Well, here we are. TK QAV 430. How are you going today?
Yes, good. Lockdown continues. Oh, man and for a long time to come I think so.
I think there Gladys is supposed to be giving an update soon but 145 new cases in New South Wales yesterday I think.
Yes. Plus big protests in the streets which I’m thinking is going to spread it further.
No, that could never happen. There was a big protest up here to seven and a half thousand people on the weekend and of course, we’ve got a guy who we found out, flew from Sydney to Ballina while infected. An air stewardess, hostess I don’t know what their flight attendant– I think that’s the official term these days, drove across the border. She flew up as a flight attendant, drove across the border, pick him up from Ballina, got infected herself, drove him back across the border and then they were both walking around here for a week, lying to the authorities about his coming from Sydney. Went to Churn side, a number of big locations here. It’s only a matter of time before we’re locked down here too. I don’t know.
What are they protesting? What are they protesting about him?
Who the hell knows. We haven’t had any lockdown. That’s what I want to know. They’re protesting the fact that there might be one day if they do a good enough job with these protests not wearing masks, there will be a lockdown there. They’re pre protesting the fact that they’re going to send us into lockdown by being a bunch of morons.
Anyway, I want to thank Gary, for leaving a review on Apple podcasts for the podcast. Appreciate that, Gary. I’ve been begging people to leave us reviews for the last couple of weeks and as far as I know, Gary’s the first person to do that. Thank you, Maestronow for doing that. It’s Gary’s username.
You mean, you haven’t been logging on under false names and leaving reviews.
No, I don’t feel desperate enough to have to do that. But I haven’t even done that for the film or the book Tony. But if anyone wants to leave us a review, there’s a link in the bottom of the weekly news letters. Just go and click on that. Apple or Spotify, just leave us a review. It helps. Because people, if they go randomly searching, they see a podcast, should I listen to this? I don’t know. It’s going to depend on how many positive reviews it has. Take a minute, give us a review. We’d appreciate it.
Emphasis of matter time, Tony. MIL, Millennium services. Now I was doing my own scorecard last week because I had to sell something. MTO I think and figure out what I was going to replace it with and then I was looking at MIL and I noticed this emphasis of matter thing which I didn’t think you’d mentioned when we did a bit of a deep dive on MIL a couple of weeks ago. It says emphasis of matter related to going concern but reading through I couldn’t really tell if it was a problem or not.
Yes, I think it is. Well, yes and no. I mean, I think I’ve stuffed up quite frankly. I think it shouldn’t be on the top scorers list because that emphasis of matter is a highlight by the auditors telling you to look at the notes in the financial statements which say that there’s a question mark over the company’s ability to continue trading as a going concern. That is the classic red flag qualified audit statement. I don’t know how I missed it but I did. I know when I was doing the deep dive last week, I didn’t check the audit report because I assumed I’d done it correctly in the past when it was added to the top scorers list and even added as a stock in a dummy portfolio. A complete oversight on my part, I’m not sure how to explain it. I’ve been wrecking my brains trying to recreate my thinking back then but I just think it’s an oversight.
It’s just gross. It was the grainy time.
I don’t think so. But I yes, I stuffed up. I’m going to fess up. I think– Look, I think it’s going to be– It highlights the fact to do your own research and check things for yourself and don’t rely on me or you or anybody else. Do it for you. But I think this kind of problem will hopefully be solved over time if we can automate checking the audit report somehow. That’s got to be something we direct some attention to. Yes, try and get a way of doing it automatically.
Well, I do. I mean, I think it’s a good thing in a way as you just said, like we’ve been urging people for the last few weeks to share this scorecards and I’d say the reason I came up with MIL is because it wasn’t on my scorecard and a couple of people, I think it was Allison and Cosman actually, who pointed out that it wasn’t there and asked why I had skipped it and when I went back in check that I noticed that I had it down as in my manual data from the last time, I looked at it probably a month ago, I had it down as having a qualified audit and I totally forgotten when you did you deep dive on it.
But again, it was the fact that I picked it up this time when I went to double check it because the community checked my scorecard and pointed out a couple of emissions. I went back to double check the emissions and then I could go back to you. This, it bloody works, Tony. This– There’s power of having 150 odd, really smart people on our Facebook group that are checking each other’s work and reviewing stuff. It’s terrific. I mean, I’m really excited by the fact that they’re picking up mistakes and errors and we’re folding it all back in so we’re all getting better results. It’s really true. Terrific stuff.
Yes, I agree. It’s– Well, it’s helped us in this occasion. It’s good. Yes, good, just probably should go on to say that I’m leaving it in the dummy portfolio and that was a decision I had to think about because normally I take it out, it’s a red flag event. It’s a go, no go, pull it out. But I suspect given the circumstances with this particular company, the going concern question was raised because there was a lot of current debt and not enough current assets to cover it.
However, there was a lot of current debt because apparently there’s an accounting rule which says, if you have long term debt which is being renegotiated during the 12 months that the report– The financial report refers to then you have to classify it as current debt and there was lots of things like $20 million worth of debt had been transferred from long term to current and there was only a couple of million dollars worth of current assets and they were saying well, you can’t pay your debts.
But really, I guess, as we saw with this company, they’ve had a restructure, they’ve had lots of job keeper payments, they pay down a lot of debt since their audit report and they’re on a better footing going forward. I suspect that the audit will won’t– I think it’ll disappear with this next reporting period which comes up next month. We’re waiting to see if it’s still there. I think I’ll probably sell it. But at the moment, the share price is going up and there’s a reason why I think the qualified audit may go away. I’m just going to hold it until we see.
It’s come back a little bit over the last day or so. I think it’s dropped 3% today. Three and a half, 3.3% today so far still up 1.75% since we bought it but we should keep an eye on it.
- MXI, I think it was Cosmin on the Facebook group also pointed out last week, was the first person to point out that MXI had been put into a trading halt and then a day or two later, they announced they were selling their trailer business, it’s shot up 30 odd percent in the day which made me very happy and Taylor very happy because we held it in our portfolios and his mate Chris are very excited. I know a lot of other QAV folks out of holding it as well. That was a nice one.
Yes, good. Must have been a bad business, that trailer business to sell it and shoot the share price up.
Yes. I wanted to ask you, is that something that you think has anything to do with QAV picking up that it was right for that turnaround or is it just purely coincidental luck thing?
Good question. I don’t know. It’s– I think it’s due to like when we see companies pop up on our QAV top scores list. Management, I got to work pretty hard to release– To get the share price up and get the price back to where they think fair value is. We’re looking at companies which are undervalued. I think this is an example of action taken by management to try and improve the share price of the business.
They think it’s undervalued as well band they’re sitting around going, OK, we have a responsibility as directors of the company to work out what we can do. Why are you laughing?
They’re not thinking about directors’ responsibilities again, shit, our options are on the water, let’s get the share price up or something like that. Well we own shares in the stock, let’s get this puppy on the road. Come on.
Well, when we have a responsibility to the shareholders, they mean themselves to release the value in a business and they figured in this case, the best way to do that was to sell the trailer business.
There is some merit in saying that QAV is uncovering these businesses that we think are undervalued and if we think they’re undervalued, it’s good chance that other people do as well, either the directors or other interested parties in the case of acquisitions or that stuff.
Yes, as we’ve seen before it’s fairly common that a QAV stock gets taken out by someone else. I think the most recent example was Australian pharmaceuticals, API, which is the under takeover offer from Wesfarmers. It’s the chemists chain. Right. It was on our top scorers list that it did– It’s dropped off the bottom I think because of price rises. But yes, I mean, a company who’s made a whole career out of taking over other companies and seeing the value just like we have.
And the other example would be Maya.
I added it to my portfolio and then Solly Lew who we know is a big fan of the show snapped it up and started driving the price.
I think Solly pays someone to listen to the podcast for him.
Of course. As I do. In fact, I’m– This isn’t actually me right now. This is somebody impersonating me. I’ve hired an impersonator to impersonate me. I’m actually lying on the– Lying in a hammock drinking Negron is out the back. Alright. MTO breached its Sell Line.
I was going to ask who you hide to impersonate you?
Oh, it’s just a guy. I found him on fiverr. Just doesn’t a person. No, he doesn’t have to do anything. Just has to read questions and tell some bad jokes and it’s all good. MTO breached itself on Thursday. I sold it out of my personal portfolio but I got to tell you, I was a little bit unsure as to whether or not I really wanted to because the chart looks good. It’s still going up and then it came back. But I thought it did breach the Sell Line. But I was like, it’s one of those charts that’s breached the Sell Line but it’s still generally going upwards towards the right here. If you look at it over. Well, since the start of COVID cough right, it’s been building back up and listener Dan send me an email about it to over the weekend.
Hey, mate. MTO has breached its sell line but I’m feeling a little reluctant to sell it on the basis. I think it’s doing quite well. I’m still learning that could be quite wrong but there’s some big pluses for me and a couple of slight negatives. They’ve been accumulating a lot of cash on the balance sheet. That cash has been used to pay down long-term debt to zero. Came out with an earnings update which they think will be of around 50%. On the last results, expanding market share by opening new stores which are apparently doing well, added subsidiary financial lead departments making them more profitable. Margins are expanding, making them more efficient.
The downside looking for an M&A which can turn into a diversification and then tailwinds of COVID lock downs will tail off. Like I said, I’m only just starting out could be way off in terms of my analysis. I’m wanting to hold off until September 28 on this one when the new figures come out. Although it has breached its Sell Line, would love to hear some feedback from the main man himself. OK, breach is the rules is rules is what I said to Dan, rules. I sold it because rules is rules, Dan but I was– I was reluctant like Dan is. I was like it looks good but yes.
