Transcript #441

QAV 441 Club

Cameron 00:04

Wel­come back to QAV. This is Episode 441. We’re record­ing this on Mon­day, the 11th of Octo­ber, 2:20pm; Bris­bane time, 3:20pm; Syd­ney time. How does it feel to be free? [laugh­ter] Tony, it is Free­dom Day in Syd­ney.

Tony 00:21

Free­dom Day. God! it’s rain­ing here, I just went for a walk and got soaked. I think I’ll be stay­ing inside all week.

Cameron 00:29

Were you are lis­ten­ing to George Michaels’ Free­dom song as you walked around? [Free­dom Song 00:35]]

Tony 00:40

Yes, it’s strange that restau­rants are open. Peo­ple are out with­out masks on. It just feels like I’ve gone to a strange coun­try with strange cus­toms and I still can’t book any­where. I can’t– I’m like two and a half weeks away from hav­ing a hair­cut. It’s real­ly annoy­ing.

Cameron 00:58

I like your mul­let. I think it’s good. Bring­ing it back. You’re rock­ing the mul­let [Inaudi­ble 1:01]. Well, very excit­ing. Not so excit­ing down in Mel­bourne feel pret­ty bad down there. But appar­ent­ly Mel­bourne Cup’s going to go ahead. 10,000 peo­ple going to be the Mel­bourne Cup on Novem­ber 2.

Tony 01:13

Yes, and one of my friends has a horse run­ning too, so I’m hop­ing that they can get to see it at least…

Cameron 01:18

As the horse been dou­ble vaxxed?

Tony 01:20

I don’t know. I don’t think he’d dou­ble vaxxed, the jock­ey has. I have the own­er and say, Hey, speak­ing of hors­es, my horse won yes­ter­day, on your birth­day too.

Cameron 01:31

I did­n’t have a bet on it.

Tony 01:33

That was your birth­day present. I got $11.50 for the win. Come on.

Cameron 01:37

What horse was that?

Tony

Nev­er Say Nay.

Cameron 01:39

Real­ly it had a win.

Tony 01:41

Yes.

Cameron 01:42

Wow. Con­grat­u­la­tions. That’s a first.

Tony 01:48

Now I know why it won, you did­n’t back it.

Cameron 01:51

Yes, that’s great for you.

Tony 01:54

Oh, it was, it was a great feel­ing one real­ly eas­i­ly and I look for­ward to it improv­ing, onwards and upwards.

Cameron 02:00

Good stuff. Well, speak­ing of onwards and upwards. Let’s talk about hydro­gen Tony.

Tony 02:04

Why not? What about your birth­day?

Cameron 02:06

We don’t want to talk about that.

Tony 02:07

Hap­py birth­day.

 

Cameron 02:08

Thanks. I don’t like birth­days. But it’s my twins’ birth­days today. They’re turn­ing 21 that’s kind of weird, isn’t it when you kids turn 21.

Tony 02:17

Huge mile­stone. It hap­pened to me last year.

Cameron 02:20

I remem­ber when I throw­ing, I think they they are going out to din­ner wiht their mum. They’re like me. They’re not into par­ties. They’re like, ‘Yes, got too much work to do. Move on.’

Tony 02:29

What work is Hunter doing?

Cameron 02:34

Mak­ing Tik­Toks!

Cameron 02:41

And thanks to all of the QAV Club mem­bers that sent me nice gifts. I real­ly appre­ci­at­ed that. Let me see there was no– There was none, OK. Hydro­gen futures. There’s a new bil­lion-dol­lar project been announced by Anas­ta­sia and our mate Twig­gy For­rest…

Tony 03:01

Hmm.

Cameron 03:01

…to build a mas­sive green Hydro­gen pro­duc­tion facil­i­ty in Queens­land. So I was run­ning around look­ing for the Hydro­gen futures in com­mod­i­ty stocks to see what that’s look­ing like.

Tony 03:15

I doubt If there is one,

Cameron 03:16

I’m won­der­ing if this is why Eliz­a­beth Gaines sold $9 mil­lion of FMG stock recent­ly so she could get in on the ground floor with the hydro­gen pro­duc­tion busi­ness.

 

 

Tony 03:28

Well, maybe, she’s say­ing is to pay tax­es, which I would prob­a­bly believe, but she’d have lots of options. But that’s cer­tain­ly why I think Twig­gy’s been ramp­ing up the div­i­dends and tak­ing mon­ey out of FMG.

Cameron 03:40

I got to say, I know noth­ing about what it takes to pro­duce green hydro­gen, but it’s nice to see an Aus­tralian min­ing mag­nate and an Aus­tralian gov­ern­ment for that mat­ter, mak­ing a sig­nif­i­cant invest­ment in mak­ing Queens­land a world leader in the pro­duc­tion of green hydro­gen bet­ting on the future of ener­gy pro­duc­tion, not on the rapid­ly slip­ping away past ener­gy futures.

Tony 04:06

I don’t know if it is rapid­ly slip­ping away. I mean, look at the price of oil and coal at the moment.

Cameron 04:10

Yes, they are going up at the moment going up. But come on. We all know that there’s the writ­ing on the wall for those things. It’s just a ques­tion of when, not if?

Tony 04:19

That’s a pre­dic­tion is it?

Cameron 04:22

Well, it is, and I got that straight from Steve Sam­marti­no, who appar­ent­ly, when he was on Episode‑5, Season‑1 of our pod­cast, accord­ing to Brett Fish­er, who has just gone back and re-lis­ten to it, and this would have been ear­ly 2019. Steve appar­ent­ly pre­dict­ed a pan­dem­ic which would shut down the glob­al econ­o­my and force every­one to work from home. I haven’t gone back to lis­ten to it, but that’s what Brett said on Face­book. So I pinged Steve Sam­marti­no and said Mate you real­ly are a futur­ist. Well, I’m super impressed.

Tony 04:52

He did­n’t answer your ping before you pinged it. He pre­dict­ed the ping?

Cameron 04:54

Yes. He said, “Hey, thanks so much for the mes­sage you’re about to send me.” Let’s talk about  MOZ if we can for a minute chart [check], I was doing this one, 5 o’clock this morn­ing try­ing to get the buy list ready to com­pare it to your buy lists. So Mosa­ic Brands, it was a big col­lapse here, it start­ed Novem­ber 19, bot­tomed out with the COVID cough, but it was falling before that by the looks of it, and then it’s been bump­ing around down the bot­tom there, try­ing to get back over $1. It peaked Sep­tem­ber 2018, at near­ly $3.50, and then it’s now trad­ing at around 60 cents. When you look at some­thing like this. I know we’ve talked a bit before recent­ly about look­ing at short­er term graphs, par­tic­u­lar­ly if com­pa­nies have had major restruc­tures, etc. For a com­pa­ny like this, how do you treat it? Or do you just take this as busi­ness as usu­al? Do we have to drill down into what’s going on there? Why it fell in late 2019?

Tony 05:54

Yes, I mean, you do, it’s just fall­en off because the busi­ness is dete­ri­o­rat­ing, then it’s not worth try­ing to drill down any fur­ther, you take the 5‑year graph and just say it’s a bad busi­ness. But if this is the busi­ness I’m think­ing of at some stage in the last 5 years, they divest­ed a com­pa­ny called City Chic, which is just tak­en off. So poten­tial­ly, maybe that hap­pened at the time that the share price went down because the investors got a spin off, the shares were spun off into some­thing else. But I think the tim­ing was before this, or it’s a dif­fer­ent com­pa­ny. But any­way, that’s what you need to do is drill down and try and work out whether there’s a rea­son to look at the short term per­for­mance or not.

Cameron 06:30

Do you both­er, like; you’ve obvi­ous­ly had a look at MOZ because it came up on my list. When do you both­er to do that? When do you not both­er to do that?

Tony 06:37

I did­n’t both­er, and the rea­son why is because I went back and looked at the dif­fer­ent time peri­ods, the 3‑year time peri­od still looks like it’s maybe it’s just get­ting into a buy using the three, prob­a­bly not and maybe it is– I’d have to draw the lines, look­ing at it quick­ly, and eye­balling it, I’d say it’s a sell and I would­n’t like to use a range much small­er than three years. Like if you look at the one-year chart, yes, it’s a buy on a one-year chart, but one year is only 12 data points. So there’s a fair bit of noise in a one-year chart. So if I looked at the 3‑year chart in Stock Doc­tor, and it looked like it was com­pelling, I’d prob­a­bly drill down fur­ther but it does­n’t look like it to me, it looks like the same sort of pat­tern as the 5‑year chart real­ly.

Cameron 07:16

Yes, but then I’m start­ing with an H1, prob­a­bly Sep­tem­ber 19, I think. It would prob­a­bly be my H1, if I’m tak­ing a 3‑year chart, my H2 would be Jan­u­ary 21. It could prob­a­bly go a lit­tle bit lat­er. I could go April but still it’s going to be a buy maybe or maybe it’s got a sell after that, right?

Tony 07:39

I think the sell would be — L‑1 March, 2020, and then L‑2 would have orig­i­nal­ly been Sep­tem­ber 2020. So the sell would that occurred around May. So the L‑2 has dropped a lit­tle bit. So it’s prob­a­bly above its cur­rent sell line. But then the buy line– Yes, the buy-line is prob­a­bly just crossed this month, Sep­tem­ber 21. It is lit­tle bit above it but it’s not— like it’s going side­ways, and it’s not com­pelling, real­ly…

Cameron 08:03

No soup for you then Moz.

Tony 08:05

I would­n’t nec­es­sar­i­ly go any fur­ther. I’m not say­ing that you could­n’t go fur­ther and work out the rea­son why the shares dropped late 2019, and in which case, it prob­a­bly is just slight­ly a buy at the moment. So you might want to look at invest­ing in it. But I haven’t done the research to know if that’s true.

