Cameron  00:06

Welcome back to QAV, TK. This is episode 545. This is Tuesday the 15th of November. We’re recording this at 8:40am Brisbane time, 9:40am Cape Schanck time, because we have a special guest we’re going to do an interview with a little bit later on this morning which will come out in an episode in a couple of weeks. That aside, how’s it going down at Cape Schanck, TK?

Tony  00:33

It’s very wet at the moment, Cam, I’m leaving today. Packing up. So, it’s been busy over the last day or so. It’s always a busy time cleaning the place and making sure it’s all ship-shape for the next person — which is usually me. Yeah, that’s how I want people to treat it.

Cameron  00:51

Leaving it ship-shape for future Tony.

Tony  00:53

That’s right. But no, it’s been raining heavily. We had flooding down here on Sunday night/Monday morning.

Cameron  00:59

Wow. That’s no good. So, no golf then? Or do you play anyway? You’d be out there in a boat.

Tony  01:06

No, I actually got to play on Sunday afternoon, which was good, but very windy. And then the storm blew in about midnight. That was my last round. I could have gone out last night, but I figured I didn’t want to pack wet clubs, so I didn’t do it.

Cameron  01:20

Well, that’s no good, Tony, but you’ll be back down at some stage, I guess? You’ll be back down over Christmas.

Tony  01:27

Yeah, back down in December. I’m only back up in Sydney for a couple of weeks.

Cameron  01:31

Great. How was the Melbourne dinner/drinks night you did last week without me?

Tony  01:38

Oh, not as good as if you were there.

Cameron  01:40

Sure, sure. Had a good time?

Tony  01:42

Yeah, I did. It was great catching up with them. A couple new faces, which was nice, and the old faces which are good, too. A few interesting discussions. There was a request for a QAV fund to be set up, which I thought was interesting. It was actually good, because we sat around the table and talked, and oftentimes at the dinners we sort of break up into little groups, but we stayed as a big group. And someone said, you know, “what were your thoughts of when you started QAV?” And I said, “well, you know, I said to Cam, ‘why would people keep subscribing once they’ve got a grip on how to do a download and manage their own investments?’ I’m surprised that people still are three and a bit years later.” And one of the guys piped up and said, “yeah, but it’s a bit like having a personal trainer.” That’s why they subscribe. It’s like a personal financial trainer. So, you get to go through all the market cycles and stay part of the group, which I thought was a good analogy.

Cameron  02:34

Except we don’t give personal advice, let’s just be very clear about that in case ASIC are listening.

Tony  02:40

Yeah, it’s a general financial advisor.

Cameron  02:42

So, you’re like a personal trainer that’s not so personal. More like a TikTok personal trainer that’s just saying “sit ups are good for your abs, just do lots of sit ups.” And you go “sit ups? Right. Yeah. Okay, good. Thanks for the reminder.”

Tony  02:53

I guess so, yeah. Pulled porks were popular, especially the one last week on Dalrymple Bay. The feedback was they found a lot interesting in that, so that was good. There was a bit of a discussion on superannuation because the government’s starting its “conversation”, which seems to be the way they start all their agendas these days, on whether the tax benefits on large Super balances should be withdrawn. And so, they’re discussing the purpose of Super. My thoughts on that were it’s fine to take away the generous tax benefits for large Super balances, I don’t have a problem with that per se, but you’ve got to be able to do it in such a way that the people who set up their finances have a chance to either pull them out of Super and put them to use some in some other means before the changes take place, or you grandfather it. Because one of the problems with tinkering with Super is every time you change the rules, it gives people less and less motivation to lock up their money for the rest of their life in Super because the rules are going to change. So, I think it’s fine to tinker with it, no system is perfect, but I think you’ve got to think about the people who structured their lives in such a way that they’ve locked up all this money in Super and now it’s gonna get taxed when they didn’t think it would be

Cameron  04:07

Yeah, true. I agree with all of that. Good, I’m glad the event went well, and thanks again to Andy for making his place available for us down there. Makes life a lot easier and it’s a better environment, I think, by the sounds of it for a social get together.

