QAV 432 Club

Cameron 00:07
Welcome back to QAV. This is Episode 432. TK, I am out of lockdown. Eight days in and out. That’s how we do it in the big red state. Is that where we are, reds. Are we the reds yes? I don’t know.

Tony 00:23
Well, you’re meant to be.

Cameron 00:27
Right. But I don’t follow commies. Yes. We’re the big commie pinko state? How’s it going down there in Sydney?

Tony 00:31
Well, I’ve had my second jab today. Hopefully I can move around a bit more and feel comfortable with it all.

Cameron 00:37
We need to get this show done and dusted before you fall over with side effects again.

Tony 00:42
Yes, quite possibly but also I hope not.

Cameron 00:45
Well, as I said to you off air, I had a hell of a day on the old stock market, Tony. But I’ll get into my complaints later. Let’s start with things you have to talk about. What is this great rotation business, Tony?

Tony 01:01
Got a lot. Well, we’ve had a lot of questions about commodity prices and whether they’re in sell territory and the rest. I just wanted to spend a bit of time going through my notes. I spent a fair bit of time yesterday looking at it all and I agree with a lot of the comments coming through on the Facebook page and in our questions that yes, things are turning down. Let me start with Santos which is I think in a dummy portfolio, I own it. It’s on the– Been on the top scorers list for a while and as we mentioned, I think last week or the week before, it’s announced the merger with Oil Search which is another oil company and the share price has gone down since then. I think Santos is probably qualifying as a sell on bad news and it’s not necessarily bad news but it’s news affecting the share price.

Let me just work through my thinking on that. The first thing is that it’s not a sell from a three-point trendline point of view unless your fudge it. The share price graph for Santos has a couple of big dips. One of them being the COVID cough last year and you can draw a line extending between those two and it gets a sell price which is way south of where the current share price is now and you could fudge it and take l1 as being the COVID cough and you’re getting a line that goes up much steeper and it’s a sell on that fudge line. Just my thoughts on that, the slope if you use the traditional three-point trendline is about 13% and we’ve been talking about having 8% as the cut off before we do a fudge. The 8% is not really anything. Not really hard science. It’s more statistical, it’s– That’s the best. That was the optimal performance when Dylan did some back testing but who’s to say whether there aren’t any outliers and 13% is wrong or right in this case and whether we shouldn’t be using the fudge line. That’s the first comment I’ll make. If you want to use the fudge line and Santos is a sell and it’s certainly not a sell if you stick to the hard 8% rule on flat bottoms and not go to say something like 13%. But put that aside for the moment.

What’s happening was Santos, it wants to merge with Oil Search. One question that begs is what will the merge company look like from a QAV score point of view? And the Santos QAV score at the moment– I’ll just look it up. I did a download yesterday on being Sunday, the eight. Santos is currently not even on our top scorers list. It’s dropped off and it has a QAV score of 0.06. That’s what I’m getting anyway. If you look at that– If you look at what the Oil Search QAV score is and also just even worse than Santos, it’s QAV score is 0.01. It’s pretty hard to me to see that the merged company is going to be on our top scores list and probably somewhere as an average between those two scores, 0.01 and 0.06. That’s another potential reason to sell.

And then I guess the third one is that again, news related the PNG government came out over the weekend and Oil Search is based in PNG. Santos isn’t. But the PNG government will have to give its ascent before the merger can go ahead and some of the things that they are likely to demand before they give their ascent is that the Santos head offices in PNG or at least the big offices in PNG and that they employ a certain number of locals and support the economy. Much the same conditions I’ve put on Oil Search operating in PNG as a foreign company. It’s possible to see that the merger that’s currently being looked at gets diluted a little bit because there are conditions placed on it by the PNG government and it’s also fair to say I think that this is– The merger has just been announced and that there may have to be other sweeteners put in by Santos to get the approval of the Oil Search shareholders across the line because the merger has to be approved by both groups of shareholders.

I think just on the news factor alone and the fact that the share price has retreated since the merger has been announced. It’s really a sell on bad news type story. It’s not necessarily bad news and it’s going to create a large oil company which will be a powerhouse in the region but not necessarily a good one from a QAV point of view. I’ve been watching the share price, it’s come down, it’s potentially bouncing around the bottom now from that overhang of news but it wouldn’t take much in terms of the offer have it having to be raised by Santos or conditions being placed on it by the PNG government to see the price taking a step down. I’m going to sell my shares. I think I put out an announcement this morning that I was thinking about it. I’ll wait 24 hours and I think we should take it out of dummy portfolio as well on that basis.

Cameron 06:46
This is– Even though I mean, we normally don’t sell things just because they fall off the QAV list, the scorecard, right and it’s up roughly 40% in the dummy portfolio since we added in so it’s been a good one for us and it’s not– There’s no really bad news like there was with GLE this morning which we’ll get to. This is what? I mean, it’s– I’m not sure how we– How do I turn this into a guideline for people. A rule.

Tony 07:28
I think it is very much news related. It’s news of a merger. Oftentimes the acquiring company and it’s– This is not really an acquiring situation, it’s more a merger. Oftentimes the acquiring company is the one that does worse out of it in terms of share price. It’s usually the acquired company which goes up in terms of its share price in the short term. I think that’s a news event. It sent the share price down. It’s not like a CFO resigning or CEO resigned or something like that but it is and it’s probably potentially long term good news for Santos but it’s got a long way to play out and it’s going to be– I think the share price will move around according to what conditions they have to give up to get the merger across.

And look the other thing too about companies falling off the top scorers list. That usually happens because their share price goes up so their price operating cash flow goes down and then we use the three-point trendline to sell them. This is, like I said a fudge three-point sell whether you– If you want to stick out for a non-fudge three-point trend line sell, then no it’s a hold. But I just can’t see this. I can’t see anything that’s rewrite the Santos share price. The oil price– Underlying oil prices coming close to a three-point sell. If we have a look at that, it’s a couple of bucks off of sell.

I’ll just go into Stock Doctor now and have a look at oil using the commodity section. Oil’s down 1.2% overnight. That is West Texas crude and I prefer to use Brent but we’ll look at them both. Yes, well what started with West Texas crude which is the US oil price. It’s currently $68. My three-point sell price for it is around 62. That’s $6 off that one and if I look at Brent, again Stock Doctor’s giving me a US Brent number but anyway we use it. That’s a fair way off if I use Brent crude North America. I can’t see where I’ve got to. Let me see if I can find the Brent crude not by North America. Crude oil, here we go.

Cameron 09:56
You’re doing this in Stock Doctor?

Tony 09:59
Yes. I’m going in– OK, what I just did then was I opened up the commodities advanced scrapping screen and over in the top left hand side, you can enter code or name.

Cameron 10:15

Tony 10:16
I put in oil and then there’s a subheading. I clicked on commodities.

Cameron 10:22
Oh, I see.

Tony 10:23
Yes. I’m going to go down and look at CL# which is the Crude Oil Futures current.

Cameron 10:29

Tony 10:30
And if I draw a three-point trendline on that, the sell price is telling me it’s about 65.50 and the current futures contract price is 68.28. It’s getting pretty close. Just the question of which one you use. If you wanted to stick out Santos and see if the oil price turns up again, fine. Or watch the commodities charts and see if they cross, fine. But I’m happy to fudge it based on the fact that there’s also news in there.

Cameron 11:04

Tony 11:05
Which isn’t necessarily– It’s not– I think it’s a positive for the stock. Put it that way.

Cameron 11:09

Tony 11:10
And it certainly caused the stock price to go down.

Cameron 11:12

Tony 11:14
OK, three-point train lines are all about de-risking. It’s trying to– Try to stay safe in the market really.

Cameron 11:21

Tony 11:23
Am I worried about missing out on the next 10% from Santos going up? Versus saving myself 20% downside if it goes down, which is all leading towards. If I take all those things together and I’m prepared to de-risk and sell Santos.

Cameron 11:41
Right. Little bit of forecasting in there, Tony?

