The market’s had a rough week, MYR collapses on good results, business confidence is up while consumer confidence is down, coking coal isn’t a sell after all, pulled pork on NCK, possible changes to Rule 1, BBN’s performance, and adding buybacks to the checklist.


QAV 632 Club
[00:00:00] Tony: Okay.
[00:00:00] Cameron: welcome, back to QAV Tony, episode 632, 8th of August, 2023, you’re back in Sydney!
[00:00:08] Tony: I am. Yeah. It’s sunny today.
[00:00:10] Tony: It’s been a bit wintry, but it’s nice today now. It’s good.
[00:00:13] Cameron: That’s good. How was your trip back through Wagga?
[00:00:17] Tony: good. Good. We played golf a couple of times. Drove back up. We had a, we had an 18th birthday on Friday night that Ruddy and I and Jenny went to, which was lovely. A friend of ours has a daughter who’s 18. So that was nice. Spent the weekend socializing a little bit.
[00:00:33] Tony: It’s been good.
[00:00:34] Cameron: right. The 18th birthday party with a bunch
[00:00:36] Cameron: of 60 year olds.
[00:00:38] Tony: Yeah. It was. It was all the, it was all the adults friends, really.
[00:00:41] Cameron: right.
[00:00:42] Tony: Yeah. But yeah, we’ve known her all her life. So it was, it was fun. I asked her if she’d been to see the Barbie movie, cause she looks a bit like a Barbie. Don’t mean that in a bad way.
[00:00:51] Tony: She’s quite an attractive blonde 18 year old. And she said, yeah, it was really boring.
[00:00:57] Cameron: Chrissy was going to see it with a bunch of female friends [00:01:00] yesterday, but she’s got a nasty cough, so she pulled out, but yeah, it’s doing well. Done like a billion dollars at the box office.
[00:01:07] Tony: Yeah. It’s amazing, isn’t it? And Margot Robbie put it all together too.
[00:01:10] Cameron: Did she? She put it together. Good
[00:01:12] Tony: Apparently. Yeah.
[00:01:13] Cameron: Do you know how many films have done a billion dollars at the box office?
[00:01:17] Tony: No, I don’t.
[00:01:18] Cameron: I thought it was like maybe 10. 53 now. Barbie is the 53rd movie to do a billion dollars. I remember when like Titanic was the first movie to do a billion dollars. Now there’s 53 of them.
[00:01:31] Tony: I remember when Titanic was, was costing nearly a billion dollars to make and Rupert Murdoch showed a rough cut of the Titanic going down at a News Corp annual general meeting just to silence the critics and everyone walked away going, yeah, it’s going to make
[00:01:46] Tony: billions.
[00:01:46] Cameron: And it did.
[00:01:48] Tony: And he was right.
[00:01:48] Cameron: Well, speaking about going down, Tony
[00:01:51] Cameron: And I’m not talking about the 18th birthday party the market’s had a rough week. Why?
[00:01:57] Tony: Yeah. why?
[00:01:57] Tony: is it so?
[00:01:59] Cameron: [00:02:00] Sand in funnel supported by
[00:02:01] Cameron: string. Glass and a half of dairy milk chocolate.
[00:02:04] Tony: Gosh, I met Julius Sumner Miller. He taught at my school.
[00:02:07] Cameron: You’ve told me, Yeah.
[00:02:09] Tony: Yeah. Well, the stock answer, Cam, is that interest rates either went up, no, went up or looked like going up in the States again. So the market didn’t like it, but I’m not sure that really applies here. And I think our stocks have been doing fine.
[00:02:22] Tony: I, I noticed Pilbara resources up a fair bit this week after there was an an update on or an upgrade to the, the, what do they call it? The amount of resources that they declared that they
[00:02:35] Tony: can mine. So that was good.
[00:02:37] Cameron: Well you obviously haven’t seen what happened to Myer today.
[00:02:41] Tony: No.
[00:02:41] Cameron: Myer can never win with Myer. It’s down 14% today.
[00:02:47] Tony: you are. ha
[00:02:49] Cameron: I saw this in the ABC not
[00:02:50] Cameron: long before we went to air. Myer shares have slumped after a forecast weaker than expected profit for the 2023 financial year. The retailer predicts that after [00:03:00] tax profit will come in between 69 to 73 million, up 15 to 21% from a year ago.