Tony  04:27

He was a great host; it was really good.

Cameron  04:29

All right. Well, there’s some stuff in the news this week that I wanted to get your thoughts on, Tony. The first one I have here is from MarketWatch: “Bitcoin owners are belly aching about its plunge, but the digital currencies volatility is no more extreme than that of stocks.” I was like, wow, well Bitcoin is down 65% in the last year, our portfolio’s not down 65%. But I guess maybe there’s an index that you know of that’s down that much? Let’s say a year ago, Bitcoin was trading at about $90,000 — Aussie, that is — now its trading at about $24,000. That’s a 70% decline roughly in a year?

Tony  05:20

Depends which stocks you’re talking about. The NASDAQ’s down quite a bit this year. But yeah, the stocks we invest in don’t tend to be that volatile.

Cameron  05:27

You know what, the NASDAQ a year ago was trading at $70 USD, $70.66. It’s currently trading at $66.40 USD.

Tony  05:38


Cameron  05:40


Tony  05:41

Wouldn’t it be $70,000?

Cameron  05:43

Well, no. $70.66. That’s what it says on NDAQ on my little stock ticker. Anyway, point being that it’s not down that much. It was down in May, it was down at $47, but it’s recovered. So, it’s down about 10%, I’d say, over the course of the year versus Bitcoin, down 70%. Dow Jones over the last year, Dow Jones was $36,100.

Tony  06:09

Sorry, let me stop you. You’re looking at NASDAQ the company.

Cameron  06:12

Yeah, yeah.

Tony  06:13

I’m talking the NASDAQ index.

Cameron  06:15

Doesn’t that track the index?

Tony  06:17

No, I think it’s the company that runs the index. It’s like the ASX company here.

Cameron  06:23

Why do I have that in my stock ticker? How do I get NASDAQ the index in here?

Tony  06:28

I don’t know. But NASDAQ the index a year ago was at $16,000, and now it’s down to $11, 100.

Cameron  06:36

Okay, what’s that?

Tony  06:37

It’s lost $5000, so about 35/40%. So, just down 30% In the last year, sorry.

Cameron  06:46

Right. Well, it’s still not as bad as Bitcoin. Dow Jones was at $36,000 a year ago, now it’s $33,000. So, it’s down about 10%.

Tony  06:56

Did you see the front page of the Fin Review today? There’s another crypto… What do you call them? Coinbase or exchange? Has folded in in Singapore.

Cameron  07:06

No. I didn’t see that. Yeah, right. Well, the thing that got my attention about this article by a guy called Mark Holbert in Market Watch, the subheading, the subtitle says, “Bitcoin is currently trading at 33% discount to fair value.” I was like, whoa, really? There’s a fair value for Bitcoin? How?  Tell me more, tell me more. The article says, “some Bitcoin owners are complaining about the cruel and unfair twists of fate that have led the cryptocurrency to plunge in recent days. In a five-day period from last weekend to its Wednesday low, Bitcoin fell nearly 30%. That came on top of the huge loss it had suffered in the previous year.” And then it goes on, “…but as big as those losses have been, Bitcoin enthusiasts need to stop their belly aching. They say they want Bitcoin along with other cryptocurrencies to mature into a full-fledged asset class as opposed to a basic currency, but if so, they must accept the inevitability that it will trade well above or below fair value. Wide as Bitcoins deviations have been, they’ve been no more extreme than those of the S&P 500 SPX or gold GC00.” Well, as we’ve just seen, they’re a bit bigger than the NASDAQ and Dow Jones. But to continue…

Tony  08:25

I think what they’re saying is in any particular period, you can compare it. So, like the mark market crash of 1930 would have been a huge drop in the Dow.

