Transcript QAV #619

QAV 619 CLUB

Cameron  00:00

Wel­come back to QAV, episode 619. Hap­py birth­day to Fox, who turns nine years old today.

Tony  00:17

Wow, Hap­py Birth­day Fox!

Cameron  00:19

I can’t believe that he’s nine. Can you believe that?

Tony  00:23

Wow.

Cameron  00:25

Oh my god. And wel­come back to Aus­tralia, Tony Kynas­ton. How was the big trip? I mean, we spoke to you a cou­ple of weeks ago, but how was the last cou­ple of weeks of your trip?

Tony  00:37

Yeah, real­ly good. It was good hav­ing Alex and Jen­ny in Toron­to with me. It was like a bit of a fam­i­ly hol­i­day, which was love­ly. And caught up with my friends over there, played a bit of golf with them. So, yeah, and, you know, it was like we’d nev­er left Toron­to. It’s such a nice place.

Cameron  00:52

Was it cold?

Tony  00:53

Yeah. Unfor­tu­nate­ly, like April is very vari­able. So, every­one there kept say­ing, “oh, you should have been here last week. It was 30 degrees.” But we were there, and it was eight degrees and rain­ing.

Cameron  01:02

Right? Urgh. And you played golf any­way?

Tony  01:05

We man­aged to dodge around it. Yeah.

Cameron  01:10

Did you take wet weath­er gear, or did you bor­row some? Buy some? What did you do?

Tony  01:14

I had wet weath­er gear with me because we got rained on in the US as well. Yeah. I always car­ry wet weath­er gear for golf. It’s an occu­pa­tion­al haz­ard for an out­door sport. Yeah, but no, it was good fun. It was good. Great hav­ing Jen­ny and Alex there, so that was real­ly prob­a­bly the high­light, was just, you know, when­ev­er we had down­time, we’d go out for din­ner or for lunch and chat. Like, we had­n’t seen each oth­er for ages. So, it was good.

Cameron  01:37

Yeah, that’s nice. Did Sean go as well?

Tony  01:40

No, he did­n’t. I think he’s fly­ing up this after­noon. He’s work­ing with Jen­ny and he’s stay­ing with us overnight, so I’ll catch up with him tonight.

Cameron  01:46

Love­ly. Well, say g’day to him for me, too. Well, it’s good to have you back. You know, be able to do a real show with you. A nor­mal show. Chat GPT’s not quite there yet. Not quite up to the TK stan­dard. I did get it to write a poem about you.

Tony  02:01

Oh no. Well, hope­ful­ly that frig­gin’ thing pro­nounces my name right. How’s it going to be the ruler of the world if it can’t pro­nounce my name right?

Cameron  02:09

Well, I was gonna, actu­al­ly, get it to, like, read the poem, put it through the tech. Well, it’s not Chat GPT that did the talk­ing, right? I threw GPTs out­put into a text to speech gen­er­a­tor that cre­at­ed all of that.

Tony  02:26

Because I was think­ing that Chet GPT was real­ly just like Stephen Hawk­ing’s brain in a bot­tle some­where, and then they hooked him up to the inter­net.

Cameron  02:38

Well, I had a cou­ple of goes try­ing to get it to write a poem about you last night that I could read, and I was think­ing, oh, I’ll have to teach it the text to speech gen­er­a­tor how to pro­nounce your name. I did tell it at one point, “Kynas­ton rhymes with tie-Aston,” and it then put the words “tie Aston” into the poem. I was like, no. That’s the best that I came up with. It did a long poem, which was kind of nice, but you know, it’s like, “in realms of wealth and name well-known, Tony Kynas­ton’s strength has shown, val­ue’s cham­pi­on, stead­fast, wise, seek­ing truth with keen sharp eyes, hid­den val­ue he uncov­ers, mar­ket secrets he dis­cov­ers, patients skilled in long term gains, for­tunes built, his wis­dom reigns. Guid­ing oth­ers on their quest, shar­ing knowl­edge, he’s the best. Fos­ter­ing growth both far and wide, men­tor, leader by his side,” which does­n’t make any sense, “nav­i­gat­ing mar­kets storms, grace­ful as his shape trans­forms, rid­ing waves of change and strife, skil­ful hands at helm of life. In the halls of wealthy stands, firm upon invest­ing lands, built on prin­ci­ples of truth, lega­cy that shapes our youth,” again, what? Okay.