Yes. Also that analysis stands down is good but the share price has dropped from 290 to 260 this month. It’s– That analysis isn’t counting for much with the current share price and if you look at the graph, it’s started off steeply after COVID. Now, it’s tapering off and even turning over. Look, take– I take Dan’s point. I take your point. It’s– I think you said 29th of September were the results but I think it’ll be August rather than September. I think unless it has a– There’s a– Have a– What’s its reporting date? Yes, and I will get– We’ll get your results from this one before the end of August. You can potentially wait until then I keep– Very much keeping an eye on the share price because there’s been a couple of– There’s been a fair few cases I think in the last month or so where we’ve seen stocks bounce off the COVID low and even though they’re in a general uptrend, the steepness I guess of that uptrend is starting to taper off and sometimes turning over and I’m thinking of stocks like VUK and ANZ at the moment and even with socks like we spoke about last week, the retailers like Adair’s and JB Hi-Fi, they’re in a bit of a downturn at the moment.
Of course, that might turn around with new figures and JB Hi-Fi and Adairs haven’t crossed their Sell Lines whereas Virgin UK and ANZ have. Virgin UK and ANZ, they’re basically telling us that we should sell when they cross the three-point trend line because they both remained beneath that the share price when they crossed. Other ones that I spoke about last week, CBA bumps up and down against the sell price. I’m having to watch that day by day and I think we spoke about CBA last week. It crossed itself price by a couple of cents and now it’s back above it. I haven’t sold any, just as an update on that one but it could easily turn around.
It’s so close to the sale price, it could turn around today or tomorrow. Yes, I think rules is rules that you might want to wait for a little bit, give yourself a couple of percentage points tolerance and just see if it does turn around. But looking at the MTO graph, I think it’s a reasonable conclusion to say that some of the wings going out of that share price.
Really, even though it’s been going up relatively consistently since the COVID cough.
Yes, it has been going up consistently and it may well keep going up. There’s never a black and white answer to this situation.
Yes and if– Like I said, if you wanted to wait and give yourself a bit of a margin, then you might wait till it’s a couple percent below the sell line before you sell. But in case it turns back up again but– Yes, I’m not convinced. In the last month, it’s dropped 30 cents on a three bucks dropped 10% in the last month.
It’s a bit of a trend I think, for me.
It has dropped a couple of cents since I sold it late last week. I’m feeling OK about– I replaced it with Cog which is come up a couple of points I think since I bought it. It’s all good on my end but yes, OK. Thanks for talking us through that. Let’s talk about the sell line for MML, if we can, Medusa. Hey, by the way you told us last week to check our sell lines every month. I went through and did that when I was doing my scorecard last week and I’m glad I did because some of them had changed really– Some of them hadn’t changed a great deal but some of them and changed really dramatically since the last time I looked at them. They’ve really going up as the graph moves to the right and yes, glad I did.
Yes, good. Occasionally [Crosstalk 00:18:28] a trough or a peak will drop off the left-hand side of the graph as well, which will drive dramatically. Yes.
MML. If I look at the five-year monthly chart for that, the low is June 2017, ran about 28 cents, then it goes to September 2017 to 29 cents but those within an eight percent variance. I’m starting L1 at November 2018 at 31 cents.
No, I think that’s L2.
Well, what are you taking is L1?
The second side. OK, let me just go through it. Yes. I’ve got– June 17 is 28 cents and we want a share price, it’s no more than 8% above that which is 30 cents. If we’re going to move the trough to the right because of the flat bottom and November 18 is 31 cents. That’s why I’m using September 17 which is 29.
Yes, you’re right. OK, I want to start there and I want to go through November 18.
Which gives me a sell price of around 33 cents and it’s currently at 91 cents.
OK, that’s a big drop. OK, good to know. I don’t know why I thought it was L1 but when I was doing last week, must have been having chart fatigue.
Well, just one thing to note too. I know we talked about using the segment line drawing feature of Stock Doctor’s graphs. I have noticed that, and that gives us a percentage when we click on it.
Which can help but I have noticed when you’re drawing these, you have to be careful that you’re anchoring to the right price. Because I’d say, for example, we look at drawing an anchor on September 17, we want the price to be 29 cents but you can actually anchor the side of that segment anywhere from about 28 to about 30 cents and still look like you’re at the bottom of that trough there. Just be careful when you’re anchoring to a point on the graph. What I’m doing now is looking at the closing price for that particular month which in September 17, case for MML is 29 cents and I’m looking across to the right side of the graph and as I move my cursor, I’m trying to get 29 cents on the right side of the graph and then I anchor it. If you don’t get that exact [Crosstalk 00:21:20], it can– I can make the percentage look wrong.
Yes. OK, good tip. OK. Let’s talk about all the new shared manual data sheets that we’ve posted up on Google sheets for QAV club members. Want to shout out cheers again, to Gary for posting something on that. I think apart from you and I, he’s the only person that’s updated some data there last time I checked late last week. Thanks, Gary.
Can we just talk about that manual data sheet?
I know this that– I think it was for Cog actually. You must have done this when you were buying it. There’s the new three-point trend line checklist item to sell is a one or a zero, not yes or no. Just be careful that we’re filling it out correctly.
Oh. What was that? I’m just bringing that up. What was the column?
It’s, is the share price in the new three-point trend upturn or is it a recent buy? I think it might be cool. It’s basically looking to whether the most recent buy is since the last financial results.
OK, somebody’s sorted the sheet alphabetical and removed the header column.
That would be me, sorry.
It would be you. Let me just fix that.
Which was my next question.
Which is what?
Which is how do– Did you have an idea of how we use this Google Sheet? What I did when I sorted it– Sorry about that. I thought I’d put it back the way it was. I sorted it by the date that the last change was made so I could go to the bottom and pick out the two or three changes that have been made since I lasted the download.
Is that how you see it doing?
Well, I’ve just been searching for the stocks that I’m looking at. See what the last person said but what I found was I didn’t trust where it was at because I thought well, qualified audit’s OK but at least with sentiment, I need to recheck the sentiment because it may have changed because sometimes you’ll– The last time you looked at it was several months ago like march in some cases.
I ended up sort of checking most of them myself anyway, particularly if they’re on my scorecard. But yes, if I can check the manual further the qualified audit thing, if they haven’t put out a new financial report since the last time it was checked, it should be valid. Assuming somebody’s checked it.
Yes, I’m just thinking how I would– I’m going to use this. I haven’t used it yet because I haven’t done a download since you posted the Google Sheet. But I’m merely going to use it one of two ways. Either copy the whole spreadsheet and just download it into my local version of the manually entered data tab on my master spreadsheet which will allow me to do a download and then it’ll give me a new top scorers list automatically or sort it and look for the most recent changes and update my spreadsheet.
Which way have you done it?
Well, as I said, I was just– When I was doing the manual data section of mine last week, I was just searching for each stock and seeing if people had done it or if you didn’t because it was only you and copying and pasting it where I thought it was safe to do so.
Yes, OK. Yes, I think the only issue will be is, as a couple I think it’s EVO maybe? No, WWR or WRR. Anyway, there’s a couple of additions that have been added to the spreadsheet which you may not pick up if you’re doing it. If you’re looking through manually for stocks that you want to find out whether they’ve been updated recently.
Well, if they’re not there, I just add them in now, right?
You’re– What are you doing? Are you doing a sort on priced operating cash flow, coming up with your list, and then checking each one of those for three-point trend line sentiment. Are you?
I do the sort on price to operating cash flow and then in the manual data tab, I’m using the Flitman version of the checklist. I stack rank in terms from for QAV score and go from the top down and I’m also just checking, getting rid of any that have been picked up as having qualified audit previously.
Yes and then I’m just making sure that the top sort of 30 stack ranked by QAV score, I’ve got their manual data done and I’ll just go down that until I find one that I don’t already own and make sure that there’s– And go down a few below it, do their manual data as well because sometimes that can kick them up above but–
- Yes. That’s not a bad way of doing it.
It’s quick means I spend as little time as possible.
ABA are back. Just with one B this time. I think this turned up on [Crosstalk 00:27:01] my scorecard. Yes, that’s it. ABA. Can we have a look at their chart for a second? I got a little bit confused about this one because it’s a bit wacky. Again, the low point, COVID cough $4.32. This is Auswide Bank.
The next point, April 2020 is only 1% above that 436. If I go up to July 2020, that’s a 4.85% gap from the first low point so I’m using that as L1
Yes, July 2020. That’s what I’ve got too.
OK, if I then extend that through October 2020.
Yes, I agree.
It’s giving me a sell price of about six bucks. It’s currently at 623 and it’s been dropping since March 21. It’s come up a long way since the COVID cough but I’m still checking that as like– Well, it’s not negative sentiment but it’s in a down– Positive sentiment with a downturn. We need a better name for that. What do we call that?
Well, I don’t know. Wait, maybe a wait to buy. Like I wouldn’t rush into buy Auswide Bank wallets in this downtown. I wanted to turn up before I did that.
And it may be– The new figures might give us that but it’s approaching it’s sell line and it’s trending down. I’d be in no hurry to buy it.
Yea. Well, wait isn’t very catchy term, Tony. We need to come up with something sexier than just a wait.
OK, that’s your department.
OK, I’ll come up with something of that.
Can you go and get Cameron from his hammock and come in and?