Cameron  08:33

Right. “To reach those conclusions, I relied on the only Bitcoin valuation model of which I’m aware,” I was like, oh, yes, that sounds interesting. Please tell me.

Tony  08:43

An IV for Bitcoin.

Cameron  08:44

Yeah, because that’s what we’ve been asking people for nearly four years we’ve been doing this show, whenever there’s a Bitcoin advocate talking to us. We’re like, “tell us how you value a single coin.” And then it’s like, get ready for an hour of rambling, usually, with lots of words like “storer of value” and like, really, what value is it storing?

Tony  09:08

Who does the mediation distributed finances?

Cameron  09:10

Yeah, and then something about the Reserve Bank and the future of currency. “To reach those conclusions, I rely on the only Bitcoin valuation model which bases bitcoins fair value on something called Metcalfe’s Law, a formalisation of what’s known as a network effect. This effect exists when the value of a network grows along with the number of users. The Metcalfe’s Law version holds that this value is proportional to the square of the number of users. Claude Erb, a former commodities Portfolio Manager at TCW Group, is the analyst who has applied Metcalfe’s law to Bitcoin. He assumes that every Bitcoin that has been mined represents one user in the network. The accompanying chart below plots Bitcoin’s actual price since 2010 alongside the estimate of Erbs model,” and he says, “it’s a remarkably close fit” and it is. He says, “currently the model calculates Bitcoin’s fair value to be around $26,100, significantly higher than its current price in the mid $17,000s.” So, I’m not sure I’m buying this, Tony. I remember the good old dotcom days in the 90s when everything was valued based on Metcalfe’s Law. It didn’t work out really well in the 90s.

Tony  10:23

We’re worth millions, Cam, if you square the number of subscribers we have.

Cameron  10:27

Well, I think you’re already worth millions, Tony. If you’re going to share it, then we’re both worth millions, true. I’m not sure I’m gonna try and sell that. Well, maybe we should just IPO QAV and say, “look, based on Metcalfe’s law…”

Tony  10:40

So, which judge hands out these laws?

Cameron  10:45

The other way of interpreting this, call me crazy, call me stupid, is that the more people mining coins, the more people buying coins, the more the value is going to go up. That sort of makes sense. So, the price to people, not the value, the price is going to go up, the more people that are competing to buy a limited number of coins. What I don’t work out with this graph that he’s done, how do you apply the value of a coin? Is it the entire value of all bitcoins traded divided by the number of coins mined, and therefore that’s the value of a coin? That’s the price of a coin, but how do you determine the value? We always say, I don’t know who we quote, is it Hue or one of these guys, or Montgomery, maybe: there’s a big difference between value and price. Value and price are two different things. I think it’s a Roger Montgomery quote.

Tony  11:37

The quote comes from Benjamin Graham, and its “price is what you pay, and value is what you get.”

Cameron  11:42

What you get, yeah. So, I understand this model is demonstrating a relationship between the amount of coins mined and the price of Bitcoin, but I’m not sure how you translate that into the value. I saw Chris, a friend of mine, ex-Uber exec, posted on Facebook yesterday. He’s been a big Bitcoin crypto advocate for years, and he said something about, you know, “you’ve got to understand that it’s about stored value.” And I’m like, really? Like where is the value stored? Like, if I get a Bitcoin and I crack it open, is there something of value or gold inside there or something? Or, you know, even some food, something I can eat? Like, I don’t get it. I honestly don’t get where the value is being stored in this. Do you have a better understanding? You’re way smarter than I am. Can you work this out?

Tony  12:35

I’m not sure about that. No, and I thought Bitcoin halved earlier this year. Don’t they, every couple of years, halve the number of Bitcoins in circulation?

Cameron  12:44

Yeah, they do.

Tony  12:46

So, does the value halve? The value goes up when that happens. How can there be a link between the number of Bitcoins and the value?

Cameron  12:54

I don’t know, its Bitcoin maths, Tony.