Tony 11:44
Yes, a little bit. Not– Well, no not really, it’s forecasting in terms of what will happen with the share price because of the merger? There’s a bit of forecasting in that. It’s getting close to a sell in terms of the crude oil futures. There’s a little bit of forecasting in that and it’s a fudge on the three-point trendline which I’m– Yes, maybe forecasting with but that’s not really forecasting, it’s just taking a fudge which I think is fine, especially with commodities. We’ve seen the leg up and we’ve seen the leg up in the oil price. It’s all happened since the COVID cough. Prior to the COVID cough, the low point for oil was $45 compared to in the COVID cough when it got down to about 19. Yes, and it’s gone up from 19 to 68. That’s, in fact, at the high point it was– What was that? 73. It’s more than tripled since the COVID cough. It’s yes, taking a profit too.

Cameron 12:43
Right. Okay. That’s something we normally don’t do though and what happens if the oil price turns around? I mean, it looks like it’s been up as high as it’s ever been in the last five years here. I can’t see it turning around and going too much, I guess.

Tony 12:57
Yes and there is a little bit of talk around that again, that would be me forecasting. But there’s pressure on OPEC to keep the price around 70 bucks a barrel so it may stay there and one of the things that happens with oil is that once it starts to get to the top end of its range, more producers are invited back into the shale or gas market in the US and you have wells which have been sitting idle for the last year or two will open up again and if the US starts to produce shale oil and volumes because they need maybe 70 bucks a barrel to make money, then there’s more that they import this from OPEC and that the price tends to equalize around this level.

Cameron 13:48

Tony 13:49
Yes, but again, that’s just my knowledge of the oil market. But yes, it’s just everything about this at the moment. I am particularly using the three-point trend line fudge and the fact that the Oil Search merger has depressed the Santos share price as reasons to sell. Now, what could go against that? Well, if the Oil Search merger gets pulled off the table, Santos share price could rise. There’s that risk.

Cameron 14:16
Right. OK, we’re going to get rid of it out of the QAV portfolio and you’re going to sell your own holdings.

Tony 14:23
Correct. Yes.

Cameron 14:25
All right.

Tony 14:26
And I think in terms of the dummy portfolio, we’ll talk about it during the pulled pork section but I’m going to buy or suggest we buys ZGL which is now the highest.

Cameron 14:57

Tony 14:57
Yes, ZGL.

Cameron 14:57
Doesn’t have average daily trade of 3k.

Tony 14:57
Cameron 14:57

Tony 14:57

Cameron 14:57
They’re not too small.

Tony 14:57
Well, our position in Santos in the dummy portfolio is 1500 bucks. Yes, potentially. It’s a little bit small.

Cameron 14:59
After getting burnt by GLE this morning that scares me but at least it’s only the dummy portfolio. It’s not my real money this time. Anyway, OK ZGL. There you go.

Tony 15:11
Yes, there you go.
Anyway, I think the iron ore prices are watch at the moment and I think if it goes anywhere lower, then the iron ore stocks are a sell Fortescue and CIA and if you look at before Fortescue share price, it’s already down from 25 odd dollars to 22.74 today. That the iron ore price is having an effect and if you look at Champion Iron, CIA which is another one that I own. I think it’s– Isn’t it in a dummy portfolio? You might know Cam? CIA in the dummy portfolio. I can look it up, I guess.

Cameron 15:17
No it’s not.

Tony 15:17
It’s not. OK, it’s just me then. But that Champion Iron is down 4% today and it’s dropping fast as well. I’m putting on– I’m going to start lightning out of these companies. I probably won’t sell all at once unless I wake up tomorrow and find out the iron ore price has dropped down again. My gut feel is that it’s not going to go much lower. But my gut feel is also it’s not going to go much higher. We’re going to sit here for a while.

And again, this is a situation where we’ve made such great money out of FMG. That’s taking some profits off the table as well and the same with Champion iron. What are we giving up? Well, there’s a big dividend coming from Fortescue metals in what, five weeks time. I think it’s mid December, mid September but it comes in. I’ll just confirm that. I’ll get back into FMG. Ex-dividend for FMG is 10th of September, 32 days away.

Cameron 15:17
You need to hold the stock on the 10th of September in order to get that dividend?

Tony 15:17
Correct. But that dividend currently, the shares are trading on a 10.7% yield. I expect as soon as it goes ex -dividend, the share price will take another leg down by a couple of bucks. That’s an issue too. Although I mean, over time, it recovers and it might be a buying opportunity. If we see that after selling it, we want to buy back but yes, we’ll see.

Yes, again, I’m using a fudge line for the commodity price and I’m going to start selling, especially if it drops further. Now, FMG has a double position in the dummy portfolio and there’s about 5000. Last time I looked it was $5,500 worth in the portfolio so we need to replace it with two stocks I think. Half each and I’m going to suggest HUM and IMA, other two stocks. We probably should keep a look at HUM because it’s getting close to its sell line as well. It’s bouncing around.

You’re laughing about how have you sold some?

I do because we still got iron ore to talk about, there’s been a few questions coming in about it and again, I’m going to suggest that I’m going to sell my iron ores, stocks, and I own Fortescue metals group which is my biggest portfolio position and I own Champion Iron which is a big position for me as well. I’ve got to figure out how to do this without crunching the price and I’ll probably do it as a dollar cost average over a few days for those stocks and then try and find something else to buy that I don’t already own and isn’t iron ore stocks because obviously, the next one makes big stock that I don’t own on this– On the top scorers list is Rio Tinto which is another iron ore stock. I don’t want to expose myself to that.

Tony 16:07
OK, what’s my feelings about iron ore? Let’s have a look at that commodity graph. Stock Soctor iron ore and the iron ore price has risen a little bit overnight. Click on commodities first and then you get iron ore and then click on Advanced charting. I’m using tr# which is iron ore, 62% pure– 62% iron CFR China (TSI) it’s called. Three-point trend lines sell for iron ore is again, much lower than the current price. The current price is $172. I think that’s per ton. Upon the current three-point sell price Is 78 bucks. If I draw a line using our three-point trendline algorithm, that’s a big fall if we want to wait until the iron ore gets to that price.
Again, I’m looking at a fudge line starting with a low point of April 2020 and then drawing a line up there which touches November 2020 and then the current share price graph has just crossed beneath that sell line. Now my reason behind doing that Cam is that again, bit like oil, since the COVID cough when the share price– When the iron ore price was 83 bucks per ton, it got up as high as well on a monthly basis, $214. But I know inter-month– Intra month it got up to being $240. Again, the price has tripled and in the last month it’s dropped from 211 back to 172. Quite a big drop.

Now what’s behind? And again, this is I guess provided for context rather than from prediction and there’s a whole heap of issues here. China is trying to talk the price of iron ore downs called jawboning and they don’t like paying record prices for iron ore and they particularly don’t like doing it because it’s an Australian resource which they’re buying and there are political issues around the relationship between Australia and China at the moment and they’ve been– China– The Chinese Communist Party has been saying things like, well, we want to get our COVID– Not our. Sorry. Our COVID– Our climate change numbers down and we’re going to put a clamp on iron ore production for a while– Steel production for a while. Sorry and that has– People are forecasting what that might mean? And that’s depressed the predictive volume and then therefore, the price of iron ore. However, in the background of that is the fact that the Biden infrastructure bill is being passed in the US Senate that will probably go ahead and that’ll be a lot of money being put into steel production in the US to build things. On top of that, Valet which is the big competitor for BHP, Rio, and Fortescue metals group is having more and more problems with its iron ore mines and shipping from Brazil. There’s no volume coming into the market at least in the short term which will get the the price down through natural supply and demand from the demand side.

It’s possible that if China is just your buying to get the price down, the price will rise from here. I probably want to watch it for a few days and see what it does but it has crossed over a fudge line sell at the moment and on top of all that, when other important things are there to consider. The next results from Fortescue metals group are probably going to be really good. I’ll pick FMG as being the biggest iron ore stock in our portfolio and you can see that if you go to the Stock Doctor, you can have a look at what the forecast operating cash flow is going to be. If you’re going to Stock Doctor for Fortescue metals group and then go into the financial metrics– And go into the the financial metrics tab. Sorry. You can see about the third line down, under the subheading solvency. The December 20 number was $3.43 a share for operating cash flow. The projected June 21 number is $5.19.

