Transcript QAV 614

QAV 614 CLUB

Thu, Apr 06, 2023 10:10PM • 52:58 

Cameron  00:06

Wel­come back to the QAV pod­cast. This is episode 614. We’re record­ing this ear­li­er than nor­mal. Mon­day, the third of April 10:30am in Bris­bane, Sun­day night in sleazy Las Vegas where Tony is doing very unsleazy things if I know Tony, very whole­some, very whole­some things, I’m sure you’re doing, Tony, over there. How’s Vegas?

Tony  00:33

Well, Vegas is very sleazy, I’ve got to say, and full of peo­ple and prob­a­bly COVID, because Rud­dy’s down with COVID.

Cameron  00:40

Oh, that sucks.

Cameron  00:41

Snow in Vegas? The mid­dle of the desert. Oh my god.

Tony  00:41

I’m okay, every­one else seems to be okay — touch wood. Yeah. You know, there’re ladies stand­ing out there in thongs and noth­ing much else hand­ing out pam­phlets. It’s sin city all right. But I’m play­ing golf. I don’t real­ly like Vegas as a place. Like, for me, Vegas is like Surfers Par­adise mixed in with Crown casi­no and mul­ti­plied twen­ty times, so I don’t get off on that. But the golf cours­es are real­ly good. They’re a lit­tle bit expen­sive. We played five days straight on some real­ly good golf cours­es, and we even had snow one of those days, which was amaz­ing.

Tony  00:48

In spring, too.

Cameron  00:52

Wow.

Tony  00:52

Yeah, it was crazy. It was cold. We’re still on the out­skirts of Vegas, but we’re up in the hills a lit­tle bit, and these real­ly dark clouds rolled in and it snowed, then it cleared up about an hour lat­er and we were back out and kept play­ing. But it must have been about two degrees, I think.

Cameron  01:40

So, you were play­ing on snow? How do you play golf on snow? Orange balls so you can see them?

Tony  01:47

You can’t play. No, well it’s just like play­ing in a heavy rain, but then the greens become unput­table. They were just like putting through a big pud­dle of water.

Cameron  01:59

We also need to talk about your birth­day par­ty.

Tony  02:02

Yeah, that was great fun.

Cameron  02:03

That was a crazy night. You had a good time?

Tony  02:05

I had a great time. Did you enjoy it?

Cameron  02:08

Yeah, I was pleas­ant­ly sur­prised that how good The Angels were. Like, The Angels come out, it’s basi­cal­ly like an after­noon at the retire­ment vil­lage. Bunch of old bald fat white guys come out, and their son’s on bass and drums, but they played their ass­es off. They were tight, the vocals were great. You told me it was­n’t Dave Glee­son, it was the orig­i­nal drum­mer from The Angels doing the vocals this time?

Tony  02:40

Cor­rect. I think his name is Nick Nor­ton, and they’re actu­al­ly think­ing of replac­ing Dave with him because Dav­e’s going back to The Scream­ing Jets, appar­ent­ly.

Cameron  02:49

Well, I thought Mr Nor­ton did a tremen­dous job doing his best Doc Glee­son, and they were just… It was great. It was loud, and we for­got to take earplugs for poor Fox, so his head was crushed about an hour into it. He was being a troop­er. Chris­sy went out and bought him some earplugs from a con­ve­nience store, but they did­n’t do any good and would­n’t stay in his ears, and so he spent the first hour with his fin­gers in his ears. And I kept say­ing, “do you want to go? We can go,” and he’s like, “no, I don’t want you to miss out. You know, it’s fine.” But it was obvi­ous after about an hour, he was just… His brains were turn­ing to mush. So, we left on like the sec­ond last track or some­thing like that. But yeah, no, it was a great night. Thank you for invit­ing us and con­grats. There were some love­ly speech­es from some of your friends, some QAV club mem­bers were there. I have no idea what the present was that we all chipped in and got you, but did you take it to Vegas with you?

Tony  03:50

I haven’t, no. So, the present was a remote con­trol golf bud­dy. Yeah, a pow­er­cad­dy they’re called, so I can keep play­ing golf as an old man.

Cameron  04:00

Yeah, just to make golf a lit­tle bit lazier than it already is as a sport, you have a robot golf bug­gy that fol­lows you around.