Tony  04:00

It’s con­cen­trat­ing on the rhymes rather than the con­tent, I think.

Cameron  04:03

Then I told it to write a lim­er­ick and I end­ed up with: “there once was an investor named Tony, whose meth­ods made prof­its not phoney. He’d buy when stocks dipped, and then when they flipped, Kynas­ton’s returns were quite stony.”

Tony  04:17

Stoney. Stoney returns.

Cameron  04:20

Yeah, well, the first time it said the returns were quite brawny. I said brawny does­n’t even rhyme with phoney, so it gave me stony. Any­way. I actu­al­ly was play­ing around with it last night. And I said to it — I was throw­ing log­i­cal prob­lems at it — I said, “if it takes five hours to dry five pieces of cloth­ing hung out­side, how long would it take to dry thir­ty pieces of cloth­ing?” And it gave me, you know, all of this arith­metic and said, you know, “con­clud­ed thir­ty hours”.

Tony  04:54

Real­ly?

Cameron  04:55

Yeah, and I asked it again. I’ve got­ten into the habit of say­ing “review that and improve upon it,” and it went “no, it’s still thir­ty hours.” I said, “alright, your job is now to check the log­ic of the for­mer answer.” And it came back and went, “oh, yeah, right. Okay. Well, it would­n’t be a lin­ear denom­i­na­tor for that.” But it said, “I don’t know enough about the humid­i­ty, how much room there is to put out the clothes,” you know, “the den­si­ty of the clothes, how wet they are? I real­ly don’t have enough infor­ma­tion to answer that ques­tion.” I thought that was a good way of get­ting out of it. Fair enough.

Tony  05:36

It is kind of human like in that it just jumps in with the wrong answer rather than ask the ques­tions to get to the right one.

Cameron  05:42

Well, actu­al­ly, that’s part of what I’ve been learn­ing to do. You know, as a good prompt engi­neer, you have to say, “here’s the ques­tion, ask me for more infor­ma­tion if you need more infor­ma­tion to work it out step by step.” And you have to kind of treat it like a teenag­er, in a lot of cas­es, to get it to think in the way that you want it to think. There’s a lot of work involved. I saw a study the oth­er day that said if you just throw in a ques­tion, you have an 81% chance of get­ting a cor­rect answer. But if you finesse it a lit­tle bit… It’s like a woman, Tony, you know, if you just tell her what you want you’ve got an 81% chance of get­ting it, but if you finesse it a lit­tle bit, take it out to din­ner, but it some flow­ers…

Tony  06:25

Well, apolo­gies to all our female lis­ten­ers, and Hap­py Moth­er’s Day on Sun­day.

Cameron  06:31

I’m kid­ding, I’m kid­ding. Lucky Chris­sy does­n’t lis­ten to this and she’s not home right now, I’d get a boot­ing.

Tony  06:37

Well, my daugh­ter will tran­scribe this, so feel free to man­gle that sec­tion, Alex.

**Alex here. It’s okay. I’ll just leave it there for pos­ter­i­ty…**

Cameron  06:45

Yes. Let’s do a port­fo­lio update before I get myself into more trou­ble. Did my week­ly update today. I tell ya, it’s been a rough trot on the old All Ords, man. I had a look ear­li­er. I think in the last three months we’re down, the All Ords is, down in the last three months. It’s up over a six-month peri­od, but not by much. Year to date it’s up, but last three months has been pret­ty grim. Secret rate ris­es com­ing in from your friends at the RBA last week.

Tony  07:18

You know, I had a thought about them. I real­ly think they need an AFSL licence before they start telling peo­ple what to do.

Cameron  07:26

Do they have one? That’s a good ques­tion.

Tony  07:28

No! But they can stand in front of a micro­phone and affect every­one’s per­son­al finances.

Cameron  07:33

That’s not right. There’s some flaw in that, I think. Any­way, our QAV port­fo­lio report, the dum­my report. Since incep­tion, which for new lis­ten­ers is the begin­ning of Sep­tem­ber 2019, is com­ing up to four years. Accord­ing to Navexa, we’re track­ing a 17.13% per annum CAGR over that peri­od, ver­sus the bench­mark STW which is track­ing at about 7.3, I think. We’re doing a lit­tle bit less than two and a half times the bench­mark over that peri­od, let’s say three and a half years rough­ly. We’re up 12.38% for the finan­cial year, per annum, again, CAGR, ver­sus the STW, which is up 16.11. So, we’ve been catch­ing up there, but it got ahead of us a lit­tle bit in the last week thanks to OML, which we’ll talk about lat­er.

