QAV 451 Transcription

Cameron  00:10

Welcome to QAV episode 451, TK. Are you in a, what do you call a bird aquarium? There’s a name for it. 

Tony  00:20

An aviary.? 

Cameron  00:21

Aviary? That’s it.

Tony  00:23

Well, I kind of am. I’m looking out the windows and there’s this beautiful little sparrow with a big red breast that just flew into a tree and out again. It’s lovely.

Cameron  00:31

You’re in the middle of the bush, Cape Schanck. 

Tony  00:34

Yep. Beautiful down here. 

Cameron  00:36

How’s Omicron in the Cape today?

Tony  00:38

Well, we, I missed it by about 10 minutes last week, so.

Cameron  00:42

“Missed by that much.”

Tony  00:45

Yeah. So, we’re at the – played golf down here, and there was somebody in the clubhouse, I think it was from ten past one ’til ten past five, they were in and out. And we left the clubhouse at about one o’clock to go and play and we got back in about twenty to five, so we just missed them. Not to say we would have caught it if we were there at the same time, but we probably would have had to have, you know, test and wait for results and stuff. So, we were lucky.

Cameron  01:07

And just hoping they didn’t cough on a golf club that you then picked up or something, or a cart. 

Tony  01:12

Well, I have my own golf clubs, yeah, but a table or something. Yeah, for sure. I bought the PCR home test now, so I tested myself before I went to a Christmas party on the weekend, and I was fine. And I’ll do it again before Christmas Day when I meet up with family, so yeah. 

Cameron  01:25

Did you see Brian May’s story? 

Tony  01:27

No, the guy from Queen? The guitarist from Queen? 

Cameron  01:30

Yeah, he posted a video on Instagram or something this week. He said “my wife and I’ve lived like hermits for the last two years and there was a birthday party for a friend and they were there with about a dozen people. All of them were triple jabbed,” he said, “great night a couple of days later, a couple of them said they had symptoms.” He said he and his wife had symptoms that was just like a bit of a tickle and a bit of a cough so they got the tests, tested negative. Then they did another test the next day, tested negative. And then they found out that about eight of their friends that were there had tested positive and they tested on the third day, and they tested positive on the third day. And he said the first two days just knocked him out like the worst flu you could possibly imagine, completely flattened him, and then starting day three, day four, he started to pick up. When he did the video, he said it had been a week and he was feeling pretty good, but he said it even tripled jabbed completely – he’s 74 – but he said completely knocked him off his feet for a couple of days.

Tony  02:32

Yeah, I’m not looking forward to it. It’s gonna hit us I think at some stage because it’s just growing so quickly, spreading so quickly.

Cameron  02:37

He said a very, very close friend of his died last year from COVID. In six days – boom, gone. And he said if “I wasn’t vaccinated, I’m pretty sure this would have probably killed me as well.” Yeah, it was that bad. Triple dose. 

Tony  02:51


Cameron  02:52

And I’m assuming that was Omicron too, right. I mean, I don’t know. It’s the dominant variant everywhere now, I assume it is in the UK as well. Might have been another one. But we keep hearing that it’s mild, and he was like, “man, this one knocked me out.” 

Tony  03:03

Yeah, it’s not mild. I mean, it may not have the same death rate, but it’s still killing people. It was, what was it? Six deaths last night in Victoria, something like that? From, I guess, Delta and Omicron. But yeah. 

Cameron  03:16

Yeah, I don’t I – haven’t seen any data yet on the deaths, whether they’re Delta or Omicron, but I did see that it’s now the dominant strain in Australia, Omicron, by cases. It is in the US, too.

Tony  03:27

Yeah. So, I think what they’re saying is that same number of hospitalisations, so less people are going to hospital because of it, but it’s more virulent. I was gonna stay down here longer, I’m going to head back to Sydney next week and hunker down until I can get my third job which isn’t due until, at the earliest, mid-January, but they’re talking about delays anyway, so. 

Cameron  03:45

Oh, really? 

Tony  03:46

Yeah. So, if I can get my third ja mid-January, I’ll come back down here for a couple of weeks after that. But I don’t know if we should be hosting dinners or anything like that at the moment with Omicron. 

Cameron  03:54

No. And I’m not due for my booster until February, I think, so.

Tony  04:01

Well, they should also bring them forward. I mean, Britain’s now down to, is it three months in Britain or four months in Britain, between shots?

Cameron  04:07

I read today that the states are pushing the Commonwealth to make it earlier. Anyway, enough of that let’s get on to investing. It’s been turbulent, continues to be turbulent, market is not happy. Just looking at the All Ords for today, it’s slightly up today, but if you look at the last three months, I guess, you know, mid-November we hit 7798, the All Ords, its currently down at 7638. So, it’s, I don’t know, 150 points down from where it was six weeks ago.

Tony  04:42

Yeah, it’s going sideways which it does in times of uncertainty, right, no one can work out what’s happening with inflation, what’s happening with bond yields, what’s happening with Omicron. All those things are still trying to get worked out. They’ve been thrown in the punchbowl or thrown in the soup, and then someone’s trying to divine what’s going to happen from, from here. It’s pretty hard.

Cameron  05:01

Peaked at 7902 back at sort of the end of August, or mid-August, by the looks of it. Yeah. But it’s been travelling down and sideways as you say ever since.

Tony  05:13

Yeah, and look, this is usually a quiet time as well. So, there probably isn’t much volume in the market so it gets moved around a little bit with a heavy trade at the moment.

Cameron  05:21

Anyway, let’s get into news and then we’ll get into questions. I noticed in doing our checklist this week that MYR was getting close to its sell line. I peg it’s sell line at about 37 cents. 

Tony  05:37

The Brettelator says 38. I mean, the thing about Myer is that it’s never good seeing a retailer have their stock price decline during the Christmas season. No, it’s 43.5 cents at the moment being the 21st of December in the afternoon, so it’s still a little bit above its sell line. But it’s never good seeing a retailer decline during Christmas, that means that something’s leaking that sales aren’t where they should be, I would guess. But who knows? We’ll still apply our normal rules.

Cameron  06:03

It’s had a massive run, though, for the last six months. Like it’s still up, I think 30% from when I bought it six months ago. So, is it maybe some profit taking throwing in as well?

Tony  06:14

Absolutely. If you look at the graph, the monthly graph and or even a shorter-term graph in Stock Doctor it sort of, coming out of COVID it had a, I don’t know, maybe a 30% sort of degree or 30 degree slope on it. And then back in June, sort of shot up really sharply and now it’s coming back towards that 30-degree slope again. So, yeah, it had a good run there and it’s just, as you say, probably because of profit taking retracing some of those steps up.

Cameron  06:44

Solly giveth and Solly taketh away.

Tony  06:48

Well, he wants the share price to go up too, it’s I think it was Geoff Wilson that caused it to sell off in the first place. 

Cameron  06:53

Yeah, Geoff Wilson.

Tony  06:54

With Wilson Asset Management selling down their shareholding. So, they could still be selling. Who knows? We don’t change the rules, though, we just apply them.

Cameron  07:02

Another one that I noticed is dropping – and the reason I noticed these two is because I own them, of course – Lindsay Transport, LAU, I think, also getting close to its sell line, which I also pegged at around about 38 cents.

