Rupert’s retirement, YAL PROPCAF update, portfolio report, pulled pork on KAR, using 3PTL with the ASX.



[00:00:00] Cameron: Welcome to QAV 639 Holiday Mode, is what I’m calling this episode, because I’m in holiday mode.

[00:00:10] Tony: Are you taking the Apollo

[00:00:11] Tony: Tourism and Leisure Camper out, are you?

[00:00:15] Cameron: Those, I told you Tony, didn’t they change their name? They’re not called Apollo Tourism anymore, aren’t they? I think they changed their name because I, I forbid use of

[00:00:22] Tony: yeah, we outed them, so they had to get rebranded.

[00:00:27] Cameron: I think our entire audience must be in

[00:00:29] Cameron: holiday mode too, because we have a total of like one question for the show today, which suits me fine. I want to thank Andrew, who, took me out for a coffee today. Andrew from Mackay, who’s in town, took me out for a coffee. We had a good chat about ChatGPT, mostly works in IT.

[00:00:44] Cameron: Up in the mines. And he was, he’s just loving ChatGPT, using it for coding and all designing his IT stuff. He and I were just both going, Oh my God, people have no idea what’s going on. It’s, you know, he said he talks to a lot of people and they’re like, what? Even [00:01:00] people in tech circles aren’t using it yet.

[00:01:01] Cameron: And he’s just like, Oh man. Anyway, it was good fun. Rupert retired this week. Tony, that’s the big news for the week. Rupert.

[00:01:12] Tony: Rupert Murdoch, of course, Keith Rupert Murdoch, to be official.

[00:01:16] Cameron: Keith Rupert Murdoch.

[00:01:17] Tony: Stephen Mayne wrote an interesting piece in the Eureka Report today about that. And it was, you know, thinking about what happens when Keith isn’t around, or when Rupert isn’t around anymore. And even though Lachie’s CEO, he doesn’t control all the shares because the family trust kicks in. And then you’ve got three siblings who’ve been ousted.

[00:01:39] Tony: You’ve got Siobhan and the other two. Who are wondering whether Lachlan is the right person to lead Fox and Sky and all the rest of it. News

[00:01:51] Tony: Corp. And there might be a vote to oust him in about a year’s time.

[00:01:55] Cameron: yeah. Did you get to the end of Succession?

[00:01:57] Tony: Oh yeah.

[00:01:59] Tony: [00:02:00] Great ending.

[00:02:00] Cameron: the last time Rupert’s been asked, was asked about it, he said he hadn’t watched it, but I’m thinking… And, he’s probably going, okay, I see the clusterfuck it was when Logan died, I need to, spoiler alert for anyone who hasn’t watched it,

[00:02:14] Tony: Yeah,

[00:02:15] Cameron: I need to be around to manage this thing, I think.

[00:02:18] Cameron: He doesn’t want to make the same mistake Logan made, holding

[00:02:21] Tony: well, well, did you read the Fin Review piece about, about the background to how it happened? They, he hired, Onassis yacht and they all flew, all the kids flew into the Mediterranean and the siblings and the grandkids and the hangers on, and they all went onto a boat thrash

[00:02:39] Tony: out what was going to happen. And I thought, wow, that’s just like the last

[00:02:42] Tony: season of

[00:02:43] Tony: Succession.

[00:02:43] Cameron: Right out of succession, yeah.

[00:02:45] Tony: yeah.

[00:02:47] Tony: Yeah.

[00:02:47] Cameron: And let’s hope Lachlan isn’t Kendall, I guess. And I was surprised because I had the impression over the last few years. since Ro when Roger Ailes got, kicked out of Fox, and they [00:03:00] sort of turned on Trump, after the last election, that Lachlan was trying to push Fox into a Less conservative right wing modality, but the first thing he does is appoint Tony Abbott to the board.

[00:03:15] Cameron: Like,

[00:03:16] Tony: Mmm.

[00:03:16] Cameron: what?

[00:03:18] Cameron: Like, why? Like, what the hell has Tony Abbott got to do with anything? Like, I don’t get that at all.

[00:03:27] Tony: Yeah, exactly. He can only be

[00:03:28] Tony: there to push Fox News even further to the right.

[00:03:31] Cameron: But what, like, what’s his relevance on a global stage? Or an American stage? Why would you,

[00:03:37] Tony: Yeah.

