QAV #636 — Come On Now

QAV 636

[00:00:00] Cameron: Wel­come back to QAV, episode 636, Tony, or should I say Big Dad­dy? It’s what I’ve told every­one we’re call­ing you because it was Father’s Day on Sun­day and I said you’re sort of the father to us all on this show, so from now on I’m refer­ring to you as Big Dad­dy. Do you have a nice Father’s Day, Big Dad­dy?

[00:00:24] Tony: I did have a nice Father’s Day. I’m not sure I like Big Dad­dy, but yeah, I did have a nice Father’s Day, thank you. I went to see Jen­ny’s father. We had lunch, which was love­ly.

[00:00:34] Cameron: Oh, that’s nice. Big Dad­dy is just cat in a hot tin

[00:00:37] Tony: it is, yeah.

[00:00:38] Cameron: That’s what

[00:00:38] Tony: was his name? Burl Ives. Burl

[00:00:40] Cameron: their lives, yeah. I see, Big Dad­dy. I’ll talk to you like that from now on. Come on now.

[00:00:46] Tony: If I, if I recall though, he died of can­cer, did­n’t he? At the end? That was, that’s what it was all about. He was dying or some­thing.

[00:00:53] Cameron: Yeah.

[00:00:53] Tony: Paul New­man, Eliz­a­beth Tay­lor. the rea­son that sticks in, my mem­o­ry was that, um, I was read­ing in the biog­ra­phy of the, of [00:01:00] Jim Mor­ri­son that he had received some kind of dis­tinc­tion or, the only thing he did well at film school in, at, uh, UCLA was putting on a pro­duc­tion of Cat in the Hot Tin Roof.

[00:01:12] Tony: And using a small red spot­light in the back­ground as the only scenery which got big­ger and big­ger to sig­ni­fy 

[00:01:18] Tony: the can­cer spread­ing in big data, you know? 

[00:01:20] Cameron: wow. I thought it was all about Paul New­man’s char­ac­ter being clos­et­ed homo­sex­u­al, but that did­n’t make it into the film ver­sion. Appar­ent­ly that’s in the orig­i­nal play, but they,

[00:01:30] Tony: bit like break­fast at Tiffany’s. She was a hook­er and her friend was gay, 

[00:01:34] Tony: yeah.

[00:01:34] Cameron: Yeah, but you can’t say that in Hol­ly­wood in the fifties or six­ties.

[00:01:38] Tony: No, you just take a pho­to of a girl in a black dress stand­ing in front of Tiffany’s in the morn­ing and you left to your 

[00:01:44] Tony: imag­i­na­tion how she got there. 

[00:01:47] Cameron: Yeah. Any­way, Big Dad­dy, Mar­ket Update, uh,

[00:01:50] Tony: What do we call you? Lit­tle Boy? Lit­tle Hos?

[00:01:52] Cameron: Baby Bil­ly. You watch the Right­eous Gem­stones?

[00:01:56] Tony: I’ve seen a cou­ple of 

[00:01:57] Tony: episodes, but I haven’t watched it from start to fin­ish. That’s 

[00:01:59] Tony: [00:02:00] good.

[00:02:00] Cameron: At some point, Wal­ton Gog­gins comes into it as their uncle, but he’s called Baby Bil­ly. 

[00:02:05] Cameron: And he, in the last sea­son, he has this TV show. He’s try­ing to get them to fund a Bible based TV show, which he calls Baby Bil­ly’s Bible Bonkers. But he has a, he has a whis­tle on his ss’s.

[00:02:17] Cameron: Baby Bil­ly Bible Bonkers.

[00:02:20] Tony: Well, that’s got to be 

[00:02:20] Tony: the name of this episode, has­n’t it? 

[00:02:24] Cameron: and his favorite say­ing is, Come on now, come on now. We’ve been doing that around the house for the last cou­ple of weeks. Even got Fox doing it now. Oh, come on now, come on now.

[00:02:34] Cameron: Any­way, 

[00:02:34] Tony: not your Twig­gy For­rest imper­son­ation, is it? Come on now.

[00:02:38] Cameron: come on

[00:02:38] Tony: good. all good.

[00:02:40] Cameron: we’ll get to FMG News. Uh, mar­ket, uh, down today by about half a per­cent. Uh, it did­n’t have a too bad a week last week, recov­ered on Mon­day from Fri­day’s down day.

[00:02:51] Cameron: But, um, I want­ed to talk about com­mod­i­ty updates. When I did the buy list yes­ter­day, Tony, I decid­ed there was a lot of. Changes in the Com­modi­ties, I [00:03:00] got Crude Oil as a buy, Cop­per as a buy, Alu­mini­um as a buy, Man­ganese as a buy, Steel as a buy, LNG as a buy, Lithi­um as a sell, So I had to get rid of the last cou­ple of parcels of PLS that we did­n’t have to rule one a week ago.

[00:03:16] Cameron: Um, Plat­inum 

[00:03:16] Tony: So 

[00:03:16] Cameron: a Josephine.

[00:03:18] Tony: I looked at that, because I still have my PLS. I must have a low­er Rule 1. And it was close to a sell, but it was­n’t a sell today. oh sor­ry, 

[00:03:27] Cameron: right? So, Yeah, 

[00:03:28] Tony: yeah, but I think the Sep­tem­ber fig­ure is the month to date fig­ure,

[00:03:31] Cameron: right. Okay. Yeah. Well, I’ve 

[00:03:34] Tony: the graph, but if you look at the gap between months, it’s big­ger than in Sep­tem­ber. 

[00:03:38] Cameron: Yeah. Well, it’s just on its sell line and, you know, if any­thing, I think. Any­way, good enough for me. Screw 

[00:03:46] Cameron: lithi­um. you know…

[00:03:47] Tony: Ha 

[00:03:47] Tony: ha ha. 

[00:03:48] Cameron: What has lithi­um ever done for 

[00:03:49] Cameron: any­body? Any­way, I sold PLS yes­ter­day.  

[00:03:52] Tony: OK, well, I prob­a­bly will this week, but I’ll work it. 

[00:03:54] Cameron: I guess the more inter­est­ing part of that for me is that crude oil… LNG is [00:04:00] 

[00:04:01] Cameron: a buy, a 

[00:04:01] Cameron: lot of stocks, well not a lot, but a cou­ple of stocks on our

[00:04:04] Cameron: buy list that are 

[00:04:05] Cameron: in crude oil and 

[00:04:06] Cameron: LNG.

[00:04:07] Cameron: So they’re 

[00:04:08] Cameron: back 

[00:04:08] Cameron: on the radar for us. I don’t know if there’s any cop­per 

[00:04:12] Cameron: stocks 

[00:04:13] Cameron: these days. Um, but, uh, any­way. 

[00:04:16] Tony: South 32, from mem­o­ry 

[00:04:17] Tony: maybe? and a lot of the gold stocks are 

[00:04:21] Tony: some­times half gold, half cop­per, or 

[00:04:22] Tony: par­tial­ly cop­per. We’ve had some of those. 

[00:04:24] Tony: before.

[00:04:26] Cameron: Well, yeah, they’re not on our buy list at the moment though, I’m just…

[00:04:30] Tony: Sam­phire was the big one.

[00:04:31] Cameron: yeah, it’s not show­ing up either, at the moment. 

[00:04:34] Cameron: Any­who, mov­ing right along. 

[00:04:38] Cameron: WSI, 

[00:04:39] Cameron: Tony. Wow. Um, you know, I did my, um, week­ly webi­nar for some of the new sub­scribers last week. And, you know, as I, I talk about my 

[00:04:49] Cameron: process for 

[00:04:51] Cameron: pro­cess­ing my dai­ly alerts and how I 

[00:04:55] Cameron: nor­mal­ly check them first thing in the morn­ing, and then I wait until about 10, 11, and then I [00:05:00] sell.

[00:05:00] Cameron: And then I don’t wor­ry about it for the rest of the day. Cause I said things,

[00:05:02] Cameron: things 

[00:05:03] Cameron: very rarely 

[00:05:04] Cameron: drop quick­ly. Well, Wes­t­ar Indus­tries 

[00:05:07] Cameron: decid­ed to 

[00:05:07] Cameron: prove me wrong on that last 

[00:05:09] Cameron: week. 

[00:05:11] Cameron: They dropped their pre­lim­i­nary final report on the 31st of August, which showed 

[00:05:17] Cameron: a 60% prof­it drop. Their shares dropped 

[00:05:21] Cameron: 32% 

[00:05:23] Cameron: on Fri­day. But, uh, I kind of love this. In drilling through their pre­lim­i­nary final report, they say the drop was 

[00:05:31] Cameron: large­ly attrib­ut­able to close out set­tle­ments on two projects com­bined with sig­nif­i­cant sup­pli­er and sub­con­trac­tor cost 

[00:05:38] Cameron: infla­tion and skilled labor pres­sures on long term con­struc­tion projects, and then I love this line.

[00:05:44] Cameron: Despite the prof­itabil­i­ty on ini­tial 

[00:05:47] Cameron: face 

[00:05:47] Cameron: val­ue not poten­tial­ly meet­ing typ­i­cal mar­ket 

[00:05:50] Cameron: expec­ta­tions Blah, blah, blah, blah, blah. Like, 

[00:05:54] Cameron: real­ly? You think? Yeah, poten­tial­ly 

[00:05:58] Cameron: not mean­ing?

[00:05:59] Cameron: Real­ly?[00:06:00] 

[00:06:00] Tony: Yeah, I’m not famil­iar with the stock. It’s a real­ly, it’s a real­ly small one. So like with such a small ADT, they can bounce around like that. 

[00:06:07] Tony: It’s about 14, 000, Stock 

[00:06:09] Tony: Doc­tor 

[00:06:09] Tony: say­ing, 

[00:06:10] Cameron: I think a few peo­ple in, uh,  our var­i­ous forums point­ed that out too, that they sort of have a his­to­ry of pret­ty wild swings. W ss I, any­way, 32%. ss I, any­way, 32%. So I had to ax that that was, uh, fun. fun. But then I’m going back, look­ing over the last, yeah, look, half the last cou­ple of years, like they had a big drop back in, uh, let’s see, may of 2022. They dropped quite a bit. 

[00:06:37] Tony:  com­ing up to end of finan­cial 

[00:06:38] Tony: year. Yeah, 

[00:06:40] Cameron: same thing in June of 2021. No, They did­n’t have a big drop, but they had come down a lot, and then they spiked in August. So I guess their finan­cials were good, that year. Any­way, there you go. What else if I… Had this week, um, Oh, well, speak­ing of LNG just becom­ing a buy, I saw this inter­est­ing [00:07:00] arti­cle.

[00:07:00] Cameron: One of the newslet­ters I sub­scribe to, Inter­na­tion­al Intrigue, had this sto­ry about, uh, Two mas­sive Chevron liq­ue­fied nat­ur­al gas projects in West­ern West­ern Aus­tralia planned to take esca­lat­ing strike action from Thurs­day the 7th of Sep­tem­ber after weeks of failed nego­ti­a­tions on pay and con­di­tions. The plants, Wheat­stone and Gor­gon, aren’t your ordi­nary LNG facil­i­ties. 

[00:07:27] Cameron: They pro­duce 5–7% of the

[00:07:29] Cameron: world’s 

[00:07:30] Cameron: total LNG 

[00:07:31] Cameron: sup­ply

[00:07:33] Cameron: with 500 employ­ees. So gas prices have whip­sawed over recent 

[00:07:38] Cameron: weeks as mar­kets track each round of union nego­ti­a­tions in Aus­tralia. Why? 

[00:07:43] Cameron: Chevron sells its Aus­tralian LNG 

[00:07:46] Cameron: to Asia, 47% to Japan alone. And dis­rup­tions can force those buy­ers into a bid­ding war with Europe for replace­ment car­goes com­ing out 

[00:07:54] Cameron: of Qatar and the US. LNG mar­kets were already pret­ty 

[00:07:59] Cameron: [00:08:00] com­plex. Around 16% of the EU’s LNG 

[00:08:02] Cameron: still comes from Rus­sia. Some util­i­ties switch back to coal or oil when LNG gets too pricey. Places like India 

[00:08:09] Cameron: just buy less LNG when prices 

[00:08:11] Cameron: spike, and the 

[00:08:11] Cameron: EU has now hit its LNG stor­age tar­gets 

[00:08:15] Cameron: ear­ly for 

[00:08:15] Cameron: win­ter. So the strike action in Aus­tralia has­n’t start­ed yet, could 

[00:08:19] Cameron: still be 

[00:08:20] Cameron: avert­ed, and 

[00:08:20] Cameron: if it starts, will start small, but that’s still enough to trig­ger 

[00:08:25] Cameron: glob­al jit­ters. I thought that was an inter­est­ing break­down on LNG stuff

[00:08:30] Cameron: that I was­n’t

[00:08:31] Cameron: real­ly aware of. 

[00:08:32] Tony: I was just going to say Gor­gon and Wheat­stone were being devel­oped when I was at Shell. They’re huge.

[00:08:36] Cameron: Right.

[00:08:37] Tony: Um, they, and they start­ed off as JV part­ner­ships between all the oil com­pa­nies and Wood­side. Um, and I think Chevron’s been buy­ing out the oth­er part­ners over time. 

[00:08:46] Cameron: Well, this, this arti­cle also says the same 

[00:08:49] Cameron: union just reached a deal to avert anoth­er LNG 

[00:08:51] Cameron: strike near­by. Its ear­li­er action at an Aus­tralian shell plant

[00:08:55] Cameron: cost 1 bil­lion in lost exports. Japan has [00:09:00] ques­tioned Aus­trali­a’s reli­a­bil­i­ty as an ener­gy sup­pli­er. Its Prime Min­is­ter vis­it­ed the 

[00:09:04] Cameron: Mid­dle East in July to firm up 

[00:09:06] Cameron: sup­plies. 