Tony  07:16

Yeah, again, the Brettelator has 36, so it’s pretty similar. 

Cameron  07:20

Right. I was just eyeballing it on the chart, I didn’t throw it into the calculator, I think. So, keep an eye on those two if you have them, folks. Make sure you’ve got your alerts set, etc., etc., etc. 

Tony  07:32

So, one more. Did you own WWG at some stage? Or still own WWG, Wiseway Group?

Cameron  07:37

At some stage I did, yeah.

Tony  07:40

Okay. Thought you might. Anyway, came off my buy list this week when I was doing it on the weekend. Just thought I’d raise it in case you do own it. And then the other major change to the buy list when I was going through it was HLS, Healius, is back on the buy list. Towards the bottom again, I think it’s got a score of 0.11, but it’s a large-cap stock if people are interested in those. 

Cameron  08:00

Good old Healius. The other change to the buy list is GAP is in the buy list and should not be in the buy list, and shouldn’t have been in the buy list for the last couple of weeks when it has been in the buy list. Mia culpa. I gave it a pass and I shouldn’t have. It’s well below its buy line, I don’t know what I was drinking, or not drinking is probably the problem. So, please don’t buy GAP. We’ve just sold it out of our Navexa portfolio, the QAV portfolio today and replaced it with GWR. It had also dropped it a bit since we bought it as well. So, there you go. But yeah, replaced it with GWR today, so apologies to everyone for that, which is why I say every week, check my work before you do anything.

Tony  08:41

Yeah, do your own research.

Cameron  08:44


Tony  08:44

Which I’m pretty sure people are doing, judging by the questions we get which is good. 

Cameron  08:48

The crazy thing is, is people probably know you do a checklist each week, Alex does one, I do one then I compare all three and decide what the final right version is because each of us makes mistakes every week, each one of us makes mistakes and because it’s human error when you’re dealing with hundreds and hundreds of stocks and data and charts and whatever, and even then I still screw it up sometimes at the end with the final list. So, yeah. A couple of other things, CAA did an upgrade to guidance this week, thanks to Jeremy for pointing that out via Facebook. That’s always nice, particularly in this kind of a market when somebody does an upgrade to their guidance.

Tony  09:27

My four favourite words: upgrade to financial year guidance. It’s just, is that four, five? Five favourite words up, sorry upgrade to full year guidance.

Cameron  09:41

I thought it was “hole in one”. Oh, that’s three words.

Tony  09:45

I’ve never had a hole in one. I’d love one. 

Cameron  09:47

Or, your horse just…

Tony  09:49

Wins the Melbourne Cup?

Cameron  09:53

So, did you drill down into, this is Capral, CAA

Tony  09:56

No. It’s, great to see capital upgraded. 

Cameron  09:58

Yeah, and their, their chart looks, like, crazy. It’s one of these ones that, you know, sometimes people say to us, “well, you know, the charts gone up so much you should sell.” And you know it – I think we bought it around about three or four bucks. It just keeps going. It’s up now, it went up to 835 and then dropped for a couple of months down to 767. This gets back to – somebody asked us last week, should we sell any stock if it drops 10% at any stage, should we then sell it? And you were like, “no.” And this is a classic one. Capral’s then jumped from that 767 up to $9.19, it is, today.

Tony  10:38

It is, and I remember looking at the aluminium price on the weekend. It’s, it’s not too far above its sell line, so that’s interesting that Capral’s going up. There’s other things at play, obviously, than the aluminium price.

Cameron  10:49

Yeah, right. I think I posted on Facebook when somebody mentioned, Jeremy mentioned this, that it’s gone up, it’s up 70% I think since we bought it. No, 85.87% now total return. Capital gain 70%, but it must have thrown some dividends or something at us as well. 85.87% since we bought it, so yeah, it’s been a terrific earner for us.

Tony  11:13

It has, hasn’t it. Yep. And that would have been, what, in the space of about a year I think? We bought it last year sometime.

Cameron  11:20

We bought it… Yes. October 2020. 

Tony  11:24

That’s pretty good. 

Cameron  11:25

Yeah, at 17 cents, but they had a consolidation in November, and a couple of huge dividends along the way as well.

Tony  11:33

Okay, I’m just calling up aluminium. It’s actually just touching it’s sell line now. So, we’ll see what happens. Or maybe just slightly above it.

Cameron  11:40

Oh, wow. Okay. Well, we might have to dump Capral next week.

Tony  11:44

Yeah, we might. Well, it’s a bit hard, Stock Doctor doesn’t have the sort of fine resolution to be exact, but it looks like the sell price for aluminium is going to be about 2570. Which I guess is, I don’t know what that unit is, dollars per tonne, maybe? And the current price is 2645, so it’s, yeah, a hundred points. Ooh, actually no, 50 points above the sell price.

Cameron  12:07

Well, that leads me to my next talking point, which is Glenn in our Facebook group said that he found out based on something you asked people to research last week, “how do we set alerts for commodities?” He said “Trading View, the app, will let you do that if you pay for one of their memberships. I think it’s about fifteen bucks USD a month for a membership for the base level subscription and you can set commodity alerts. So, I’ve set them for a few; platinum, iron ore, gold, and I will go in now and set it for aluminium. And this being an American site, they probably spell it wrong. A-L-U-M-I-N-U-M. 

Tony  12:49


Cameron  12:50

Ah, right. 

Tony  12:51

Yeah, they spell it that way but they pronounce it “aluminum”. 

Cameron  12:53

So which futures should I be looking at? 

Tony  12:56

Well, I’m using Physical, Aluminium XAL_.

Cameron  13:01

I don’t think they use the same codes. Yeah, there’s no, nothing matching XAL_. Well, they have a lot of alum… they have Manaksia Aluminium, Wisdom Tree Aluminium. I don’t know if these are companies or commodities, I can look at. Yeah, they just have futures. Oh, well, I’ll just use a future one, then.

Tony  13:24

Yeah, use the shortest termed future one if you can. 

Cameron  13:27

Oh. Well, it looks… is that buy line you looked at really steep? Because this is a really steep graph.

Tony  13:36

It’s pretty steep, yeah. It’s been going up since the COVID cough, since April 2020 when it was as low as 1461, and it got as high as 2851 in September.

Cameron  13:50

Are you fudging the sell line for this?

Tony  13:54

Not at all, no. I’ve got L1 May 2020 at 1515, and then L2 at September 2020 at 1737.

Cameron  14:07

Well, I’ve got an earlier buy li- sell trough on the one I’m looking at back from July 17. 

Tony  14:14


Cameron  14:15

And then I run it through L2 in May 2020 and it comes in quite low.

Tony  14:19

July 17?

Cameron  14:20

Mm. But again, this is aluminium futures on…

Tony  14:24

Yeah, I don’t know, sorry. I don’t know Trading, Trading View.

Cameron  14:28

Yeah, we’ll play around with this and we’ll come up with an alert for that. All right, well, that’s all of my news items to get through this week. Tony, what have you got to talk about?

