QAV #634 — Whitehaven Coal

QAV 634 Club

[00:00:00] Cameron: wel­come back to QAV episode 634, TK. We’re record­ing this on the 22nd of August, 2023. I believe you’re not feel­ing well, Tony, still.

[00:00:25] Tony: Oh yeah, no, I’m okay. Just got some kind of chest infec­tion that’s lin­ger­ing on

[00:00:29] Cameron: It’s all that Vic­to­ri­an weath­er you were exposed to a cou­ple of weeks ago.

[00:00:32] Tony: Well it’s strange. I, it seems like I, I just go on hol­i­days or go away and come back and get sick, so Dun­no what it is.

[00:00:40] Cameron: That’s the uni­verse telling you no more hol­i­days.

[00:00:43] Tony: yeah, exact­ly.

[00:00:44] Cameron: Well, it’s been not a great week in the All Ords. Tony

[00:00:49] Tony: It’s sick as well.

[00:00:50] Cameron: yeah, it’s been sick. We’ll get into that lat­er, but I want­ed to start off with the news of the day because I’ve had a num­ber of club mem­bers post­ing and email­ing me about this after­noon. Per­en­ti, did you see my email about Per­en­ti?

[00:01:04] Tony: I did.

[00:01:05] Cameron: PRN Deliv­ered Record FY23 Finan­cial Results, Record Rev­enue, Record Under­ly­ing Earn­ings, 18% Increase in Rev­enue, 50% Increase in EBIT, 58% Increase in NPAT, and the shares are down by 14%. Last time I checked 13. Now it’s a rule one and a 3PTL sell for most of us. Now fun­ni­ly, well, not fun­ni­ly, but inter­est­ing­ly one of our QAV Light sub­scribers who will remain anony­mous because I don’t know if he’s sup­posed to give us this inside gos­sip, but he emailed me imme­di­ate­ly and said quick feed­back from the CEO, CFO did­n’t speak. Mar­ket did­n’t like lack of a div­i­dend, giv­en con­sid­er­a­tion of a div­i­dend was pre­vi­ous­ly stat­ed when lever­age was under 1, but with refi­nanc­ing due next year, they want­ed to keep some buffer, plus allo­ca­tion of future funds slash invest­ments to elec­tri­fi­ca­tion, risk man­age­ment and min­ing tech­nol­o­gy, which have a num­ber of years pay­back rather than short­er term returns for share­hold­ers. Loss of first US ten­der and big local ten­der weren’t seen. as large neg­a­tives. I you know, I think it’s one of these things that I expect to bounce back, Tony. It actu­al­ly did bounce back already. It dropped down to a 1. 02. So it start­ed at 1. 21 today. After the announce­ment, it dropped down to a 1. 02. rebound­ed up to a 1.065, but has dropped back down to a 1.025 now, so yeah, dun­no, I thought I did­n’t jump on the rule 1 or 3PTL sell, I thought, I’ll give it to the end of the day and see what hap­pens, but does­n’t look good.

[00:02:55] Tony: Yeah, it’s a strange, it’s a strange out­come. I saw your ques­tion about half an hour ago and my notes, I could­n’t find any­thing when I googled, but my notes said lack of div­i­dend.

[00:03:05] Cameron: Right.

[00:03:06] Tony: so only because I saw that it, it stopped pay­ing a div­i­dend and I won­dered whether that was the rea­son why the share price went down if they did­n’t pro­ceed with one.

[00:03:14] Cameron: this is like Mas­ter­mind, one of those game shows where you have to hold, you have to hold up your card and we see

[00:03:19] Tony: Yeah.

[00:03:19] Cameron: writ­ten on it.

[00:03:20] Tony: The oth­er thing I was look­ing into was whether some­thing hap­pened with DDH, which is under takeover by Per­en­ti, because they both dropped, which makes sense because their share prices are in lock­step now because Per­en­ti are using shares to pay for DDH. So but DDH did­n’t have results today, so I don’t think that’s the dri­ver. It’s more like­ly to be the lack of div­i­dend. That’s the issue. Yeah, but I tend to agree with you, even though it’s a 3PTL sell, so you got to sell it. That big a drop just because they haven’t start­ed pay­ing div­i­dends is a strange reac­tion, I think. If you should, I mean, I would have thought if peo­ple were in the share mar­ket for div­i­dends, there’s plen­ty of oth­er things to buy. And so I don’t know why peo­ple were buy­ing this on the expec­ta­tion of a div­i­dend. But yeah, it just goes to show off that if the CEO did indi­cate that there was one com­ing and they decid­ed not to pay it. It you know, mar­ket always rewards say­ing what you know, doing what you say rather than say­ing one thing and doing anoth­er. So that could be the rea­son.

[00:04:17] Cameron: Well just a fol­low up, we might have a fol­low up on that because the QAV Light mem­ber, I’ll just say his name is Michael, it’s prob­a­bly not going to give away too much, has asked the CFO and the CEO if they’ll come on the show.

[00:04:31] Tony: Oh, okay, cool.

[00:04:32] Cameron: He said now that the results are out, they might be will­ing to do it. So, thanks for that, Michael. We’ll see how it goes.

[00:04:38] Tony: Yeah.

[00:04:39] Cameron: Well, mov­ing on to oth­er great news. Why Chi­na’s slow­down mat­ters on the BBC. After a long peri­od of stun­ning growth, Chi­na’s econ­o­my is now slow­ing. The econ­o­my grew at an aver­age rate of 10% a year for the three decades up to 2010. It has slowed marked­ly. Oh no, hold on. This arti­cle’s from 2015. Let me find the lat­est round of it’s all Chi­na’s com­ing off the boil sto­ries. Finan­cial Review, August 22nd. Chi­na faces down­ward spi­ral as prop­er­ty cri­sis deep­ens. We’ve talked about this before. It’s like just been this con­stant series of Chi­na doom and gloom sto­ries for, well, going back to 2015

[00:05:24] Tony: oh and before that too yeah and Chi­na’s still grow­ing it, it’s just announced a down­grade, the expec­ta­tions will grow at 4. 2% which is about, Twice the rate of Aus­trali­a’s growth, so, and most of the rest of the world. So 4. 2% still pret­ty good

[00:05:41] Cameron: But it’s not 20% or 10%. but it was

[00:05:45] Tony: No but I mean, like, you’d be hard pressed to find any econ­o­mist who would have thought Chi­na could keep on grow­ing at 10% per annum, right? It’s been well. Researched and well exam­ined that Chi­na was going through a growth phase and then it’s got to slow down. Basi­cal­ly because it’s dragged all these peo­ple out of rur­al pover­ty and cre­at­ed a mid­dle class and the mid­dle class, you know, wants decent jobs and secu­ri­ty and the abil­i­ty to save for a home and all those kinds of things. Bet­ter wages, which means that Chi­na does­n’t export as much in the way of cheap man­u­fac­tured goods and it slows the growth down. So it’s not like this is a train wreck that hap­pened yes­ter­day. It’s been well, well flagged for a long time.

[00:06:23] Cameron: And it was, you know, I think a cou­ple of years ago we were talk­ing about big prop­er­ty cri­sis over there and large devel­op­ers default­ing on loans and they keep trundling along. I mean, there’s this con­stant theme in some of the newslet­ters that I get talk­ing about whether or not they’re going to end up like Japan. in a boom peri­od in the 80s and then crash­ing and burn­ing. But yeah, it makes sense that they’re going to have to slow down. They can’t keep that sort of growth up for­ev­er. I guess the tough thing for economies like Aus­trali­a’s is that our econ­o­my is pred­i­cat­ed in large part on how well, yeah, it does, but that’s par­tic­u­lar­ly the case for the iron ore mar­ket. But a lot of Aus­tralian exporters got out of Chi­na over the last few years because of the trade sanc­tions that Chi­na put on, like the coal exporters in par­tic­u­lar as well as the winer­ies and some of the oth­er bar­ley and some of the oth­er grains, et cetera, just try­ing to just found rea­sons not to allow them to be import­ed.

[00:07:24] Tony: So they’ve all rebound­ed and found oth­er mar­kets. And yeah, I tend to think that that. They will again. It’s, what they’re say­ing about Chi­na is what they wrote about Aus­tralia last year. I mean, we had prop­er­ty com­pa­nies going bust at a more rapid rate than we’ve seen usu­al­ly or in the past. So it’s the same sort of thing. The sit­u­a­tion in the past has been reme­died by Chi­na drop­ping inter­est rates, which is the same way that we rem­e­dy the sit­u­a­tion. So it’s like, I this is a head­line or a head­line in search of some news. I think real­ly it’s it’s yeah, it’s not very illu­mi­nat­ing.

[00:07:57] Cameron: Yeah. I mean, the media is all, you know, there’s got­ta be, I think it’s writ­ten into the con­tracts with jour­nal­ists in every media com­pa­ny. Right now you have to write at least two neg­a­tive sto­ries about Chi­na every day. That’s a part of the deal that we’ve got with Joe Biden. You want nuclear sub­marines, you got­ta write more neg­a­tive sto­ries about Chi­na.

[00:08:19] Tony: yeah.

[00:08:20] Cameron: Speak­ing of the U. S., u. S. bond yields hit fresh 15 year highs, accord­ing to the Finan­cial Review this morn­ing. Let’s see this week’s main eco­nom­ic event is Fed­er­al Reserve Chair Jerome Pow­ell’s speech at Jack­son Hole on Fri­day. Half his luck. You ever been to Jack­son Hole? I love Jack­son

[00:08:40] Tony: have it. You have it? Okay.