[00:03:06] Cameron: You would think that’s good, but below a forecast of 88. 5 million by financial news service Refinitiv. Like, who’s listening to Refinitiv? Why are we listening to Refinitiv all of a sudden? When, why do they get to decide what should happen? Myer says sales rose 12. 5% from the 2022 financial year to 3. 6 billion.
[00:03:27] Cameron: That’s despite deteriorating trading conditions over the first half of 2023. So, seriously, what the hell? Their, their profits are up, their sales are up. Share price is down 14%. Like, give me a break. That’s not right.
[00:03:41] Tony: Consensus downgrade. That’s. One of the things that drives the share market the most is forecasts, and we all know how good forecasts are, and we all know that stockbrokers are inclined to gild the lily with forecasts when they talk to their clients, and as soon as someone comes out and says, yeah, that forecast isn’t going to be [00:04:00] met, even if they make up a lot more money this year than last year, share price drops.
[00:04:04] Tony: And it’s a, it’s kind of a strange thing in the share market, really. A, that you listen to stockbroker forecasts or, or analyst forecasts, and B, Myer should have been doing a better job of guiding them down if they are meeting with those analysts along the way. To come out with a surprise downgrade is never a good look.
[00:04:21] Tony: And this is confession season for Myer, because they, they don’t report in August, they report in September. Oh, sorry, they announce their results in September, they report they finished, they rule their year off in July.
[00:04:33] Cameron: So this is a confession, I guess.
[00:04:35] Tony: Yeah,
[00:04:36] Cameron: Myer Chief Executive John King said we continue to tightly manage costs, inventory and cash to ensure we have a strong balance sheet as we begin FY24, where we expect the ongoing uncertainty around the macroeconomic environment to persist. I thought he was going to say, you know what, you can all just bite me.
[00:04:53] Cameron: That was a bloody good result. Leave me the hell alone.
[00:04:56] Tony: yeah, they should, but he’s trying to be polite, I guess.
[00:04:59] Cameron: It’s [00:05:00] probably why I’m not the chief executive of Myer.
[00:05:02] Tony: Well, John King is pretty experienced. He should have known better than to have a surprise downgrade. He should have been out there much before, a long time before this,
[00:05:10] Cameron: Well, he’s, he is, isn’t that what he just did? He just guided the market.
[00:05:15] Tony: Yeah, a bit late though, he would have known about this. Because Myer, you know, the interesting thing about Myer is they do more than half of their business in the first half at Christmas time, so something’s gone horribly wrong in the second half, which he would have been part of, and knowing as it went, he should have been out there a little bit earlier, I would have thought, letting people know it’s good, but it’s not as great as the analysts are saying.
[00:05:36] Cameron: Like, it’s just, this is my experience from like last year with Myer all over again, it’s just, it’s up 25, 30, 50%, and then you just watch it slide all the way back down to become a rule one.
[00:05:48] Tony: Oh, it’s a bugger, yeah.
[00:05:50] Cameron: Well, Tony, speaking of confusing news, I was looking at the ABC before we went to the air. Two stories back to back in the ABC today. The first [00:06:00] one is business confidence picks up even though costs rise. The National Australia Bank says business confidence has lifted slightly to be back in positive territory in July.
[00:06:09] Cameron: However, it is still low at two index points. Business conditions eased one point to 10 index points. Trading conditions, employment and profitability were all steady according to NAB chief economist Alan Oster. He says business conditions continued to show resilience in July and have been broadly steady in the past couple of months at above average levels.
[00:06:29] Cameron: The very next story says consumer confidence falls. Consumer confidence remains deeply in pessimistic territory amid high interest rates, high inflation and the slowing economy. Westpac and the Melbourne Institute say consumer sentiment dropped 0.4 percent to 81 in August. Westpac senior economist Matthew Hassan says the Reserve Bank interest rate pauses last month and this month have done little to lift confidence, probably because the RBA has warned that more rate rises may be needed.
