QAV #635 — Sugar Hits

[00:00:00] Cameron: Wel­come to QAV, TK This is Tues­day, the 29th of August, episode 635 By the looks of the fan­cy back­ground There you are in Wag­ga.

[00:00:25] Tony: I am, yeah, enjoy­ing, Mark Rud­d’s hos­pi­tal­i­ty.

[00:00:31] Cameron: Have you played golf yet?

[00:00:32] Tony: No, unfor­tu­nate­ly, I’m still get­ting over a calf strain, so, just try­ing to exer­cise it and get it good for the golf tour­na­ment com­ing up, but, may only play in a week’s time or so.

[00:00:45] Cameron: What tour­na­ment are you play­ing in?

[00:00:47] Tony: It’s called Black Snake It’s a, an event up in Bon­neville in, in Coffs Har­bour So it’s the reg­u­lar guys we go away with often that do char­i­ty work and, I’m not sure if this one’s for char­i­ty I played Bondville once before with Rud­dy, and it’s such a great golf course, I want­ed to go back, so I joined the, group that’s going up there soon.

[00:01:07] Cameron: The Black Snake Tour­na­ment?

[00:01:09] Tony: Yeah, they give each dif­fer­ent tour­na­ment a name It’s, Scal­ly­wags, I think Scal­ly­wags Cup goes to Tas­ma­nia The Decem­ber one we play in is Ned Kel­ly Cup, and this one’s Black Snake.

[00:01:24] Cameron: Good stuff And you’re still recov­er­ing from your chest cold.

[00:01:28] Tony: Yeah, no, get­ting bet­ter, thank you You can prob­a­bly hear from my voice, it’s a bit stronger, clear­er.

[00:01:36] Cameron: Well, not with the shit­ty micro­phone, the Air­Pods micro­phone that you’re using while you’re trav­el­ing, but yes.

[00:01:43] Tony: Do you reck­on, do you think peo­ple real­ly care? Is it about the con­tent or is it about the qual­i­ty of the record­ing?

[00:01:49] Cameron: Oh yeah, no, I think it’s the con­tent, as long as it’s lis­ten­able I don’t think peo­ple mind too much Yeah.

[00:01:55] Tony: I had this debate with Phil Mus­catel­lo on Fri­day when he was help­ing me.

[00:01:59] Cameron: Oh, .

[00:02:00] Tony: To install a qual­i­ty micro­phone he rec­om­mend­ed and then dissed and then threw out Now we’re get­ting anoth­er one.

[00:02:07] Cameron: Fail.

[00:02:08] Tony: Which is not the micro­phone’s prob­lem He gets to my place and he goes, no, it’s Too much glass here It’s gonna just keep echo­ing and reflect­ing Mmm.

[00:02:17] Cameron: That’s the prob­lem.

[00:02:18] Tony: Mmm.

[00:02:19] Cameron: Well, I want to start the show by con­grat­u­lat­ing the Prime Min­is­ter on his pay rise today.

[00:02:25] Tony: Seri­ous­ly? Real­ly?

[00:02:28] Cameron: No, not real­ly, face­tious­ly.

[00:02:31] Tony: No, I mean real­ly, he’s got a pay rise He’s giv­ing him­self a pay rise.

[00:02:35] Cameron: Oh, they all got a pay rise today He got a pay rise Dut­ton got a pay rise Adam Bandt got a pay rise They all got a pay rise MPs are get­ting a pay rise.

[00:02:43] Tony: That’s why no one oppos­es.

[00:02:47] Cameron: Well, yes, exact­ly But I love, I love the pho­to in the ABC Con­grat­u­la­tions to the ABC Like they, they picked the cheesi­est pho­tos of those three guys, Albanese, Dut­ton and Bant, big shit eat­ing grins on their faces to run with the sto­ry of get­ting a pay rise Classy Yeah, ABC is so classy these days It’s.

[00:03:10] Tony: Yeah, I had­n’t been aware of that I mean, politi­cians work hard, so you can’t begrudge them what they get paid And I guess there’s lots of agi­tat­ing for pay ris­es giv­en infla­tion in the econ­o­my, but it’s nev­er good when you see politi­cians uni­lat­er­al­ly get a pay rise I’m sure it was­n’t debat­ed.

[00:03:29] Cameron: Aren’t they caus­ing the infla­tion? Should­n’t they be like man­ag­ing the infla­tion bet­ter and then.

[00:03:34] Tony: Well, that’s right.

[00:03:34] Cameron: Rise when you’ve Man­age the infla­tion.

[00:03:37] Tony: Is one of the, one of the prob­lems with democ­ra­cy is that, they’ve got a vest­ed inter­est in not solv­ing these prob­lems A bit like, cig­a­rettes and gam­ing and liquor They get so much tax­es from all those things, they’re nev­er going to go away Or, or, you know, have some kind of, health man­age­ment pro­gram or frame­work around them.

[00:03:54] Cameron: It’s like the mil­i­tary indus­tri­al com­plex in the US, why would we want wars to go away when that’s how we make 10% of our income every year?

[00:04:01] Tony: Exact­ly.

[00:04:02] Cameron: Mov­ing on to oth­er issues, wheat price, Tony Speak­ing of wars, wheat price became a sell this week in our check­list, which meant we had to sell Grain­Corp because it’s attached to the wheat price, and I went dig­ging into the whys of the wheat price col­lapse And, it’s kind of fun­ny, I was on this web­site called food­busi­ness­news net and, going back over the last week of report­ing, so, August 23rd said wheat futures climbed Wednes­day as traders mon­i­tored news of a Russ­ian drone attack on the port of Its­mail along the Danube Riv­er in south­ern Ukraine, which Ukrain­ian Deputy Prime Min­is­ter Kubrakov said destroyed 13 tons of grain So they blow up this, grain silo, price of wheat futures go up The next day, August 24th, wheat futures closed most­ly low­er Thurs­day as traders weighed wheat demand for U S wheat against strong glob­al sup­plies exem­pli­fied By con­sul­tan­cy, Agritel’s Thurs­day fore­cast for Russ­ian wheat exports at 49 mil­lion tons in 2023 24, which would be a record high So, wheat price, wheat futures went down The next day, August 25th, wheat futures were mixed Chicago’s soft red win­ter con­tracts declined under pres­sure from plen­ti­ful glob­al sup­plies and a strength­en­ing U S dol­lar Still, there were signs of con­cern in some wheat grow­ing regions such as Argenti­na and Ukraine, which helped sup­port KC and Min­neapo­lis wheat futures So, it seems to be up one day, down the next day, bit like a mar­ket but any­way, it’s down for us, so we had to sell GNC and, we own sev­er­al parcels in our dif­fer­ent port­fo­lios It had bare­ly moved, I think one of the port­fo­lios was up 1%, one of them it was down 2% since we bought it, because we bought them, a cou­ple of weeks apart So it real­ly went nowhere for us, Grain­Corp, and, who knows, it could be a buy next week again But, as I said in my post, we don’t pre­dict, we just play it day by day.

[00:06:13] Tony: Yeah We’re cer­tain­ly not experts on the wheat, indus­try and cer­tain­ly not experts on the Russ­ian and Ukraine con­flict I would, it’s, it’s, it’s strange to me that I would have thought that the Rus­sia con­flict would have been push­ing wheat prices up, but, Yeah, because the wheat has been flow­ing, I know, until recent­ly when Rus­sia decid­ed not to let wheat out of Ukraine, so I would have thought that would have pushed wheat prices up, but it did­n’t, so I’m not sure what’s going on, nor do I have the exper­tise to judge.

[00:06:42] Cameron: Well, I was watch­ing a, Tik­Tok series about Ukraine war, live thing this morn­ing, an Amer­i­can guy who does a day by day analy­sis of what’s going on And he spent quite a bit of time talk­ing about how Ukraine is still able to ship their grain They’ve just found dif­fer­ent ship­ping routes that bypass­es Rus­sia and stays in NATO waters So Rus­sia can’t do any­thing about it with­out, set­ting them­selves up for a NATO reprisal So Appar­ent­ly Ukraine is still ship­ping grain.

[00:07:11] Tony: Okay, that makes sense then.

[00:07:13] Cameron: So that might have some­thing to do with it Well, speak­ing of play­ing things day by day, Tony, Fortes­cue’s, Revolv­ing Man­age­ment Door, is sort of a day by day thing Who’s in? Who’s out? It’s a bit like Musi­cal Chairs in Fortes­cue Their fresh­ly mint­ed CEO of the min­ing busi­ness, Fiona Hick, who I think had only been there for six months, she replaced Eliz­a­beth Gaines, has left after Jim­my Barnes Did you read, the blow by blow in the Finan­cial Review this morn­ing?

[00:07:44] Tony: I did, yeah Yeah.

[00:07:46] Cameron: About flame trees, yeah, tak­ing the lyrics from Flame Trees and then.

[00:07:51] Tony: Oh, right I did­n’t see.

[00:07:52] Cameron: That was good.

[00:07:53] Tony: Skimmed through it I love that song It’s one of my favourites.

[00:07:58] Cameron: Me too, he was like, num­ber one is to find some friends who say you’re look­ing well Every­one was telling Andrew For­rest on Sat­ur­day night that he was look­ing very well.

[00:08:08] Tony: Ha, ha, ha, ha.

[00:08:09] Cameron: Num­ber two is the hap­py hour at one of two hotels They go, Oh, there was a lot of hap­py hour going on at.

[00:08:16] Tony: Ha.

[00:08:16] Cameron: Pil­bara The drinks were flow­ing Num­ber three is nev­er say her name And, then they were talk­ing about Fiona Hick So they.

[00:08:25] Tony: Was that, was that who they were talk­ing about? Not Mrs For­rest?

[00:08:28] Cameron: Well, so many, so many, yeah And then they were also talk­ing about the num­ber of, sex­u­al harass­ment, cas­es in at Fortes­cue this year It’s gone up.

[00:08:42] Tony: Ooh.

[00:08:43] Cameron: Year, and a lot of peo­ple have been fired, removed from the com­pa­ny because of sex­u­al harass­ment inves­ti­ga­tions Twig­gy For­rest, not one of them No, no foul calls on Twig­gy For­rest, but Their finan­cials came out, declared a ful­ly franked final div­i­dend of 1 a share We’ve always talked in the past about how they’re very gen­er­ous div­i­dend issuers.

[00:09:10] Tony: They were That’s one of the issues why the share price went down.

[00:09:14] Cameron: Real­ly? Dol­lars not good enough?

[00:09:16] Tony: Yeah, it’s low­er than it may even be hot, but it’s been in the last cou­ple of years.

[00:09:21] Cameron: Their rev­enue decreased 3% to US$ 16 9 bil­lion Its under­ly­ing earn­ings before inter­est tax­es, 6% to US$ 10 bil­lion Net prof­it after tax fell 23% to US 4 8 bil­lion and Dino Otran­to has been appoint­ed Chief Exec­u­tive in the wake of Fiona Hicks depar­ture So what do you make of all of that, TK?

[00:09:53] Tony: Well, I’d have to take it at face val­ue The Fin Review report­ed that, Ms Hicks, who’s leav­ing, Fiona Hick, who’s leav­ing, came out of some of the big ener­gy com­pa­nies in Aus­tralia I think it was either Wood­side or Rio And, brought that kind of Big sort of cor­po­rate cul­ture to an entre­pre­neur­ial com­pa­ny and the mesh did­n’t gel That’s what’s being report­ed So you have to believe it That is, I mean, to me, it’s a red flag I mean, that’s prob­a­bly the third senior exec­u­tive to turn over in the com­pa­ny prob­a­bly this year So we had Eliz­a­beth Gaines leav­ing, who was their long­time CEO Now, Fiona Hick, Guy DeBelle, who was CFO of the Future Indus­tries side left So there’s a lot of change in the exec­u­tive ranks, which is not that unusu­al for a sort of a, I’ll call it a fam­i­ly com­pa­ny It’s, you know, it’s Andrew’s way or the high­way, I guess, and that makes sense because he’s in charge and knows what he’s doing So there can be clash­es of cul­tures So, but the oth­er side, I think all the exec­u­tive turnovers are a red card for me They called out that cost infla­tion is hit­ting their busi­ness and there’s a mine expan­sion project called Iron Bridge, which has just tak­en a 700 mil­lion plus write down, so that was a lot And there was also some dis­cus­sion by Twig­gy about the future, I think it’s called Fortes­cue Future Indus­tries, that’s the part of the busi­ness which is not iron ore, it’s, it’s, invest­ing in, alter­na­tive ener­gies in the main And he was say­ing that he ful­ly expects that to not return as much as the iron ore busi­ness on an IRR basis And of course, ana­lysts scratch their heads and go, well, why the fuck are you doing it then? Why don’t you take the mon­ey you’re putting in that and put it into iron ore, which is, as you said, return­ing high­er So there’s a ques­tion mark over that And then there’s also a bit of angst in the mar­ket about the future of the iron ore price, because Chi­na is, awash with, fin­ished but unoc­cu­pied apart­ments, and so the CCP came out, I think, in the last few days and said that they weren’t going to increase steel pro­duc­tion this year, so most peo­ple think the steel price The iron ore price will drop So all these kind of things, I think, coa­lesced around the results announce­ment A few oth­er things like the div­i­dend going down did­n’t help and, yeah, shares have been sold off.