[00:08:43] Cameron: it’s love­ly. It’s where I want to, it’s where I want to retire. After the US Civ­il War, when prop­er­ty prices crash, I’m going to buy up some prop­er­ty in Jack­son Hole. The wor­ry is that Pow­ell would dash investors hopes that the Fed has already hiked inter­est rates for the final time and that its next move will be to cut rates ear­ly next year. So, I don’t know, between the Chi­na and US and all this kind of stuff, quite hon­est­ly, I find it hard to give a shit, but

[00:09:09] Tony: Yeah, I’m the same. I’ve nev­er been one for fol­low­ing macro­eco­nom­ic trends or let­ting it dic­tate what I do. Does­n’t change the way that I invest at all. And for the most part, it’s just head­lines. It’s not it does have impacts on the econ­o­my for sure, but we seem to find a way around, ways around it. So yeah, I tend to ignore it. We have to. Yeah. I mean, yeah and also too, whether it’s the last inter­est rate hike for the Fed and what­ev­er Jerome Pow­ell says on Fri­day, it’s, almost irrel­e­vant in my world. Yeah.

[00:09:37] Cameron: keep doing what you’re doing.

[00:09:39] Tony: Yeah. Both, you know from the way I live my life, but also the way I invest.

[00:09:44] Cameron: Yeah. Yeah, I was talk­ing to one of our new club mem­bers on zoom yes­ter­day. Shout out to Julian. And I was just say­ing, yeah, you know, the, for me, the great thing about, we were talk­ing about you know run­ning a paper port­fo­lio for a while when you become a new club mem­ber and just see­ing if the style of val­ue invest­ing, at least the way that we do it suits your. tem­pera­ment and your per­son­al­i­ty. I said, you know, I like the fact that it just allows me to ignore the news sto­ries, ignore the noise, ignore the cycles, because I don’t have to get caught up in all of that. I don’t have to stress over it or wor­ry about it. I just wake up in the morn­ing, check my alerts, sell some­thing if I need to sell it. By the way, which is why I haven’t sold Par­en­ti yet. ’cause my rule now is I don’t react on the day. If I get a, if I get a noti­fi­ca­tion that some­thing’s become a sell, I’m like, I’ll wor­ry about it in the morn­ing. And I, you know, , We did a webi­nar, oh, just a shout out for every, to every­one who came to the new week­ly webi­na­rs that I did last week. I’m doing them every Thurs­day now. And basi­cal­ly the first, I thought it was gonna be the first 15 min­utes, but it turned into the first hour. Cause I’m a long talk­er. Was just a quick overview of QAV, right? This is how it works. It’s basi­cal­ly like the sort of thing you and I do when we do the ASA webi­nar, right? This is the straight, this is basi­cal­ly the phi­los­o­phy and the strat­e­gy. Here’s a look at the check­list and it’s open to every­body, club mem­bers, light mem­bers, no mem­bers, any­one who wants to know more about how we work can jump on Zoom, eight o’clock on a Thurs­day night. I just walk through, okay, here’s the check­list, here’s the buy list. You know, this is kind of what we do and how we do it. Here’s how alerts work. Here’s the dif­fer­ence between light and club, et cetera, et cetera. And then peo­ple get to ask ques­tions and I do a bit of Q& A after­wards. Any­way. Yeah, as I was telling peo­ple on the webi­nar last week, you know I, my, my process is now I’ll open up my spread­sheet first thing in the morn­ing and fig­ure out if I need to do any­thing for the day and if some­thing. becomes a sell, you know, after 11 o’clock in the morn­ing, it’s okay. It’s tomor­row. That’s tomor­row’s prob­lem, right? Unless, you know, you know the comet is com­ing through, unless it’s a major dis­as­ter that seems real­ly bad, any­thing be any­thing below dis­as­ter lev­el event. What do they call them in sci­ence fic­tion movies? End of life event? Any­thing oth­er than Ellie? Any­thing below an Ellie? It’s like, ah, it can wait till tomor­row. I got oth­er stuff to do.

[00:12:10] Tony: Yeah, it’s a good approach, I think. I mean, you might miss out on a cou­ple of per­cent sell­ing a day lat­er, but some­times things regroup the fol­low­ing day as well.

[00:12:19] Cameron: Well, that’s been my expe­ri­ence over the last four years is it’s a 50 50 chance. It could go back up and I don’t have to sell it. It might drop and I might lose a bit. And par­tic­u­lar­ly now with the think­ing that maybe Rule 1 does­n’t have to be 10% of mon­ey, it’d be 20%, puts even less stress. But, you know, what I was say­ing to peo­ple is, what I’ve learned over the years, and you’ve rein­forced this from your expe­ri­ence, is that it’s very rare that things drop quick­ly. It, you know, I think in four years I’ve been doing this, maybe two or three instances, I’ve seen the bot­tom drop out of some­thing quick­ly. But usu­al­ly it’s sort of a slow process and,

[00:12:54] Tony: well, even when the, but even when the bot­tom drops out quick­ly, like it has today with Per­en­ti so you find out it’s already down 10%. If you sell today, you might sell the 10% loss and you might get nine tomor­row. You might get 11 tomor­row. It’s like, it’s gen­er­al­ly it’s that it’s the first drop is too quick to catch. And then after that, it goes slow­ly. There’s been a cou­ple of cas­es I can think of where it keeps going quick­ly over a few days, but they’re very rare.

[00:13:21] Cameron: Very rare. And, you know, half the time it drops quick­ly and then, you know, the mar­ket buys back in and goes, You know what? You guys over­re­act­ed. I’m gonna snap this up because the fun­da­men­tals are good. Which is what, why we bought it in the first place. And as Per­en­ti’s results demon­strate, they’re run­ning a good busi­ness. They’re doing well. I don’t care about the div­i­dend, you know. I’m sure oth­er peo­ple out there don’t care about the div­i­dend that much.

[00:13:45] Tony: Yeah. And look, I hope it does cross it’s three point trend line buy line. I think that’s the more impor­tant one in this case any­way, because as you say, it might go back up above a rule one. Because yeah, we’re not buy­ing this stock for its div­i­dend. It was­n’t part of our cal­cu­la­tion or our num­bers when we bought it. And now we get to buy 10% cheap­er for the same, you know, for the same com­pa­ny with the same sto­ry. So I think it’s still an attrac­tive com­pa­ny to look at.

[00:14:08] Cameron: Yeah. Well, just while we’re talk­ing about results dum­my port­fo­lio still doing two and a half times the bench­mark since incep­tion for the finan­cial year, we’re up 3% ver­sus the STW, which is down near­ly 1%. So, so far we’re doing well for the finan­cial year. In terms of the last week big win­ners for us, not that they were that big, but up three, three and a half per­cent, were CVL and Hori­zon. And the big losers, down four to five per­cent, were CLX and VUK. But all up for the week, we were down near­ly one per­cent. So, yes, you know, as I said, mar­ket sort of col­lapsed. Towards the mid­dle of last week. I think Tues­day, Wednes­day morn­ing it col­lapsed last week and has­n’t real­ly recov­ered since then. What else, what do you got to talk about

[00:15:07] Tony: A cou­ple of things. So there’s been a num­ber of QAV stocks report­ing because it’s report­ing sea­son. I focused on one, which is SGM Sims Met­al only because I owned it. And It’s sim­i­lar to most of the oth­er stocks that have been report­ing in their QAV world. They’ve been report­ing, you know, drops in sales, drops in prof­it ris­ing costs. And their share price goes up, so Sims went up, you know. 12% I think on the day it announced its results. Nick Scali did some­thing sim­i­lar. And you look at the, you drill into the results, it’s kind of the reverse of the Per­en­ti one we talked about before, which was a good result. And the share price goes down. These ones have had, what I think are pret­ty ordi­nary results, but the share price has gone up. And I think that’s the kind of theme for this report­ing sea­son is that things ain’t as bad as peo­ple thought it was going to be. So it’s kind of a relief ral­ly for a lot of these stocks. It’s like they’re not going near them. until they report and they’re going, okay, you know, we expect­ed some­thing worse. So it’s okay. We’ll get back in. That’s it’s a fun­ny sort of year this year. So yeah. So Sims, Sims went up, which is good. Although I did check the scrap plot price recent­ly and it’s get­ting pret­ty close to a sell. So not sure how much longer Sims will be in my port­fo­lio, but we’ll see. So the last thing I want­ed to say, and this is due to Alex, the aver­age mort­gage rate in our QAV spread­sheets has gone up this month. So 6. 65%. So if you’re not using the one that gets put out every week, buy Al, you’ll need to update it your­self. And that’s because of ris­ing mort­gage rates. That’s the aver­age of the, of what’s on offer. And we use that to test against div­i­dend yield.

[00:16:51] Cameron: Right. Thanks. I bet­ter send an alert out just to make sure peo­ple plug that into their spread­sheets.

[00:16:56] Tony: I did have a pulled pork to do as well, Cam.

[00:16:59] Cameron: Alright,

[00:16:59] Tony: Yeah, okay, so inter­est­ing one today. Speak­ing of ESG, I’m going to do White­haven Coal. Ther­mal Coal is a buy, again. Just, so it may change, but there has been a tick up recent­ly. And again, this is one that has been con­tro­ver­sial for us over the years. We’ve owned, I’ve owned WHC. It’s been in our dum­my port­fo­lio in the past. It’s gone up and down, I guess, with the coal price but then we’ve copped, I’ve copped some stick for invest­ing in coal com­pa­nies um, from