[00:09:08] Cameron: So, uh, there 

[00:09:10] Cameron: you 

[00:09:10] Tony: yeah, and if, you were, if you were Qatar, I’d prob­a­bly be pay­ing the union organ­is­ers to agi­tate for a strike too in, in Aus­tralia, 

[00:09:20] Cameron: Inter­est­ing. alleged­ly. 

[00:09:23] Tony: I’m jok­ing. Um, yeah, alleged­ly. But, but yeah, I mean, it’s, it’s this whole idea of sov­er­eign risk again, isn’t it? I mean, if, if we can’t guar­an­tee con­tin­u­ous sup­ply for what­ev­er rea­son, whether it’s, strikes or cyclones or gov­ern­ment puts new tax­es or wants the LNG to go into Aus­tralian domes­ti­cal­ly first, it’s it comes back to sov­er­eign risk.

[00:09:44] Tony: And it’s, it’s a kind of a fine line that Even coun­tries like Aus­tralia work, uh, walk, because if, like, like, LNG is so impor­tant to keep the pow­er on that, yeah, Tokyo is not going to muck around, they’re just going to go straight up and find oth­er sup­pli­ers, and even if [00:10:00] we do

[00:10:00] Tony: retain the con­tracts, they’ll always have back­ups in place, and they won’t want to give 

[00:10:03] Tony: us all the busi­ness going for­ward, so it’s an inter­est­ing sit­u­a­tion.

[00:10:07] Cameron: Is it sov­er­eign risk though? When, you know, work­ers are strik­ing at a 

[00:10:12] Cameron: plant, how’s that tie into the coun­try. itself being risky? 

[00:10:16] Cameron: Is it just the labor laws in the coun­try that make it 

[00:10:19] Cameron: a sov­er­eign risk? 

[00:10:20] Tony: yeah, yeah, yeah, I mean, sov­er­eign risk? 

[00:10:23] Tony: nor­mal­ly applies to, you know, action at the gov­ern­ment lev­el but I guess it real­ly applies to the whole coun­try. And it’s infra­struc­ture and it’s peo­ple. Yeah. So I put it this way, there’d be less sov­er­eign risk if you’re buy­ing the gas from Chi­na. 

[00:10:38] Tony: I can’t imag­ine a strike being let to go too long in a, in a author­i­tar­i­an region. 

[00:10:46] Cameron: No, not big on strikes in 

[00:10:48] Cameron: Chi­na.

[00:10:49] Tony: No. Yeah. 

[00:10:50] Cameron: to, 

[00:10:50] Cameron: because it’s a com­mu­nist 

[00:10:51] Tony: Come in. Come in. We 

[00:10:53] Cameron: Every­one is tak­en care 

[00:10:54] Cameron: of 

[00:10:54] Tony: We nego­ti­ate with you 

[00:10:55] Cameron: Every­one’s looked after They don’t need to, 

[00:10:57] Cameron: strike.

[00:10:58] Tony: Right.

[00:10:58] Cameron: Alright, let’s talk about 

[00:10:59] Tony: [00:11:00] Every­one’s looked, every­one’s looked after in Aus­tralia, by the 

[00:11:02] Tony: way, too.

[00:11:04] Cameron: Well, 

[00:11:05] Tony: I’d love to be on the 

[00:11:06] Tony: pay pack­et that the Gor­gon work­ers are on. I imag­ine 

[00:11:08] Tony: it’s quite high. 

[00:11:10] Cameron: you would­n’t get out of bed for their pay pack­et, I’m sure, Tony, but 

[00:11:13] Tony: But I mean, you know, sol­i­dar­i­ty with the Gor­gon 

[00:11:15] Cameron: yeah, I’m all for 

[00:11:16] Tony: Who knows what they’re being paid. 

[00:11:18] Tony: Yeah, 

[00:11:18] Cameron: Shar­ing, shar­ing of the 

[00:11:20] Cameron: prof­its, down to the work­ers. I’ve just been doing actu­al­ly, on my Cold War show, we’ve just been doing we’re build­ing up to Oper­a­tion Ajax, 1953, when the CIA over­threw the gov­ern­ment of Iran, because they were going to nation­al­ize their oil. And the British, Churchill con­vinced the new­ly found­ed CIA to go and over­throw the gov­ern­ment of Iran for him.

[00:11:44] Cameron: But, in order to build up for that, I’ve been doing sort of the his­to­ry of Iran in the ear­ly 20th cen­tu­ry. late 19th and ear­ly 20th cen­tu­ry, uh, look­ing at the all of the con­ces­sions that, the British and the Rus­sians were extract­ing out of the shahs at the time [00:12:00] and all of the pres­sure that those coun­tries were put on.

[00:12:02] Cameron: Of course, oil being dis­cov­ered around about 1908 just increased that through the roof. Churchill said it was like a fairy tale gift from the, from the gods for Britain to have dis­cov­ered their own source of oil. But, uh, I, I know that the con­di­tions of the work­ers in Iran work­ing on British oil 

[00:12:21] Cameron: extrac­tion and refiner­ies was just like bru­tal in the ear­ly to mid 20th cen­tu­ry. It was just, they were get­ting paid noth­ing and liv­ing in the most god awful con­di­tions. Any­way, 

[00:12:36] Tony: Did Churchill set those con­di­tions, 

[00:12:39] Cameron: well, uh, yes, I guess The British 

[00:12:42] Cameron: gov­ern­ment The British gov­ern­ment, uh, con­trolled 

[00:12:45] Cameron: APOC, the Anglo Per­sian Oil Com­pa­ny, which became, I think, BP, even­tu­al­ly, but, uh, yeah. 

[00:12:53] Cameron: So, yes, they were the ones, they were, they were pay­ing them, so they prob­a­bly did set those con­di­tions. Any­hoo! 

[00:12:58] Tony: And did the Mid­dle East [00:13:00] play­ers go, Oh, that’s, that’s accept­able con­di­tions, is it? So can I think some of those con­tin­ue until today in some 

[00:13:06] Tony: of those

[00:13:07] Cameron: No, they, I think the, the, the Ira­ni­ans under Mossadegh, who was the prime min­is­ter, decid­ed to nation­al­ize the, oil inter­est because Amer­i­ca had recent­ly

[00:13:17] Cameron: dis­cov­ered oil in Iraq. And I think Iraq was get­ting 50 cents on the

[00:13:21] Cameron: dol­lar for 

[00:13:22] Cameron: all of the oil that came out of Iraq in Iran was get­ting like six 

[00:13:26] Cameron: cents on the dol­lar. and, so he tried to rene­go­ti­ate. with Churchill. And Churchill 

[00:13:32] Cameron: told him where he could stick his rene­go­ti­a­tions. so he said, fine, we’ll just nation­al­ize 

[00:13:36] Cameron: the whole thing then, and you can go to hell. And so Churchill did­n’t like 

[00:13:41] Cameron: that. But did­n’t have the where­with­al after World War II 

[00:13:45] Cameron: to over­throw the coun­try by him­self.

[00:13:47] Cameron: So

[00:13:47] Cameron: he had to ask, uh, the 

[00:13:48] Cameron: Amer­i­cans to do it for him, which they did. 

[00:13:52] Cameron: And 

[00:13:52] Cameron: then lied about it for 50 years. 

[00:13:54] Tony: oils played such a big part in the 20th cen­tu­ry world his­to­ry. polit­i­cal­ly, uh, [00:14:00] and, uh, eco­nom­i­cal­ly. But yeah, it’s also, I mean, I, I enjoyed the book called the Sev­en Sis­ters, um, which came out in about the eight­ies, I think, on the his­to­ry of how, uh, what was the big oil com­pa­ny there pri­or to the breakup?

[00:14:10] Tony: Any­way, there was a big oil com­pa­ny that was bro­ken up into sev­en com­pet­ing oil com­pa­nies, but they pret­ty much got along, cosied up and set the 

[00:14:17] Tony: price high. Oh, it was Stan­dard Oil. You’re right. I think so.

[00:14:21] Tony: Yes. Yeah. 

[00:14:22] Tony: Yeah. 

[00:14:23] Tony: So good sto­ry. And then, you know, expand­ed out around the world, um, no rules out­side the US. Yeah.

[00:14:29] Cameron: Well, mov­ing right along, uh, last week, uh, Alex I 

[00:14:32] Cameron: think asked a ques­tion about, uh, these guys at Tick­er say­ing that they were get­ting 30 60% a year, and we, we gave some

[00:14:39] Cameron: thoughts on that. And he point­ed me. Lat­er on dur­ing the week to a quote from War­ren Buf­fett from 1999,

[00:14:48] Cameron: where War­ren said, If I

[00:14:49] Cameron: was run­ning 1, 000, 000 today, or 10, 000, 000 for that mat­ter, I’d be ful­ly invest­ed.

[00:14:55] Cameron: Any­one who says that size does not hurt invest­ment per­for­mance is sell­ing. [00:15:00] 

[00:15:00] Cameron: The high­est rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the num­bers. But I was invest­ing 

[00:15:07] Cameron: peanuts then. It’s a huge struc­tur­al advan­tage not to have a lot of mon­ey. I think I could make you 50% a year 

[00:15:14] Cameron: on 1, 000, 000.

[00:15:15] Cameron: No, I know I could. I guar­an­tee that. 

[00:15:20] Cameron: And then Char­lie, long time QAV Club mem­ber, uh, remind­ed me about Jim Simons, 

[00:15:25] Cameron: who I know you’re a 

[00:15:26] Cameron: big fan of. Uh, the guy who, did he invent 

[00:15:30] Cameron: quant? 

[00:15:31] Cameron: You read a book on him years ago, did­n’t you? 

[00:15:33] Tony: Oh, yes. Okay. Yes. Yes. Yes. Yeah. It was Simon’s. You’re right. I 

[00:15:36] Cameron: Yeah. he gave me that look like, who, what? Yeah, the 

[00:15:39] Cameron: quant guy.

[00:15:40] Tony: Yeah. yes. Yes. I know who you 

[00:15:43] Cameron: And he, uh, achieved 

[00:15:44] Cameron: 66% CAGR for 30 

[00:15:47] Cameron: years, 

[00:15:48] Cameron: appar­ent­ly. Um, the man who solved the mar­ket, which I think is the book you read. So that, you know, 

[00:15:57] Cameron: War­ren says he could earn 50% a year 

[00:15:59] Cameron: on 10 mil­lion.[00:16:00] Um, obvi­ous­ly Jim 

[00:16:01] Cameron: Simons fig­ured it out. So it can be done, or Buf­fett believes it can be done. 

[00:16:05] Cameron: Jim Simons did it with his quant stuff. So 

[00:16:09] Cameron: what 

[00:16:10] Cameron: does Buf­fett know that we don’t know that he could make 50% a year on 10 mil­lion?

[00:16:14] Tony: He’s just a bet­ter investor than I am, I think, Cam.

[00:16:17] Cameron: gonna say that ? 

[00:16:22] Tony: I ful­ly, I ful­ly, um,

[00:16:24] Tony: acknowl­edge 

[00:16:24] Tony: that. And so is Simons. I think, I’m not sure 

[00:16:28] Tony: about Simons, I mean, the 

[00:16:29] Tony: ques­tion for 

[00:16:30] Tony: both Buf­fett and 

[00:16:30] Tony: Simons is, 

[00:16:32] Tony: um, and is how 

[00:16:33] Tony: long

[00:16:33] Tony: can they do it for? So, 

[00:16:36] Tony: Buf­fet­t’s say­ing he could do it if he had up to 

[00:16:37] Tony: 10 mil­lion. Does that mean he gets the 10 

[00:16:40] Tony: mil­lion. and then

[00:16:40] Tony: sells and stays at 10 mil­lion and sells

[00:16:42] Tony: and that’s legit­i­mate? And he 

[00:16:44] Tony: gets a 50%

[00:16:45] Tony: return? That’s fine. Um, Simons, uh, Simons may still be get­ting high

[00:16:50] Tony: returns. I think he shut his fund

[00:16:51] Tony: to out­side mon­ey, um,

[00:16:52] Tony: 8 years, 7 or 8 years ago. 

[00:16:54] Tony: Uh, and…

[00:16:56] Tony: he made his

[00:16:56] Tony: mon­ey from get­ting into big data before any­body else [00:17:00] did and look­ing at things 

[00:17:02] Tony: like, um, you know, If a hur­ri­cane’s 

[00:17:04] Tony: off

[00:17:04] Tony: the coast of Flori­da, what does that 

[00:17:05] Tony: mean for 

[00:17:06] Tony: Wal­mart shares?

[00:17:07] Tony: That kind of thing. So putting togeth­er, 

[00:17:09] Tony: um, I would­n’t say non 

[00:17:10] Tony: log­i­cal, but

[00:17:11] Tony: on the sur­face, unco­or­di­nat­ed bits

[00:17:13] Tony: of data and then prof­it­ing by trad­ing the stocks based on that. Uh, that’s now a big part of what, 

[00:17:19] Tony: A lot of hedge funds do, so, um, I don’t know if you would con­tin­ue to do, 

[00:17:22] Tony: that. So, I 

[00:17:24] Tony: guess, you know, I mean, what I say, what I said last week, 

[00:17:26] Tony: which 50% per annum over a long peri­od of time sounds, 

[00:17:30] Tony: um, too high, um, to say 

[00:17:31] Tony: that it sounds too high for you and I 

[00:17:34] Tony: to get

[00:17:34] Tony: con­tin­u­ous­ly over a long peri­od of time.

[00:17:36] Tony: There’s prob­a­bly a bet­ter way of 

[00:17:37] Cameron: An hour put putting 

[00:17:39] Cameron: in an hour a week 

[00:17:40] Cameron: or a cou­ple hours a week, 

[00:17:42] Tony: Yes, that’s right. And the oth­er thing too, is if, I mean, if I can do it, I 

[00:17:47] Tony: guess any­one can do it, but, um, you do have to, they will 

[00:17:49] Tony: have to work. A lot hard­er than what I 

[00:17:51] Tony: work and, 

[00:17:53] Tony: uh, and, um, I’m, you know,

[00:17:54] Tony: like Simon, sor­ry, you know, invest­ed heav­i­ly in

[00:17:58] Tony: data servers and hir­ing [00:18:00] PhDs and all that kind

[00:18:01] Tony: of stuff.