This is the real Cameron guy. He told me that he told me he doesn’t want to be disturbed. OK, let’s look at WWG. I picked up WWG and it had a relatively good score. I think it was 0.19 or something but very low ADT about six grand.
Higher than GLE but not by much and I’ve already owned GLE and you you had a look at WWG and Wiseway group. You confirmed that you think that’s a buy for people with a very low amount to invest maybe?
Yes, I had a look at it looks fine. Yes. A good pickup. It’s been a buy for a while. I think probably.
It’s got a bit of an uptick too. It’s going up at the moment. Looking Nice. That’s one if people have got relatively small investment portfolio like myself, you might want to have a look at WWG. Run your own numbers. Do your own work on that? Make sure I haven’t screwed anything up. OK. Paul wrote in, says that he believes you’re well on your way to earning an order of Australia for your time and generosity putting into the financial future of others. TK for the OA is the new campaign that we’re servicing.
He also says, this is about the home the property leveraging stuff I think that you talked about in detail last week. Firstly, purchasing a first time is becoming more like a 10 to 15-year journey for many young couples, let alone singles. Tony’s often spoken about it as the first step before beginning to seriously invest in shares which must be rather demotivating for younger listeners for whom a decade feels like an eternity. I would have thought 10 years of QAV is the more likely pathway to a sizeable deposit for first home buyers these days, perhaps Tony might like to speak about that and particularly timing around tapering off derisking when the house purchase becomes imminent and also any wisdom on stock market and property cycles to time the exit from shares and the entry into real estate.
Yes, I wasn’t. I’m not trying to demotivate people by sharing that example of what I did. It’s– I think it’s probably it’s help. I think it’s motivating. I hope it motivates people rather than demotivates them. Yes, start off with QAV if you like and get your deposit together. But I think there’s also– Certainly it probably doesn’t have to be the start of your investing– Your investing life. It can be– It should be a part of it I think. It’ll help– The gearing will help anyway. It’s much easier to gear against the house and it is the gear against shares because the shares come with margins which margin calls which can happen, which can can work against you but anyway, just yes.
A couple of points they’re raised by Paul. If I think about how I first started in property, the first owner occupant– The first owner occupier– I’m sorry, the first investment property I bought and this would have been in the about 87 or 88, was a property in Sydney in Melbourne in a suburb near Yarraville and for this grey and we paid $100,000 for that property and I looked it up recently on realestate.com.iu and it has a price estimate of 1.2 million.
That’s in line with what I shared last week, it’s gone from 100,000 to 1.2 million over 33-34 years and it’s about what we said last week. I said a million dollars to 13 million. That’s pretty similar and gives you an idea of how things will grow over time. But when I bought that house, I did it with a friend of mine and we complemented each other. I had a good job which was providing enough income to service the mortgage and he had just split with his partner and they were, they’d sold the house. He had lots of cash and didn’t have the job I had. We put one on one together, I bought the house, he put in a lot of equity and I put in less equity in and I paid the line’s share of the interest and it was negatively geared.
I think there’s an element of problem solving you need to do with property and I’m not saying it’ll suit everyone but the old 1950s idea of wanting to get married and saving for deposit is not the only way of getting into the property market and then the second point I wanted to make was after we sold that place and I use some of the equity that accumulated and it wasn’t very much at that stage because we sold it about three or four years later.
I bought an owner occupier and I helped to pay that– The mortgage on another owner occupier and I guess some of the equity maybe but mainly the mortgage by renting out two of the rooms to friends so I was able to negatively gear two thirds of the mortgage which helped me and of course, you do go into for savings when that happens. But that’s a good thing because it helps you to budget and save and think about trading off things like a new car versus an appreciating asset investment like a house.
If I think about how Jen my wife started, she bought a little two-bedroom flat in a red brick apartment block in Melbourne and it wasn’t a very attractive building to look at. But that got her into the property market. There are ways of getting into the market and the important thing is to get into the market and it doesn’t have to be the house you live in for the rest of your life but get started and work out a way to make it work for you using potentially negative gearing, renting out rooms, all that stuff. That’s the first thing, I’m not suggesting that people are going to fork out 200,000 and buy a million-dollar place and live in it for the rest of their lives. People have to get a bit creative, I think with their circumstances and working out how to get into the property market and certainly, investing in QAV might be there way. Hopefully it won’t take them 10 years but it might.
The second point is though is to be careful about investing in the share market with respect to saving up for a deposit in a house because as Paul points out, the closer you get to your goal, the more sensitive you’re going to be to movements in the share market going — Particularly going down and that’s always a risk and he’s talking about tapering. I’m not– I have no experience with that. I can’t really comment on it but I think if you’re– It’s almost impossible to time the cycles, either the share market or the property market in the short term except to say they both go up in the long term.
I think if you’re investing in the share market in particular, you’ve got to be flexible, at least in terms of one variable or two variables a time and goal. If you’re say saving for to trying to save $200,000 in the next five years to buy a property, you’ve got to be flexible with one of those things. It’s– If you’re investing in the share market, it might be that in five years time, you haven’t got $200,000 because there’s been a recession in between or it might be that you get there in six years or it might be that you get there in four. You’ve really got to be flexible in terms of your timing or in terms of your financial goal. But you can’t be rigid in both because even though over the long term, the share market goes up at 9-10 percent and we’ve been getting– I’ve been getting better than that– Double that in the market. Not every year it’s double and you can’t have a short term goal.
There’s a couple of points I wanted to make. I can’t really answer Paul’s questions any more than that about my experience with how you taper out of the share market if you have a goal of saving for deposit and a house, other than to say, just don’t be rigid. Just– If you haven’t hit your deposit in five years, you might have to wait seven years and if– You might get there in four. Yes, just be flexible.
We’ll just add to that, when I was on a walk with Taylor the other day and we were talking about what you’d said in last week’s episode. Taylor said, well, what about his mom? The house that she and I bought here in Brisbane when we moved up here from Melbourne 13 years ago. We bought just before the GFC and she got it valued I think about a year or 18 months ago and it hadn’t appreciated at all in that time.
I should probably poured it, we probably– She bought it. I was still in Melbourne but we probably bought it at the height of the property market pre-GFC and then in the last couple of years, she’s– It’s come up with it needs to be restamped. There’s a lot of things that have a lot of work that needs to be done which is probably reducing the value of it as well. I guess, part of it is you need to be careful what you buy and when you buy it.
Yes, definitely. Right. Yes, I mean, it’s a bit– I mean, we could do a whole podcast series on residential property as well and what to look for and there are podcasts out there about it and newletters and Facebook groups, etc and yes, it’s– But yes, like I said, it’s hard if you need a house and it’s just before the GFC. You don’t know it’s just before the GFC. You got to buy. Right, yes. But I mean, that doesn’t change the fact that I’m guessing she would have paid down some of the mortgage so she can still release some equity. I’m not giving her financial advice here. I’m saying if someone’s caught in that situation where the house hasn’t moved in value over 10 years or 13 years or whatever.
You potentially still can release equity and invest that outside of the house.
Yes, right. OK. You would still have paid off some equity in that period of time?
Yes, I will. I think so. Yes.
Yea, good point. Second part of Paul’s email. I think we all wish we had the maturity to take up QAV at 25. But for most of us, the moment has come later. Instead of wishing those 10 to 20 years back, however, why not encourage people to take them back? It’s quite realistic these days with a disciplined approach to diet and exercise to wind the biological clock back 10 to 15 years. QAV compounded returns in this respect is a big health and fitness motivator for me. Buffett’s wealth was impressive at 70 but far more so at 90. He may have done it on coke and candy but for most of us and he’s not talking about the good coke and candy. He’s talking about the mainstream coke and sea candy. Not coke and nose candy, which is the same thing. But for most of us a healthy innings like that is going to be built on applying QAV style discipline to the way we invest in our bodies. Good point he made there.
Yes. If Paul has any health tips too, I’d be glad to have him on the show and pass them on. Especially if I can wind the clock back 15 years, that’s for sure.
I’m guessing the grannies aren’t part of it, though.
Well, maybe we need to start a QAV Life Extension club.
You should be investing in– What’s his face thing? Methuselah Foundation, the guy I had on my show almost years ago, my old show. What’s his name?
Another guy I mean, Aubrey de Grey.
De grey. That’s it. Yes.
Well, the motivator for me was Kurzweil in transcendent men.
Which was a great book and I came about that book through your g’day world podcast which was excellent.
I had right on many years ago. Yes.
Yes. I actually met him at a conference after that too which was–
But that was my inspiration for a long time was if you’re healthy and can live long enough, you’ll live forever. Yes. It’s going to be all hokum who knows but he preaches the rapture of the nerds and how if you can live long enough, your brain will get uploaded to the Internet and you’ll live forever and there’s probably an element of truth in there somewhere that might not happen for hundreds of years but that was motivational for me. But yes, I’m more impulse camp now that just seeing the sort of returns I’ve gotten over the years as motivational and you think about the compound interest of living for 10 extra years, it’s quite spectacular and as he said, I think you– Don’t know if it’s still there but at one stage you posted on our website, Buffett’s wealth over the years and it’s a graph that looks pretty flat and unimpressive right up until his later stages when it goes up almost vertically and that’s how compound interest works.
I mean, if you drill down into the graph and you reduce the y-axis, I think it’s still pretty good in those first few decades. But yes, big difference between 100 million and 100 billion on the y-axis.
Yes. But now it’s a really good comment from Paul. I wholeheartedly endorse it.
Alright, well, we’ve got a question from, might be the same Paul, might be another Paul. He said ANZ.
Sorry, before you do that, we haven’t done stock of the week. Did you want to do that or just skip it?