[00:17:25] Cameron: from who? Hmm,

[00:17:26] Tony: from peo­ple who don’t want to invest in uh, coal com­pa­nies and um, I’ve tak­en the posi­tion that buy­ing shares from some­body else isn’t a good If I don’t buy the shares, noth­ing’s going to change in terms of the plan­et or its car­bon lev­els, so I’m hap­py to buy them and do the best from a finan­cial point of view for me. So that aside, if you don’t like invest­ing in coal com­pa­nies, then you can fast for­ward. Oth­er­wise here’s White­haven Coal. So White­haven Coal, large, I think it’s prob­a­bly Aus­trali­a’s largest Cer­tain­ly largest stand­alone coal com­pa­ny. It’s main­ly a ther­mal coal com­pa­ny. As you know, there’s ther­mal and met­al­lur­gi­cal. Ther­mal coal is the stuff that goes into pow­er sta­tions. It’s it posi­tions itself as Aus­trali­a’s largest pre­mi­um ther­mal coal min­er with an empha­sis on pre­mi­um. And the rea­son for that is that there are dif­fer­ent grades of coal and the one, the pre­mi­um end of the mar­ket or pre­mi­um into the coal spec­trum has low­er emis­sions and is there­fore suit­able for what’s called HELE pow­er sta­tions, high effi­cien­cy, low emis­sion pow­er sta­tions, and that does seem to reduce the car­bon emis­sions. Going out from burn­ing coal. So there’s some upside to this com­pa­ny if you’re an ESG investor, although I’m pret­ty sure an ESG investor would­n’t invest in it. The com­pa­ny’s based in Aus­tralia, pri­mar­i­ly in the Gunnedah Basin of New South Wales, but they have start­ed to expand into the Bowen Basin and also into met­al­lur­gi­cal coal, which is the coal that’s used to make steel in blast fur­naces, and does­n’t have the same sort of car­bon emit­ting pro­file as the ther­mal coal does. I found it inter­est­ing research­ing this com­pa­ny because you know, it’s a clas­sic con­trar­i­an val­ue invest­ment. They make a good case in their pre­sen­ta­tions to say that the ana­lysts in this space don’t have the sort of fore­cast for the coal price cor­rect, and they make the point that there are a lot of things at play at the moment in the coal space. Russ­ian sanc­tions, which are tem­po­rary, I sup­pose are def­i­nite­ly at play. And so the coal price will be moved a lit­tle bit by what hap­pens in Rus­sia. But also, there are things like the fact that new mine approvals around the world are becom­ing more dif­fi­cult to get. There’s a move­ment towards the high effi­cien­cy, low emis­sions pow­er sta­tions and also pow­er sta­tions that take mixed fuel. So they take pre­mi­um coal as well as hydro­gen, for exam­ple, and oth­er bio­fu­els. So that should sup­port the coal price going for­ward. There is def­i­nite­ly a lot less access to finance and cap­i­tal if you’re in the coal min­ing busi­ness, so that’s con­strain­ing mine devel­op­ment and also too, the gov­ern­ments are increas­ing­ly being focused on their own ener­gy secu­ri­ty needs, so there are some coun­tries, includ­ing Aus­tralia, which now put reserves on how much coal can be export­ed because of their need to keep the base­load of the grid going. And the last point that they make is that the price of coal is still a lit­tle bit under the price of gas, which is the one of the alter­na­tives to put into pow­er sta­tions. So all of these things tend to sup­port the coal price going for­ward. They’re all, they also say there’s a kind of a polit­i­cal ele­ment to all this as to why any­way that they feel the future of coal is being den­i­grat­ed by ana­lysts and econ­o­mists. They state there’s a insti­tu­tion­al bias or dis­in­ter­est from even research­ing the mar­ket because of the ESG con­cerns. There’s also an under­es­ti­mate they feel of demand. and growth in the mar­ket. So most econ­o­mists who look at the coal mar­ket are say­ing it’s it’s ter­mi­nal and it’s going down when, where­as in fact the vol­umes are increas­ing year on year. And there’s also an under­es­ti­ma­tion of the the growth in the mar­ket, large­ly because peo­ple are fac­tor­ing in a shift to green ener­gy, which is either not hap­pen­ing or hap­pen­ing much slow­er than antic­i­pat­ed. So I know this is White­haven coal. call­ing out that they think the future is bright for coal and that’s you know, should be tak­en with a pinch of salt. But there is some legit­i­ma­cy to what they’re say­ing and cer­tain­ly, you know, the real­i­ty in the last near term any­way is, has been bear­ing out their argu­ments. A cou­ple of oth­er points which are inter­est­ing about White­haven Coal. In its past, it was sell­ing coal into Chi­na, and a cou­ple of years ago, Chi­na stopped tak­ing coal from Aus­tralia as part of the sanc­tions that it was lev­el­ling against Aus­tralia for var­i­ous rea­sons, not the least of which was ques­tion­ing that COVID start­ed in Wuhan. but White­haven suc­cess­ful­ly found cus­tomers in the rest of the world and is now a big sup­pli­er to Japan and Korea. and the rest of Asia. So if Chi­na does open up its coal mar­kets again to Aus­tralia that would be a boost for this com­pa­ny. And there, they also point out a num­ber of over­seas trends that are hap­pen­ing which will impact their abil­i­ty to export coal. So for exam­ple, Cana­da has announced that they will have zero coal exports by 2030. Colum­bia has stopped allow­ing new open cut mines. And that’s a, they’re a large exporter of coal. And South Africa has cut exports by 50 per­cent as it focus­es on a domes­tic ener­gy cri­sis. So there’s a lot of tur­moil in the coal mar­ket and I think a lot of peo­ple are draw­ing a straight line con­clu­sion that even­tu­al­ly coal will dimin­ish in terms of its use, but we’re not see­ing that at the moment, and nei­ther is White­haven. I’m not see­ing it at the moment, nei­ther is White­haven. So any­way, by the by.. That’s the back­ground, I guess, to this com­pa­ny and what’s going on. Using the num­bers it comes up real­ly strong­ly on the QAV buy list. I’m still using Decem­ber 21 num­bers, so it has­n’t announced its results yet. And so, of course, these num­bers may change, but using those num­bers, the ADT is 39 mil­lion, so it’s um, it’s very large uh, a very large­ly trad­ed stock so we can buy it with­out any dif­fi­cul­ty. Um, I’m using a price of 7. 28, which was on the week­end, which is 90% of the con­sen­sus tar­get. So it’s trad­ing just below what the ana­lysts expect­ed to trade at. The div­i­dend yield is cur­rent­ly just under 10%, which is huge. And even though, as I said before, the mort­gage rate on aver­age is up to 6. 65%, the yield is still high­er than the mort­gage rate, which is very good. So it scores for that. The PE on this stock is only two, two times. So you can buy this com­pa­ny for twice its earn­ings, which is incred­i­ble, I think. Again, that feeds into this you know ESG argu­ment that peo­ple aren’t look­ing at it and alter­na­tive­ly are fac­tor­ing in a decline in the coal mar­ket going for­ward. But buy­ing a, you know, such a strong­ly prof­itable com­pa­ny with a PE of 2 is just incred­i­ble and, you know, Won’t be seen for a long time again, I would­n’t think. The Prop­Caf is 1. 38, which is again incred­i­ble. You can buy this com­pa­ny for almost one time’s oper­at­ing cash flow. It’s just it’s ridicu­lous. Um, this com­pa­ny does tick our box for a rarely seen met­ric, which is the yield minus the PE. So the yield­’s high­er than the PE. Yield minus PE is greater than one. Yes, greater than zero, sor­ry. So yield­’s high­er than PE, which is unusu­al, but it’s a, I found it to be a deep. Val­ue indi­ca­tor. Finan­cial health is strong and steady in Stock Doc­tor, which is also good. This com­pa­ny has an ROE of 83%, which I know is not part of our check­list, but that’s a huge num­ber in any­one’s um,

[00:25:02] Cameron: yeah,

[00:25:02] Tony: And the PE of 2. 04 is the low­est in three years. IV1 for this com­pa­ny is 18. 30, IV2 is 29. 40. So intrin­sic val­ue is 29. 40, bear­ing in mind the share price is 2. 70 some­thing. So let’s see, 10 times under­val­ued, accord­ing to that met­ric, and it’s trad­ing just below its book plus 30 per­cent. So net equi­ty per share is 5. 87, book plus 30 is 7. 62. So one, one sort of cloud on the hori­zon is the fore­cast for earn­ings per share is to Go back­wards by 17%. So we’ll have to wait and see what hap­pens when it reports, but that’s a neg­a­tive that we score it for, but every­thing else is a scream­ing buy, qual­i­ty score for this com­pa­ny is 14 out of 16 or 88%. And the QAV score is 0. 63, which is way up to the top of the buy list. So what do I think will hap­pen for this com­pa­ny? Do I think it will trade at? 29, what­ev­er the IV2 was, 29. 41. I don’t think so. I think it’s a, I think it’s a great val­ue stock, but this reminds me of stocks like the tobac­co com­pa­nies that when they, the mar­ket does­n’t look at them even­tu­al­ly they kind of ask the ques­tion, well, why are we list­ed on the stock mar­ket? So I don’t think it’s going to hap­pen any­time soon, but even­tu­al­ly the man­age­ment may get. So frus­trat­ed that they engi­neer a buy­out or engi­neer some­one to buy out this com­pa­ny and take it pri­vate which will mean that they’ll, you know, face a lot less scruti­ny and being bashed around the head for being a coal min­er. And so that’s poten­tial­ly on the cards for the com­pa­ny. I’m re, I’m remind­ed of the, I think it was Keynes, the econ­o­mist, I think he said the share mar­ket was a beau­ty pageant, but not one where you’re try­ing to pick the con­tes­tant you think is the most attrac­tive, but where you’re try­ing to pick the con­tes­tant that every­one else thinks is the most attrac­tive, and there­fore, you know, I would think that White­haven Coal will nev­er reach its true val­ue because there’s just not enough peo­ple in the mar­ket attract­ed to buy this kind of stock, even though it’s real­ly well under­val­ued. I think it will go up from here because I like their argu­ments about where the coal price will go. But it’s oper­at­ing in less than a full mar­ket and I think that’s going to be a bit of a drag on it, but have a look at it if you aren’t put off by the ESG con­cerns and cer­tain­ly White­haven make an argu­ment that of coal min­ers they’re prob­a­bly the least worse if that makes sense from an ESG point of view because they they mine pre­mi­um grades of coal but yeah, it’s cer­tain­ly an inter­est­ing sit­u­a­tion, and very, cheap and under­val­ued.

[00:27:30] Cameron: That’s how I sold myself to Chris­sy. I said of all the cis white males that you’re going to meet, I’m the less worse one of all

[00:27:39] Tony: Least worst napoleon pod­cast­er you’ll meet.

 

[00:27:41] Cameron: Speak­ing of the move to clean ener­gy, I’ll talk about this more in After Hours, but I’ve been read­ing one of Vaclav Smil books on ener­gy. Ever read Vaclav Smil?