Cameron 20:35

Tony 20:36
You’d expect there to be a big increase in the operating cash flow and that’s a projection, that’s a consensus number. But given the fact that we’ve had our last quarterly report from Fortescue and where days, if not, maybe a week or so away from their results. It’s probably a pretty safe bet. They might– Fortescue may come in and surprise on the upside. I wouldn’t expect them to surprise on the downside. If you plug that number into the checklist, then FMG is going to improve in terms of its QAV number. It’s currently– My checklist has a QAV score of 16.16 and given the operating cash flow is going to go up by about 30%. That’s probably going to be in the 20s, in the 0.2s after we get the new numbers.

Now, isn’t that a good thing? You might say, well, it is except that it’s– That number and particularly for commodity based stocks for miners, is that numbers the rearview mirror, that’s saying to me, they’ve had a good 12 months. It’s not necessarily saying I’ll have a good 12 months going forward or as good as 12 months going forward and again, this is prediction that if you have a look at the June 22 forecasts, it’s for a lower number of 481, still higher than where we are now but 4.81 of operating cash. There’s all numbers being used as assumptions in those forecasts. I treat the June 2018 number with a grain of salt but it is hard to see how in two years time the iron ore price is going to get to a record high. Again, you would need to have full on steel production around the world which is what people have predicted when we come out of COVID and you will need to have the competitors like Valet still having problems getting any big demand into the market to bring the price down both of those two things.

Yes, that want to forecast but those two things that are potentially hard to see happening. Anyway, I think the iron ore prices are watch at the moment and I think if it goes anywhere lower, then the iron ore stocks are a sell for the skew on CIA and if you look at before the skew share price, it’s already down from 25 or doors to 2274. Today that the iron ore price is having an effect and if you look at champion on CIA, which is another one that’s because I I think it’s I think it’s in a dummy portfolio. You might know cameras CIA in the dummy portfolio, I can look it up, I guess. Now it’s not. It’s not okay. So it’s just me there. But that that champion is down 4% today, and it’s struggling fast as well. So I’m pretty good. I know. So I’m going to start lightning out of these companies, I probably won’t sell all at once. Unless they wake up tomorrow and find out the iron ore price has dropped down again.

My gut feel is there; it’s not going to go much lower. But my gut feel is also it’s not going to go much higher. So we’re going to sit here for a while and again, you know, this is a this is a situation where we’ve made such great money out of FMG. That’s taking some profits off the table as well and the same with champion on what are we giving up? Well, there’s a big dividend coming from Fortescue metals. In what five weeks time, I think it’s mid-December, mid-September, but it comes in, I’ll just confirm that I’ll get back into FMG. Ex dividend for FMG is 10th of September, so 32 days away. So you need to hold the stock on the 10th of September in order to get that dividend. Correct. But that dividend currently, she has a trailing 10.7% yield. So, you know, I expect as soon as it goes ex dividend, the share price will take another leg down by a couple of bucks. So that’s an issue too, although I mean, over time, it recovers and it might be a buying opportunity. If we see it after selling it. We want to buy back but yeah, we’ll say. So yeah, again, I’m using a fudge line for the commodity price and I’m gonna start selling especially drops further. Now FMG has a double position in a dummy portfolio and there’s about 5000 last time I looked it was $5,500 worth in the portfolio so we need to replace it with two stocks I think half each and I’m gonna suggest

Cameron 25:37
I sold both of those recently. I sold HUM about a week ago. I sold it by the end of the financial year. But yes, I sold HUM recently after it went backwards on me.

Tony 25:52
Yes, it’s been dancing around that sell line. These are all just– Going to have a look at IMA. What’s the sell price for IMA?

Cameron 25:59
I don’t know. But I did a scorecard this morning. Neither of those are in my top 10.

Tony 26:04

Cameron 26:05

Tony 26:06
I did one yesterday and they both weigh up in my top 10. I’ve got Xycom, Medusa, Cash Converters, IGL, HUM, CIA.

Cameron 26:18
Well, let me [Cross talk 00:26:21]. No, I mean, I’ve got IGL at the top of mine.

Tony 26:25
IGL was NGO.

Cameron 26:27
IGL– ZGL, I took out because the ADT was too small for me. Yes, when I look at– When I do the sell line for HUM, I think it’s right on the sell line.
Tony 26:43
Now, It’s been dancing around. I’m getting a sell price for HUM of 94 cents and the current price is 96.

Cameron 26:57
95 according to Stock Doctor right now but yes, my Stock Doctor anyway.

Tony 27:01
Let me have a look. Well, we might be buying and selling it quickly. But you’re right, 95. I just refreshed.

Cameron 27:09
Yes, and I mean, I’m just drawing a line. I’m not putting it into the three-point calculator but I’m getting a sell line of 94, 96– 94.96 cents and it’s currently 95 cents. I don’t know man. I probably wouldn’t have that on my list. It’s a bit dicey for my liking.

Tony 27:32
Yes. It’s also in a bit of a downtrend as well. Yes, let’s skip over it then.

Cameron 27:37
And IMA. Have a look at IMA. I did check this one late last week but because I sold it recently I didn’t want to buy it again because you warned me, things you sell on the last day of the financial year, you shouldn’t buy back too quickly. It’ll look like you’re trying to scam something.

Tony 28:23
Yes. capital gains. Yes.

Cameron 28:49
Well, I think IMA is a Josephine too.

Tony 28:49
What’s a Josephine?

Cameron 28:49
Oh, Tony, this is my new terminology. You haven’t caught up with the Josephine. We haven’t talked about it on the show. I think I’ve used it in emails and on Facebook. This is what? Yes, wait and see. It’s like not tonight, Josephine. You said a couple of weeks ago, something– If something’s above its buy line and above its sell line but it’s currently in a downtrend.

Tony 28:49

Cameron 28:49
Then it’s a wait and see, which I call is Josephine. I call it a Josephine hecause it’s not tonight, Josephine, which– I can tell you. There’s no record that Napoleon ever actually said that but it’s good enough and it’s sexier than just a wait. I’m talking about IMA though. IMA finished in July 19.8. It’s currently at 18.5.

Tony 28:53
I’ve got IMA on the way out. Let me just have a look. It is currently at 18.5. No, yes, it’s dropped down a bit. OK. Yes, it’s in the downturn, you’re right. It’s about a sell price. Yes. Let’s skip it.

Cameron 29:06
That’s a Josephine.

Tony 29:07
A Josephine.

Cameron 29:09

Tony 29:09
I like Robin Williams as it’s a Nefertiti. Not tonight. I’m having my pyramid.

Cameron 29:17
What was that in?

Tony 29:22
One of your stand up acts.

Cameron 29:24
Right. OK. Good. Yes. Well, sorry to put the kibosh on those but–

Tony 29:30
That’s fine.

Cameron 29:31
And I tell you when I was doing my checklist today, it was brutal because nearly everything I looked at was a Josephine. Everything had been retreating for the last month or two.

Tony 29:42
Yes, and that’s a bit of another worry in the market, isn’t it at the moment?

Cameron 29:47
I don’t know. Is it– Is that a worry? Isn’t that just–

Tony 29:49
Well, if you can’t business as usual.

Cameron 29:51
Oh, eventually could but it took me a long time. We should have Reg. Reg, one of the members here in Brisbane. Reg called me up early today and he goes, I’ll just do a checklist. Do I need to do the– My manual data, there’s 80 stocks in it? Do I need to do all the manual data on these 80 stocks? And I explained, well, I normally just do the top 20 or 30 depending on how many stocks I need to buy and I said, I’ve got to buy two todays. It shouldn’t be very long exercise for me to go through and I just checked sentiment. Normally I find that when I checked the sentiment, about half disappear immediately but half is still there. But then I got off the phone with him and I was checking the sentiment and everything was just nope. I was like, oh my god, this is– I was really getting that in my top 10. ING is number 10 and I’ve got a QAV score for it of 0.12. Normally, I don’t go below 0.2. For stuff, I had to really scrape the bottom of the barrel to get a list of 10 or half.

Tony 31:03
I’m just working through my list at the moment. Looks like KSC is the next one that is above its buy line, above its sell line and is at an upward trend this month.

Cameron 31:22
KSC. They’re not on my list.

Tony 31:29
They’re PDT stock as well. It’s K and S Corporation. It’s a transport company based in Adelaide.

Cameron 31:29
Right. OK.