Oh no, we do. I skipped all your stuff and accidentally skipped that. Do you have any pulled pork for us this week, Tony?
Yes, a pulled pork pull apart. My pull up– My pull apart this week is an old favorite Horizon oil which was on our list way back at the start of our podcast and then if you recall, the AFR did an exercise into them which alleged that they were bribing Papua New Guinea officials to obtain oil licenses and the share price tagged and we took it off. Within the dummy portfolio, I think in just in the last little while it’s made a resurgence and a couple of things have happened in the interim.
I wanted to bring us up today and I guess on that, I hadn’t watched it for a while because I think that was going back almost two years ago or 18 months ago that we took it off the portfolio. But since then and this is what the horizons chip has said at their November, AGM. He’s– I’m quoting; we are pleased now that we have substantially put the allegations of 2011 corruption in PNG behind us. The board back in February reactive rapidly and appropriately by setting up an independent board Committee which then commissioned a thorough investigation conducted by Herbert Smith free hills and assisted by the Lloyd. The investigation which reviewed nearly a million documents as well as forensic analysis of all electronic devices failed to establish any breach of Australian foreign bribery laws.
There you go.
They give themselves a tick but I certainly haven’t heard anything more about the bribery allegations since then. That is cleared up. This year, they have sold off their PNG assets and then they are operating with a new oil well in China and one in New Zealand. They’re just wiped their hands of PNG completely, both because of the legacy issues and they sold off their oil assets there. Two things have happened recently, they’ve announced that they are going to do a return of capital. Originally, they said they would do a 1.4 cents per share return.
I think that’s right. But they upped it to three cents in the last little while and that’s with the share price up and they’ve highlighted the fact that the oil price has been going up this year as we renew that from Santos which is our dummy portfolio and as we recall, your price tanked during the COVID cough and it’s now back up over 70 bucks a barrel and that’s helped. They’re funding their return of capital because of the rising ship– Sorry, oil price which has put them in really good financial position. But then also too, I noticed that a company called Samuel Terry Asset Management bought nearly 20% of the company in June and they’ve added a director to the board. That may lead to corporate action. Someone taking a 19.5% or 19.9% stake in a company could be a passive investor but usually it’s the start of some takeover bid for the company. But either way, it’s a big vote of confidence in the company and I guess, I wanted to highlight that this is a classic buffet style contrarian investment.
Take a good company which we knew was good because it was on our top scorers list a couple years ago and when the management’s distracted by something extraneous to the business, like, in this case, it was a bribery scandal. It depresses the share price and can often make it an even more compelling investment. Anyway, that’s the general learning that we can draw from this case. But it’s certainly– It’s had a recent three-point trend up turn, it’s now back up to almost where it was before the bribery scandal. It’s a couple of negatives, it’s now trading on a very high PE.
Its highest in the last three years. It gets a minus one in there manually entered data for that. It doesn’t have consistently increasing equity, it gets to zero for that and I’m using a share price here of 12 and a half cents which it was this morning which is Monday, the 26th of July and the share price makes a big difference to this company, in terms of its QAV score, but the QAV score is currently around 0.1 and it’s on the bottom of our list. Last week, when I came across it again, it was actually about 0.1, three, or four. Half a cent increase in share price makes a big difference on the QAV score. It has a quality score of 58%. Seven out of 12.
However, the fact that this new director has a 20% shareholding hasn’t come through in Stock Doctor data yet, potentially because it’s part of an asset management company rather than just that individual director. But we could actually score up a little bit because the directors holdings is now up over 20%. Price to operating cash flow is five which is good. PE 14 is good. It’s the book plus 30% is actually 12 cents per share, it’s just above that now. But if it drops back, again, the QAV score will go up. We don’t have any stockbrokers’ consensus forecast here. We don’t know what the growth is going to be and the thing to be careful of I think is that is to time this. If you’re thinking about buying and if you’re buying now, you’ll get the 3% return of capital but the share price may drop three cents as well because of that. But it’s also possible that the share price drops a bit big when the return of capital happens but all other people start buying in as well and the share price keeps going up because it’s a compelling story otherwise. But that’s the– That’s something people might want to have a look at. Not a recommendation but back on the top scorers list.
Right, there you go pulled pork of the week Horizon oil.
Just one more thing before we go back to questions. I spoke before about Commonwealth Bank flirting with its sell line. It’s back above it. Last time I looked this morning. It was Macquarie Group is a stock I own. It’s getting close to its sell line. It’s been doing the same dance at Com Bank as it goes above it one day and back below the next thing and back above it. I may well sell my holding in Macquarie Group this week, time will tell and the last one was last week and I’ll do a bit of a, maybe a deeper dive about oil when we have a week when there’s not many questions. But the ore price was getting close to its three-point trend sell as a commodity. It’s now back up above that. It got down to I think about 68 bucks last week and my calculation of the sell was 66 and I’m talking Brent crude there in US dollars. It’s now back up over 70. It’s flirting with its sell price. Just be aware of that. It may reach again, before I noticed that.
All right. Any other news you want to talk about?
No, I think that’s enough, Cam. There’s a few questions to get through.
All right, let’s get to Paul’s question. Says, ANZ have just announced a share buyback and Com Bank is swimming in cash apparently ahead of an August report. I wonder where the Tony would consider those issues or countering the share price downturn.
No, I wouldn’t. No, share price downturn as if it’s gone past the sell line, it’s a sell. Because the other flip side to the analysis is that with the banks in particular is with Delta COVID coming out and shutting down. GE probably the majority of Australia as we speak. The banks are putting a pause on writing back their bad debt provisions in case there are bad debts arising in the mortgage market and the analysts were factoring into their numbers, how much dividends might be raised and how much would be given back by the banks because of their high cash holdings.
I’m guessing that’s all going to be paused unless something dramatic happens to improve the lockdown situation before the numbers come out next month. But I– My gut feel says we’re not going to see dividends increase or provisioning get released the way we thought we were before we went into lockdown and the share prices are going up.
Right. Rules is rules.
Rules is rules. Yes. I think we’re just one further comment about all this one, we’re seeing companies like Com bank which are flirting with their sell lines and that– And the sell line is hugging that upward trend in the graph. We spoke about before with motorcycle Holdings as well. If Paul wants to hold them because he thinks they got businesses for the long term and because he thinks that they’re– They got lots of cash and they’re going to increase their dividends or do share returns or whatever or start share buybacks. Go with it. I mean, we– The three-point trend line is a line on the graph, no one in Macquarie street or Collin street sitting there going, well, we’re close to a three-point trend line let’s do something there. That’s not how businesses are run. Over the long term and on average, the three-point trend line is, has done a great service to my portfolio but it may not work in every case because it’s a statistical thing. Just be aware of that too.
You won’t excommunicate Paul from the fellowship of the queue.
No, and if he wants to come back and crow in six months’ time because he’s held on to ANZ and it’s now worth twice what it is now. More power to him. That’s fine.
Good luck to him. It’s not easy to get excommunicated from the cult of the QAV.
It’s QAV members, it’s a low bar to entry.
OK, yes. You’re saying you let me in. Mark says, he’s back to CBA here. A lot of CBA questions, regarding CBA and the 8% flat line rule for the buy line, instead of using APR 2017, $87.40 in January 2020, $85.26 which has a 2.45% difference. You’re using January 2020 85, 26. In January 21, 83, 51 with a 2% difference, both are less than a percent.
What are you thinking about the buy line here? Isn’t it for CBA?
Buy line. Yes.
I’m just– I think I double checked that and I think he was right. I think my buy line was dodgy.
No, I think your buy line is correct. We’re conflating two rules here though. One is the 8% Flat Top rule and the other one is the fact that the bottom line should come after the sell line. We may have to have a precedence order for the rules here, like brackets come first and then multiplication and division and then addition and subtraction. But why I drew this buy line. I’ve got the CBA graph in front of me is that, well, the highest price is around the current price and we don’t have a peak there. You can’t draw a buy line currently. I go and draw the sell line in, first of all, and we spoke about the sell lines getting close to the sell price now. We have a sell line. I’m looking for a buy then that occurred before that sell line.
I’m going backwards. The next highest point on the graph goes back to April 2017. The second point, which should be h2 is January 2020 and they’re within 8%. Then, the next one I would look at would be– I’d start with h1 being January 2020 and I look across to January 2021. That point I think is Mark’s pointing out is still within eight percent of the original h1 back in April 17. Then, I will ignore it and I would, if I– Sorry, if I then use January 2021, I can’t get a peek to the right of that. I have to back up and then if I’m looking if I’m looking at that one. The next lowest point to the right is that peak we just spoke about. You can do a buy line in there if you don’t want to do that because you don’t want to use that peak because it’s within the 8%. You can work through it as going down from h1 of January 2020 h2 of July 2020 and then that gives you buy that crossed at some stage during September of 2020 and that’s then– That’s occurred after the sell line was drawn. That’s all good.
Sorry, that the sell line goes from L1.
March 2019 through December 2019. is how I’ve drawn it. How you draw?
March 2019 through to December. March 2019. Talking about the sell line here?
Yes, L1. March 2019. It’s $70.64.
Yes, this is working backwards to get a sell line before the buy line for sure. Yes. It’s crossing. It’s going through December 19, as you said and then you get it across in February. Drawing a line after that. Yes. Then you get the sell line then going in at March 2020. September 2020, but they are within 8%. September 2020 becomes L1 and then February 2021 becomes L2 and that line’s drawn after that cross. Yes, that’s how I’m drawing it. I think the buy line would be January 2020, h1 and then July 2020, h2. But you could also– I think equally you could do it as January 2020 and January 2021, as well.