Cameron 08:20

All right. Well, I was just won­der­ing this morn­ing, because how much time should I spend on this? How much work should I do in it?

Tony 08:28

For me, if the graph was going up sharply at the right there, I do the work, but it’s kind of just in buy ter­ri­to­ry, per­haps at the moment.

Cameron 08:36

Right. Noth­ing to see here.

Tony 08:37

Yes, that’s what I think.

Cameron 08:38

I want to talk a lit­tle bit about our port­fo­lio, Tony, we were look­ing like chumps there a cou­ple of weeks ago after the iron ore col­lapsed, and we were below the SPDR 200 for the finan­cial year. Last week, we’re up 3%, this week, we’re up near­ly 6% with the 200 up half a per­cent for the finan­cial year. So right now we look like com­plete leg­ends and cham­pi­ons. For a cou­ple of weeks there, we looked like com­plete chumps. So the dif­fer­ence of a cou­ple of weeks can make.

Tony 09:10

We nev­er look like com­plete chumps. Come on.… Life’s all about time

Cameron 09:13

Tim­ing [laugh­ter]

Tony 09:16

Good time to up the adver­tis­ing spend this week­end.

Cameron 09:20

So yes, it’s look­ing good again, it’s not as good as it looked like going back at the end of July when we were up 10%. But we were up 10% and the 200 was up 2%. So we were doing rough­ly 5 times bet­ter than it then, we’re doing rough­ly 10 times bet­ter than now. So I guess we’re doing bet­ter now than we were then rel­a­tive­ly speak­ing,

Tony 09:39

Rel­a­tive­ly speak­ing, yes, but again, it’s a short term data set, lot of noise in there.

Cameron 09:43

You decid­ed this morn­ing that we had to sell MTO because it’s breached its sell line. But what are we going to replace it with?

Tony 09:54

Our Stock Of The Week. It’s CLX.

Cameron 09:56

We’re going to replace it with CLX… CTI logis­tics. Is that what that is?

Tony 10:03

Cor­rect. That’s the one. Yeah.

Tony 10:05

Okay, and you get to do a pulled pork on that I think today.

Tony 10:08

I am.… Yes.

Cameron 10:08

Before we get into that, I also want to talk about that stock tips: The stock of the week tips that we’ve been doing offi­cial­ly again since ear­ly Sep­tem­ber. They were all under water a week or so ago, now not so much. look­ing pret­ty good. Actu­al­ly, a cou­ple of are still down, AIS is 11%, IGL is down 9%. Myer’s down 15%. It still has­n’t recov­ered from the Geoff Wil­son sell off. Thanks a lot, Geoff. We know you lis­ten. Every­thing else is doing OK. Or at least has­n’t moved at all. CGF is at zero. KRM is at zero since we bought it. Every­thing else is a lit­tle bit up though. So it does­n’t look too bad. 70%?

Tony 10:50

Yes, I think we’re kind of back to square. I mean, it’s so this is, again, small sam­ple sizes. I think once we get up to track­ing sort of 15 to 20 rec­om­men­da­tions, we might see it behave more like a port­fo­lio rather than just be the vagaries of indi­vid­ual stocks shoot­ing one way or the oth­er.

Cameron 11:05

Yes, of course we only ever claim that we’re going to get 60% of our balls will fly right?

Tony 11:10

Cor­rect.

Cameron 11:10

A bit too soon to be talk­ing about balls fly­ing right, I have to say, because I’m still work­ing a lit­tle bit fun­ny this week. Still a lit­tle bit ten­der. We don’t need to talk any­more about that. All right. What do you want to talk about today, Tony, mus­ing on this rule to replace three PTLs?

Tony 11:27

Yes, nowhere near ready to rec­om­mend it or to use it. But I guess what trig­gered my think­ing was that I often talk about what using 3PTL get­ting the first 20% of a down­turn, which tends to hap­pen, right? We’re wait­ing for a trend to estab­lish itself. So then I thought, Well, why don’t we use 20% and try and see if we could fit that into graphs and start­ed look­ing at some this does­n’t work for every sit­u­a­tion, and there’s got to be a lot more work done either by myself or by doing or some­one like that to ana­lyze it. But if you just look at any par­tic­u­lar stock graph, I’ve got Mosa­ic Brands open at the moment. So that’s as good as any I guess, if I have a look at it, let’s look at the 5 year that’s a longer term trend. I think H1 is still going to be Sep­tem­ber 2019. H2 looks like it’s Novem­ber 2019, and you draw a line through those while I’m sug­gest­ing [crosstalk]

Cameron 12:20

Why isn’t H1 back in Sep­tem­ber 19?

Tony 12:22

Oh it is OK?  [crosstalk] Yes, prob­a­bly is actu­al­ly you’re right, Sep­tem­ber 2019, H2 Feb­ru­ary 19,

Cameron 12:33

They would have had a sell bad June 19. So we need an H2 after June.

Tony 12:38

OK, so then we’re using Sep­tem­ber 19 as the H2. Any­way, so my point is that, if we take the H2 and look at a 20% decrease in that share price–H2 on this case is 2.94. So it’s going to be you know, 58 cents below that, it’s going to be mid sort of 2.50s, 2.60s, it becomes a sell on that way down right off the cliff. So it’s going to be a sell prob­a­bly in Novem­ber 2019, or maybe Decem­ber 2019, which is a good time to sell, and then if you look at the L1, L2 cur­rent­ly, so L1 is going to be March 2020. L2’s prob­a­bly going to be August 2021. If you look at the price 20% above L2, L2 is cur­rent­ly at 45 and a half cents. So again, nine cents above that. So 54, it’s 20% above–54, 55. It’s prob­a­bly a buy right now, almost a buy right now. Yeah cur­rent price is 60 cents. So it’s a buy right now, because it’s trend­ing up. So this is kind of just been a rough approx­i­ma­tion of an idea. So I’m just going to start doing some research on it. If I can flesh out some rules that work in every sort of cir­cum­stance, which this kind of does cov­er most bases. It does­n’t always pick the… it nev­er picks across a buy line or a sell line, but it gets us in and out in the same sort of gen­er­al area. That’s going to be a lot eas­i­er to code because we can just sim­ply take like a 5 year month­ly points work out H1, H2, L1, L2 and then apply a 20% decrease or increase on those and get our binds.

Cameron 14:12

When does the bor­der open up with Vic­to­ria?

Tony 14:15

They haven’t announced that I’m hop­ing before Christ­mas.

Cameron 14:17

I think, Brett Fish­er will be hunt­ing you down if you just get rid of the 3PTL and say Oh, we’re just going to do 20%, 30% above L2, we don’t need that, he spent six months of his life cod­ing this bloody thing. You’re like, nah­hh.

Tony 14:32

I haven’t done enough research yet to prove this is just the mus­ings.

Cameron 14:35

You bet­ter go into wit­ness pro­tec­tion If you change that, Brett will be hunt­ing you down.  In your email to me, You said, “Buy when it’s 30% greater than L2,” but just now you said, “20%”.

Tony 14:48

Yes, it’s 20 right now.

 

Cameron 14:51

So you got to do some regres­sion test­ing on this at some point and see what it looks like.

Tony 14:56

Yes, I mean, I haven’t quite worked out how to do it yet, and if we get an ana­lyst and get into the Refini­tive data, we’ll do it that way but yes, I’ve got least 2 years’ worth of buy list now, I can go back and check that against the 3PTLs any­way. We’ll just pick a sam­ple see if it’s worth pro­gress­ing.

Cameron

How did you cook up this lit­tle idea?

Tony

Yes, like I said, I’m lis­ten­ing to myself talk about 3PTLs and when you’re buy­ing in and buy­ing out and the ques­tions that we get, we often miss the first 20% of an upturn while the trend estab­lish­es itself and we eat the first 20% of a down­turn while the trend estab­lish­es itself. If you think about Forestcue Met­als Group, the high price was about 25 bucks, we got out around 20, that’s kind of 20% below the peak. I keep say­ing it enough to myself or to you or to oth­er peo­ple who lis­ten, is that actu­al­ly the basis for a rule and then looked at the graph and thought yes, it actu­al­ly fits L2 and H2.

Cameron 15:47

If it ris­es 20% above the L2, we are just say­ing “OK, we think there’s a trend now,” that’s it.

Tony 15:52

Well that’s the hypoth­e­sis.

Cameron 15:55

Very cool. Sor­ry Brett. [laugh­ter] Back to the draw­ing board Brett.

Tony 15:59

No, We’ll keep using 3PTL and Bret­t’s fan­tas­tic cal­cu­la­tor, which is such a great time sav­ing device. We just do what we always do, we will chal­lenge it. He’s the cham­pi­on, we have to chal­lenge it and see if we can­do bet­ter.

Cameron 16:11

GCY is back on the buy list Tony I spot­ted that this morn­ing.

Tony 16:16

Gas­coyne; it’s a oil and gas com­pa­ny. Did a bit of research into it. Two things, it’s under a takeover offer which is poten­tial­ly why it’s back above its buy price and it went to a trad­ing halt today which I noticed when I was prepar­ing for the show, so we can’t buy it today, so we’ll see what hap­pens, it was last time I trad­ed on the week­end when I had a look it was below the offer and the direc­tors were say­ing take no action but obvi­ous­ly some­thing’s hap­pened in between so we’ll see.

Cameron 16:41

And remind us what Gas­coyne do?

Tony 16:44

Oil and gas explor­er but I’ll just look it up in Stock Doc­tor and get my answer spot on.

Cameron 16:49

And oil is con­tin­u­ing to go well. Gold explo­ration and devel­op­ment accord­ing to Stock Doc­tor.

Tony 16:55

Got it wrong have I sor­ry. I thought it was a real com­pa­ny. No you’re right it’s a gold min­ing com­pa­ny, my mis­take…

Cameron 17:01

Same thing. Oil, gold.…

Tony 17:05

Black gold and gold gold.