[00:27:51] Tony: Does­n’t ring a bell

[00:27:52] Cameron: oh man, you’d love him. He’s a Czech Cana­di­an sci­en­tist and author. I think he’s writ­ten like 36 books. Bill Gates is like his num­ber one fan. Bill Gates has said that he waits for a new Vaclav Smil book like most oth­er peo­ple wait for a new Star Wars movie to come out. That’s like the high­light of his year. He’s a cli­mate sci­en­tist. He’s a sci­en­tist and, you know, he writes a lot of sci­ence y type books. But yeah, I’m read­ing his book on ener­gy. And he’s very skep­ti­cal about the move to clean ener­gy hap­pen­ing any­time soon. Not that it should­n’t, just that it’s gonna hap­pen you know, in any sort of time frame. You know, in 2018, he was say­ing that coal, oil and nat­ur­al gas still make up 90% of pri­ma­ry ener­gy sources. And he just said replac­ing fos­sil fuels was just gonna take… You know, a huge amount of time for us to retool every­thing, and the incen­tives aren’t real­ly there yet you know, in terms of gov­ern­ments forc­ing com­pa­nies to do it, and yeah, sad­ly it does­n’t seem to be mov­ing as quick­ly as I think we’d all would like to see.

[00:29:02] Tony: No, true. But it’s impor­tant to get it right. I don’t know what he’s say­ing, but does that mean the argu­ments for things like nuclear are stronger?

[00:29:11] Cameron: I don’t know what his posi­tion is on nuclear, but I’ve always been a fan of nuclear. I think nuclear, you know, I know it takes a long time to build a nuclear pow­er plant. Although Gates, get­ting back to Gates, he’s work­ing on this, he’s been work­ing on this project for years of how you take spent fuel rods and fig­ure out how to squeeze the ener­gy that’s left out of them. I can’t remem­ber. Do you remem­ber what the name of his com­pa­ny is that does that?

[00:29:36] Tony: No.

[00:29:36] Cameron: I think it’s like Ter­raPow­er but any­way, yeah. I think nuclear is def­i­nite­ly should have been an option, but it takes like 20 years to build a nuclear pow­er plant and 40 gajil­lion dol­lars, it’s not a quick thing to do.

[00:29:51] Tony: Yeah, But if you don’t start now, you’re not going to have it in 20 years time when you need it.

[00:29:54] Cameron: Yeah, but you know, it’s also hard to sell, you know. Yeah,

[00:29:58] Tony: Yeah, so, well, hope­ful­ly car­bon cap­ture or some­thing sim­i­lar then might help, but yeah, I’m like, I’m per­suad­ed by that argu­ment, I don’t think we’re fac­ing up to the fact that it’s either going to cost us a heck of a lot to move to new ener­gy, or, which means stan­dard of liv­ings go down, or we’re just not going to get there unless we use some­thing alter­na­tive, like that isn’t being con­sid­ered now, like nuclear.

[00:30:20] Cameron: we’ve got to bite the bul­let at some point, but no one wants to bite the bul­let. Gov­ern­ments that is.

[00:30:26] Tony: Yeah, fun­ny that, because they rely on peo­ple’s votes. Peo­ple tend to vote with their back pock­et.

[00:30:31] Cameron: Yeah, you know, there’s also the con­se­quences of not bit­ing the bul­let but I guess they fig­ure well that’s some­body else’s prob­lem. I’ll be out of the game by the time the con­se­quences roll around and some­one else’s prob­lem

[00:30:44] Tony: Yeah, I find it a fas­ci­nat­ing area to delve into. I mean, like, like you, I’d love cli­mate change to be solved tomor­row. But it’s just been a mud­dle so far of con­flict­ing incen­tives to try and get there. And I’ve long argued it’s a tragedy of the com­mons prob­lem where every­one has a vest­ed inter­est in the sta­tus quo. So the only way you can get there is for the gov­ern­ment to impose a solu­tion or some­one out­side to impose a solu­tion.

[00:31:07] Cameron: is why we need Chi­na to take over. I’m dead­ly seri­ous! I’m not even jok­ing.

[00:31:13] Tony: don’t think they’ve solved the prob­lem though, they’re open­ing coal pow­ered sta­tions as fast as they can.

[00:31:19] Cameron: Yeah, they are, but they’ve got, I mean, they’re also invest­ing heav­i­ly in alter­na­tive ener­gy. They know that there’s a time­line here that they have to, in order for them to be com­pet­i­tive with the West eco­nom­i­cal­ly, mil­i­tar­i­ly, they need to ramp up very quick­ly as they’ve been doing since 1979. But they also know that there’s a time­line where they need to tran­si­tion before they cook them­selves as well. And now there’s a book I’ve talked to you about before that I’ve been, one of the books that I’m read­ing is about. The strengths and weak­ness­es of the Chi­nese mod­el of gov­er­nance, ver­sus the strengths and weak­ness­es of the West­ern style, the West­min­ster, or the Amer­i­can style of gov­er­nance, it is the tragedy of the com­mons, you know, we can have doo­fus­es get elect­ed, and make stu­pid deci­sions that, you know, then get over­turned four years lat­er, and then those deci­sions get over­turned four years lat­er, and we run around in cir­cles, where­as if you look at Chi­na’s strat­e­gy for the last 40 years does­n’t tend to change with who the pre­mier is. It’s just yep. This is where we’re going. It’s this long term plan and they have to adjust from time to time as things don’t go the way that they thought that we’re going to do, but they have this sin­gle mind­ed focus, which is. Catch up to the West, sur­pass the West, you know, take over every­thing, be the dom­i­nant eco­nom­ic and mil­i­tary super­pow­er on the plan­et, like we should be because of the size of our coun­try and the amount of peo­ple that we have and all of those sorts of things, our 3, 000 year his­to­ry, all this kind of stuff, and get­ting back to where we were a thou­sand years ago.

[00:32:56] Tony: Is that actu­al­ly their stat­ed goal? To become the dom­i­nant super­pow­er? I thought they were hap­py to live and let live.

[00:33:02] Cameron: Well, you know, yeah, sure, I’m hap­py to live and let live if I’m the dom­i­nant super­pow­er as

[00:33:07] Tony: Yeah, Ha. well, pro­tect them­selves any­way.

[00:33:10] Cameron: Yes, I mean, you know, obvi­ous­ly they went through the… What they see is the great embar­rass­ment, the tragedy of the opi­um wars of the 19th cen­tu­ry and what the West did to them you know, as a result of them los­ing the opi­um wars and it, it took them, it’s tak­en them what, you know, 150 years, 160, 170 years to rebuild after that and deter­mined that it’s nev­er going to hap­pen again. No one’s going to be able to push them around ever again. So, you know, every­one likes to be the big dog. The U S has loved it for the last 70 years. You know,

[00:33:52] Tony: Yep. No, I agree.

[00:33:53] Cameron: Hey Alex,

[00:33:54] Alex: Hel­lo. How are you? I’m good. Thank

[00:33:57] Cameron: good. How was your trip to Syd­ney?

[00:34:00] Alex: It was great. It was real­ly nice. Thanks. Yeah. It was nice to cel­e­brate with mum. She for­gets her birth­day every year. So as I get old­er, I feel more inclined to make it a big deal for her. So yeah, no, it was real­ly nice. And Sean came up as well. So we had a prop­er lit­tle hol­i­day.

[00:34:14] Cameron: Very

[00:34:14] Tony: Yeah, it’s good. to see you.

[00:34:15] Cameron: You did­n’t catch your dad’s lur­gy?

[00:34:17] Alex: well, he got test­ed to make sure that he was­n’t con­ta­gious and he was­n’t. So it was good.

[00:34:22] Cameron: Well, that’s good.

[00:34:23] Tony: Hey, this is prob­a­bly a good time to talk about our give­away for QAV lis­ten­ers.

[00:34:28] Alex: Yeah. Yep. Yep. So dad had the great idea of get­ting a link. Well, so I was giv­en a VIP tick­et link to send out to peo­ple who I thought might be inter­est­ed in going to the afford­able art fair in Mel­bourne, which is from August 31 to Sep­tem­ber 3rd this month. And dad said, Oh, why don’t we get one for QAV peo­ple? Because there’s a pret­ty good Mel­bourne con­tin­gent who might be inter­est­ed. So I assume that’s what you’re talk­ing about, but

[00:34:55] Tony: Yeah, I am. Yeah.

[00:34:57] Alex: yeah so I’ve arranged for a QAV link, and the, so basi­cal­ly if you click the link, it has my code pop­u­lat­ed in it. The code name, I think, is Dad, instead of QAV, because my friend set it up for me, who’s work­ing at the afford­able fare, so if you see that, that’s why it says Dad. But yeah, I’ll be there every day, and I think Dad will be there on and off dur­ing the week­end, so it’d be nice to say hel­lo, any­way. What’s the, what would it nor­mal­ly

[00:35:25] Tony: cost to go, Al, do you know?

[00:35:27] Alex: I haven’t checked, I think it’s about 80 for a VIP tick­et which might just be the pre­view, plus the addi­tion­al 20 to 40, I think, for the whole week­end. So it’s, yeah, it’s, I mean, it’s prob­a­bly under 100 for the same tick­et, but yeah, this one’s for free. And I think you can book two at a time, but if some­one else logs in on a dif­fer­ent com­put­er, I think you can. Prac­ti­cal­ly book as many as you want. Yeah. I think we’ve been allot­ted 70 or some­thing like that. So we’ll yeah, we’ve got plen­ty.

[00:35:56] Tony: good.

[00:35:57] Cameron: And I guess I’ll put the link in on Face­book and in places like that for peo­ple. But just give us a, give us the pitch for the Afford­able Art Fair, Alex. Tell every­one again what it is.