[00:06:58] Cameron: He says consumers are worried about [00:07:00] inflation. including recent fuel and energy price rises with pressure on family finances and concerns about rates and the economic outlook. Now, call me crazy, call me stupid, but I would have thought if consumer confidence is low, business confidence would also be low seeing as consumers are the ones that are spending the money on the businesses and so if consumers are worried that they’re not going to spend money and therefore business confidence would be low, but apparently I don’t know anything.
[00:07:26] Tony: Yeah, I don’t know. I mean, consumers are being driven by interest rates, which I guess business is too, to a certain extent. Oh, I’ve got no idea why they’re different. Just speculating. I suspect they see, I mean, the talk about recession is lifting and supply chains are opening up and inflation’s coming down a little bit.
[00:07:43] Tony: So that’s probably stoking business confidence, but, but mortgage holders, residential mortgage holders are still experiencing high, a quick rise in interest rates, which should be hurting is my guess.
[00:07:55] Cameron: Well, there you go. Other news? Coking Coal. [00:08:00] In our when we put out our buy list yesterday, we said Coking Coal was a sell. Then I noticed that meant Stanmore was a sell because they’re Coking Coal. I went to double check that this morning and I looked at the chart again and I think it is a sell .
[00:08:16] Cameron: I think it’s above the sell line. Do you have a look at it? What do you
[00:08:20] Tony: Yeah, I agree. I think it’s a buy, according to the chart. The only question I have is that’s, that’s the graph that we use a rolling monthly futures contract for, isn’t it? So we don’t really get a five year monthly graph for coking coal.
[00:08:33] Cameron: No.
[00:08:34] Tony: Yeah, so it’s, yeah, I might just try and dig around and maybe you can do the same and try and find a five year graph for coking coal if we can.
[00:08:41] Cameron: I think we did that and that’s how we ended up with this one. I think this is the only one we could find the last time we did that, but
[00:08:47] Tony: I know.
[00:08:48] Cameron: things might have changed.
[00:08:49] Cameron: Alright, well, portfolio updates our portfolio’s still doing the same, still two and a half times the index since inception [00:09:00] it’s been a, I don’t know, relatively Quiet week, I guess.
[00:09:04] Cameron: Nothing much has really happened. Haven’t had to trade anything in the last week. No really big highlights. Do you have any highlights from our portfolio in the last week, Tony? I think the biggest performer was PLS as of today, because it’s gone up, as you said. The worst performer was probably LAU, Lindsay Australia, it’s taken a bit of a hit.
[00:09:27] Tony: Okay,
[00:09:28] Cameron: I mean, it, we bought it at 42 cents and it’s currently 1. 22, so I’m not complaining to the Lindsay brothers, but still, it’s, it’s come back a bit. Don’t know why, maybe a little bit of profit taking, who knows.
[00:09:40] Tony: well,
[00:09:41] Tony: the
[00:09:41] Cameron: had a couple of dividends in there too, so it’s, it’s been a corker of a stock.
[00:09:46] Tony: Yeah, good. The weekly report I got from Navexa, which is the calendar week last week, says the worst performing stock was Credit Corp, which we spoke about last week, coming off again because it’s forecasting less than what [00:10:00] analysts are forecasting, so the stock is down 12%. But ASG, Auto sports groups, was up 11. 11%. 11. 11%.
[00:10:08] Tony: Last week,
[00:10:09] Cameron: last week. really?
[00:10:10] Tony: Hmm. So that’s between 31st of the 7th and the 6th of the 8th, according to Navexa.
[00:10:16] Cameron: Well, it’s come off a lot since then.
[00:10:19] Tony: Okay.
[00:10:19] Cameron: At the moment, they’re saying I’m looking at the last seven days and it’s saying it’s down 1. 22%.
[00:10:26] Tony: Hmm.
[00:10:27] Cameron: So, oh no, that’s just today. No, it’s up 0. 83% in the last seven days. So, I don’t know. It must have taken a turn. I never know. Your numbers are always different from my numbers.
[00:10:37] Tony: Yeah. I just used the report Navexa gives me for the calendar week, week before. Anyway.
[00:10:41] Cameron: Anyway, not a lot of movement.
[00:10:43] Tony: No, it’s actually kind of eerily… Quiet, isn’t it, for a reporting season? Oftentimes people are second guessing what’s coming out and selling and trading trading, on results, but haven’t seen much of that yet.