Cameron 17:06

Yes, gold is still doing well who’s mak­ing the offer or just down­load­ing their state­ment, does­n’t say…

Tony 17:12

West­gold I think.

Cameron 17:15

So this might be one of those cas­es where we’re not the only ones who think it’s under­val­ued.

Tony 17:20

Cor­rect. Exact­ly. Yes, West­gold do obvi­ous­ly and poten­tial­ly more it’s the first bid, so, you know, the first shot is nev­er the last show in the war. I’d expect there to be high­er bids… Or Gas­coyne does some­thing left field and does a Logan Roy and tries to take over a big com­pa­ny in a shit­load of debt as a defense.

Cameron 17:39

You’re still watch­ing Suc­ces­sion, I see.

 

Tony 17:41

I fin­ished.

Cameron

good stuff isn’t it?

Cameron 17:43

Yes. Good to know. I don’t own it, so out in the cold here, I wish I did by the sounds of it

Tony 17:51

Well you still might be able to– I mean it was trad­ing below its bid price on the week­end, which is why I put it on the list to talk about, and who knows what comes out of a trad­ing halt. We’ll see. I sus­pect anoth­er bid but we’ll see.

Cameron 18:01

CTP is back on our list, who are CTP?

Tony 18:06

This was the oil and gas explor­er, Cen­tral Petro­le­um. There you go , I knew we had one some­where.

Cameron 18:11

CTP baby you know me.

Tony 18:13

Yes, just might be of inter­est to peo­ple as it’s down 4% today, so I’ll warn peo­ple on that.

Cameron 18:18

They’re not oil either, they are gas, onshore gas.…

Tony 18:23

Good point. They often go hand in hand.

Cameron 18:25

Oil and gas from their Mur­ri­ni Palm Val­ley and Din­go Fields, etc. Oil and Gas. [crosstalk] You said that last week, right? It’s like the gas and the oil.

Tony 18:36

Often­times, oil con­tracts and gas con­tracts are writ­ten at par­i­ty to the oil price. They often go in lock­step but gen­er­al­ly if you’re drilling for oil you’ll find gas as well.

 

Cameron 18:44

ADT of about 33,000 these guys, so they’re so good for the big­ger investor.

Tony 18:49

They’re small.

Cameron 18:51

Yes, that’s big for me. [laugh­ter] Indoor sky­div­ing, they have a qual­i­fied audit.

Tony 18:59

Yes, man, and this is like, I guess this is top­i­cal, giv­en that I’ve asked Steve Mabb, from the ASA to take a look at appen­dix 4Es for me, and while doing prep for a sub­mis­sion on that, I look at the ASX rules, and one of the appen­dix 4E ques­tions is:

1. Are your Finan­cials audit­ed.

 

1. In that audit process was there a mate­r­i­al con­cern or a qual­i­fied audit.

1. If your finan­cials aren’t audit­ed do you expect when they are audit­ed that they will con­tain some kind of qual­i­fi­ca­tion.

So in the space of like 30 days, indoor sky­div­ing put out their appen­dix 4E and said no, the finan­cials haven’t been audit­ed yet. That’s it. 30 days lat­er, report comes out, qual­i­fied audit, mate­r­i­al con­cern over the going con­cern, so we’ll give IDT a pass and that maybe they did­n’t know but real­ly…

Cameron 19:54

IDZ, I think it is?

Tony 19:55

IDZ. Sor­ry. I called IDT. IDT is a dif­fer­ent com­pa­ny. “Indoor Sky­div­ing” — Any­way I’ll give them a pass, we’ve got no rea­son to say they did­n’t know. I mean the ASX should at least look at it. 30 days away from an audit being hand­ed down and you did­n’t know that the audi­tors were look­ing at whether you could con­tin­ue trad­ing.

Cameron 20:13

Yes, right.

 

Tony 20:14

They had­n’t dis­cussed that with you? So any­way, I don’t want to skate on thin ice in terms of falling foul of some kind of libel law, but please give me a break– Come on ASX Have a look.

Cameron 20:26

Very strange

Tony 20:28

And just anoth­er exam­ple of you know, just the strange things that come on with his appen­dix 4E’s that.. I should­n’t just sin­gle out indoor sky­div­ing. There are oth­er com­pa­nies that either don’t answer the ques­tion full stop or answer it with his remarks like check out annu­al report for our audit, which is not the answer that the ASX is want­i­ng, it’s quite clear what you have to answer. ‘Yes’, No’, ‘Maybe’ is hard­ly answers to the ques­tions and it just gets ignored so often, which means you have to go through the annu­al reports, and it just adds time to your analy­sis, and on top of that, Alex and I will as an exam­ple about how to find a qual­i­fied audit, I was show­ing her I thought I’ll pick a big com­pa­ny and show her how to find and an audit state­ment in a big com­pa­ny. So I picked one of the biggest BHP. In fact, she asked me She said, how do I find audit state­ment BHPs annu­al report. It took us like 20 min­utes to find. Seri­ous­ly mem­bers who are lis­ten­ing to this, go and look up BHPs announce­ments, you’ll find some­thing like 600 pages of stuff they’ve announced and the audit report is not near the end, it’s buried away in the mid­dle. It’s not even in the con­tents to the reports to the fil­ings, you know, the US fil­ings, the UK fil­ings, the Aus­tralian fil­ings and the Aus­tralian fiings kind of rolls up some of the oth­er ones. It’s like, hun­dreds of pages long.

The annu­al report does­n’t appear in the index or table of con­tents– Sor­ry, the audi­tor state­ment, and you say you have to go dig­ging for it. It’s prob­a­bly the most impor­tant thing of Any annu­al report is, what is the objec­tive audi­tor, the Eye of Sauron, think about the land­scape for BHP. It’s the first thing an investor should look a.

Cameron 22:18

Yes, BHP is not going to have an audit prob­lem. Sure­ly.

Tony 22:21

No, and we’d read about them on the front page of the Fin Review if they did, by the time it took Rear Win­dow to go through and comb through 600 pages of text to try and find the audit report with­out an index. But yes, no, you’re right. If BHP can get away with it, this kind of obfus­ca­tion, how can the ASX beat up on a small com­pa­ny…

 

Cameron 22:40

Get­ting back to the ten­den­cy some of these com­pa­nies have to– not be clear about it in their 4Es. What do you think’s going on? It seems like a pret­ty sim­ple thing to do. Just state clear­ly what the posi­tion is with your audit. Why would they say things like refer to our annu­al report?

Tony 22:59

I sus­pect and I think I’d be the same and if I was in the com­pa­ny sec­re­tar’s shoes, I think they see it as bureau­cra­cy. They have filed the annu­al report, they filed it with the audi­tor state­ment; Why do they have to also do an appen­dix 4E fil­ing?

Cameron 23:10

But they’re doing an appen­dix 4E any­way.

Tony 23:13

It’s a list­ing rule.

Cameron 23:14

Yes, when I’ve seen these appen­dix 4Es, and I’ve seen the audit state­ment, it’s a cou­ple of lines any­way, it’s not an oner­ous thing that they have to do, what’s the big deal?

Tony 23:22

I just think it’s been let slide for a long time by the ASX. They haven’t pulled any­body up, haven’t made an exam­ple of any­one, and I think it’s because you know, peo­ple don’t– Yes, it’s the law of large num­bers. There’s half a dozen com­pa­nies on our watch list who have qual­i­fied audits, there’s only a dozen com­pa­nies out there on the ASX that have a qual­i­fied audit. So most times, it’s com­plete­ly irrel­e­vant but it’s so impor­tant in the times where it’s not that they need to put their returns in prop­er­ly.

Cameron 23:47

OK, mixed com­mod­i­ty min­ers– I was look­ing at MIN this morn­ing actu­al­ly try­ing to work out how to think about com­modi­ties for some­body like MIN.

Tony 23:58

Yes. So when we talked about AIS in par­tic­u­lar, I gave it a pass because it’s a mixed com­mod­i­ty min­er, and even though it sells iron ore, which has gone down in val­ue, At the time, I was­n’t sure whether that was good enough just for it to be a sell based on the com­mod­i­ty sell sit­u­a­tion, but I think it prob­a­bly is now, if you look at MIN, the first thing I go to to try and work out what the ratio of the dif­fer­ent com­modi­ties is, is to go down to, I’m in Stock Doc­tor, I go down to the earn­ings break­down sec­tion, which is almost at the bot­tom of the right hand part of the front page in Stock Doc­tor, and often­times it gives you an earn­ings break­down by the prod­uct it’s sell­ing but in this case, it does­n’t always, this time is giv­ing it to us by divi­sion, which is just list­ed as cen­tral com­modi­ties and min­ing ser­vices, and you can see from the break­down that com­modi­ties is by far the biggest part of rev­enue and prof­it. So we can’t tell the breakup of com­modi­ties that sim­ply, so we then have to go to, again the annu­al report or some­times I go to an announce­ment which is the com­pa­ny talk­ing about its finan­cial num­bers, pre­sen­ta­tion to ana­lysts on their finan­cial num­bers — In gen­er­al, you’ll find it there either in the annu­al report or in the pre­sen­ta­tion, which will say here’s how each of our com­modi­ties are going. But the big­ger ques­tion is, once you know that, if we know that there’s a sort of siz­able part of MIN is com­ing from iron ore, but not all of it, because it’s also I think, from mem­o­ry has lithi­um, yes, that you know whether we should make it a sell or not, but you can see on the share price, cer­tain­ly, the mar­ket fac­tored into the share price the decline in the iron ore price, it was a mis­take, but I did­n’t have expe­ri­ence in this area. But I think going for­ward, I’m going to make these com­mod­i­ty sells  if a large enough por­tion, and you know, what’s a large enough por­tion, maybe 30% or more comes from a com­mod­i­ty, that’s a three point sell.