Tony  04:08

Go and try play­ing golf for five days straight and see how lazy you feel.

Cameron  04:12

Just a leisure­ly walk around a nice field. Every now and again you hit some­thing, then you walk a lit­tle bit more.

Tony  04:18

Yeah, that’s it. Just do it for four or five hours straight each day.

Cameron  04:23

Your actu­al birth­day is not until tomor­row, Aus­tralian time. Fourth of April, right?

Tony  04:28

That’s right. And I haven’t been drink­ing, so I haven’t had a drink for five months now, but I may have a whiskey Tues­day night our time, which is the fourth over here. And the last day of our trip in Vegas.

Cameron  04:41

Yeah, you did­n’t even have a drink at your birth­day par­ty, I was impressed.

Tony  04:46

No, I did­n’t feel like it.

Cameron  04:48

Don’t need it to have a good time, right?

Tony  04:50

Cor­rect, yeah. And you know, I’m just real­ly cop­ing with trav­el and non­stop golf and busy sched­ules with­out drink­ing, it’s much bet­ter. It’s got its advan­tages.

Cameron  05:02

Yeah, absolute­ly.

Tony  05:03

There’s twen­ty guys on this trip and about half of them are from Mul­lumbim­by, and they’re all cel­e­brat­ing their fifti­eth birth­days, so they are going ham­mer and tong non­stop. Com­par­ing notes were the cheap­est beer is on the strip, and then just hit­ting it like a pack of locusts. And, yeah, get­ting up or just turn­ing up and play­ing golf, and falling asleep on the bus on the way home and then doing it all again.

Cameron  05:31

Yeah, I don’t know how peo­ple do it. You know, I haven’t lived like that since I was, I don’t know, seventeen/eighteen, going that hard. I don’t know how peo­ple keep it up into their fifties.

Tony  05:43

Six months for us.

Cameron  05:46

Six months?

Tony  05:47

Yeah, since we hit it that hard.

Cameron  05:49

Oh, yeah. Yeah, right. Well, good for you. I’m sure there will be many health ben­e­fits for you by cut­ting back a bit for a while. Well, let’s move on from your birth­day cel­e­bra­tions and talk about some invest­ing, because I know you’ve got din­ner plans and you got­ta go.

Tony  06:07

Yes, we got din­ner and then we’re gonna go and see Penn and Teller for the nine o’clock show.

Cameron  06:12

Oh, fan­tas­tic. I’ve always want­ed to see them. That’ll be fan­tas­tic.

Tony  06:16

Yeah. And we saw The Bea­t­les “Love” again the oth­er night, which was great. The Cirque du Soleil.

Cameron  06:22

So, we saw that in 2018 when we were over there, right? No?

Tony  06:26

Cor­rect. Around then.

Cameron  06:28

When were we there? 2017 I think we were in Vegas togeth­er. Yeah. Good stuff.

Tony  06:33

The show has changed a lit­tle bit, but it’s still real­ly good.

Cameron  06:36

Yeah, ter­rif­ic. I love a good Cirque show. Of course, Vegas is where Chris­sy and I got mar­ried, so it has… I hate Vegas, she hates Vegas, too. It’s ter­ri­ble, but we got mar­ried there so it has one redeem­ing fac­tor in my his­to­ry. Any­way, onto invest­ing. It’s been a sur­pris­ing­ly good week in the mar­kets. You should go away more often, Tony, you go away.

Tony  06:59

Oh, hap­py to.