[00:10:58] Cameron: You haven’t noticed anything? You’re [00:11:00] still doing downloads of the stocks with the that have come out with their financials a couple of times a week? No?
[00:11:06] Tony: Nah, nah, unless I’ve got something to buy or sell, I’m not. And I haven’t at the moment, so everything’s reasonably above its, its sell lines, which is good. It’s nice to have a stable portfolio for change.
[00:11:17] Cameron: So what investing stuff do you have to talk about this week, Tony?
[00:11:22] Tony: A couple of things. I’ve got an update on the work that Ryan has been doing for us and it’s, it’s still probably a week away from being completely finalized and I’ve asked him to put, put the major points into a PowerPoint presentation, just a short three slide deck that we can share. It’s looking like though, apart from the fact he’s got double check numbers, etc.
[00:11:45] Tony: It’s looking like though, as I thought, there’s no difference from buying top down on the buy list to buying bottom up on the buy list, or little difference anyway. So that, we can put that one to bed. Which is kind of counterintuitive, because you think if the [00:12:00] QAV score was higher, it would be a better buy, but it wasn’t coming out that way.
[00:12:05] Tony: And he’s also done a fair bit of work on whether Rule 1 should be 10% or 20%, and despite some early results showing 20% was better, again it’s come out as little difference in terms of ROI. So, I’ve said, yeah, so the only difference that we found, or that he found, is that there are much less trades if you use 20% compared to 10%.
[00:12:30] Tony: It’s kind of a net net, you get the same sort of returns whether you use 10% or 20%. So I’ve asked him to go back and put in a transaction cost and see what the difference that makes to the returns. So he’s going to come back next week and let us know if it makes a big difference or not.
[00:12:46] Cameron: What figures is he using for the brokerage calculation?
[00:12:49] Tony: I’ve asked him to use 0.4 of a percent, which is what I use. which is what I pay with Ballieus. So he’s going to use that.
[00:12:57] Cameron: So changing rule one from [00:13:00] 10% to 20%. on the surface of it didn’t make any difference.
[00:13:04] Tony: It, it didn’t make any difference to the returns, but it made a big difference to the number of times we had to sell. And he also pointed out that it made a big difference to the, the rule ones after rule one. So there are almost no rule ones after rule ones at 20%, but there are a lot of rule ones following on the heels of rule ones, like the concatenating sells, the death spiral, if you use 10%.
[00:13:26] Cameron: So you’re saying that if we leave it at 10% the results are the same and therefore we might as well move it to 20% and then have to trade less?
[00:13:35] Tony: Correct. That’s what I’m thinking, but I’m going to wait until I get the final results next week.
[00:13:38] Cameron: Wow! That’s that’s a big change to our processes if it comes out that way at the end.
[00:13:46] Tony: Yeah, will be. And you know, it’s limited to three, like three years worth of analysis, but it’s fairly rigorous. So I’ll release it. And I’ll probably just do it as a trial myself for a while, first of all to see. You know, what the kinks up and then [00:14:00] yeah, we might make a change later on this year.
[00:14:02] Cameron: So has he looked at 25%?
[00:14:05] Tony: No, no. And look, to be fair to him, it’s a, it’s a really manual process to what he’s doing. So he’s got the buy, all the buy lists we’ve issued. And he goes back to the start and he just starts making. I think he made six or eight portfolios from different starting dates and then traded all the way through.
[00:14:25] Tony: And because we don’t have great automation, like he’s checking for commodity sells manually, he’s, you know, using the Brettalator for three point buy lines, which you’ve got to do manually as well. So there’s a fair bit of manual work there. It’s, it’s quite time consuming to say, okay, go and try 17%. or go and try 25%. So we just did 10 and 20.
[00:14:44] Cameron: Yeah, hopefully we can build some sort of software app that’ll enable us to speed up the regression testing. But that’s that’s, oh, that’s fascinating. Thanks for doing all of that. Thank you to you and Ryan for looking into that. I’m sure that’ll make all of our lives a lot easier if we didn’t have to do [00:15:00] as many rule ones.