Cameron 25:39

I’m going through their FY 21 investor pre­sen­ta­tion, try­ing to find a break­down of iron ore ver­sus lithi­um in their rev­enues, haven’t found it yet– PAGE 33 of their investor pre­sen­ta­tion has a pie graph rev­enue by end user and iron ore is 75%. Lithi­um is maybe 20%, 15% Gold, con­struc­tion and oth­er is what makes up the bal­ance.

Tony 26:10

Right. Well, this is say­ing min­ing ser­vices, which is anoth­er part of the busi­ness. So it’s like the con­tract­ing part of the busi­ness. So we need the com­modi­ties part of the busi­ness. So you’d expect that they’ll con­tract into iron ore min­ers, and the con­tract­ing tap might turn off when the price is low, but that will be less than the effect of the iron ore export sec­tion of the busi­ness– A cou­ple of pages so that’s I’m on page 75, it’s the com­mod­i­ty seg­ments of min­er­al resources, and you can see that 1.5 bil­lion out of 1.68 bil­lion is iron ore sales. I should have called this as three point trend line sell even though com­modi­ties is not their total busi­ness they have that min­ing ser­vices sec­tion as well. But yes, it’s a lot.

Cameron 26:50

And they also pro­duce Spo­dumene…

Tony 26:54

I think that’s the under­ly­ing Lithi­um min­er­al.

 

Cameron 26:59

Spo­dumene is a pyrox­ene min­er­al con­sist­ing of lithi­um alu­mini­um inosil­i­cate, LiAl(SiO3)2, and is a source of lithi­um, we need to do a lit­tle bit of work with these mixed min­ers and fig­ure out exact­ly what their expo­sure is.

Tony 27:15

Yes, so I think the upshot is I should have tak­en both MIN and AIS off our buy­er list because of iron ore declines. I think AIS from mem­o­ry was­n’t as quite as skewed to iron ores as min­er­al is but yes, we should take them off. Some­one point­ed out that is AIS had iron ore in it when I was remov­ing FMG and BHP and RIO from our buy list.

Cameron 27:36

Let’s talk about MMS, back on the buy list.

Tony 27:40

So Macmil­lan Shake­speare; it’s a com­pa­ny I watch and I guess when you’ve done this for as long as I have there are com­pa­nies which con­tin­u­al­ly come on and off the buy list, not nec­es­sar­i­ly quick­ly but they come and go and Macmil­lan Shake­speare and Cred­it Corp, for a long time, were a cor­ner­stone of my invest­ing port­fo­lio over the years. Macmil­lan Shake­speare and Cred­it Corp will again soon become too expen­sive to be on the buy list but they do pop in and pop out, they’ve always been good invest­ments for me, FMG is sim­i­lar over the years so yeah, so you know that’s why kin­da like when Oh MacMil­lan Shake­speare’s back on the buy list. It’s worth hav­ing a look at peo­ple when they have a look. It’s not at the top of the buy list, it’s got a QAV score of 0.13, but it’s got a very largeish annu­al dai­ly trad­ed for peo­ple who are inter­est­ed in such things. The com­pa­ny with­out doing a full pulled pork it’s a com­pa­ny which pack­ages ups or salary pack­ages. So it han­dles the paper­work for HR depart­ments. If you want to take out a lease as part of your remu­ner­a­tion pack­age or you know, there are oth­er things in there, they pay for your golf club mem­ber­ship or what­ev­er. It han­dles all the paper­work for that.

It did fall foul of the fed­er­al gov­ern­ment when Kevin Rudd was in pow­er and Wayne Swan the world’s great­est trea­sure at the time decid­ed to do some­thing fun­ny with fringe ben­e­fits tax around salary sac­ri­fice and changed the rules, and Macmil­lan Shake­speare took a nose­dive in terms of share prices, peo­ple thought that salary pack­ag­ing was dead but then fun­ni­ly enough the gov­ern­ment reversed its deci­sion and then salary pack­ag­ing came back again the way it had been, last­ed about two weeks I think before they back­tracked from lots of pres­sure I imag­ine. Yes, so that’s what it does. It’s one of those bread and but­ter com­pa­nies that’s all it does been doing it for years. You know, prob­a­bly has a large mar­ket share. I don’t want to do a full pulled pork on it. But yes, good to see it back on the buy list. So if peo­ple are inter­est­ed in adding some­thing that’s got a large ADT to their port­fo­lio.

Cameron 29:39

Does well on the founder own­er score too, I think because William Shake­speare still owns a chunk of stock in that. [laugh­ter]

Tony 29:47

With Harold McMil­lan.

Cameron 29:49

Yes, the two of them teamed up.

And you want to do your pulled pork for the week. Our stocks of the week by the way, our large cap is EHL, You did a pulled pork on them a few weeks ago. I think you going to talk about CLX today.

Tony 30:02

I am yes… Inter­est­ing thing hap­pened about Eme­co, EHL, before I leave it, I again decid­ing whether to do the to do the pulled pork on and look­ing at their announce­ments and their CFO has resigned for EHL, but I just did a quick look and it looks like it’s some kind of staged tran­si­tion, he’s going to hang around for six months while they tran­si­tion to a new replace­ment. So I don’t think it’s any­thing to be wor­ried about in this par­tic­u­lar case. CLX logis­tics. Speak­ing of own­er founders, the founder still holds near­ly 40% of the com­pa­ny, so 35 ish per­cent of the com­pa­ny– So yes, very strong own­er founder con­tin­gent, I think the board in total hold around 40% of the com­pa­ny. Not a big com­pa­ny, it’s only got ADT of $8,000. So that’s why it’s our small cap pick and the mar­ket cap’s only around 80 mil­lion. So it’s not huge. It’s for peo­ple who don’t know, which they may not know about… It’s a logis­tics com­pa­ny. I think the inter­est­ing thing now is that it’s a Perth based logis­tics com­pa­ny, and at least a large part of the com­pa­ny is oper­at­ing with small trans­port com­pa­nies and couri­er com­pa­nies in Perth and what’s the thing we know about Perth, Cam, in the last two years, “No COVID”, so prob­a­bly the only trans­port com­pa­ny in Aus­tralia that’s got all the uptick from deliv­er­ies to home but none of the down­sides of hav­ing staff on the bench because of COVID, so it’s doing well. Sales are up, prof­its up and also to not just the Perth side of it’s up but they do long haul to the East­ern states and that’s up too, just gen­er­al­ly par­cel deliv­er­ies are up because of COVID, So yes it’s rid­ing a bit of a wave here and it’s in a good space going through its num­bers QAVs score 0.36, the qual­i­ty score is 83%, PE is less than 9 (8.8), price to oper­at­ing cash flow 2.32, so obvi­ous­ly a val­ue play for us.

Tony 31:59

Anoth­er good thing I like about a stock like this, low bro­ker cov­er­age, so we’ve got no fore­cast IV, no fore­cast earn­ings per share or any­thing like that in Stock Doc­tor. So this is one of the ones that will even­tu­al­ly I think come onto the radar of some of the stock bro­kers but at the moment it has­n’t. One down­side which is inter­est­ing, the finan­cial health has gone down from strong to sat­is­fac­to­ry but it does tend to oscil­late between those two met­rics, so I’m not over­ly ter­ri­bly wor­ried about that I think it’s prob­a­bly just a six-month thing but it’s com­pa­ny strong yield, cur­rent yield is over 4% so it scores well for us there. Equi­ty con­sis­tent­ly increas­ing. Equi­ty score is zero over the last 6 halves but if you look at the last four halves it’s increas­ing so it’s even though I’ll score it as zero it’s not over­ly wor­ry­ing from that side of things, net equi­ty per share is $1.18 which is high­er than the cur­rent share price of 96 cents as of when I looked this morn­ing, the 11th of Octo­ber so we’re actu­al­ly buy­ing this for less than its fire sale val­ue which is always attrac­tive if you’re an investor and it scores a 2 for hav­ing a record low PE, so all in all, good invest­ment I think.

Cameron 33:09

What did you say the price to oper­at­ing cash flow was again?

Tony 33:13

2.32.

Cameron 33:15

Very good. All right. CLX. Thank you for that. Have anoth­er look at that one. Time to get into the ques­tions for this week, Tony.

Tony 33:23

Yes, good.

Cameron 33:24

David says, “Hi! Tony and Cameron, I enjoy your pod­cast and may con­sid­er join­ing at some stage.

Tony 33:30

Well let’s just stop there. I mean, if you’re not a mem­ber, Come on. [laugh­ter] We know only smart peo­ple join up because… Come on! Are we going to give this guy some air­time real­ly?

Cameron 33:39

Well, the fun­ny thing is, he won’t hear this cuz he has­n’t joined up.

Tony 33:45

OK, well read away. [laugh­ter] Let’s give him anoth­er rea­son to join.

Cameron 33:50

He says, I have a strong lean­ing.

Tony 33:52

That’s a good ques­tion.