Tony  14:37

Not a whole lot just, wanted to of course wish everyone Season’s Greetings for the holiday season and hope everyone stays away from Omicron and has a happy and safe holiday. And thanks to all our subscribers, you’re very valued. And thanks to our listeners. You’re very valued too. And for all the people who give us questions and support on the Facebook group, it’s, it’s very welcome. It’s great. So, Season’s Greetings everyone. I’ve got a couple of things to go through. I’ve got our Navexa portfolio was up 0.95% for the week and the biggest mover was Capral that we spoke about, up 13.4%. GAP was our worst performer, down 6%, but we’ve removed that today from the portfolio. A couple of other things. I did post something on Facebook last night, the world’s second tallest department building is being built in Malaysia at the moment and I know about six months ago I talked about Colin Nicholson’s top of the market indicators, and one of his indicators that always stuck in my mind is when someone builds the world’s tallest building, it’s definitely a sign that the markets very toppy. So, the second tallest apartment building might be telling us it’s getting toppy as well.

Cameron  15:47

That’s why you posted that. I thought “what’s that got to do with anything?” I think, I think I thought you’d posted it mistakenly or something to the forum. I see, makes sense now.

Tony  15:58

Yeah. Colin Nicholson. I don’t think his website’s still going, well the site might be still going but his service isn’t, but I used to subscribe to it. And he had used to publish three papers on indicators for different stages in the market, and yeah, there was stages in the bull market with high levels of IPOs merger and acquisition activity and people start building icons to themselves. I guess you could probably count the blue penis as one of those; spaceships to yourselves. Maybe that’s the tallest thing in the world at the moment.

Cameron  16:28

Sorry, what? The blue penis? What?

Tony  16:31

Yeah, the spaceship that Jeff Bezos built and rode up in was nicknamed the blue penis. You didn’t see that.

Cameron  16:37

Really? No, I missed that. 

Tony  16:43

Yes, edifices to rich people is a sign of the top of the market.

Cameron  16:47

There’s a, an image I won’t get out of my head for the rest of the day now.

Tony  16:53

Yeah, riding inside the blue penis. Anyway, it’s a sign the markets getting toppy, but I guess we know that because it’s getting choppy and we’ll have to let it resolve itself. But it doesn’t change what we do, but just sometimes it’s nice to know context for what’s going on. 

Cameron  17:08

What about stocks of the week? FMA? No, sorry, FEX and GMA this week?

Tony  17:14

Yes. So, I’m going to focus on GMA, Genworth Mortgage Insurance, and we have a question about it later, which I’ll, I guess I’d better talk about up front. So, first of all, Genworth Mortgage Insurance, been around for a long time. Was an international company with a, an office in Australia, and earlier this year, or end of last year completed a sell down. So, it’s now wholly owned by Australians and listed on the ASX. So, it’s been around for a long time. It’s one of the main providers of mortgage insurance, so it’s a one product company, which can be a problem if something goes wrong with that one product, but, but it’s been fairly profitable over the years. It wasn’t profitable during COVID so it made a loss last year. And oftentimes, the losses with a company like this being an insurance company are around provisioning. So, it might have to mark to market a change in how much its providing in case there are losses, which it did last year and then that gets written back this year – a bit like what the banks do for providing for doubtful debts when they lend people mortgages. So, its first half back in profitability happened this last results in June. What else can I say about it? If people don’t know what mortgage insurance is, it’s if you’re going to take out a mortgage from a bank and the bank says you must have 80%, or, sorry, no more than 80% borrowing, so a 20% deposit, you can actually reduce that deposit by paying for mortgage insurance. And it’s something I’ve done in the past when I was first starting off in the real estate sector. I took out mortgage insurance, which meant I could actually borrow 90% from the bank and I paid a couple of grand to someone like Genworth to insure the fact that if I didn’t meet repayments then Genworth would pick them up for me if I ever went down into foreclosure. So, that’s what that is, it’s been doing it for a long time. I guess a couple of things to note; it’s basically a white label supplier, so, and when I took it out many years ago it was offered by the bank I was borrowing from even though it was provided by probably a company like Genworth. I guess that’s still happening these days. Doesn’t matter either way, I suppose. But the banks have just started putting these contracts out to tender. So, I think it was last year at the start of last year, National Australia Bank put out to tender their mortgage insurance providers contract and Genworth lost it and QBE picked it up, and there were only two people in that tender so it’s a fairly niche market. And then the Commonwealth Bank earlier this year announced that they would run a tender when their current contract was nearing completion. So, the current contract which is held by Genworth doesn’t come up or keeps running until December 2022, but the Commonwealth Bank will run that tender process well before that time period to allow them to transition away if they, if they need to. My guess is again, there’ll probably be a very small number of people applying for that tender, and who knows whether Genworth will get it or not. The material factor is that CommBank is about half of Genworth’s insurance business so if they lose this tender it’ll be a big hit to their profits. And likewise, if they’re desperate to keep it, which you think they would be, if they, if it’s worth that much to them, they may have to shave their margins right down to the bare bone. So, it could be a hit to future earnings as well. So, that’s a couple of things to keep in mind with it, we should know the results of that tender well before the end of 2022 – I think it may even be underway now. So, this trade isn’t without risk and that’s one of the reasons why it comes on to our buy list as a value play. But it’s there now. It’s just come on above its buy line in the last week or so. So, it’s a, it’s a new three-point uptrend. And to go through the numbers – sorry, before I do that, a few other points to make. The price graph has slowly been increasing since the COVID cough and it’s taken another leg up recently, and the leg up it’s taken recently is probably because they’ve announced a, an on market buyback, and they plan to spend about 10% of capital buying back their own shares. So, management are giving us a vote of confidence in the company even though it’s, there’s a fair bit of uncertainty around it. The latest profits have been helped by the housing market, which before COVID happened, some people said was going to tank, but in fact, the reverse happened. Shows you how good some economists are at forecasting. And so, there’s been a lot of business for them and people taking out mortgage insurance. And as it gets, as house prices rise, and it gets harder to save for a deposit more people tend to take out mortgage insurance and do what I did; take out an insurance policy and then the bank will lend you more so you have to save for a smaller deposit, which is a worthwhile thing to do if you’re considering buying into the market, and you can afford to do that. The other thing which has helped, has been a tailwind for this company, is that because of COVID and the lockdowns, the banks were told not to foreclose on people who couldn’t pay their mortgages, and they actually had programmes where you could take, I think it was, up to six months off your mortgage repayments, and so that meant that the number of claims on mortgage insurance went down because of that. And also because of all the government support that was being handed out to people. The unemployment rate’s pretty low. So, there’s been less claims and more activity coming in through the front door for Genworth, so it’s been a good period for them. So, that was one of the reasons why the company’s turned around with its share price. So anyway, so that’s, that’s by the by, that’s the background, but the numbers are – and I’m doing this with a stock price of $2.36, which was at the weekend 19th of December 2021. One of the reasons why I picked this one to do it, it’s high up on the buy list, but it also has an average daily trade of just under $2 million, about $1.8 million. So, it should suit most investors. The price currently is below its consensus target price, it’s about 71% below its consensus target price, so it scores for that. The financial health in Stock Doctor is strong and also recovering, and again, because it was at a loss last year, and it’s now profitable and I tend to like companies which are doing that. So, it scores a 2 on the checklist for that. If anyone’s interested in the ROE, it’s low, it’s about 3%. I’m not particularly worried about ROE but I know some people focus on it, I guess that’s a reflection of the industry, it’s in the insurance industry where a lot of the returns are fairly skinny on skinny margins, but over a large volume. And it’s got to do with reinsurance pricing for the risks they take etc., etc. So, low ROE. That’s not unusual for this industry, though. Because of all the risks involved, price to cash flow is down to 2.5 times, so that’s very low for us. Interestingly enough, the PE is up at 23 times, so that says to me, again, this is a company which is bringing in lots of cash, but then obviously losing all that cash the costs along the way. So, that’s just again, the nature of the insurance industry, I guess. IV 1 it’s greater than IV 1, it’s less than IV 2 and it’s less than two, IV 2 was greater than two times the share price, so we score it a two for that reason. It’s actually, the share price is currently less than NEPS, it’s the net equity per share, and so it scores e a point for that. It’s also less than NEPS plus 30%, so it scores another point for that, obviously, if it’s less than NEPS. There’s strong growth forecast and earnings per share, and I guess you gotta be careful with this, because if it does lose the contract that will, that will still reduce, but the forecast growth is really high so even if it does lose CommBank we’ll probably still see some growth in the EPS next year. Growth over PE, which is what we look at, is 14 times, and we’re looking for something to be 1.5 times on that metric, so it’s well and truly above our threshold hurdle for that. So, it scores a 2. As I said before, it’s a new uptrend, so it scores a 1 for that. It is a record high PE, so it gets a -1 for that. And I said before the PS’ 23, so that’s quite high. And it doesn’t have consistently increasing equity, not surprising if it had a loss last year so it doesn’t score for that. All in all, I get a quality score of 80%, and a QAV score of point 0.32. So, it’s something to have a look at, certainly high up on the buy list, but certainly not without its risks.