[00:15:02] Tony: yeah. So hopefully I’ll have something to produce next week on that one. What else have I got? I’ve got a pulled pork to do cam on I’m going to do it on Nick Scali, which popped up on the buy list again this week. I think I may have done Nick Scali years ago, or at least in the past, but I’m going to do it again.
[00:15:18] Tony: And I think it’s, it’s a good company. It’s worth highlighting. So Nick Scali, the, the ticker code is NCK. I’ve owned it in the past, don’t own it now, and it’s been off the buy list for a while probably because of COVID and COVID related issues. And I’m doing the analysis on the results that we have available today.
[00:15:39] Tony: And this company doesn’t report until the 22nd of August. So the numbers we’re using are six months old and we’re waiting for new ones. It’ll be two or three weeks before we see them. But as you know, I I’m happy to buy. A company that comes into the situation, even though we’re waiting for new numbers.
[00:15:57] Tony: Might be, if people are out there a bit more conservative, they [00:16:00] can, you know, happily wait until we get new numbers. But generally I find, if something pops up on the buy list during reporting season before the results, especially retail companies which tend to be more cyclical and volatile than some, you know, some of the other companies that we look at.
[00:16:16] Tony: As we saw with Myer today. I’m happy to buy them because if they’re trending up coming into reporting season, usually that means the analysts have figured it out and are expecting a good result. There could even have been a leak of information somewhere along the line as well. But anyway it’s usually a good sign.
[00:16:31] Tony: Not always, but usually. So, have a look at it. Nick Scali, if people aren’t aware of them, they’re a furniture store network. A bit like, you know, Harvey Norman. that kind of thing, but they do offer brands across the whole economic spectrum from discount through to premium. And the big change in their business last year was they acquired a company called Plush, which has boosted sales and profit for [00:17:00] them which has been, been good for them going on their last results.
[00:17:03] Tony: So this is going back to February or March profit was up 30 from million to 60 million net profit after tax. And what was it? I don’t have the sales numbers in front of me, but sales were also up, so something similar. So big, big boost to profit from acquiring Plush throwing off lots of cash flow, which we like, and they’re paying down the debt that they took out took on to make that acquisition.
[00:17:31] Tony: So working well for them. They, they said in that profit result that they were able to extract 20 million a year in synergies from the two brands, and that they’ve done a lot of work to bring Plush into line with the practices and processes that Nick Scali use. So they’ve transitioned to Nick Scali’s point of sale and they’ve adopted, you know, the policies and procedures in terms of drop shipping, because a lot of Nick Scali’s business is you go in, [00:18:00] pick a sofa or a bed that you like, and then they deliver it to you in 12 weeks time and they manufacture it Overseas. So they have a very streamlined manufacturing process. Business is interesting. It’s been around for as long as I have, 60 years ago. It was, it was started in Sydney and they largely import, I think they might import all their furniture, as I said, through our drop ship method. They have currently 107 stores in Australia and New Zealand.
[00:18:27] Tony: They called out in the last results that they thought that they could get up to 180 stores, so there’s still plenty of room to, to grow in the ANZ market without cannibalizing the current offerings. And they also now have an online presence, which is increasing as well. So it looks like there’s a fair bit of growth available for this company.
[00:18:48] Tony: The big thing I like about Nick Scali as well is that it’s He does have an owner, founder, still running the business. A guy called Anthony Scali, so not the Nick of the name, who I think was their [00:19:00] father, but the son, Anthony. And he still has he’s a director holding about 14% of the shares. And I remember a year ago, maybe a few years ago now, he went and bought out his siblings.
[00:19:12] Tony: So it’s just him, and he’s been running the business for a long time. Probably working it with his father. And still holds 14%. So it’s one of those stories of owner founders doing well and focusing on, on the process that got them to where they are. So that’s good The numbers. The ADT for this, for this stock is 1. 847 million per day. So it will be big enough, I think, for most of our listeners. I’m doing the analysis of the price of 10. 67 which is less than the consensus target. At that price, the stock is yielding just over 7%. So that’s a tick from us because it’s above the mortgage rate. Stock Doctor Financial Health is strong and steady.
[00:19:54] Tony: I’ll just call out the ROE for this company. I don’t focus on ROE in the checklist, but it’s high for this company. [00:20:00] I know some people do. It’s nearly 73%, which is huge. The PE for this company is 8x. Which is, you know, probably getting up there for a QAV stock, but it is the lowest of the last six halves, so it gets a tick from us for that.