[00:36:11] Alex: Yeah, sure. So I think. Well, so it’s based in the UK, the actu­al Afford­able Art Fair brand, and they’ve got quite a few I think they might be reach­ing about 20 dif­fer­ent fairs across the globe. And they’ve been in Aus­tralia for the last three or four years, though there was a sim­i­lar fair about 20 years ago, which I went to with mum and dad, which was called the Afford­able Art Fair at the Roy­al Exhi­bi­tion Build­ing, where it is again this year. So it’s kind of a full cir­cle moment for me any­way, being at it. Now but basi­cal­ly the pitch is that it’s every art­work’s between 110, 000. So it’s afford­able, which not so much for me, but for oth­er peo­ple, maybe.

[00:36:53] Tony: Well it’s a great thing for val­ue investors, hey, to pick up some­thing cheap.

[00:36:58] Alex: Well, And

[00:36:59] Cameron: we have a check­list, Tony? And now what’s the art check­list look like?

[00:37:01] Tony: Yeah. I don’t have one.

[00:37:03] Cameron: Okay. Sor­ry, keep going, Alex.

[00:37:05] Alex: that’s okay. Well, so I’m going to say I’m part of the young tal­ent sec­tion, which would be kind of the, I guess, cause we’re pret­ty cheap com­par­a­tive­ly and also we’re up and com­ing. So every­one in the young tal­ent sec­tion is under 35, but most of us are real­ly recent grads from dif­fer­ent art schools around the coun­try. So yeah, there’ll be five of us, but oth­er­wise it’s all gal­leries. So we’re the only ones that are rep­re­sent­ed by the art fair them­selves. And then there are gal­leries from most­ly the East­ern seaboard. And I think a cou­ple from New Zealand. that are going as well. So there’ll be 53 gal­leries, a wine bar, which is enough of a rea­son for some peo­ple to go, regard­less of the art, and cafes and stuff. And it’s in the REB, so it’s quite pret­ty.

[00:37:47] Cameron: So you’re part of Young Tal­ent Time, is what you’re say­ing.

[00:37:49] Tony: Yeah.

[00:37:51] Cameron: Close your eyes and I’ll kiss you to my… Don’t let John­ny Young get you alone. Out in the back room, that’s all I got­ta say. Let me tell you about the time I repos­sessed John­ny Young’s car. Tony that’s a sto­ry for anoth­er time. Alright Alex got any ques­tions for us this week?

[00:38:08] Alex: Yep, I’ve got a ques­tion from Max. I think it’s two, kind of wrapped in one. So he says, Hey guys, I always hear about Imu­gene on the Comm­Sec pod­cast. Looks like they have a can­cer treat­ment cur­rent­ly in tri­als. Nowhere near a QAV stock, but does seem to have made more progress than your typ­i­cal junior biotech. If you are short of ideas any­way, maybe con­sid­er this one. The treat­ment does look promis­ing. And then he has anoth­er. Ques­tion. So just lis­ten to the back­test­ing of a 20% rule one. Tony was say­ing he used three years of data, which is great. My only query on that is that three years ago is when COVID hit. It’s been a very strange three year peri­od, so not sure it is reli­able enough for this type of change. The mar­ket has been super volatile. So stocks that dropped 15% one week went up 30% the next. In our typ­i­cal bull mar­ket, if a stock drops 10%, there is prob­a­bly more at play than just stan­dard mar­ket moves. I’ll wait for the final results, but reck­on it will need fur­ther back­test­ing in your typ­i­cal mar­ket. I can hear Tony now say­ing what is a typ­i­cal mar­ket, which is a fair point, but even he would say the last three years have been pret­ty unique. Oh, and then one last point. You can keep, you keep stat­ing the per­for­mance of the DP as being 2. 5 times. Is it worth not­ing the per­for­mance of the like port­fo­lios as well? Inter­est­ed to com­pare the dif­fer­ences? Cheers, Max.

[00:39:20] Tony: Yeah, so a cou­ple of ques­tions there. Imu­Gene phew, I would­n’t, I’d nev­er touch these stocks they’re, bio, bio­s­tocks are very def­i­nite­ly in the tech stock cat­e­go­ry they’re all sto­ry, all promise, occa­sion­al­ly one works and you get suc­ces­sor bias which, which drags peo­ple into the indus­try when their friends tell them they made 20 or 30 times their mon­ey. on a par­tic­u­lar break­through, their break­throughs are very rare. They’re even rar­er for Aus­tralian com­pa­nies, even though I guess per capi­ta, we have a rea­son­able record in terms of dis­cov­er­ing and devel­op­ing med­ical break­throughs. But it just has­n’t been a part of our share mar­ket for a long time. And there’s been plen­ty of peo­ple who’ve tried and crashed and burned. So yeah, I mean, some­thing like Imu­Gene, even if it. Does come off. It’s share price is sug­gest­ing it’s a long way from that. And yeah I can’t invest in it. I’m remind­ed of one time I did dip my toe in the biotech world and way back when I first start­ed invest­ing in it. I must admit it was pri­or to a QAV check­list, but it prob­a­bly, from mem­o­ry, the stock still had some good runs on the board and was mak­ing mon­ey. From mem­o­ry, the stock was called Bio­ta and it devel­oped a prod­uct called ResMed, which I think is still on the mar­ket now, and it’s an antivi­ral inhaler. And the rea­son I did well at it was because I’d I did the old buy the rumor, sell the fact. So I bought it. The share price start­ed going up a lot on the basis that they kept announc­ing they were get­ting clos­er to clin­i­cal tri­als in the US and then they were pass­ing some, because there’s a whole series of stages in clin­i­cal tri­als, they were pass­ing the ear­ly stages and get­ting close to FDA approval. And then the sort of day before the FDA was about to hand down their final approval and the share price was dra­mat­i­cal­ly up, I sold it. I thought, well, Yep, it may go up a bit fur­ther if the FDA approves it, but it’s already had a good run, and it’s going to crash if it does­n’t. So I sold out, and that’s prob­a­bly the way to play these stocks is to buy the hype, and then as it gets clos­er to real­i­ty, sell them.

[00:41:27] Cameron: And what hap­pened?

[00:41:28] Tony: I actu­al­ly can’t remem­ber I… I think, from mem­o­ry, I think it did­n’t pass FDA approval, and the share price came down, or what­ev­er the approval was, but then the com­pa­ny was bought out by one of the big, or the prod­uct was bought out by one of the big drug com­pa­nies, Pfiz­er or Mer­ck or one of those and the share price recov­ered a bit, but yeah. Yeah, so look, yeah, I mean, there’s so many oth­er cas­es like this Imu­gene that you hear of from time to time. They gen­er­al­ly are head­ed up by a, you know, real­ly well qual­i­fied pro­fes­sor or researcher or clin­i­cian who’s had a sto­ried career and they’re very volatile and very rarely Suc­ceed. So that’s all I can say about this kind of stock.

[00:42:11] Cameron: Have you had a look at the chart for Imu­gene? IMU

[00:42:13] Tony: a look. Yeah.

[00:42:15] Cameron: at home. Looks like it float­ed back in Decem­ber 1993. at about 30 bucks was its share price. It opened, actu­al­ly no, it opened at 12. 56 and closed at 30. So, float price must have been around 12 bucks. Went up by June of 94, it was trad­ing at 35. And then by Feb­ru­ary 2002, it was down to five cents. And now it’s trad­ing at 7 cents. So

[00:42:49] Tony: That’s a long time to be list­ed.

[00:42:51] Cameron: if you bought when it was at 30 bucks and now, and you’re still hold­ing because you believe you’re a big believ­er at 7 cents. Even like going back to Octo­ber, Novem­ber, 2021. It had this mas­sive spike. It must’ve had some good news. It was up trad­ing at 54 cents. It had been around like five, sev­en cents for 30 years, but all of a sud­den it spiked up to 54 cents and now it’s back down to sev­en cents. So yeah, that’s a hell of a

[00:43:23] Tony: I have, I haven’t done a deep dive on it, but I’m guess­ing if I hear about a share price like that, there’s been cap­i­tal rais­ings, which dilute the shares.

[00:43:31] Cameron: Yeah. Well there, I looked in their announce­ments, they’re just doing anoth­er one or just did anoth­er one actu­al­ly in August, 35 mil­lion place­ment. So yeah, rais­ing a lot of mon­ey over the years, I guess, to fund their research.

[00:43:46] Tony: Yeah. And there’s oth­er exam­ples. Mesa Blast brings to mind. I think that was either that one or so MesoBlast was one Com­pa­ny, the prod­uct is called SIR-spheres, it might be MesoBlast, I can’t remem­ber now, but Yeah, there’s been peo­ple who’ve been around for a long time, and every now and then some­one will come to me and say, Hey, I just went to this great lunch, and the guy made a pre­sen­ta­tion about this great med­ical break­through that’s about to hap­pen, and they’re wait­ing for approvals, and blah, blah, blah, and I always say, yeah, it’s a, go to the casi­no, it’s a bet­ter, it’s a bet­ter deal than back­ing these com­pa­nies,

[00:44:18] Cameron: Yeah,

[00:44:19] Tony: yeah.

[00:44:20] Cameron: alright, what

[00:44:21] Tony: And again, we don’t buy stocks on the basis of the sto­ry, even if it will cure can­cer.

[00:44:26] Cameron: So Max thinks your three year time frame is a bit dodgy, Tony.

[00:44:31] Tony: Yeah, look, I have some sym­pa­thy with that argu­ment. Unfor­tu­nate­ly, that’s all we have the detailed data for because we need buy lists in the same for­mat so that we can, you know, Run the process the same way we would the QAV since we’ve been doing it in a dum­my port­fo­lio, but we did have anoth­er year of data, but it was­n’t in the same sort of buy list for­mat that it is now, so it was a bit tricky to use. So yeah, look I tend to agree with it. That’s why I think the rule change won’t come until I, tri­al it going for­ward with this, with, you know, a por­tion of the port­fo­lio, maybe 10 or 20% of the port­fo­lio of my port­fo­lio and see you know, if it does make a dif­fer­ence to us. I’m just hold­ing off for anoth­er week until I release the results because I had a cou­ple of ques­tions for Ryan who was­n’t avail­able to work this week, but won’t be long before I can put out the infor­ma­tion. You can decide for your­self whether it holds water. Yeah, look, I take the point it is, but the flip side of that is that our rules have to stand up in all types of mar­kets. And I know I’ve hurt, and the DPs hurt in the last year or so from con­stant rule one sell­ing, the sort of death spi­ral of buy­ing some­thing, sell­ing it, buy­ing some­thing, going down 10% again and sell­ing it. And yeah, the only way around that was to have a low­er stop loss of 20%. So. It does make sense that, I mean, this, Max is right. This mar­ket con­di­tion may not hap­pen again for a long time, 10, 20 years or what­ev­er, but at least we’ll be ready for it when it does. So I’m turn­ing, I’m lean­ing towards doing it, but I’m going to run it for a tri­al first to give me some more con­fi­dence.