Cameron  25:40

When you talk about the risk of it losing Commonwealth Bank’s business, but then, you know, you’re talking about the analysts have given it strong growth forecasts, you would assume that these analysts have a sense for what’s going on in this space?

Tony  25:56

Yeah, look, I don’t know what these analysts are thinking and I don’t know what guidance they’ve been given by the company. The company may well have given guidance and then said, you know, asterisk, assuming we retain all these contracts. But oftentimes an analyst, if they’re worth their salt will say, “well, there’s a X percentage that doesn’t,” you know, they’ll work out what the percentages are, they’ll say “50% probability that they keep the CommBank contract, and therefore we’ll apply that to the earnings forecast and we’ll come out with our number.” But it looks to me like they’re forecasting a high number and if they lose the combat contract, they’ll still get some growth out of their future forecasts.

Cameron  26:35

Right. And shout out to my old friend Gerd Schenkel, who I see was appointed Non-Executive Director of GMA in November 2021.

Tony  26:46

Okay, well give them a call and ask him what’s happening with the RFP.

Cameron  26:49

I was gonna do that. I was gonna see if we can get him on the show to talk about it. Just tell us what’s going on.

Tony  26:54

Yeah, that’d be great. He’ll have to say “no comment, no comment, no comment.”

Cameron  27:02

Sure, he’d be happy to do that. Gerd used to sponsor my podcasts eleven or twelve years ago when he was running – he was one of the founders of something called UBank, one of the first sort of new generation bank things – used to sponsor my booze budget, actually, for my podcasts. Good guy. Nice guy.

Tony  27:25

I know, I know who you’re talking about now. Yeah. Right. Well, shout out to Gerd if he’s listening.

Cameron  27:30

Exactly. Alright. Well, thanks for that breakdown, Tony. Should we get into questions?

Tony  27:35

Absolutely, yeah. 

Cameron  27:37

First one is from good ol’ Dave from Newy: he says, “g’day Cam. Challenger Limited, CGF, in the interest of disclosure, I was a holder, but sold on, on a rule 0.2.” I’m not sure what rule 0.2 is, but okay, “it went up 10% from where I bought it, in which case I was set to sell on breakeven as it pulled back. It lost a couple of percent below that on the open, anyhow, I’m out for the time being. But I get more announcements for CGF then most holding. A lot of these relate to substantial holdings CGF has in other listed stocks, a lot of these are not what you’d call QAV worthy. I did some digging in the annual report to try to work out what percentage of revenue and equity assets is tied up in these holdings, but the thing is a friggin’ doorstop. And presumably CGF has costs associated with managing the holdings’ internal and external retail partners? Not expecting Tony to dissect the annual, but I’d be interested in his general thoughts on how this sort of a setup is different to just directing some dollars to a managed fund. I get the model is partly Berkshire, but you’d back whatever Buffett is spending his float cash on compared to some of the holdings that have popped up for CGF. Not down ramping, just keen to understand the model for a business of this nature. It’s outside my wheelhouse. Thanks, Dave from Newy.” 