Cameron  07:00

… The mar­ket has a good week. It’s been up. I don’t know of com­mod­i­ty updates, because we actu­al­ly haven’t fin­ished the buy list yet for this week, but I can do a quick port­fo­lio update. The dum­my port­fo­lio since incep­tion — for new lis­ten­ers that’s sec­ond to Sep­tem­ber 2019 — our dum­my port­fo­lio is up 17.56% CAGR per annum over that peri­od, ver­sus the bench­mark that we use, the STW, the SPDR 200 Fund, which is up 6.84% CAGR per annum over the same peri­od. So, as it has been recent­ly, we’re not quite three times the bench­mark, but pret­ty close to it. Three sev­ens are twen­ty-one, we’re about sev­en­teen and a half, eigh­teen. So, yeah, we’re a lit­tle bit under three times the bench­mark. For the finan­cial year to date we are up 9.72%, actu­al­ly no 12.28% per annum. I don’t know, Navexa gives me two num­bers. There’s a chart, a lit­tle graph that says 9.72, but then the sum­ma­ry above says 12.28, ver­sus the STW, which it says is at 13.85 for the finan­cial year. So, for a while there we were lag­ging the STW for the finan­cial year quite a bit. We’ve near­ly caught up, and there’s a cou­ple of months left to go. So, we’ll see where we end up. In the last sev­en days, we’re up 2.93%, STW is at 2.65%. Some stocks have done pret­ty well in the last week. RSG, Res­olute Min­ing up 11% in the last week. What else have we got here? Lind­say up 6.3%. Lind­say’s been on a cork­er run.

Tony  08:53

Won­der if that was because of K&S Coal Trans­port going under? They may have picked up some mar­ket share from that.

Cameron  09:00

Oh.

Tony  09:00

 They’re both trans­port logis­tics com­pa­nies.

Cameron  09:03

Right. It’s not in the dum­my port­fo­lio, but in one of our light port­fo­lios, is some­thing I want­ed to talk about, is ALO. I think this hap­pened just when you left. Allog­gio Group, Allog­gio I think they pro­nounce it. So, it was announced last week that Allog­gio is being acquired by a group called Next cap­i­tal, and their share price went up 45% in a day based on the acqui­si­tion price. It’s fan­tas­tic for those of us that held it in their port­fo­lio. It is now up 80% since we bought it back in Sep­tem­ber ’22. So, again, as I point­ed out on our Face­book page, and we’ve seen this hap­pen a few times since we’ve been doing this show togeth­er. If we think some­thing is under­val­ued, quite pos­si­bly oth­er peo­ple think it’s under­val­ued, and they come and buy it and we go along for the ride.

Tony  10:11

Cor­rect. That’s inter­est­ing that Next Cap­i­tal is involved. I actu­al­ly know one of the prin­ci­ples there and play golf with him occa­sion­al­ly.

Cameron  10:19

Did you put a lit­tle word in his ear?

Tony  10:21

We haven’t col­lud­ed on this one. No, in fact, Patrick Elliot often comes along on some of these trips with us well. So, yeah, that’s inter­est­ing. But yeah, I think you’ve said it exact­ly right, that if we’re see­ing val­ue in a com­pa­ny, then some­body else is going to see val­ue in a com­pa­ny. I just wish some­one would see some more val­ue in mine and take some over and give us an extra boost. But it’ll hap­pen at some stage.

Cameron  10:46

Yeah, well, that was very excit­ing. It’s not very often you see a share go up near­ly 50% in a day. Very excit­ing for those of us that hold. Did­n’t real­ly help the two-two-one port­fo­lio and light enough to get it back up into the black. That’s the one we closed just before the mar­ket crashed in April last year, but it gave it a nice lit­tle bump. Just one oth­er thing I want­ed to men­tion, so last week, the week before last — we had Tim Lin­coln on last week, so the week before that — we had a ques­tion about some­thing you said way back in one of our first episodes about ETFs and the size of ETFs on the mar­ket. And you reit­er­at­ed your source for that as Stock Doc­tor and the val­u­a­tions. Like, you were say­ing that accord­ing to Stock Doc­tor, the biggest ETFs in Aus­tralia are up around like SPY 555 bil­lion?

Tony  11:41

Well, that’s what Stock Doc­tor’s say­ing, yeah, Not sure if it’s mil­lion or bil­lion.

Cameron  11:44

Well, the $555,615 mil­lion. 

Tony  11:49

Right. So, half a bil­lion.

Cameron  11:51

$555,615 mil­lion is half a bil­lion? They put six zeros on the end of all these num­bers.

Tony  12:01

Oh, okay. Sor­ry.

Cameron  12:03

I don’t know how to read it, my brains not work­ing. Mon­day morn­ing. Yeah, it says mar­ket cap in the mil­lions, and then it has 555, 615.

Tony  12:13

You should add three zeros to it.

Cameron  12:14

Three zeros.