Tony 31:30
It’s small. It’s like another $4,000.

Tony 31:30
Put that one in.

Cameron 31:32
Oh, well.

Cameron 31:33
We’re going to replace FMG with some KSC and then we need another one.

Tony 31:40
Yes, KSC. Half with KSC. Let me keep going.

Well, by the way, in terms of what I buy when I get out of FMG. Unless something pops up during the next week or so with company reporting season, I’m just going to have to top up my current holdings.

Cameron 32:02

Tony 32:03
Because I pretty much bought into every big company on the top scorers list now.

Cameron 32:09

Tony 32:12
OK, what are we looking at? Next one on my checklist to check out is Beacon Minerals. Is that one you’re familiar with?

Cameron 32:21
Yes, I think I put the kibosh on those last weeks. BCN.

Tony 32:26

Cameron 32:27
I didn’t check them today but I did a list on Friday when I had to buy something and yes, that’s a Josephine as well. It’s been coming back since May.

Tony 32:38
Yes, no, you’re right.

Cameron 32:39
It’s actually below its sell line now too I think.

Tony 32:42
Oh, is it? Let me have it. Yes, it could be. It’s one of those. It’s a very low volume ADT again. The graph is a bit– I think it’s crossed sell line to your right. You should take it off the checklist. I’m just going to do that now online.

Cameron 32:59
In fact, it crossed it’s sell line back in March I think.

Tony 33:06
OK, we’ve got next one down is a Eclipse Group. We already have. Choice Corporation’s next one down. It’s too small. It’s only got 3000 ADT. Kingsrose Mining. Do we have KRM?
Cameron 33:17
I bought them on Friday and they dropped by 10% this morning so I axed them this morning which is a question that I want to talk to you about at some stage. I was a little bit confused thinking about this over the weekend. Got an email from somebody. I can’t remember who it was. Might have been Ed or something like that about rule one but Kingsrose Mining by the way is another Josephine. It– Like you’ve said– We talked about rule one last week. You said if you bought something and then it quickly dropped by five to 10%, you would sell it, exercise one. Rule number one. But you previously had reminded me you had said that when you buy something you don’t look at it for a month. Which of those?

Tony 33:30
This is like the life of Brian, isn’t it?

Cameron 34:23
It’s a sandal. It’s a holy sandal. We should all take our sandals off [Crosstalk 00:34:22].

This is your life. It’s like we’re bringing out one guest to go well, Tony once said this and the next guest will say, well, actually, he told me the complete opposite. Well, no, I look at it and I think they’re both sensible but I’m wondering which one takes precedence. I’ve been worried then like when I answer because after he told me this last week, I’ve sold a whole bunch of stocks last week that I bought, that had dropped by 5%. But then when Ed, whoever it was, I think it was– It reminded me this. I was like, Oh well, should I just ignore it for a month and then look at it. I don’t know.

Tony 35:00
OK, the background to rule one for me was about 10 years into my investing career, we were refinancing our home mortgage and we had a private banker and she came to the house and we signed up the documents and a cup of coffee and we talked about what I was going to do with the money which was to invest in the share market and of course, the private bankers apart from giving us really good service was also there to try and sell us other products, other bank products and so she said, Oh, did you know we can offer you a solution to stop your share portfolio from dropping more than 10%? Would that be of interest? I said, yes, well, tell me more? She went and got the guy who does that to come in and take me through it. Basically, there’s a thing called Cuff and Collars which are basically options that you put all these puts and calls into the market. And

Cameron 35:58
I went to a nightclub once where there was customer calls involved. I think there was quite a few bankers there as well actually and a big bowl of cocaine in the middle of the room. But anyway, sorry yes. Go back to your story.

Tony 36:09
The cafe. It used to be the name of the restaurant at the Geebung Polo Club in Melbourne and Hawthorne.

Cameron 36:15

Tony 36:16
All the road, we used to go there a lot, I remember.

Cameron 36:19
Met my first wife at the Geebung. Yes, good pub, man. Well, I know it didn’t work out very well for me but we didn’t have any cuffs and collars involved but anyway.

Tony 36:32
Anyway, basically, long story short, they would put a whole series of options into the market, into the portfolio based on the shares I held and yes, it wouldn’t drop more than 10, the portfolio wouldn’t drop more than 10%. I said, How much is this going to cost me? And they said, well, 10%. It was– I thought, well, hang on, if I just put a stoploss in for all my shares at 10% are doing the same thing for free. That’s where rule one sort of came to be 10%. Yes, and that’s what I’ve used in terms of not looking at stocks side after I buy them. I don’t but having said that, you do find out if something is dropping, either through reading or the AFR. If it comes up on the daily charts on the AFR of the stocks that have gone up the mature drop, the match dropped the most, you can see it that way and these days, I guess it’s coming up on the Facebook group as well that people are saying, what do I do? You probably do find out about it. Quicker than I would normally.

Cameron 37:37
I’ve– When I buy something now, I set a price alert in Stock Doctor for 5% less than what I paid for my buy price and they will send me emails, unfortunately, way more often than I intended in the last couple of weeks. Should I do that or not do that? Should I give it a month?

Tony 37:58
Do it.

Cameron 37:59
Do it. OK, do it.

Tony 38:00
Yes, well, especially I would use 10%. I said, five to 10% last week. If you’re setting an alert at 5% at least you’ll know and you can watch it and see if it gets much below that.

Cameron 38:12

Tony 38:12
Yes, but I’ve always used 10%.

Cameron 38:15
10%. OK.

Tony 38:17
Yes, I don’t watch stocks. I mean, I forgot I traded out of Macquarie group last week and bought Suncorp and I completely forgotten. I did that until I was going through the portfolio on the weekend saying, how much is FMG in the portfolio? And how much CIA do I have and what do I have to buy and what do I currently owe? That’s some cool. Yes, I forgot that I own that one already.

Cameron 38:35
And then they just announced today the big dividend. I saw somebody in Facebook. Ys. Cool. Let’s do that.

Cameron 38:44
All right.

Tony 38:45
Yes. That’s that.

Cameron 38:47
We’re going for time here, Tony. We’re 41 minutes in.

Tony 38:52
We haven’t had a–

Cameron 38:52
Second stop to replace FMG with yet though.

Tony 38:55
Let me just keep looking.

Cameron 38:57
I tell you what I’ve got at the top of my list, which is IGL, 0.41. COG, 0.22. Mastermind group at 0.21. Australian vintage, 0.20, and Midway limited at 0.18.

Tony 39:16
I have none of those. I have IGL. What was the other one after right? Let’s look at IGL in is that. I think that’s in our dummy portfolio already, Cam?

Cameron 39:25
Yes, let me check.

Tony 39:27
We don’t want that. What was your name? COG, COG financial.
Cameron 39:34
Why is that ringing a bell?

Tony 39:35
Oh, yes, I’ve got in my mind, but it’s down the list a bit. Right. So I have a QAV score of 0.284. What do you have?

Cameron 39:43
0.22 and it’s number two on my list. I already own it. By the way, just as a full disclosure not that anyone cares what I own.

Tony 39:55
We don’t have it in the dummy portfolio.

Cameron 39:59

Tony 40:00
I was going to look at– I’ve got two before COG on my list, Motorcycle holdings and my holdings.

Cameron 40:08
I own both of those in my own portfolio. Well, at least I did and I still own. I may have sold MTO because I think MTO.

Tony 40:19
MTO touch that sell line recently I think didn’t.

Cameron 40:22
I think so and I may have sold it then. Let me have a look at the current–

Tony 40:30
You must have sold it because. its up 1.38% today.

Cameron 40:36
Yes I’d say it’s– Maybe just above its sell line now but it was below it. Yes.

Tony 40:46
I think it’s OK to buy. Let’s put MTO on the portfolio.
Cameron 40:49
Right. OK, MTO.

Tony 40:57
That’s our two stocks for FMG. Do we have any? I think we have GRR, don’t mean a dummy portfolio, another iron ore stock.

Cameron 41:04
I think we do. Yes. we do. It’s up 187% since we bought it and mostly like just this financial year, I think.

Tony 41:18
OK. That’s why I had a good announcement a couple of weeks ago. Didn’t it?

Cameron 41:23
Yes, now we’re going to sell it.

Tony 41:25
It’s been cool.