[00:20:14] Tony: PropCaf, likewise, is 6. 27 times, so it’s getting up towards our seven ceiling. So this, this company is starting to get… a bit expensive for us, but it’s just sneaking in at the moment. IV1 is 6. 79. So the share price is above that, but it’s just below IV2, which is 11. 82. So we score it for that.
[00:20:36] Tony: Can’t score it for book value. It’s book plus 30 is only 2. 69. And I think the reason for that is it’s the It’s carrying lots of intangible assets which is the goodwill from the Plush acquisition. So that’s on the balance sheet at the moment affecting the book value and NTA even worse. Forecast, interestingly enough, the consensus forecast earnings per share for this company is a drop of [00:21:00] 10%.
[00:21:01] Tony: Nothing I could see in any of the announcements from the company sort of supported that. So I’m not sure where that number’s coming from, but certainly, you know, with the increases we saw from the Plush acquisition, I’m not sure There might be a surprise on the upside. I’ll leave it at that. I’m not sure that’s going to hold.
[00:21:16] Tony: So, but anyway, it gets a negative one score for decreasing EPS in our checklist. It is a new three point trend upturn. So let’s just come back on the buy list. It does have consistently increasing equity, which is always a good sign. And all in all, the quality is 14 out of 16, or 88%. And the QAV score is 0. 14. So not near the top above the bottom. And possibly if it keeps going the way it’s going, it might fall off the, the buy list if the price increases too much further. I mean, it is, it is a discretionary retail stock. So we have lots of discretionary retail stocks on our buy list at the moment.
[00:21:55] Tony: Super cheap accent AX1, [00:22:00] accent one, I think it is a shoe company, et cetera, et cetera. And they’re. You know their sales have been hit by discretionary spending drying up because of interest rates rising so they are back on our buy list but there will come a day when they turn around and become buys again and this this is looks like it’s the case for Nick Scali.
[00:22:19] Tony: Risks are obviously interest rates if they do stay where they are or even increase that could eventually hurt sales but I also think too there’s a lot of talk around them in the , financial press at the moment about housing construction shortfalls and problems and prices going up and builders not being able to renegotiate fixed price contracts or, or canselling them rather than renegotiate them.
[00:22:44] Tony: And one of the key drivers of people buying furniture is moving house. So that might be a. a difficulty that they face in the near future. But their risks, we’ll see what happens when they announce their results. But at the moment, I think it’s a buy and people could have a look at it and do their own research.
[00:22:59] Cameron: Did you know that [00:23:00] Nick Scali is still alive?
[00:23:02] Tony: No, I didn’t.
[00:23:03] Cameron: Still alive, still a consultant to the company and a non executive director.
[00:23:08] Cameron: I found this story about him from the Sydney Morning Herald, 1983. Says, 30 years ago, Nick Scali arrived in Melbourne on an old Greek ship, the Hellenic Prince. He had 10 pounds in his pocket and a little English.
[00:23:21] Cameron: The minute his feet touched Australian soil, he was transferred to a train and railed straight to the immigration camp at Bonagilla, Victoria. He was a long way from home, Reggio Calabria, southern Italy, where his parents had a successful small goods business and bakery. I was 18. I had no trade or profession.
[00:23:40] Cameron: It was very difficult, but I was adventurous, he said. Within a few days, Nick had packed up and set off on a working trip around Australia. I thought, if I don’t do it now, I never will. I’d heard that Australia was a huge country, still in its natural state, and lots of birds to see. I love birds, he said.
[00:23:56] Cameron: Don’t we all, Nick? He returned to Melbourne, enrolled in [00:24:00] night school English classes for a year and began to assess the economic situation. It was pretty disastrous. Food, clothing, there was no quality merchandise, and it was so far from everything. In 1955, Nick Scully set up an electrical appliance company.
[00:24:15] Cameron: Most of my customers radiograms and fridges. Love a good radiogram, don’t you, Tony?
[00:24:21] Tony: I do. The old 301, beautiful.