Tony  12:16

That makes it… No, you’re right. Six zeros. It’s in mil­lions, isn’t it? Yeah, no, so it’s a bil­lion. Yeah, sor­ry.

Cameron  12:22

$555 bil­lion. Where­as accord­ing to List Cor­p’s list of ETFs in Aus­tralia, the largest is Van­guard at $11.86 bil­lion. Now, Chair­man Mabb of the Aus­tralian Share­hold­ers Asso­ci­a­tion reached out to me last week, he said “yeah, mate, I checked the num­bers on List Corp and I checked them on the ASX as well, Stock Doc­tor’s way out here.” He thinks the List Corp list is is the right one. So, I emailed Vic­tor De Pas­cuale at Stock Doc­tor, I said, “can you have a look at this for me and tell me what’s going on? I’m sure there’s a rea­son­able expla­na­tion.” He had a quick look and came back to me and said, “yeah, I think our list is wrong. I don’t know what’s going on there. I’ll ask the ana­lysts and I’ll get back to you.” So, he has­n’t yet, but just an FYI that we think Stock Doc­tor is lead­ing us astray there.

Tony  13:20

Just to com­ment on what you sent through, Cam, the List Corp list of ETFs has the VAS, Van­guard Aus­tralian Shares Index ETF, as the largest on that list. That’s $11.6 bil­lion. Stock Doc­tor have VAS at $8.05 bil­lion, so there’s a dis­crep­an­cy there, but it’s not as big as some of the oth­er ones. So, that may be a tim­ing issue. But do you have a List Corp val­u­a­tion for SPY or VAP or BTS?

Cameron  13:51

They don’t come up on that top rank­ing there. What’s this one? Van­guard Aus­tralian shares, VH… So, we have VHY in both lists we can com­pare. List Corp has VHY at num­ber eleven at $2.7 bil­lion. Stock Doc­tor has VHY at $49.3 bil­lion.

Tony  14:12

Okay, there’s some­thing crazy going on.

Cameron  14:16

A bit of a dif­fer­ence in that.

Tony  14:18

it’s inter­est­ing List Corp don’t have SPY, for exam­ple. I won­der if it’s just lis­ten­ing ETFs that just deal with the Aus­tralian.… oh no, there’s an S&P 500 there. Don’t know. Let’s see what Stock Doc­tor have to say.

Cameron  14:31

Yeah, I just want­ed to flag that with every­one. I mean, I don’t think any­one was invest­ing in ETFs who lis­tens to this, but just by the by, we’ll get some clar­i­fi­ca­tion on that.

Tony  14:42

Well, there might be, but the ques­tion was asked about my com­ments about how ETFs can ampli­fy a mar­ket down­turn. And so, if the List Corp num­bers are right, that mag­ni­fi­ca­tion is going to be minis­cule, but if the Stock Doc­tor num­bers are right, it’s going to be a real thing. So, we’ll just need to work out who’s right there.

Cameron  15:01

And for what it’s worth, Chair­man Mabb said to me that he thinks the threat of ETFs is mas­sive­ly overblown, and he thinks they’re very tiny, a very tiny com­po­nent of the Aus­tralian mar­ket­place and there’s a lot of mis­in­for­ma­tion or mis­un­der­stand­ing about them. So, that was his two cents.

Tony  15:20

Okay, no, I’ll defer to him.

Cameron  15:23

Well, he is the Chair­man of the Board.

Tony  15:27

Chair­man of the Board, yeah. He should be in Vegas.

Cameron  15:31

He should be in Vegas, yeah, up on stage, singing “The Lady is a Tramp.” What else have you got to talk about before we get into a cou­ple of ques­tions? We don’t have many ques­tions today, so do you have any­thing else you want to touch on? I don’t think you’ve been pay­ing much atten­tion to the mar­ket in the last week, have you?

Tony  15:46

I haven’t, no. I’ve skimmed through the Fin Review. That’s about it.

Cameron  15:51

Although you told me that you had a bunch of sells that you had to do just before you left the coun­try?

Tony  15:57

Yeah. They all turned around while I was on the plane, so I’m fine. That was lucky.

Cameron  16:03

Oh, so you did­n’t sell them. You just told Alex?