Tony  12:59

I’m not an expert on Metcalfe’s Law. I mean, I have heard of the Network Effect, and it does make sense to me. I’m not sure it’s a law of physics, but maybe there is someone in social sciences who can tell us that if you have enough people sitting in a circle, and they’re each paying x person a dollar, you can put a value on the circle. But it doesn’t really obey the laws of physics, I don’t think, or valuation, really.

Cameron  13:23

Well, I couldn’t make any sense of it. Speaking of things I can’t make sense of: Twitter. I get to laugh at all the people that say, “Twitter’s now a dumpster fire since Elon Musk bought it.” I’m like, really? Have you been on Twitter in the last ten years?

Tony  13:37

I stopped using it a long time ago.

Cameron  13:38

Yeah, I was one of the early adopters of Twitter back in 2006/2007 when it came out, and I was very active on it for a couple of years. Did you ever see the thing I tried to get off the ground, “The Twitteries.” The Twitter short stories.

Tony  13:54


Cameron  13:55

Very early days of Twitter, I tried to get a new form of literature where it would be written tweet by tweet by a group of people. So, a group of people would sign up on a forum that I had called Twitteries: Twitter short stories, and, you know, I would write the first line and then the next person in line had to write the next line, and then the next person had to write the next line. I was trying to see what kind of stories would emerge if people were limited to a hundred and sixty characters or whatever it was at the time, hundred and eighty characters, that you had to write a line of the story. But what I found was, you know, the first twenty people would take it seriously and something really interesting would be starting to emerge and then the inevitable person would be like, “and then somebody came along with an atom bomb and just blew them all up. The end.” There was always one that had to come in and just…

Tony  14:43

Dumpster fire.

Cameron  14:43

Yeah. But I gave up on Twitter a long time ago. It’s a dumpster fire. I don’t know what you’d call what Elon Musk is doing with it, but it’s so much fun to watch. As I’m sure everyone has heard, he came up with this new verification system. Verification, I don’t know how much you’ve paid attention to this, but for the younger generation — like Hunter and Taylor’s generation — verification is a big deal. Taylor’s jumped through so many hoops in the last year or two to try and get himself verified, and all of his talent that he manages verified on Instagram and Snapchat, and Twitter and Facebook and all this kind of stuff. And I’m always like, “who cares?” He goes, “when you’re verified that’s like goals. Then you can,” as the kids say, “slide into celebrities DMs.” And I’m like, “really? That sounds horrible.” So, anyway, get old Elon Musk has changed the rules of how to get verified. It’s costing $8. Subsequently, as everyone’s heard, a whole bunch of fake accounts were set up and got verified and have just been creating havoc out there in the streets. There was a fake account set up for Eli Lilly, big pharmaceutical company in the US, and the fake account said they were going to start giving out insulin for free. Eli Lilly’s share price crashed when this came out, even though they put out a subsequent official tweet saying, “don’t believe those guys, that’s a fake account.” And then I think the fake account said “no, you’re the fake account. We’re the real account.” It did recover a bit, but then it declined again. So, you know, before this happened, it was trading at $368 on the New York Stock Exchange, USD. Its currently at $356. It dropped down to $346 and it’s edged up a bit, but it’s still way below where it was. Billions of dollars wiped off their market cap because of fake tweets from fake accounts. As an investor, Tony, how would you feel about that if you were heavily invested in Eli Lilly?

Cameron  14:44

Yeah, not great. I imagine the class lawyers in the US are having a look at this and will be suing Twitter. It just reinforces my opinion of Elon Musk that he’s the proto-typical Bond villain. And I gotta say, the only dumpster fire going on is with the $44 billion he raised to buy Twitter, I can’t see it surviving. When things like this are allowed to go on when it’s not raising any money…. From the accounts you read, Twitter’s only revenue is from advertising at the moment, and big companies like Eli Lilly aren’t going to advertise on Twitter going forward and anyone who’s seen this won’t advertise on Twitter. So, good luck to Elon.

