some sort of soci­ety- He’s a nov­el­ist. He’s in some sort of soci­ety par­ty and he sees a woman that he used to work with, anoth­er assas­sin come in, has­n’t seen him for 15 years. They slept togeth­er once. When they were killing Nazis and he walks, he thinks, he goes, oh my god, I guess I should bet­ter go over and say hel­lo and as he walks towards her, she gives him the sig­nal. Don’t expose my cov­er. I will make con­tact. So it goes on from there.

Tony  1:17:25

Cer­tain­ly.

Cameron  1:17:25

They’re pulling him out of retire­ment. Just when he thought he was out. They dragged him back in.  Like a [unin­tel­li­gi­ble 01:17:47] I was just going to say that like a [unin­tel­li­gi­ble 01:17:50]

Tony  1:17:30

[inaudi­ble 01:17:27] the Wreck­ing Crew, the movie, where he keeps try­ing to retire and they keep bring­ing him back in and he meets up with oth­er assas­sins he’s slept with before. But it’s like 60s camp com­e­dy guy. Like a Bat­man episode.  The guy who used to play King Tut plays the bad­die in the Wreck­ing Crew. Bad actor.

Cameron  1:17:57

Yes, King Tut. But is that real­ly Bat­man. [unin­tel­li­gi­ble 01:18:03]

Tony  1:18:08

laugh­ing]

Cameron  1:18:14

Vic­tor Bono. Yes. Right. All right. Well. Have a great week, Tony, and every­body lis­ten­ing to this and we’ll be back next time.