Tony  16:07

No, Mac­quar­ie group had breached, one of the tranch­es I bought breached a rule one, but then when I looked at it, I thought, well, I should­n’t be doing rule one prices for pur­chase, I should­n’t be doing it as an aver­age. So, it was still, when I reviewed it, it was still above the aver­age. So, I decid­ed to just let it ride, and when I got off the plane Mac­quar­ie had gone up any­way a lit­tle bit. So, I was fine. So, Macquarie’s good, did­n’t have to sell. And look, the only com­ment I want­ed to make was that Bloomberg TV here and news­pa­pers are still full of “Amer­i­ca’s gonna be in reces­sion” fore­casts, but I’m not see­ing any sign of that at all at the moment. I mean, Vegas is full, golf cours­es are full. And maybe Vegas is an anom­aly, and maybe out in the heart­land of Amer­i­ca it’s not as good. But cer­tain­ly, I think it’s more expen­sive over here than it has been in the past for me, but that’s prob­a­bly a com­bi­na­tion of infla­tion but also Aus­tralian dol­lar being so low. So, not real­ly pay­ing much atten­tion to that. But yeah, I’m not see­ing any signs of reces­sions or loom­ing reces­sion. So, I’m not sure what to believe there in terms of eco­nom­ic fore­casts. It may hap­pen but look­ing good at the moment.

Cameron  17:26

What do you think’s going to hap­pen when Trump gets arrest­ed on Tues­day?

Tony  17:31

Tell you what, it’s inter­est­ing being over here with all that going on, for sure.

Cameron  17:35

I bet. Is it crazy?

Tony  17:38

Oh, not real­ly. I mean, we’re in Vegas, so it’s not a thing here. But you know, peo­ple are talk­ing about it, for sure. It’s either peo­ple on one side of pol­i­tics say­ing “hey, he’s due,” and the oth­er side of pol­i­tics say­ing…

Cameron  17:49

He’s a Jew?

Tony  17:50

Yeah, he’s due to be incar­cer­at­ed.

Cameron  17:57

Oh, not that he’s a Jew. No.

Cameron  17:57

Yeah, like, I’m shocked, not because I don’t think Trump has prob­a­bly bro­ken many, many laws, but, you know, gen­er­al­ly Amer­i­can pres­i­dents skate on any­thing that they did dur­ing their pres­i­den­cy. It’s like the third rail of Amer­i­can pol­i­tics, apart from you don’t do any­thing about gun con­trol. You don’t go after ex-pres­i­dents for what­ev­er the hell they did. It’s just, you don’t go there. Because if you do, it opens up Pan­do­ra’s box, and once you once you open that every ex-pres­i­dent can be pulled up on all of the dirty crim­i­nal shit that they’ve all done, I don’t care who it is. But any­way, I was shocked that they final­ly seem to be step­ping over that line. We’ll see how it plays out.

Tony  17:57

No, not a Jew, he is due to be incar­cer­at­ed. And the oth­er side say­ing it’s the weaponiza­tion of the legal sys­tem to politi­cise Trump, but I’m wait­ing for Tues­day. We’re debat­ing whether they’re gonna have to send the black Escalades in to bring him out in cuffs or whether he’s going to vol­un­tar­i­ly sur­ren­der him­self. So, that’ll be very inter­est­ing. But either way, he’s still rais­ing mon­ey. As soon as the charges were dropped, he’s out there with all these ads say­ing, you know, “this is a ter­ri­ble injus­tice that’s being hand­ed out to me,” and, you know, “con­tribute to my fight­ing fund.” It’s just amaz­ing.

Tony  19:21

It’s always fun to turn on Fox News here in the States, it’s full of just the most lunatic rhetoric about how this is, you know, anti-glob­al­ist elit­ist col­lu­sion to stop the great­est hero in Amer­i­can his­to­ry from rerun­ning for pres­i­dent. And then you get the oth­er side of pol­i­tics on CNN, who are quite right­ly point­ing out that Trump’s approval rat­ing is going to go up if he’s indict­ed, because Clin­ton’s did when he was impeached, and Trump’s did when he was impeached. And so, peo­ple are pret­ty apa­thet­ic, but if they sent any sort of injus­tice, they’re gonna ral­ly behind any­one. Does­n’t mat­ter who they are.