Tony  29:04

Yeah, good. Good question, Dave. And I don’t know what rule point two is either. I think what he means is it went up and he sold it when it came back down to breakeven, perhaps. But anyway. Look, I actually really liked Challenger. I’ve owned it in the past and it’s an interesting business model. If I go back to when it first started, I don’t know, fifteen-twenty years ago, maybe a little bit longer, what the founder set out to do was to invest in real estate and then provide the people who gave him the money to invest with a guaranteed return every year. So, that’s what is called an annuity and that’s what challenger does in the main part. And that was successful at doing that for a while. There was a retail downturn during the GFC and there were lots of questions about whether the model was broken and all that kind of stuff. And it’s also a very highly regulated business for that reason, because it involves lots of forecasting on returns for their investments and, and then whether they can meet their obligations to pay the annuities. So, for example, my father had an annuity and basically when he retired, he went to Challenger and paid them whatever it was, let’s say it was a hundred grand, and they guaranteed to pay him seven grand for the rest of his life. That’s the way the product works. So, there’s a lot of actuarials going on there to decide how long he might live for, and then forecasting and projecting as to what they can get as a return from taking his hundred grand and investing it in either real estate, and more recently in the share market, and that’s what Dave’s talking about. So, along the way, I think it was post GFC, because of ruptures in, in the real estate market, they started to diversify a bit and started to invest in the share market. They knew it was going to be more risky than property, but they also expected to get higher returns. And so, they were doing that as a way to try and beef up their – to bolster their investments so that they could guarantee the annuities, but also, I guess, to make a bigger margin. If you’re still offering, you know, whatever they’re offering now, I don’t know what they’re offering now, 6% maybe, to people guaranteed for life, then you’ll get, part of that will be higher from the share market if you’re investing wisely compared to the property market, but the property market is usually less risky. So, they’ve been fiddling with the blend now for a while. And that’s, that’s attracted some criticism and made it a little bit controversial. And they also, a couple of years ago, downgraded what they projected that their returns would be from their investment portfolios, which again, made share price slide. But some people are also saying that the projected returns are much more realistic now. So, it’s not a funds management company, Dave, it’s more like a twist on banking. So, what they’re doing is taking people’s deposits, investing those, and then managing to get a better return than what they pay back to the customers as an annuity. There’s probably a little bit more risk there because they take the money upfront, and they’ve got to guarantee it for, either for life, or for a period of time. So, sometimes they’ll say the annuity lasts for ten years or twenty years or whatever, and the person taking, the retiree taking out the annuity can decide whether they’re going to live that long, or whether they care and they’re happy to go onto the pension, for example, at the end of that period. But that’s the game they’re in. And I think why I like it is because I’m old enough to have been working corporate back in the 80s, when most of the pension, or most of the superannuation plans, were changed from defined benefit to what they are now, which is basically an investment style account. So, in the past with defined benefit superannuation, if you, when you retired, you basically got a percentage of your finishing salary. And I guess more often than not, it was like the average of the last three years that you work, and you might have gotten as high as 60% or 70% of that salary, so they were very generous. And all the risk was absorbed by the superannuation fund. And much in the same style as Challenger is absorbing risks; they’re saying “I’ve had your, all your money for a long time and I’ve invested it wisely, and it’s grown to a large amount so that I can guarantee your retirement based on your age and based on the last three years of your salary, etc., etc.” Companies moved away from that to make all, to pass all that risk back on to the superannuants themselves. And so, if you’re retiring from a big corporate you get, you’ll get given a lump sum, you can go into a pension phase, I guess, but it largely depends on how you want to invest the money, whether that be with superannuation funds that you trust, like industry funds, for example, or whether you want to do it yourself. So, the risks have gone back on to the person. Someone like my father, who was a, basically a chippy for most of his life, didn’t have the first knowledge of how to invest and I could see that when he finally showed me his, his retirement profile, but an annuity suited him because he had the guarantee of an income even though, you know, he payed his lump sum up front to get guaranteed return. So, challenges in that business. In terms of the split of the managed funds versus the, the other investments, if you look at the front page of Stock Doctor, Dave, you’ll see that the funds management side of Challenger is now 15%. So, it’s by no means the predominant part of Challenger, and I think what’s happened in the last little while is that Challenger, when it started to branch out and invest for itself in the share market, decided that that was also an offering that they could offer to retail investors. And so, they’ve turned what was inhouse investments into also an externally offered investment programme, so, or product. So, I guess if that ever grew to be the dominant part of Challenger, it would change the type of business it is and I would treat it more like a listed investment company or a fund manager and probably take it off the buy list, but for now, it’s not, it’s more in the sort of banking mode of things with a twist that they provide annuity. So, that’s what I know about Challenger. It can be controversial because, you know, if the share market turns down, all the analysts will focus on, on management and asking if they can still provide the annuities. That can be good or bad. But over the timeframe it’s been operating, which was I think about fifteen/twenty, maybe even twenty-five years, as far as I know, it’s never missed any annuity payments, so, it’s been well managed. And I would expect that to continue.

Cameron  35:14

Fascinating: a bank with a twist, banking with a twist. I like that. You should be in marketing, Tony.

Tony  35:20

It’s also, I mean something that I was thinking about, in terms of if we ever have a fund offering for people, that if we can get 19.5% in the market, how much do we have to give back to someone who wants a guaranteed return for the rest of their life? You know, generally people these days are looking for about 7%. If you can guarantee that for them, and the rest is not just profit for us, but a buffer and in case we have a market downturn for a couple of years, it’s actually not a bad business model.

Cameron  35:49

You could guarantee them 8%, but if we have a good year, give them 10% and say “here, Merry Christmas. We had a good year.”

Tony  35:59

You could. Absolutely.

Cameron  36:02

Alright, thanks for that question, Dave. Ashish asks, “Tony mentioned he sold FMG for $20.50. If we assume you bought the share for $10.50 more than a year ago, his capital gains tax would be $5 per share. If he’s on the 30% tax rate out of the capital gains, he has to pay $1.50. So, if you’re planning to get back in you have to buy the share at $19 just to break even. If we consider brokerage the get back in price would be even lower. Hence, if we know that if the company is fundamentally sound, can we just keep the stock there and ignore the short-term volatility?” 

Tony  36:40

Yeah, good question. And I think that in all those numbers, Ashish has missed a couple of important points. One is that who knew that Fortescue Metals Group would come back from where it did? Who knew what the bottom was going to be, whether it was going to be $15, or $14, or $10? And so, the three-point trend sell line is all about an insurance policy. I want to prevent big downturns like that, on the, I guess, the likelihood that they may stay low for a long time. And so, all of Ashish’s numbers make sense if I bought back into Fortescue Metals Group now, it’s probably a breakeven game for me, except for the fact that I still had all my profits to invest in the last two or three months that I wouldn’t have had if I’d stayed in Fortescue Metals long term. As it turns out, the last two or three months haven’t been a great time in the market, so it probably is a zero sum game if I bought back into Fortescue now, ut, but that’s the thinking behind it. We take a profit, we can invest it somewhere else and make money out of that ,and if the original investment then comes back to be a buy, we can buy it. More often than not, not always, but more often than not, that’s for the cheaper price than what we sold out at. Fortescue Metals Group has just gone up quite quickly, and to be honest, I’m scratching my head on all these iron ore stock, because Fortescue I think got to about $25 a share at its height, and the iron ore price around that time was in the $220 range per tonne. And I think when I sold Fortescue Metals Group, the price was about $180 per tonne, and was dropping fast, and iron ore price I think dropped down to in the $90 range. And Fortescue Metals Group dropped back to about $14.50, and now the iron ore prices back up to, I dunno, its around $115 to $120 a tonne. But the share price has almost regained all its ground. So, something isn’t gelling for me in that, in that maths equation. Fortescue Metals is back on the buy list, and so are all the iron ore stocks, so I’d be buying it if it was the next stock on my list. I’m not saying don’t buy it. But I just don’t understand how something that was, you know, had an underlying commodity price of $180 is now worth almost the same as it was when the underlying commodity prices was $115. That doesn’t make sense to me. But anyway, people are I guess forecasting what will happen with iron ore, which, which I don’t like doing. So yeah. So, Ashish is right with his sums. If I do buy back into it, it’s probably been a zero sum for the last two or three months, but I’ve been safe. And the three-point trend sell line is always about insurance, and it will pay off more times than it won’t, but sometimes it won’t. But I’m not worried if it doesn’t, because I’ve still got my profits, and I can put them to work somewhere else. Even if the share price goes on to be above what I sold it for, I’m not worried. I stayed out of a stock that had a high-risk profile, and I didn’t want to be in.

Cameron  39:27

Yeah, and the thing that jumps out at me here is that Fortescue in this particular instance has rebounded rather quickly, but it could have gone down to $10 and stayed down there for two years. And if you just held and didn’t sell, then your money’s not doing anything for two years, so the other principle is to keep your money working for you. We don’t know what’s going to happen with Fortescue, right, or the iron ore price, but if something falls like that, yeah, I mean, in retrospect, you can go “well, it came back up, we should have just sat on it” and maybe that’s justifiable, but it could have gone down and just stayed down. Who knows? We don’t know what’s going to happen with it, so we’re cutting our losses or not our losses in this case, taking our profit and putting that money to work, hopefully, making it work well for us while we, while time moves on and Fortescue can go up, can go down, can go sideways, doesn’t really matter to us then what happens once we’ve got out. I wanted to ask you about Fortescue, though, because Elizabeth Gaines has just somewhat surprisingly announced that she’s stepping down as CEO and it was sort of positioned in the media as this is part of their pivot to green energy, getting out of iron ore. Are they still an iron ore company in that case? I mean, obviously, that’s still their revenue right now. But how do you think about a stock like FMG when they make those sorts of announcements? 