And just ignore the fact that they’re both within the 8% variance because [Crosstalk 00:58:43].
What takes precedence here?
I think I’m inclined to take it back to that November 20. Sorry, h1, January 2020, h2, July 2021.
Yes, that’s how I’ve got a drawn on my chart here. OK. Thanks, Mark. Thanks for double checking our work, Mark. Always, good to see people double checking our work. Question from Daniel. I know TK has the system to buy from the top of the list but sometimes sees tail wins such as a spike in the commodity prices or gold as previously mentioned. I want to know if he’s ever been influenced by something like heavy buy backs or insiders buying heavily which is related to some good success or any other memories or insights he could share. Thanks, Daniel.
Yes, I think from memory, the only time I can think that we’ve gone down the list is two things, commodity prices which Daniel’s mentioned. We’re looking for– Like a copper price may have just turned up. We’re looking for a copper company on our list which might not be at the top but it’s worth buying because of the commodity underlying it is going up. But the other one I can think of was, when a really good quality large cap comes on the list like a JB Hi-Fi, for example, they normally come on at the bottom of that list, like a QAV score around 0.1 to 0.2 numbers and you can be tempted to buy something in that range because I expect it’ll drop off the buyer list pretty quickly as the share price goes up and I know it’s a good quality company and would be a good long term hold.
That’s what I’m tempted to get to buy from the bottom as well. Terms of buybacks or large director holdings. I can’t think of any examples of those except to say that capital movements like buybacks or returns of– Capital returns or things like that or increased dividends or whatever or special dividends. We’ll probably see that in the share price appreciating and it might bring something back on to the top scorers list, like a Horizon oil, for example, is a classic example of that. But would I go down the list and buy Horizon oil that’s at the bottom of the list? Just on the strength of those capital moves. No, probably not.
Right. But if there was a recent turnaround in the oil commodity price maybe?
Yes. I can’t think of any other examples except for the fact that I have been tempted when a JB Hi-Fi or something like that comes along– Gets on the bottom of the list.
Yes, thanks Daniel…. Murray. The broker I use often quotes a multiple of EV over EBITDA value shares. EV for the listeners being enterprise value. EBITDA standing for bullshit earnings according to Charlie Munger. I haven’t quite got my head around the value of this metric but it seems like it might be good as it combines pretax earning with balance sheet value. I wonder what Tony’s thoughts on this. Thank you, Murray.
I think I have to address the Charlie Munger comment, first of all, and pretty sure from memory, he made that comment during the dot-com boom in the late 90s when a lot of stock brokers were pushing internet companies based on their EBITDA numbers.
Because they wanted people to ignore the debt that was being used to leverage them and that’s when shall we call them bullshit earnings? And to certainly and he’s right, they are and then Buffett would go on to a big explanation about why depreciation was important which it is. The reason why I don’t place a whole heap of emphasis on depreciation and amortization is because again, a lot of times they’re– Or they’re either governed by accounting rules which they are to a large extent but they’re also– A lot of them are under the prerogative of management. How much provisioning you take up for those things? And that can—
That is just another example of why I don’t think bottom line profit is necessarily a great thing to use one day in your company because it is subject to management’s manipulation. To look at the EBITDA is actually a reasonably similar metric to operating cash flow. It’s a– Basically, it’s a– It’s before interest is before tax. It’s basically the what you’ve been selling less the cost of goods. Sometimes it’s called operating profit. It’s close to operating cash flow.
The difference I think, from memory is that operating cash flow is the cost of the underlying businesses operating profit less the cost of getting that profit but it doesn’t include some things which can be an EBITDA which is one-offs or income or profit. It’s derived from things which aren’t the core business. If they’ve sold something, they’ll go through into EBITDA but it won’t be an operating cash flow, for example. That’s why again, I prefer operating cash flow to EBITDA but it’s a– In most cases, we’re splitting hairs there.
In fact, enterprise value which is the market cap plus the cash minus the debt is if you take enterprise value on a per share basis and you take EBITDA on a per share basis, it’s in the same ballpark as price to operating cash flow. Right? It’s because the market cap is divided by number of shares as the share price. Its share price adjusted for the debt cash and its operating cash flow with other things added in if they’re not– If they one-offs or not the main business. It’s a similar metric, I guess, I’m trying to say. I think it’s a legitimate metric. It’s not one that I use. It’s a little bit harder to calculate than price to operating cash flow but I think if you were using it, you probably have similar results to the QAV metric.
Roughly, ballpark you get the same value out of looking at that metric as you do priced operating cash flow?
Yes, I think so and I think price operating cash flow, we’re looking for a ratio of seven or better. I’m not sure what EV it to– Sorry, EV to EBITDA would be but it’s probably going to be 10 something like that. It’s– Again, it’s like using PE ratio except I don’t like PE because its profit and profit’s open to interpretation. It’s halfway between PE and priced operating cash flow, I guess, or part of the way along.
Thanks. Thank you, Murray. Ridge. Ridge says, he’s talking about XERO which he bought for $38 and doesn’t want to give too much away if it starts to drop. It’s on a PE of 121. Great product XERO. I use XERO. I think you use XERO.
And share site is based on XERO as well or affiliated with XERO.
Good little Aussie company. Aussie New Zealand. Aussie. Yes.
Aussie’s now New Zealand. Yes.
If it qualified on QAV parameters which it wouldn’t, but if it did, it would be a buy pretty well now?
There hasn’t been a recent sell. That would be the latest buy line and the sell line would be shown with a sell of around just above $75 which seems too low for me to set a stop loss there. What do you reckon?
Well, I think the sell lines even lower than that– I’ve got it at $47 when I did the analysis this morning. Well, your company’s like XERO, I think can fall into a little bit of your portfolio. If you like Peter Lynch, come across a new company and think this is really good. I’m going to buy it regardless of the valuation metric. I’ve spoken about that in the past and I think it’s fine to have a couple of stocks in your portfolio like that. I spoke in the past about if I wish I’d bought Apple when I first started using an iPhone, I wish I’d bought Amazon when I first started ordering books with them and certainly XERO, I thought pretty hard about buying the share price when I converted across to using XERO because it’s a great product. Just the value investor side of me just wouldn’t let me do it but it would have been a great investment. I think they have a price to have a place in the portfolio. If you’re doing that Peter Lynch, one up on Wall Street.
Hey, I’ve discovered a new product. I’m going to put some of my investment into it and see how it goes and then the three-point trend line is actually a good way of managing that investment. If it turns down, sell it. If it doesn’t, great. But the graph of XERO is so impressive, it’s pretty hard to find what the buy line and the sell line is. Just let me have a go at it. I’ll call it up.
I’ve got the load point back in October 16 around $16.61. But then if I start to use the segment tool and I drag it across March 2017 is about a 3.7% variance.
The next low trophies I think, August 2017 which is 39% higher. I’m using March 2017 is L1 and October– August 2017 is L2 which gives me a sell price of about 75 bucks. Yours is lower?
Yes, I actually went with February 17 and march 17. I think February was the last time I got within 8% of that low point and if I use February and March, then I’m getting some price of 50 or 47 or something like that.
Oh, OK. I see.
What you do look it’s so hard to see what the graph is because it’s gone up so much on the right that the checkpoints on the left are really hard to read in this graph.
Whether it’s 47, 50, or 70, it’s a long way from the current share price of 144.
I said to Reg in my email back, I think two with the three-point trend line stuff like the companies that pass QVA must have got really solid fundamentals been generating cash along time, etc. and undervalued and if there’s a market downturn and they start to come back, they’re only going to come back so far because they’ve really got strong fundamentals. They’re real businesses generating real products or they’re mining stuff out of the ground or they’re manufacturing stuff or they’re banks. Whatever it is. Real businesses. My question around software businesses, internet businesses is, in a crash of that affects tech stocks, do they fall back faster and quicker in your experience than quote unquote real businesses or do they?
I think they do. I mean, the PE is what are the 800?
21 he said.
Price to operating cash flow of 100 times. Yes, I think there probably will.
When we draw the three-point trend lines, we’re drawing them for businesses that have passed QAV muster. Three-point trend line for stop like this might have to be different. Your stop loss might need to be a lot higher because the stock may not obey in a cataclysmic event. The stock may not obey the same principles of physics that QAV stocks do.
Yes. Well, I think that’s the case. I think. I mean, XERO is a good company. I just think the valuations wrong and then when you have a– And that’s my opinion. I know there’s plenty of analysts out there who will tell me about it’s all their profits being put into marketing and growing in the business and when that share stops and it’ll be a profitable company. I get that, you’re banking on the future. Banking on the current strategy, getting to that future point which I think is always has a certain amount of risk involved in that strategy and afterpay is another example that comes to mind with that strategy and therefore, I think when you get pullbacks, they can be quite large because the fundamentals currently don’t support the current share price.
Everyone’s banking on it being a much more profitable company in the future and getting into some Nirvana when they can stop putting all their profit into expansion and then they’ll throw off lots of cash and that’s all fine but it’s got to happen and good luck to Reg, he’s bought it at $38 and it’s now 144. That’s fine and also to I think, in terms of three-point trendlines. If Reg wants to turn the buy line up a bit and use some points which are closer to the upward trend and get a higher buy– Higher sell price. I think quite legitimate. Depends on his risk appetite.
I think it easily– You could easily use say something like March 2020 as his second point and maybe use something around October 18. You’re going to get a buy price which is about 100 bucks. That might be more realistic for a sell price going up so quickly.