[00:03:38] Cameron: there’s plenty of right wing conservative people he could have appointed from the US. What has Tony Abbott got to do with anything? What did they owe Tony Abbott? You know, what was the

[00:03:50] Tony: Yeah. That’s more like that. That was a thought that crossed my mind is that he’s replacing Jack Nassar, who

[00:03:56] Tony: was a successful Australian businessman in [00:04:00] the auto industry for a long

[00:04:01] Tony: time.

[00:04:01] Cameron: wasn’t he the CEO of

[00:04:02] Tony: Yeah. Yeah, and he was Australian as well, so perhaps they feel like they’ve got to have an Australian on the board, but it does sound like Kripo

[00:04:10] Tony: Kwi for something that happened in the past in Australia.

[00:04:13] Cameron: Wow. Anyway, congratulations to my old, my old friend Lachlan. met

[00:04:19] Tony: You’re old friend? I thought you were more friends with his

[00:04:20] Tony: wife.

[00:04:21] Cameron: Well, I tried to get friendly with his wife. I

[00:04:23] Cameron: mean, I often said, I said to her, what’s he got that I don’t have? She said, you know, he’s going to inherit billions of dollars. And I was like, yeah, but you know, really? Does that buy happiness?

[00:04:34] Cameron: And she was like, yeah, actually it does. I was like, okay.

[00:04:37] Tony: buys you Onassis’s yacht on the Mediterranean for a month.

[00:04:42] Cameron: Anyway, congratulations to Lachlan and Sarah and all the kids. I hope it, hope it works out well for them. Better OneTel did.

[00:04:51] Tony: Yeah, that’s, that’s the thing, isn’t it? Again, Stephen Mayne pointed out he’s only chaired

[00:04:55] Tony: two businesses so far, and they’ve both gone belly up.

[00:04:59] Cameron: [00:05:00] Well, you know, you learn from your mistakes if you’re a

[00:05:02] Tony: Yeah,

[00:05:03] Tony: absolutely.

[00:05:04] Cameron: And he’s, I’m sure he is.

[00:05:06] Cameron: And I’m sure his dad’s going to be looking over his shoulder for the rest of his life. However

[00:05:13] Tony: well, you’ve got to think that, yeah, you’ve got to think that that’s, on the horizon for Rupert now, apart from his age. Why would he step back if he wasn’t

[00:05:20] Tony: starting to feel it in his bones that, he was up, not up to the job?

[00:05:25] Cameron: Well, I think to avoid the Logan Roy scenario where

[00:05:27] Cameron: he drops over dead of a heart attack, dishing a mobile phone out of a toilet or whatever Logan was doing. And then. The whole succession thing plays out of everyone fighting each other. And did he, did dad really sign that document? Is that really Kendall’s name on it?

[00:05:44] Cameron: Or did he draw a line under your name or through your name and all that kind of stuff? It was good stuff.

[00:05:50] Tony: That’s still going to happen, right? Cause he’s got this family trust with kids and grandkids and new kids and old kids in it. It’s, it’s going to

[00:05:57] Tony: happen. There’s going to be all sorts of deals and [00:06:00] counter deals and renegs

[00:06:01] Tony: going on.

[00:06:01] Cameron: I don’t think the new kids are in it. I don’t think Wendy’s kids made it. I think it’s just, and his first daughter’s not, and I think it’s just the, the three. I think the three are the only ones that are in it. Lachlan and his brother and his sister.

[00:06:16] Tony: James. Okay. I thought that, okay. There was some deal done I seem to recall with Wendy Ding’s kids. Maybe they have their own separate trust and

[00:06:22] Tony: holding.

[00:06:23] Cameron: I think they got looked after, but I don’t think they have any power is what I read. Anyway, enough of News Corp. I, I did note the little spike that in their share price on the day that it was announced, which I thought was somebody sticking the knife in to Rupert. But, I do want to talk about sticking the knife in.

[00:06:38] Cameron: I want to, I

[00:06:40] Tony: bit of confidence for the new CEO.

[00:06:42] Cameron: Sure. Let’s read it like that. I want to get back to our YAL conversation. This is only interesting to people that are interested in, YAL and Stock Doctor. So we had this conversation last week about YAL’s price to operating cashflow and whether or not taxes should be taken into account [00:07:00] and We had one number from Stock Doctor and a different number from Stockopedia.