[00:18:01] Tony: So it was a big busi­ness for him real­ly in the end. But if we want access to those peo­ple, we’re going to pay a real­ly high price for it. So 

[00:18:07] Tony: those num­bers would be before fees.

[00:18:10] Tony: I know Buf­fett was charg­ing 220 back when he was a, 

[00:18:13] Tony: um, 

[00:18:13] Tony: an unlist­ed investor, invest­ment 

[00:18:15] Tony: man­age­ment, which means that he took 2% to run the thing and then 20% of any prof­it.

[00:18:19] Tony: So 50% drops 

[00:18:22] Tony: a lot. Um, but it’s still a great return. So 

[00:18:25] Tony: I’m not going to say you begrudg­ing from that. And you can, you can see it. It’s in there. If you go and look at the Berk­shire Hath­away Annu­al reports, he always puts 

[00:18:33] Tony: the long term per annum returns for Berk­shire Hath­away. That did­n’t start in the 50s, it start­ed in the 60s, but the first 10 years you’re often 

[00:18:42] Tony: see­ing 100% return, 80% 

[00:18:44] Tony: return, 70% return.

[00:18:46] Tony: It’s quite large and also quite volatile to be, to be fair. Oh

[00:18:50] Cameron: Well, yeah. And again, I encour­age any­one who 

[00:18:53] Cameron: thinks they can get those returns to 

[00:18:55] Cameron: go out and do it, and then come and tell us 

[00:18:57] Cameron: how you did it. 

[00:18:59] Tony: it, 

[00:18:59] Cameron: [00:19:00] Yeah. 

[00:19:00] Cameron: Come back and share the 

[00:19:02] Cameron: share the wis­dom with us. 

[00:19:04] Cameron: Uh, but again, I, I. 

[00:19:05] Tony: And don’t say cryp­to. 

[00:19:08] Cameron: Hey, I, I was just look­ing at Bit­coin, man. 

[00:19:10] Cameron: Bit­coin’s up near­ly like 80% since the 

[00:19:13] Cameron: begin­ning of the year. 

[00:19:14] Cameron: Mean it’s still down 80% 

[00:19:16] Cameron: from where it was two years ago. But ‚you know,

[00:19:20] Cameron: you wan­na ride the light­ning? 

[00:19:21] Cameron: Um, no, but I get the, the amount of time and effort that you put in, I think is the

[00:19:24] Cameron: key thing, like, yeah.

[00:19:26] Cameron: And if you wan­na work 

[00:19:27] Cameron: eight hours a day, 18 hours a day on invest­ing, you prob­a­bly should get bet­ter returns than some­body who puts in an hour a day on aver­age, as you do. 

[00:19:37] Tony: Mm hmm. Cor­rect. Yeah. 

[00:19:39] Cameron: and that’s the trade 

[00:19:40] Tony: Yeah. And that’s a big part of it. I 

[00:19:41] Tony: mean, yeah, no, exact­ly. I’m not, to be hon­est, I’m not 

[00:19:45] Tony: sure I

[00:19:45] Tony: would get um, you know, uh, it’s almost like dimin­ish­ing returns. The more you put in, you don’t nec­es­sar­i­ly dou­ble. If I put the dou­ble of the outs in, I don’t know if I get 

[00:19:52] Tony: dou­ble the returns.

[00:19:54] Tony: Real­ly, I might, but um, you can work a long time with invest­ing and not

[00:19:57] Tony: improve your returns. Mm hmm.

[00:19:59] Cameron: [00:20:00] Yeah, but like, you know, we’ve had guys on the show that run funds that go out and meet with man­ag­ing direc­tors of 

[00:20:08] Cameron: firms and they get to see the num­bers and they pick it 

[00:20:11] Cameron: apart, 

[00:20:12] Cameron: they under­stand the sec­tor and they under­stand the, you know, the, the, you know, the, the com­pe­ti­tion and they get down into the eco­nom­ics of the busi­ness and they know who’s who in the zoo.

[00:20:21] Cameron: We don’t real­ly do that. 

[00:20:23] Tony: Yeah, I think, no, we don’t plan to do that, and I don’t, I’m not 

[00:20:26] Tony: even sure 

[00:20:27] Tony: if we did that it would make a big dif­fer­ence. Buf­fett

[00:20:29] Tony: does­n’t do that. He quite 

[00:20:30] Tony: famous­ly lives in Oma­ha. To avoid doing that, does­n’t want to talk to the peo­ple

[00:20:34] Tony: run­ning 

[00:20:34] Tony: the 

[00:20:34] Tony: busi­ness. Yeah, or to Wall Street, I could. Ana­lyst nut? 

[00:20:38] Cameron: Well, no, he did. It 

[00:20:39] Cameron: is in the book about him

[00:20:40] Cameron: Berk­shire Hath­away, he 

[00:20:42] Cameron: went and 

[00:20:42] Cameron: met with the guy that owned 

[00:20:43] Cameron: Berk­shire Hath­away and nego­ti­at­ed a deal with him before he took

[00:20:48] Cameron: it over, right? 

[00:20:50] Tony: Well, the full sto­ry is, he bought a stake in Berk­shire Hath­away, I don’t know if he actu­al­ly talked to them before­hand, uh, got on the board, and then was upset with the way the com­pa­ny

[00:20:59] Tony: was 

[00:20:59] Tony: being [00:21:00] run, and then decid­ed to buy them 

[00:21:02] Tony: out, made 

[00:21:02] Tony: an offer,

[00:21:03] Tony: I think the chair­man had agreed a par­tic­u­lar 

[00:21:05] Tony: offer, 

[00:21:06] Tony: and then reneged,

[00:21:07] Tony: and they’re 

[00:21:08] Tony: only talk­ing 

[00:21:08] Tony: about… Half a cent or some­thing 

[00:21:11] Tony: dif­fer­ence in the price and Buf­fett said 

[00:21:12] Tony: stuff you and went out and 

[00:21:13] Tony: launched a 

[00:21:13] Tony: takeover and bought it all. So, yeah, I don’t think, I don’t know if you would 

[00:21:17] Tony: have 

[00:21:17] Tony: met with

[00:21:18] Tony: any­one at Berk­shire Hath­away before, before buy­ing his

[00:21:21] Cameron: Well, I just remem­ber in his, the ear­ly part of his invest­ing career, when no one else was doing 

[00:21:27] Cameron: it, 

[00:21:27] Cameron: real­ly, no one else, out­side of you know, Ben Gra­ham, was real­ly, and he 

[00:21:34] Cameron: was­n’t even real­ly doing it the way Buf­fett 

[00:21:36] Cameron: was doing it, he was more of a 

[00:21:38] Cameron: pro­fes­so­r­i­al

[00:21:38] Cameron: type, but Buf­fett was 

[00:21:40] Cameron: say­ing that it was amaz­ing to him that if he 

[00:21:41] Cameron: went and

[00:21:42] Cameron: knocked on the door, of man­ag­ing direc­tors of 

[00:21:45] Cameron: these com­pa­nies and said, Hey, I 

[00:21:46] Cameron: want to talk to you

[00:21:47] Cameron: about your com­pa­ny. Cause I’m 

[00:21:48] Cameron: think­ing about invest­ing into that. I’m like, 

[00:21:49] Cameron: what? 

[00:21:50] Cameron: Uh, sure. Come

[00:21:50] Cameron: in. He’s this young guy who want­ed to know how 

[00:21:53] Cameron: their

[00:21:53] Cameron: busi­ness works, you know? 

[00:21:57] Tony: It hap­pened in a cou­ple of cas­es and I think it was Geico was [00:22:00] the famous one where on a Sat­ur­day after­noon he want­ed to learn about insur­ance. I end up on the door of the Geico’s build­ing and the CEO was the only per­son work­ing who answered and spent the after­noon telling him about insur­ance.

[00:22:10] Tony: Um, but I don’t know that Buf­fett did that. Um, and there were plen­ty of funds around at that time. I mean, you know

[00:22:16] Tony: Wall Street was awash with funds, which is one of the rea­sons why it crashed in 29 so bad­ly. Um, so there would have been heaps of ana­lysts maybe with com­pa­nies around 

[00:22:24] Tony: that 

[00:22:24] Tony: time. 

[00:22:24] Cameron: okay. 

[00:22:25] Tony: Any­way, it’s, it’s prob­a­bly a moot point. Yes, you could, you 

[00:22:29] Tony: could poten­tial­ly 

[00:22:30] Tony: meet with, um, com­pa­nies like

[00:22:32] Tony: Jeff Wil­son does at WAM, um, always on the road, 

[00:22:35] Tony: but his returns aren’t 50% per 

[00:22:38] Tony: annum. So,

[00:22:39] Tony: um, I’m not sure that’s a nec­es­sar­i­ly the thing to do. Um, it’s more like­ly, 

[00:22:43] Tony: I think the, the, 

[00:22:43] Tony: more the, 

[00:22:43] Tony: if, if you put a gun to 

[00:22:45] Tony: my 

[00:22:45] Tony: head 

[00:22:45] Tony: and say, how, how would you get high­er returns? I’d say 

[00:22:48] Tony: Con­cen­trate your 

[00:22:49] Tony: bets. 

[00:22:50] Tony: You know, find a, find some­thing you real­ly, real­ly, real­ly like and put every­thing into it, 

[00:22:56] Tony: you know?

[00:22:57] Tony: yeah, 

[00:22:57] Tony: um, And then ride the 

[00:22:58] Tony: volatil­i­ty. [00:23:00] 

[00:23:00] Tony: And that’s, that was going to lead, so that was going to lead me to 

[00:23:04] Tony: an arti­cle that was in today’s LiveWire about this very, very top­ic where, um, a com­pa­ny, I think it was called Alpha Archi­tect from the States did research on, uh, just try­ing to find my notes, um, Uh, the returns for, for com­pa­nies across the deciles, um, every five years.

[00:23:20] Tony: So by that I mean they took the, the five year returns of com­pa­nies list­ed in the us, 

[00:23:25] Tony: ranked them from top to bot­tom in terms of the biggest cagr, and then broke them up into 10% bands. So the high­est 10%, 

[00:23:32] Tony: uh, and their analy­sis went back to 1927. The high­est 

[00:23:36] Tony: 10% achieved if you could pick the 

[00:23:38] Tony: high­est 10%.

[00:23:39] Tony: At the start of the five year peri­od, you would get 30% returns CAGR since 1927. So even if you are invest­ing with

[00:23:48] Tony: hind­sight and you knew at the start of every five year peri­od what the best per­form­ing stocks were, the top 10% of stocks, you’re only get­ting 30%. 

[00:23:56] Tony: and and part of that rea­son is

[00:23:58] Tony: because of the [00:24:00] of the volatil­i­ty. 

[00:24:01] Tony: So There’s lots of big crash­es even in the top 10% of stocks along the way and then they recov­er. 

[00:24:07] Tony: So, to me, um, the thing that, that, that I pulled out of that quote you gave me was that Buf­fett said in there some­where about, um, he’s always ful­ly invest­ed. If I was run­ning a mil­lion dol­lars today or 10 mil­lion dol­lars today for that mat­ter, I’d be ful­ly invest­ed.

[00:24:23] Tony: So I think that’s the key point is, you’re going to get volatil­i­ty, but don’t try and time the mar­ket and sell out when it’s low and buy in when it’s high. Yeah, and I also, these peo­ple, Alpha Archi­tect also point­ed out that Even if you’d bought Ama­zon when it list­ed, which is prob­a­bly one of the best per­form­ing stocks in the U.

[00:24:41] Tony: S. Uh, it’s achieved 33% CAGR. Over 

[00:24:44] Tony: time. So to get as high as 50, you’ve got 

[00:24:48] Tony: to be doing some­thing more than just buy­ing it, find­ing a good com­pa­ny and, um, and invest­ing in it. 

[00:24:52] Cameron: Well, I think the key take­away then from Buf­fet­t’s quote is that he’s full of shit. And speak­ing of full of shit, Fortes­cue 

[00:24:57] Cameron: medals.

[00:24:59] Tony: Well, I don’t think Buf­fet­t’s [00:25:00] full of shit. I think it’s an inter­est­ing, inter­est­ing dis­cus­sion, inter­est­ing com­men­tary on 

[00:25:03] Cameron: Yeah. But that’s not as good a segue into fortes­cue met­als. Tony, 

[00:25:06] Cameron: I was , I was try­ing to slide 

[00:25:08] Tony: The big, the big vision. ,

[00:25:10] Cameron: ‚the big vision . So we talked last week about how 

[00:25:15] Cameron: Fiona Hicks, the c e o of Fortes­cue Met­als resigned slash was pushed. Um, a cou­ple of 

[00:25:21] Cameron: days lat­er, their C F O. 

[00:25:23] Cameron: Resigned, slashed, was pushed, and then, this is Chris­tine Mor­ris, and then, a day or two after that, Guy DeBell, 

[00:25:35] Cameron: who was the for­mer cen­tral banker, quit the board 

[00:25:39] Cameron: of Fortes­cue Future, Indus­try.

[00:25:42] Cameron: So three senior peo­ple in the space of a week left 

[00:25:47] Cameron: Fortes­cue. 

[00:25:48] Cameron: Um, con­spir­a­cy the­o­ries aside 

[00:25:50] Cameron: about Andrew For­rest’s big vision, uh, what’s red­der than a red flag, Tony? We said last week it was a red flag. What’s red­der than a red flag? Like a nuclear bomb [00:26:00] going off? 

[00:26:00] Cameron: Is that 

[00:26:01] Cameron: going on? 

[00:26:03] Tony: Yeah, I mean, they’ve had, they’ve had rea­sons behind each of the depar­tures, which you’d expect 

[00:26:07] Tony: from a big com­pa­ny, but prob­a­bly got a, an investor rela­tions team think­ing of things to say when some­one leaves. 