Sorry, sell price.
But again, you just fudging it to suit your appetite for risk. Pulling your feet, pulling a number out of your ass and going well, that’s all. It’s not really any three-point trend line logic behind that apart from– Well, what do you reckon’s a fair thing?
No trades. Exactly.
Yes, well, it is a good business and I’m sure there is a whole bunch of logic behind why it’s that the price it is but the flip side is we know that the last five years, these tech stocks have just been benefiting from the certain state of euphoria which history tells us has to end at some time.
Yes, and I’m guessing as soon as interest rates start to rise, they’ll get tested which haven’t for a while now. We’re in lockdown again but yes, it’ll happen at some stage.
Yes. Thanks, Reg. Alice wants to know, would it be better to wait until reporting season to buy new stocks? I also have another query. Tony has mentioned before that if a stock is a buy but is still close to the sell line, you can wait for an uptick. Could you perhaps quantify what is an uptick? OK, let’s start with number one. Right about now, we’re recording this on the 26th of July 2021.
Which is only days away from the start of the reporting season. Yes, I guess my general comment would be, if I had to commit a lot of money to the market now, I’d wait. If I was starting in my investing now or if I came into a large lump sum through inheritance or whatever, then I’d wait. But I do trade at the moment. I’m buying and selling so we spoke about that. Potentially we’ll be selling Commonwealth Bank and then I’ll replace it with another stock. But that is probably only going to account for five or 10% of my portfolio. I’m not making big changes to the portfolio now. But yes, I think if you had a lot to commit, I’d wait for reporting season and use new figures.
Right. But for anything less than 20 mils you just get straight in there like any small amounts, you just play money.
Yes. Monopoly money.
You’re not going to worry too much about that all right. Alice’s part two, uptick if– We’ve talked about upticks a few times in the past. It’s an upturn since the last. OK. It’s not a new upturn but an uptick. OK, an uptick since the start of the month?
Yes. What’s a good example here? If I look at CBA, again, which is flirting with its sell line. Where is it? I’ll just call up the graph and I’m trying to find an example here I can talk about exact numbers. If you look at CBA, right, but the start of the month, the share price will close that– For the end of last month, it closed at 99.87. Today, it’s 99.09 and its sell price is 98 something, 98.50 or 60ish. It’s in the la– In this month, it’s turned down. I would want– Since it closed last month at 99.87. It had been an uptick if it was above 99.87. I wouldn’t be buying it new for anything less than a 100 bucks.
Well, one cent above 99.87, two cents 10%.
No, I don’t have any hard and fast rules. I’m just looking for it to be not below 99.87.
Right. Any amount above its previous close. Month.
Yes, I want to see the share price going up, not down when it’s that close to the sell line which it is.
And that’s because if it’s that close to the sell line, it’s in a downtrend. It’s heading towards a sell price. You might be selling out of it again straightaway. That’s a bit of a pointless exercise I think because he’s paying transaction costs. Yes, I’m going to wait until I see it in an uptrend.
All right. Thank you, Alice. All right. Well, we did have a few more questions that came in this morning. But we’ve got an interview with Alison Harrington coming up in a minute. I think we might push those till next week. Apologies to John and Elma and Dave from Newey on those but we’re– I think we’re an hour and 22 this already plus the interview, so we’ll get to those. They’ll be top of the list next week ajd have a great week, folks. You too, Tony. Enjoy another week of lockdown.
Yes. Oh my god. Thank goodness, the Olympics on. I can watch TV a lot more. Yes. Well, it’s– I don’t mind watching the Olympics like watching sport. What else did I watch? Gosh, it’s been– My TV habits are getting worse during lockdown. I watched Loki which wasn’t too bad.
Started off as a good premise I thought but rapidly just went nowhere. It’s just became matrix level convoluted silliness I thought. Yes, Owen Wilson’s always fun and Tom Hiddleston is great but they didn’t give you much to do. I think he’s much better when he’s been cunning and evil. When he’s just the nice variant. I didn’t think it didn’t work as well.
Yes. No, I agree. He was being a bit redeemed. Wasn’t good.
Yes and the bad one came back in because it was other versions of Loki without giving too much away but which was good.
It’s good to see the old Withnail and I.
Richard E. Grant. He’s always fun to watch.
Yes, it’s always a huge over reactor.
That’s a good bit loves a leg of ham which.
I’ve always said he would have been a good doctor. They should have made him the doctor. I think he’d be great. He’s got that level of campiness and over the top of.
Which would be great.
Yes. No, I agree and Ella Wilson reminded me of the other actor, the gray haired guy from Mad Men.
Oh, yes. Yes, I know you mean yes.
Richard, that was him when I first saw it.
Yes, right. Bit of a silvery spiky hairdo.
You know exactly. He was good. Not in mind but haven’t found much else to recommend. I got sucked into watching Lux listings in Sydney.
Yes. Probably the first time I’ve ever watched a reality TV show but it was a good postcard for the area I live in. It was
Do I need to stage an intervention for you before you start watching Real Housewives of Beverly Hills or something like?
What channels are they?
I don’t know. I don’t have a TV. All right. Well, as I told you off here, we watched a– Well, I watched Oliver Stones Platoon finally over the weekend which I’d never gotten around to watching and I kicked myself because it is bloody great. What a great powerhouse performance from everybody. Great film, good art. Good one
One of those movies, I went back and watched it about a week after I first saw it.
Yes, right. Good film. Charlie Sheen before he went nuts.
And check out Salvador. That’s probably even better I think than platoon. Fantastic movie.
Back to Platoon though, like interesting Charlie made that about 10 years after his father made Apocalypse now and it’s a very similar role in some ways. He goes on his journey in Vietnam and comes out of a just– Has to kill an American officer and comes out of it just, is like whatever, broke– A little bit broken, a little bit despondent or given up on the dreams and the illusions. Nice to see him almost replaying his father’s role.
- [Crosstalk 01:21:34]
Speaks about that and he’s chasing the white book which is really good too.
I’m going to read that. I’ll watch Salvador and then get a copy of that. I’ll report on Salvador next week. Let you know what I think. All right. Cheers, Mate. See you. Bye.
Today, we’re joined by a guest, Alison Harrington. I had the opportunity to meet Allison at a Brisbane Australian shareholders Association meeting several months ago and she talked about her experience as a value investor of many decades and shared with me her thoughts on women as better investors than men and I thought we absolutely need to get Allison on the show because we have been rightly criticized by Tony’s wife and others for not having enough women guests on the show. In fact, any women guests on the show. I think you’re first Allison. Maybe you can help start a trend of correcting that. Welcome to the show, Alison Harrington. Alison, if you don’t mind, give everybody a little bit of a background on yourself and your investing experience.
Alison Harrington 1:22:48
We’ve been an investing family for two or three generations, more on my husband’s side and in the 90s, my husband became very unwell and at around about the same time, my mother in law was introduced to the Australian Investors Association.
Apparently, were bought up north of Juliet Creek, 90 miles from the nearest town. They– My mother in law was very pleased to actually be able to see face to face other investors and she bought her entire family along to Australian Investors Association conferences and because I was in Brisbane, I ended up starting to go to the meetings and that was 1999. I’ve been going for 20 odd years and now most of my time is spent with the Australian Shareholders Association. But I’ve been an active member of both since 1999 and the first event I went to listening to them talking about fundamental and technical and psychology of investing and I’m thinking, Oh, hang on there’s words here I don’t really know not being and from there, I got involved and I sat there very quietly for five years.
I didn’t say a thing. I used to sneak into the meeting, sit at the back and people laugh when they know me now and then eventually I was asked to be part of a strategic review of investing education and from there, I just got more and more involved and I think the advice that was given at that first conference was probably still the most important advice that I’ve ever had. It was, understand your psychology, have a goal, know what you’re doing, know what you want out of investing, and have systems. Have a review process.
Set up a system that you can review and then you can amend and change it. If you’re an emotional investor, you have nothing to grip to actually come back and say, what went wrong and it’s been an evolving experience since then and of course, it used to be– You basically relied on your stockbroker for information and reading the financial papers and now, of course, we have an amazing range of information. But in an odd way, a lot less active retail investors.
There seems to be so many people out there advising, that concept that the individual doesn’t really know what to do is almost a stronger one than it used to be. It’s changing all the time. I love it. I love being involved in knowing, seeing what’s happening, working with the changes that are happening in our society, working with the economic changes, and the values, and the new generations that come through and the new technology. It gets you involved in every single day and of course, I love being financially independent. That’s the best answer.
Here. Do you remember who it was that gave you those starting tips that you talked about?
Well, that was interesting because not one person had the whole lot. There were a bit from this one and a bit from that one. Everybody had their own little box and platform that they were speaking from. The guy that was the most impressive was a psychologist from Tasmania called Harry Stanton. I think he called his book, let the trade winds blow. But he made the comment that there are two things that test you as a human, getting married and being a responsible investor and he’s right.
I think you mentioned to me after the ASA meeting that you’re quite close with Roger Montgomery in his early years.
Oh, Roger. Roger was one of the presenters on that night. That’s 20 odd years ago. Roger was a baby then and he– It’s been fascinating to watch Roger’s journey as a major influencer in the investing stream and the ups and downs and the journeys we all take is almost a mirror of everything that we all do and of course, his book, valuable, is a great read for people who really want to think about value investing. He used to have a– Damn what was it called? He used to have a formula so that you purchase this formula for $99 and then you went into every share that you’re interested, a company that you’re interested in. You extracted all of the data and then you’ve punched it all into and put Roger’s formula on it and it gave you the magic figures of the range that you should buy that share if you’re interested in buying. It was great fun. It actually was really good tool. I enjoyed it. Of course, that’s long gone. Now I could do all that just with algorithms quickly.