[00:46:00] Cameron: And I am try­ing to get access to more his­tor­i­cal com­pa­ny data and to get some­one to build more of an auto­mat­ed regres­sion test­ing sys­tem for us. You know, at some point, hope­ful­ly in the next 20 years, we will have the abil­i­ty to just hit a but­ton and regres­sion test all sorts of dif­fer­ent vari­ables, but we’re not quite there yet.

[00:46:24] Tony: Well, in 20 years time, we’ll have 23 years worth of buy lists. So that’ll be enough.

[00:46:29] Cameron: And AI will be doing all of our invest­ing any­way, so we won’t need to do any­thing. We’ll just say, yeah, just buy good stocks, AI. Give us bet­ter ones than you give every­body else. If you don’t mind. Give every­one else the shit­ty stocks. Give us the good ones. As for Max’s ques­tion about QAV Light Yeah, I do, I only real­ly report on the light port­fo­lios at the begin­ning of every month because there’s four of them and I just can’t be both­ered doing it each week. And they’re a bit all over the place. So the thing with the light port­fo­lios max is we start­ed, the first one closed in April last year, I start­ed it in Feb­ru­ary and closed it out in April and of course the Ukraine inva­sion hap­pened in Feb­ru­ary, so the mar­ket was just, you know, ter­ri­ble time to start a port­fo­lio. So I think that one is still under water. The next one that I start­ed in late April, May is killing it, it’s up like… 26% the last time I looked. So I don’t know why. Oh, I do know why. I think we had one of the, one of the News Corp stocks that had a big con­sol­i­da­tion and gave back a lot of cash. Any­way, it

[00:47:41] Tony: Oh, that was a New Zealand one. Sky News.

[00:47:43] Cameron: Sky News. S k t, that’s

[00:47:45] Tony: SKT, thank you.

[00:47:46] Cameron: So we’ve got four light port­fo­lios. 221, 222, 223 and 231. 221 was down 13. 4% since incep­tion. The STW was up 2. 83, so it’s lag­ging quite a bit. 222 was up 25. 94% ver­sus the STW up 10. 27. So that one’s doing two and a half times the… Bench­mark. 223 was down 3. 68% since incep­tion, which would have been sort of late 22, ver­sus the STW up 9. 85. and two three one which we only closed a cou­ple of months ago, was up 1. 02%, and STW was up 0. 79%, so they’re kind of neck and neck. So all up, the QAV group was up 9. 87%. Over sort of an 18 month peri­od ver­sus the STW, which is up 23. 74%. If I, you know, sort of take them all and add them all up. So, you know, it’s all up, it’s trail­ing a bit and you know, we’re look­ing for a, wait­ing for a good stretch. We’re wait­ing for a good stretch in the mar­ket where we can do our thing, but we

[00:48:59] Tony: Yeah, those live port­fo­lios haven’t been oper­at­ing for very long com­pared to the dum­my port­fo­lio, which has been around for near­ly four years.

[00:49:07] Cameron: Yeah, and the Dum­my Port­fo­lio real­ly made its bones com­ing out of COVID. You know, that, you know, sort of June 2020 to ear­ly 2022, it had a great run and, you know, that’s where we real­ly got all of our gains. Peo­ple who missed that you just got­ta wait until the mar­ket has anoth­er sort of good run, I think. which we’ll have some­time in the next cou­ple of years, prob­a­bly if his­to­ry is any guide. Alex, do you have any more ques­tions?

[00:49:38] Alex: Nope.

[00:49:38] Tony: No fol­low ups. You don’t want to invest in gene ther­a­py stocks or can­cer drugs or what­ev­er.

[00:49:44] Alex: no. Also, I think like, par­tic­u­lar­ly like some­thing like a can­cer com­pa­ny too, it’s pulls on the heart­strings pret­ty strong­ly. So it’s always makes me feel cau­tious when it’s some­thing like that. Yeah, that’s all. Thank you. See ya.

[00:49:59] Tony: Yeah, I def­i­nite­ly agree. It’s the same thing with ESG invest­ing. I feel too, that some­times peo­ple want to do the right thing with their mon­ey and there’s noth­ing wrong with that. But you know, don’t get too star­ry eyed about doing good for the plan­et and get­ting bad returns along the way doing it, you still got to be prag­mat­ic about it too, I think, cause it’s invest­ing for your future.

[00:50:18] Cameron: And there’s no harm in tak­ing some gam­bling mon­ey and throw­ing that behind some of these things. Some, you know your horse rac­ing mon­ey.

[00:50:26] Tony: Horse rac­ing mon­ey. Yeah, I mean very small amount. I don’t mind exper­i­ment­ing. You’ll learn the hard way with stocks like this, unfor­tu­nate­ly. And you got to be care­ful because if you do hap­pen to pull the lever and get triple sev­en on the slot machine from your one time in the biotech space, don’t go and put the rest of the port­fo­lio into the biotech space because that’s a prob­lem.

[00:50:48] Cameron: Yeah, I know how to make this

[00:50:49] Tony: Yeah.

[00:50:50] Cameron: Look at that, I’m a genius!

[00:50:53] Tony: And I’m sure like I’m sure if we had some­one on the show who was an investor in this space, it’d be like the peo­ple who, you know, do ven­ture cap­i­tal star­tups. They’ll have a whole port­fo­lio of a hun­dred of these com­pa­nies, hop­ing that one shoots the light, becomes a uni­corn, shoots the lights out, and the rest they can just get rid of over time.

[00:51:10] Cameron: Alright, thank you Alex, thank you Max. We’ll do the last ques­tion. Then we’ll get into after hours. Glenn, a cou­ple of ques­tions for TK actu­al­ly. What are his thoughts on why com­pa­nies raise cap­i­tal via a share place­ment at a sig­nif­i­cant dis­count to the share trad­ing price using Core lithi­um? In paren­the­ses, I’m not an own­er. As an exam­ple he sent me a PDF. They announced a hun­dred mil­lion dol­lar place­ment at 40 cents, which rep­re­sents a 26. 6% dis­count to the last clos­ing price of 54 and a half cents on the 15th of August, 2023, Napoleon’s birth­day. He did­n’t write that. I’m just adding that in. Side note, in case you for­got, and 30. 2% dis­count to the five day vol­ume weight­ed aver­age price of 57. 3 cents as at 15th of August 2023, Napoleon’s birth­day. Only 243 years, not 343 years as I said on the show, as I was doing the math when I was edit­ing again. This com­pa­ny is an explor­er and has years of neg­a­tive cash flow. Does that lim­it their capac­i­ty to bor­row, issue bonds? or oth­er means at rea­son­able rates. I’d imag­ine most com­pa­nies would be able to bor­row or issue bonds at rates less than 10%. So in this case, are they issu­ing new shares as they are trapped for cash, and low­er­ing slash destroy­ing the share price is the only mech­a­nism? In a hypo­thet­i­cal sit­u­a­tion, if Tony was run­ning a sim­i­lar com­pa­ny, what options would he explore to raise cap­i­tal? Has he expe­ri­enced a 25 plus per­cent dis­count place­ment raise with a QAV stock, which have pos­i­tive cash flows? Then he sent me a screen­shot about their share price. They dropped 24.77% in a day by the looks of it. Yes. What are your thoughts on Glen’s ques­tions about core lithi­um? Tony,

[00:53:03] Tony: Yeah, well, it’s we see it hap­pen all the time. We’re just talk­ing about Imu­gene before, sim­i­lar sort of sit­u­a­tion. So these are com­pa­nies that aren’t mak­ing mon­ey. So it’s pret­ty hard for them to be able to go to a bank and say to the bank, yeah, lend us some mon­ey, we’ll pay it back because it’s, their future is. is rea­son­ably uncer­tain. This com­pa­ny does have a fair bit of cash on the, in the bank, on the books, but it is burn­ing through it also quite quick­ly as well, which is why it’s rais­ing some more mon­ey now. So yeah I tend to think that using script to raise mon­ey, which is what’s hap­pen­ing here is the lender of last resort. There is a, I mean, there is A school of account­ing called Weight­ed Aver­age Cost of Cap­i­tal, which allows you to cal­cu­late whether it’s cheap­er to issue a bond, or take on debt, or use script. But in this case, giv­en that they’re not mak­ing mon­ey, it’s issu­ing script. Sim­i­lar sort of sto­ry to the biotech sec­tor. They’re fund­ing their future through issu­ing more shares. I imag­ine it’s not some­thing they’d like to do because, you know, the val­ue of all their own hold­ings is being dilut­ed as well. Typ­i­cal­ly, what should hap­pen is that They announced the issue and then the share price should take into account the dilu­tion and rate down, which it seems to have done this, but a lit­tle bit more than that. So I think the dilu­tion was 16% and the price drop is 25%, so you know, the mar­ket has­n’t react­ed kind­ly to what’s going on, but it it should have prob­a­bly only fall­en about 16%, gen­er­al­ly that’s the math, is that you’re dilut­ing the stock

[00:54:36] Cameron: Where are you get­ting the 16% from?