[00:12:26] Cameron: Yeah, well, when you say it’s a bit of bad news We often talk about bad news sells, and you’re very strict in your lim­it­ing of the cri­te­ria for a bad news sell Sud­den depar­ture of a CEO or a CFO is usu­al­ly one of those But we also usu­al­ly wait and see how the mar­ket reacts to the announce­ments Like there was a dip in the share price, but it also coin­cid­ed with their report com­ing out on Mon­day So hard to know whether or not it’s relat­ed to her depar­ture or the results or both and how much is one or the oth­er The share price has been recov­er­ing since yes­ter­day morn­ing’s dip So what’s your read on it? Is this a bad news sell for us or do we hold?

[00:13:19] Tony: Oh, it’s always a hard call, I think it’s a bad news sell myself even though there’s expla­na­tions for why the CEOs have gone it’s two CEOs CFO, I may have got that mixed up, but I think it’s, that’s the case in the last sort of nine months So, some­thing is enjoy­ing in Fortesque, whether it’s A cul­ture clash with the own­er founder, or whether it’s the future indus­try side of the busi­ness is not work­ing or attract­ing too much atten­tion from the founder, I don’t know, but there’s some­thing going on there I’d rather just, sit aside and at least wait for our share price to improve It is, even though it’s turn­ing up today, it’s It’s off its highs It’s, what is it today? 20 20 And it’s been, it’s down about 10%, I think, in the last cou­ple of months.

[00:14:13] Cameron: Yeah.

[00:14:13] Tony: Yeah, so it’s not near its sell I’ll give it that, but yeah, I’m not encour­aged to hold it I’d be sell­ing.

[00:14:21] Cameron: Well, I don’t hold it in any of my port­fo­lios or the QAV port­fo­lios We did, but we had to rule one it back in June So it’s not in my per­son­al port­fo­lios I don’t think it’s in yours either by the.

[00:14:34] Tony: No, same So yeah, it’s a moot point for us But, it’s not the kind of thing you like to see hap­pen­ing in a large com­pa­ny.

[00:14:42] Cameron: Yeah Par­tic­u­lar­ly when iron ore is still a buy I’m look­ing at the iron ore chart again now I mean, it’s been, it’s down from, where the price was in June of 2021, but it’s been pick­ing up since May So the iron ore price is on its way up It’s still a buy for us, usu­al­ly when iron ore is a buy, we’re buy­ing iron ore com­pa­nies left, right and cen­ter because we’ve done so well out of them in the past, but, this is not one of those times.

[00:15:10] Tony: Yeah, and it’s tricky because I find all remains a buy I’m a bit scep­ti­cal about that, giv­en where Chi­na is, and I sus­pect that Chi­na will go through a peri­od of less steel pro­duc­tion, but that’s a pre­dic­tion, so who knows But yeah, if Fortesque does turn up, it’s, I mean, I don’t have a rule for when the red card, how long the red card sus­pen­sion lasts for, whether you wait for a CEO to come in and last for 6 months or 12 months and make sure they bed down, I don’t real­ly have a rule for it So that’s a hard one.

[00:15:43] Cameron: I also had to rule one FEX this morn­ing from one of our port­fo­lios, so that’s also inter­est­ing.

[00:15:52] Tony: Well, I sus­pect that peo­ple, I sus­pect that the fun­dees and the ana­lysts are pre­dict­ing the iron ore price to drop even though it’s not going up in the cur­rent graph.

[00:16:03] Cameron: Yeah.

[00:16:03] Tony: And so they’re get­ting out of iron ore BHP was also, I think, hav­ing a tough run at the moment too I’ll just call up, call up the graph for that.

[00:16:13] Cameron: FEX just came out with their results, I think, today, 29th of August, yeah And got a two cents per share, ful­ly frank div­i­dend Flick­ing through the high­lights of their results, I don’t see record, the word record in here any­where, so Their finan­cials are prob­a­bly down a lit­tle bit as well, like Fortes­cue’s, so.

[00:16:39] Tony: Yeah, And BHP, so I’ve just looked at the graph, it’s at Josephine and head­ing down It’s above its sell line, but below its buy line.

[00:16:47] Cameron: So what are those Inter­est­ing sit­u­a­tions? Inter­est­ing sit­u­a­tions It’s an inter­est­ing sit­u­a­tion for us where iron ore is a buy, but the iron ore com­pa­nies aren’t doing well.

[00:16:57] Tony: Yeah Which, which to me is the mar­ket pre­dict­ing the iron ore price will turn down.

[00:17:02] Cameron: All right, where were we? PLS Oh God.

[00:17:06] Tony: Yeah, gosh That’s a hard.

[00:17:09] Cameron: Talk about, let’s talk about PLS Oh my God So, Pil­bara, lithi­um, the only lithi­um stock on our buy list We were quite excit­ed by PLS and, and with good rea­son So they released their results on the 25th of August Amaz­ing results 224, sor­ry, 242% Increase in rev­enue to 4.1 bil­lion 464% Increase in cash bal­ance to 3.3 bil­lion 307% increase to their ebit­da 14 cents per share Ful­ly franked div­i­dend, and 326% increase in their prof­it after tax to 2 4 bil­lion What did the mar­ket do? Dropped it, dropped them by 8% with­in min­utes of the results com­ing out I was explain­ing this to Chris­sy the oth­er last night I was like, nor­mal­ly the QAV mod­el is to find good com­pa­nies, com­pa­nies that are being man­aged well, gen­er­at­ing cash, good his­to­ry of gen­er­at­ing cash, invest­ing in them when we can buy them at a dis­count to their val­u­a­tion Nor­mal­ly when you do that and they come out with a good report, the share price goes up because every­one goes, Oh, well, look at that.

[00:18:29] Tony: Yeah.

[00:18:30] Cameron: Doing well Let’s buy it Let’s get in on that But this fun­ny, this report­ing sea­son No, they go, wow, look at that They’re going to prob­a­bly suck next year So let’s, let’s dump it while the going is good is my take on what’s hap­pen­ing What do you think?

[00:18:45] Tony: Yeah, I think you pret­ty much sum­marised it There it is It is strange because the results are so good and prob­a­bly the biggest thing which I focused on was how much cash has been thrown off by this com­pa­ny It’s just a wash in cash, like this just Yeah, so, that, I mean, you, I for­get now what the num­ber was when we did the, the pulled pork We were buy­ing it at like, two times cash or some­thing for this com­pa­ny, which was incred­i­ble, cou­ple of, cou­ple of things I think peo­ple have focused on, num­ber one, they’re using that cash to invest an increase in pro­duc­tion So they, I think it was about 40% over five years, they’re going to mine more And the mar­ket already has con­cerns that the lithi­um min­ing sec­tor is grow­ing too quick­ly and that will depress the price And they’re also focus­ing on the price, which has come off a lot in the last few months, it’s been high dur­ing the year, which has dri­ven all this cash fly­ing into Pil­bara I guess, my, who knows? I don’t want to pre­dict My take on it is, when­ev­er I’ve seen this hap­pen before, they even­tu­al­ly recov­er They find a way of, either hoard­ing cash I mean, they’re going to be smart oper­a­tors If they think that, if they expand mine pro­duc­tion, it’s going to depress the price They’ll get the bal­ance fair­ly right, even if the mar­ket’s con­cerned about the lithi­um price not recov­er­ing The oth­er thing I want to men­tion is, and I was going to do a quick update on Fleet Part­ners, which I’ll do now, FPR, they actu­al­ly report March and Sep­tem­ber, so they haven’t report­ed their annu­al results, but they have giv­en the mar­ket update, I think it was the end of last month, actu­al­ly and the, and the shares have been going great and it’s been on our buy list for a while but the thing which I want­ed to high­light now when we’re talk­ing about Pil­bara is that Fleet Part­ners, which is a com­pa­ny which pro­vides leas­ing sys­tems, I guess, to large com­pa­nies, so they look after the fleet for a large com­pa­ny, obvi­ous­ly it’s their name, but they also pro­vide employ­ees with salary pack­ag­ing so they can lease a car That’s usu­al­ly called a novat­ed lease, so you lease it for 3 or 4 and then you agree to either sell it and give them the prof­its or pay back a bub­ble at the end So the cost depre­ci­at­ed down to maybe 30 or 40% and that is what you owe the fleet part­ners And you may have made a prof­it or not on that along the way Any­way, the thing I want­ed to high­light was they came out and said last month that In the last quar­ter, 45% of the new vehi­cle leas­es were elec­tric vehi­cles And that’s one of the things that’s dri­ven their share price up, because elec­tric vehi­cles cost more than inter­nal com­bus­tion engine vehi­cles And so, Fleet Part­ners is, in terms of its leas­ing dol­lars, has had a bump in sales, which is good for them But, 45% of new vehi­cles being leased are elec­tric vehi­cles It’s hard to see how the lithi­um mar­ket is going to stay depressed, even if there are new mines com­ing on So, one of those things does­n’t add up, and I guess we’ll have to wait and see what hap­pens But it’s a shame we had to rule one Pil­bara out of the dum­my port­fo­lio I haven’t had to rule one yet, I bought it a lit­tle bit ear­li­er But it’s get­ting close, so we’ll see what hap­pens But I’m hop­ing I can hold on to it, because you’re pay­ing so lit­tle for this cash bal­ance And man­age­men­t’s been suc­cess­ful so far in terms of, grow­ing that cash bal­ance and there’s no rea­son to doubt they won’t be going for­ward There.

[00:22:12] Cameron: Well, if I’d held onto it to today, Tony, I would­n’t have had to rule one It it’s gone back up above the rule one price I still hold it in the light port­fo­lios It did­n’t quite breach the rule one yes­ter­day And now it’s gone back up today So it was a bit of a crazy over­re­ac­tion And, you know.

[00:22:33] Tony: Sup­ports the rule one being 20, 20% again, does­n’t it? Yeah.

[00:22:37] Cameron: Yes, if that had been the offi­cial rule, I would have held onto it But any­way, them’s the breaks when you’re play­ing the game that we play Dis­ap­point­ing, but there you go Win some, you lose some.

[00:22:52] Tony: Well, I mean, the good, the good thing is it’ll, I think it’s still a buy, it’ll stop being a Josephine soon on the short term and it’s still on the buy list after those results So they come back into the port­fo­lio at some stage.

[00:23:05] Cameron: I think it was like num­ber two on the buy list when I sold it I was like, Oh, this is insane But rules are rules Speak­ing of Oth­er stocks I had to sell, AFG, Aus­tralian Finance Group They came out with their results Again, real­ly good results They did fore­cast a more dif­fi­cult year ahead and I had to sell that as well.

[00:23:29] Tony: Yeah It’s a, it’s a shame, isn’t it? We seem to be say­ing that a lot this year, but, the mar­ket thinks last year was the good year and the com­ing years are going to be the bad years, it’s, who knows, the mar­ket may get it wrong, they may get it right I guess the, the thing that I want­ed to focus on from AFGN, peo­ple don’t know it, it’s a mort­gage broking busi­ness, and they did, the thing that they did which I think upset the mar­ket was they decreased their div­i­dend pay­out ratio to 60% So, in the past they’ve been pay­ing out near­ly 80% of their prof­its as div­i­dends And the cur­rent yield is, before this announce­ment, was 7 28%, which is quite high, so that will drop, because they’re going to pay out less in div­i­dends and rein­vest more into the busi­ness, which again comes back to this US ver­sus Aus­tralia sort of dichoto­my So I’m quite hap­py for a com­pa­ny to pay out no div­i­dends or to pay out, less div­i­dend as long as it’s rein­vest­ing the mon­ey ade­quate­ly and get­ting a bet­ter return doing that So, I’m not per­turbed by that, but the mar­ket is, and they expect the div­i­dend to reduce, which will make the stock less attrac­tive in the Aus­tralian mar­ket, they did call out a whole heap of issues, as you said before, going for­ward I guess I want­ed to high­light, and this often hap­pens, is I read the release announce­ment, and it was­n’t until I think the third last para­graph, and the sec­ond last para­graph was about how much they appre­ci­ate their staff, and the last para­graph was, they look for­ward to the future sort of thing But in the third last para­graph of the doc­u­ment, they start to talk about, this is the direct quote, net inter­est mar­gin enjoyed over the past few years will be fur­ther chal­lenged as the busi­ness bears the full 12 month impact of high­er ware­house costs on facil­i­ties rolled over Thank you From the end of the last finan­cial year, 23 finan­cial year So it’s, it’s bury­ing the lead right down the end of the doc­u­ment But that’s the thing that peo­ple know to expect And it’s a bit like an annu­al report You often read these releas­es from the bot­tom up and see what they’re try­ing to What they’re forced to say is a dis­clo­sure, but they’re try­ing to avoid high­light­ing Again, I’m not that dis­turbed by it I mean, you have to be blind pret­ty not to know that inter­est rates have gone up and there­fore these guys are in the mar­ket bor­row­ing mon­ey and then lend­ing it, but that’s going to have an impact on their mar­gins giv­en that It’s hard­er to bor­row now because inter­est rates are high, so it’s sur­pris­ing that the mar­ket waits until the day of the results to come out and mark it down but that’s what’s hap­pened .