Tony  40:52

Yeah, I did. I was cautious, because it was a surprise announcement when a CEO changes roles, I would have preferred to have some signaling beforehand. But, I think the way it’s been handled is this was the signal that it’s been well managed. They’ll, they’ll replace her, she’s going to head – still work at Fortescue – and head up the new division. Yeah, look, I thought about it being a bad news sell but I don’t think it, I mean given what the share price has done, I don’t think we could call it that. She’s been there for three years, which is a bit on the short side, but she’s not leaving the company, so that that makes sense. Initially, I thought, perhaps a bad news sell, but I think it’s all kind of working out for them. I still think of Fortescue Metals Group as an iron ore company, all of the green hydrogen and whatever else they’re getting into is still pretty much blue-sky. It’s, it’s a small part of their portfolio mix at the moment.

Cameron  41:40

But when they say, well, the CEO is stepping down to focus on other stuff, when iron ore is still their main bread and butter, you would think you’d keep the CEO doing that, doing what she’s doing, and have somebody else do the blue-sky stuff? But, what the hell do I know? I trust that Twiggy knows what he’s doing here.  

Tony  41:59

Yeah, look, I tend to agree with you. But, I think you’re right. Twiggy does know what he’s doing, everyone seems fairly comfortable with the move. I think, from memory, Elizabeth Gaines came from outside the industry, so I think she’s had a pretty tough and steep learning curve and maybe she’s had enough and maybe they’ve negotiated this and it’s been going on behind the scenes. She hasn’t, like, spat it and resigned. And typically, the reason why I don’t like seeing a CEO do that is because, a bit like with the Magellan CEO, he just leaves and you don’t know why, and you’re supposed to assume, that you’re being told by the, by the people who are still there that it’s business as usual. But something’s gone on. In this case, I suspect she’s just tired of running an iron ore company. It’s been very demanding for her and she wants to focus on the new stuff, and they’re going to manage their way through that.

Cameron  42:47

Think she was the CEO of Helloworld prior to joining FMG, from memory. I think they’re like a travel company.

Tony  42:54

Yeah, so she’s come from outside the industry. I think she’s a very smart woman, I think she was a McKinsey graduate or something like that. But, tough world, being an iron ore seller, particularly to the Chinese in this market, and it’s obviously had its ups and downs. I totally respect what Ashish was saying, particularly in this case, but my question to Ashish is: if you’re not going to sell when the underlying commodity drops, or if you’re not going to sell when the share price goes through its three-point trendline when do you sell? So, it’s, it’s fine if you have a better way of, of selling something, but to buy something as if it’s a Forever stock, I think is, is not going to work, particularly in the last twenty years in the share market. May have worked a hundred years ago.

Cameron  43:36

I think that’s a question people who bought Afterpay six months ago are asking themselves; when should I sell? The people who bought it back in late August at $136 when it was going to the moon! They’re gonna go to the US! They’re gonna be acquired by Square. It’s going to the moon! And now they’re at what, 90… $82. $82. Yikes.

Tony  44:03

Yep. And the US governments just launched a probe into buy-now, pay-later companies. 

Cameron  44:07

Yeah, like, don’t get me wrong, if you bought it back in December 19, at $8.90 – no hold on, that was March 2020, sorry. COVID cough, right, $8.90. You’ve done very well, if you got out at the right time – even if you got out now you’ve done very, very well. But I worry for the people that were buying into it at $153 in February this year, or $133 or whatever, the people who bought it at $153, $154 it peaked out in February. It’s almost half that now. So, it’s yeah, there you go. What did you used, what do you always say?  “No, no tree. No tree grows to the sky?” 

Tony  44:50

Correct, yeah. High flying, high PE stocks, they, they can be very volatile. Yeah. And the answer to the question of when should I have sold? When someone asked, “when should I have sold?” The answer is inevitably last week. The fact that you’ve just stumbled across that as a question means that you should have sold before.

Cameron  45:09

Yeah. All right. Wade says “Wow, MFG. 33% down today,” I think this was probably yesterday, “and counting on the back of continued negative news, in Tony’s corporate investing experience, what would be management’s mindset/targets at this point?” You know, I’d open a window at the top of the building and jump out, I think. “Direction change of the business or just trying to stabilise the current situation and rebuild a stable base into the future? Any commentary appreciated? I’m just glad I don’t hold.”

Tony  45:44

Yes, I agree, Wade. I’m glad I don’t hold it too. I think it was on the buy list a couple of years ago, was certainly on my radar; I think I may have owned it maybe four or five years ago. So, it does have periods where it comes down in price and then we can buy it and it goes up, although currently even though the price is I think around $20 or sub $20, it’s, it’s still only got a QAV score of about 0.04 at the moment. So, it may come on to our buy list, but it’s not there at the moment. And look, again, this is like Afterpay. MFG, at its height, February 2020, so just before the COVID crash was at a high of $72. And now it’s $20 today. So, back then in February 2020, the PE was 30 times and now it’s 8.9. So, yeah, it’s fallen a long way. But you know, my question is, why would you pay 30 times income for, or earnings for a fund management company? That’s a lot of faith on the stock picker, and as it’s turned out, the stock picker has been distract. There’s been plenty of stuff spoken about and written about, about Hamish Douglass’s divorce and the fact he took three months off and went and sat on Kerry – James Packer’s yacht in the Mediterranean and all this kind of stuff. The CEOs resigned unexpectedly, and there’s been no reason given. So, there’s obviously a lot of internal ruptures. The two things I would focus on, maybe three things I would focus on with Magellan is, first of all, Hamish Douglas does have a good track record but he did go to cash last year, thinking that the market was overvalued. And that just hasn’t worked out for him because the market, particularly overseas, which is where he focuses most of his fund’s management, and in the US, is, has gone up quite high this year. So, he’s underperformed his benchmark in the short term, but in the long term he’s done okay and that’s what he will be focusing on. He’ll be saying, “forgive me my mistakes this year, but look at what I’ve done over the last ten or so years, fifteen years,” and people will. Magellan is incredibly embedded in the financial advisors network and with the institutions in Australia and somewhat overseas. There was a big mandate, their biggest mandate was lost a day or two ago, the St. James institution in the UK took away about 13% of their funds under management, so that was a big hit to them. But look, I mean, what’s management, thinking Hamish Douglas will probably be very focused now on going around and talking to all the people who recommend their funds, saying, “hey, I’ll get through this. We’re thinking about redeploying our cash.” He also had some problems in that he invested in China at the height of the boom there. And if you recall, in the last about twelve months ago, in the last twelve months, the Chinese government has cracked down on people like Jack Ma for, I guess, being too rich and having too much influence and even being a bit critical. So, stocks like Alibaba and Tencent have underperformed in the last six-twelve months, and Hamish Douglas was a bull for those and a booster for those, so that’s hurt him. So, he still has all the funds under management, he’s still smart, very experienced operator, and eventually he’ll work his way through all his personal problems and his investment problems. And they do have such a great network of people recommending him that even if he loses some of it, they’ll pull through. So, that’s what they’ll be thinking at the moment is they’ll be probably going around to some of the other key personnel saying, “look, if you stay on that and you don’t jump ship, we’ll give you some retention bonuses” and things like that. And he’ll be clearing the decks and clearing his personal life to focus on the business again. That’s what he’ll be thinking.