[00:07:06] Cameron: I went back to the Stockopedia guys, to Elio D’Amato, and Chris Batchelor, and said, you sure your numbers right here. Did you factor in the income tax, etc. They came back and said, yeah, yeah, no, we stand by our numbers. You should go back to Stock Doctor. And I’d already been to Stock Doctor and said, yeah, yeah, we stand by our numbers.

[00:07:24] Cameron: So I spent hours, building a spreadsheet that looked at the, I got Yale’s annual report, dumped those numbers in, looked at the Stock Doctor numbers, looked at the Stockopedia numbers, and something wasn’t right about the Stock Doctor numbers. So I went back to Stock Doctor again and said, I think you’re missing, what I said in my original email to them, I think you’re missing about 3 billion dollars of operating cash flow here.

[00:07:51] Cameron: And it, but it wasn’t the June half, it was from the December half. They had, they say it wasn’t them, it was Morningstar, but the, the [00:08:00] December half numbers were 3 billion dollars out. And they’d carried it over into their trailing 12 month figure. so they were 3 billion dollars out in their operating cash flow.

[00:08:10] Cameron: so. When we ran our checklist on YAL and it had the price to operating cash flow of like 8, it should have been more like 3. So, they’ve fixed their numbers, they tell me. but, you know, this is not the first time we’ve had problems with Stock Doctor numbers over the last couple of years. And, you know, I’m not pointing the finger at Stock Doctor because A.

[00:08:33] Cameron: They rely on a third party for their data. And B. You know, there’s a lot of… Dealing with numbers. I’m, I’m, I’m the last person who should, criticize anyone for getting a spreadsheet wrong, but it just points out that, it’s good to have, a second data provider that we can compare numbers with and say, Hmm, okay, why is there such a big difference in the numbers between provider A and provider B?

[00:08:58] Cameron: I just hope that in [00:09:00] future, when that happens, I don’t need to spend three hours building a spreadsheet to try and work it out and go back to them. Hopefully.

[00:09:07] Tony: done. Cause I did that last week and the difficulty I was having was Yancoal and their reporting weren’t giving us a six monthly figure. So I was just getting 12 month and 12 month and 12 month and

[00:09:17] Tony: 12 month. So I couldn’t work out the six month or the rolling six month.

[00:09:22] Cameron: There was, I did find a six monthly figure in one of the Yancoal reports, but I needed to dig back into it and, you know, add that in and all that kind of jazz. It was a pain in the arse, Tony. But just letting people know that the Stock Doctor number was wrong. And, and props to Jon Altman, one of our new subscribers, new club members, who was the first person to highlight that to me, because he was doing his own numbers and they weren’t, he was wondering why YAL wasn’t on the buy list, so.

[00:09:51] Cameron: Props to John. One of the things we always say, it’s great that we have smart QAV club members

[00:09:59] Tony: Yeah. The hive [00:10:00] mind is always, the sum of the parts is always better than the, than greater than the, the

[00:10:04] Tony: whole is always greater than the sum of the parts. Yeah.

[00:10:08] Cameron: other news items. I did our portfolio now that we’ve agreed that NAVEX is okay again, I went back and had a look at our numbers this morning. Our, dummy portfolio since inception, still up around 16.41% per annum versus STWor the AXJOA at 6.45.

[00:10:33] Cameron: percent per annum. So we’re doing, I don’t know, two and a half times that. But the most, the more interesting one was the financial year numbers. So we’re nearly at the end of September now. So three months into the financial year, the Portfolio is running at 7. 18 percent per annum for the financial year versus the.

[00:10:58] Cameron: STW at [00:11:00] negative 0. 32%. So, we’ve had a good start to the financial year, particularly vis a vis the benchmark. That’s how we like it. That’s what I want to see.

[00:11:13] Tony: Yeah, it is. You know, as we spoke about for the six months preceding when we were underperforming, it’s it’s a rubber band and it winds up and then let’s go and we

[00:11:23] Tony: fling the other way and start to

[00:11:24] Tony: outperform.

[00:11:25] Cameron: Yeah.