Cameron 33:53

Well, I thought there was some inter­est­ing points that I had­n’t thought about before. “I have a strong lean­ing against invest­ing in fos­sil fuel com­pa­nies. I under­stand why they may be good stocks to trade dif­fer­ent from invest­ing. I dis­agree with Tony’s rea­son­ing that invest­ing in coal is okay from sup­ply side; if we don’t sell it, and there is demand some­one else will or our coal is clean­er than oth­er coun­tries so it’s bet­ter that we sell it or it is impor­tant for Aus­tralian jobs in our econ­o­my. Unfor­tu­nate­ly, I have to say that none of these rea­sons sat­is­fy my eth­i­cal frame­work, but I real­ized that ethics and val­ues are very per­son­al. To me the envi­ron­ment is so impor­tant that every oppor­tu­ni­ty to make a state­ment by my actions should be grabbed. Buy­ing coal com­pa­nies pro­vides a price sig­nal i.e. more buy­ers push up the price and val­ue. Pub­lic com­pa­nies raise cap­i­tal at IPO or share issues. Would you turn down a share pur­chase plan offer from a coal com­pa­ny you own at a dis­count and if not tak­en would dilute the val­ue of your shares. Those funds go to the com­pa­ny not the share­hold­er who sold them to you. Final­ly, employ­ees and man­age­ment are reward­ed with shares and options. So increas­ing the val­ue of shares increas­es incen­tives to keep the com­pa­ny oper­at­ing longer. We need strong action on cli­mate change, includ­ing lead­er­ship by peo­ple like you who have a sig­nif­i­cant audi­ence. Coal prices might increase in the short term, and those com­pa­nies may be more prof­itable in the short term, but they are dead assets long term. Final­ly, Tony, I implore you to use your wealth for the ben­e­fit of the world com­mu­ni­ty and for the ben­e­fit of your chil­dren and their chil­dren by pro­duc­ing more of Cameron’s doc­u­men­taries.”

Cameron 35:31

Oh wow thank you. Nice of you to say that.

Cameron 35:35

“There are plen­ty of oth­er invest­ments with good returns. Sor­ry about the com­ment on Cameron’s doc­u­men­taries still like your pod­cast, David.”

Tony 35:43

Good. Well, thanks for the ques­tion, David, Look, I mean, at this stage, I gen­er­al­ly agree with all of your points except how they apply to invest­ments. So yes, I’m very much in agree­ment with the major­i­ty posi­tion on cli­mate change. I Do what­ev­er I can to reduce my usage of fos­sil fuels, I pay more and get my clean ener­gy from my elec­tric­i­ty sup­pli­er, we’re in an apart­ment that does­n’t have gas, you know, dri­ve a car, which is meant to take some of the car­bon out of its emis­sions. You know, there’s been scan­dals around that. So who knows, but that was my intent. I agree with David around all those things that we should be doing to reduce the prob­lems for our­selves and for our kids. But my chal­lenge to David is, how does me not throw­ing a cou­ple of mil­lion bucks at New Hope Coal shares save the plan­et. How does it stop any of those things from occur­ring? It does­n’t make a state­ment, because no one would know that I did­n’t buy the shares, I guess unless I came onto a show and said, Hey, I’m not buy­ing coal shares. That’s a state­ment, and I had to smirk when you read out the ques­tion, because I just haven’t thought of myself of hav­ing an audi­ence that was worth mak­ing a polit­i­cal point too– But any­way, maybe there’s some degree of soap­box that I can stand on to talk to peo­ple? And I cer­tain­ly would say, yeah, try and do what you can to stop cli­mate change. But I don’t think not buy­ing shares is one of those things. I dis­agree.

I think I do see David’s point about mak­ing a state­ment, and obvi­ous­ly if we make enough state­ments and it sways polit­i­cal pres­sure, then that will have an effect. Mak­ing a biggest stat­ment  would be to buy shares of New Hope Goal and then going to the AGM and call­ing out the board for not doing what some­thing like Twig­gy For­rest is doing and invest­ing in renew­ables are hav­ing a plan to move away from coal min­ing to get into renew­ables. That’s the thing. I mean, if we close down all the coal mines tomor­row, we kind of cut off our nose to spite our face. I don’t think we’re ready for that yet, even if we could do it. So it’s a tragedy of the com­mons issue, I still see this as being a sup­ply side prob­lem, you don’t solve tragedy of the com­mons issues by say­ing, OK, I’ll vol­un­tar­i­ly not graze my sheep on the com­mons, because the grass is dying and not going to be able to regrow in time because then some­one’s going to just elbow you out the way and put their sheep there, it only gets solved when the may­or of town comes in and goes, right, you you and you take your sheep and piss off, you know, where there’s over­graz­ing going on here. So that’s my solu­tion, and I think I’m ful­ly sup­port­ive of that hap­pen­ing but if I can make some mon­ey along the way, because the coal prices going up, and that’s David’s point, I guess, maybe I’m a trad­er, rather than an investor in this kind of sit­u­a­tion, that I’ll hold it until the com­mod­i­ty turns down. Whether that’s next week, next month, next year, next decade, I just don’t know, I’m not going to pre­dict. But I also will say for what it’s worth, I don’t own shares in coal com­pa­nies, I do have shares in San­tos, which is an oil and gas pro­duc­er. But again, what do we dri­ve if we say we’re not going to allow petrol fired cars to run on our streets.

So I think it’s going to be, as prob­a­bly will hap­pen in the Glas­gow Cli­mate Con­fer­ence, there’s going to be a roadmap out, which will take until 2050, to get us to the tar­gets that we need to get to, and some coun­tries will get there in 2030, includ­ing maybe Chi­na which will kill most of our fos­sil fuels indus­tries any­way, or cer­tain­ly dam­age them, and we’ll just make those calls as they present them­selves as invest­ment deci­sions for us. But until then, I’m not fazed by buy­ing shares in a coal com­pa­ny.

I take David’s point that, would I work for a coal com­pa­ny, I don’t know, if they made me a good enough offer, maybe but it’s a case by case deci­sion, I think.

 

Cameron 39:15

What kind of offer would any com­pa­ny need to make to get you to go work for them now, Tony?

Tony 39:19

Yes, 8 to 9 fig­ures, mate.

Cameron 39:22

Well, let’s answer some of David’s spe­cif­ic ques­tions. Would you turn down a share pur­chase plan offer from a coal com­pa­ny; you won’t get a dis­count? And if not tak­en would dilute the val­ue of your shares?

Tony 39:34

Yes, good ques­tion. I’d have to look at the num­bers and see whether it was a good deal or not, don’t know. I’m assum­ing what David means is that they’re going to use that to buy anoth­er mine or anoth­er coal com­pa­ny or what­ev­er. If the share pur­chase plan was to build a hydro­gen plant, then yes, maybe I would. But yeah, it’s a case by case. I think what David’s try­ing to do there is negate my argu­ment that I’m not buy­ing shares, where the mon­ey flows through to the com­pa­ny. I’m buy­ing shares from some­one who’s sell­ing out of their shares.

Cameron 40:01

Yes. But your answer is, well, if they were going to use the mon­ey to dig more coal out of the ground, you would­n’t or you still might?

Tony 40:09

I’m not going to be cat­e­gor­i­cal. I’m here to make mon­ey in the share mar­ket first of all. With one hand, I can buy shares and with the oth­er hand, I can lob­by my local Mem­ber of Par­lia­ment, to shut down coal mines, I don’t see incon­gruity in that.

Cameron 40:21

Oh, his sec­ond point, which I thought was inter­est­ing is, well, by buy­ing shares, you are prop­ping up the share price. — To some degree, the share price is the basis of incen­tives for the exec­u­tives. So by buy­ing fos­sil fuel com­pa­ny shares, you’re in fact reward­ing fos­sil fuel com­pa­ny exec­u­tives indi­rect­ly.

Tony 40:42

Yes, because I want them to do a good job while  I’m an investor. Yes, I am. There’s a whole thing. A lot of things at play here. One is I guess– Let’s start from the top and work down, oth­er com­pa­nies, I would feel ter­ri­ble being an investor in, and I think there prob­a­bly are, for me, it would be tobac­co com­pa­nies, and maybe some arms man­u­fac­tur­ers.

Cameron 41:01

What’s the dif­fer­ence?

Tony 41:01

Yes, exact­ly. It’s per­son­al ethics. I think with a tobac­co com­pa­ny. In both cas­es, poten­tial­ly, we know they’re harm­ing us. I think with the coal com­pa­ny; I think there will be, if there’s not already a plan to move away from fos­sil fuels. With the tobac­co com­pa­ny, I think there’s always going to be a rump of the pop­u­la­tion, which is seems to be set­tling around 10% who are going to smoke, even if it kills them. That’s why I think I would not nec­es­sar­i­ly favor invest­ing in a coal com­pa­ny. Coal com­pa­nies fit the sweet spot for me, like they’re a con­trar­i­an invest­ment, right? Because we have to have these kinds of dis­cus­sions, if they were— I mean, from a val­ue point of view, they’re a no brain­er, and they’re a val­ue invest­ment because of that, because there’s peo­ple out there oppos­ing their con­tin­u­ance as a going com­pa­ny, which dri­ves the price down so that, you know, it’s a con­trar­i­an invest­ment. Would I buy shares in a tobac­co com­pa­ny? I don’t think so. But that did­n’t real­ly serve things because all it meant was that enough  investors did­n’t want to buy their shares and they went pri­vate. Now there’s no one scru­ti­niz­ing tobac­co com­pa­nies it’s like lais­sez-faire again, at least when they were list­ed Peo­ple would go along and make protests at their AGMs, they’d have a soap­box that they could step on to high­light the fact that all these bad things are being done by the com­pa­ny. You know, now they’re pri­vate, prob­a­bly not even res­i­dent domi­ciled in Aus­tralia. It’s hard­er to do.