Cameron  49:27

Jolly good. Well hold the best to everyone there. Tim asked a question about GMA but I think you’ve pretty much answered that. This is about the CBA GMA contract. 

Tony  49:39


Cameron  49:39

Got a late question from Jamie aka P Head, which I know I haven’t given you to prep for but I don’t think you need prep. He says “could Tony perhaps elaborate on his experience with his hundred times return on Monadelphous, how he managed to stay the course, his decision-making process, how he took profits, etc. The impact to his portfolio, the redeployment post sale of the large amount of funds, etc., etc. This is a once or twice in a lifetime type return for an investor, a Holy Grail, so a deeper dive would be great listening and learning.” You could save that for a future episode if you want or you can give us a high ball.

Tony  50:16

Yeah, I can give you, I mean, yeah, off the cuff. It wasn’t a hundred times, by the way, I don’t think. I think it was, was less than that. I bought it for around 80 cents, and I sold it for about $21. So, it was more like a 20% plus type return.

Cameron  50:33

Think you mean twenty times, not percent? 

Cameron  50:35

Sorry. Twenty times, yes. So, whatever that is 2,000%, I guess. I bought it in 1998 or thereabouts, and there was a thing called the Asian Financial Crisis back then, when a lot of emerging economies across Asia were defaulting on their bonds because they’d invested heavily and couldn’t afford the debt repayments, and so the market started to crash because of the flow through onto the banking system. Because of that, there was a bit of a decline in the stock market. It wasn’t like a GFC event, but it was a, probably a 20% decline, maybe a little bit more. And certainly, when that happens, like, the market just does what it is doing now; it goes sideways, like it drops and then it goes sideways as people try and work out what’s happened, who’s affected, all those kinds of things. And I took the opportunity then to buy Monadelphous which was cheap on all its metrics. I didn’t have a formal checklist in place, but certainly things like low PE, good yield, strong cash flow, owner-founder, all those things were in place. And it was a buy. I held it, I mean, it just kept going up for a long time, and eventually a guy, it was founded by a guy called I think John Rubino from memory, an Italian – and you’ll like this Cam, I remember at one stage when Monadelphous went up dramatically, he became, went from being CEO to Executive Chairman and Alex Hay told me that John Rubino took the opportunity to go back to Italy for his daughter’s wedding and hosted it in the villa where they filmed The Godfather scene when Michael goes back and gets married in Sicily.

Cameron  52:11

No. Oh, that’s badass. 

Tony  52:17


Cameron  52:19

Hopefully, no, no, early 50s Chevy’s were harmed in the making of that wedding – didn’t blow up.

Tony  52:28

No. So John Rubino was then moved to become the Chairman and a guy called Rob Velletri I think from memory took over as CEO. I used to go along every six months to Baillieu’s and meet with them and get an update, and then it was all going well. The thing I liked about the business was they were a mining contractor, but they had very little staff. They used to put their staff on a back to back contract. So, if they, if they won a three-year contract to start up a mine for BHP, all the staff who worked on that were on a three-year contract. So, if there was ever a downturn, they didn’t have to worry about cutting staff or redeploying them. And the downturn of course happened when the GFC struck. And I remember going along to my, the final briefing I went along to, and used to just be about half a dozen of us sitting around the table, and in the end, there was a room full, a boardroom full of people – must have been fifty to a hundred people there wanting to know what was going on. And they, and Rob Velletri just stuck to the same story; “look we have back to back contracts. were still profitable. If the GFC turns out to be a big hit to the mining industry, we will lose revenue, but we won’t lose profit. So, we won’t have the cost of, of making people redundant which will hit profit.” So, it did, it did fall away. I think it got to a high of about $24, the GFC hit, it oscillated around that sort of low twenties mark and I decided to sell. It was probably the first stock I sold on the three-point trendline, I was thinking about what to do, so it must have been towards the end of the GFC when I was trying to work out how to improve my investing based on when to sell. And it certainly had retraced back to, you know, that sort of low $20 mark. I think I got out at about $21/$22. And it’s, I don’t think it’s ever touched up against that price again, and certainly on our current checklists you wouldn’t buy Monadelphous. 

Cameron  54:23

Yeah, I did look at it before, like it did come up to about $19 again in early 2019, but it’s currently trading south of $10. About $9.50.

Tony  54:34

Yeah, did get back up to $18.70/$19 back in 2019, you’re right, but I think that would have been, wouldn’t have hit our buy list. I’d say it would have been trading on a high PE or something like that, and in fact at the moment if I have a look at Monadelphous its QAV score is negative in fact, it’s that bad. So, it’s quality score is negative, which means that, you know, something’s got a -1 in there which is health, its health is declining in Stock Doctor. And it’s, it’s a negative growth forecast, yeah.

Cameron  55:07

Do you remember what you did in terms of redeploying the funds when you got out?

Tony  55:12

I don’t, exactly, but that would have been close – I probably said on cash for a while, because like I said, it was towards the end of the GFC. I’m not sure of the exact timing of this, Cam, but it, coming out of the GFC it got to be March 2009 and we started getting the company reports from February or from sorry, the end of December, coming out in February-March of 2009, and everything was just looking like it was great value, it was a good time to buy. And I finished up not only redeploying that cash but also borrowing money against my properties to reinvest and like that all, all those investments made at that time went up by three, probably an average of 300%. So, it was a great time to be buying in the market, the companies that had had problems in the GFC all took the opportunity to raise money and bolster their balance sheets. They, they trimmed their dividends a little bit. So, they were far more profitable coming out of the GFC than they were going in, and far stronger in terms of their balance sheets as well. So, it was a good time to invest.

Cameron  56:16

Well Monadelphous was only trading at about 10 bucks at the end of March 2009. So, I’m not sure about your timing there. If you sold it around $20, it must have been around early 2011, according to the chart, I’m looking at January 2011, it hit $20 for the first time. 

Tony  56:33

Could be, Cam, I could have that timing wrong, sorry. 

Cameron  56:36

As I said, this came in late, just before we recorded. I didn’t give Tony any warning or prep time for this to go back through his records. But anyway, the point is that you held the course, sold it when it started to drop the beginnings of the three-point trendline sell indicator, and happy days. 

Tony  56:53

Yeah, so that, actually that would have been, you’re right, I’m just looking at the graph, it would have been around 2011. So, scratch that about reinvesting it after the GFC. And it would have been a, most likely, an early three-point sell, which I started to look at after the GFC, for sure. Because you can see around that time it does take a big step down.