Tony  08:25

Well, I kind of find it strange that with every­thing going on in the world, the All Ords are still up 16%.

Cameron  08:31

I know, right?

Tony  08:31

So, that’s amaz­ing.

Cameron  08:33

But you’ve said to be before, like, it’s all at the top end, you think, in this last year?

Tony  08:37

Yeah. I think from mem­o­ry, you know, some of the big iron ore min­ers came back. What else has hap­pened? Oh, the banks. Comm­Bank did okay in the first half of the year, I think it’s come off a lit­tle bit since then. So yeah, it’s the big end, for sure.

Cameron  08:52

For the quar­ter, which obvi­ous­ly start­ed the first of April — so, we’re a month and a bit into the quar­ter — we were way ahead of the STW until OML kicked in, and now we’re sort of neck-and-neck. We’re up 1.4, it’s up 1.4. So yes, OML. We lost 23% on OML last week. It just crashed and burned, and we’ll talk about that a lit­tle bit lat­er on when we get into the rest of the show. That was dis­ap­point­ing, but there you go. Inter­est rates are up, Tony.

Tony  09:29

Again.

Cameron  09:30

Every­one needs to put the rights up in the spread­sheet again.

Tony  09:32

Yes, cor­rect. That’s right. I haven’t done a mort­gage rate sur­vey yet, but I’ll do that in a week or so when it flows through and see if we have to update that cell in the spread­sheet as well for our test against yield. But yeah, peo­ple should update their spread­sheets for our IV cal­cu­la­tions using the bench­mark rate, the cash rate.

Cameron  09:51

I will do an updat­ed ver­sion of the TK and AF sheet with the lat­est rates at some stage in the next day or so.

Tony  10:01

Inter­est­ing that they did raise rates, though, I thought. They paused them the month before, and I think every bond trad­er and every econ­o­mist in Aus­tralia was think­ing they con­tin­ued to be paused, so every­one was blind­sided. Lis­ten­ing to Alan Koehler and a few oth­er com­men­ta­tors, they think it may have been polit­i­cal because the Reserve Bank Review came out and crit­i­cised the cur­rent lot. So, it might have been a bit of revenge going on there. But any­way, who knows? Strange Days.

Cameron  10:28

Wow. That’s a big call.

Tony  10:30

I love a good con­spir­a­cy the­o­ry.

Cameron  10:32

I know you do. Well, speak­ing of con­spir­a­cy the­o­ries: I think War­ren Buf­fett and Char­lie Munger were replaced with dig­i­tal ver­sions of them­selves run by a game engine, because I refuse to believe that two guys in their nineties — Buf­fet­t’s about, what nine­ty-two/nine­ty-three now, Char­lie’s nine­ty-nine — could do a six hour and forty-four minute Q&A at the Berk­shire AGM this week,

Tony  11:01

I mean, they’re prob­a­bly Mup­pets. They’re Statler and Wal­dorf from the Mup­pet Show.

Cameron  11:07

Well, I don’t know whose hand is up their ass, but they did a real­ly good job.

Tony  11:12

Ajit Jain and Greg Able, who are wait­ing to take over.

Cameron  11:16

But they were sit­ting at the table too. Well, Greg was any­way. That’s just the pow­er of See’s Can­dy, I guess. Seri­ous­ly. Like, I’ve got a lot of friends, well one less since Father Bob died, but I’ve got a lot of friends in their nineties who are rel­a­tive­ly cogent, but there’s no way they could sit there and do a Q&A for near­ly sev­en hours on invest­ing and what­ev­er. That’s seri­ous­ly, insane­ly impres­sive, those two guys. I mean, Char­lie does­n’t talk much, but when he does its good stuff.

Tony  11:52

Yeah, I mean, it’s been cov­ered a lot in the press, but I’m still amazed by them. They still make a whole heap of sense. They’re fun­ny, they’re wit­ty, they field all sorts of ques­tions. It’s just amaz­ing. It’s a great show. I think one of our lis­ten­ers was over there, so when they get back, we should have a chat with them and get their impres­sions.

Cameron  12:09

Yeah, that’s right. I don’t remem­ber who that was. Brett, Brent, some­body? Any­way, they’ll let us know. Well, I’ve got some clips here, some high­lights. I might play a cou­ple of clips for peo­ple that haven’t watched the whole sev­en hours. Have you watched the whole sev­en hours yet?