You learn a lot from Tony’s– From Roger’s book. Didn’t you Tony? We had a great book just before the COVID crash, actually, and you talked about it.
I’ve actually done a 14 hour, one-day course with Roger. It was only meant to be 10 but he didn’t stop talking. We kept buzzing, Roger, we’ve got to go. Wonderful.
Yes, good book and yes, he’s– I think he ran climb investment management I think?
Yes, he started to climb.
And then he moved over to Scaffold.
Yes, that’s right.
He said, this is [Inaudible 01:28:56]. This is shades of life. That’s why he had the book because between it, he wasn’t allowed to practice. He had that year to write the book.
Right. Yes and he used to be a regular on the ASX Podcast Series when podcasts first came out, which was a great resource as well.
He also put me in line of another little book and I can’t remember it’s called, but it was written understanding cash flow and it was written for the point of offense. You have offense and the what each post stand for and what each rail stands for and it’s a great way of of thinking about where you really focus on your cash flow because it was one of the difficulties that so many people make in business. They think that their cash flow is profit and that’s definitely not the case. And– But it was a great. It was never– It was a privately published book. It was never out there on the market but it was a fabulous tool as well.
And I’m guessing if you’re a fan of Roger’s, you’re a value investor. Why value investing over other forms of investing?
It’s a lot more than just value investing. I mean, I’ve read a lot of stuff on Buffett and in fact, my first introduction to Buffett was reading Katharine Graham, who owned the Washington. Post her by autobiography which was one of the best reads I’ve ever had and she talked about Warren Buffett because he came in and worked with her and that was my– That was actually long before knowing about Buffett through Roger.
I think it’s more than just value investing. Now, you’ve really got to understand what value is. But value is not just a figure, it’s a clarity of purpose, its strategy, it’s good management, it’s having a future and knowing how to build on that future. Value is actually working out. Yes, is this company overvalued if you want to buy it. But value is so much more than that. It’s not just, is it the right time to buy? Quite often at times, I’ve made the decision not to buy something because I thought it was overvalued. CSL is the classic one of that, that I can espouse on that one and thought it was overvalued at $6 and $30 and $60.
It’s a lot more than that but it is an essential tool to actually understand what you’re doing as far as an investing. As far as a company goes, but it’s also about how the directors really understand what they’re doing and whether they have clarity and then the other word for value is do they have good values as human beings? And then technical is really all about your emotion, it’s about when do you buy and who else is getting involved in this market? And, each stock has its own technical story as well. It’s a comp– It’s a complimentary tool, both of them.
Can you take us through your process then Allison when you’re analyzing the stock? I think you mentioned to me at the same meeting that you have some form of a checklist that you work your way through?
Yes, the classic three is it big enough and liquid enough and do I understand the business would be the first three things that you look at so and then starting looking at what I’ve ended up over the years working out which one and I can’t remember off the top of my head now. But which one of the main things? But it’s really consistent growth and if there isn’t consistent growth and explanation of why there is not. I think, if you remember, Wesfarmers was doing really well and then they bought Kohl’s and everybody said, Oh, they’ve messed up now. The share price almost halved. And– But they– Because they weren’t consistently getting that return on equity.
But of course, in the end that was a way of coming down and then building up it up again. The– It’s that I prefer a 10 year history so I can actually see how long it’s taking for a company how they’re going over a longer period and we’ve been 2007 of course, we had the GFC and now we’ve just got COVID so you really you need to make sure that you’ve always got those major events and seeing how people have responded to those major events and also to see how they share all those values have changed over different managers and different way the company is being run.
It’s really consistently and if there’s not a consistent story, there’s a glitch somewhere, why? And said like Wesfarmers as your classic one, why that glitch happened? It’s because they’re bought in to calls and sometimes– And then looking at how they value the share price and the number of– Whether they they’re keeping on increasing the number of shareholders your value but I’m particularly interested– It’s a value for the shareholders. I’m particularly interested in, are they generating enough profit that once they’ve paid me a dividend, are they going to steal be able to grow? I want a company to be twice as big in 10 years time so that they’ve got to have cash flow to do that. The old cash is king but it’s also how you manage it and how you put value into it.
There’s some of the key things that you look at. When you over that 10-year period, are you pulling down their financial data and then throwing it all into a spreadsheet and just making sure that it all looks good? How do you– What’s your actual process?
I just use a tool. Somebody else pulls it all out there and it’s all there and I just look– I’m looking for patterns. I’m not drilling down fussed about particularly individual. Because I’ve done my first filter with the top, the first three, size, liquidity, and do I understand the business and then as you go through each line, you can actually start filtering other companies out, it’s very quick to then start off, look their free cash flows just going nowhere.
Their sales per share is not increasing. You can start pulling all of those things out and you starting with a very small number of shares. Then it gets good, gets easier. Then when you’ve done that, then you start looking at your bigger pictures like debt to equity, how they use their cash flow, and just making then starting to look at how the companies run their culture, the values. I don’t really go into those at the earliest stage. They’re more once you narrow that down to a number of different companies.
Right. Tony, you have any questions for Alison about her process?
You said the one I wanted to focus in on was understanding what the company does. Do you have any particular industry expertise that you rely on or other industries you just give up on because you’ll never understand them? Is that part of the process?
I mean, if you look around in your daily life, there are so many businesses you understand. I mean, you understand how banks work and you understand how real estate works, you understand how retail works and you understand how what– You know what products you’re using, whether you’re buying beds or toilet pans or whatever. There’s a lot of stuff. Generally, the mining industry– I was brought up in the generation where the mines– Mining industry was incredibly large part of our country, we’ve lost a lot of our manufacturing. Looking at what minerals are out and about, we ran a seminar once called mind the miners, which was wonderful.
Just talking about how you understand the cycles of mining and when to pick up and when to back off onto the mining industry because everything is cyclical. Looking at some shares or our that they’re– High volatility– Their opportunity to buy and sell is very solid businesses but they’re influenced by external factors. You might want to buy into them when they’re low and incre and when they’re high, they’re cyclical. That gives a different type of stock.
Others, you can see them just growing and getting to the point. You’ve got to think about what I’m going to get. I’m moving sideways out of that one. There’s the stocks you keep in stock you move through stocks you speculate on and stocks you just got to have a bit of fun with. You’ve always got to have a couple of splurges there that you just want to watch and see what they do. But I think for my generation, the boom in the last 10 years in the technology industry and I’m in the ASX, All Techs sector is. It was started with 25 stocks beginning of last year and there’s now nearly 100 stocks. The boom in the technology stock is just another whole game because it’s there’s so much happening there so that you don’t see all this, like Atlassians all that software program behind that as a person sitting in front of your computer, you don’t really see all of that and but also when a company is growing like Xero and Amazon, they don’t make profits for years and years because everything goes back in. Well, when you bought up to always look at a company that’s got profits, then it’s changing the way we’re looking at those companies is a different ballgame.
Does that mean when I buy shares in Xero or on Amazon or are they companies you just don’t really understand?
Oh no, I understand them. I just never talked about what I own. It’s one of the rules within the organization, the ASA and AIA. Nobody should feel obliged to talk about what they own. That’s up to you. If you want to but I just have a rule, I don’t talk about what I own. I find to be honest, as soon as you start talking about what you own, the area of competition comes in. People want to always tell you the story about how they got into a better or barter or whatever. It’s just easier to stay out of that. Investing is such a personal journey that to be influenced by other people’s competitiveness is not going to bode you well and that’s really underlying why women are, according to research make at least 1% better return than men because they’re not actually competing with each other or with the market. They’re just working away at it and I know some very smart women investors.
Well, I wanted to talk about that because you mentioned that study to me. Can you tell us a little bit more about what you’ve read about why women are better investors than men is it just because they make better decisions because they’re not as competitive?
I think that’s one thing but I also think they’re just a little more quieter about it because they’re not interested in being at the front and being look at me. I find that most of the women I know that invest, don’t talk about it, they keep it very quiet and then every now and then, there are groups. I don’t belong to the other group where you actually talk about your own investments and I said, it’s just my personality. But there are some very smart investors but they just tend to just quietly work away and keep their own thing. I think the sad thing is there are not enough women investing for them to be in. I’ve got a little cohort of women that are friends who invest and that’s about all I really interact with. Never know when that next piece of joyful information that helps you choose the next good winner stock is going to come through it. It can come through from anywhere.
Now I think women to be having now observed the investing industry and seeing many– I mean, I’ve been to so many conferences and seminars and we’ve had so many speakers to just see. I mean, some of the women’s speakers have just been extraordinary. I mean, I’ve heard many times that some of the best speakers in Australia and I think that we really are targeted with an underlying image that women– That that money is men’s business and I’ve actually heard men say this, that money is men’s business and I think that that’s an underlying philosophy that it’s easier therefore for a woman to just keep her own counsel and do her own thing.
Pick the brains and get along– Get on with it and it is I think becoming even more so because there is so much money around that’s being managed through the superannuation industry which of course changes the dynamics about investment community as well. But they’re all personal opinions. There are many– Probably other women are not running into who are very active communicators with each other.
What do you think you would change to encourage more women to manage their own finances?