Cameron  20:02

And the fun­ny thing about the Fox’s sup­port for Trump is that we now know from the Domin­ion court case that all the Fox News hosts and man­age­ment hate Trump pri­vate­ly. Tuck­er Carl­son and every­body on there are just talk­ing about what an idiot he is and how they can’t wait to see the back of him.

Tony  20:25

Well, yeah, both of those things were hand­ed down on the same day over here. So, the judge ruled the Domin­ion case could go on to a tri­al and Trump was indict­ed both on the same day. Repub­li­cans were scratch­ing their heads try­ing to work out what to say, what to do.

Cameron  20:41

Rupert Mur­doch hates Trump, all of the guys at Fox hate Trump, but they’re still his num­ber one sup­port­er. It’s hilar­i­ous. Any­way, back to invest­ing. You want to do a pulled pork?

Tony  20:52

I do. Yeah, I’m just gonna do a pulled pork on Ramelius Resources, which was a ques­tion for this week. I has­ten to add that, num­ber one, my num­bers are about a week old because I haven’t had a chance to do anoth­er down­load, and it’s Mon­day morn­ing your time, so we haven’t got Alex’s down­load for the week­end. But any­way. And num­ber two Ramelius have launched a bid for anoth­er gold min­ing com­pa­ny called Break­er Resources. I did a quick sur­vey before we jumped on the show, and I could­n’t real­ly see the pro for­ma effect on Ramelius that the takeover would have if it went through. It’s prob­a­bly out there but I haven’t been able to work out whether Ramelius is going to bor­row mon­ey to exe­cute the takeover or pay it in cash or issue shares or what­ev­er. So, I’ll go through and talk about it but peo­ple are going to have to watch announce­ments to see, if they’re inter­est­ed in buy­ing it, they’re just going to have to watch announce­ments and see what the impact of the takeover will be. Or wait until the next six-month­ly num­bers come down and you have a clear­er pic­ture of what it looks like. I sus­pect if the takeover goes ahead, it will have hap­pened by then.

Cameron  22:00

And we should also point out that BRB is on our buy list.

Tony  22:04

Yeah, it’s the takeover-ee.

Cameron  22:07

Yeah, and I’ve had a note in my spread­sheet not to buy it, because it’s one of the few stocks that — look­ing at the light port­fo­lio — is one of the few stocks that’s on the buy list that has been in a buy state and not a Josephine, hits all of the met­rics, but I have to keep remind­ing myself not to buy it because it’s sort of at the peak of where it’s going to be if this takeover goes through. Its usu­al­ly not a good idea to buy some­thing that’s been tak­en over, right?