[00:26:02] Cameron: Well just by the by, I just got a noti­fi­ca­tion Oh no, ignore that NTD became a three point trend line cell for one sec­ond there, but now it’s gone again So it must’ve changed.

[00:26:17] Tony: So.

[00:26:17] Cameron: An alert pop up say­ing it was a cell, but.

[00:26:19] Tony: Until the end of the mar­ket, see what hap­pens.

[00:26:22] Cameron: Yeah Well, I, I have a script that pops up and tells me stuff these days, but that I wrote some code any­way, Jor­dan Yeah, I mean, man, GPT has turned me into a cod­ing mon­ster.

[00:26:37] Tony: Wow.

[00:26:38] Cameron: Jor­dan post­ed a nice lit­tle graph­ic in our Face­book group, the cost of tim­ing the mar­ket Nice lit­tle chart here that I bor­rowed from some­body called Visu­al Cap­i­tal­ist, some research out­fit And they got the data from J P Mor­gan, but it says bad tim­ing can take a bite out of returns Below we show the risk of try­ing to time the mar­ket by sim­ply miss­ing out on the 10 best days an investor could lose the major­i­ty of their over­all return Now we’ve talked about this con­cept or this data before, but it’s always a good reminder, I think, that, well, why you need to be ful­ly invest­ed So it comes down to lit­er­al­ly days over the course of 10 years, this says that the val­ue of 10, 000 invest­ed in the S& P 500 from Jan­u­ary 2003 to Decem­ber, 2022, if you kept it invest­ed for the entire peri­od, the val­ue of it would be 64, 844 If you missed the 10 best days over that 20 year peri­od, your return would be 29, 708 That’s a huge dif­fer­ence That’s 50% dif­fer­ence.

[00:28:02] Tony: And it’s only 10 days.

[00:28:05] Cameron: 10 days If you missed the 20 best days, you’re down to 17, 800 If you missed the 30 best days, you’re down to 11, 700 And it goes down and down and down If you missed the 60 best days, it’s down to 4, 205 Your 10, 000 invest­ed actu­al­ly gets halved over that peri­od Now, obvi­ous­ly this isn’t talk­ing about play­ing the mar­ket or any kind of sys­tem, et cetera, et cetera But I think the point stands true that there are very good days that come and go And if you’re not ful­ly invest­ed in those days you’re miss­ing out on a huge amount of your long term returns.

[00:28:50] Tony: Yeah I’d just like to add here, I’m going to read out those 10 days just quick­ly The best day was Octo­ber 13th, 2008 The sec­ond best was Octo­ber 28th, 2008 and March.

[00:29:05] Cameron: Weren’t we in the mid­dle of a glob­al finan­cial cri­sis then?

[00:29:07] Tony: Yeah Towards the, yeah, mid­dle or towards the end But any­way, so all these dates, I won’t read them all out, they’ll read a GFC, pret­ty much, I think there’s, one.

[00:29:18] Cameron: Five of them at 2008.

[00:29:21] Tony: Yeah, so, there’s major­i­ty of 2008, 2009, so that’s eight of them, and two were 2020, March 2020, so.

[00:29:31] Cameron: Yeah.

[00:29:32] Tony: So, they’re basi­cal­ly say­ing, don’t be a dum­my and sell out when the mar­ket goes down, stay invest­ed.

[00:29:38] Cameron: And like those are the two biggest crash­es in the last 20 years, and they also con­tain the top 10 best days of the top 20 years.

[00:29:49] Tony: Yeah So it’s kind of coun­ter­in­tu­itive, I mean, you feel like you want to get out of the mar­ket when­ev­er it’s gone bad, but if you do, you can see how it affects your returns.

[00:30:00] Cameron: Yeah, I mean that’s, it’s such a sim­ple idea, but some­thing that I think is just coun­ter­in­tu­itive for most ama­teur investors When the mar­ket’s, you know, down and it’s, every­thing’s depress­ing Like we’ve lived through the last cou­ple of years Instinc­tive­ly, you just want to get out It’s emo­tion­al­ly it can be, if you don’t have a sys­tem to fol­low that removes the emo­tion like we do, it can be emo­tion­al­ly tur­bu­lent.

[00:30:33] Tony: Yeah And even, even if you do feel like get­ting out, don’t, or you feel like your sys­tem’s fail­ing you you can stay, but as we’re doing, look, let’s research the sys­tem and see if there are any things we can improve on which we might do dif­fer­ent­ly going for­ward, rather than say­ing, I’m going to sell out and go away.

[00:30:51] Cameron: Go suck my thumb in the cor­ner.

[00:30:53] Tony: Yeah.

[00:30:56] Cameron: All right.

[00:30:56] Tony: The clas­sic buy high, sell low strat­e­gy, which most retail investors fall into, but is the oppo­site of What they should be doing.

[00:31:04] Cameron: Yeah What else you got to talk about TK?

[00:31:09] Tony: , I had a pull book to do I’m just look­ing, sor­ry, we spoke about the fleet part­ners Return, Qan­tas has also had a good result, and it’s on our buy list and the share prices come off And it’s been a, it’s been on the front pages of the paper, so it’s been a polit­i­cal event as well as a, a share mar­ket event, and it’s been inter­est­ing, it’s, the air­line indus­try has long been, I guess, sup­port­ed by state, by dif­fer­ent states around the world, and I think that’s behind what’s hap­pen­ing now It seems to be cen­tred on the fact that the fed­er­al gov­ern­ment, I’ve declined to let Qatar Air­ways have more flights, or slots as they’re called, into Aus­tralia, there’s been some sug­ges­tion that’s been The pres­sure of Qan­tas, but I think Qan­tas has prob­a­bly just been say­ing, Hey, if you do that, we’re going to be less prof­itable And that means jobs going in Aus­tralia And the bot­tom line is that the air­line indus­tries around the world typ­i­cal­ly have vary­ing degrees of state sup­port They’re almost nation­al­ized indus­tries in some respect And that goes for Qan­tas because the gov­ern­men­t’s inter­ven­ing in the mar­ket So, It’s, I think it’s an inter­est­ing dynam­ic I’m still hap­py to stay invest­ed in Qan­tas, but it does rely on some sort of gov­ern­ment sup­port because pret­ty much every oth­er states, every oth­er nation­al car­ri­er around the world gets some kind of lev­el of state sup­port And I’ve, you know, it’s par­tic­u­lar­ly the biggest in the Mid­dle East with Emi­rates and Eti­had and Qatar So it’s nev­er a lev­el play­ing field So it’s always a tricky deci­sion by the fed­er­al gov­ern­ment to sup­port it So it’s a bit like it reminds me a bit of the Man­u­fac­tur­ing busi­ness when, when Ford used to come to the gov­ern­ment, every new gov­ern­ment and say, Hey unless you prop our indus­try up and give us these sub­si­dies, we’re going to close down and you’ll lose all these man­u­fac­tur­ing jobs And guess what? They’re in mar­gin­al seats So you’ll prob­a­bly lose the next elec­tion So even­tu­al­ly I think it was Tony Abbott bit the bul­let and said, no more sup­port And they closed down and moved off It’s a bit like that with the air­line indus­try, I think, they don’t get nec­es­sar­i­ly Mon­ey from the gov­ern­ment in the way the car man­u­fac­tur­er is used to but they get sup­port every now and then in terms of not allow­ing the sub­sidy sub­sidised, nation­al lot car­ri­ers from oth­er parts of the world to gain equal access to our mar­ket And that’s just how it oper­ates around the world that sort of restric­tion applies in places that Qan­tas want to fly into as well So, inter­est­ing times The oth­er thing I thought was inter­est­ing was, our old friends Steven Jones The Assis­tant Trea­sur­er entered the mar­ket yes­ter­day and said that this was all about prof­itabil­i­ty for Qan­tas And then the oth­er min­is­ter who was respon­si­ble said I would­n’t have used those words myself Mr Jones often pops up when there’s some kind of quid pro quo going on for the gov­ern­ment, whether it’s super or some oth­er indus­try, and he has again in this case Any­way, that’s just an aside Qan­tas has come off a bit since its results, but the results were record prof­its again 2 point, I think it was 8 bil­lion, they, they are chang­ing over their CEO The cur­rent CEO on Joyce has been pret­ty suc­cess­ful, cer­tain­ly at nav­i­gat­ing his way through COVID and these kinds of issues and, and tak­ing costs out of the com­pa­ny and there­fore con­tro­ver­sial because he’s polar­ized a lot of peo­ple who think the ser­vice should be bet­ter and work­ers who think they should­n’t have lost their job So that’s always a tough A tough line to walk but the big issue fac­ing Qan­tas going for­ward is it needs to replace its fleet even­tu­al­ly And I guess the big argu­ment dur­ing this report­ing sea­son was, hey, we have enough cash to do that and still pay a div­i­dend and still make prof­its, which are attrac­tive So we’ll see how it plays out, but I just thought it was an inter­est­ing result that came out.

[00:34:55] Cameron: And it’s just become a rule one.

[00:34:57] Tony: Has it?

[00:34:58] Cameron: For us in one of our live port­fo­lios Yeah, we bought it back in March, but, it’s fell, fall­en now, 11% down since we bought it.

[00:35:08] Tony: And Stan, since his results are out for the same sorts of rea­sons, I guess.

[00:35:12] Cameron: Hmm.