[00:54:38] Tony: Yeah, so the com­pa­ny is, has issued 100 mil­lion shares and a fur­ther 100 mil­lion worth of shares, a fur­ther 20 mil­lion avail­able in a share pur­chase plan. The cur­rent mar­ket cap is 7 53, so that’s about 16%. new share val­ue being issued which gen­er­al­ly is what the share price would drop, all things being equal. This has dropped a bit fur­ther than 16%, it’s dropped about 25%. So the mar­ket just has­n’t been hap­py stump­ing up has­n’t been hap­py to return, to put more mon­ey into this com­pa­ny. That’s about all I can say. I mean, in terms of alter­na­tives I don’t think a bank would lend them mon­ey. I know they’ve got assets like prop­er­ty, plant and equip­ment and I guess mines. I don’t know how the bank would ever take secu­ri­ty as a mine giv­en they’re not min­ers. So that’s dif­fer­ent to like if it was a house when they can, they know they can flip the house and get their mon­ey back. So banks are going to find it hard to sell. And typ­i­cal­ly that’s what the bank wants. I guess the bank will want um, A, the abil­i­ty to repay the debt And, you know, loans are decades long, so they’ve got to con­vince them­selves this com­pa­ny’s going to be around for the length of the loan, and then they’ve got to have some kind of secu­ri­ty, which is prob­a­bly their oth­er main focus, and there’s, apart from a hole in the ground, if this com­pa­ny can’t make that prof­itable, then I’m not sure how the bank can make it prof­itable. So they would­n’t see much secu­ri­ty here either. So that rules out debt, for the most part, I would have thought. Issu­ing a bond is an option, but again this would be a junk bond because it’s being issued by a com­pa­ny that’s not mak­ing any mon­ey. So again, the mar­ket would say, well, how do we know you’re going to be around to, you know, if it’s a 10 year bond, how do you know you’ll be around for 10 years or what­ev­er, if it’s a five year bond bear­ing that in mind, if they did issue a bond, I would think it would have to be at a a very high coupon rate, so you know, it… I’m not sure what junk bonds are going for now, but it would be up around 15% I would’ve thought in this kind of mar­ket. So that’s gonna cost them a lot as well. Every year they’re pay­ing that, so a hun­dred mil­lion dol­lars is on, $120 mil­lion is on issue. Even if they’re, they get a bond away at a 10% coupon, they’ve got­ta find 12 mil­lion bucks a year to. Pay the bond­hold­ers and they’re already cash flow neg­a­tive. That’s just going to short­en their run time before they burn through all their cash. So the ben­e­fit of issu­ing new shares, even though it hurts the cur­rent share­hold­ers, which is prob­a­bly man­age­ment as well, is that it does­n’t hurt their prof­itabil­i­ty. So they don’t have to fund either debt or the bond issuance out of their dwin­dling cash flows. So that’s, that’s prob­a­bly the most attrac­tive solu­tion for them. It does. Put the asset on them though to hur­ry up and get the mine built and prof­itable. And I know I had a quick look at them today when the ques­tion came through and they’re talk­ing about hav­ing five years before the mines up and run­ning. So, and it sounds like they’ve changed man­age­ment to try and focus on that, which I think is a good thing. So you know, I’m not say­ing this is nec­es­sar­i­ly a bad sit­u­a­tion, but it’s a com­mon sit­u­a­tion when you’re invest­ing in com­pa­nies that aren’t mak­ing. Prof­its and don’t have strong cash flows, it’s high­ly like­ly that they’ll come back to you and ask for more mon­ey at some stage, whether it’s a mine, whether it’s a tech com­pa­ny, whether it’s a biotech com­pa­ny, that’s just the way they oper­ate. And I imag­ine that the pros in this area don’t give all their mon­ey up front, they prob­a­bly hold back some for the round two invest­ment, the round three invest­ment, etc, which they expect to be com­ing down the track based on the his­to­ry of this kind of stock. So, yeah,

[00:58:12] Cameron: One thing I learned at pimp school, Tony, is you nev­er let your pro, you nev­er let your pros hold on to mon­ey. Always get the mon­ey from the

[00:58:19] Tony: Well and that’s, you know so Glenn asked what I would do. And I think the,

[00:58:25] Cameron: You’d just open up, you’d just open up your pig­gy bank if you need­ed a hun­dred mil to fund it, would­n’t you? You’d be just like, yeah, under the, what’s under the couch?

[00:58:32] Tony: Take the com­pa­ny pri­vate, but no, well, this, again, this is a bit like the the biotech space. I’d hire a CEO who was a real­ly. or he or she was a real­ly good sales­per­son and was great at rat­tling the can in front of investors because that’s the best hope this com­pa­ny has is the abil­i­ty to raise more mon­ey until it becomes prof­itable which is always going to be a you know a it’s a crash through or crash type strat­e­gy so hope­ful­ly they know their stuff well enough to be able to build the mind and peo­ple get their mon­ey back but we’re get­ting into the whole area of the sunk cost sit­u­a­tion again where you need to keep putting good mon­ey after bad just to get the good mon­ey back and it’s nev­er a great sit­u­a­tion to be in.

[00:59:12] Cameron: Have you had a look at their chart?

[00:59:13] Tony: Yeah.

[00:59:14] Cameron: Again, anoth­er one of these com­pa­nies like Imu­gene, been around a long time. Looks like they float­ed back in ear­ly 2011 at around 13 cents, quick­ly dropped to about 3 cents and sat there. ever since until late ear­ly 2021, went from 4 cents up to. 1. 40 by August 2022. So a year ago, they’d gone from 4 cents to 1. 40. Now they’re back down to 40 cents, but that’s a crazy run.

[00:59:52] Tony: Yeah. And the lithi­um boom was behind that. And the ques­tion I’ve got to ask is, you know, PLS is on the buy list. It’s a lithi­um min­er, which is throw­ing off lots of cash right now. Why would­n’t you invest in that over a com­pa­ny like this, which is still try­ing to get estab­lished and tak­ing risks and requir­ing fur­ther invest­ment to do so?

[01:00:13] Cameron: Unless they’re join­ing Elon Musk to send robots out to one of the moons of Jupiter or some­thing, where they’re going to mine lithi­um in Ceres or some­where like that.

[01:00:22] Tony: Well that’s for 10 years down the track when I need more mon­ey. Right. That’s, the sto­ry there.

[01:00:27] Cameron: Right. I think that’s the plot of one of the Apple TV shows for all mankind. It’s like an alter­na­tive Cold War his­to­ry show and they’re fight­ing over lithi­um min­ing in the remote regions of the solar sys­tem or on the moon or some­thing. I don’t think the moon’s got any lithi­um, but yeah, I think it’s some­thing about space race. Lithi­um min­ing is the one of the main plots of that show I’ve heard. Good stuff. Well, there you go, Glenn. I hope that helps. Prob­a­bly not much. Would­n’t touch it with a barge pole as Tony’s basic sum­ma­ry there. Well that’s the show for this week, TK, After Hours.

[01:01:04] Tony: Yeah, well, we’ve already touched on that. We had Alex up, which was love­ly with Sean cel­e­brat­ed Jen­ny’s birth­day. And watched lots of soc­cer, lots of wom­en’s soc­cer. Well, Sean’s a Mad King soc­cer sup­port­er and his sis­ter actu­al­ly came up when they went back and stayed with us and she went to the FIFA Female World Cup Final on Sun­day night, so she was pret­ty excit­ed about that. Love­ly to have her with, stay with us. Real treat, but yeah, it’s the real zeit­geist, as we were say­ing before, this wom­en’s FIFA. World Cup, at least in Aus­tralia, I hope it’s catch­ing on around the world, but it seems to be like a turn­ing point in female sports, which is a great thing.

[01:01:41] Cameron: I actu­al­ly broke my rule and watched the Matil­das play Eng­land because Fox want­ed to watch, so we fig­ured out how to watch it, and it was fun. I enjoyed it, yeah, real­ly enjoyed

[01:01:50] Tony: Yeah.

[01:01:51] Cameron: yeah.

[01:01:51] Tony: Yeah.

[01:01:52] Cameron: Not a good out­come for the Matil­das, but you know, I

[01:01:55] Tony: game you watched it was a los­ing game.

[01:01:57] Cameron: Well, it was­n’t los­ing for Eng­land. I mean, I don’t real­ly care who wins. I thought Eng­land played real­ly well at the end there. I thought under pres­sure last, few min­utes of the game and they pulled out anoth­er cou­ple of goals and, they real­ly, had it where it count­ed in the last, real­ly took the steam out of the Matil­das abil­i­ty to fight back at the end there. And I thought they did a great job. Yeah, well that’s it. So that’s my one game of sport I’ve watched now. I don’t need to watch anoth­er one for five years. I’m done.

[01:02:22] Tony: So why did Fox want to watch it? That’s an inter­est­ing thing, isn’t it real­ly?

[01:02:26] Cameron: I think you’ll his friends at school were all talk­ing about it and there’s just like the Matil­da’s mar­ket­ing has been insane. I don’t know what it’s like down there, but up here it’s every­where and You know, the Coles give­aways and Woolies give­aways or some­thing to kids. It’s just Matil­da’s trad­ing cards and stuff like that. He was telling me like a while ago, Oh yeah, like Sam Ker­r’s my favorite play­er and I’m like, you do you ever watch Sam Kerr plays? No, but you know, she’s my favorite kind of thing. Yeah. They’ve done a great job at mar­ket­ing it. You know, who­ev­er’s behind the whole. cam­paign has done a tremen­dous job, I think.

[01:03:06] Tony: very good.

[01:03:07] Cameron: They even our Kung Fu school let us out 15 min­utes ear­ly that night, so we could all get home in time to see the Matil­das game. So I

[01:03:15] Tony: right.

[01:03:16] Cameron: was like, well, shit, if I’m miss­ing out on Kung Fu, I bet this bet­ter be a bloody good game. And in my last 15 min­utes, I don’t know if you can see, but I’m cov­ered in, I’m cov­ered in scars today. You know, my bust­ed lip, bust­ed cheek. It’s from spar­ring on Sat­ur­day. I get the shit kicked out of me by a vari­ety of peo­ple.

[01:03:35] Tony: Sam Kerr?

[01:03:36] Cameron: Cause I did­n’t care who won the

[01:03:37] Tony: Yeah.