[00:11:27] Tony: Yeah,

[00:11:27] Cameron: if I look at I don’t know, I didn’t look at it for the last 12 months. so last one year, Yeah, if I look at the last one year now, we’re neck and neck, the benchmark, so it’s sort of caught up, I guess, we’ve caught up to the, benchmark, and if I look at the two year Timeline, we’re ahead again, 6. 4 percent versus 3. 34%. So a little

[00:11:58] Tony: Double market.

[00:11:59] Cameron: [00:12:00] yeah, a little bit less than double market, but pretty close to double market. So, you know, it was, we had a bad stretch there last year, but it seems to be writing itself, at the moment, even though the markets had a shitty time. We had like an 11, 11 month low, I think the AFR said the other day.

[00:12:21] Cameron: The ASX was at its lowest point in 11 months, but our portfolio has been doing reasonably good despite all of that, probably because we’re weighted in a lot of, mining stocks that have been doing well recently, perhaps. What do you think?

[00:12:36] Tony: Not, not sure. I’m going to have to start buying the dummy portfolio stocks. I’ll sign up for QAV Light because, I just had to sell Qantas yesterday after it crossed its three point trend sell line, which was marginally above my rule one line. So it was going to be a sell either way this week, I think.

[00:12:52] Tony: And a bit of a shame I can’t vote at the AGM because I know

[00:12:55] Tony: I’ve been voting to do,

[00:12:57] Tony: but I sold it yesterday.[00:13:00]

[00:13:00] Cameron: Yeah, I think a few of us were, I had to rule one a week or two ago from my super too, so yeah. Nice job, Alan. Thanks, Alan.

[00:13:10] Tony: Richard.

[00:13:11] Cameron: Yes, Alan and Richard. well that’s all I’ve really got to talk about this week. Tony, have you got anything on the to do list?

[00:13:21] Tony: All I’ve got is a pulled pork to

[00:13:22] Tony: do. I didn’t have any news this week

[00:13:24] Tony: either.

[00:13:24] Cameron: Right, okay. Well, if you want to get stuck into that and then we’ll do our one question and then we can all go home.

[00:13:31] Tony: you can, you can go on your holiday. . I’m just coming back from mine, so I’ll get stuck into my pulled pork.

[00:13:36] Cameron: Okay,

[00:13:38] Tony: Okay, so today it’s on Karoon energy, KAR, which has come back on the buy list. And, this is a, an oil and gas, I guess, driller and and mainly oil, it’s, it’s been around for a while, if people aren’t familiar with it, it’s mainly, it’s, it’s an Australian oil and gas provider, but the, it basically [00:14:00] has extensive oil fields over in Brazil, in what’s called the Santos Basin, off the coast of Brazil, the company’s It’s been around for a while on the listed set since 2004 and started drilling and exploring in the Browse Basin off the WA coast back in that sort of time frame of 2004 onwards.

[00:14:21] Tony: It partnered with some large companies like ConocoPhillips to develop the fields that it had the rights over and did well out of that and then used the cash that it got in from that and other sales to purchase rights. To, drill for oil in Peru and Brazil. it, for example, it sold 40 percent of one of its Browse Basin gas wells to Origin Energy for 800 million in 2014 and used the income to develop the Brazil fields even further.

[00:14:52] Tony: so the focus now though, is on the. If I’ve got the pronunciation right, the Bauna Fields, B A U [00:15:00] N A, Bauna Fields, in Brazil, in the Santos Basin, and they’re also exploring in nearby areas, the Patola Field, and they’ve also had some discoveries recently in some new wells in the Neon and, again, I hope I pronounced this right, Goia.

[00:15:15] Tony: Goia, G O I A, Oil Discoveries, and the last one is the Clarita Exploration, Prospect, all over in Brazil. Why Brazil, I guess, is a legitimate question. And, something happened in the world of oil and gas. about 30, 40 years ago, the Brazilian government Nash had nationalized all of its oil fields, and, they were owned by a company called Petrobas.

[00:15:40] Tony: Petrobas sa, they controlled all production until 1998 when the government opened up the industry for investment, by private, companies. And they, they did that by, Putting out various tenements for tender, in an auction format, and then, allowing, private interests to buy and develop those [00:16:00] fields.