[00:35:13] Tony: Yeah, any­way, that’s, that’s Qan­tas, we’ve seen this, as we’ve said else­where in the show, a num­ber of times that record prof­its come out and the stocks get sold down, which is a very unusu­al sit­u­a­tion, but, we don’t change what we do Okay, I have a pulled pork to do, which is, which was a request, MAH, which is MacMa­hon Hold­ings Inter­est­ing­ly since, I mean, the, the buy list went out on Mon­day and MacMa­hon Hold­ings was­n’t a buy, but I checked it today and they are just slight­ly above the, the buy price, so I went through and pop­u­lat­ed the man­u­al­ly entered data for them and they’re quite high up on the buy list, so have a look at them if you’re if you’re inter­est­ed you might have to do your own down­load to get the most recent data or at least plug your own num­bers into the man­u­al­ly entered data sheet that we use, but yeah, it’s a recent three point trend line buy, which are always inter­est­ing, I think So, MacMa­hon Hold­ings, it’s a buy­ing ser­vices com­pa­ny It’s been around for a long time, 60 years in fact Start­ed in 1963, like a lot of oth­er good things, and it oper­ates in Aus­tralia and around the world, New Zealand, South East Asia and Africa Had also oper­at­ed in Mon­go­lia for a while and it’s big in Indone­sia I said South East Asia, but a lot of it’s in Indone­sia They con­stant­ly, I mean, they, they cov­er the whole water­front for min­ing ser­vices, both sur­face, under­ground min­ing, engi­neer­ing of new equip­ment and main­te­nance of exist­ing equip­ment So, yeah, it’s a large min­ing ser­vices com­pa­ny, but not large in terms of the ADT for this stock, which is 128, 000 And one of the rea­sons for that is that There’s a 45% share­hold­er which con­tracts the liq­uid­i­ty, I guess I’ll get to it in a minute, but as I go through the his­to­ry, the com­pa­ny was found­ed by, believe it or not, Bri­an MacMa­hon back in 1963, it was an engi­neer­ing com­pa­ny It’s cur­rent­ly based in Perth 20 years on, in 1983, it list­ed At that stage, it was doing a lot of civ­il engi­neer­ing work, not just min­ing work, so build­ing roads and bridges and things, but I think is, it did in 2013 sell off its con­struc­tion, civ­il engi­neer­ing busi­ness and became sole­ly focused on min­ing, but since then, it did come back in and board a civ­il engi­neer­ing busi­ness, but it’s pre­dom­i­nant­ly a min­ing ser­vices busi­ness In 2016, it was award­ed, what was, I think, at the time, the biggest min­ing ser­vices con­tract in the world for 2 8 bil­lion to, help with a mine in Indone­sia, the Batu Hijau mine, and I hope I’ve pro­nounced that right, but I prob­a­bly haven’t, but the com­pa­ny, that mine is is oper­at­ed by Aman Min­er­als And as part of the deal, they took a 44% own­er­ship in MacMa­hon and they still retain that own­er­ship now It’s not a new thing for this com­pa­ny to have large own­ers, I was read­ing through its his­to­ry it was They did have latent as a big share­hold­er when they, when they were doing civ­il con­struc­tion because Latent is a big civ­il con­struc­tion firm And in 2013 they sold their con­struc­tion arm to latent who had a 24% share­hold­ing at the time, which is now not there, and they all, and Lay­ton also owned the road, a, a large cap­i­tal rais­ing for the com­pa­ny back then, so they’ve, Both acquired com­pa­nies and they’ve had oth­er larg­er com­pa­nies tak­ing stakes in them So a lot of M& A activ­i­ty for this com­pa­ny over the years One sort of puz­zler piece I haven’t been able to fit in was what hap­pened to the MacMa­hon fam­i­ly So they’re not there at the moment Per­haps they sold down in list­ing I’m not sure or they sold to one of the oth­er M& A part­ners who’ve come along from time to time, but cer­tain­ly this isn’t a com­pa­ny which has an own­er founder Which is a bit sur­pris­ing giv­en that they still car­ry the name MacMa­hon in their, in their title So yeah, that’s, that side’s inter­est­ing We don’t score it for an own­er founder, which was a bit sur­pris­ing to me, but, it’s been going for 60 years, so the orig­i­nal founder would have moved on, but often­times in these cir­cum­stances, or some­times in these cir­cum­stances, a fam­i­ly mem­ber is Con­tin­ued to be on the board, but not the case with this one, it’s large around the world, 27 sites, 4 offices, includ­ing one in Jakar­ta, 4 large engi­neer­ing work­shops Yeah, that’s prob­a­bly all I can say about it, it gen­er­al­ly works in the gold cop­per space in terms of the min­ing it sup­ports, which is Prob­a­bly a good thing at the moment, because as we said before, iron ore, is, it’s, even though it’s a buy there’s a lot of con­jec­ture that it won’t be going up any time soon because of what’s hap­pen­ing in Chi­na, and coal might be in that same boat too, although, the Aus­tralian coal min­ers have found oth­er places to sell their coal, so who knows, but yeah, gold and cop­per in the main which I think is impor­tant both as a risk and, and, a poten­tial upside, as I said, if iron ore comes off Any­way, the num­bers, and we do have recent num­bers in Stock Doc­tor from their recent results And as I said before, ADT is 128, 000, which is not over­ly large giv­en the size of the com­pa­ny, but it will, will suit all of our lis­ten­ers, share price I’m doing this at is 15 5 cents, which was just above its buy price of 15 cents and it’s 62% below, or 62% of the con­sen­sus tar­get, so it’s well below con­sen­sus tar­get Yield for this com­pa­ny is 4 84%, so it’s a decent yield, but it’s not above the the mort­gage rate that we like to see, so I’m not going to score it for that Stock Doc­tor finan­cial health is strong and recov­er­ing, and I do like to see recov­er­ing, because that’s a good sign for the com­pa­ny It’s get­ting its finances under con­trol If any­one’s inter­est­ed, the ROE is 20%, which is not too shab­by for a min­ing con­trac­tor, I guess the real eye open­ing num­bers are on the val­u­a­tion for this com­pa­ny The PE which is the low­est in six halves, so we score it well there The price to oper­at­ing cash, cash flow is only 1 28 times, so it’s Amaz­ing again that we have anoth­er one of these com­pa­nies which are trad­ing at almost what you get back in a year in terms of cash flow So that’s pret­ty good IV1 is 15 cents, which is about what it’s trad­ing at IV2 is 37 cents, which is more than twice the cur­rent share price, which I like to see And that’s, that scores a point for that We don’t often see com­pa­nies trad­ing at half their IV2, it’s, it’s also trad­ing at less than book val­ue and there­fore book plus 30% So net equi­ty per share is 28 cents Share price is 15 5 So it scores for that, fore­cast­ed earn­ings per share growth is 27%, so that’s good Growth over P is near­ly five times So our hur­dle for that is 1 5 times So it scores for that So every­thing’s look­ing good on the val­u­a­tion and a growth side for this stock, there’s no own­er founder, I spoke of Direc­tors only hold 1 5% of the com­pa­ny It’s a new three point upturn, so since the results, peo­ple are lik­ing what they see, at least a lit­tle bit any­way It does­n’t have con­sis­tent­ly increas­ing equi­ty, so it gets a zero there, but it’s close So there was a slight decline in one of the halves, but it’s gen­er­al­ly been going up, which is good But all in all, this com­pa­ny scores 17 out of 17 for qual­i­ty, which is 100%, and has a QAV score of 78 When it comes, when it’s just come back onto the buy list, it comes back near the top So it’s hard to see why this com­pa­ny is being kind of, shirked by the mar­ket, giv­en that you can buy it so cheap­ly But I sus­pect That’s got a bit to do with the liq­uid­i­ty and hav­ing that large share­hold­er there on the mar­ket So a lot of it’s, the ADT is going to be too small for a lot of fund man­agers and a lot of fund man­agers won’t want to buy into a sit­u­a­tion which is con­trolled by or so heav­i­ly con­trolled by anoth­er par­ty, so they, it can, those fund man­agers exert less influ­ence So I think that’s why it’s under­val­ued, but it might suit retail share­hold­ers We’ve seen that before in oth­er stocks which have had large share­hold­ers on the base, it can be, can be good buy­ing, but there is also a risk too that some­thing hap­pens with that large share­hold­er They decide to sell their stake or sell it down or exert some influ­ence on the com­pa­ny which may not be in the best best inter­est of the oth­er share­hold­ers And giv­en that they, oper­ate the mine that, that MacMa­hon is con­tract­ing to, you can see how there can be a con­flict of inter­est there So that’s a, that’s obvi­ous­ly a risk for this com­pa­ny, but you’re being well com­pen­sat­ed for that risk So it might be worth look­ing at Some of the oth­er risks you need to bear in mind, of course, is it’s, it’s, it’s going to be lever­aged to the com­mod­i­ty cycles And even though it’s largest Expo­sure is to Gold­mine, which is an upturn Even­tu­al­ly that might turn down So, that’s that’s going to be an issue even­tu­al­ly And it’s also exposed to a cou­ple of large com­pa­nies So, 90% of its work is with Anglo Gold Ashan­ti, AGU, which was on our buy list before it was being list­ed, and then I think the sec­ond biggest com­pa­ny is Armand, which is the largest share­hold­er So a lit­tle bit of con­cen­tra­tion in terms of its cus­tomers there There’s also the usu­al ones for this kind of busi­ness cost infla­tion, giv­en that wages are the last expo­sure, largest expo­sure in the cost base for a min­ing ser­vices com­pa­ny Con­trac­tor, but, often times these guys are real­ly good at mak­ing sure the con­tracts have CPI claus­es in them, so if wages go up it may not be, a hit to mar­gin if they can get a raise in what they’re being paid I haven’t done a deep dive in to see if that’s the case for this com­pa­ny, but it’s usu­al­ly The case in all these com­pa­nies like they back to back or flow through infla­tion­ary increas­es, the oth­er risk with this one is that it’s a lot of this min­ing ser­vices busi­ness is a lot of mar­gin busi­ness a bit like most engi­neer­ing busi­ness­es like they bid for large con­tracts and if they get one quite wrong, that can be, a large influ­ence on their prof­it for the year So even though they’ve got tremen­dous expe­ri­ence and a lot of his­to­ry of doing this, it does­n’t mean it’s not going to be a risk going for­ward So It’s, have a look at MacMa­hon, it’s, it’s real­ly well priced, it’s just back on the buy list but not with­out it’s risks.

[00:46:07] Cameron: Thank you TK and thanks to Car­olyn for sug­gest­ing we take a look at MacMa­hon and for point­ing out that it was­n’t in our buy list this week I think we had it down as neg­a­tive sen­ti­ment, but I don’t think it, I don’t think that got updat­ed this week and it’s, just gone back above.

[00:46:22] Tony: Yeah, I think, I think the buy price is 15 cents, which it was on Fri­day, and it’s like 15 and a half cents when I had a look this morn­ing on Tues­day morn­ing, which was just above it’s buy price.

[00:46:33] Cameron: Good stuff All right, thank you again Car­olyn Let’s get into ques­tions Alex?

[00:46:41] Tony: Yeah Hi, Darl.

[00:46:43] Alex: Hel­lo.

[00:46:44] Tony: How are you, Alex?

[00:46:45] Alex: I’m good, thank you.

[00:46:47] Tony: You ner­vous?

[00:46:49] Alex: Yeah.

[00:46:52] Tony: Get­ting ready for your first art exhi­bi­tion.

[00:46:55] Alex: Yeah, Yeah, No, I’ve got like a detailed itin­er­ary for the next day and a half That’s like every hour That’s what I got­ta do to get ready, so yeah, no, I’m look­ing for­ward to it.

[00:47:09] Tony: Yeah, good We all, we all are.

[00:47:11] Alex: Thank you No, I’m thrilled you guys will come down for it So that’s great Thank you.

[00:47:15] Tony: Yeah Where, Cam, have we had any take ups on our offer for tick­ets to the show? Do you.

[00:47:22] Cameron: I, I, I would­n’t see it It’s just a.

[00:47:25] Tony: No Okay Just a link.

[00:47:27] Cameron: It’s a, yeah, it’s a link to the Afford­able Art Fairs web­site So to go through them thing.

[00:47:33] Alex: Yeah I think it goes straight to Eventbrite Miran­da can see the uses of the code though So we can find out at the end how many sub­scribers came.

[00:47:42] Tony: Okay.

[00:47:43] Alex: Yeah.

[00:47:44] Tony: And where’s the link, Cam, if any­one wants to take it up who’s lis­ten­ing?

[00:47:49] Cameron: , I put it in the blog post and the show notes and all of that sort of stuff last week.

[00:47:55] Tony: Okay.

[00:47:56] Cameron: Yeah I’ll do the same this week.

[00:47:58] Tony: Yeah Maybe put it in the Face­book group or some­thing too.

[00:48:01] Cameron: I did that.

[00:48:02] Tony: We did that Okay Yeah, cool.

[00:48:03] Cameron: Yeah Yeah It’s a long link, so I can’t even read it out on the show It’s.

[00:48:08] Tony: Okay.

[00:48:09] Cameron: An unin­tel­li­gi­ble sort of link Yeah.

[00:48:13] Tony: Yeah Well, look­ing for­ward to it, Al.

[00:48:16] Alex: Yeah, me too.

[00:48:17] Cameron: Excit­ing.

[00:48:19] Alex: Yes, thank you.

[00:48:22] Cameron: , all right So, what ques­tion are you ask­ing us this week, Alex?

[00:48:27] Alex: I have a ques­tion from anoth­er Alex? I thought it was apt to read it There were quite a few, so it sounds like it’ll.

[00:48:34] Tony: Do we know if it’s a, do we know if Alex is a boy or a girl, Cam?

[00:48:39] Cameron: , I haven’t per­son­al­ly done a phys­i­cal inspec­tion, but I believe that, I believe that this Alex likes to be rep­re­sent­ed as a male Yes.

[00:48:49] Alex: Yeah, I had a look on the Face­book mem­bers page and it looked like all the oth­er Alex­es were boys, so hel­lo male Alex­es Yep so Alex says, I fol­low US val­ue investors that claim their method­ol­o­gy returns 30% to 60% per annum Does TK think returns like this are pos­si­ble, i e the US mar­ket is more favor­able to growth or is this mar­ket­ing spin? And then he, pre­sum­ably, has put a link to a I guess an invest­ing kind of sim­i­lar thing to QAV It’s a ser­vice, but not real­ly I did­n’t tell Called Tykr I think you would pro­nounce it Yeah.

[00:49:34] Tony: Yeah Thank.

[00:49:35] Cameron: Tykr com.

[00:49:37] Tony: Yeah Thanks, Alex, I, I’m not famil­iar with TYKR, tykr com, I just had a quick look through their web­site I could­n’t see any claims on their returns, whether it’s as high as 30 to 60%, it was­n’t obvi­ous, but maybe, they talk about it in one of their, doc­u­ments or shows or what­ev­er they do, I’ll have a look at it next week or so and see if I can come up with some­thing more But, be that as it may, I think you’ve asked two ques­tions which are prob­a­bly more impor­tant One is, are returns of 30 60% per annum pos­si­ble? And, I think that’s pos­si­ble over the short term, I don’t think it’s pos­si­ble over the long term it sounds It sounds too high to me, how do I know that? Because I think if some­one was over the long term get­ting as high as 30 to 60 per­cent returns, they’d be absolute­ly swamped and prob­a­bly be the rich­est per­son in the world And that’s does­n’t seem to be the case, giv­en it’s the first time I’ve heard of tykr or any­thing to do with it So I’d be skep­ti­cal I’m not say­ing, I prob­a­bly am say­ing it can’t hap­pen it’s, I, think about it If you were, that’s basi­cal­ly say­ing you’re dou­bling your mon­ey in less than two years So if it’s been going for ten years, it’s, you know, two to the fifth, which is what 16 times And if it’s been going for 20, it’s astro­nom­i­cal­ly large, it just, it seems unlike­ly that some­one has this kind of long term return and stayed under the radar and has­n’t been at least snapped up by some­one, some bil­lion­aire on Wall Street to do their invest­ing for them or, or made a lot of mon­ey as a fund man­ag­er rather than sell­ing a sub­scrip­tion ser­vice to how they did it So I’m skep­ti­cal, in terms of whether the U S mar­ket does bet­ter than the Aus­tralian mar­ket, that’s an easy one, they, over the long term, they tend to do about the same and there are pros and cons for both mar­kets, the U S mar­ket prob­a­bly is a lit­tle bit more growth ori­en­tat­ed than the Aus­tralian mar­ket, there’s a lot more tech stocks over there, biotech stocks over there there’s a, a lot more suc­cess­ful entre­pre­neurs who’ve real­ly struck Roc­co Rich, Steve Jobs, Elon Musk, peo­ple like that So, that mar­ket does tend to sup­port that kind of uni­corn style com­pa­ny, how­ev­er, the volatil­i­ty comes along with that And so you have big crash­es as well, like the tech crash in 2001 So it does tend to even out over time, that most index­es around the world tend to aver­age around 10% they all have their pros and cons The Aus­tralian mar­ket’s known for pay­ing frank div­i­dends, so we tend to be seen as being low­er growth, but if you add the div­i­dends back, we also get a sim­i­lar sort of volatil­i­ty And if you look at sort of short term peri­ods at the moment, I think in the last sort of four or five years, the US mar­ket has out­per­formed the Aus­tralian mar­ket But as I said before, over time there are big cor­rec­tions in the US and longer term So the last hun­dred years they’re both get­ting nine or 10% type returns So I don’t, I’ve nev­er felt the need to invest in the US mar­ket as opposed to the Aus­tralian mar­ket I think there’s plen­ty of stocks here to invest in and plen­ty of stocks with over­seas expo­sure that does become attrac­tive, so yeah, so I’m skep­ti­cal of a high returns that are being talked about and I’m hap­py to stay At home, I’m close to my meet­ing with the com­pa­nies I walk past every day and read about in the paper every day.