[00:26:15] Cameron: Well, there was an inter­est­ing arti­cle in the 

[00:26:17] Cameron: Finan­cial 

[00:26:17] Tony: yeah, it looks, it’s a big red flag. 

[00:26:20] Cameron: There was an 

[00:26:20] Cameron: inter­est­ing arti­cle in the 

[00:26:21] Cameron: Finan­cial Review by Peter Kerr, Resources 

[00:26:25] Cameron: Reporter, on the 1st of 

[00:26:26] Cameron: Sep­tem­ber. He said Fortes­cue Met­als 

[00:26:29] Cameron: investors are split over whether Andrew 

[00:26:31] Cameron: For­rest is dam­ag­ing its cul­ture with a for­mer major share­hold­er sell­ing down

[00:26:35] Cameron: his stake. over fears the com­pa­ny’s chair­man might wreck 

[00:26:39] Cameron: the iron ore major. But man­u­fac­tur­ing mil­lion­aire Peter

[00:26:43] Cameron: White’s sug­ges­tion that Dr. For­rest should get the 

[00:26:45] Cameron: hell out of Fortes­cue’s dai­ly

[00:26:47] Cameron: oper­a­tions came as oth­er large investors said Dr. For­rest

[00:26:51] Cameron: deserved more respect. It goes on to quote from, Tuma­zos.[00:27:00] 

[00:27:02] Cameron: said Fortes­cue

[00:27:03] Cameron: had for­mi­da­ble employ­ees and the com­pa­ny’s core is very strong. Mr. Tuma­zos, an

[00:27:08] Cameron: investor in. the Unit­ed States, is in

[00:27:10] Cameron: the Greek islands as he 

[00:27:12] Cameron: awaits pay­ment of almost 78, 000 in final div­i­dends from

[00:27:16] Cameron: Fortes­cue. Does it mat­ter if Mick­ey Mouse or Don­ald Duck are CEO or 

[00:27:20] Cameron: chair­man? he 

[00:27:21] Cameron: asked the 

[00:27:21] Cameron: AFR Week­end, It amazes 

[00:27:24] Cameron: me how lit­tle Andrew is appre­ci­at­ed or respect­ed for cre­at­ing so much

[00:27:27] Cameron: wealth and employ­ment. These atti­tudes focus on ridi­cul­ing 

[00:27:31] Cameron: Fortes­cue’s ener­gy busi­ness­es, which is either too late to ridicule, where it is too late to ridicule its iron ore suc­cess­es. Through­out Fortes­cue’s his­to­ry, I’ve 

[00:27:39] Cameron: found that the Aus­tralian sell side ana­lysts and finan­cial press are very quick

[00:27:44] Cameron: to piss in their face.

[00:27:46] Cameron: Over the past decade, I have con­sis­tent­ly rec­om­mend­ed and owned Fortes­cue shares. Mr. Tuma­zos said, adding that he was not deterred by the exit of Ms. Hicks, who had been in the top job for six months, and Ms. Mor­ris, who was Chief Finan­cial [00:28:00] Offi­cer for less than two months. Some­times in my own office, we had to make a hire twice to find the right per­son, or we deter­mined after a short time that some paper cre­den­tials were mean­ing­less, he

[00:28:10] Cameron: said.

[00:28:11] Cameron: In the case of Fiona leav­ing after sev­en months, she had not been there long enough to make a con­tri­bu­tion or ful­ly learn the busi­ness. At the out­set, I won­dered if a career at Wood­side, which is 

[00:28:21] Cameron: BHP like, was an ide­al prep for Fortes­cue, which 

[00:28:24] Cameron: has a less 

[00:28:25] Cameron: bureau­crat­ic or less tra­di­tion­al cul­ture. The depar­ture of a 20 year vet­er­an 

[00:28:30] Cameron: might con­cern me more. I know you’ve been a big fan of Twig­gy For­rest over the years. Tony, what do you think about Mr

[00:28:37] Cameron: Tuma­zos’s com­ments? 

[00:28:39] Tony: did­n’t Eliz­a­beth Gaines leave too? Recent­ly, 

[00:28:42] Cameron: Yes. Yeah, 

[00:28:44] Tony: I think she left. Yes. Well, she’s been there for 20 years or some­thing 

[00:28:47] Tony: for a long time. So, um, Oh, look, I, I, 

[00:28:48] Tony: um, I under­stand both sides of the argu­ment. Um, to me, it’s a red 

[00:28:51] Tony: flag when staff leave, espe­cial­ly

[00:28:53] Tony: staff from. who have 

[00:28:54] Tony: good career records in big insti­tu­tions and big com­pa­nies.

[00:28:58] Tony: Uh, the flip side of that coin is you [00:29:00] could say that it’s a, it’s still a fam­i­ly oper­a­tion and the cul­ture’s fast and loose, and

[00:29:05] Tony: it’s all about being entre­pre­neur­ial.

[00:29:07] Tony: So I get both sides of that, but. It does appear like

[00:29:12] Tony: if you’re invest­ing in Fortes­cue, now you’re catch­ing a tiger by the tail and hold­ing on.

[00:29:16] Tony: So, um, but, you know, I’ve, I think the, was

[00:29:19] Tony: it Jim Thomas, if I did­n’t catch his name, sor­ry, but ana­lyst who said he

[00:29:24] Tony: was hap­py to stay in, or the investor who was hap­py to stay in. He makes a good point. Like I’ve been hear­ing about Trudy For­rest all the

[00:29:31] Tony: way through my invest­ing career, start­ing with the time he had a nick­el.

[00:29:37] Tony: Mine, and Pro­cess­ing Plant that

[00:29:39] Tony: went broke and cost a lot of peo­ple a lot of mon­ey. And, uh, and I was sur­prised to see that he was able to raise mon­ey again for Fortes­cue and sell that vision. And there’s been plen­ty of… bad press along the way and plen­ty of left turns and plen­ty of sur­prise end­ings and things when he you know could­n’t get the it’s almost like a [00:30:00] cliffhang­er every week it’s like 

[00:30:01] Tony: if if if Fortes­cue can get 

[00:30:03] Tony: access to the

[00:30:04] Tony: rail­way the rail lines oper­at­ed by BHP and Rio that’ll be the mak­ing of the 

[00:30:08] Tony: com­pa­ny next week Rio and BHP 

[00:30:11] Tony: refuse to let Fortes­cue use their their 

[00:30:14] Tony: rail track Twig­gy takes them to the

[00:30:15] Tony: courts um could Twig­gy los­es the week after

[00:30:19] Tony: you know week after that Twig­gy Rais­es mon­ey to build his own

[00:30:24] Tony: 500km rail­way to the port.

[00:30:26] Tony: Um, Twig­gy can’t get port access to offload his iron ore, you know, it just goes on and 

[00:30:30] Tony: on and on. But he always breaks through and it’s,

[00:30:32] Cameron: He’s, he’s, he’s, he’s the Chi­na of Aus­tralia, is what he is. 

[00:30:35] Cameron: We’re talk­ing about this, you know, for 15 years, there’s always these neg­a­tive sto­ries about Chi­na’s econ­o­my 

[00:30:39] Cameron: and how it’s, it’s falling over. 

[00:30:42] Tony: Yeah. 

[00:30:43] Cameron: Aus­trali­a’s Chi­na. John Tuma­zos, by 

[00:30:46] Cameron: the

[00:30:46] Cameron: way, 

[00:30:46] Tony: So, 

[00:30:47] Cameron: John Tuma­zos, yeah, you know he’s, um, inde­pen­dent because his com­pa­ny is called Very Inde­pen­dent Research, LLC. 

[00:30:55] Cameron: So you know! 

[00:30:56] Tony: and the fact that he was wait­ing for, what was it, the He was 

[00:30:59] Tony: wait­ing for a 70, [00:31:00] 000 div­i­dend, so he’s not real­ly a big fund man­ag­er invest­ed in Fortes­cue, but, um, any­way, yeah.

[00:31:07] Cameron: Any­way, 

[00:31:08] Tony: Um, so, yeah, I think it’s a red flag. I 

[00:31:10] Tony: think it’s a red flag because, um, even 

[00:31:12] Tony: if Put­ney’s 

[00:31:14] Tony: right, 

[00:31:14] Tony: and peo­ple like, uh, Ms. 

[00:31:15] Tony: Hicks, who came out of Wood­side, was a bad fit for the cul­ture, 

[00:31:19] Tony: um, 

[00:31:19] Tony: I would have thought the Wood­side cul­ture 

[00:31:20] Tony: was pret­ty good, and they knew how to get shit done 

[00:31:23] Tony: in a big com­pa­ny, so, um, yeah, 

[00:31:25] Tony: it’s 

[00:31:26] Tony: it’s always the prob­lem with own­er 

[00:31:28] Tony: founder com­pa­nies, I mean, they, they, they 

[00:31:30] Tony: keep their hands in, 

[00:31:30] Tony: they move 

[00:31:31] Tony: entre­pre­neuri­al­ly, uh, but then what hap­pens? They’re 

[00:31:34] Tony: very volatile, and 

[00:31:35] Tony: what hap­pens when they 

[00:31:35] Tony: move on? Some­how the com­pa­ny’s got to sur­vive, yeah. Mm

[00:31:38] Cameron: but you know, you, you often talk about one of the most impor­tant fac­tors we look for as an own­er 

[00:31:45] Cameron: founder that’s got a lot of skin in the game. You know, 

[00:31:48] Cameron: he’s got a lot of skin in the game. 

[00:31:50] Tony: yeah. Yeah, so has his 

[00:31:51] Tony: wife, who he divorced recent­ly as well. So there’s a lot 

[00:31:53] Tony: going on in the, in the orbit of Annette Twig­gy at the moment. I’d hope he’s focused on the,

[00:31:59] Cameron: he’s, 

[00:31:59] Cameron: got, a lot of 

[00:31:59] Cameron: skin in [00:32:00] the game.

[00:32:01] Cameron: He’s got a lot of game and he’s been putting his skin in 

[00:32:04] Cameron: the game. 

[00:32:05] Cameron: appar­ent­ly, 

[00:32:06] Cameron: alleged­ly. Speak­ing of not a good fit 

[00:32:11] Cameron: Not a good fit for orga­ni­za­tions. Alan Joyce 

[00:32:14] Cameron: has moved his retire­ment up by two months. He’s leav­ing tomor­row. Qan­tas has got them­selves in a

[00:32:22] Cameron: bit of a pick­le. 

[00:32:23] Tony: Yes, I did see that today and, um, I’m going to do a pulled pork on 

[00:32:26] Tony: Air New Zealand

[00:32:26] Tony: in 

[00:32:27] Tony: a few min­utes as a con­trast to, um, to, Qan­tas. um,

[00:32:30] Tony: but yeah, the 

[00:32:31] Tony: share price is up slight­ly today, 

[00:32:32] Tony: which might be the mar­ket, but 

[00:32:34] Tony: it 

[00:32:34] Tony: could also be on 

[00:32:34] Tony: a res­ig­na­tion. but any­way, look, kudos. I mean, first of 

[00:32:37] Tony: all, I 

[00:32:38] Tony: think Alan Joyce has been a

[00:32:39] Tony: good

[00:32:39] Tony: CEO. 

[00:32:40] Tony: Um, he’s been there for 15 

[00:32:41] Tony: years, 

[00:32:42] Tony: which is per­haps a lit­tle 

[00:32:42] Tony: bit too long. Um, but kudos to, um, to Ria Win­dow in the 

[00:32:46] Tony: AFR, because I, I think he’s prob­a­bly 

[00:32:48] Tony: behind 

[00:32:48] Tony: the scalp of claim, or claim­ing the 

[00:32:50] Tony: scalp of Alan 

[00:32:51] Tony: Joyce. So, he was the, 

[00:32:53] Tony: the first, uh, Joe 

[00:32:53] Tony: Astin was the first 

[00:32:54] Tony: per­son to start rais­ing 

[00:32:56] Tony: issues about, Qan­tas using the

[00:32:58] Tony: Chair­man’s Club to dole

[00:32:59] Tony: out,[00:33:00]  um, you know, favours to 

[00:33:01] Tony: politi­cians and 

[00:33:02] Tony: then start­ed 

[00:33:03] Tony: report­ing on the fact that

[00:33:03] Tony: Antho­ny Albane­se’s son 

[00:33:05] Tony: had been made a mem­ber of the Chair­man’s Lounge and how that 

[00:33:07] Tony: was­n’t declared on 

[00:33:08] Tony: Albane­se’s, um, uh, what do they call them?

[00:33:10] Tony: The record of dona­tions 

[00:33:11] Tony: or what­ev­er it’s called. Um, and, uh, and 

[00:33:14] Tony: then start­ed 

[00:33:15] Tony: to take on Qan­tas per­for­mance and how much mon­ey it received dur­ing COVID, and all this kind of, and then start­ed to

[00:33:21] Tony: find peo­ple who could­n’t claim their 

[00:33:23] Tony: flight cred­its, which were refund­ed dur­ing COVID, etc, etc. Alan Joyce’s response was to stop stock­ing the AFR in their lounges.

[00:33:31] Tony: He could­n’t read 

[00:33:31] Tony: about 

[00:33:32] Tony: it. And, uh, even­tu­al­ly ASIC got involved and said, yeah, there’s, there’s where there’s smoke, there’s 

[00:33:38] Tony: fire, and now Qan­tas might be on the hook 

[00:33:39] Tony: for 250 mil­lion in fines if they did try and sell peo­ple tick­ets to flights, which they knew had already been canselled. So, yeah, it’s, 

[00:33:49] Tony: uh, it’s a bit of a, I mean, it prob­a­bly would have all come out even­tu­al­ly, but it’s a bit 

[00:33:52] Tony: of a coup for inves­tiga­tive jour­nal­ism.