Tony  16:50

Or maybe he’s a genius. Maybe they need to advertise now to tell everybody not to believe the fake tweets, the fake tweets that say they’re giving insulin away for free. Maybe, you know, this is a cunning 5D chess strategy that he’s done here.

Tony  17:49

It could be, but wouldn’t you make the verification cost like $80,000 a month rather than $8 so only Eli Lilly can afford to say they’re Eli Lilly? At eight bucks a month, anyone can afford to be verified.

Cameron  18:01

Yeah, well, people are still bitching about it. I set up a Tony Kynaston account and got that verified, so just be careful.

Tony  18:11

Well, someone’s taken my account. I’m now, I think, TKynaston1 or something on Twitter.

Cameron  18:16

Oh, really?

Tony  18:17

Yeah. I tried to log in when QAV started, and I lost my account because I hadn’t used it in a long time. Someone’s taken it.

Cameron  18:25

Someone had taken over TKyno. Are they active? Are they tweeting as you?

Tony  18:29

No, it just went. I don’t know what’s happened to it.

Cameron  18:32

Right, just a squatter waiting for someone to come and pay them money to get it. Speaking of dumpster fires; I remember reading in the Financial Review a couple of weeks ago, October 28, 2022, Financial Review magazine, on the weekend. “Can this man solve Crypto’s $2 trillion image problem. Sam Bankman-Fried to spend US $1 billion on shoring up crypto businesses, and yet he’s still not convinced the industry has proved itself. Depending on how you define young Sam Bankman-Fried as the world’s richest young person, the financial markets maven owns a large personal stake in FTX, a cryptocurrency exchange he co-founded in 2019, and which has become the world’s third largest. His net worth is estimated by Bloomberg at US $15 billion, although it had been us $25 billion before this year’s meltdown in crypto markets.” He’s thirty. There are a lot of associations with him being like Warren Buffett because he doesn’t like to splash his wealth around. And maybe he should have splashed it around while he still had it, is what I’m saying. You know, nice sounding guy. It says “he speaks publicly about living modestly and the importance of giving. He’s possibly the most prominent follower of a new modern philosophy called Effective Altruism, which studies how to donate money while maximising its impact, while also giving young people a set of compelling reasons to earn as much wealth as they can.” So, that was October 28th that he was going to save crypto. November 14th, 2022 in the financial review: “FTX collapse puts US auditors in the spotlight. The collapse of FTX has thrown a spotlight on the two US accounting firms that the crypto currency exchange said it used to audit its books.” Yeah, so FTX, the company that was going to save crypto, two weeks later is now in bankruptcy proceedings or liquidation or something. His trading firm Alameda Research also collapsed. The collapse of crypto all over the place.

Tony  20:36

Yeah, there’s a couple of interesting things about that. He was on the front cover of Fortune a couple of weeks ago, and the headline was “is this the next Warren Buffett?” And then he was on the front cover of the AFR weekend as the richest person under thirty, I think it was, in Australia. And within two weeks, he was broke. So, he certainly solved Bitcoins brand problem. We now know what the brand is worth. But two issues here; one is there’s something going on and it hasn’t been uncovered completely yet, but money was syphoned out of the crypto exchange into Alameda Research — or at least that’s the allegation — to prop it up before they both went bankrupt. That’s door number one; door number two is that hackers got involved as it was crumbling, and they syphoned off a large wad of money out of the crypto exchange as well. So, that hastened the downfall and that money’s gone. So, we’ve been saying it for a long time, but just be careful with Bitcoin and crypto. It’s unregulated, and that means that the government is not going to stand up and ensure your deposits and your savings, and you are playing with real cash, and there are real people out there who are trying very hard to take it off you.

Cameron  21:44

Yeah, I’m seeing just constant stories in the ABC these days of people saying they lost their life savings in this crypto scam, that crypto scam, it’s pretty tragic.