[00:53:19] Cameron: I did a quick search on the most suc­cess­ful investors in the Unit­ed States and of course It’s all the usu­al names, Ben­jamin Gra­ham, War­ren Buf­fett, Jack Bogle, Peter Lynch This is a Mot­ley Fool arti­cle, by the way They talk about Cathie Wood ARK Inno­va­tion, ETF, says that her fund, and she does high growth stuff, obvi­ous­ly, that’s her whole thing, says that her fund tar­gets a 15% annu­al­ized return over a 5 year peri­od.

[00:53:51] Tony: And that’s in a high growth fund?

[00:53:53] Cameron: Yeah, that’s high growth stuff So, you know, if the US was a bet­ter mar­ket for high growth stuff And those sorts of returns could be achieved con­sis­tent­ly You would think Cathie Wood would prob­a­bly be aim­ing for those sorts of returns as well, but 15% sounds more real­is­tic.

[00:54:13] Tony: Yeah, and I mean, you could have lucked out and bought Apple when it float­ed and Ama­zon when it float­ed and, have a lot of mon­ey now, but your aver­age fund man­ag­er, I don’t think, would have just bought two stocks They would have bought anoth­er 20, and now those 20 are prob­a­bly all bank­rupt FryFly and Pet com and oth­er things that crashed in the com bub­ble.

[00:54:39] Cameron: But by all means, Alex, go fol­low those.

[00:54:41] Tony: Yeah, tell us more Alex, we’d love to make.

[00:54:44] Cameron: Come and report back, as.

[00:54:45] Tony: Per round, that’d be great.

[00:54:50] Cameron: Long as it’s your mon­ey you’re doing it with.

[00:54:52] Tony: Yeah Well thank you.

[00:54:55] Cameron: Yeah, look, I, in terms of, sor­ry, in terms of returns, when peo­ple ask me about, those sorts of num­bers from time to time, I real­ly always say, look, Buf­fett and Munger are con­sid­ered the most suc­cess­ful investors or up there with the most suc­cess­ful investors of all time, they tend to report 19 5, 19 8%, aver­aged out over the long haul com­pound annu­al growth returns If they’re, if they’re A, known as the most suc­cess­ful investors and that’s 20% rough­ly is what they are able to achieve I think that’s sort of the high water­mark for long term suc­cess invest­ing is 20% That seems to be what is achiev­able if you’re the best of the best, which is what Buf­fett and Munger, if not the best, cer­tain­ly up there with the best, any list of the most suc­cess­ful investors in the world or in the US is going to have those guys up in the top, one, two, three, and that’s the sort of num­bers that they achieve So it.

[00:55:53] Tony: Yeah, and I mean, there’s a book I read ages ago about, I think it’s called Dou­ble Mar­ket, but it talks about how your team growth at twice the mar­ket rate and I can’t remem­ber the detail now, but there was a math­e­mat­i­cal proof which said it’s very hard for a busi­ness or an invest­ment to grow at more than twice mar­ket con­sis­tent­ly for a long peri­od of time, because to some extent you’re teth­ered to the mar­ket because you’re invest­ing in it So you know, if there’s an eco­nom­ic crash or a war or what­ev­er that comes out, even if you’re out­per­form­ing, it’s going to drag you down as well as the mar­ket as well So there are oth­er rea­sons why That’s the case But yeah, it’s kind of like a stan­dard devi­a­tion thing You can get bet­ter returns in the mar­ket if you’re care­ful, but they can’t be infin­i­tes­i­mal­ly bet­ter returns in the mar­ket over a long peri­od of time, sta­tis­ti­cal­ly any­way.

[00:56:45] Cameron: Speed of light in physics there’s.

[00:56:47] Tony: Yeah Well, so some­one, yeah.

[00:56:49] Cameron: Nat­ur­al lim­it to how fast you can go before you break the laws of physics.

[00:56:54] Tony: Yeah And look, from time to time, I read arti­cles about peo­ple who have had fan­tas­tic returns and even over a decent peri­od, maybe 10 years, they tend to be con­cen­trat­ed in one par­tic­u­lar indus­try or involved in some­thing like ven­ture cap­i­tal or pri­vate equi­ty, and good luck to them, but they also, you and I can’t, when we invest with them, we pay them fees and that gen­er­al­ly brings the returns back to earth as well.

[00:57:18] Cameron: And I I ful­ly believe that there are prob­a­bly peo­ple out there that have a high lev­el of domain exper­tise, and real­ly good con­tacts in a par­tic­u­lar sec­tor, and they know who’s who in the zoo, and they know what’s com­ing up in the research, and they can prob­a­bly dance between the rain­drops, but Most of us don’t fit.

[00:57:40] Tony: Yeah, that’s right.

[00:57:42] Cameron: We’re lim­it­ed to, human lev­els of access and skill You know.

[00:57:47] Tony: Yeah, we’ve got to be real­is­tic, but not even that, like, if you do have that kind of domain expe­ri­ence and I guess peo­ple like Bill Gates and Steve Jobs do, and they’ve been very suc­cess­ful, but there’s also been a lot of peo­ple who have The main expe­ri­ence like in retail or what­ev­er, and they’re bil­lion­aires for sure but a lot of that comes from cor­po­rate activ­i­ty, they’ve raised mon­ey from some­one and then invest­ed it and shared the prof­its and tak­en on lots of debt, that kind of thing So it’s not some­thing that’s read­i­ly avail­able to you and I to do that.

[00:58:22] Cameron: Thank you, Alex and Alex and good luck with your art fair Alex, num­ber one, num­ber one, Alex.

[00:58:30] Alex: Yep, num­ber one.

[00:58:31] Cameron: The only, the only female, the only female Alex that we know of in the.

[00:58:35] Alex: We know of Yeah, there could be, there could be a female Alex out there, who knows? I hope so.

[00:58:40] Cameron: There is Well one of the actress­es on the orig­i­nal sea­son of the white Lotus, was an Alex So.

[00:58:48] Alex: I haven’t watched it.

[00:58:49] Cameron: You watched it final­ly, Tony? Did you get around to it?

[00:58:51] Tony: I can’t get past the first episode.

[00:58:55] Cameron: You said that about Suc­ces­sion, too.

[00:58:57] Tony: Yeah, I did go back and watch it, you’re right Good point.

[00:59:02] Cameron: Yeah, there are oth­er female Alex­es out there, Alex, but none of them are you None of them are as.

[00:59:07] Alex: Yeah, thanks Thank you.

[00:59:10] Cameron: .

[00:59:10] Alex: Num­ber one.

[00:59:11] Cameron: In the world Alexan­dra Dad­dario.

[00:59:15] Alex: , yep.

[00:59:16] Cameron: Yeah?

[00:59:16] Alex: Yep She’s cool All the boys in my year at school had a crush on her? and still do.

[00:59:21] Cameron: Mmm Yeah, me too, just qui­et­ly, but let’s not, let’s not talk about that or get in trou­ble.

[00:59:27] Tony:  we thought we were find­ing an exot­ic name call­ing Alexan­dria Alexan­dra Alexan­dra, but then all these guys got called Alexan­dria, Alexan­der at the same time.

[00:59:39] Alex: Well I get called Alexan­der as well some­times, there’s no win­ning.

[00:59:43] Cameron: Is that what, your par­ents call you when they’re cross with you? They say Alexan­der!.

[00:59:47] Alex: No, my uncle, but to be fair, he’s got a real Queens­land drawl, so I think he’s say­ing Alexan­dra, but it sounds a lot like D E R.

[00:59:57] Tony: Yeah Okay.

[00:59:59] Cameron: Go Thanks.

[01:00:00] Alex: Yeah, alright, see ya, bye.

[01:00:06] Cameron: Alright, anoth­er ques­tion from Alex I think it’s the same Alex as before Who knows? Who can keep track of the Alex­es? Hey Cameron, has TK ever spo­ken about his deci­sion, too many Alex­es?

[01:00:18] Tony: The Alex’s.

[01:00:18] Cameron: Yeah Could have Alec Bald­win in there too, the Alex And the Alex’s, yeah Hey Cameron, has TK ever spo­ken about his deci­sion to use momen­tum indi­ca­tors, aka 3PTLs, rather than stock­pil­ing and dol­lar cost aver­ag­ing? If not, could you please ask him his thoughts on these two dif­fer­ent approach­es and why he chose one over the oth­er? What’s stock­pil­ing? Just buy­ing more when the share price goes down? Isn’t that dol­lar cost aver­ag­ing? It’s the same thing?

[01:00:48] Tony: Yeah pret­ty much I mean, stock­pil­ing is that As the stock price reduces, you buy more Dol­lar cost aver­ag­ing is just, you don’t care whether the stock­’s going up or down, you’re just going to buy a cer­tain amount every month or what­ev­er the time peri­od is Dol­lar cost aver­ag­ing is usu­al­ly more asso­ci­at­ed with some­one who’s buy­ing an index fund So they don’t buy it all in one day and then find out that by the end of the year, the mar­ket’s gone down, they buy bits Drip feed, they’re pur­chas­ing over the year and get the aver­age results So but that can also work for val­ue invest­ing I’ve heard peo­ple say, well, the share price is going down, I’m going to buy a quar­ter of my posi­tion now and wait, see what hap­pens and then buy more and then buy more and then buy more And hope­ful­ly if it all works out, they’re going to U shape type buy­ing So, two of the prices were on the way down, two of the prices were on the way up And it’s, it’s aver­ag­ing out close to the bot­tom, but that’s if every­thing comes off To plan, and as we know, they might get four on the way down and still drops, which I remem­ber doing that dur­ing the GFC I, used to use these kinds of tech­niques before I came across three point trend lines, and that hap­pened dur­ing the GFC And I remem­ber, plain as day, buy­ing stocks when the GFC first hap­pened, think­ing, this is great, because they’re They’re drop­ping in price, I’m going to buy some, I’m going to wait and buy some more, and 18 months lat­er I was notic­ing some pret­ty heavy loss­es because they just kept drop­ping, so dol­lar cost aver­ag­ing did­n’t work in that case, and nei­ther would stock­pil­ing, I think, pret­ty sim­i­lar in that case but they are gen­er­al­ly what val­ue investors do, and Buf­fett cer­tain­ly has used those kinds of things, in the past, he finds some­thing which he likes the price of and he does­n’t care the price is falling because you’ll know he’ll buy some now and he’ll buy some in the future But that’s often­times as much about, Buf­fett hav­ing to ease his way into a pur­chase because he has such a large amount of cash to deploy If he just goes out in one hit, he’s got to pay a takeover pre­mi­um for the stock or what­ev­er he’s buy­ing But if he does it in dribs and drabs, he gets in at a cheap­er price, so that’s a dif­fer­ent dimen­sion, how does that com­pare to 3PTLs and oth­er sim­i­lar type ways of decid­ing when to buy and sell? Well, the, I mean two things I remem­ber when I read the lit­tle pam­phlet on three point trend line invest­ing a long time ago They claimed that if you did, if you fol­lowed that way of invest­ing, you’re get­ting 15%, which was, bet­ter than the mar­ket And I also remem­ber lis­ten­ing to an ASX pod­cast and var­i­ous oth­er ones back when the ASX used to have pod­casts that did them­selves I know Phil Mus­catel­lo has res­ur­rect­ed that again recent­ly, but way back in the 90s, the ASX kind of pio­neered pod­cast­ing in the finan­cial space any­way And they had peo­ple on, and I remem­ber there was a a fundee who came on and talked about using mov­ing aver­ages, like, the 30 day stock price over the 120 day mov­ing aver­age and then, when the lines cross when the graphs cross, you can buy on the way up and so on the way down, and They also claimed above index returns, and that makes sense to me as well, so I tend to grav­i­tate towards those, cer­tain­ly the 3PTLs work for me The dif­fi­cul­ty I have with dol­lar cost aver­ag­ing and stock­pil­ing is what are the rules? And how do that you’re not buy­ing a falling knife? Where­as the attrac­tive 3Point Trend­line is We know we’re not going to buy the cheap­est price because we’re wait­ing for an upturn to estab­lish itself, but we know we’re buy­ing up on, we’re buy­ing on the way up and the, and the falling price fin­ished And I find that attrac­tive that rather than try­ing to guess how many dol­lar cost aver­ag­ing pur­chas­es to make and at what stage on the way down, you make them, if you make them too late, you invest A quar­ter of your amount and then the stock price goes up and you stop buy­ing, and if you go too ear­ly, you’ve spent your pow­der before it reach­es the bot­tom So, the only way you can solve that is to wait until there’s an estab­lished trend going up or an estab­lished trend going down in reverse So that’s why I favor that way of invest­ing over dol­lar cost aver­ag­ing.