[00:33:54] Tony: And, um, yeah, 

[00:33:55] Tony: I mean, uh,

[00:33:55] Tony: Alan Joyce has been very polar­iz­ing because he 

[00:33:57] Tony: takes issues on social, um, he takes stances [00:34:00] on social 

[00:34:00] Tony: issues. Um, and he also, you know, 

[00:34:02] Tony: um, uh,

[00:34:02] Tony: push­es dona­tions, et cetera, 

[00:34:04] Tony: to cours­es that suit him, 

[00:34:05] Tony: which I guess most CEOs do. So I’ve, I’ve always

[00:34:09] Tony: seen him to be very 

[00:34:09] Tony: effec­tive, but per­haps he’s been there for too 

[00:34:11] Tony: long now.

[00:34:13] Cameron: well, Qan­tas is down in our port­fo­lio. We hold a cou­ple of parcels of it. Um, it’s down five to 10% and I think. Might be a rule one today by the way it’s going, although it’s been 

[00:34:24] Cameron: close to that for a week or so any­way. But, 

[00:34:26] Cameron: um, 

[00:34:26] Cameron: yes, uh, 

[00:34:27] Tony: Yes, I own, I own a stock 

[00:34:29] Tony: and I’m look­ing for 

[00:34:30] Tony: a bounce. With the new CEO tak­ing over.

[00:34:33] Cameron: yeah, well the mar­kets, it sort of did spike up a bit this morn­ing, but then it came 

[00:34:38] Cameron: back down again, sort of was up by sort of 1030 and back down after that. So it’s still hov­er­ing around a rule one sell for me. 

[00:34:49] Cameron: so Um,

[00:34:51] Cameron: The mar­ket does­n’t seem to have giv­en it a 

[00:34:53] Cameron: bye bye Allen bounce yet. We’ll see what hap­pens over the next cou­ple of days, but…

[00:34:58] Cameron: Well, that’s all I have on my list of [00:35:00] things to talk about, TK. What have you got to cov­er off before 

[00:35:03] Cameron: we get into some 

[00:35:04] Cameron: ques­tions? 

[00:35:05] Tony: Yeah, so just a cou­ple of things. 

[00:35:06] Tony: Um, The RBA is meet­ing today, so prob­a­bly in about half an hour’s time. It’s 

[00:35:11] Tony: sort of large­ly expect­ed that

[00:35:12] Tony: they’ll keep rates on hold, but we’ll, I guess we’ll 

[00:35:14] Tony: wait and see. Uh, and, um, I hope they 

[00:35:17] Tony: do because infla­tion clear­ly is com­ing 

[00:35:19] Tony: down even though 

[00:35:20] Tony: it’s, um, still rea­son­ably high.

[00:35:22] Tony: Um, so that, that’ll be a good thing if they 

[00:35:24] Tony: do. Uh, I did want to talk 

[00:35:25] Tony: about, um, the, well, it’s the 

[00:35:27] Tony: start of the month. So peo­ple, um, who set their own alerts should be check­ing three point trend lines and set­ting 

[00:35:31] Tony: alerts. It’s what I’ve been 

[00:35:33] Tony: doing over the last day or so. Um, because the 

[00:35:36] Tony: trend line, 

[00:35:36] Tony: three point trend line sells. Alerts 

[00:35:39] Tony: change over time, 

[00:35:41] Tony: the posi­tions change, so just check all those.

[00:35:45] Tony: What else have I got? I just want­ed to say a big shout out to some of our 

[00:35:50] Tony: lis­ten­ers who I got to meet at the Afford­able 

[00:35:52] Tony: Art Fair on the week­end,

[00:35:53] Tony: which was love­ly. 

[00:35:54] Tony: Thanks for com­ing in and sup­port­ing the art show 

[00:35:56] Tony: and 

[00:35:56] Tony: going up and see­ing Alex. It’s been a won­der­ful [00:36:00] week­end for her. 

[00:36:00] Tony: She sold a lot of paint­ings 

[00:36:02] Tony: and it’s a very pos­i­tive 

[00:36:05] Tony: start to her 

[00:36:05] Tony: career in the arts indus­try. I’m very hap­py and proud for her. But I bumped into peo­ple I had­n’t met 

[00:36:12] Tony: before. So shout out to Annette 

[00:36:14] Tony: and Toby. Um, and then Bret­t’s fam­i­ly came in. I saw them 

[00:36:17] Tony: on the Sun­day after­noon as well, which is nice 

[00:36:18] Tony: to meet the whole gang, so.

[00:36:20] Tony: Love­ly. Thank you. 

[00:36:21] Cameron: They were like, this is who you’ve 

[00:36:22] Cameron: You’ve been work­ing for free for all these years.

[00:36:25] Tony: Yeah. Yeah. 

[00:36:25] Tony: No. No, they were, uh, the, I think 

[00:36:26] Tony: the, 

[00:36:26] Tony: there was three chil­dren and I think the 

[00:36:28] Tony: one, the girl was, um, inter­est­ed in art. So it was a, I think her first time 

[00:36:32] Tony: in an art show. So that 

[00:36:33] Tony: was 

[00:36:33] Tony: a bit of an eye 

[00:36:33] Tony: open­er for 

[00:36:34] Cameron: great. yeah, 

[00:36:35] Cameron: con­grat­u­la­tions to Alex, very hap­py for her, 

[00:36:37] Cameron: that’s ter­rif­ic. 

[00:36:38] Tony: Yeah. And she won’t be on the show today 

[00:36:39] Tony: ’cause she’s going on the hol­i­day after all 

[00:36:41] Tony: the 

[00:36:42] Tony: weeks of late nights paint­ing and , 

[00:36:45] Tony: get­ting things ready for 

[00:36:46] Tony: the show. 

[00:36:47] Tony: Yeah, but good on it. It’s great. Pulled 

[00:36:49] Tony: pork time, Cam, as I said, and New Zealand. Bit of fore­shad­ow­ing there,

[00:36:55] Cameron: Now, I’m a lit­tle bit wor­ried about this, Tony, because I just added 

[00:36:58] Cameron: them to some of our port­fo­lios 

[00:36:59] Cameron: [00:37:00] yes­ter­day, and I know it’s already 

[00:37:02] Cameron: very close to its sell line. It was just above the sell line, and I thought I’ll take a punt on it, did­n’t know you were going to do a pulled pork on it, so that could be the death knell of it, but let’s 

[00:37:12] Cameron: see how we go.

[00:37:14] Cameron: Gird my loins. 

[00:37:16] Tony: yeah, Pulled Pork. 

[00:37:17] Tony: Alright, so it’s Air New Zealand, code is 

[00:37:19] Tony: AIZ.

[00:37:20] Tony: I often think ANZ, but that’s the bank, so it’s AIZ. And as you said, 

[00:37:25] Tony: it’s just above its sell 

[00:37:26] Tony: line, 

[00:37:26] Tony: only like by a cent and a half when 

[00:37:28] Tony: I 

[00:37:28] Tony: last looked. Rea­son­ably 

[00:37:30] Tony: sized busi­ness, ADT of 

[00:37:31] Tony: 344, 000, so that’s not too bad. 

[00:37:35] Tony: But It’s dual list­ed, 

[00:37:37] Tony: so list­ed in New Zealand, list­ed in Aus­tralia and also the New Zealand gov­ern­ment is still 

[00:37:43] Tony: a big own­er of this com­pa­ny, so it tends not to get much trad­ing from the big instos, so, 

[00:37:50] Tony: The, Even though it’s an 

[00:37:52] Tony: ADT of 344, 000, there is that big 

[00:37:55] Tony: share­hold­er sit­ting there and that kind of tends to keep peo­ple off the 

[00:37:58] Tony: reg­is­ter, [00:38:00] but it should be big 

[00:38:00] Tony: enough for 

[00:38:00] Tony: most peo­ple.

[00:38:01] Tony: A cou­ple of 

[00:38:02] Tony: things I want­ed to say about it. I mean, I think peo­ple are famil­iar with who 

[00:38:05] Tony: our New

[00:38:05] Tony: Zealand is.

[00:38:07] Tony: It’s New

[00:38:07] Tony: Zealand’s flag­ship car­ri­er. They it was inter­est­ing to go through their 

[00:38:12] Tony: results and announce­ments and 

[00:38:15] Tony: to think 

[00:38:15] Tony: about how 

[00:38:16] Tony: they com­pare with Qan­tas, 

[00:38:17] Tony: com­pare and con­trast with Qan­tas. 

[00:38:20] Tony: They’ve report­ed in their most recent results that they’ve got, the last half any­way, has had lots of tail­winds 

[00:38:26] Tony: in their busi­ness, as it has with Qan­tas. 

[00:38:28] Tony: So they’re get­ting back up close 

[00:38:30] Tony: to Pre COVID but they’re say­ing post pre COVID lev­els of prof­itabil­i­ty, et cetera, and sales, but they’re say­ing post COVID, they’ve seen some impacts which are, which are going down which are, sor­ry, well, the impacts are less­en­ing, so their cus­tomer demand is increas­ing post COVID, there was, there has cer­tain­ly been some con­strained mar­ket capac­i­ty because a lot of air­lin­ers moth­balled their planes, or at least 

[00:38:52] Tony: put them out in the desert where they 

[00:38:53] Tony: would­n’t rust over time, so they’re, They’re, 

[00:38:56] Tony: Still all to come back online and there’s been low­er fuel [00:39:00] prices, 

[00:39:00] Tony: um, in the 

[00:39:01] Tony: sec­ond half of F 

[00:39:02] Tony: 23,

[00:39:03] Cameron: What, what, deserts in New Zealand are they putting planes 

[00:39:06] Cameron: in? 

[00:39:06] Tony: Not in New Zealand, but over in? 

[00:39:08] Tony: Neva­da, you Google, Google the plane grave­yard, there’s a, 

[00:39:12] Tony: there’s, there’s, it’s in 

[00:39:13] Tony: Neva­da or Death Val­ley or some­where around there where 

[00:39:15] Tony: they, they, put these planes, there’s just rows and rows of like fields of 747s and Air­bus­es all 

[00:39:22] Tony: sit­ting there. Yeah. Yeah. 

[00:39:24] Tony: And some­thing they’re say­ing Not Air New Zealand, but some oth­er mar­ket play­ers are say­ing they may not come back out.

[00:39:30] Tony: They’re just going to buy new planes instead. 

[00:39:32] Tony: So, there is a con­straint on the 

[00:39:34] Tony: num­ber of seats avail­able in the air at the moment because of that. But, and it’s cer­tain­ly going to be a part of both Qan­tas and Air New Zealand going for­ward that they’ve got to upgrade their fleets and, and find new leas­es.

[00:39:45] Tony: And that’s one of the issues that they, they called out. I think the inter­est­ing thing on the day of Alan Joyce’s retire­ment is the guy who runs and New Zealand is named Greg Foran. Any­body who’s been invest­ing as long as I 

[00:39:58] Tony: have that might [00:40:00] trig­ger a mem­o­ry. So Greg Foran, I don’t see the Foran.

[00:40:03] Tony: F O R 

[00:40:04] Tony: A N, I’m 

[00:40:04] Tony: not sure how to pro­nounce it, Foran or Foran.

[00:40:06] Tony: He was 

[00:40:09] Tony: in line to run Wool­worths a long time ago, maybe 15 or so years ago, and was passed over for a guy called O’Brien who was more of, I think, a strate­gic guy rather than an oper­a­tional guy. And that’s a whole dif­fer­ent sto­ry again about how well or not strat­e­gy man­agers are at run­ning big com­pa­nies and ex con­sul­tants at run­ning big com­pa­nies.

[00:40:36] Tony: Aster­isk. They’re ter­ri­ble at it. That’s the foot­note. Any­way, but Foran thought he, he was hard done by and No Future was there in Wool­worths and went across and ran. Wal­mart in Chi­na and did a good job and then went to the States and ran I think, well, I called him CEO of Wal­mart, but I imag­ine by look­ing from my knowl­edge of what he did, he sound­ed more like [00:41:00] COO.

[00:41:00] Tony: But any­way, he was either num­ber one or num­ber 

[00:41:02] Tony: two at Wal­mart and did a real­ly good job there. And Wal­mart was on the skids there for a while before he took it over and he cleaned up the stores and made sure the stock was always avail­able and did a few ini­tia­tives like 

[00:41:15] Tony: curb­side pick­ups and stuff, which have seen 

[00:41:17] Tony: Wal­mart return to its its right­ful posi­tion.

[00:41:20] Tony: I think this Wal­mart shares are up about 30% this year or some­thing in the U. S. Any­way He is a Kiwi by birth so he sur­pris­ing­ly resigned and left Wal­mart a cou­ple of years ago and maybe three years ago because he, I think, almost on the first day of his becom­ing the CEO of AA New Zealand, COVID hit and he had to deal with all of that.

[00:41:42] Tony: So it was kind of a bap­tism by fire. Does­n’t, has, I did a Google search and could­n’t find out if there were any rea­sons why he came back. There was some analy­sis from some trade mag­a­zines in the States that said there was some fric­tion between the guy who ran the inter­net divi­sion of 

[00:41:57] Tony: Wal­mart and for­eign, [00:42:00] for­eign, like, who knows he may have just decid­ed he want­ed 

[00:42:03] Tony: to go back to New Zealand and raise his fam­i­ly 

[00:42:05] Tony: there.

[00:42:05] Tony: So, 

[00:42:05] Cameron: with, did­n’t agree with Twig­gy’s big vision. 

[00:42:10] Cameron: Was­n’t on board, was­n’t on board with the 

[00:42:11] Cameron: big

[00:42:12] Tony: he’s he’s sold. He saw Twig­gy’s big vision and said, 

[00:42:15] Tony: yeah, not for me. 

[00:42:19] Cameron: not big enough. 

[00:42:20] Tony: Any­way, it’s a long way of say­ing I 

[00:42:22] Tony: think Air New Zealand are very priv­i­leged to have this 

[00:42:25] Tony: guy 

[00:42:25] Tony: run­ning their busi­ness. He’s a, he’s a top class expe­ri­enced, glob­al­ly expe­ri­enced CEO. And I would expect, even though he’s, he’s prob­a­bly get­ting up towards my age, I would expect to, you know, to see Air New Zealand run very, 

[00:42:40] Tony: very Strong­ly and well with him at the helm.