Cameron 41:26
We are brutal today, Tony.

Tony 41:30
I’m fudging the iron ore price. We need– Let’s– The next one on my list is Maya.

Cameron 41:38

Tony 41:39
And we know that that’s in an uptrend.

Cameron 41:44
Yes, I think Maya is still holding strong. It’s dipped a little bit but I don’t think it’s– Oh, well, it’s a Josephine actually. It’s–

Tony 41:55
Last month has it.
Cameron 41:56
Yes, end of July, I had 49.6 cents. It’s currently hold on. No, that’s not right. What’s going on?

Tony 42:03
3% today.

Cameron 42:05
Finished. Sorry. Stock Doctor was just catching up. Yes, finished July 49.5 cents. It’s currently 47.5 cents.

Tony 42:15
OK, let’s keep going. COG is my next one which is your next one. Let’s see what COG is like.

Cameron 42:29
Colgate? Right. Look at that chart. It’s a Viagra chart. That one.

Tony 42:39
Yes. OK, let’s put COG in.

Cameron 42:42
COG. All right.

Tony 42:44
Just let me check its three-point sell line because it is slowing down a bit.

Cameron 42:50
It’s got plenty of room to go about it.

Tony 42:52
That’s fine.

Cameron 42:53

Tony 43:08
OK, GRR goes out, COG goes in.

Tony 43:08
We don’t have calls. OK, what else I want to say? No, that’s probably it. The only other consideration for me is I’m going to have a big capital gains tax bill.

Cameron 43:08
All right.

Tony 43:08
We don’t have COG already in the exit portfolio. Do we?

Cameron 43:11

Cameron 43:15

Tony 43:18
By selling FMG and CIA which the dummy portfolio doesn’t. That’s a benefit for dummy portfolio but I’m going to have to manage that myself going forward.

Cameron 43:29

Tony 43:30

Cameron 43:31
Are you just– Say you like some of the money that you’d get from the sell you put aside for it? Or what do you do?

Tony 43:39
No, I don’t. I can always sell something when the tax return is due.

Cameron 43:44

Tony 43:44
And that’s a fair way away because if you use a tax account to do your tax, you don’t have to pay it for about 18 months after the end of the financial year. We’re talking two and a half years away before I have to pay CGT on FMG.

Cameron 44:03
Ans as we’ve talked about before, because of your portfolio, doubles every three years, 18 months is a half a doubling. I think it’d be alright.

Tony 44:14
Yes, I think so too. [Cross talk 00:47:17]. I can always sell my real year shares and I’ve got a loss against them.

Cameron 44:24
I was telling Tyler that story today. Because we couldn’t get out of GLE which is– Can I talk about that for a second? Mining goes. Woke up this morning, and well, sometime this morning, 930 or 10 o’clock, got an email from Stock Doctor or someone, HotCopper maybe. Saying GLE had announced that their CFO had resigned, effective immediately resigned today, leaving today, out the door, you’re gone. Don’t pack a box. Don’t collect your goods. Didn’t say that but it just said she was effective immediately and I emailed you and then I emailed Tyler and said, this is not a good sign and we’re already dodgy about GLE and we decided to sell. Tyler and I both bought our shares for a superhero.

Tony 45:23

Cameron 45:24
And it had a very low ADT, I think it was like three grand and we had not paid attention to that. Well, he bought it six weeks ago in the flurry of things I was doing with the boys and immediately after we bought, I noticed and I went, Oh, shit. Well, we’re in now let’s see where it goes and then it went up, if you remember by like 12% one day, and then it went down 15% the next time. Anyway, I– We tried to log on the superhero to sell our stocks. This is about 10.30– 10.35 this morning and superhero’s website wasn’t working properly. It was not coming up both Tylor at his place on the app and me on the website and my place. Couldn’t get it to fully load. It was like half load and the site wouldn’t load and we’re hitting refresh. Finally, I got it to load and I put through a sell order for GLE. It said it had received the order and it was pending.

A few minutes later, I’d say three minutes later, I got a text message from superheroes saying that the sell order failed and I was like what the? And I went back to their website and again, it was not really loading, refresh, managed to put through another sell order which went through, they sold most of my holding but not all of it. There’s 250 shares remaining which I didn’t find out for several hours because I had to run out the door to go to the blood bank. Anyway, in the five or 10 minutes between me putting in the sell order that filed then redoing it and then them selling it, the share price dropped by about 20%. Because we got in before I can see the price drop on stock doctor in their daily charts. We put it in before it dropped and then it dropped and they didn’t get me even all the way out at the end.

Cameron 47:29
I also sold Kingsrose Mining, around about the same time it went through. OK, but I’ve emailed the super I contacted the superhero people on Facebook initially and said what’s going on with your website today? They said send us an email which I did. I’ve sent them an email and say look, this is terrible. Your site wasn’t working properly and as it wasn’t working, it’s cost me money because the cell didn’t go through and then you didn’t even sell my whole parcel.

There’s still stock outstanding. In their site, it says review. If I go to my transaction history, it says review. When I click on review, it just gives me an option to cancel the order. Doesn’t tell me why? Doesn’t tell me what else to do? I said to them, look, I can’t use or tell people about your site, if this is what’s going on, I’m not using superhero anymore.

Unfortunately, one of the things I liked about superhero is when you transfer funds into it, they use Osco. The funds transfers immediate. I went back to self-wealth and tried to transfer funds into my self-wealth account and it’s going to take three days for the money to hit their bank account. It says, so I did a checklist and it was a hard one because of all the sentiments I spent an hour or so doing the checklist and then I couldn’t buy anything because I can’t get money and I don’t want to use superheroes. I was like, Oh, my gosh and the king rose money thing. As I said before, I bought it on Friday and I don’t know why I’m looking at the chart and it was a Josephine already by Friday. I don’t know why I bought it on Friday. I must have checked the chart close enough. But yes, it dropped 10% this morning. I don’t like that as well. But yes, it was I mean, good, learning opportunity for myself as to using some of these new apps that then crash and what can happen when a stock’s in freefall and your brokers websites not working?

Tony 49:26
Did you– What kind of seller did you put in at market or admire?

Cameron 49:30
No, admire.

Tony 49:31

Cameron 49:31

Tony 49:32
That last bit of your share sale should have gone through.

Cameron 49:36
You would think unless nobody’s buying.

Tony 49:40
Well yes, that’s possible and I think we traded stock but [Cross talk 00:49:44].

Cameron 49:44
Tyler was able to sell his stocks.

Tony 49:47
Put the brakes on.

Cameron 49:48
Well, maybe. Tyler was able to sell his stock and his mate Chris sold his or around about at the same time. I don’t know man but not because–

Tony 50:01
It’s nice if you’d let them go first.

Cameron 50:05
Yes, well, I emailed Tyler, immediately FaceTime me and said, what do we do? And I said, well, let Chris know. I think we should get out, let Chris know and–

Tony 50:13

Cameron 50:14
And then it dropped through the roof. I don’t know. I mean, it may have come back with a bit of luck. It’s come back up and I made a profit on that stuff that they didn’t sell but I don’t like my chances.
Tony 50:26
Does it usually work that way?

Cameron 50:29
No, it’s down 18.57% since this morning. There you go.

Tony 50:34

Cameron 50:35
Anyway. Good learning experience for me, Tony, of all those things as I said.

Cameron in the editing room late on Tuesday afternoon, the 10th of August. 24 hours after we recorded this episode and 36 hours, give or take. Well, I mean, not quite in that 30 hours after this whole debacle happened, I did get an email back from the superhero folks last night basically saying, oh yes, sorry, the site had some problems but we fixed it fairly quickly. To make up for your problems, we’re willing to offer you two free trades. Now trade superhero is $5. They’re offering me $10 in compensation and I said to them, $10, that doesn’t even begin to cover the losses I made– I incurred because your site was down and they still haven’t replied to me about what happened with the parcel of shares that didn’t get sold. It’s still sitting in pending a day and a half later and they haven’t replied to my email. Yes, I’m moving all my stuff off of superhero and going back to self-wealth. That’s my two cents on that.

Tony 51:57
I keep talking about some of the commodity price charts just quickly?

Cameron 52:01

Tony 52:01
To really do that.