[01:05:01] Cameron: Hmm We were talk­ing about War­ren eas­ing his way in I just had this vision of Sir Les Pat­ter­son talk­ing about how he used to ease his way in because he was a very con­sid­er­ate lover Well, I make love to a lady I like to enter her slow­ly and then I walk slow­ly towards her.

[01:05:22] Tony: Alex is going to regret ask­ing that ques­tion now, I’m pret­ty sure.

[01:05:25] Cameron: No, he’s going to love it.

[01:05:27] Tony: Any­way.

[01:05:28] Cameron: Yeah, so get­ting back to the GFC stocks that you were buy­ing on the way down, have you ever done any analy­sis as to how that would have worked out if you just kept doing that and held on to them until today?

[01:05:41] Tony: , it’s a good ques­tion It’s hard to do because I did hold onto them and they, my port­fo­lio basi­cal­ly halved dur­ing the GFC, at least on paper, and then I tend­ed to, As oppor­tu­ni­ties came up on the way out, liq­ui­date some­thing which had­n’t worked, took a cap­i­tal loss and then bought into some­thing which I saw as being more com­pelling, like, rights issues from Com­mon­wealth Bank when they raised cap­i­tal And I can still remem­ber March 2009 being the best time I’ve ever seen on the share mar­ket to buy, because the mar­ket was still very neg­a­tive, it was com­pa­ny report­ing sea­son, and these com­pa­nies just, time after time, it’s kind of the reverse of what’s hap­pen­ing now They report returns like we’re see­ing, hey, we’ve had a great 12 months the con­sumer sen­ti­men­t’s returned, every­one’s buy­ing, shop­ping hap­pi­ly along again But the mar­ket had­n’t caught up with that, so they were still being marked down, and so I bought them, and then they just all shot through the roof in 2009 As we saw in that graph, that, that most of those good return­ing days hap­pened at the end of a GFC, so, yeah, I can’t real­ly say I did the analy­sis on whether I, if I had sold, held the ones that went down, whether I would have got­ten the same return But cer­tain­ly along the way it was very painful.

[01:07:03] Cameron: All right Well, thanks for going over that Hope that helps Alex, just don’t think about Sir Les Pat­ter­son too much RIP Bar­ry Humphreys Jon, new mem­ber Jon says, Hi, how are you doing today? Fin­ished the course last night and enjoy­ing the pod­cast Con­grat­u­la­tions on fin­ish­ing the QAV course Jon, you could be the first per­son I think that’s ever fin­ished it, I haven’t looked at the stats for a while, but most peo­ple don’t seem to get very far into the course for what­ev­er rea­son I’m so glad that I spent a cou­ple of weeks of my life putting it togeth­er Glad to know that some­body’s using it, Jon, curi­ous to know what QAV think with the AUD exchange rate drop­ping Will more Aussie com­pa­nies be attrac­tive takeover tar­gets for over­seas busi­ness­es slash investors? And have any past QAV iden­ti­fied com­pa­nies turned into takeover tar­gets? I’m hope I’m not ask­ing ques­tions brought up in past ses­sions Well, You are in part, we often talk about QAV com­pa­nies becom­ing takeovers and yeah, it hap­pens on a fair­ly reg­u­lar basis.

[01:08:09] Tony: Yeah, it does Yeah Thanks, Jon Con­grat­u­la­tions on com­plet­ing the course and we’ll send you a cer­tifi­cate in the mail It’s like a mor­tar­board and a gown Yeah.

[01:08:21] Cameron: Mm-hmm.

[01:08:22] Tony: But okay, so you may have asked a cou­ple of ques­tions there Does the low­er dol­lar exchange rate accel­er­ate takeovers? My expe­ri­ence is not so much because the Aus­tralian mar­ket’s quite small and we’re not the only cur­ren­cy that’s been going down, so Canada’s been going down, UK’s been going down, parts of Europe are going down, so there are, we’re part of the mar­ket that peo­ple are scan­ning from the US, and oth­er places that have a high­er cur­ren­cy, but we’re only a small part of that, so yes it will hap­pen, I don’t know if it’ll be any faster than what it nor­mal­ly is, But the sec­ond ques­tion is, yes, we do have QAV stocks all the time being tak­en over, usu­al­ly if we find them attrac­tive the pro­fes­sion­als find them attrac­tive too And I, I did go through and pull out some exam­ples So last year there was a com­pa­ny called Empire Red Which was on our bio list It was acquired by Capgem­i­ni in the last six months Even there was C6C, which was a cop­per stock was tak­en over by Hud­son Bay or HUD Bay, which was a Cana­di­an min­ing com­pa­ny, break­er resources BRB was tak­en over by Ramelius Resources, which I think is, was on our buy list It may not be any­more, but B BRB cer­tain­ly was Bio­ta group was tak­en over in the last six months I dun­no if it was on the buy list when it was tak­en over, but it was on the buy list in times past, I think Sun­corp was from mem­o­ry, did­n’t go back into the buy list and had a look, but it recent­ly was denied being tak­en over by ANZ, but that’s under appeal, so that might go ahead DDH was one of our buy list com­pa­nies, and they’re under a takeover offer from Per­en­ti So, yeah, there’s, I think that’s five or six I’ve just named in the last 12 months, so yeah, it hap­pens all the time.

[01:10:10] Cameron: And usu­al­ly a good thing If, if for us, if we own them, usu­al­ly it was a pre­mi­um.

[01:10:16] Tony: Well, it’s a two head­ed, it’s a two edged sword because we get a bump, so it’s usu­al­ly they’re going to pay sort of 25 30% pre­mi­um to take it over before the board will engage and accept but it’s a, the down­side is we’re not going to get more than that because these com­pa­nies were usu­al­ly incred­i­bly under­val­ued and throw­ing off lots of cash, so, if they don’t get tak­en over, we enjoy the ride up as they get bought by the fund man­agers in the stock mar­ket any­way So but it’s usu­al­ly a short term sug­ar hit and we can invest the prof­its some­where else, mean­ing­ful­ly.

[01:10:45] Cameron: Short, short term sug­ar hit.

[01:10:48] Tony: Yeah.

[01:10:50] Cameron: That’s going to be the title of this episode It’s anoth­er good name for a band.

[01:10:54] Tony: Yeah.

[01:10:55] Cameron: Term sug­ar hits.

[01:10:56] Tony: Yeah The Alex is sup­port­ed by short term sug­ar hit.

[01:11:05] Cameron: All right Hope that helps John Phil Sev­er­al stocks have had good results and price dropped obvi­ous­ly because of sell­ing, where do you think this mon­ey goes? Has to go some­where as like­ly funds aren’t stay­ing in cash I mean, how do you think they are choos­ing to sell these stocks and then choos­ing to buy else­where?

[01:11:25] Tony: Yeah Inter­est­ing ques­tion, Phil, it’s a hard one to answer gener­i­cal­ly, we’ve cer­tain­ly seen As we said before, the sell­ing is going on, which is based on the out­look, so either ana­lysts are try­ing to fore­cast com­modi­ties or infla­tion or dis­cre­tionary spend­ing or inter­est rates or all of the above, and not lik­ing what they see but, you know, the good results trump all those, we’ll have to see over time, but what hap­pens when some­one sells, I the man­date, so often­times it’ll be big sell­ers in some of these stocks which will dri­ve the share price., if it’s a, if it’s a fund man­ag­er, they’ll prob­a­bly go back into anoth­er stock If it’s a super fund, it might go into stocks or bonds or inter­na­tion­al shares You don’t, I don’t real­ly know, but I did pull up Pil­bara Resources and have a look at their trades recent­ly, and the list isn’t up to date, so it may not take into account the most recent sell­ing, but it does give you a fla­vor of what hap­pened So, for exam­ple Black­rock, Black­rock Group bought a big stake Back in July, that was bought from J P Mor­gan Chase, so that’s prob­a­bly some­one act­ing for a fund man­ag­er as a stock­bro­ker or a cus­to­di­an, J P Mor­gan Chase even­tu­al­ly sold State Street Cor­po­ra­tion, so anoth­er big sort of fund, bought some shares They were sold by a com­pa­ny called Con­tem­po­rary Ampex Tech­nol­o­gy from Hong Kong, so not sure if that’s a fund or whether it’s anoth­er com­pa­ny who’s tak­en a stake in Pil­bara Thank you very much, it goes on and on Black­Rock is in there a lot Aus­tralian Super is in there a lot, anoth­er list of min­er called Min­er­al Resources is in there So, I think what tends to hap­pen with com­pa­nies like this one, like Pil­bara, is that it’s kind of trade amongst the funds, whether it’s super funds or, or index funds like Black­Rock or even oth­er ASX list­ed min­ing com­pa­nies who often take stakes in up and com­ing min­ers like Min­er­al Resources So, I think that’s prob­a­bly What gen­er­al­ly hap­pens and then the share price goes down when you have a bit of a mis­match when the last sell­er has a big par­cel to sell and can’t get it away so they drop the price.

[01:13:40] Cameron: All right Thank you, Phil Sam, we were talk­ing about PLS on Face­book I think or on What­sapp or some­where, Sam said Last, how does TK look at the dif­fer­ence in volatil­i­ty between dif­fer­ent shares? For exam­ple, a share that has an aver­age volatil­i­ty of X, not refer­ring to Elon Musk’s social media com­pa­ny which is pret­ty volatile, but an aver­age volatil­i­ty of X com­pared to one that has a volatil­i­ty of two times X Based on that, which I think is called beta in finance, per­haps that could be part of the tri­al with the high­er 20% rule one, as in use it for those shares that have an exist­ing high­er lev­el of volatil­i­ty TK always says he sees volatil­i­ty as an oppor­tu­ni­ty, but I don’t think he’s ever men­tioned the past volatil­i­ty as an esti­mate or guide for future volatil­i­ty Giv­en he con­sid­ers pre­vi­ous trends as an indi­ca­tor of future trends, which is hope­ful­ly cor­rect 60% of the time, how about past volatil­i­ty? What do you think, TK?