Tony  22:34

Cor­rect. Well, look, it’s not unless you have any sort of spe­cial­ist knowl­edge, and I cer­tain­ly don’t about the gold min­ing sec­tor. What I do know is this par­tic­u­lar takeover is being sup­port­ed by the board and by the major investors. So, chances are that it’s going to be accept­ed and it’ll go through at around the cur­rent price. I can’t see any­body com­ing in and lob­bing anoth­er bid. They could, it’s always pos­si­ble, but less like­ly in this kind of sit­u­a­tion with approval from the board and the major stake­hold­ers. But also, the flip side is I can’t see Ramelius walk­ing away from this either. So, the down­side risk is pret­ty lim­it­ed. So, the takeover experts in this sort of cir­cum­stance would be look­ing to make, you know, pen­nies out of this sit­u­a­tion just to see if they can arbi­trage what’s going on with the share mar­ket com­pared to the takeover price. And it can vary by cents every day depend­ing on what news is com­ing out of both camps. But yeah, I agree with you. I would­n’t be buy­ing BRB at the moment, and prob­a­bly can’t buy in the future because this takeover will prob­a­bly go through at the cur­rent price. So, that’s it. That’s actu­al­ly answered a ques­tion no one’s asked, but that’s actu­al­ly an inter­est­ing thing if you are a BRB hold­er, is you’ve got to decide whether you want to sit on it in the hope that some­one lobs a high­er offer. Because if you do you’ve got to wait for the takeover to go through and then to get your check from Ramelius, which could be months and months and months away, as opposed to sell­ing on mar­ket now — and I haven’t checked the price of BRB com­pared to Ramelius’ offer — but if it’s only pen­nies, the stan­dard way I would oper­ate is to sell on mar­ket and move on and take that prof­it some­where else. Because oth­er­wise it’s like hav­ing mon­ey in the bank, it’s just gonna sit there doing noth­ing for three or four months while the whole thing grinds through. Any­way, get­ting back to Ramelius, it’s a large gold min­er based in West­ern Aus­tralia. It’s main­ly around the Mount Mag­net area. It has a num­ber of mines, Mount Mag­net being one of them, Mount Mag­net gold­mine. There are three oth­ers: Edna May, Mar­da and Vivien, they’re also in in WA. And the rea­son they’re bid­ding for Break­er Resources is Break­er con­trols a project called Lake Row, which is close to one of Ramelius’ gold mines called Rebec­ca, or the Rebec­ca project. I don’t know if it’s actu­al­ly devel­oped into a mine yet. And so, Ramelius is count­ing on syn­er­gies from being able to progress the Break­er Gold Mine, which is close to their own gold mine, and put them both togeth­er and one of them makes three for them. That’s one of the rea­sons why they’re pay­ing a pre­mi­um for Break­er. The oth­er thing to note is that Ramelius is now big enough that it just recent­ly was added to the ASX 20 list. So, it’s get­ting quite large now. I think it has over a bil­lion dol­lars in mar­ket cap, and it did get a bump of about 5% when it went into the ASX 20 list. So, I guess that’s rel­e­vant to the con­ver­sa­tion we had the last time we spoke about how index­es can change the share price of a com­pa­ny. So, that’s what hap­pened to Ramelius. The oth­er thing to note, I guess, just in gen­er­al about gold and gold mines, is the gold price is going up again. And that’s best large­ly due, I think, to the fore­casts of reces­sion in the US and infla­tion being stub­born­ly high. It is drop­ping in Aus­tralia, although I’m not sure it’s drop­ping as much in the US as it is in Aus­tralia. And gold tends to do well in those peri­ods. It’s called a safe haven or a store of val­ue. So, if you think that assets are going down, because in real terms with infla­tion at as high as 9%, they’re worth less every year, gold tends to have the inverse qual­i­ty: peo­ple buy gold expect­ing it to at least stay the same price and not be affect­ed by infla­tion. Which poten­tial­ly has the reverse effect, because if enough peo­ple do that, it push­es the price up for gold. And gold is still used com­mer­cial­ly for mak­ing jew­ellery and a lit­tle bit in the tech sec­tor and auto­mo­tive, etc. And there’s also a lot of buy­ing of gold by Reserve Banks, again, for their bal­ance sheet and to be a stor­er of val­ue. But there’s still prob­a­bly about, oh, the num­bers I’ve seen is 25 to 30% is spec­u­la­tive behav­iour. So, that’s peo­ple look­ing to buy gold just to have a safe haven in an uncer­tain time, espe­cial­ly if a reces­sion could be com­ing. So, the gold price is going up. I looked up the lat­est results for Ramelius, and their AISC, which is All In Sus­tain­able Cost of pro­duc­ing an ounce of gold, is around $2,000: that’s Aussie. And the cur­rent gold price is around $3,000, just under $3000 — like $2950 Aussie. So, they’re mak­ing a good mar­gin on what they’re dig­ging out of the ground at the moment. If the gold price goes up, that sort of mar­gin increase flows straight to their bot­tom line. Their costs will go up with infla­tion, but