[00:42:43] Tony: Any­way, so let me go through the num­bers of Air New Zealand. I’m using a share price of 77 cents per share. It’s greater than the IV1 and we don’t have an IV2. And as I’ve said before, I like sit­u­a­tions where we don’t have any sort of con­sen­sus [00:43:00] for­ward guid­ance for a com­pa­ny. It means that peo­ple aren’t watch­ing it.

[00:43:04] Tony: So it’s good for us small investors to be able to 

[00:43:07] Tony: get a stake before the big peo­ple mus­cle 

[00:43:10] Tony: in. I think the rea­son for that 

[00:43:13] Tony: is because the gov­ern­ment owns so

[00:43:15] Tony: much of our New Zealand and that’s often­times some­thing 

[00:43:17] Tony: that

[00:43:19] Tony: fundies won’t like. I looked up Stock Doc­tor and it said… You’ll like this Cam, it said that the num­ber, the largest share­hold­er was Her Majesty the Queen in right of New Zealand. And Stock Doc­tor’s actu­al­ly say­ing they own 51% when I was Googling doing my research, some­body else said 49%, and Stock Doc­tor may be right, or this oth­er per­son may be right, but it’s around half is owned by the New Zealand, or Her Majesty the Queen, who is now dead, so I don’t know how she’s the own­er.

[00:43:48] Tony: But they’re usu­al­ly on gov­ern­ment any­way, owns half of approx­i­mate­ly half, did own it out­right, they’ve been sell­ing down for the last decade or so, from 100% down to 75% and then pro­gres­sive­ly from [00:44:00] there. But I think fund man­agers would quite right­ly see that if they bought a rea­son­able stake in our New Zealand, they would­n’t have a con­trol­ling inter­est, and I would think that even though 

[00:44:12] Tony: the New Zealand gov­ern­ment is sell­ing down, they’re prob­a­bly going to be focused more on things like ser­vice and mak­ing sure there’s good route cov­er­age across New Zealand for region­al peo­ple.

[00:44:23] Tony: Air­ports being ser­viced by you know, air­craft and enough flights rather than mak­ing the last buck for share­hold­ers. So that would be the view I would 

[00:44:31] Tony: think of most large instos. I don’t nec­es­sar­i­ly share that view or I cer­tain­ly see enough pos­i­tives to go with that neg­a­tive. The New Zealand gov­ern­ment is, is also going to be there to do what the Aus­tralian gov­ern­ment is doing at the moment, which is to run inter­fer­ence for heav­i­ly sub­sidised oth­er inter­na­tion­al car­ri­ers from get­ting a toe­hold in the mar­ket, whether that’s good or bad, I’m, I’m kind of on the fence on that one.

[00:44:55] Tony: I think it’s, it’s it’s impor­tant to have a, have a [00:45:00] con­trol­ling stake in, in being able to pro­vide a ser­vice, But there’s a point where it becomes so expen­sive to fly that you may as well allow oth­er peo­ple in and erode the nation­al car­ri­er just to get bet­ter deals on flights. So it’s always a bit of a bit of a two edged sword that one.

[00:45:18] Tony: But cer­tain­ly hav­ing the gov­ern­ment as a major share­hold­er would mean you’d expect that they would­n’t be allow­ing Emi­rates, Qatar, etc. to come in and take over large mar­ket shares. Any­way, back to the num­bers the, they haven’t been pay­ing a div­i­dend since COVID, but they actu­al­ly have announced a spe­cial div­i­dend of six pence, six cents per share.

[00:45:40] Tony: And I’ll just high­light the fact now that I think that the stock goes ex div­i­dend in two days, so what’s today? It’s now the 5th and I think it goes ex div­i­dend on the 7th, so if you’re inter­est­ed in the div­i­dend, get in quick­ly if you hear this in time. But I think prob­a­bly the bet­ter news is that Apart from that sort of make up for the fact they haven’t been pay­ing [00:46:00] div­i­dends for a while, they fore­cast they’re going to pay between, have a pay­out ratio of between 30 and 70 per­cent going for­ward.

[00:46:07] Tony: So they will start pay­ing div­i­dends again, which is some­thing I like to see. Obvi­ous­ly no own­er founder, although when I was liv­ing in New Zealand, some­one tried to con­vince me that the, the New Zealan­der made the first pow­ered flight in the world before the Wright Broth­ers, which I always found hilar­i­ous because New Zealan­ders like to claim every dis­cov­ery in the world first so it’s always an inter­est­ing dis­cus­sion over a few beers.

[00:46:30] Tony: Any­way, that’s an aside but no own­er founder. No, no con­sen­sus fore­cast, which I said is good for us. It’s hard to say whether this is the low­est PE or not because there’s been no prof­it since COVID for this com­pa­ny. So, it, you know, we can’t score it as the low­est PE even though it’s the only PE.

[00:46:49] Tony: So it’s hard to do that. As you’d expect, no increas­ing, con­sis­tent­ly increas­ing equi­ty, because they’ve been liv­ing off their cash dur­ing COVID. So, all in all, a qual­i­ty score of 70%, [00:47:00] which is still pret­ty good, and a QAV score of 0. 45, so it’s cheap at the moment. It’s rebound­ed from its lows prob­a­bly three or so months ago and, but be care­ful because it’s just above its its sell line.

[00:47:13] Tony: A cou­ple of oth­er things I think the pos­i­tives for this com­pa­ny are def­i­nite­ly the CEO. I think the neg­a­tives, I mean, I strug­gle to see whether I would put the gov­ern­ment own­er­ship in the pos­i­tive or neg­a­tive camp, but cer­tain­ly if you were an ins­ta you’d prob­a­bly say it was a neg­a­tive because of the mis­align­ment of objec­tives but I think there are some pos­i­tives as I said.

[00:47:32] Tony: And yeah, all the nor­mal ones that we spoke about with QADIS in the past about fuel, and I think they’re, they’re fore­cast­ing that they have either hedged or they’re expect­ing a price for fuel, I think from mem­o­ry it was a dol­lar, yeah, a dol­lar five US per bar­rel is what they are using to fore­cast.

[00:47:49] Tony: So that will be a key met­ric to watch if you’re a New Zealand investor. is the fuel price. If the fuel price goes above that, it will prob­a­bly be affect­ing their fore­cast and there­fore prob­a­bly their prof­its. [00:48:00] If it stays below that, you prob­a­bly can expect a bet­ter than expect­ed prof­it, but that’s the aver­age for the year.

[00:48:06] Tony: And they quite pos­si­bly also hedged around that. I know that they’ve hedged there. The New Zealand exchange rate to the US dol­lar to make sure that that does­n’t affect what they pay for fuel and oth­er costs, I guess. And they’re also, and they’re hedged for fuel. So I think 50% was the num­ber from mem­o­ry, which is prob­a­bly pret­ty stan­dard for an all for an air­line, because his­tor­i­cal­ly the air­lines have been neg­a­tive­ly cor­re­lat­ed to the oil price.

[00:48:31] Tony: In oth­er words, when one goes up, the oth­er one goes down in terms of price because it’s such a big cost for them. The oth­er thing they called out in their. Their results pre­sen­ta­tion was that their costs have increased by 16% across the board due to infla­tion. So, that has got to be a neg­a­tive going for­ward.

[00:48:49] Tony: That hope­ful­ly will come down, but it may also be a squeeze on their mar­gins going for­ward. So, any­way, that’s our New Zealand. Inter­est­ing, inter­est­ing lit­tle [00:49:00] com­pa­ny. I have owned 

[00:49:00] Tony: it in the past. I don’t own it now. But when I saw who was run­ning it, I thought, big tick from 

[00:49:04] Tony: me on that one.

[00:49:06] Cameron: Good stuff, well, let’s hope you’re right on that, because we own it, and as we said it’s real­ly close to the sell 

[00:49:13] Cameron: line, 

[00:49:14] Cameron: see how it goes. I always enjoy fly­ing with Air New Zealand I got­ta say, although they 

[00:49:20] Cameron: did sort of half, half sort of do the 

[00:49:22] Cameron: dirty 

[00:49:23] Cameron: on 

[00:49:23] Cameron: me a cou­ple of years ago, last 

[00:49:25] Cameron: year, but 

[00:49:26] Cameron: that’s all right. 

[00:49:27] Tony: What’d they do? 

[00:49:27] Cameron: Well, I bought the we were fly­ing to The US and I bought 

[00:49:30] Cameron: these spe­cial seat­ings

[00:49:33] Cameron: that you know, like say, you could lie down, I 

[00:49:36] Cameron: can’t remem­ber what they called it, paid extra for 

[00:49:38] Cameron: some sort of lie down 

[00:49:40] Tony: Pre­mi­um. Pre­mi­um. econ­o­my? 

[00:49:42] Cameron: pre­mi­um econ­o­my. That was it. Yeah. but 

[00:49:45] Cameron: we could­n’t actu­al­ly use it, 

[00:49:47] Cameron: For some rea­son. 

[00:49:49] Cameron: And I asked them about it and they were like tough.

[00:49:52] Cameron: So I 

[00:49:54] Cameron: thought they’d 

[00:49:54] Tony: That’s not good. 

[00:49:55] Cameron: do me a favor and I can’t remem­ber what the deal was, but there’s some­thing we paid for. It could­n’t use it [00:50:00] and they would­n’t give me a refund. They 

[00:50:01] Cameron: said, you know, tough 

[00:50:02] Cameron: tit­ty. So, 

[00:50:03] Tony: Yeah, that’s always been one of

[00:50:04] Tony: my 

[00:50:04] Tony: crit­i­cisms 

[00:50:04] Tony: One of my crit­i­cisms of Qan­tas is the Air New 

[00:50:07] Tony: Zealand is in the oth­er alliance net­work. I think that one’s called Star 

[00:50:10] Tony: Alliance 

[00:50:11] Tony: and I for­get the

[00:50:13] Tony: And so when I was liv­ing in Cana­da 

[00:50:14] Tony: and occa­sion­al­ly flew Air Cana­da, which were also part of the Air New Zealand 

[00:50:18] Tony: alliance, 

[00:50:19] Tony: I would some­times get on the Air New Zealand leg and the planes were great.

[00:50:22] Tony: The ser­vice was great. They tend­ed to be much new­er 

[00:50:24] Tony: planes than Qan­tas flew. So, you know, I can see 

[00:50:27] Tony: that they’re fair­ly com­pet­i­tive in the mar­ket. with their their offer­ing.

[00:50:31] Cameron: hmm. Nice friend­ly staff though, apart from, actu­al­ly the staff on the planes, when I explained that 

[00:50:38] Cameron: I could­n’t use it for what­ev­er rea­son, they said, oh, that’s fine, just, they gave me a lit­tle thing, they said, con­tact cus­tomer sup­port when you get there, we’ll make a note of the sys­tem, they’ll look after you, you’ll be right, and then I did that, and they were like, nah.

[00:50:48] Cameron: So any­way, the staff on the plane were nice though. Alright, well, Alex, as you said, our offi­cial keep­er of the ques­tions, asker of the ques­tions, is not, avail­able, so I’m going to [00:51:00] resume the job of being the keep­er of the ques­tions today. Only two. First one’s from John. G’day, where’s my cer­tifi­cate? I think this is because he com­plet­ed the course last week.

[00:51:11] Cameron: He says, I’ve been doing some back­ground home­work before, it’s in the mail, John. I’ve been doing some back­ground home­work before jump­ing into VUK, Vir­gin UK. I stum­bled on an arti­cle in the AFR dat­ed Sep­tem­ber 5th, 2019 about David Duffy,

[00:51:26] Cameron: who was the for­mer CEO 

[00:51:28] Cameron: of CYBG. PLC, before he joined VUK. 

[00:51:36] Cameron: I tell my kids, they learn by 

[00:51:37] Cameron: mak­ing mis­takes, but VUK is this, but VUK is this rea­son­able or con­sid­ered bad news and don’t touch, have a great week­end.

[00:51:46] Cameron: So this arti­cle that he’s point­ed us to, Chan­ti­cleer, From 2019, CYBG Share Col­lapse Explained. Says share­hold­ers and CYBG woke up on Thurs­day morn­ing to a shock

[00:51:57] Cameron: announce­ment that soon result­ed in [00:52:00] about one fifth of the

[00:52:01] Cameron: val­ue of the bank being wiped out and David Duffy. 

[00:52:06] Cameron: Was the head hon­cho there at the

[00:52:08] Cameron: time.

[00:52:09] Cameron: So do you take 

[00:52:11] Cameron: into account the track record of a CEO, some­thing like this? Tony when look­ing at an invest­ment, if they’ve had things like this in their past, is that a black mark? Is that on 

[00:52:22] Cameron: the 

[00:52:22] Cameron: check­list? 

[00:52:25] Tony: It’s not, I think you know that, but it’s 

[00:52:26] Tony: not. No, unless it’s, 

[00:52:28] Tony: unless it’s what we were talk­ing about before with peo­ple leav­ing the 

[00:52:32] Tony: organ­i­sa­tion unex­pect­ed­ly and, and I 

[00:52:34] Tony: guess in the case of Fortes­cue in large num­bers, it’s not a red flag for me. And we’re going back to 

[00:52:40] Tony: 2019 for this par­tic­u­lar 

[00:52:41] Tony: issue with CYBG and I did do a pulled pork on 

[00:52:44] Tony: VUK last time it was on our buy list 

[00:52:46] Tony: and when it was a year or two ago. But quick­ly, CYBG was the 

[00:52:52] Tony: Clydes­dale Bank in the UK, not a big bank, but about a decade or so ago, 

[00:52:57] Tony: Nation­al Aus­tralia Bank, 

[00:52:58] Tony: NAB, went over to the 

[00:52:59] Tony: UK [00:53:00] as part of its growth

[00:53:01] Tony: ini­tia­tives, and also, I think, from when we went

[00:53:03] Tony: into the States and bought Home­stead, I think it was called, a 

[00:53:06] Tony: Home­stead a bank 

[00:53:07] Tony: over there.