Cameron 41:01

In the Psy­chopath Epi­dem­ic book I had a chap­ter about ethics and val­ues, and I remem­ber speak­ing to a vari­ety of lead­ing Aus­tralian ethi­cists and QC’s around, how do you devel­op an eth­i­cal frame­work, I was­n’t think­ing about invest­ing then, just liv­ing — You know, one of the things that I always come back to is, the more I drill down into that in terms of my behav­ior as a con­sumer, and I think that plays into invest­ing, it’s incred­i­bly dif­fi­cult. If I talk about buy­ing the lat­est iPhone, or Mac­Book, or what­ev­er it is, I know that these get man­u­fac­tured in Chi­na, I know the staff at Fox­conn and places like that work intol­er­a­ble hours for very low pay, again, to what we are used to in terms of work­ing con­di­tions in the West. Am I hap­py about that? Well, yes and no. But it’s com­pli­cat­ed. Again, Chi­na’s pulled 850 mil­lion peo­ple out of pover­ty, and a large part of that is they’re work­ing man­u­fac­tur­ing goods for West­ern con­sumers at much low­er salaries and much worse work­ing con­di­tions than we would expect. But it’s bet­ter than pover­ty. So, I would like to see them paid more, I would like to see their work­ing con­di­tions improve. Does this mean I’m not going to buy an iPhone though? Prob­a­bly not. So, fig­ur­ing out where I’m going to draw the line and why I’m draw­ing the line there. What’s my under­ly­ing ratio­nale for where I draw the line? OK, we can all agree that coal is prob­a­bly real­ly bad thing for the envi­ron­ment. Flip­side is it’s nec­es­sary for heat­ing and cool­ing and lots of run­ning elec­tric­i­ty for hos­pi­tals and sav­ing lives these days. When I was run­ning my mar­ket­ing con­sult­ing busi­ness, I had some clients that were in the min­ing indus­try, and you know, they were very clear about their ethics. It’s like, Hey, our soci­ety runs on coal, you take away coal tomor­row, and soci­ety shuts down, there isn’t enough elec­tric­i­ty that can be gen­er­at­ed today by green ener­gy. So right now it’s crit­i­cal.

Tony 44:24

I mean, that’s part of the issue Cam, I think we will get to a stage where we’ll move away from coal. But it’s got to be a planned exit to keep every­thing run­ning. I mean, I used to run the research depart­ment of the com­pa­ny, and researchers solve these kinds of dilem­mas by con­joint analy­sis. Going back to your iPhone exam­ple; the research ques­tion would be, would you like to buy the new iPhone pro at $1300 a pop and know that was built by Fox­conn which pays salve labor wages, or would you buy an iPhone that was put togeth­er by peo­ple in Aus­tralia being paid union­ized wages but it costs five times as much. $5,500, which iPhone are you going to buy and it’s the same with with coal.

Do you sup­port shut­ting down coal mines?

Yes.

Do you sup­port shut­ting them down tomor­row with no alter­na­tive source of pow­er? Or even if there is with no infra­struc­ture set up to sup­port it yet?

No.

So yes, you got to look at these things as a con­duit.

Cameron 45:19

While they con­tin­ue to exist, should we invest in them or not If they’re the best invest­ment in the mar­ket­place?

Tony 45:26

Yes, and so I fall in the camp of– Yes, hap­py to wait for the gov­ern­ment to shut them down, hap­py for gov­ern­ment have a plan to move away from them. But at the moment, they’re actu­al­ly pro­vid­ing a vital asset for most of the world, and I guess, we keep talk­ing about ther­mal coal, but there’s also cok­ing coal, if you shut that down, there’s no iron ore smelters, there’s no steel. So there’s no con­struc­tion. So there’s no new schools or hos­pi­tals or build­ings. So yes, there’s, it’s a sim­ple solu­tion to say don’t buy coal shares, but I think it can exist with a more com­plex solu­tion, which is, let’s plan our way out of this and we can still make a bit of mon­ey on the way.

Cameron 46:05

Well, that was my point in the book, is, when I start­ed try­ing to write my own eth­i­cal frame­work, and I think it’s impor­tant that we all do this. I don’t think we do it enough. I don’t think it’s talked about enough. I don’t think it’s taught to us as chil­dren enough to write your own eth­i­cal frame­work, and if you don’t have one, it’s easy to slide unknow­ing­ly into doing all sorts of hor­ri­ble shit par­tic­u­lar­ly if you work for the Aus­tralian CEO of Sony appar­ent­ly, for the last 30 odd years, what­ev­er his name was. But when you start doing that for your­self, and you do start ask­ing your­self the five lev­els of why ques­tions: Well, why do I believe this is bad? And how do I know that to be true? And— When you start get­ting into the nit­ty-grit­ties of it, it’s actu­al­ly incred­i­bly dif­fi­cult to say; Ok, well, if coal is bad, why is an invest­ment in agri­cul­tur­al com­pa­nies, not bad… When cat­tle and they’re giv­ing off methane and then all of this land where we can grow trees that could be pulling car­bon out of the atmos­phere, instead, we’re pro­duc­ing methane, so now we can’t invest in farm­ing busi­ness­es, either. So what hap­pens to all of Aus­trali­a’s farm­ers and our food sup­ply? You know, the more you drill down into it and try and be con­sis­tent, it gets incred­i­bly dif­fi­cult. It’s not sim­plis­tic.

Tony 47:30

And I’m not say­ing we should abro­gate our respon­si­bil­i­ty for some­one to come along over the top and solve those for us, we should solve them our­selves, and cer­tain­ly vote for peo­ple who have solu­tions for these prob­lems, but you just can’t solve it overnight. Not invest­ing in coal com­pa­nies only spites me, it does­n’t affect the coal com­pa­ny at all, or save cli­mate change at all.

Cameron 47:52

Thank you for your ques­tion, David. If you ever get around to lis­ten­ing to this, I hope you’ll like your answer. My mate Bris­bane Reg from the ASA, He said “Hi, team on this week’s pod­cast there was some chat about oth­er para­me­ters or fil­ters that might be use­ful. I won­der if Tony or any oth­er mem­bers con­sid­er a stock­’s price rel­a­tive to its 25 day mov­ing aver­age when ana­lyz­ing a buy. I used to buy my data from investor cen­ter before I joined Stock Doc­tor and their founder, a pret­ty wiley investor, always said; ‘Nev­er buy a stock if it is trad­ing below its 25 DMA’. Unfor­tu­nate­ly, this is not a fac­tor that can be built into Stock Doc­tor as a fun­da­men­tal fil­ter which com­pli­cates things I know but the gurus there have pro­grammed it for me as a tech­ni­cal fil­ter, as they call it, which can be over­laid on a stock doc­tor watch list. I haven’t played much with it yet, but I intend to, any thoughts. Tony, what do you think about 25 DMA’s?

Tony 48:51

Well, it’s the mov­ing aver­age for the last 25 days. It sounds to me like a Josephine, we’ve been talk­ing about our def­i­n­i­tions for Josephine, So per­haps the 25 mov­ing day aver­ages is a good one to look at. Because we’ve been using is the cur­rent price below the end of month from the pri­or month, you know, three weeks into it and that tends to have more val­ue as you go into the month– the fur­ther on into the month you are. So obvi­ous­ly 25 days in is a more valu­able test then the first day of the month. So yes, I think it’s worth­while look­ing at this, might be our Josephine proxy, but I’m not famil­iar with it. Haven’t done the research. I can look at it though, but would be inter­est­ed to get more from Reg on his— If he’s done any research on using it. Is it bet­ter to use it or not use it? Is 25 days a mag­ic num­ber. Is it bet­ter than 30 or 50 or 10? I mean, all the things that we need to answer before we can go out and a limb and say it works.

Tony 48:53

Well that is going to be my next ques­tion to you. Any idea why it’s 25 days? Why is that the mag­ic num­ber?

Tony 50:06

I don’t know.

Cameron 50:07

OK, thanks Reg. Some­thing to add to our list for the team of research ana­lysts that we have. Qui­et­ly work­ing away deep inside of a coal mine to back test al this stuff, Inside of Fox­conn, a coal mine in Fox­conn. Gary asks, can you please run through the tim­ing for 3PTL sells again for exam­ple, I held WAF for a lit­tle while, I think that’s West African Resources… Had the bad news about the coup in that area and broke through the 3PTL dur­ing the month and now has recov­ered sig­nif­i­cant­ly and does­n’t show being below the sell line at all. You know, I looked at the chart for that this morn­ing and it’s had a huge spike.

Tony 51:00

I don’t think it, well for my own WAF so full dis­clo­sure, I don’t think it broke through its 3 PTL thought. But what it did do was it came very close to being a rule one for me, and I think from mem­o­ry the share price around the time that we talked about it or at least we put it on the buy list was around 90 cents and they got back to around that in the last cou­ple of weeks, and it’s shot back up from there.

Cameron 51:25

$1.26 it is today. Were you say it did­n’t break through the 3PTL.  Do you mean it did­n’t break through its sell line?

Tony 51:32

Cor­rect. Have a look at it. It’s got a real­ly low Sell line. I’ve just called up on the Bret­ta­la­tor.

Cameron 51:37

Yes, I’ve got it now, it’s about 66 cents, dropped down to about 75 back in March of this year but is way back up since then.

 

Tony 51:50

I think we might have talked about it after that or I think I might have bought mine after that. I’m pret­ty sure I pay 90, 91 cents for it some­thing like that.

Cameron 52:01

Yes, I did see it was­n’t that long ago you talked about the coup, It was Episode 438- Oh, same episode you did EHL as your pulled pork by the way, but yes Mark asked why it was drop­ping and you said there was a coup in Guinea This is back in just the 28th of Sep­tem­ber, only a cou­ple of weeks ago.

Tony 52:24

Yes, but what I’m say­ing is I bought it before then and it got back to close to my buy price, actu­al­ly I may have bought it for like 98 cents and it dropped 10% below that, was 90 cents but I remem­ber I was focus­ing on 90 cents as the sell price for me. But either way still way above its 3PTL sell price.

Cameron 52:48

So Gary’s ques­tion was about the tim­ing of 3PTL sells. I’m not real­ly sure what he means but the sell is it breach­es the line you sell.