the gold price will prob­a­bly go up high­er than that, or poten­tial­ly go up high­er than that. I should­n’t spec­u­late on what the gold price will do. If his­to­ry is any guide, then it prob­a­bly will, and cer­tain­ly lots of peo­ple think it will. So, gold com­pa­nies are hav­ing a bit of a day in the sun at the moment. They had come down a rea­son­able amount over the last twelve months and are now, sort of, turn­ing around. I do also want to say, though, that this par­tic­u­lar stock, Ramelius, isn’t on our buy list, and one of the rea­sons why it’s not apart from its QAV score being too low is that it even though it’s turned up in the last month or so it’s still bel­low it’s buy price. And so, I’m doing my analy­sis today at $1.155, which was the price on the 26th of March. The price before the mar­ket opened this morn­ing, being Mon­day, was $1.27. So, I’m already late in terms of my analy­sis, and so the price is mov­ing quite quick­ly. But as we’ll see through the num­bers here, the QAV score is quite low, and at $1.15 it’ll be even low­er at $1.27, and the buy price on this stock is $1.51 cur­rent­ly. So, I sus­pect even if we reach that buy price, and I think it prob­a­bly will keep going up until it’s a three-point trend­line buy, it almost cer­tain­ly won’t have a QAV score worth invest­ing in. So, I’m doing this because it was request­ed, but it’s not on our buy list. Okay, the num­bers. So, ADT on this stock is large. It’s around $4 mil­lion ADT per day, so very large, would suit every­one lis­ten­ing to this pod­cast. The yield is low, it’s less than 1%, so we don’t score it for that. Inter­est­ing­ly enough, Stock Doc­tor’s finan­cial health has it as “ear­ly warn­ing”, and because in the past it’s been strong, it’s also a dete­ri­o­rat­ing trend. So, we give it a ‑1 on the check­list for that. I’m not sure what what’s going on there. The com­pa­ny actu­al­ly made a neg­a­tive prof­it last half, so just below breakeven, but it is fore­cast to make a lot of mon­ey this half, I guess, because of the ris­ing gold price. But again, the ques­tion mark remains over that fore­cast as to what effect the takeover of Break­er Resources will have on its prof­it. So, for exam­ple, if it pays out the takeover amount in cash that’s going to obvi­ous­ly reduce its bal­ance sheet, if not its prof­it if they’re using prof­its to help that pay­ment process. So, there’s a few things mov­ing around here with this com­pa­ny. The Pr/OpCaf on it at $1.15 is 5.15 times, so that’s good for us, how­ev­er the price is ris­ing, so that will lose that score poten­tial­ly, I think, very soon. And I can’t score it on a PE because it did­n’t make any prof­it last half, so it does­n’t score for PE. The share price is greater than IV1 and IV2, and net equi­ty per share is 86 cents and book plus 30 is there­fore $1.11, and the share price is above that, so it’s not going to score for those. Man­age­ment has a small hold­ing in the com­pa­ny, but there’s no own­er-founder, so I can’t score for that. There is con­sis­tent­ly increas­ing equi­ty, which is good. All in all, the com­pa­ny scores only 14% for qual­i­ty, so we’re not scor­ing it very much on those met­rics. And cur­rent­ly, the QAV score is 0.03, so it’s well below our thresh­old of 0.1. And like I said before, if any­one was inter­est­ed in buy­ing the stock, and it’s cer­tain­ly being bought, just because it’s not on our buy list does­n’t mean that it won’t go up. It’s cer­tain­ly been one of those cas­es where a ris­ing gold price is lift­ing all boats. Ramelius is in West­ern Aus­tralia, so there’s very lit­tle sov­er­eign risk with this com­pa­ny. The only risk is that Jim Chalmers in the next bud­get decides to put an extra tax on min­ing com­pa­nies. I don’t know how remote that is, but it’s a pos­si­bil­i­ty. But it’s dif­fer­ent to, say, invest­ing in some of the stocks that are on the buy list like West Africa Resources, where, as one of our lis­ten­ers point­ed out a cou­ple of weeks ago, you know, there’s a lot of sov­er­eign risk over there, a lot of cor­rup­tion in gov­ern­ment places. I think where WAF is there’s been a cou­ple of coups in the last twelve months as well. So, WAF is on our buy list because it’s much cheap­er than a stock like RMS, but that does­n’t mean RMS can’t go up. But if you are think­ing about buy­ing it, then just be care­ful of what hap­pens with the Break­er Resources takeover and try for your own sake to get some clar­i­ty around what RMS’s num­bers will look like if that takeover goes ahead. Or at least I would wait until some more num­bers come out in the August report­ing peri­od and see what they look like then.

Cameron  32:10

Right. I did by RMS a few weeks ago, some­body asked why was it in our dis­clo­sure lists, and I think I screwed up, is the answer to that.

Cameron  52:13

Cheers, you too. The 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 and not per­son­al finan­cial advice. We don’t know your per­son­al finan­cial cir­cum­stances. Please see a finan­cial plan­ner before mak­ing any invest­ing deci­sions.