[00:53:08] Tony: And both end­ed pret­ty bad­ly for them, par­tic­u­lar­ly Home­s­tate. Large­ly because, even though bank­ing is a fair­ly sim­ple 

[00:53:15] Tony: busi­ness. it’s also a fair­ly local

[00:53:17] Tony: busi­ness. And you know, if you did­n’t grow up in the 

[00:53:19] Tony: States, you would­n’t nec­es­sar­i­ly know all the ins and outs of why there.

[00:53:24] Tony: are idio­syn­crasies in how home loans are

[00:53:26] Tony: writ­ten and man­aged and tak­en out over there.

[00:53:29] Tony: Sim­i­lar­ly, I 

[00:53:30] Tony: guess, with the UK. The par­tic­u­lar 

[00:53:32] Tony: arti­cle refers to, 

[00:53:33] Tony: well any­way, so long sto­ry short, NAB sold off both of those, sold off Clydes­dale Bank. A com­pa­ny was formed and licensed the Vir­gin brand and now it’s called Vir­gin 

[00:53:42] Tony: UK, so it’s basi­cal­ly a UK bank. It’s still list­ed in Aus­tralia, large­ly 

[00:53:46] Tony: because of the peo­ple who were 

[00:53:50] Tony: spun

[00:53:50] Tony: out of NAB when they were share­hold­ers here in Nation­al 

[00:53:53] Tony: Aus­tralia Bank and when the CYBG branch was spun out and became VUK.

[00:53:58] Tony: They kept the list­ing in [00:54:00] Aus­tralia. I quite like the UK, it’s 

[00:54:01] Tony: been, I’ve owned it in the past, I, you know, had to sell it when it went down for what­ev­er rea­son. I would cer­tain­ly buy it again. 

[00:54:08] Tony: 2019 is a long time ago 

[00:54:10] Tony: to be pick­ing out issues

[00:54:12] Tony: on this bank. A par­tic­u­lar issue that’s referred to by the arti­cle was one

[00:54:16] Tony: about it’s, I think it’s called PPI insur­ance over there.

[00:54:19] Tony: If my read­ing of it is cor­rect, 

[00:54:20] Tony: it’s, it’s like mort­gage insur­ance here where if I’m right, 

[00:54:24] Tony: you can get a 

[00:54:25] Tony: high­er equi­ty or the bank will lend you more mon­ey if you take out this insur­ance which pro­tects the bank if you default on your 

[00:54:32] Tony: mort­gage. So, it’s a way of, you know, banks might lend you 

[00:54:35] Tony: 80% of the, of the equi­ty in the house.

[00:54:39] Tony: But if you take out mort­gage insur­ance, they might lend you 90%. I think it’s some­thing sim­i­lar. The issue in the UK was that the banks were basi­cal­ly sign­ing this insur­ance to every­one, it seems, bundling it up in the mort­gage and not telling you what the split was between mort­gage insur­ance price and the price of the mort­gage.

[00:54:56] Tony: So, you know, hooray for the banks, they were mak­ing an extra mort­gage [00:55:00] insur­ance sale they might not have made, and you could­n’t shop around because you did­n’t know what the rate was on your insur­ance com­pared to anoth­er provider. So. And then there was some kind of scan­dal where I don’t know the ins and outs of it, but any­way, the, the banks had to write off some of these insur­ance, either claims or sales, and this guy, David Duffy, under­stat­ed what the pro­vi­sion was for this par­tic­u­lar bank, the reg­u­la­tor found out.

[00:55:26] Tony: told them to up the pro­vi­sion and then he had to declare it to the mar­ket and dragged his feet in doing so and the share price dropped a lot, became known. How­ev­er, all that aside, the bank is still very well cap­i­tal­ized, was even very well cap­i­tal­ized dur­ing this prob­lem. I guess they’ve paid their fine by now and they’re mov­ing on.

[00:55:44] Tony: So, yeah, I’m not wor­ried about it. Prob­a­bly my last com­ment on a com­pa­ny like VUK is I would expect it to be one of the small­er banks in the UK So it, you know, as the small­est play­er or one of the small play­ers, it might be more [00:56:00] volatile with issues like this com­pared to some of the big banks over 

[00:56:03] Tony: there. Just like we see here with some of the small banks here and how volatile they are com­pared to Com­mon­wealth Bank, for exam­ple. 

[00:56:11] Cameron: So the over­ar­ch­ing les­son here is we don’t real­ly take into account 

[00:56:16] Cameron: the track record of senior exec­u­tives. 

[00:56:21] Cameron: Maybe it’s the Bill Gates’s phi­los­o­phy where at Microsoft in the 

[00:56:25] Cameron: old­er days, he used to, if some­body screwed up and cost him a lot of mon­ey, he’d pro­mote them and 

[00:56:30] Cameron: say, well, you won’t do that again.

[00:56:31] Cameron: So I’ve, you’ve just had, you’ve just 

[00:56:35] Cameron: had a very expen­sive edu­ca­tion. I expect you 

[00:56:37] Cameron: to put that to good 

[00:56:38] Cameron: use. 

[00:56:40] Tony: Yeah, 

[00:56:41] Tony: and I actu­al­ly have some sym­pa­thy with that, 

[00:56:42] Tony: How­ev­er, if you do it twice, I think that’s I’d be show­ing you the door.

[00:56:46] Cameron: Yeah. Well, VUK, we do hold it in the dum­my port­fo­lio and it’s 

[00:56:51] Cameron: down about 6% since we bought it 

[00:56:53] Cameron: at the end of July, 

[00:56:54] Cameron: so 

[00:56:55] Cameron: let’s see how David Duffy does with our invest­ment. [00:57:00] Thanks for the ques­tion, John. Last ques­tion is from James. Hi Cam, is there any update from Tony on the use of 

[00:57:06] Cameron: Renko charts? 

[00:57:07] Tony: Yeah. So I’m still run­ning my paper tri­als for those. So I’m 

[00:57:12] Tony: run­ning, I’ll talk about three, 

[00:57:14] Tony: two are 

[00:57:14] Tony: Ren­co’s and 

[00:57:15] Tony: one’s a dif­fer­ent one, which I’ll explain in a minute. So when I say a tri­al, I set up dum­my port­fo­lios in an Excel spread­sheet a cou­ple of months ago. So the Ren­co tri­als 

[00:57:25] Tony: go back 

[00:57:25] Tony: until

[00:57:26] Tony: the 26th of April this year.

[00:57:28] Tony: So they’re 

[00:57:28] Tony: now, what, some four months old. But 

[00:57:31] Tony: but, and there are two tri­als. One 

[00:57:33] Tony: is. I used RENCO charts in con­junc­tion with 

[00:57:36] Tony: all the things we use for QAV on whether to buy or 

[00:57:39] Tony: sell. 

[00:57:39] Tony: So, 3 point trend lines, com­modi­ties, sales rule 1 sales, QAV 

[00:57:47] Tony: score, the buy first, that kind of thing. So basi­cal­ly I was just not buy­ing a stock if it had a red bar on its RENCO 

[00:57:54] Tony: chart.

[00:57:54] Tony: And I 

[00:57:55] Tony: added sell­ing a stock if it had a 

[00:57:57] Tony: red bar, 

[00:57:58] Tony: if the chart went from a green [00:58:00] bar to a red bar. 

[00:58:01] Tony: So that, and it took a lit­tle while to get ful­ly invest­ed with that. 

[00:58:05] Tony: That par­tic­u­lar tri­al 

[00:58:07] Tony: is run­ning at 

[00:58:08] Tony: minus 4%, so it’s 

[00:58:10] Tony: lag­ging the mar­ket since then. I think it also lags the dum­my port­fo­lio from 

[00:58:14] Tony: mem­o­ry too, because I bench­mark both. I’ve set up not as recent­ly as that, I actu­al­ly set it up at the same time, but it’s tak­en me a long time to get to 

[00:58:23] Tony: 10 stocks invest­ed only in the last month or so from mem­o­ry. And this is a Renko 

[00:58:28] Tony: only

[00:58:29] Tony: tri­al, So it still buys things from the buy list top down but only if they have a green, Bar on a 

[00:58:36] Tony: Renko chart, and then I 

[00:58:37] Tony: sell them if they have a red bar on a Renko 

[00:58:38] Tony: chart. And I don’t use any of the oth­er 3 point trend lines or Com­mod­i­ty All Rule 1 sells for 

[00:58:43] Tony: that. that par­tic­u­lar one is up 1. 2%, so 

[00:58:48] Tony: it’s actu­al­ly doing slight­ly bet­ter than the oth­er 

[00:58:51] Tony: bench­marks, but it’s very ear­ly days, so they’re two things which I’ll keep run­ning. 

[00:58:56] Tony: And then the last one I want­ed to talk about today, which isn’t Renko, but it’s [00:59:00] anoth­er dum­my port­fo­lio I set up a lit­tle while ago, again 26th of April, 

[00:59:03] Tony: but it’s tak­en a long time to get that one invest­ed as

[00:59:06] Tony: Well, is a port­fo­lio of QAV stocks with a score of greater than 

[00:59:10] Tony: 2. So, 

[00:59:12] Tony: Not buy­ing on the buy list below 2 

[00:59:16] Tony: rather than 1 as as a 

[00:59:18] Tony: tri­al. And that 

[00:59:20] Tony: actu­al­ly has been return­ing 

[00:59:22] Tony: 8%, so that’s the best return­ing of those dum­my port­fo­lios. How­ev­er, I, I want to make two points. One, it’s, it’s real­ly only been in the last month or so, prob­a­bly since the com­pa­ny report­ing sea­son, and I’ve been able to find 10 stocks to put into that port­fo­lio.

[00:59:37] Tony: It’s had three or four back since the start of April, so that could be affect­ing it’s, it’s results, because the oth­er ones have been fuller for longer, cer­tain­ly the first one has. But also to it’s dif­fer­ent to the analy­sis that Ryan’s been doing, where, where he was com­par­ing bot­tom up pur­chas­ing ver­sus top down pur­chas­ing and found lit­tle dif­fer­ence.

[00:59:58] Tony: So you’d think if [01:00:00] we were only buy­ing down to 2, that should rea­son­ably equate to Ryan’s analy­sis of top down only pur­chas­ing. But Ryan’s gone back to re do some of that work. We found a cou­ple of things that he was­n’t apply­ing to the analy­sis, which I’d like him to apply, and prob­a­bly not his fault, prob­a­bly my fault for not spec­i­fy­ing things.

[01:00:21] Tony: in detail. So he’s gone back to make sure at the moment that he is apply­ing the ADT rules of not buy­ing some­thing which is more than five times the invest­ment amount. Although the ADT is less than five times the invest­ment amount. Yeah, so he’s doing that but cer­tain­ly the analy­sis to date sug­gests that there’s no dif­fer­ence.

[01:00:40] Tony: How­ev­er I did decide to bench­mark test it myself and do a dum­my port­fo­lio and it’s work­ing well. So I’ll just keep run­ning it and see what hap­pens. And then when 

[01:00:51] Tony: Ryan’s analy­sis is fin­ished, I’ll bring that for­ward too. And hope­ful­ly in the next cou­ple of 

[01:00:55] Tony: weeks we can reduce that and pub­lish it.

[01:00:59] Cameron: Real­ly? [01:01:00] So when you say that one’s doing 8% and the oth­er one, the Renko one’s doing 1%, is that 8% and 1% return or 8% and 1% bet­ter than the bench­mark 

[01:01:13] Cameron: or bet­ter than the 

[01:01:14] Cameron: dum­my port­fo­lio or some­thing? 

[01:01:16] Tony: Yeah, just the straight return. 

[01:01:18] Tony: So, you know, I put, I think from mem­o­ry, I put a hun­dred thou­sand 

[01:01:21] Tony: into each. 

[01:01:22] Tony: So I’m going to close the 

[01:01:22] Tony: ses­sion now. One’s 108, 000 and one’s 

[01:01:24] Tony: 101, 000. So it’s not a CAGR. I

[01:01:27] Tony: haven’t had it long enough to do a CAGR and it’s not like, I have bench­marked it against the bench­marks, but 

[01:01:33] Tony: that is the return of the fund.

[01:01:36] Tony: Not the dif­fer­ence with the bench­mark.

[01:01:39] Cameron: Inter­est­ing. Thank you for that, Tony. Thank you, James, for the ques­tion. That’s 

[01:01:44] Cameron: it for ques­tions this week. 

[01:01:47] Cameron: After hours, you’re at Cape Schanck, obvi­ous­ly. 

[01:01:50] Cameron: What else is

[01:01:51] Cameron: going on in your world for fun? 

[01:01:54] Tony: Jen­ny 

[01:01:54] Tony: down here and Rud­dy down here, which is nice. We’ve been up and down to Mel­bourne to see Alex at the art show, to go to [01:02:00] Jen­ny’s 

[01:02:00] Tony: Fam­i­ly, with Jen­ny’s fam­i­ly for Father’s Day 

[01:02:03] Tony: lunch. So it’s been, yeah, it’s been, 

[01:02:04] Tony: a nice sort of fam­i­ly 

[01:02:05] Tony: affair 

[01:02:05] Tony: down here. Caught up with 

[01:02:07] Tony: some 

[01:02:07] Tony: friends yes­ter­day.

[01:02:09] Tony: Been love­ly. That’s been hap­pen­ing. So we did 

[01:02:11] Tony: actu­al­ly last night, got back from lunch late and put on the new Indi­ana 

[01:02:15] Tony: Jones movie, which was a lot of fun. 

[01:02:17] Tony: Very 

[01:02:17] Cameron: or the recent one? 

[01:02:20] Tony: yeah, the recent one, this, what’s it called? The 

[01:02:22] Tony: Dial of Des­tiny or some­thing. Yeah. About time trav­el. 

[01:02:25] Cameron: Yeah. 

[01:02:26] Tony: Yeah.

[01:02:27] Cameron: How 

[01:02:27] Cameron: was 

[01:02:28] Tony: I liked it. Good fun. 