I have asked that question so much. I actually did spend time for a few years developing a website that was aimed just for women and it was based around the concept that women do need to learn and be confident before they will speak out. They do need to learn in a quieter situation. I think that just or every volunteer organization, every person who is educating people about investing, even people who have knowledge bases that are teaching people. They really need to focus on how to get through to more women. It’s well documented now that America, the generation of women, over 55 are now manage more than 50% of the wealth of America and they are not being heard.
That’s a lot of it through inheritance, a lot of it through their own businesses. But that’s not being heard. I think there’s a huge need for the industry to really think about how women can be empowered and educated and it’s about that empowering women to make them understand, you actually can do it, you don’t have to be a genius at mathematics, you don’t have to be a genius at understanding how business runs, you just have to have a system and not be frightened to ask questions and that system should be evaluated and changed and adjusted as you learn more and as you become more and more experienced and even if you just know enough system to be able to really get your advisor to fight for you and give you the best deal and not be someone of that they don’t really care so we won’t push them into that extra rate or ETF that just might make them that bit of extra money. Yes, don’t undervalue women is really what the industry needs to do and the media.
What can we do to attract more female subscribers to our show on investing?
I really think if you were really keen on it, have an introductory session on a regular basis. That’s focusing on those barriers to entry for women and don’t talk down to them. In that sense of empowerment that women can do it. It’s– We see so much advertising, that you go and buy a $1500 pair of shoes or a glitzy piece of jewelry, you just don’t see those stories out there about that $1500 pair of shoes could be worth when you’re 50, 60, 70, thousand dollars. It’s not there. In our language, it’s not there in the conversations of daily life.
We need to make a TV show like Sex in the City but it’s just the four women sit around saying, no, we’re not going to waste money on Manublunic shoes. We’re just going to invest that and start talking about compound returns. For those people listening to our show who aren’t members of the Australian shareholders Association, what would you say the pitches for becoming a member and going along to your get together and meetups and conferences etc.?
You don’t need to know anything to start being a member. There is no expectation of knowledge, you can do what I do. I did sit there for five years and say nothing and number, the most important thing is that they are not pitching a particular story. It doesn’t matter what type of investor you are, whether you– Or how much you’ve got to invest. There will be resources that come through the ASA that you’re going to grow as an investor. One week, we might have someone talking about green investing. Next week, we’ll have someone talking about bonds. The next week, we’ll have someone talking about their system for selecting shares.
Next time, we might have someone talking about the mining industry. Bitcoin investing in technology. It just goes on and on, the range of things and that’s just in one meeting and then you throw into that, the webinars that are available, the reading available, and then the seminars and the conference. Seminars don’t happen as much since COVID. But we used to have three seminars a week, a year, half day or all day seminars as well as the annual conference.
Great opportunities to just passively learn and you never know which meeting is going to make you that bit of extra money. I remember one meeting going to it and discovering that there was this one little thing that so that you had that one opportunity and I made $15,000 just by tweaking my tax return and another time there was an advisor someone was looking at something differently and I made enough money in four months to buy a new car so there weren’t stocks I wanted to be in long term.
But they were just undervalued and I made an opportunity and you never know, then you might go for a year or so and not know anything and it’s just the joy of being with like-minded people who care about being financially independent and valuing their own ability to be able to manage their own finances and that’s that underlying being with people who actually have the confidence to do it is just a phenomenal feeling and it’s a delightful, both Australian shareholders and Australian investors Association about delightful organizations, they both have the same values. Australian shareholders, has the extra role of advocacy and company monitoring of companies and they’ve made some quite considerable differences in how boards perform in Australia.
At the few Brisbane meetings that I’ve been to and also the annual conference, the age of the attendees, the demographic seems to be on the older side. Do you have younger people joining the organization or that I’ve just not visited to have done a visibility? Or is that something you’re trying to do more as attract?
It’s definitely something that we need to work out how we’re going to do it and it’s– There is a little bit of a restriction in that we because we don’t have a system that we advocate, we just expose you to everyone who has systems or ideas and all different forms of investing. We– It’s hard to actually create, this is what you should do as a brand new investor. It’s not impossible and then– But we’re a volunteer organization. Finding people who are willing to not only run what is already been run but and in formal work and the Australian shareholders are just starting to move into that area to actually create a new position that will be responsible for education and then we need, we’ve done a big survey on women and when– What’s it called? Winvest is a new organization that they’ve– Section of the organization that they’ve started but they need to work out what to do with the young ones.
They move much faster, they’re so much more tech savvy than gray haired generation and they need something to capture them that bit quicker, they have that very short attention span. But it is essential that young people start because they’re the ones that get the compounding– The value of compounding, it’s such a difference if you can actually get moving early and have money in the bank that you know, hit your 40s and instead of thinking, oh my gosh, I’ve got nothing to retire on.
To see that your mortgage is starting to come down, your investments are growing and you can actually start seeing you have choices in your life and that’s– I think that’s the joy of investing young, you can actually a) Have time to make mistakes and b) You can have the joy of seeing the growth of companies that are growing with you and your net worth is growing and that gives you those choices and hopefully along the way you’ll find that stock that you’ll pick up for 20 cents and or CSL $2.50 now $280. There these stocks do come through and but you can’t invest in them unless you’re actually in the stock market and I think the other thing I would say for young people, the ASX learning to invest and their competitions are phenomenal. But I only think you learn if you put money in the stock market. You can theorize as much as you like but unless you actually are willing to put money in the stock market, you’re not really going to learn and it’s a bit like going to the horse races. What’s the point of going through horse races if you don’t have a bet on a horse? It’s the same thing.
That’s one of Tony’s favorite pastimes. Isn’t it Tony?
It is. Yes. Although I did go to the horse races in Dubai once. We’re not allowed to put a bid on because of the Muslim religion but that’s a difference.
But they have races anyway.
World cup. Yes.
Oh wow. Do you have any last questions for Alison before we let it go, Tony?
I think you’re going to ask Allison about her biomedical experience. Is that right? Yes.
Yes. You’re involved in organization doing some interesting work that you told me about? Could you tell us a little bit about that before you go, Allison?
Yes, it’s interesting when you go. If you went to a doctor and you had symptoms of diabetes, they would ask you all their clinical questions and then they would send you off to a blood test and they would decide which would tell you that you have diabetes and how severe it is and that would be used then regular tests to manage the diabetes. If you have mental health issues and you go to a doctor or a psychiatrist, they have no objective measures that says, yes, you have changes in your body, physiological changes, we can put a measure on those, we can then give you a treatment plan and then we can retest to see how your body is physically responding to the treatment program and we’ve been involved in original research, we have some brilliant researchers in Queensland and we’ve actually done world leading research.
We actually have the beginnings of just a very simple process that gives some very nice tools for the medical profession to work with. The most important and better thing about it is that, when you become suicidal, or depressed or whatever, you just think, why me what’s happening and if somebody says, look, let’s measure this, oh, this one is way off the tree, let’s do something about it. It’s empowering. You feel like you’ve got some chance of actually repairing your system and it– But we won’t hear about us because we don’t, we’ve been quietly doing this research and there’s no point in researching, it’s no use until it’s actually happened and we’re just at the beginning where we’re starting to actually talk about it and teach people about it.
We have online courses for doctors now that actually quietly teach about this. I can’t rush into it because it takes a while to understand how to manage object adding these objective measures. It’s been immensely rewarding for everybody involved and hopefully, we will end up being part and parcel of the system when you come, when you have issues with mental health. If we can do anything to reduce suicidal tendencies that would make an enormous difference. But this research and all of this is all ahead, we have to prove the biochemistry of the physiology. Start with the science, start with the base, the groundwork, and that’s where we’re working at the moment. That’s why you don’t hear about us. We’re just doing the rock solid stuff behind the doors.
Is this a company that you have set up or chair or what’s your relationship?
I’m a chair of the organization’s and not for profit charity.
What’s it called? Are you able to say?
Biobalance health, we are run online programs for medical doctors. We have new– We train new doctors and then we continually upgrade the work for doctors already done the training. It’s and they were pretty impressive. Bunch of doctors.
And you let us know ahead of the IPO.
One of our doctors actually did a research paper, he was dealing with a lot of schizophrenia scripts, schizophrenic sufferers and he found that 650 patients, I think about 180 of them finished his program using the objective measures and the average stay in hospital went from 20 days a year to two days a year just by being able to look at the objective measures and managing those and allowing encouraging the body to repair itself. That was pretty good outcome.
They– It stops them from thinking that there is something wrong with them, they’re a bad person, they’re a broken person. But no, there’s just something going on with your biochemistry and we fix them and you’ll be back to normal?
Yes. With diabetes, yes.
Yes, that’s great. Well, getting in on the ground floor of the IPO would do something about my depression. I can’t say that but I don’t want to make light of it.
That’s your return on your investments is very good for your depression as well.
That sounds like a terrific research. Well, listen. We’ll let you go, Allison. Thank you so much for coming on. Congratulations on the great work that you’re doing with the ASA and on your own investing as well and hopefully, we’ll be able to figure out how to get some more women on our show and involved in investing. Tony, and I’ll have to sit down and figure out how we position ourselves to get more of the allowance. And
[Inaudible 02:00:21]. I put a huge amount of thought about into this. Always happy to chat to you and encourage you guys.
Thank you for inviting me on and get those women investing.
Thanks for your time and talk to us and if you have any other colleagues or people you invest with who you think might be good to come on the show, please point them our way.
Yes, I actually do have a couple of ideas. They’re quite quiet so they might not but there are some quite smart women.
Yes. Fantastic. Well, we look forward to having some of those ladies on. Have a good afternoon. Thanks for listening. Thanks.