Tony  21:56

And there were stories, I remember this time last year, of people selling their house to put it into Bitcoin. I feel sorry for them, too.

Cameron  22:02

Yeah, I knew guys who were trying to convince me it was going to be worth $100,000 or a million dollars a share. It was, you know, never ending. Well, who knows? It may be back, it may recover and go to a million dollars. But I wouldn’t want to be heavily invested in it over the course of the last year, I’ll tell you.

Tony  22:21

Alright, that’s enough of Bitcoin. Let’s move on.

Cameron  22:23

Let’s move on. Light versus club. People have been asking me to explain the difference between QAV Light and QAV Club. So, back earlier in the year, we sort of soft launched/beta launched this thing called QAV Light. A couple of reasons why; over the last few years we’ve had a lot of people email me saying “I love what you guys are doing, love QAV, love the philosophy. Just can’t either afford the time to do the checklist and study it and figure out how to make it work by myself, too busy, or just can’t figure it out, not smart enough.” Or “just can’t afford a QAV Club subscription and a Stock Doctor subscription,” and all that kind of stuff. Which is fine. QAV Club was designed for a particular kind of investor, so it wasn’t designed for everybody. But we, you know, we want to help people where we can. So, we launched a lower cost, lower effort product just to test to see how it goes, partly based on chats that we had with people like Lee. He said there’d be an opportunity in the marketplace for something like that. So basically, the deal with Light is people pay $29 a month plus GST, they get a couple of free stock tips from me every Monday. When we do the buy list, I filter it and send out a couple of stock tips, which I then track in a portfolio. People can buy those stocks if it meets their criteria in terms of their average daily trade requirements or not, or just pass on it, it’s up to them how they run it. And then I track those stocks according to our usual sell triggers, and if they become a sell, I will sell them out of the portfolios that we’re running and I email the Light subscribers and say, “hey, we just sold this stock and that stock and we’re replacing it with these stocks.” So, people, if they bought it, they know that they might want to sell it as well, and they can play along. So, that’s all you get with Light; you get these emails whenever we buy or sell something, versus the Club. So, the Light subscribers don’t get access to the premium episodes, they don’t get access to the checklists, the buy lists, the Facebook group or the Slack group, or the dinners, or to ask questions, or the Bible, or the course, or all that kind of stuff, which is for Club subscribers. Our Club subscribers on the other hand can see the Light updates each week. They can play along with that too if they want while they’re learning to do it themselves. But basically, in my head, the difference is Club is for people that want to do it themselves and light is for people who don’t want to do it themselves, they want us just to tell them what to do and play along that way. Now, when we launched it, I wasn’t sure if we were going to keep doing it because I wasn’t sure how much work there was going to be. It turns out, it’s a lot of work. I’m still figuring out how to get smarter about doing the work. And you know, when we launched it, I think, in April, I thought, well, it’ll just be an email once a week: “yeah, we’re gonna buy these two stocks. Thank you, goodbye.” Of course, the market crashed the week after we launched it and instead of, you know, just one email a week, it’s turned into quite often four or five emails a week as things have passed through rule ones and I’ve had to replace them. It’s been, obviously, as everyone knows, the last six months has been a challenging time as investors, and it hasn’t really been as smooth sailing as it had been previously. So, I’m not sure how long I’ll keep doing this. It may be a short-term experiment; it may be a long term. I’ll make a call on it at some point. But that hopefully is the difference between Light and Club for people. If you have any questions, shoot me an email. I also wanted to just quickly talk about the Brettelator beta. We always have a beta version of the Brettelator running where Brett is testing different stuff with Tony. We’ve been working on a beta for a while. It’s not quite ready for primetime yet, we’re still working out a few bugs in it, but people have been seeing my screenshots of it in the updates and saying, “hey, that looks different. Can I have it?” And I have to keep saying “yeah, not quite yet.” So, don’t send me those emails. If there’s a new version, I’ll tell you. That is that. Portfolio update. Hasn’t been a good week for us. It’s been a great week for the All-Ord’s, not a great week for us because of coal. We’ve been taking a beating on some of our coal stocks in the last week. So, last week I think I said our portfolio since inception, the dummy portfolio, was up about 70% versus the STW, which was roundabout 1%. It’s had a good week, it’s up 1.58%; we’ve dropped down to 14.56 — that’s per annum with a CAGR calculation. So, we’ve dropped a little bit, it’s increased a little bit, but we’re still doing seven times, roughly, better than the STW since inception, which still seems insanely too good. But that’s what Navexa says. So, take it for what it’s worth. That’s it from me, Tony, what have you got to chat about?