[01:14:43] Tony: Yeah, inter­est­ing, inter­est­ing ques­tion, inter­est­ing dis­cus­sion, I think the dif­fi­cul­ty in in mea­sur­ing volatil­i­ty is actu­al­ly get­ting some data on it, we prob­a­bly have to crunch that num­ber our­selves because I, I’m not aware of a Data set which tells you the volatil­i­ty of shares on the ASX and from time to time you see research But it’s like I haven’t come across a live data feed for that, yeah, I kind of like the idea of if it’s a if it is a high beta stock using a 20% rule one That makes sense But again, it’s get­ting access to the data, which will be hard, and as a, as the ques­tion­er said I do like volatil­i­ty That’s how we kind of get, try­ing to get our advan­tage, I guess, we get good returns from volatile stocks I’m remind­ed of a book I read many years ago which is real­ly Inter­est­ing to read, and I rec­om­mend it, called Against the Gods I’m just try­ing to look up who wrote that Peter L Bern­stein, The Remark­able Sto­ry of Risk is the sub­ti­tle And it’s a great book Rec­om­mend it It goes through the whole his­to­ry of risk back from the times of Niko­lai Pare­to all the way through to rea­son­ably mod­ern port­fo­lio the­o­ry I think it was writ­ten about 10 or 20 years ago, and the sort of sum­ma­tion of all the, the sort of his­to­ry, his­tor­i­cal study of risk was to buy a bas­ket of inter­na­tion­al index funds And that way, like the, you buy an index fund for the US, one for Aus­tralia, one for the UK, Europe, Asia, etc And the volatil­i­ty is ironed out that you get index like returns across the world, but there was a rec­om­men­da­tion in there as well If you want to do it your­self have a look at the high­est beta stocks because they can pro­duce, above index returns if you can stom­ach the volatil­i­ty that’s pret­ty much always stuck with me, and so I, I, yeah, ful­ly embrace volatil­i­ty Peo­ple who look at my returns will know that some years are up and some years are down, but over­all there’s an increase, which is pret­ty much how the share mar­ket goes The oth­er inter­est­ing point was that, I don’t know if this is coin­ci­dence or we’re on the same wave­length, but I actu­al­ly, was doing some research into beta and put togeth­er a, what I call a high beta dum­my port­fo­lio tri­al, as I often do, put togeth­er tri­al port­fo­lios to test var­i­ous things on the basis that, yeah, I do like volatil­i­ty and, and the high­er the volatil­i­ty might pro­duce bet­ter returns, It was hard to get data as to what the high­est beta of stocks were in Aus­tralia, so what I fin­ished up doing was going to a web­site called Damodaran com, D A M O D A R A N, which is a U S, site, and he makes He puts togeth­er the beta of dif­fer­ent sec­tors in the U S and you can fil­ter those and pull out the high­est sec­tors, which I did, and then use Stock Doc­tor to fil­ter those sec­tors using GIC codes in Aus­tralia, and do the down­load and then stack rank them, I actu­al­ly stack ranked them by ADT, because a lot of them are very small stocks It’s an inter­est­ing list It tends to be all the high PE stocks in the mar­ket that we would think would be in a high beta list, but the sec­tors are soft­ware and ser­vices, cap­i­tal goods, auto­mo­biles and com­po­nents, real estate man­age­ment and devel­op­ment, Tech­nol­o­gy, Hard­ware and Equip­ment, Media and Enter­tain­ment Trans­porta­tion I think that prob­a­bly cov­ers them all And, so I put togeth­er a cou­ple of port­fo­lios because if I stack rank them by ADT and then just to put togeth­er a 10 stock port­fo­lio based on the ratio of their ADT to the total port­fo­lio And then also did­n’t buy stocks which weren’t a buy using the three point trend line cal­cu­la­tor I got a list of stocks and these will be famil­iar with peo­ple, WiseTech Glob­al Tops, the list NextD­C’s in there Reliance World­wide, a r b cor­po­ra­tion, G u D, Kogan Deca­ta Deca­da­ta, sor­ry Data three Han­son Tech­nolo­gies and Aud­i­nate Group Now None of those are on the QAV list because they all have high PEs and some of them haven’t been prof­itable, if I, if I put that, that port­fo­lio, I did it at the start of August, so it was before report­ing sea­son So there’s been some big changes in their share prices because of com­pa­ny report­ing sea­son, but that port­fo­lio is down 9% If I bought the same stocks on an equal weight­ing, the port­fo­lio is actu­al­ly up 3%, so that might be the bet­ter way to do it, and that’s Large­ly being dri­ven by WiseTech and what was the oth­er big drop? WiseTech and Reliance WiseTech’s down 19% since its results, Reliance is down 5% But then Aud­i­nate which is the small­est cap on the, that list is up 40% So you can see the, the high beta in action just in the last month, and then I also did a port­fo­lio which was just the top 10 regard­less of whether they were buys or sells using the bread loader And an equal weight­ing of those, and that port­fo­lio is down 7%, that includes Xero what else is there?, Tech­nol­o­gy­One, Altium and some of the ones we spoke about like Reliance and, I’ll read the list, Xero, WiseTech, Nex­ty, DC, Tech­nol­o­gy­One, Altium, Reliance World­wide, PEXA group, Iris, ARB, and Appen, so yeah, so, if, in con­struct­ing the port­fo­lio, one of two ways, it’s down, tak­ing an equal weight­ing, it’s up, and the stocks that we’re already buy­ing, the bet­ter lat­er Again, this is the sort of age old prob­lem I’ve been hav­ing with how do you invest in gross stocks, because that tends to be what high beta stocks are This might be a way but at the moment it’s it’s a very short time frame and I’ll keep run­ning it and see, but you know, no par­tic­u­lar learn­ings from it so, I would­n’t be incor­po­rat­ing this into the check­list, that’s for sure at the moment, but I, but I also like beta, so we’ll see what hap­pens with it But yeah, if if who was it? Was it Sam? Sor­ry? Sam If Sam knows of data that we can get beta rat­ings on a stock lev­el basis, that are recent, and we have some his­to­ry for it, that would be great, but I was­n’t able to find any.

[01:21:15] Cameron: I just found one, Trad­ingview They have, Page, High Beta, The Riski­est Aus­tralian Stocks on the Mar­ket And there’s a hun­dred com­pa­nies in this.

[01:21:28] Tony: Yeah, how often do they refresh that, Cam?

[01:21:32] Cameron: Does it say?

[01:21:33] Tony: Yeah, that was my dif­fi­cul­ty, was that was a list that comes out from time to time, but to be able to oper­ate day to day using QAV and hav­ing beta as part of a check­list to influ­ence rule one is I could­n’t find a reli­able up to date list.

[01:21:50] Cameron: Well, let me just check some of these prices Yeah.

[01:21:54] Tony: So we could, we could do an annu­al inspec­tion and say is the share we’re trad­ing on the list and is there­fore rule one or rule two I’m not sure how often that list gets updat­ed though.

[01:22:05] Cameron: Well, it seems to be at least the share prices here are live they seem to be up to date but some of the com­pa­nies on this list are com­pa­nies that have been QAV stocks over the last few years Mount Gib­son Iron, Reg­is Resources Accent Group, West Gold Resources, GRR, Red­bub­ble, it’s been on our list from time to time Yeah, Manu­ka Resources I think that’s been on our list at some point So yeah, Pon­tera Point­era, 3DP, that’s not off on the list I don’t think But there are there are some QAV stocks on here, there you go, Grange Resources yeah, that’s about it real­ly.

[01:22:49] Tony: Yeah, okay, well let me, let me keep research­ing it I could­n’t find a list and.

[01:22:55] Cameron: I don’t know, how they’re deter­min­ing the fact that they’re high beta stocks here, there’s not a lot of infor­ma­tion on it, and how often they’re updat­ing that though, so, yeah, that could be an issue.

[01:23:06] Tony: As, if Sam wants to do more research, there’s also a thing called the Sharpe Ratio, which Looks at I’ll put risk in air quotes, risk rat­ed returns, so you don’t just take the return of the stock, but you also fac­tor into that, the cal­cu­la­tion, the volatil­i­ty of the stock which gives you, so the idea is you opti­mize your returns based not just on CAGR, but also based on how volatile that stock was, it’s called the Sharpe Ratio, and it’s kind of in that whole school of invest­ing around ETFs and index funds and things And gets employed by peo­ple who are, maybe in retire­ment phase and don’t want to take on too much volatil­i­ty after they stop work­ing and want to pre­serve their cap­i­tal But that’s also anoth­er angle to look at this from beta and volatil­i­ty.

[01:23:54] Cameron: Alright, good ques­tion Sam! I had­n’t heard of beta before, so that’s a new thing for me.

[01:24:00] Tony: Alpha’s mar­ket returns and beta is the dif­fer­ence between the stock return and alpha.

[01:24:10] Cameron: Good stuff Well, that is all of the ques­tions for this week, TK Let’s get into after hours What have you been doing that’s non invest­ing relat­ed in the last week? That’s fun to talk about.

[01:24:21] Tony: It’s fun to talk I like the last caveat I’m just try­ing to find my notes Oh dear Oh, here we go Well, I’m in Wag­ga Wag­ga, so that’s always fun Enjoy­ing Rud­dy’s hos­pi­tal­i­ty.

[01:24:34] Cameron: That’s good.

[01:24:35] Tony: Yeah, we got this We sort of fall into this rou­tine of, when we’ve run out of things to watch on Net­flix or what­ev­er, we start watch­ing old episodes of a show called Would I Lie to You? I don’t know if you’ve seen it, it’s an Eng­lish quiz show where peo­ple, one team of three tries to con­vince the oth­er team of three that what they’re say­ing is true and it may be true or it may be a lie and you have to pick the case So, broth­er you and I being com­pet­i­tive gam­blers, sit there and take it in turns to decide whether it’s the truth or lie and then tell you up the results We get quite engrossed in the com­pe­ti­tion, and.

[01:25:11] Cameron: You put, do you put mon­ey.

[01:25:13] Tony: We, we don’t, but I can imag­ine that’s pret­ty close to hap­pen­ing.

[01:25:18] Cameron: Backloves.

[01:25:20] Tony: So that’s fun So, so Wag­ga Wag­ga today and tomor­row, down to Mel­bourne, Cape Shank after that, what else? I bought your books that you rec­om­mend­ed last week, but I haven’t read them yet So, we’ll get to those Ener­gy and the sci­ence fic­tion one.

[01:25:32] Cameron: Schmiel and.

[01:25:34] Tony: Yes Yes I thank you for those I’ll get to those And the last thing is my hors­es are com­ing back into work, so we might see some starts in the next month or so And Kim and Ma and I bought a cou­ple of hors­es last year and they might be hav­ing their starts, I think maybe the next few months any­way, but one just got named and we named the dou­ble mar­ket that was accept­ed as a, for the race.

[01:25:58] Cameron: Dou­ble mar­ket .

[01:26:00] Tony: We, we tried to get it called Char­lie 99, but for some rea­son that was­n’t accept­ed, so it’s called Dou­ble Mar­ket So watch out for that Hope­ful­ly it’s, it returns Dou­ble.

[01:26:11] Cameron: Who, has to, who has to approve your horse nam­ings?

[01:26:15] Tony: , Rac­ing Aus­tralia, to make sure you don’t put in some­thing which has a dou­ble mean­ing, or offends some­body, or has been used before, is prob­a­bly the most com­mon thing Or too close to an exist­ing horse So they, if there’s a horse called Char­lie 98, 98 and Char­lie 99 run­ning in the same race against each oth­er.

[01:26:38] Cameron: That could be too con­fus­ing Yeah.

[01:26:40] Tony: So the clas­sic, the clas­sic exam­ple and peo­ple can turn off if they don’t like Liz Pat­ter­son­’s style of humor The clas­sic exam­ple was a horse that was called Wood­en Swal­low, the Wood­en Swal­low, like the ones that used to go on the walls in old Aus­tralian homes Yeah And one day at race in a race, With A Horse Called My Girl­friend, And The Race Caller Was, Had To Call, My Girl­friend Would­n’t Lie, Across The Lines.

[01:27:07] Cameron: Nice Nice.

[01:27:09] Tony: So They, They Banned It, Banned The Name Any­way.

[01:27:16] Cameron: Good times at the race­track.

[01:27:18] Tony: Hmm.

[01:27:19] Cameron: I took Chris­sy to see Bar­bie final­ly last week.

[01:27:22] Tony: Yep, Good.

[01:27:24] Cameron: She loved it Like, lit­er­al­ly, like, best movie she’s seen in the cin­e­ma in Ten years, she said Because she’s a big Bar­bie, play­er, as a kid So she got all of the in Bar­bie jokes which went com­plete­ly over my head Nev­er hav­ing seen a Bar­bie.

[01:27:41] Tony: You’re, You’re More A GI Joe, Kind Of Guy, Eh?

[01:27:45] Cameron: Six mil­lion dol­lar man doll, action fig­ure I had as a kid, yeah, yeah You want to talk about Steve Austin and doo­doo­doo­doo­doo­doo­doo­doo­doo­doo­doo­doo­doo­doo­doo, I could talk about that for hours, but, Lee Majors.

[01:27:56] Tony: I could­n’t con­vince my father to let me, to buy me a mod­el air­craft kit for a birth­day present, let alone a toy that was a doll Oh yeah.

[01:28:04] Cameron: Yeah No What kind of presents did you get as a kid?

[01:28:08] Tony: , cheap ones I used to get clothes, basi­cal­ly I remem­ber ask­ing for Lego, get­ting the cheap knock­off ver­sion, Chi­nese knock­off ver­sion of it I remem­ber ask­ing for a elec­tric car set and get­ting the, the six volt ver­sion, sky’s 12 volts, so yeah, always got the The cheap­est ver­sion I remem­ber get­ting Pana­ma Jeans one year and I did­n’t sur­vive the first bike ride because I split, so that was, that was my tale of, boy, I had a hap­py child­hood, I’m not going to com­plain, but that was, yeah, the gifts weren’t so great.

[01:28:42] Cameron: Right.

[01:28:43] Tony: I used to be jeal­ous I’d go into my friend’s place and go, wow, you’ve got a set of ency­clo­pe­dias Oh, you got a bil­liard table And even­tu­al­ly my father felt guilty and bought a bil­liard table and it was like the one from the cas­tle that, you’d hit a ball straight and it would go through this arc of 90 degrees, go in the side pock­et when you were hav­ing it at the cor­ner pock­et Yeah.

[01:29:04] Cameron: I was always jeal­ous of one of the friends I had in pri­ma­ry school, like 78, 79, he had a full, Death Star Mod­el when you get all the Star Wars fig­urines and you could put them in the Death Star and the Mil­len­ni­um Fal­con and Oh, then I could­n’t even get the good main­stream Star Wars char­ac­ters I think my par­ents got me a Star Wars fig­urine for one birth­day, one Christ­mas It was like one of the knock, one of one of the droids on Tatooine in the back, in the back of the scene that does­n’t, you don’t even know the name of it Like it nev­er gets ref­er­enced Yeah Yeah The shit­ty droid.

[01:29:42] Tony: From The can­ti­na scene, yeah.

[01:29:44] Cameron: Yeah But Chris, you real­ly enjoyed it I, I enjoyed it I thought it, it, it was amus­ing, it had a lit­tle bit of a polit­i­cal mes­sage, which I thought was fair­ly light touch When my boys went to see it, they were just com­plete­ly offend­ed by how How polit­i­cal the whole thing was, and I thought it was fine, like, I thought it was light­weight, Yeah, yeah, it had a lit­tle bit of a barb in its sting at the end, but I thought that was fine I thought it.