Tony  12:22

I haven’t. I’ve just been pick­ing the clips out as well.

Cameron  12:24

Yeah. I watched a bit, I tried to get through as much of it as I could, but I just don’t have sev­en hours to kill. But here’s talk­ing about the impact of AI and robot­ics.

War­ren Buf­fett  12:39

“…And I thank you for ask­ing Char­lie that ques­tion.”

Char­lie Munger  12:45

“If you went into BYD’s fac­to­ries in Chi­na, you would see robot­ics going on at an unbe­liev­able rate. So, we’re gonna see a lot more robot­ics in the world. I am per­son­al­ly scep­ti­cal of some of the hype that has gone into arti­fi­cial intel­li­gence. I think old fash­ioned intel­li­gence works pret­ty well.”

War­ren Buf­fett  13:13

There won’t be any­thing in AI that replaces the jig. I state that unqual­i­fied­ly. They can do amaz­ing things. Bill Gates brought me out the lat­est, maybe not the lat­est ver­sion, but one he thought maybe I could han­dle. They have to be care­ful with me in terms of lead­ing me too fast. And it did these remark­able things…”

Cameron  13:41

It sounds like Bill Gates and Buf­fett have the same rela­tion­ship as you and I, Tony. I don’t want to ask you to do too much on the tech­nol­o­gy side of things. It’s slow­ly, slow­ly, incre­men­tal­ly.

Tony  13:53

Yeah, well, I’m wait­ing for Chat GPT to improve so I can take a hol­i­day again. You’ve trun­cat­ed the Buf­fett clip there. There’s a punch line to it you’ve missed.

Cameron  14:03

Yeah, yeah, I just paused it.

Tony  14:04

Ah, sor­ry.

Cameron  14:05

I’m get­ting back to it.

War­ren Buf­fett  14:08

“It could­n’t tell jokes. Bill told me that ahead of time…”

Cameron  14:11

See, I can tell jokes, which is why I had to pause it.

War­ren Buf­fett  14:14

“It just isn’t there. But you know, things like check­ing all the legal opin­ions since the begin­ning of time and every­thing, and elim­i­nat­ing all… I mean, it can do all kinds of things. And when some­thing can do all kinds of things, I get a lit­tle bit wor­ried, because I know we won’t be able to unin­vent it and we did invent for a very, very good rea­son, the atom bomb, in World War Two, and it was enor­mous­ly impor­tant that we did so. But is it good for the next two-hun­dred years of the world? The abil­i­ty to do so has been unleashed. We did­n’t have a choice. But when you start some­thing… Well, Ein­stein said after the atom bomb, he said, ‘this changes every­thing in the world except how men think.’ And I will say the same thing may… Not the same thing. I don’t mean that. But I mean with AI, it can change every­thing in the world except how men think and behave. And that’s a big step to take. A good ques­tion.”

Cameron  15:32

He has anoth­er bit on AI and invest­ing lat­er on that I’m going to jump to, because there’s a great quote in this.

Tony  15:39

Thank you.

Char­lie Munger  15:40

“I’m going to take that one. I think val­ue investors are gonna have a hard­er time now that there’s so many of them com­pet­ing for a dimin­ished bunch of oppor­tu­ni­ties. So, my advice to val­ue investors is to get used to mak­ing less.”

War­ren Buf­fett  15:59

“And Char­lie has been telling me the same thing almost the whole time we’ve known each oth­er. We get along won­der­ful­ly because…”

Char­lie Munger 16:06

“Well, we are mak­ing less.”

War­ren Buf­fett  16:07

“Yeah, well, but that’s most­ly I think is because…”

Char­lie Munger  16:11

“We were younger…”