[01:02:30] Tony: Oh, sev­en at The most, 

[01:02:32] Tony: six or 

[01:02:33] Tony: sev­en.

[01:02:34] Tony: Yeah, a lot of, I mean, you know, you’ve got to sus­pend 

[01:02:36] Tony: belief. We were sit­ting, like Ron­nie and I just sat there and picked holes in the script the whole way through, but you got­ta do, you can’t do that, you got­ta just go 

[01:02:43] Tony: with the flow. But a lot of fun things too, like Indi­ana’s 

[01:02:47] Tony: Har­ri­son Ford’s 80 years old now, so,

[01:02:50] Cameron: yeah. 

[01:02:50] Tony: be an action chase 

[01:02:51] Tony: scene, and instead of 

[01:02:53] Tony: see­ing Indy 

[01:02:53] Tony: run­ning after a 

[01:02:54] Tony: like, a car get­ting away, you’d just see him take a step into the cam­era like he’d just been run­ning, and I’d just caught [01:03:00] up with him.

[01:03:00] Tony: That’s all you’d see. It’s just the one step in the cam­era. 

[01:03:04] Tony: But yeah, Phoebe Waller Bridges was great. Real­ly like what she does. 

[01:03:08] Tony: And, you know. 

[01:03:10] Tony: Good, good Spiel­berg pro­duced, you know, Sat­ur­day, Sat­ur­day after­noon mati­nee 

[01:03:16] Tony: fun.

[01:03:17] Cameron: Did you watch 

[01:03:18] Tony: Mads 

[01:03:18] Tony: Mikkelsen was a great. 

[01:03:19] Tony: Mads Mikkelsen I 

[01:03:20] Tony: love Fleabag.

[01:03:21] Cameron: Yeah, me too. Thought it was great. Yeah. Real­ly 

[01:03:25] Tony: Yeah. Real­ly good. Mads Mikkelsen plays a great bad­die as he always does. So that was good. 

[01:03:31] Cameron: Yeah. 

[01:03:31] Cameron: He does make a good bad­die. 

[01:03:33] Cameron: Oh, that’s

[01:03:34] Cameron: good. That gives me 

[01:03:35] Cameron: hope. I did­n’t real­ly intend on watch­ing it, but I’ll give it a crack now. I haven’t seen much. Oh I’ve been re watch­ing my cousin 

[01:03:43] Cameron: Vin­ny. 

[01:03:44] Cameron: We haven’t fin­ished it yet, but Chris­sy appar­ent­ly had nev­er seen it. I was, I was flick­ing through the TV one night when we were doing a stretch­ing, look­ing for some­thing to watch.

[01:03:52] Cameron: And I was like, Oh God, I haven’t seen my cousin Vin­ny for years. And 

[01:03:55] Cameron: she said, I’ve nev­er 

[01:03:56] Cameron: seen it. I was going, come on, you 

[01:03:57] Cameron: must’ve seen my cousin Vin­ny. [01:04:00] 

[01:04:00] Cameron: She’s like, no. So we put it 

[01:04:01] Cameron: on and it, it’s sil­ly, but it, you 

[01:04:05] Cameron: know, it’s great too. It’s one of those films. It’s 

[01:04:07] Cameron: ridicu­lous, but. Joe Pesci and Marisa Tomei 

[01:04:14] Cameron: just just gold to 

[01:04:15] Cameron: watch.

[01:04:16] Cameron: Just, it was 

[01:04:16] Cameron: good fun. Yeah. Enjoy­ing it. 

[01:04:19] Tony: And the great Fred 

[01:04:21] Tony: Gwynn. Her­man Mun­ster plays the judge. 

[01:04:23] Cameron: the judge. Yeah, 

[01:04:23] Cameron: no, he’s great in it and Ralph 

[01:04:26] Cameron: Mac­chio iss in it, but he 

[01:04:27] Cameron: does­n’t have much to 

[01:04:28] Cameron: do. 

[01:04:28] Cameron: But there’s the lawyer

[01:04:29] Cameron: in it. The, he’s the lawyer for the 

[01:04:32] Cameron: pros­e­cu­tion against Ralph Mao’s char­ac­ter, who I’m pret­ty sure 

[01:04:35] Cameron: Wal­ton Gog­gins got the char­ac­ter for, for baby 

[01:04:38] Cameron: Bil­ly from Right­eous Ear.

[01:04:40] Cameron: ’cause he, because he talks like 

[01:04:41] Cameron: his lies, he’s got the same 

[01:04:43] Cameron: south­ern accent with the whis­tles on the end of his ash­es. And he’s talk­ing to the, talk­ing to the jury with his hands up like 

[01:04:51] Cameron: this. And now we’re going to explain some­thing to 

[01:04:53] Cameron: y’all here. I want you just to lis­ten a 

[01:04:55] Cameron: lit­tle moment here while I explain how this went down.

[01:04:58] Cameron: Yeah. 

[01:04:58] Cameron: Yeah. You hear 

[01:04:59] Cameron: now? [01:05:00] Come on 

[01:05:00] Cameron: now. It’s real­ly good. I love, I love a good, the accents of that 

[01:05:04] Cameron: film are great. Like all the, they’re in the, wher­ev­er 

[01:05:06] Cameron: they are, some­where in

[01:05:06] Cameron: the deep South. And 

[01:05:07] Cameron: then you’ve 

[01:05:08] Cameron: got the 

[01:05:09] Cameron: Joe Pesci and Marisa 

[01:05:10] Cameron: Tomei from 

[01:05:11] Cameron: New York with their out of the, over the top sort of Brook­lyn Jer­sey type 

[01:05:14] Cameron: accents.

[01:05:15] Cameron: It’s

[01:05:16] Cameron: a lot of fun. 

[01:05:18] Tony: there was a very con­tro­ver­sial Oscar win for Marisa too, if I recall. A sur­prise. Oscar win. 

[01:05:24] Tony: Oh, yeah. yeah. well there you go, see, sur­prise. But she was up 

[01:05:29] Tony: against some famous actress­es and she got, and she pulled 

[01:05:32] Tony: it off and got the Oscar. 

[01:05:34] Tony: Which I think may have been due 

[01:05:36] Tony: to… 

[01:05:37] Tony: Some­one lob­bied, like pay­ing, you know, 

[01:05:39] Tony: I don’t know, I don’t know, 

[01:05:40] Tony: if that was

[01:05:42] Tony: a a

[01:05:43] Tony: Mira­max film, but prob­a­bly used the Mira­max way of you know, buy­ing off Oscars, 

[01:05:48] Tony: To achieve it.

[01:05:49] Tony: So,

[01:05:50] Tony: not say­ing it hap­pened that way, but it was a very 

[01:05:52] Tony: sur­prise 

[01:05:53] Tony: win­ner. 

[01:05:54] Cameron: 20th 

[01:05:54] Cameron: Cen­tu­ry Fox, dis­trib­uted by Palo Vista Pro­duc­tions, who [01:06:00] direct­ed it Jonathan Lin. 

[01:06:02] Cameron: Yeah, no, she’s 

[01:06:03] Cameron: great 

[01:06:04] Cameron: in it, just she’s just burst­ing with just, 

[01:06:07] Cameron: charis­ma in that. She’s gor­geous and she’s just, she’s smart and she’s scrap­py and,

[01:06:13] Cameron: yeah, 

[01:06:13] Cameron: real­ly great role. 

[01:06:16] Tony: yeah, but look, look at in, in hind­sight, she, she deserved a bit at the time. I remem­ber

[01:06:21] Tony: every­one scratched their heads say­ing, what, how did she win

[01:06:23] Tony: an 

[01:06:23] Tony: Oscar for that? I’m just going to see who she was up against, but from mem­o­ry, it 

[01:06:27] Tony: was peo­ple 

[01:06:28] Tony: like 

[01:06:28] Tony: Emma Thomp­son and Meryl Streep.

[01:06:30] Cameron: Yeah, well, they’ve got enough Oscars, they don’t need any more.

[01:06:34] Tony: yeah, 

[01:06:35] Cameron: Best Sup­port­ing Actress she got Yeah, I did­n’t know that, that’s 

[01:06:37] Cameron: fan­tas­tic.

[01:06:39] Tony: yeah,

[01:06:40] Cameron: Um, 

[01:06:40] Tony: uh, does­n’t, I can’t find it 

[01:06:42] Tony: easy. 

[01:06:42] Cameron: we watched a cou­ple 

[01:06:43] Cameron: of episodes of Mr. Inbe­tween last night, try­ing to fin­ish that. We’re in the last sea­son, I 

[01:06:48] Cameron: think there’s only a cou­ple more 

[01:06:49] Cameron: left. Just great, real­ly great show. 

[01:06:52] Tony: Isn’t it? 

[01:06:53] Cameron: And it’s the com­e­dy in it, with Gary, his best 

[01:06:56] Cameron: mate. 

[01:06:57] Cameron: You know, what we 

[01:06:58] Cameron: watched last night, he, [01:07:00] he, he just start­ed 

[01:07:01] Cameron: his, uh, 

[01:07:01] Cameron: porn pro­duc­tion busi­ness where he’ll go to your 

[01:07:04] Cameron: house and film your porn video. And his 

[01:07:06] Cameron: first clients are a cou­ple of gay guys. And you kind of see him 

[01:07:10] Cameron: sort of freak­ing out, but then

[01:07:12] Cameron: like grit­ting 

[01:07:13] Cameron: his teeth.

[01:07:13] Cameron: He needs 

[01:07:13] Cameron: the mon­ey. He’s push­ing 

[01:07:15] Cameron: ahead with it. Uh, just the

[01:07:16] Tony: Yeah, He’s 

[01:07:17] Tony: bought the equip­ment, needs 

[01:07:18] Tony: to pay for the equip­ment. Yeah. ha

[01:07:20] Tony: ha 

[01:07:20] Tony: ha 

[01:07:21] Cameron: the com­e­dy in the show is real­ly well done. Real­ly got­ta hand it to the team behind it. It’s 

[01:07:26] Cameron: very good.

[01:07:28] Tony: Yeah. I’ve just looked, just Googled who Maris­sa beat, and I remem­ber why it was a big deal here because she beat Judy Davis,

[01:07:36] Tony: so 

[01:07:36] Tony: there was a bit of a focus on… The Oscars that year from Aus­tralia. But she beat Joan Plowright, Vanes­sa Red­grave, and Miran­da 

[01:07:45] Tony: Richard­son. 

[01:07:46] Cameron: Oh, 

[01:07:46] Tony: And the um, I remem­ber the scut­tle­butt, the scut­tle­butt was she got it because she was the only 

[01:07:51] Tony: Amer­i­can up for 

[01:07:53] Cameron: Right. 

[01:07:54] Cameron: Well, good for her. 

[01:07:56] Tony: it. Mmm. No, she deserves it. Espe­cial­ly in hind­sight when you [01:08:00] see what oth­er great things she’s done. 

[01:08:01] Cameron: Yeah, she’s great, and, uh, it’s just a great, it’s 

[01:08:04] Cameron: just a great, great, role, you. know, it’s just real­ly, like, the, the film itself, as I said, it’s sil­ly, 

[01:08:10] Cameron: and it, it, it, It’s full of 80s tropes, but, 

[01:08:14] Cameron: um, or ear­ly 

[01:08:14] Cameron: 90s tropes, but, um,

[01:08:15] Cameron: she, she, she, she’s, I think, bet­ter than Joe Pesci in the film, she’s, uh, she’s real­ly, 

[01:08:21] Cameron: real­ly 

[01:08:21] Cameron: enter­tain­ing, so, 

[01:08:22] Cameron: good for her.

[01:08:24] Tony: Mmm. Yeah, it’s 

[01:08:25] Cameron: Alright, 

[01:08:26] Cameron: TK, 

[01:08:26] Cameron: well, I know you’ve… Got things to do, I’ll let you go. 

[01:08:30] Cameron: Thank you for tak­ing time to chat with us today, Big Dad­dy. 

[01:08:34] Cameron: And, uh, where will you be this 

[01:08:36] Cameron: time next week? 

[01:08:38] Tony: Well, I was going to talk to you off air. I’m, I’m going to be trav­el­ing between Cross Har­bour and the Gold Coast. 

[01:08:44] Tony: I’ve got a golf tour­na­ment that fin­ish­es on the Tues­day and I jump in a car and dri­ve up

[01:08:47] Tony: to 

[01:08:47] Tony: our accom­mo­da­tion up there. So I won’t be able to 

[01:08:50] Tony: record 

[01:08:51] Tony: at this time next 

[01:08:52] Tony: week. 

[01:08:53] Cameron: Well, right. I might have to wan­gle a guest. I’ll see, 

[01:08:57] Cameron: I’ll work some­thing out. [01:09:00] 

[01:09:00] Tony: Yeah, 

[01:09:01] Tony: I can record before then or 

[01:09:04] Tony: after that. I just can’t do it, 

[01:09:05] Tony: on Tues­day. Oh, I can’t do it, 

[01:09:06] Tony: I can’t do it 

[01:09:07] Tony: Mon­day either, but I could do it Thurs­day or 

[01:09:08] Tony: Fri­day this week if you find a 

[01:09:10] Tony: guest. 

[01:09:11] Cameron: This week? 

[01:09:13] Tony: Yeah,

[01:09:14] Cameron: Well, that’s 

[01:09:15] Tony: back in Syd­ney on 

[01:09:16] Tony: Fri­day. 

[01:09:19] Tony: Actu­al­ly back in Syd­ney on, yeah I won’t get back up until Thurs­day late after­noon, so, Fri­day this week or Wednes­day next week.

[01:09:25] Cameron: all right. Well, I’ll have a think. We’ll work some­thing out. All right.

[01:09:28] Tony: Yeah, okay. 

[01:09:29] Cameron: Have a good trip. 

[01:09:30] Cameron: I’ll 

[01:09:31] Tony: All right, 

[01:09:31] Tony: thanks.

[01:09:32] Cameron: talk to you soon. Bye.

[01:09:33] Tony: All right, cheers, Bye.[01:10:00]