[00:24:23] Cameron: what’s a radiogram? I got no idea, I was
[00:24:25] Cameron: being
[00:24:26] Tony: We used to have a radiogram. It’s, it’s a, it’s a, a stereo record player and radio all in the same big timber unit with the
[00:24:34] Cameron: All those big timber box things that were in the living room? Is that what they were called?
[00:24:38] Tony: Yeah.
[00:24:39] Cameron: They were migrants and they needed everything to set up home. They’d ask me if I could help them get their furniture. That was the start. By 1958, he was buying and selling local furniture, but because he was dissatisfied with the local products and the lack of craftsmanship, Nick began to import from Italy.
[00:24:54] Cameron: From Italy, you can buy modern furniture, Baroque and traditional, says Nick. They really know how to [00:25:00] make fine furniture there. Italians have been
[00:25:02] Tony: Grand Sale, Grand Sale, Grand Sale.
[00:25:05] Cameron: Comprara, Comprara, Comprara! Franco Cozzo! God, that’s so drilled. I haven’t seen a Franco Cozzo ad in 30 years.
[00:25:16] Tony: Oh, did you see that there’s a documentary about him on the ABC a couple of months
[00:25:19] Cameron: that would,
[00:25:20] Tony: Someone’s painted a mural in Footscray on the side of a wall franco
[00:25:25] Cameron: God, the first like 20 years I lived in Melbourne, just Franco Cozzo late night TV. What a, it was fantastic.
[00:25:32] Tony: Well, you just, you said italian Baroque Furniture And that made me think of Franco Cozzo.
[00:25:37] Cameron: And then you go past a Franco Cozzo shop and you go, yeah, I’d never buy any of that stuff. It looks terrible, but he knew how to market. That’s for sure. So that’s there’s, I went and looked on the Nick Scali website. There’s nothing about the story of the dad and how it got started, but this is from an old Sydney Morning Herald.
[00:25:53] Cameron: So there you go.
[00:25:55] Tony: Oh, great. I love those founder stories. They’re fantastic.
[00:25:58] Cameron: Yeah, I mean they’re usually a little bit, [00:26:00] you know, fictional too, mythologized, but I’m sure there’s
[00:26:03] Tony: and Survivor bias
[00:26:04] Cameron: than fiction then. Yeah,
[00:26:06] Tony: There was a whole shipload of people came across with the amount of those.
[00:26:09] Tony: Started a successful furniture business, yeah.
[00:26:11] Cameron: yeah. I like this section, this is like 1983 journalism. At Scali’s there are extraterrestrial beds. Round ones set in lotus shaped suede panels, reclining beds which adjust to any desired angle at the touch of a gear stick, beds which look like they’d give birth to a Bottiselli Venus beneath eggshell green satin bed heads shaped like shells.
[00:26:36] Cameron: This does sound like Frnaco Cozzo. There are beds with velvet crescents rising at one end and setting at the other. There are prim and quilted beds with flounced skirting around their legs. These are sensualist’s beds. And there are hand carved beds. Suddenly we’re in the built in modular bar section.
[00:26:53] Cameron: This sounds like your style. This is apartment owning, groovy, single swinger or young married [00:27:00] territory. Built in radios play softly behind indirect lighting. Digital clocks ooze the passage of time, cassettes turn, light emitting diodes dance like laser beams across airline cockpit inspired panels set in rich, dark leather, glass cabinets with smoke tinted doors slide and spring Open at the slightest touch, Chrome Tubes, Arc, Curve and Reflect, A World, Which Out Hollywood’s Hollywood After A Few Campari’s Or Black Russians, The Fridge Door Is Definitely Bomb And Bulletproof, It’s Quilted And Studded Leather, We Move On, I wanna see all of that, I wanna go back to 1983 and see a Nick Scali store.
[00:27:39] Tony: Those extra threats for your bed should go on the Josh Rogan, experience. Talk about UFOs.
[00:27:44] Cameron: Joe Rogan, not
[00:27:45] Cameron: Josh, Joe
[00:27:47] Tony: Joe, oh God, have you heard all that stuff? Someone posted a meme on Facebook, it said, Here’s a map of UFO sightings.
[00:27:55] Tony: It was a map of America,
[00:27:56] Cameron: Usually in the Midwest, Idaho.