War­ren Buf­fett  16:13

“We nev­er thought we could man­age 508 bil­lion. But I would argue that there’re gonna be plen­ty of oppor­tu­ni­ties. And part of the rea­son there’re going to be plen­ty of oppor­tu­ni­ties… The tech does­n’t make any dif­fer­ence or any of that. I mean, if you look at how the world’s changed in the years since 1942 when I start­ed, you’d say, ‘Well, how does a kid that does­n’t know any­thing about aero­planes, does­n’t know any­thing about engines and cars and does­n’t know any­thing about elec­tric­i­ty and all that.’ But that real­ly isn’t the… the world chang­ing does­n’t… or, new things com­ing on don’t take away the oppor­tu­ni­ties. What gives you oppor­tu­ni­ties is oth­er peo­ple doing dumb things. I would say that in, well, the fifty-eight years we’ve been run­ning Berk­shire, I would say there’s been a great increase in the num­ber of peo­ple doing dumb things, and they do big dumb things. And the rea­son they do it to some extent is because they can get mon­ey from oth­er peo­ple so much eas­i­er than when we start­ed. So, you could start ten or fif­teen dumb insur­ance com­pa­nies in the last ten years, and you could become rich if you were adroit at it whether the busi­ness suc­ceed­ed or not, and the under­writ­ers got paid and the lawyers got paid. And that cre­ates, if that’s done on a large scale — which it could­n’t be done fifty-eight years ago, you could­n’t get the mon­ey to do some of the dumb things that we want­ed to do, for­tu­nate­ly. And so, I think that invest­ing has dis­ap­peared so much from this huge, cap­i­tal­is­tic mar­ket that any­body can play in, but that the big mon­ey is in sell­ing oth­er peo­ple ideas. It isn’t out­per­form­ing, in out­per­form­ing. And I think if you don’t run too much mon­ey — which we do — but if you’re run­ning small amounts of mon­ey, I think the oppor­tu­ni­ties will be greater. But then Char­lie and I always dif­fered on this sub­ject. He likes to tell me how gloomy the world is and I like to tell him, ‘we’ll find some­thing.’ And so far, we’ve both been kind of right.”

Cameron  18:44

Oth­er peo­ple doing dumb things.

Tony  18:47

A great quote, isn’t it? And the oth­er great quote was, you know, peo­ple mak­ing mon­ey from sell­ing ideas, not per­form­ing well.

Cameron  18:54

Not out­per­form­ing, yeah. Just in the, you know, three or four years we’ve been doing this show, I guess I’ve had a big edu­ca­tion just see­ing peo­ple doing some dumb things; get­ting sucked in by hype and pro­pa­gan­da around invest­ing oppor­tu­ni­ties rather than just doing the basics. Peo­ple hate doing the basics, don’t they? It’s because it’s kind of bor­ing.

Tony  19:22

Yeah. Go for a walk, eat your veg­gies. Prob­lem solved. Rather than, go to the shop, you know, browse the vit­a­min counter, buy a shake. I mean, I’m real­ly proud that we have on our front page our port­fo­lio and how it’s per­formed. We don’t try and hide it. We always talk about it every week; we don’t talk about it just when it’s out­per­form­ing. We’re just doing the basics, week after week after week.

Cameron  19:48

Yeah, and look, I think AI is going to be an incred­i­ble tool for us. I do think it’s going to speed up and sim­pli­fy a lot of the research that we do when it’s ready. It’s not quite ready to do that yet, but it’s mov­ing real­ly quick­ly. But peo­ple will use it to do dumb things as well, and to invest in dumb things, just like they always have. Peo­ple have said to us over the last few years, aren’t you wor­ried that peo­ple will take what you’re doing, and then every­one will be doing it and there won’t be any oppor­tu­ni­ties left. And we always point out, well, War­ren Buf­fet­t’s been telling peo­ple how to do this stuff for fifty years, and most of us still aren’t doing it. So, if Buf­fett can’t con­vince peo­ple to do this, then as much as I think we’re pret­ty good at teach­ing this, I don’t think we’re War­ren Buf­fett yet.

Tony  20:42

Yeah, that’s right. We’ve got anoth­er fifty years to go, prob­a­bly. Well, we can’t. We could nev­er approach War­ren Buf­fett sta­tus, but he has a lot of expe­ri­ence behind him. I mean, you’re right. I mean, you know, some­one’s gonna work out how to game Chat GPT to always spit out their fund name when some­one asks Chat GPT “where should I invest?” Right, and they’re going to get very rich. That’s just the way soci­ety works. I think the real issue with Chat GPT is it’s just going to increase trib­al­ism. I mean, after trav­el­ling through the US, it’s just so trib­al now. Every­one’s dug into their fox­holes. They’re toss­ing hand grenades. No one’s will­ing to talk with any­one else out­side of their tribe. And, you know, part of that is due to-it’s all media dri­ven. You know, you can watch Fox News and see one side of the sto­ry, watch CNN see the oth­er side of the sto­ry. It’s going to get worse with Chet GPT, because it’s com­ing across as an objec­tive arbiter. But you could prob­a­bly ask it two ver­sions of the same ques­tion and get the right way answer and the left-wing answer.