Tony  27:43

A couple of things. So, I’ve updated the mortgage rate that we use in our calculations. I did a survey of the majors last week, and people need to plug in 6.07% as the bank rate that we use to test the yield of the stock against. So, that’s both in my spreadsheets and the Flitman model. Nickel is a buy again. I checked that recently and I don’t think it appears on the scorecard, so I’ll need to get Alex to add that to the scorecard and track it from now on, but nickel looks like it’s a buy.

Cameron  28:17

Sorry, what stocks does that affect off the top of your head, Tony?

Tony  28:21

I can’t think of any, Cam. Might be South 32, was that nickel as well as aluminium?

Cameron  28:27

I’ve got a tab in the spreadsheet that I’m just going to filter on nickel. So, to some extent according to this list. Well, there’s quite a lot of companies. Let me see, who are the big ones that we may be aware of? Well, BHP has an exposure. I imagine it’s not a big part of their revenue, though. MLX, Metals X Limited.

Tony  28:53

Yeah, South 32 has an exposure as well. That was the one I think I was looking up.

Cameron  28:58

South 32, Poseidon Nickel, Rio, Sandfire Resources, Sheffield Resources — SFX. Nothing else that I can see here that I remember being prominent on the buy list, but a lot of companies. We’ll add nickel to Comm Status so we can start tracking it. Is there one on Stock Doctor? Where are you looking at it?

Tony  29:25

I was looking at it in Stock Doctor, yep. And then I just wanted to read out a little bit of a summary from an AFR article from James Thompson. And it’s because of the QAV stock in the news, which was NAB, who have new results. The results are in Stock Doctor and it’s still on the buy list last time I looked. This was on the 10th of November, so what’s that? About five days ago. And it was a bit of an insight into NAB under the CEO Ross McEwan, and it reads: “in a funny way, the success of the turnaround that Ross McEwan has engineered at National Australia Bank over the past three years can be judged by what’s absent from the bank’s four-year results as much as what is actually there. For the fourth consecutive half, McEwan has delivered a set of numbers with zero notable or extraordinary items, i.e.. no customer remediation provisions, no impairments on struggling business units, no losses on asset sales, no capitalised software charges. McEwan is Australian banking’s Mr Clean, and a 25% gain in NAB’s share price since he arrived in December 2019 shows how much investors value his ‘no surprises’ approach. The lack of notable items also allows the guts of the bank to shine. Cash earnings rose 8.3% to 7.1 billion in the year to September 30, with operating income up 8.9% and expenses up 5.6%, or 3.9% when the recent acquisition of Citibank’s consumer business is included, which was in line with guidance. Cash return on equity which slumped as low as 8.3% in the 2020 financial year hit 11.7% in 2022. In addition to being Mr Clean, McEwan is banking’s Mr Simple; from the moment he arrived at the bank, he has deliberately talked down the complexities of modern banking, arguing it is essentially a game of looking after customers and staff. ‘Do the basics well and deliver what you say you’re going to do’ was how he described his internal mantra on Wednesday.” So, that’s the quote from the AFR. I just thought it was a good quote. McEwan is well respected. You know, one of the better, if not the best of the banking CEOs in Australia, and it’s good to see his simplification process seems to be working.


Cameron  1:06:11

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