[00:16:00] Tony: So, I guess the positive is Brazil has always had a strong oil and gas sector, so the infrastructure is ready made for Caroon to use. labour and on and offshore services aren’t a problem. there are also some favourable tax and royalty incentives available in Brazil as well, so… That’s where their focus is.

[00:16:19] Tony: recent discoveries have put a bit of a rocket under the share price, as has the oil price, which has become a buy on our buy list over the last couple of weeks. and there is a strong correlation to the oil price. If people want to see that go into something like Stock Doctor and call up Caroon and then call up Brent Crude Futures, and you’ll see it’s, it’s a very strong correlation.

[00:16:41] Tony: So that’s the strength at the moment. While the oil price is strong, it could well become, of course, a negative if, if the oil price turns down, but at the moment it’s a strength. Anyway, on the numbers, using our, our buy list download, this is a large cap stock. It’s ADT is 4, 000, 000 per day, so it should suit [00:17:00] everyone to buy into this fairly safely.

[00:17:02] Tony: The share price I’m doing my numbers on is 2. 50. Which is greater than IV1 but less than IV2, and also, two times the share price is also less than IV2. which gives it an extra point on our checklist. So it’s good value if you believe the consensus forecast going forward. it’s also 90 percent but less, less than the consensus target currently.

[00:17:25] Tony: And I guess the last, the last thing to, or another thing to point out is that it’s just become a star growth stock in Stock Doctor. So if I… like this company as well. no dividends, so you’d expect that from a company which is growing based on exploration in the oil industry, that they’re taking whatever cash they have and putting it back into new finds and developing what they’ve already found.

[00:17:48] Tony: financial health in Stock Doctor is satisfactory and steady, so not quite strong, but we accept satisfactory as being good enough to score. If anyone’s interested, return on equity is 39%, which is [00:18:00] quite high. and high given the low PE and low PropCaf, and the PropCaf for this company is only three times.

[00:18:06] Tony: So, we’re buying current cash flow at three times the price, and given its growth profile, which is expected, earnings per share is expected to grow by 86 percent next year, that PropCaf is going to get even cheaper unless the share price goes up, which is, I guess, what we’re Banking on. I can’t quite buy this one at book value or book plus 30.

[00:18:28] Tony: Book plus 30 percent is 1. 64, which is below the share price of 2. 50, so we can’t score it for that. Getting back to growth, it scores extremely well on that metric. Growth over P. E., which we look to have a hurdle rate of 1. 5. This company scores 13 times because of the low P. E. and high forecast growth. No owner founder, which I thought was a bit interesting, but, but, There isn’t one in this case. P is only 6. 43, which is not the lowest or the highest, so [00:19:00] we score it a zero. Likewise for increasing or consistently increasing equity, it’s been up and down a little bit. It’s increasing now, but not consistently for the last six halves. It gets a one for a new upturn, just scrapes in there.

[00:19:15] Tony: since the last results and, Oh, sorry. Since, since June, the end of financial year, overall, we’re giving it 16 or 81 percent for quality score, which is, which is quite good and a total QAV score of 0. 27, which puts it reasonably high up on the buy list. As I said before, there are some risks and, and, positives with this one.

[00:19:38] Tony: The risks are the, I guess, normal ones of currency, for example, so, because it’s based in Brazil and it’s selling oil from Brazil, all of its revenue is in U. S. dollars, which will, you know, could go up or down depending on the exchange rate. It’s good at the moment, but if you think that, you know, our exchange rate is low, it might get worse.

[00:19:59] Tony: Might get [00:20:00] depressed going forwards. if you think it’s going to go further down, then it’s, it’s a positive for the company, but it’s certainly a risk. the oil price, is going up, but it will eventually come down. So that’s gotta be a risk. And I’ve put in here as a risk, and I did question whether it’s a risk or, or a positive, or perhaps just an observation is sovereign risk.

[00:20:19] Tony: So, you know, Brazil has had. Nationalized oil fields in the past, even though the last 30 odd years they’ve been privately owned, there’s no necessary reason why it couldn’t go back to being nationalized in the future. Currently, as I said before, Brazil is trying to attract investment in the industry, so it is providing some royalty relief and tax incentives.

[00:20:44] Tony: Might actually be a positive being in Brazil rather than sovereign risk, but, but certainly it’s a, it’s a external government to where we’re investing from, so that there’s always a bit of a risk there. We’re not hands on with the Brazilian, political climate. but the positives for this [00:21:00] company are very strong cash flow.