Cameron  21:48

Well, what I pre­dict will hap­pen is there will be one AI that you will ask and it’ll give you the right wing answer, and you’ll ask anoth­er one and it’ll give you the left wing answer. And then the left wing one will tell you the right wing one is lying, the right wing one will tell you the left wing one is lying. So, you know, it is, it is going to cre­ate a lot of prob­lems. I mean, it’d be nice to think that there’d just be one that was com­plete­ly neu­tral and gave you the facts. But I remem­ber thir­ty years ago when we thought the inter­net was going to democ­ra­tise infor­ma­tion, too, and I don’t know what hap­pened to that. It just got gamed, right?

Tony  22:28

Yeah. And this is this is the inter­net on steroids, so it’s going to get gamed, too, and make it even hard­er to see through what’s going on. Which is unfor­tu­nate. And to your com­ment about at the moment, what was it? 81% of answers are cor­rect. I read an arti­cle about a lawyer who said, “I love Chat GPT. It’s going to increase lawyers’ bill­able hours, because I’ve now got to employ some­one to check the out­put from Chat GPT before I can present it in court.” So, every­one’s say­ing, “oh, they’re gonna inter­me­di­ate lawyers and oth­er white-col­lar pro­fes­sion­als.” Well, not yet.

Cameron  23:02

Not yet. But, you know, I don’t think it’s going to stay at 81% accu­ra­cy for long. I mean, still got to remem­ber this thing was­n’t even in the pub­lic eye six months ago. So, as I keep telling peo­ple, it’s bug­gy. It’s a beta tool. You’ve got to think of it as a beta tool. But where it will be a year from now, or five years from now, these tools, who knows? Any­how, mov­ing right along.

Tony  23:26

You did­n’t play the bit of War­ren Buf­fet­t’s video that I thought you were going to play when he talks about when Bill Gates brought him Chat GPT, or an ear­ly ver­sion of it, and he said he want­ed to ask it, “how are you going to get rid of the human race?”

Cameron  23:40

Oh, I did­n’t hear it.

Tony  23:42

Buf­fett wants to see what it says and pull the plug out before it does it.

Cameron  23:47

I did­n’t see that bit. No, I just heard the bit about it does­n’t tell jokes. There are a lot of clips, we can’t spend all day on it, but there was anoth­er clip where he talked about being a non-emo­tion­al per­son when it comes to invest­ing. Be emo­tion­al in oth­er parts of your life but be non-emo­tion­al when it comes to invest­ing. And obvi­ous­ly that’s one of the things that QAV does for us, is it helps us be non-emo­tion­al. And that was going to lead me to my next point. Steve wrote on Face­book, one of our QAV club mem­bers, the oth­er day: “this post is for any­one that needs a reminder to not hold on to losers and to fol­low the rules. Have a look at what is hap­pen­ing with SRX and OML today. The take­away here is that they can keep drop­ping before they find a new base.” I’ve had a few peo­ple, few of our mem­bers recent­ly tell me their own expe­ri­ences with that, that they let some­thing go through the rule one or the 3PTL line and they were like, “I think it’s going to come back and I don’t think I should sell it just yet.” And then it just kept drop­ping and kept drop­ping and kept drop­ping, and they got to the point where they’re like-even Tay­lor did that. I think for Tay­lor, it was just he took his eye off the ball and did­n’t check his alerts. But yeah. Then it drops 20/30% and peo­ple get into the whole, wow, it’s dropped so much now, what do I do? I just might as well hold on to it and hope it comes back even­tu­al­ly.

Tony  25:11

On the odd occa­sion when I have missed my alerts for what­ev­er rea­son. If you turn up one day and it’s down 20 or 30%, you got­ta sell it. It’s down that low for a rea­son. It’s prob­a­bly not going to get bet­ter in a long time.