[01:30:10] Tony: Yeah, you need that don’t you? Yeah.

[01:30:13] Cameron: Well, I thought they did it for the sake of com­e­dy I did­n’t see it as a big polit­i­cal film at all I thought it was very light­weight and and quite enjoy­able Yeah I thought the, the high­light in terms of the per­for­mances was Kate McK­in­non from SNL Have you seen the film yet Bar­bie?

[01:30:30] Tony: I haven’t seen it but I have seen a small clip with her in it and she looked, looked great.

[01:30:35] Cameron: She’s crazy Bar­bie Appar­ent­ly all the girls would have one Bar­bie where they would cut the hair and, put make­up on it and cloth­ing on it and then I think Chris­sy said she had want­ed to spend like a whole year on the roof of the house because they were throw­ing it around and all that kind of stuff So appar­ent­ly that’s a thing The Crazy Bar­bie Kate McK­in­non’s always fun­ny, I was a big fan.

[01:30:56] Tony: She’s great She’s, she’s incred­i­ble isn’t she? I agree.

[01:30:59] Cameron: She’s real­ly fun­ny, Yeah, yeah.

[01:31:01] Tony: Yeah, well, Jen­ny went and saw it with one of her friends and real­ly enjoyed it, came home and said, yeah, it was real­ly good, so.

[01:31:07] Cameron: Yeah, good.

[01:31:07] Tony: It, yeah.

[01:31:08] Cameron: Well, I just saw on the ABC today it’s top­pled Har­ry Pot­ter to become the big, high­est gross­ing Warn­er Broth­ers film of all time.

[01:31:17] Tony: Wow.

[01:31:17] Cameron: It’s done, 1 342 bil­lion US dol­lars in inter­na­tion­al gross earn­ings as of today Yeah.

[01:31:27] Tony: And there might be some life in cin­e­mas yet, because they’ve had a tough time over the last few years.

[01:31:32] Cameron: Yeah There you go, and I’ve been watch­ing and read­ing up on The Voice I think our new­ly paid prime min­is­ter is going to be announc­ing the time­line for the ref­er­en­dum tomor­row, I think, Wednes­day night it’s expect­ed to be a six week cam­paign before we do the ref­er­en­dum thing So I’ve been watch­ing a cou­ple of videos by some com­men­ta­tors, Abo­rig­i­nal activists, Indige­nous folks talk­ing about it I read the Ulu­ru State­ment from the Heart last night, which I had­n’t got around to read­ing before So yeah.

[01:32:06] Tony: And.

[01:32:08] Cameron: Oh.

[01:32:09] Tony: Mind up?

[01:32:11] Cameron: I, I did­n’t, I already, like, give them every­thing they want and more, like, it’s, that’s my view on it is like, yeah, look, any­thing you want, take the sil­ver­ware, take the light fix­tures It’d be, to me, it’ll be extreme­ly embar­rass­ing if, as I sus­pect, the no vote will prob­a­bly win I mean, I hope Aus­tralia votes yes, but I think the no, the no cam­paign is, seems to be so much frothy mouthed stuff in the no votes that I wor­ry that they’ll get the upper hand on this whole thing I don’t, I think the yes cam­paign, at least until this point, has sort of been rel­a­tive­ly mut­ed We’ll see what hap­pens when there’s a time­line and see if they can get their way behind some­thing that explains it to peo­ple, but.

[01:32:58] Tony: I’ll be incred­i­bly dis­ap­point­ed if we don’t get a yes vote I think that’s just a bad out­come for Aus­tralia Bad luck inter­na­tion­al­ly Bad local­ly, ter­ri­ble dis­re­spect to the First Nations cul­ture, and they’re not real­ly ask­ing for much, are they? They just, it’s like.

[01:33:12] Cameron: What? That’s the thing You’re like, yeah.

[01:33:16] Tony: It’s a, it’s.

[01:33:16] Cameron: A.

[01:33:17] Tony: In the con­sti­tu­tion Okay That’s that, yeah, strike of a pen And we’d like to, because we can’t, we’ll nev­er, we’re 6% of the pop­u­la­tion spread out over Aus­tralia We’re nev­er going to have any of our mem­bers elect­ed to par­lia­ment, so we, but we still like to have a say and have a lis­ten to us.

[01:33:34] Cameron: Yeah And not have the abil­i­ty, as has hap­pened over and over again in the past, that we have a rep­re­sen­ta­tive body and then gov­ern­ments come along and just dis­man­tle it or ignore it or, dis­band it Yeah.

[01:33:47] Tony: And look, to be fair, that’s prob­a­bly the biggest argu­ment against the voice that I’ve come across, which I can sym­pa­thize with to some extent that gov­ern­ments have felt the need to shut down ATSIC in the past because there’s been, alleged­ly cor­rup­tion in the ranks and things like that And if we enshrine it con­sti­tu­tion­al­ly, you can’t do that But my answer to that is, well, if it gets to that, it’s a shame, but there are oth­er ways of solv­ing that prob­lem with­out shut­ting down the voice of the par­lia­ment But I mean, you read, you Over­seas play­ers are get­ting involved, our white suprema­cists are get­ting involved There has been a vac­u­um on the yes side, which is unfor­tu­nate and I do hope that the gov­ern­ment does ramp it up over the next six weeks to clear­ly enun­ci­ate what the voice actu­al­ly means and stops all the fear mon­ger­ing It’s become, it has­n’t become a First Nations issue, it’s become a Lib­er­al Labour issue, like it’s, the oppo­si­tion is just going to be against it because they want to attack the gov­ern­ment, not because they nec­es­sar­i­ly when you don’t like the voice, although they say that’s the case, it’s not the case They’re just being, they’re just gain­say­ing what the gov­ern­ment wants.

[01:34:58] Cameron: Yeah And the fact that Aus­tralia is the only Com­mon­wealth coun­try that does­n’t have a treaty with its First Nations peo­ple I think is just embar­rass­ing for us as a nation It’s.

[01:35:10] Tony: I think so too, and I think if the voice does go down, there’ll be moves to bring in a treaty, which, you know It’s prob­a­bly a bet­ter out­come, but it’s, well, the best out­come is the voice and the treaty But I don’t think peo­ple who are against The Voice are actu­al­ly going to, thwart a treaty even­tu­al­ly being signed It’s inevitable And hav­ing lived over­seas in New Zealand and see­ing how it works over there, I just think it’s, it’s a great thing to get it sort­ed out, it’s a very dif­fer­ent dynam­ic over in New Zealand a lit­tle bit in Cana­da where they have First Nations as well, peo­ple to see how they’re treat­ed ver­sus how We tend to ignore to a large extent, the Abo­rig­i­nal pop­u­la­tion Cer­tain­ly, in terms of lis­ten­ing to them And that’s the most com­pelling argu­ment is all they’re ask­ing for is to be heard You know, we want to talk our truth and lis­ten to your truth and, hope­ful­ly we can come to a Some kind of way for­ward, but they’re not ask­ing for a veto, or any sort of, a third cham­ber of par­lia­ment, or, rights to change Aus­tralia Day, or to stop Anzac Day, or what­ev­er, it’s just ridicu­lous what the no vote’s going on about.

[01:36:22] Cameron: Yeah, Yeah, I agree.

[01:36:25] Tony: Get, like, because I debate this all the time with my friends, because they, You know, a lot of, as you’d expect, half my friends are Labour vot­ers and half my friends are Lib­er­al vot­ers and I guess maybe not half and half because there are oth­er peo­ple, Greens vot­ers in there and the stuff they come up with, you can just hear it com­ing out of the Mur­doch press or Ray Hav­i­ly or what­ev­er And the, the most recent one I heard was, oh, there’s going to be 40 peo­ple employed in Can­ber­ra to look after the voice And I’m like, okay, so if Crip­pie For­rest came along and said he’d fund it, would you still vote against the voice? Oh yeah, yeah So real­ly that’s not the rea­son you’re vot­ing against the voice And if you’re wor­ried about, well, if you’re wor­ried about politi­cians and the cost of gov­ern­ment, let’s do away with the Sen­ate and we can talk about sav­ing mon­ey on gov­ern­ment spend­ing.

[01:37:12] Cameron: There’s no oth­er mon­ey wast­ed on bureau­cra­cy or cor­rup­tion in Can­ber­ra, so.

[01:37:16] Tony: No exact­ly.

[01:37:19] Cameron: Well, yes, we’ll see what hap­pens with that And I’m read­ing Baude­laire’s Flow­ers of Evil again Haven’t read it for, since I was a young guy, so I pulled that out Get­ting back in a lit­tle bit of my, I’ve been try­ing to read a lot more poet­ry recent­ly.

[01:37:33] Tony: Is it good? I’ve nev­er read it.

[01:37:36] Cameron: Yeah, yeah, it’s inter­est­ing I mean, it was obvi­ous­ly very influ­en­tial and very con­tro­ver­sial in its time but I’m enjoy­ing it Yeah, I like it.

[01:37:48] Tony: Nev­er got­ten around to read­ing, which is prob­a­bly in the same ilk, which I should, is Rim­baud That’s, yeah Have you read him?

[01:37:56] Cameron: Yeah, I read all these guys in my 20s, and I want to go back and read Rim­baud as well Yeah, I real­ly like Rim­baud stuff Prob­a­bly more than Baude­laire, but it’s more engag­ing, but yeah, that’s all good stuff But I was going to use that as a coun­ter­point to me read­ing through the AFSL RG146 doc­u­men­ta­tion, which.

[01:38:14] Tony: Not.

[01:38:15] Cameron: I have been try­ing to read at, at night this week and oh my God, it is so bor­ing And I was try­ing to think, how do I make this inter­est­ing and engag­ing? Because, I do a lot of pod­casts about real­ly bor­ing sub­jects like invest­ing and his­to­ry and try and make them engag­ing and enter­tain­ing for myself as much as for the audi­ence And I thought, I have to, the only way I’m going to learn this stuff is I have to do a pod­cast about.

[01:38:42] Tony: Oh, no Ohhh Haha­ha­ha­ha­ha­ha.

[01:38:44] Cameron: It’s the only way I’m gonna fig­ure out how to enter­tain myself with this is to do a pod­cast I was doing flash­cards and I was try­ing to do all sorts of stuff to make it not just turgid­ly bor­ing for myself, but.

[01:38:59] Tony: Invest­ing in his­to­ry isn’t bor­ing, don’t know where you get that from.

[01:39:04] Cameron: Well, most peo­ple think it is I mean, usu­al­ly I mean, his­to­ry is, is com­mu­ni­cat­ed to us often in very dry, dusty tomes of dates and places and stuff And yeah, when you get into his­to­ry, it’s not bor­ing at all It’s all about vio­lence and rape and mur­der and blood­shed and all sorts of cool stuff like that, and invest­ing is, can be cool too Finan­cials How do we talk.

[01:39:36] Tony: Haha­ha I.

[01:39:37] Cameron: You know, Prop­Caf? Like, come on, I, I I had to start com­ing up with fun­ny names for things like Schro­ding­ers and Josephines and a fudge, fudge pack­ing, to make it enter­tain­ing for myself.

[01:39:52] Tony: You should approach ASIC or the ASX and get them to pay to do a pod­cast on IG146.

[01:39:59] Cameron: Yeah, how to, how to make this shit.

[01:40:01] Tony: Yeah Ha ha.

[01:40:02] Cameron: Not com­plete­ly bor­ing for peo­ple Any­way, I am per­sist­ing with that I asked Chat­G­PT to sort of take the doc­u­men­ta­tion I uploaded the PDF of the first thing and said, can you make this enter­tain­ing for me? And it said, nah, even I can’t do that Sor­ry This is too, you’re ask­ing too much I may be an AI, but I have lim­its So, okay.

[01:40:23] Tony: I’m prob­a­bly just sum­maris­ing it for you.

[01:40:26] Cameron: I tried that Yeah, could­n’t do that either So any­way.

[01:40:31] Tony: Yeah, I mean, I must admit.

[01:40:32] Cameron: It myself.

[01:40:33] Tony: The first, I think there’s two mod­els I had to do and one was the gen­er­al intro­duc­to­ry one That’s prob­a­bly the worst because it goes into macro­eco­nom­ics and, and insur­ance, which, aren’t ger­mane to what we yeah, it’s, The sec­ond one on, on on invest­ing in stocks is, is a bit bet­ter.

[01:40:51] Cameron: Okay, I haven’t got to that one yet It’s the first one I’m slog­ging my way through.

[01:40:56] Tony: Oh yeah I remem­ber slog­ging through the dif­fer­ent types of insur­ance and then answer­ing ques­tions on the dum­my exams about if you had this claim, whether it was busi­ness or prod­uct lia­bil­i­ty or pro­fes­sion­al indem­ni­ty or con­tents, and I was just like, who cares? Yeah.

[01:41:12] Cameron: Alright, I’ll fig­ure it out Thanks, TK you Have a good week.

[01:41:16] Tony: You too Talk to you next week from.

[01:41:17] Cameron: To you.

[01:41:18] Tony: Schanck.

[01:41:18] Cameron: QAV a good week, every­one.

[01:41:20] Tony: Bye.