Cameron 52:02

Tony 52:03
I’m just going to call out that copper is close to a sell. A quick look at that and that will affect c6c in the dummy portfolio and I also have Sandfire which is a copper stock in my own portfolio so it will affect that. If I go back into Stock Doctor into the commodity section, copper’s down half a percent today.
Cameron 52:31
Now, copper is the problem one. Isn’t it copper’s the one where we need to look at? Something else–

Tony 52:36
If we use futures, we’re a bit off the sell price. The hg# which is copper futures, that price is 4300 or $4.32 a ton. Yes and the three-point sell is $3.75. It’s a bit off but if we look at the copper price itself, physical price, again, I typed copper into that search window, hit commodities and then we have XCU_ which is copper physical.

Cameron 53:09
Yes. That’s the one.

Tony 53:12
And then that’s pretty close to itself. This must be again, a price per ton. 9500 is the current price and that’s got to sell at around 9300. Pretty close.

Cameron 53:32
94. 443 I’m getting.

Tony 53:39
What have I got? [Cross talk 00:53:45]. Yes, it’s close.

Cameron 53:47
OK, we’re not– Are we because the lows actually back in August 2016 but is that within 8% variance of the other low in early 2020? Are we fudging it?

Tony 54:01
No, I don’t think I have to fudge this one. If I look at the lowest point is, yes, it’s a flat one.

Cameron 54:09

Tony 54:09
Lowest point is always 16 at 4600 and then the COVID Cough is 4797. That’s within 8%.

Cameron 54:19

Tony 54:20
Yes, it really was only on iron ore that we had to fudge. Everything else is playing out using three-point trend lines but just wanted to call out that so maybe during the week before we talk again copper crosses and we’re out but obviously we’ll put something out on Facebook and a stock journal for that one on the website. Gold is getting close as well, Cam.

Cameron 54:45
What is going on, Tony?

Tony 54:47
Well, all these things have had great run since the COVID cough. That’s what markets do. They don’t go up forever.

Cameron 54:54
What goal are we looking at? Futures or XAU_?

Tony 55:02
Yes. XAU_ is what I’m using.

Cameron 55:06
Gold spot multi.

Tony 55:08
Which is also the in US dollars– Excuse me. This has got a current price of 1746 US dollars per ton and sell prices at 1631, 1640. It’s about 100 bucks away from its sell price. It’s getting pretty close. I think all it would take is either a bit of a drop in the gold price or we scroll forward a month and we’re probably going to hit that sell line for gold.

Cameron 55:39
Yes, right.

Tony 55:41
Again without fudging. I’m just going to call that one out there as well and I think we’re starting to see that reflected in the gold price or the gold stocks dropped two or 3% today.

Cameron 55:51
Yes. Is that like Kingsrose Mining?

Tony 55:54
Yes, it might be one of them but I think they all did– All of mine– I have a Remilius. It’s down 6% today. 5.57% today.

Cameron 56:04

Tony 56:05
A bit of prediction going on in the share prices for gold miners. I’m prepared to wait until we cross but yes, it’s coming up, I think.

Cameron 56:16

Tony 56:16
As good as I can tell. But all the other ones are good. Nickel, Aluminum, a good actually Platinum is a sell which is if anyone’s holding zim platz they might want to have a look at the Platinum price.

Cameron 56:33
Zim goes splat again.

Tony 56:35
That’s right. It might. Again, Platinum’s had a really good run. If I go back into my advanced graphing page and call up Platinum. In the commodities tab, platinum physical is XPT_ in Stock Doctor. If you want to have a look at it, if you’re a Zimbabwean holder and it’s cross.

Cameron 57:01
Yes, it’s really dropped off, isn’t it?

Tony 57:04
Yes. From $1200. Again, I think this is per ton down to 979 and that’s cross the sell line.

Cameron 57:13
OK. How is that? [Cross talk 00:57:18].

Tony 57:22
They’ve done really well. Sometimes they’ve tripled from COVID and it’s time to come back to Earth now.
Cameron 57:27
Right. Speaking of coming back down to earth, our portfolio for this financial year is almost neck and neck with the ASX 200.

Tony 57:37
Yes, well, I’m not surprised. We’re overweight. FMG, GRR, Gold stocks they’re all starting to turn back again.

Cameron 57:47
Right. Back at the end of July, we were killing it against the ASX. We were 11% up versus 1.7% up. Now, we’re up a little shy of 5% versus the all odds 3.2.

Tony 58:02
Yes, right. Well, I’m hoping that we’re getting the timing right to get out of these commodity stocks. We should following the logic and that will avoid any more losses in iron ore at least.

Cameron 58:15

Tony 58:17
Perhaps copper and perhaps coal as we rotate out.

Cameron 58:20
Just pointing out for listeners though. That’s it’s a big decline but our goal is to do double the all odds. Three to six, not two to 10. We were shooting the moon back at the end of July with our performance back then.

Tony 58:37
Yes, that’s also in the back of my mind. Canada last year on the market was the biggest market rise ever for Australia.

Cameron 58:43

Tony 58:44
I can’t see that happening twice, two years in a row.

Cameron 58:47
Rudy says we’re heading into a new bull market, Tony.

Tony 58:50
I saw that. Well, really there’s no Gold stocks or iron ore stocks, obviously.

Cameron 58:58
Just see yourself. Let’s just all see yourself.

Tony 59:03
Which makes AstraZeneca which is going to become a non-event, I think, pretty soon.

Cameron 59:09
Oh, really? They make AstraZeneca really?

Tony 59:12
Yes. They were really good last year when they started. They were the only local producer of a vaccine and then people started getting blood clots and yes, we’re coming back now. The share prices back up now. But we’ve struggled there for a while.

Cameron 59:30
All right. Well, what now? What are we going to talk about now?

Tony 59:34
More questions. Thanks for bearing with me during that discussion on the big rotation, the great rotation of commodities wait. We’ll– I guess, implement that. Pay close attention to some of those other commodity prices in the near future.

Cameron 59:50
Before we get into that, you wanted everyone to email Rachel Waterhouse at the Australian shareholders Association. She’s the president, Chairman.

Tony 1:00:05
She’s the CEO designate. She’s coming in to replace the current CEO.

Cameron 1:00:09
Right. I hope when you emailed her, you fixed her email address for her.

Tony 1:00:14
No, it bounce back from me too after you sent me a message this morning or last night.

Cameron 1:00:20
She sent out a group email, an email to all the ASI subscribers talking about what her favorite investing podcasts were. We were not on the list, embarrassingly for her and she said, email me what your favorite investing podcasts are and you and I both sent her an email saying, Hey, we’re ASI members and we’ve had Alison Harrington on recently and Phil. You’ve been on Phil muscatel show and Steve labs has been on our show. We should be at least on your radar. Thank you very much, but her email address that she put in the email was wrong. If you want to email her as Rachel, R A C H E L dot Waterhouse at Shoot her an email, tell it to check out QAV if you wouldn’t mind.

Speaking of things that people have done for us recently. Want to thank a and mcl for the apple review that came through this week. It was short and sweet, but did the job. Thank you and Mikkel, speaking of good results, I don’t want to take too much time because I want to get a few questions in. I know we’re just wherever now but I saw the Financial Review today they were saying that bank share prices since the COVID cough, Commonwealth banks up 80%, Westpac up 70%, ANZ adds up 85%, and the NAB is up 77%.

Tony 1:01:51

Cameron 1:01:52
I know that we– You talked a lot coming out of COVID, about wanting to fudge the banks because they were on the lower end of the scorecard, I think at the time.

Tony 1:02:04
Well, no, they came onto the scorecard and had quite strong results and the numbers really stacked up but the three-point trendline hadn’t breached its buy position. I didn’t buy them.

Cameron 1:02:14
You didn’t buy it?

Tony 1:02:14
Unfortunately. [Cross talk 01:02:16].

Cameron 1:02:17
Yes. That’s just the way the cookie crumbles.
Tony 1:02:23
Yes, I could have fudged it and gone early but I decided not to and I’ve still made some good money out of CBA in particular, I’ve got in and out of the other ones.

Cameron 1:02:33

Tony 1:02:34
And that’s one of the issues I’m having at the moment is that our three-point trend lines for a lot of stocks coming out of COVID is really steep.