Cameron  25:24

Well, speak­ing of a rea­son. OML, oOh!media for peo­ple that don’t fol­low OML. We held it in a port­fo­lio, a cou­ple of port­fo­lios, actu­al­ly. It was in the dum­my and in the light, and on the Third of May, yeah, as we said ear­li­er, it dropped by 23% in one day. Every­one was scratch­ing their head on the day try­ing to fig­ure it out and ask­ing ques­tions. Could we have used Renko charts to get out ear­li­er? But it looks like it all came down to this pre­sen­ta­tion they gave at a Mac­quar­ie Con­fer­ence. I saw a copy of the pre­sen­ta­tion on the day, and I flicked through it and it did­n’t look that bad to me, but it’s obvi­ous­ly seemed to coin­cide with the drop. Now if you go on Stock Doc­tor and look at the com­mu­ni­ca­tions tab under OML, it’ll show you that there was a 23% drop asso­ci­at­ed with that pre­sen­ta­tion on the day. So, did you learn any­thing more about why OML tanked as quick­ly as it did?

Tony  26:27

Yeah, I’m not sure where I read it, but I read a cou­ple of days lat­er, or maybe a day lat­er. Yeah, so I mean, the Mac­quar­ie con­fer­ence is, you know, a con­cen­trat­ed Shark Tank of all the bro­kers sit­ting in a room. And one of the things that was part of the pre­sen­ta­tion was that Oohm!Media was­n’t grow­ing as fast as peo­ple thought, and so the num­bers got re-crunched on the spot and the com­pa­ny was deval­ued. So, it had a bit to do with the fact that out­door media was grow­ing dur­ing COVID at the expense of oth­er media, and-no, sor­ry, the reverse, it was shrink­ing dur­ing COVID because no one was going out­doors, and then the year after COVID it had a huge increase year on year. And that slowed down a lot, and so peo­ple read­just­ed their num­bers. And there was also some­thing about mar­ket share being tak­en by a com­peti­tor as well in one of the cat­e­gories which was impor­tant. So, yeah, it did­n’t take long for the bro­kers to sense blood in the water and sell.

Cameron  27:24

Yeah, that was dra­mat­ic.

Tony  27:26

It was, was­n’t it. It’s unusu­al. You don’t nor­mal­ly see that.

Cameron  27:29

It dropped from $1.63 on the close of the day before down, like, lit­er­al­ly in the morn­ing it dropped imme­di­ate­ly down to $1.23. And then it kept drop­ping down to $1.15 — a $1.14, even. It did recov­er a bit since then. I think it’s back up to about $1.24 now, but still a long way down from where it was. And going back on the 27th of April, it was $1.71. So, yeah, that’s a mas­sive drop. It lost a third of its share price, I guess, since 27th of April. And it did­n’t hap­pen slow­ly. It hap­pened, boom, one hit, one day. So, yeah.

Tony  28:09

Very unusu­al, but it can hap­pen.

Cameron  28:11

Now, I still don’t know how to dri­ve a Renko chart prop­er­ly, Tony. I doubt, though, you know… If this was a result of their pre­sen­ta­tion at the con­fer­ence, unlike­ly that any Renko chart would have tipped us off.

Tony  28:24

Yeah, I agree. Well, I haven’t got the Renko chart in front of me, but oOh!media was going up, so it would have been green bars going up as well. But it’d be a red bar now because it’s dropped so much, but I doubt if Renko would have pre­dict­ed this at all. Renko charts are basi­cal­ly a trail­ing stop loss as Brett point­ed out to us as well. If the stocks going up, it’s not going to cross it’s stop loss.

Cameron  28:47

Yeah, I just pulled up the Renko charts for it. So, what am I doing wrong here? The Renko bars fin­ish in 2021.

Tony  28:56

Oh, no, there’s two com­pa­nies. Just to make sure you’ve got the right one. There’s oOh!media, OML, and there’s OOH, which I think it might have been a for­mer incan­ta­tion of the com­pa­ny that was delist­ed.

Cameron  29:12

Yeah, I’m look­ing at OML.

Tony  29:13

Oh, okay.

Cameron  29:15

I got noth­ing after 2021 in terms of Renko, though. If I go to the line chart that goes all the way to today.

Tony  29:24

Yeah, I got the same. Yeah, don’t know.

Cameron  29:27

There you go. Renko charts would not have helped us because there are no Renko charts for the last cou­ple of years on it.

Tony  29:34

Well, I’m gonna guess, and this is only a guess, is that that last bar actu­al­ly spans a num­ber of years. So, Renko charts aren’t like look­ing at a line chart. You don’t get an equal gap between the time peri­ods nec­es­sar­i­ly.

Cameron  29:48

Oh, real­ly?

Tony  29:49

Yeah, they just they just tell you when they change. So, if a stock goes up for a long time, or side­ways for a long time, it maybe can only have one bar on the chart.

Cameron  1:31:47

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