Cameron  57:13

Yeah. Falls down to $7 by, I don’t know, what’s this? 2015?

Tony  57:18

Could even have been later, Cam, I’d have to check my records. It could even have been in 2013/2014 as well when it dropped off a lot, too.

Cameron  57:25

May we all get a Monadelphous at least once in our investing careers.

Tony  57:31

I’m sure we will. Yeah, there’s, there’s been other ones which have had good runs. I mean, the original, my original investment in Fortescue Metals Group, I think I bought it for about a buck and sold it for like six. So that was a good run. I don’t know if I’ve ever had another twenty bagger like that, but certainly have been some great, great quick returns. I remember Jubilee Mines went up 400% in a year, and I bought it during the last nickel boom, coincidentally. There was a company called Snack Foods Australia, which I bought and it went up 400% In the year as well, and it was then bought out by one of the big, like Nabisco or something like that, one of the big biscuit companies or FMCG companies. So, yeah, it’s, it’s not unheard of to get some really good returns along the way. 

Cameron  58:15

Good stuff. Well, that’s all the questions for this week. I’ve got some cool stuff to share with you though, in after hours, Tony.

Tony  58:24

Yeah, well, I’ve got nothing. My after-hours has been playing golf and catching up with my friends. 

Cameron  58:30


Tony  58:31

Yes, drinking. Exactly. 

Cameron  58:32

Well, I started listening to Billy Connolly’s – the audio, the Audible audiobook version of Billy Connolly’s new autobiography Windswept and Interesting, which he narrates, and it’s just, right straight out of the gate, it’s just hilarious. Fantastic. And of course, as I think I’ve told you before, my dad was from Glasgow, you know, very similar accent to Billy Connolly. So, its kind of, and Billy’s talking about growing up, he would’ve been, he’d be about the same age as my dad. So, you know, just all those stories about growing up in Glasgow in the 50s, early 50s, late 40s early 50s, just is fun, but it’s hilarious. Highly recommended if you’re a Billy Connolly fan, even with his advanced Parkinson’s I think it is he’s done a great job of narrating this, he’s very funny. Speaking of very funny, Louis CK dropped a new stand up special this week on his website, which I, Chrissy and I watched last night. Had got himself into a lot of hot water a few years ago, Louis CK. I think it was a little bit overblown, personally. But very, very funny, his new stand up special. We were huge fans of Louis CK before his fall, and he hasn’t lost it. Probably outside of the Dave Chappelle stand ups that have been happening on Netflix, this is the funniest thing I’ve seen in a long time. He’s just, he’s a master of the craft. I’ve been listening to Robert Forster’s last solo album Inferno a lot, really enjoying that. Some really catchy tracks on that. And I’ve got a food one for you. Truff. Have you heard about Truff? T-R-U-F-F?

Tony  1:00:20

I haven’t, is that a recipe, a book, a style of food. What is it?

Cameron  1:00:24

It is something that Oprah had come out with a while back. Chrissy and I have been into it. It’s a combination like hot sauce and truffle sauce. A single bottle. 

Tony  1:00:37


Cameron  1:00:38

Fantastic. Put it on everything, put it on scrambled eggs. We put it on salmon bagels, we put it on everything. If you like your truffle, if you like your hot sauce, Oprah’s got you covered. It’s expensive as hell, but beautiful bottle – very, very nicely designed. A little bit goes a long way. It’s quite hot. But yeah, if you like those flavour profiles, check it out.

Tony  1:01:05

I do. I’ve had some bad experiences with truffle sauce, though, that I’ve bought. It can be, yeah, very overpoweringly bad sometimes, so it’s gotta get the right mix, I think.

Cameron  1:01:15

Truffle oils? Yes. I’ve gone through a bunch of different brands of truffle oils to find the one that I actually like. But they are, their, quite often they taste a little bit rancid and plasticky and horrible. But this one, well, this is Oprah so you know Oprah is not going to, Oprah’s not going to do you wrong. A million middle-aged white women can testify for that. They all got a car under their seat when they went to see her, so yeah, you can buy it locally, they’ve got an Australian distribution operation. Just look it up: Truff. Order a bottle online, it’ll turn up on your doorstep a couple of days later. Fantastic.

Tony  1:01:52

Well, they should send us a bottle now for plugging it on our show. Come on Oprah.

Cameron  1:01:57

Yeah. That’s what Oprah needs. Oprah needs our help with her branding. Yeah. 

Tony  1:02:02

I just checked under my seat. There’s nothing there, Oprah, come on.

Cameron  1:02:07

I’ll send you some, I’ll send you some and then that’ll be it. That’ll be your gift from Oprah and me. Alright, well you got nothing. That’s what I’ve got. It’s hot in my office. This will be our last formal show, I think, for the year. Next week I think I’ll put out a best of, best of 2021. Assuming when I go to Bundaberg this week, I find time in between laying on the beach. And I guess we’ll be back after that. Which will be probably around about the end of the year or first week of January. I haven’t looked at the calendar, but something like that.

Tony  1:02:42

Yeah, it’ll be second, second or third of Jan, I think probably.

Cameron  1:02:46

I think that’ll be season five, then, crew, we’ll go from season four to season five, I think, for 2022. What do you think?

Tony  1:02:53

Yeah. Good. Makes it sound like we’ve been around for a long time.

Cameron  1:02:57

We have been around for a long time. Don’t you feel it? It’ll be three years in February-March. Not quite five, but yeah,

Tony  1:03:03

I know. It’s gone quick, hasn’t it? 

Cameron  1:03:05

Well, has for me, yeah. I sometimes feel like you’re, you’re a little bit tired of the whole thing, but I’m having fun. I’m learning. 

Tony  1:03:14

No, no, I’m not tired of it. I just get, I just got stretched in a lot of different ways in the last few months,

Cameron  1:03:20

Right. You’re good? You’re in there? Staying the course?

Tony  1:03:23

I’m good. Yep, absolutely. 

Cameron  1:03:25

Just don’t get COVID. 

Tony  1:03:27

No, I know, I’m going to head back to Sydney and hunker down in the penthouse just to try and avoid it for a while until I get a booster shot.

Cameron  1:03:33

Good plan, Stan. All right, well, you take care mate, I’ll talk to you soon. Take care everybody, thanks for all your support this year and the community and the emails and the laughs. Stay safe and good luck with your investing, it’s gonna be a, it’s gonna be a rough period probably for a while here but it’ll, it’ll be fine. Just stick with it. You’ll get there, don’t worry about. Just play the, just play the numbers, don’t think too hard about it.

Tony  1:03:57

Yeah, exactly. The system’s there for the rough times. That’s when it’s most useful.

Cameron  1:04:02

Yeah, love it. Love a little bit of rough. Love it in the rough, that’s what you say when you play golf? You love it in the rough. Get it in the rough, love it in the rough.

Tony  1:04:11

I’ll get some Truff to have with my rough. 

Cameron  1:04:15

Alright, I’ll make it happen. Take care buddy. 

Tony  1:04:17

Alright, bye

Cameron  1:04:21

QAV Podcast is a production of Spacecraft Publishing Proprietary Limited authorised representative of AFSL 520442 AFS 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.