Cameron 1:02:43

Tony 1:02:43
They’re going up along the sell line.

Cameron 1:02:46

Tony 1:02:46
Sometimes touching it, sometimes crossing and then came back. It’s been an unchartered territory for me in terms of three-points sell lines for such a steep period in the market really but yes.

Cameron 1:02:57
Post crash with rapid recovery.

Tony 1:03:00
Correct. It’s unusual.

Cameron 1:03:02
Right. That kind of a rapid MMT.

Tony 1:03:05
Incredibly unusual.

Cameron 1:03:06
Alan Kohler, I saw you last week said it’s not technically MMT, it just looks like MMT.

Tony 1:03:11
I think it is. I mean, we’re through the looking glass. Aren’t we really like that? It looks like an economy, walks like an economy but it doesn’t smell like an economy at the moment. You’re going to lock down. We’ll give you some job keeper. Well, I don’t care if you think you’re going to lose sales. Yes, take some. That’s great. Here’s some cash.

Cameron 1:03:33
If you’re a church, doesn’t matter. Take cash. Take millions and millions of dollars.

Tony 1:03:40
Billions. Yes and well, don’t you have to pay it back. It’s fine. Well, I’m going to tell people who got the cash.

Cameron 1:03:47

Tony 1:03:47
That’s fine. But look guys, it was the Treasury forecast. It’s going to cost 120 billion, it cost 60.

Cameron 1:03:54

Tony 1:03:54
That’s great. Yes.

Cameron 1:03:56
And of course, imagine if labor was in charge and did all of this. The Murdoch press would be out for blood.

Tony 1:04:04
Just like, I’ve never seen that happen before and then Reserve Bank, just print some more money and buy some more bonds and that all goes away?

Cameron 1:04:13
Well, anyway, we did OK. Nonetheless.
Tony 1:04:16
Could have done better.

Cameron 1:04:17
Done well.

Tony 1:04:18
You can always do better but we did OK. We followed the rules. We did OK.

Cameron 1:04:22
Yes. All right. Let’s do your time. Can we do a couple of questions before we–

Tony 1:04:26
Yes, sure.

Cameron 1:04:27
OK, how you feeling? How’s the COVID shot going? How’s your AZ? Yes, good.

Tony 1:04:32
Yes, I’m good. Thanks.

Cameron 1:04:35
Dave from NUI. Now, we had a couple of questions from Dave last week and after we read him out, he sent me an email saying, on reflection I realize they are way too long for listeners and you and Tony. Sorry about that. I have a tendency to waffle when I write so I’ve shortened my last two questions below and I think we’ll give you one this week, Dave because otherwise we won’t get to any others. Dogs of QAV fiddling around with filters in Stock Doctor, I ended up with a screen for three-year price change with a healthy price to cash flow and price to NTA also included. I then stack ranked for biggest negative change and compared my latest QAV list, Sky television NZ, code SKT is on the QAV watch list and third worst on a three-year price change. I dug a little deeper and there are a bunch of risks plus they are not a buy on a 3ptl basis but following Tony’s example of putting his money where his mouth is with experiments, I’ve taken up a small position, I’ll let you know how it progresses. We’d be keen to hear Tony’s thoughts and/or if he’s ever modeled a dog’s type experiments. I think you have, right? You talked about that recently.

Tony 1:05:49
Yes. I used to use something similar. I used to use the 10 stocks with the highest forecast dividend yield which correlated pretty heavily to dogs of dow because their share price was bombed out and they were continuously paying dividends and the yield was up from a forecast point of view. I think, well, it was about market, not QAV numbers 14, 15% and that’s about whenever I’ve gone back and looked at dogs of the Dow in terms of ganky, usually every year they– Someone publishes the results as a story in the newspaper, you can compare it and it’s been good but again, not– Hasn’t outperformed the market every year and probably around the 13, 14% over time.

Cameron 1:06:36

Tony 1:06:37
Once I got my hooks into QAV, I let that go.

Cameron 1:06:42
Yes, right. OK.

Tony 1:06:45
I just want to say on SKT, I’ve– It’s got a good QAV score but I’m a little uncertain about its three- point trendline.

Cameron 1:06:54
Let’s have a look.

Tony 1:06:55
I’m just going to call it up and also too it’s a stock I’ve known for quite a while. I lived in New Zealand for three years, about 10 years ago and it was– It’s been declining– It’s been– I’ve looked at it a lot from 10 years ago and probably every year since and it’s always score well from a value perspective but it’s been in a falling knife situation for a heck of a long time now.

Cameron 1:07:25
And it’s been flatlining since the COVID cough. Pretty much.

Tony 1:07:30
Yes and I’m actually getting it as a sell at the moment.

Cameron 1:07:34
Yes, I wouldn’t touch that with a bargepole. Not only because it’s a sky but yes, look at that. That’s a horrible flatline for 18 months.

Tony 1:07:47
Yes, I just wanted to point out I don’t think it’s a buy at the moment. I’ve got it as a sell. Well, I’ve got a sell price of 18 cents and currently its 16 but it’s pretty hard to draw that sell line.

Cameron 1:07:56
Yes, Dave did say they’re not a buy on a three-point trend line basis. We would agree with that. But good luck, Dave. Let’s know how it goes. I hope you like what he’s doing, part of the beach party at NUI last week, Dave. That’s all.

Duncan wanted to know. This is last week, how you draw a sell line on Rio.

Tony 1:08:21
Yes. OK, not too hard. What have I got? Rio. I find my notes.

Cameron 1:08:28
Well, it’s sell– It’s l1 is August 2016 at 47.6 and but it’s about to fall off like in a couple of weeks.

Tony 1:08:40
Right. I’ve got l1 the same as l2’s COVID cough and a sell line of $98.68. Sell price, sorry.

Cameron 1:08:49
Right. You wouldn’t fudge this thing seeing as it’s about to fall off the end there?

Tony 1:08:56
No, we could. Let me have a look at it.

Cameron 1:08:57
I don’t know if it would make much difference because then you’d have your new low point would be November 18 and it’s pretty much the same, actually.

Tony 1:09:09
Yes, the sell price goes through.

Cameron 1:09:11
Yes, but not by much, a couple of bucks.

Tony 1:09:16
Yes. I’m also thinking too, Cam like with all these commodities, we should probably update the checklist and have a go, no-go if the commodities in a three-point trend sell phase.

Cameron 1:09:29
Right. OK.

Tony 1:09:31
For iron ore, for example, potentially copper and gold. Because what’s going to happen is if we don’t do that, Rio, Fortescue metals, CIA, GRR, they’re probably all going to be good scores but they’ll be on the buy list when we don’t necessarily want to buy them because their commodities are downtown– Are turning down.

Cameron 1:09:52
Yes, but if I look at Rio, same with FMG it’s a Josephine right now. I wouldn’t buy it anyway.

Tony 1:09:57
Right. OK. Yes. I think I should add that to the checklists, I’ll just have to work out how to do that easily.

Cameron 1:10:02
OK. Is it a Josephine? Just put that in Josephine calm.

Tony 1:10:07
Well, we should have that but I’m thinking also too about the underlying commodities.

Cameron 1:10:11
Yes, OK. Yes, I need to put a Josephine in mine because I’m giving them negative sentiment when they’re really not negative, they’re positive but it’s just a Josephine. I’ve been thinking about putting a Josephine column in mine or when I do yes or no, it’d be in the sentiment column. It’d be nice to have Yes, No, Josephine. Josephine. She’s so confused.

Tony 1:10:38
Yes, its like the original Facebook slot. Josephine, No, Yes. Swipe left. Swipe right.

Cameron 1:10:44

Tony 1:10:47
Well, we’ll call them swipe left from now on.

Cameron 1:10:54
Steve wanted to know sell lines for CBA and DSK.

Tony 1:10:58
Yes, well, CBA is fairly obvious. Let me get my notes out. CBA. I’ve got l1 of September 20 at 63.61 and l2 February 21, 81, 56 and the sell price is currently $100.55.

Cameron 1:11:16
You’re flatlining to sell line here. Yes, right.

Tony 1:11:21
Yes, that’s it.

Cameron 1:11:24
What did you get is a sell price again, Sir?

Tony 1:11:27
Today, it’s $100.55.