Tony 53:04

I mean it’s a cou­ple of things, I’ve got a cou­ple of stocks at the moment that breach their sell lines and I’m kind of hang­ing on just for a bit longer because it’s a bit like the CBA expe­ri­ence, it goes ex div­i­dend, it breach­es, we add the div­i­dend back, it comes back up. Div­i­dend gets paid and it’s still below its buy line but it’s still going up. So yes, when we’re down to sort of cents. It’s like a cou­ple of cents below its sell price. It looks like it might be trend­ing up. I’m going to hold and see if it real­ly cross­es. If it drops again, I’ll sell. So yes, it’s a lit­tle bit of finesse going on there. But if it was like, drop­ping fast, and had rock­et­ed past its sell line def­i­nite­ly sell straight away. But I tend to linger when it’s like a cent below or it’s just gone ex div­i­dend, and you can make sort of a case for it. Once it set­tles down, it’ll turn around again. But gen­er­al­ly we just go rules is rules, and if it drops below we sell.

Cameron 54:03

Yes, unless you don’t. Unless you want to fudge it a lit­tle bit. Hold on for a bit. OK, hope that helps, Gary. Scott asks for you to give a dis­ser­ta­tion on Elliot Wave the­o­ry, and fol­low that up, The sec­ond point of that ques­tion is, can you explain quan­tum wave the­o­ry at the same time?

Tony 54:27

Yes, sure.

Cameron 54:28

What’s Elliot wave the­o­ry, Tony.

Tony 54:31

Yes, so this is a part of tech­ni­cal analy­sis. So it’s goes way back to the 1930s, and it talks about, it’s some­times called the triple peak or triple head. Some­times it’s called head and shoul­ders, there is always dif­fer­ent names for it. But basi­cal­ly, it looks for a series of, I think from mem­o­ry, it’s 5 peaks on the way up and then 3 peaks on the way down and uses those as buy and sell sig­nals. So like I think it’s a sell Sig­nal after it has 5 peaks in a row, it’s a buy sig­nal after has three peaks on the way down. So suc­ces­sive peaks are low­er for three times it’s a buy sig­nal. I looked into it, like about at least a dozen years ago, like I looked into all of oth­er tech­ni­cal analy­sis things after the GFC try­ing to find out a way if I could improve my returns, you know, in a drop­ping mar­ket, and I set­tled on the 3PTL algo­rithm, which is much sim­pler and seemed to work for me. I could­n’t find a rea­son for Elliott Wave to work and it did­n’t work when I looked into it for myself, you know, I picked out a sam­ple of stocks and tried to trade them with the Elliott Wave and it did­n’t work. I could go into Investo­pe­dia today on invest­ment terms any­way, and they agree with me, they explain what it was but they there was a quote here say­ing not all traders inter­pret the the­o­ry the same way, or agree it is a suc­cess­ful trad­ing strat­e­gy, and I think that’s prob­a­bly the Elliot wave the­o­ry in a nut­shell. It’s rules and sub-rules and sub-rules of sub-rules about when to apply it, when not to apply it, and it’s pret­ty sub­jec­tive.

Cameron 56:11

Now explain Heisen­berg’s Uncer­tain­ty Prin­ci­ple.

Tony 56:15

If you have a cat, and you put it in a box, you close the box– Heisen­berg’s Uncer­tain­ty prin­ci­ple is the act of mea­sur­ing some­thing will influ­ence the thing you’re try­ing to mea­sure. So you can nev­er real­ly mea­sure some­thing. See I did uni­ver­si­ty physics, Cam.

Cameron 56:32

Yes, well, there goes 3PTL. We can’t mea­sure any­thing. What’s the point?

Cameron 56:38

Yes, true.

Cameron 56:39

It only goes up– Your price only goes up because you’re look­ing at it.

 

Tony 56:44

Well, actu­al­ly, that’s prob­a­bly true. There’s prob­a­bly some­thing in that. If enough peo­ple are look­ing at the price, there’s prob­a­bly enough peo­ple buy­ing it and the price goes up. But no I would­n’t rec­om­mend any of these tech­ni­cal analy­sis things, they promise the world and well just like we are with the three point trend lines, you can spend a lot of time try­ing to finesse it and get it nailed down. But they work more in the gen­er­al than they do in this spe­cif­ic some­times.

Cameron 57:09

You ever hear Buf­fett talk about any of this tech­ni­cal analy­sis stuff?

Tony 57:14

Oh, good ques­tion. I haven’t, no. I’d be sure he would­n’t be a user of them though. I can’t think of any quick quote– I say things like the only per­son that makes mon­ey out of graphs is a map­mak­er.

Cameron 57:23

You see the car­toon I post­ed on Face­book today.

Tony 57:32

I did, did you see my reply.

Cameron 57:33

No. What was your reply?

Tony 57:35

I said, well, the car­toon was ask­ing a val­ue investor about whether they should use bleach on their under­gar­ments.

Cameron 57:42

It was a wife in the laun­dry doing the laun­dry and her hus­band’s read­ing a book on War­ren Buf­fett, she says Oh yes, please tell me what Buf­fett has to say about using bleach on your del­i­cates, and you said…

Tony 57:54

I said, Buf­fett would do a dis­count­ed cash flow on the cost of bleach and then work out it was bet­ter invest­ing in Berk­shire Hath­away.

Cameron 58:01

And then you said…

Tony 58:03

Why would you have to bleach your under­gar­ments any­way?

Cameron 58:06

And I replied, you’ve obvi­ous­ly nev­er seen my under­gar­ments. But I thought it was good because that’s what it must be like being mar­ried to a val­ue investor. Well, accord­ing to War­ren Buf­fett.…

Tony 58:24

Well, I said I think it was in the mak­ing of an Amer­i­can cap­i­tal­ist that his wife want­ed to replace the cur­tains in their home, and Buf­fett would not let her because he did the DCF on what the cur­tains were actu­al­ly worth If you took it out long enough into the future with the mon­ey invest, I think Berk­shire Hath­away

Cameron 58:39

For mem­o­ry, it was going to cost $10,000 and he worked out what he could do with that $10,000 over 20 years, what he could turn it into. So she divorced him and so it’s the moral of that sto­ry. 30 years lat­er, but still– Thank you Scott. Trent asks Tony’s view on let­ting emo­tions impact in invest­ing deci­sion and a review of ATLs price with a reac­tion from Cam.… ha-ha thanks.

Tony 59:09

Have a look at ATL; it’s near­ly dou­bled in val­ue since it came back on the buy list and got tak­en off even though it does­n’t have a qual­i­fied audit But I was con­cerned it was raised as a key audit item that the com­pa­ny may face prob­lems if COVID keeps going. So yes, what do we do? Do We put it back on the buy list now is the mar­ket proved us wrong that ATL actu­al­ly is a good invest­ment.

Cameron 59:32

One of our sub­scribers I can’t remem­ber who it was but some­body sent me an email the oth­er day say­ing that ATL was the best per­former in their port­fo­lio, and I said, “Good luck. Let me know how that works out for you.”

Tony 59:49

Wel lit has a QAV score of 0.46, I looked it up this morn­ing when I saw the ques­tion and it’s share price has rock­et­ed since we talked about it and did­n’t buy it. So that’s the reverse, we’ve got the reverse curse. We’re not buy­ing things and they go up, we talk about– Well, if we had have done a pulled pork or bought it, it would have gone down for sure.

 

Cameron 1:00:11

Back at the end of August, it was trad­ing at 38 cents, it is cur­rent­ly trad­ing at 72 cents. It’s dou­bled. A lit­tle over a month. Oh my god. As I said on Face­book, when some­body was rib­bing me about ATL recent­ly, I will nev­er, ever, ever buy Apol­lo Tourism and Leisure again, unless you tell me to, and then unless it has a good score.

Tony 1:00:40

I am tempt­ed to take the qual­i­fied audit off it and put it back on to the buy list.

Cameron 1:00:44

It’s too late. Now it’s already up 100% I guess it could go down. But it was [crosstalk]

Tony 1:00:49

I’ll stick to the Orig­i­nal plan. I’ll wait till the half, and we see some new num­bers and make sure it gets through COVID.

Cameron 1:00:54

It was up as high as $1.85 back in Jan­u­ary 2018. But it’s been a long time since it’s been up in those areas. No,all jok­ing aside. Yes, if it came up on my buy list, and we were quite hap­py it did­n’t have a qual­i­fied audit or any taint around that had been removed. Sure I’d buy, you know, num­bers are num­bers, rules are rules. Yes, it’s burned us a few times in the past that I don’t hold grudges. If peo­ple know any­thing about me. It’s apart from the fact that I’m insane­ly good look­ing, It’s that I don’t hold grudges.

Tony 1:01:27

Real­ly?

Cameron 1:01:28

OK, I was jok­ing about good look­ing thing. OK, there’s a few peo­ple I’d hap­pi­ly push into a wood chip­per. But that hap­pened to a cousin of mine.

Tony 1:01:43

Yes, I know you said that. That’s ter­ri­ble. Yes, I’ll stick with the orig­i­nal plan, which is to see what hap­pens next half with ATL but yes, good luck to the peo­ple who took a risk, that’s often the way it works. It is big, big risk, big reward.

Cameron 1:01:57

And also big fail­ures if you get it wrong, but yes, Live on the edge. Alright. This is the last ques­tion. This came in via email from Sue today. Did you see this email from Sue?

Tony 1:02:09

No. OK, go ahead.

Cameron 1:02:11

It’s easy for you. Any­way, she says; “Hel­lo Cam! Con­tin­ue to love the show. I’m assum­ing it’s not my first wife, Sue. If it is Hi, how you doing? It’s been a long time. I’ve also start­ed lis­ten­ing to your cold war pod­cast, which I’m enjoy­ing. Then I think I noticed that she had some sort of catholic.edu thing in her email address, and I was like, Oh, Sue, I’m not sure Catholics should be lis­ten­ing to my cold war show because it gets pret­ty nasty, but good luck with that. Any­way, she asks a ques­tion for the QAV show with the ever nar­ra­tive of infla­tion fears, what is Tony’s take or expla­na­tion or expe­ri­ence with invest­ing in QAV the­o­ry, I’m still learn­ing but with infla­tion, if goods and ser­vices prices increase, won’t the val­ue of shares busi­ness prop­er­ty and assets also increase? Thanks again, love­ly shows Chee­rio Sue.