[00:27:58] Tony: sighting
[00:27:59] Tony: of 1957 in [00:28:00] Russia.
[00:28:00] Tony: All these dweebs came on to pull him apart.
[00:28:03] Cameron: Yeah. For some reason, you know, these aliens travel light years come to Earth and then always end up speaking to someone with. Five teeth missing in the middle of Idaho. At the end of this article, getting back to Nick Scali, what kind of furniture do the Scalis have in their Point Piper home?
[00:28:22] Cameron: According to Son Anthony, they have specially imported custom built furniture of the Feathered Down variety. My taste is quite different to what we’re selling, he says.
[00:28:32] Tony: So he doesn’t get the furniture from his own store.
[00:28:35] Cameron: From his dad’s store.
[00:28:36] Cameron: you know. That’s young Anthony. So yeah,
[00:28:39] Tony: And they were already living in Point Piper in 1983.
[00:28:43] Cameron: 1983. Yeah. Well, 62, they started that. 83, 20 years. Successful little business done well.
[00:28:50] Tony: Yeah,
[00:28:51] Cameron: So there you go. Thank you for doing that pulled pork, Tony. Let’s get into Q& A.
[00:28:56] Cameron: Hey, Alex.
[00:28:58] Alex: Hello?
[00:28:58] Cameron: What do you have for us this week, [00:29:00] Alex?
[00:29:01] Alex: There’s a, well, I guess a comment from Marcus, so I’ll, I’ll read that out. He says, this is a Hail Mary to the group. As some of you know, I’m traveling in Europe for four months, so have no PC or tools. Very lucky.
[00:29:14] Tony: I couldn’t imagine doing that.
[00:29:16] Alex: For four months?
[00:29:17] Tony: Yeah.
[00:29:17] Alex: Really?
[00:29:18] Cameron: Take a MacBook Air. I mean, that’s what I would do. But anyway, you do you, Marcus.
[00:29:22] Tony: Yeah.
[00:29:22] Alex: So he says, I’ve cashed out of all Stock, barring substantial holdings in BBN, my former employer. The price has rebounded significantly the past couple of weeks slash today with the earnings update, i. e. approximately 40% up over the last few weeks. I’m holding out for the dividend date later this month.
[00:29:42] Alex: Management are going through a transition with a new CEO in October. Cam, can I request TK does a pulled pork once results are released and in Stock Doctor, please?
[00:29:50] Cameron: Baby bunting.
[00:29:52] Tony: Yeah,
[00:29:52] Cameron: Daddy’s gone a hunting. Is are you going to do that as a pulled pork today, Tony?
[00:29:57] Tony: No, not today because the results aren’t out yet. [00:30:00] So I’m going to follow the request and do it. I think it’ll be next week, but it may be the week after. I looked up Baby Bunting’s date of announcing their their profits. It’s 11th of August, which is only a few days away. So hopefully it’ll be in stock Doctor by next week and I can do a pulled pork then.
[00:30:16] Tony: But I’ve got to say, I hope Jon hasn’t gone yet because… If you look up baby bunting the brettalator, it’s a, it’s a sell.
[00:30:24] Cameron: Really?
[00:30:25] Tony: not sure the results are going to help, but we’ll see.



QAV 721 – Dr No

In 721 we discuss the pain of FND, why Aussie investors keep investing in unprofitable companies, and TK does a Pulled Pork on SRV.

In the club edition only: the myth of the ‘new normal’, why LIC AFIC is selling below its NTA, how Aussie investors can benefit from the AI boom, what we should do about copper prices being up, how to interpret the number of buys going down, how often is TK is making purchases based on factors outside the numbers, and how to interpret the resignation of the PRN CFO.

QAV 720 – Boom!

The Budget cometh, Lessons in Kindness from Buffett, and a Deep Dive into Boom Logistics.

Also in the Club edition: Reflections on Jim Simons and Quant Investing, Navigating Market Fluctuations: FND and FPR Updates, Exploring VYS’s Surge, Elon Musk’s Suggestion to Warren Buffett, Marcus has a question about applying quality score to existing holdings, Jim asks about Life 360, Stock Doctor Data Integrity Issues, Nick asks about Josephine rules, Trent asks about AGL and LNG


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