[01:03:38] Cameron: She hunt­ed me down. Well, I’ve been read­ing a cou­ple of great books, Tony. I men­tioned Vaclav Smil’s book on ener­gy, which is real­ly great. And you know, ener­gy is, it’s one of those things I’ve been hav­ing argu­ments about with peo­ple for. You know, ever, decades. It’s a bit like the con­ver­sa­tion we had about time a few weeks ago being a con­struct. Ener­gy is a con­struct. It’s an abstract con­cept. You know, you prob­a­bly don’t sit in as many hip­pie kind of rooms as I do, but peo­ple start say­ing, well, you know, we’re all made of ener­gy. And I go, real­ly? What is that then? Explain to me what an ener­gy looks like. Well, you know, every­thing’s made of ener­gy. Eh, is it though? Do you know what that looks, do you know what ener­gy’s made out of? Ener­gy. It’s just it’s a gap filler. Ener­gy is the word that sci­en­tists use that when we do, when some­thing’s hap­pen­ing and we don’t know what it is, we go, well, it’s ener­gy. It’s poten­tial ener­gy. It’s kinet­ic ener­gy. It’s when some­thing is hap­pen­ing, we say that, well, there’s ener­gy hap­pen­ing. What is it? We don’t know. Richard Feyn­man famous­ly said some­thing about, you know, ener­gy’s like one of the great mys­ter­ies. We don’t know what it is, we don’t know how it works, we just know that some­thing’s hap­pen­ing so we have to call it some­thing so we say it’s ener­gy, but no one knows what it is. It’s just the abil­i­ty to do work. That’s, you know, so Any­way. Any­way, I’m read­ing Vaclav Smil’s book on ener­gy, which is real­ly And then I start­ed read­ing Jorge Luis Borges Uh, one of his col­lec­tions of short sto­ries. You ever got into him? I got the feel­ing you’d be down, you’d be right into this guy.

[01:05:15] Tony: Nah, nev­er heard of him.

[01:05:17] Cameron: Oh, mas­sive, like prob­a­bly one of the most revered Latin Amer­i­can writ­ers of the 20th cen­tu­ry, died in the eight­ies. He’s up there with Gabriel Gar­cia Mar­quez as one of the great, but he most­ly wrote short sto­ries, but very sort of philo­soph­i­cal sto­ries that are mind bend­ing, sur­re­al­ist, touch­ing on physics and sci­ence and time and the uni­verse. But I’ve only read one at the moment, which is, which was fan­tas­tic. It’s about, it’s writ­ten like It’s non fic­tion about, it cer­tain­ly was evi­dent in con­ver­sa­tion with a friend of his, and the friend gave him some quote that he real­ly liked, and he said, who’s that quote by, and he said, well, it’s this guy who was the here­siarch of Tlön, and I read about it in this ency­clo­pe­dia, and then they go and look in the ency­clo­pe­dia, and it’s not there, so then they go, and it’s like this imag­i­nary coun­try that no one real­ly knows much about, and that’s been hid­den from every­body. And then they find out more about it. And these peo­ple have their own maths, their own form of sci­ence, their own lan­guage, which has no nouns or verbs in it. And it’s this long explo­ration of this fic­tion­al soci­ety and their mythol­o­gy and how their mythol­o­gy pre­sup­pos­es this plan­et with all this, where this, all the stuff hap­pens. And then over the course of this short sto­ry, which isn’t quite so short. This mythol­o­gy of this place becomes so pop­u­lar that it starts to take over every­thing on earth, all of our sci­ence and math and mythol­o­gy starts to get replaced by theirs, and this is, it’s any­way, it’s great, it’s a real­ly good read, I high­ly, if you’re look­ing for some­thing. Real­ly engag­ing to read. Jorge Luis Borges, B O R G E S, Borges, but Borges, I think is how they pro­nounce it in Span­ish, Argen­tin­ian. Yeah,

[01:07:08] Tony: Ball­hay, maybe?

[01:07:10] Cameron: some­thing like that. Any­way, Borges, prob­a­bly, yeah. Any­way, it’s a real­ly good show.

[01:07:15] Tony: Yeah. Today’s episode’s being brought to us by SBS.

[01:07:18] Cameron: Well, it kind of reminds me of you know a lit­tle bit of Catch 22 guy. Joseph Heller. yeah, a bit of him. And also who was the oth­er guy? You put me onto his books years ago, the World War II stuff. He was actu­al­ly in Oh, Von­negut. yeah, Von­negut.

[01:07:37] Tony: Oh, I love Von­negut. I love Heller as well.

[01:07:39] Cameron: it’s a lit­tle bit like, you know, Latin Amer­i­can ver­sion of these guys. I found sort of real­ly that, which is why I thought you’d be all over this guy. It’s that sort of, that’s what it remind­ed me of, you know, real­ly engag­ing sto­ries that are a lit­tle bit sur­re­al­ist and, but real­ly smart. And any­way, yeah,

[01:07:59] Tony: You ever read Break­fast of Cham­pi­ons by Von­negut?

[01:08:02] Cameron: yeah, you put me onto it, like,

[01:08:03] Tony: Ah, okay.

[01:08:04] Cameron: 8 years ago, and, yeah, I just loved it, just, thought it was fan­tas­tic, yeah.

[01:08:09] Tony: Yeah! Just cov­ered all the things we’ve been talk­ing about. No free will. Yeah. I for­get what the oth­er things were, but it was like our con­ver­sa­tion had been writ­ten down in a book by Von­negut.

[01:08:18] Cameron: Yeah, I real­ly love, like, those guys, and, you know, I love Philip K. Dick­’s stuff for a sim­i­lar rea­son. Peo­ple who can take deep, sci­en­tif­ic or philo­soph­i­cal ideas, but also just put them in a real­ly engag­ing sto­ry that can take you to a dif­fer­ent place and mess with your head. Get a kick out of that.

[01:08:37] Tony: Yeah. right.

[01:08:38] Cameron: What I should be read­ing at night is all the prepara­to­ry mate­r­i­al so I can sit the RJ 46. I keep telling myself I should be read­ing that at night, not read­ing fun, philo­soph­i­cal stuff. So that’s my, one of my goals for this week is to read that instead.

[01:08:55] Tony: okay. Yep. You’re sit­ting the exam, hey?

[01:08:58] Cameron: Yeah, I got­ta sit the exam and I’ve been say­ing that, but I got­ta, I just got­ta find the time to do the read­ing, so, I fig­ured the only time I have to read is at night. So I used to sit down for a cou­ple of hours every after­noon and just try and knock it

[01:09:10] Tony: off.

[01:09:10] Cameron: yeah, right.

[01:09:11] Tony: Yeah.

[01:09:12] Cameron: Well, I’m going to try and get that done over the next cou­ple of weeks.

[01:09:15] Tony: And it does­n’t stop because I still have to keep read­ing the, you know, what­ev­er it was, 20 hours a year, Tend to do in the last month or so.

[01:09:22] Cameron: I’m just gonna feed it all to Chat­G­PT and say, sum­ma­rize this for me so I can under­stand it , and then use it to, I’m gonna use Chat­G­PT to test me too. Gonna feed it the doc­u­ments after I’ve read them and they go, okay, ask me ques­tions. Send me a test based on this and get it to test me, so before I set the actu­al test. So I’ll see how that goes.

[01:09:43] Tony: Yeah. Good.

[01:09:45] Cameron: All right,

[01:09:46] Tony: good luck. It’s a big thing.

[01:09:48] Cameron: Thanks, Tony. Hope you’re feel­ing, hope you feel bet­ter by the time we talk next week.

[01:09:52] Tony: Yeah, thank you, so do I. Oh, actu­al­ly, I’ll be away too. I’ll prob­a­bly be call­ing in from Wag­ga, I think.

[01:09:57] Cameron: Too sick to trav­el, man, what are You doing? You wan­na go to Wag­ga?

[01:10:00] Tony: hope­ful­ly I’ll be done by Mon­day.

[01:10:02] Cameron: Wag­ga’s a swamp.

[01:10:03] Tony: Wag­ga.

[01:10:03] Cameron: That’s why you get sick. That’s why you’re sick in the first place. Going to

[01:10:07] Tony: all these dif­fer­ent germs, all exposed to the dif­fer­ent cli­mates, micro­cli­mates. Yeah, so while I go pick up Rud­dy, we’re going to Mel­bourne for Alex’s art show.

[01:10:15] Cameron: Back down to Mel­bourne.

[01:10:16] Tony: so I’ll be, so we’ll go next, next Tues­day and then Cape Shank the Tues­day after, and then I’ll be com­ing back up after that on the Wednes­day.

[01:10:24] Cameron: Not stay­ing down this time.

[01:10:26] Tony: No, I’ve got a a golf tour­na­ment in Coffs Har­bour.

[01:10:30] Cameron: Oh, love­ly.

[01:10:31] Tony: yeah, play there.

[01:10:32] Cameron: Love Coffs Har­bour. Love­ly lit­tle… Think­ing about retir­ing there.

[01:10:36] Tony: okay.

[01:10:37] Cameron: It’s

[01:10:37] Tony: well as Jack­son, as well as Jack­son Hole,

[01:10:39] Cameron: Before Jack­son Hole. Yeah, I’ll get, well, I’ll retire to Coffs Har­bour while I wait for the US Civ­il War to play out and the you know, the radi­a­tion lev­els to dis­si­pate, but yeah, Coffs Har­bour, nice tem­per­a­ture. Like, it’s sort of nice sort of per­fect tem­per­a­ture there all year round, I think, up around that sort of north­ern New South Wales

[01:10:57] Tony: yeah, it’s a love­ly area.

[01:10:58] Cameron: Yeah, not great when bush­fires go through. I got a good mate there, went to high school with who is a prin­ci­pal of a school there. And yeah not great when the fires hit a few years ago, ear­ly 2020 or when­ev­er it was, late 2019. Where were the fires? Around about then, I think.

[01:11:13] Tony: before the floods,

[01:11:14] Cameron: Yeah, some­where in between the floods and COVID there were, there was fires. All right. Thanks TK.

[01:11:19] Tony: right, okay,