Tony 1:02:58

All right, I can’t see the ques­tion that Sue say would busi­ness val­ues decrease if infla­tion increased?

Cameron 1:03:04

No increase. If infla­tion of goods and ser­vices prices increase won’t the val­ue of shares, busi­ness, prop­er­ty and assets?

Tony 1:03:14

Well, poten­tial­ly, infla­tion is gen­er­al­ly seen as being a bad thing for mar­kets because the bor­row­ing costs for busi­ness goes up, that’s prob­a­bly the main dri­ver, and unless wages keep pace with infla­tion, then peo­ple can afford to buy less. So that’s gen­er­al­ly infla­tion seen as an anchor on the econ­o­my. But you know, as we said last week, with a sim­i­lar ques­tion, we don’t care. It’s… we’ll find stocks which will prof­it dur­ing infla­tion­ary peri­ods. I don’t know what they are now. They’ll present them­selves at the time and we’ll invest in those even if the mar­kets going down, we’ll prob­a­bly still find some stocks to invest in. So yes, I’ll be, I’ll be lead by what’s in front of me at the time rather than try­ing to make a pre­dic­tion. But yeah, I mean, I have spo­ken about infla­tion in the past I think it is, at some stage in the future going to  be a head­wind for the share mar­ket gen­er­al­ly. I think you know, those kinds of things play out with a  move in bonds in the US which affects the share mar­ket because you know, the bor­row­ing costs are priced on bond prices, bond yields, and Amer­i­ca will sud­den­ly have a hissy fit and the share mar­ket will drop 10% in a day and then we’ll wake up in the morn­ing going oh shit real­ly don’t know what’s going on but I bet­ter sell. So hys­te­ria takes over and our mar­ket’s then down 15% sud­den­ly, you know, I’ve seen the whole thing play out like that before but we’ll just keep doing our thing, which is what if our indi­vid­ual stocks go below their sell prices, we’ll sell them and if they don’t, we’ll hold them and if we find ones which are infect­ed by, aren’t affect­ed by infla­tion, and maybe Sue is already into some of those, and we’ll buy them. Usu­al­ly infla­tion works well for com­mod­i­ty stocks. So it’s a bit of a chick­en and egg thing, but if we start to see infla­tion we nor­mal­ly see iron ore, cop­per and stocks like that go up in val­ue as well. Some­times an increase in com­mod­i­ty prices dri­ves infla­tion, and some­times the under­ly­ing infla­tion dri­ves com­mod­i­ty prices. So for exam­ple, gold will gen­er­al­ly go up if infla­tion is there because peo­ple want an asset to pro­tect the val­ue of the cash or the cash equiv­a­lents, so they will buy Gold as a store of val­ue, some of that rubs off onto some of the oth­er com­modi­ties. So there’ll be busi­ness­es out there which will be ben­e­fit­ing from infla­tion, for sure.

Cameron 1:05:34

And if we wake up that morn­ing and the mar­ket’s down 10 to 15% and we have to sell two thirds of our port­fo­lio, we then just replace them with stocks that we’ve decid­ed are look­ing good or under­val­ued and wait for the mar­ket to ride back up again.

Tony 1:05:52

Yes, I mean, the worst case is it goes down for 10, 15% on one day and back­up the next day as it kind of did dur­ing the COVID cough but even in the COVID Cough we’re able to prof­it from it. So it gives us a cash port­fo­lio to deploy when and if we find some­thing bet­ter to deploy to.

Cameron 1:06:10

Yes, and you’ve said before like the COVID turn­around was remark­ably quick for a vari­ety of rea­sons but some­times it’s not that quick. Some­times it can take a year for the mar­ket to bounce back but our job is to find the stocks that are under­val­ued and get in on them and wait for them to revert to the mean.

Tony 1:06:31

Yes, I think there’s kind of two things to con­sid­er in terms of mar­ket cor­rec­tions. One is the Black Swan event. You don’t know what’s going to hit you and when it does every­one goes; oh yeah, I should have seen that and the mar­kets down 20, 30% right, and you put the GFC in that cat­e­go­ry, some­times it comes with a bub­ble so you can put the tech wreck in that cat­e­go­ry, peo­ple knew it was com­ing but when and if, who knoew and then you got the oth­er ones which are more run of the mill down­turns, I’ll call them and I think infla­tion might fall into that camp. I remem­ber a cou­ple of years ago maybe three years ago now I think it was in a Jan­u­ary, the mar­ket dropped 10% in a month and it gets your atten­tion, I did­n’t sell any stocks because none of them breached their sell lines in that time and the mar­ket clawed its way back in in the fol­low­ing months to get back up to where it was but yes, when the mar­ket drops 10% quick­ly you cer­tain­ly look at it and watch your port­fo­lios and set your price alerts and things like that but you don’t change what you do. You don’t sort of fol­low the herd and say the sky is falling and I should go to cash com­plete­ly because if you did and you’re out of the mar­ket turns back quick­ly you missed out.

 

Cameron 1:07:44

There you go, Sue.

Tony 1:07:45

I sus­pect that all of the met­rics the mar­kets that are val­ued at the moment and it  would­n’t sur­prise me if we see a 10% cor­rec­tion. As you said before with the ASX it has­n’t per­formed very well this finan­cial year because the oth­er thing that can hap­pen is it goes side­ways for a long time. It does­n’t just keep increas­ing at the rate it has been which has been unusu­al­ly fast since COVID. So would­n’t sur­prise me if the mar­ket goes side­ways. Even goes down a cou­ple of per­cent a month for the next six months. So that’s nor­mal behav­ior. We’ll just keep invest­ing the way we invest now.

Cameron 1:08:19

Good stuff. Well there you go. That’s a full lid TK, after hours apart from Suc­ces­sion, What’s been tak­ing your fan­cy late­ly.

Tony 1:08:28

Noth­ing to real­ly rec­om­mend. I’ve gone on a Ted Las­so band­wag­on on the week­end. So I’ve watched a few episodes of that, quite light and fun, and I did that because I watched the first four episodes of Foun­da­tion. The Isaac Asi­mov series which is com­ing out on Apple Plus.

Cameron

Any good?

Tony

50/50 like I’m a big fan of the books I grew up on them and you know lis­ten to stage radio plays by the BBC and read the books from begin­ning to end prob­a­bly three or four times and love it. Love the idea of sci­ence being pro­gressed as a reli­gion, to spread it through the uni­verse. All that kind of stuff, was just so ground­break­ing in terms of its ideas. This pro­duc­tion is just lush, it’s like, visu­al­ly real­ly good to look at but haven’t real­ly got a han­dle on the script I don’t think, it jumps around a lot, which has always been the prob­lem. It’s very hard to turn, like a three vol­ume series of books, dense­ly packed with ideas into a TV show or a movie. But yes, not a bad effort, it’s cer­tain­ly worth watch­ing and see­ing if you like it.

Cameron 1:09:29

My con­cern with Denis Vil­leneuve ‘s upcom­ing Dune remake, it’s the same thing like I grew up on those books, read them many times, huge fan. It’s just real­ly, real­ly hard. I’m sure it’ll be beau­ti­ful and lush. But you know whether or not it’s going to have any sort of rich­ness to the sto­ry, I don’t know, we will see, very hard.

Tony 1:09:49

Yes, exact­ly. I’m in the same camp. The Dune that came out in the 80s was flawed, but gee, it was good. It’s what you want from a book made into a movie. It adds extra dimen­sions to the sto­ry. Every­thing does­n’t look the way you pic­ture it in your head but it just adds to the book it does­n’t try and just turn the page and show you how that scene looks, it was good…

Cameron 1:10:13

[crosstalk] Lynch’s ver­sion

Tony 1:10:14

Yes, def­i­nite­ly.

Cameron 1:10:15

I’m a huge fan of that. I mean, it’s does­n’t have a lot in com­mon with the book but it’s just such a crazy messed up film. It’s a lot of fun.

Tony 1:10:32

And a great cast. It’s one of those movies where you did­n’t know that at the time, but all those peo­ple went on to great things like Patrick Stew­art, Geur­ney Hal­leck, Kyle McLaugh­lin, Sting. Great cast.

Cameron 1:10:52

All right. Well, I don’t have any­thing to add. That’s the show for the week. hope every­one’s stay safe. Syd­ney enjoy­ing your new­found free­doms. Mel­bourne, hang in there. Anoth­er cou­ple of weeks Mel­bourne. peo­ple stay safe, and hope­ful­ly we’ll be doing some more QAV din­ners around the coun­try very soon.

Tony 1:11:14

Yes. Any whiskey lovers out there hit us up. We might go along to the Aus­tralian Whisky Asso­ci­a­tion annu­al awards in Jan­u­ary in Syd­ney,

Cameron 1:11:23

QAV Aus­tralian Whiskey Awards.

Tony 1:11:28

Or at least the QAV table at the Aus­tralian Whiskey Awards.

Cameron 1:11:31

Yes. Keep an eye out for that. Thanks, man. Have a good night.

Tony 1:11:36

Thank you. Bye.

 

Cameron 1:11:43

QAV Pod­cast is a pro­duc­tion of space craft pub­lish­ing pro­pri­etary lim­it­ed autho­rized rep­re­sen­ta­tive of AFSL 520442 HFS [check] rep­re­sen­ta­tive num­ber 001292718. Please don’t make any invest­ment deci­sions based sole­ly on lis­ten­ing to this pod­cast. This is pre­sent­ed as gen­er­al advice only not per­son­al finan­cial advice. We don’t know your per­son­al finan­cial cir­cum­stances. Please see a finan­cial plan­ner before mak­ing any invest­ing deci­sions.