Cameron 1:11:31
Right. Mine looks a bit higher about 102. But OK. Good enough. Yes. It’s going up, the share price is going up but the sell line’s racing to catch it.

Tony 1:11:47
Yes, again, it’s one of these ones coming out of COVID, isn’t it? Which ans CBA dropped the lowest sell line a couple of weeks ago and I was going to sell it but then it came back the next day so I kept it.

Cameron 1:11:57
Yes and DSK.

Tony 1:12:01
DSK is a hard one but I’ll just tell you my thinking on it. DSK, I’ll still use the five. It’s a new listing but also use the five-year monthly chart.

Cameron 1:12:13
Yes. I may have bought this. I can’t even remember. I know I looked at it. Oh, no. I decided to wait a while ago. Yes, but it’s a Josephine. I think so. I didn’t. Well, it is a Josephine. No thinking about it. That’s why I didn’t buy.

Tony 1:12:28
Stock Doctor’s gone to sleep on me.

Cameron 1:12:30
They must be running on the same platform as superhero.

Tony 1:12:32
Yes, here we go. OK, it really is only one tough– Trough, sorry, on the DSK. Five-Year monthly, which is March 2021 at a price of 294. I ran a line from– Well, you can do two things. I ran it first of all from the listing price.

Cameron 1:12:57

Tony 1:12:58
But then there was a like a shoulder all caught like a half trough around January.

Cameron 1:13:03

Tony 1:13:04
I use that as l1.

Cameron 1:13:07
Oh, use the shoulder as l1?

Tony 1:13:08
Yes, where the line dropped below there and that’s a 221 and I drew the line up using that trough which is there in March.

Cameron 1:13:18

Tony 1:13:20
And I’m getting a sell. Let’s cross sell line and I’m getting your sell price around about– Well, it’s going above the graph. When it crossed, it would have been around 370.

Cameron 1:13:30
Yes. OK.

Tony 1:13:32
Yes and the share price is 348. That’s how I draw it.

Cameron 1:13:36
Yes. All right. Well, I think we draw a line under it there. What do you think?

Tony 1:13:43
Yes, I think so. We’ve covered a lot. We haven’t done stock of the week. We’ve talked about enough stocks here that people should get a flavor for it. We’ll do a stock of the week next time.

Cameron 1:13:51
Yes. I have plenty of other stuff to talk about but it can wait. Yes. OK.

Tony 1:13:59
Yes. OK and sorry, we didn’t get to all the questions. We will attempt to do that next week.

Cameron 1:14:05

Tony 1:14:06
Reporting season, two people. Stay on top of that.

Cameron 1:14:09

Tony 1:14:10
We have had some good reports from Corvus [phonetic], from credit Corp. A. few others have come through, CBA comes through this week.

Cameron 1:14:21

Tony 1:14:22
Stick close to the numbers.

Cameron 1:14:23
Right. Thank you, TK. You had some music you wanted to talk about before we go?

Tony 1:14:30
Oh, no, I just I just made some notes because you asked me every week. Well, I’ve been listening to Watching to. Yes. I always get put on the spot and I think about it afterwards, I should have said that.

Cameron 1:14:40
Do you listen on Spotify?

Tony 1:14:42
No, I use Apple Music.

Cameron 1:14:44
OK, I was going to say we should create a Tony’s playlist– Shared playlist on Spotify.

Tony 1:14:50
Fat pop. What’s fat pop? Well, its a new album.

Cameron 1:14:55
Oh, really good. You’re a big Paul Weller fan.

Tony 1:14:58
I am yes, that’s really good and then we had a another one came out I just got onto last night. The Pet Shop Boys have done a cover of a couple of singles which are really good to extended mixes. Yes.

Cameron 1:15:10
And you want me to talk about oblique strategy cards briefly here?

Tony 1:15:14
Yes, you posted it on Facebook. What’s going on there?

Cameron 1:15:16
Yes, I’ve been wanting to get these for a long time. Brian Eno. Sure, you know who Brian Eno is?
Tony 1:15:31

Cameron 1:15:42
He was the band, he was in originally Brian fairies band.

Tony 1:15:42
Roxy Music.

Cameron 1:15:42
Roxy Music. He was the keyboardist of Roxy Music and then he became a producer of Bowie’s experimental stuff in the 70s and he’s produced millions of different people’s albums.

Tony 1:15:42

Cameron 1:15:42
Collaborates with David Bowie.

Tony 1:15:44
With David Byrne.

Cameron 1:15:45
Yes, Byrne. Yes, he’s one of those guys who if you need some deep thinking done on your sound and your direction, you go to Brian Eno. In 1975, I think it was he in a major his another musician, not a painter, Steve something, put together these things called Oblique Strategies cards for themselves originally and then they ended up selling them. It was just a couple of 100 little cards with ways of thinking outside the box to challenge themselves. If they got stuck on a problem, they just pull a random card out and it would have some Zen-like saying on it and then they would ask themselves, well, how could we apply that? These are my cards that arrived, I finally bought them because I’m working on a similar card pack.

The thing with Peter Elliot, I’m trying to take a lot of Peters stuff and turn it into cards that are more accessible than a 400-page book with 38 ideas every page and I’m like, no one can read a book anymore, we need– If we break them down into little cards that you can pull out that just make you think about something. If I pull off Peter Schmidt was the name of the other guy. If I pull out a random card, this one is, once the search is in progress, something will be found.

Tony 1:16:28
Well, that sounds like the iron ore price, doesn’t it? we’re trying to decide whether we sell Fortescue metals.

Cameron 1:17:13
I tell you the first one I’ve pulled out a couple of days ago, when I got it was, not building a wall but making a brick and I thought, try to apply that to QAV as a service. OK, I started thinking about QAV in terms of bricks, what are all the components that we now deliver in QAV and I got a list of about 20 and then I spoke to you and you added a few more. There’s 23 different things at the moment that we’re working on in QAV, individual service components. This thing started off as let’s talk for once a week, an hour about a podcast and it’s turned into this thing that has lots of different facets.

Then I started thinking about OK, well, with each of these bricks, what’s my vision for each of the bricks? If they were operating at 100% capacity, what would that look like? Can I write where they are now? And what do I need to do to get each of them from where they are now to 100% capacity? What’s the plan for each of the bricks? And that led me to thinking about our onboarding process. When somebody discovers QAV is a brand new listener, they know nothing about us, how do we take them from that to feeling proficient with QAV? How do we compress that amount of time as much as possible? And that led me thinking, well, it’s just a bit of a hot mess at the moment, the way that we do that because it’s growing randomly and people have some of our early listeners and members gave us feedback, you need this, you knew you should ever getting started guide, which became the Bible, you should have this, you should have that. Like when we started, we didn’t even have the dummy portfolio, we didn’t have the Bible, we didn’t have, you know, all of this stuff which is emerged gradually but it’s a bit of a mess. I’m looking at hiring someone to come in and take a fresh look at it and say, OK, well, the best way to get someone from zero to hero would be through this set of steps in this process. Anyway, that’s what the Oblique Strategies cards are.

That’s just every morning, this is my exercise. Now, before I do email or anything, I pull a card out and I sit down with pen and paper for half an hour and it just prompts me to think in a different way about QAV than I would otherwise, right, because you get stuck in patterns of thinking over time and it’s very hard to think outside of your existing thinking. Yes, I’m excited. It’s– I love getting being prompted to think differently about solving problems and it doesn’t always lead to anything. It might go nowhere. But Mila. If once a week, it gives me a good idea about how we can make something better than good.

Tony 1:20:10
Yes. Jenny’s reaching out to a couple of people to do that process for you.

Cameron 1:20:16
Oh, good.

Tony 1:20:17
The onboarding review.

Cameron 1:20:18
Yes. I’ve– Since I posted something on Facebook, a few people got back to me as well. I’ve started some conversations but yes, good if we can have half a dozen conversations with different people and then get some ideas and some quotes and stuff. That’d be great. Thanks. Well, that’s it from me. This week session. Yes, you must be exhausted. Sorry.

Tony 1:20:36
That’s all right.

Cameron 1:20:44
All right. Have a good week mate. Stay save you to your little hidey hole on there. Cheers. Bye.

Tony 1:20:47
Ok bye.