[00:21:01] Tony: We’re buying it at three times cash flow, which is great. And given that it’s had a, you know, a good growth path since inception, it does seem likely that they’ll be able to participate in oil discoveries and, and a good exploration program going forward, which will also boost the share price. So all in all, one to watch, Caroon Energy.

[00:21:22] Tony: Have a look.

[00:21:23] Cameron: I own it in four portfolios, Tony, which I’m obviously going to have to sell now that you’ve done a pulled pork on it. WGX, by the way, is down since you covered it last week, but it’s sort of in line with the rest of the market. But I was going to say that, I first added KAR, at least with the current holdings, to my Stockopedia test portfolio on the 19th of July at 2.

[00:21:46] Cameron: 17. It’s up 16 percent since then. so yeah, the Stockopedia checklist. Pulled that one out too, which was good. It’s in a couple of other portfolios where it hasn’t done as well, but I only added [00:22:00] it during this month, a couple of weeks ago, but yeah. Thank you. Karoon Energy. Good stuff. Well, we’ve got one question.

[00:22:11] Cameron: It’s from Richard, and he’s asking whether or not we should apply a three point trend line sell to the All Ords, looking at the All Ords. And I think we have talked about this before. And my recollection is that we don’t apply it to the market, because we’re trying to cherry pick the best stocks inside of the market.

[00:22:37] Cameron: So we don’t really care where the market’s going. We, we try and stay fully invested, but is there more to it than that? Is there something I’m missing as to why we don’t apply it to the market in general and use that as an indicator that we should go to cash and get out?

[00:22:54] Tony: Well, I think I, I agree with you, but there are a couple of further points on that. and, and Karoon Energy is a good example. [00:23:00] You know, it’s been my experience that whether the market’s going up or down, generally I can find something to invest in,

[00:23:06] Tony: which could be, counter to the market. Doesn’t always happen that way, the GFC being a case in

[00:23:10] Tony: point.

[00:23:11] Cameron: And last year.

[00:23:11] Tony: Yeah, yeah, that’s right too. doesn’t always work, but current energy is a great example of that. I mean, the market’s down because bond yields are high, bond yields are high, which means interest rates are high because interest rates are high. interest rates are high because of inflation. Inflation is being held up by the oil price.

[00:23:29] Tony: so what’s depressing the market is actually something we’re investing in because it’s going up. So there is always a, usually, a sort of countermarket opportunity for us to invest in. Not that I approach it from that point of view, like a macro down approach, but, you know, our normal process uncovers these kind of, yeah, counterintuitional, counterintuitional, stocks to buy into. so that’s, that’s… Counterintuitive, thanks. That’s the first, the first point to make. the second one is, yeah, you could use, the three point trendline check on any sort of [00:24:00] graph. And we do for commodities and we do for stocks. So there’s no reason why you couldn’t use it for the ASX.

[00:24:05] Tony: And I, I did try and do a bit of research this morning and I’ve forgotten the listener’s name, but there was a gentleman who I think worked in the education industry who last time there was a, three point trendline sell. in the ASX he bought into, it was, I think it was called Something like Beta Hedged.

[00:24:24] Tony: There’s a, there’s a couple, there was two ETFs that you can buy, which actually are the inverse of what the share market does. So they’re basically, shorting the market. And he was going to do that, but I haven’t heard how he went. So if he’s listening, please come back with some results. Cause this was going back about three years, I

[00:24:39] Tony: think,

[00:24:40] Cameron: Hmm.

[00:24:40] Tony: maybe, maybe before around the time of COVID when he was looking at that.

[00:24:44] Tony: so I’d be interested to know how that went, but I did do my own research last time we talked about this and went back as far as I could to look at the sell, the sell periods in the stock market, and they didn’t correlate when my portfolio was going down, so it, [00:25:00] Like, as you said, it’s been problematic in the recent past, but historically it hasn’t always been a one to one correlation that the market turns down, becomes a three point trend line sell and therefore we should go to cash.

[00:25:11] Cameron: Okay, I’m just scrolling through my show notes and seeing if I can find what you’re talking about and who it was.

[00:25:21] Tony: One of our early listeners who either worked as a teacher, I think he might have went from teaching into some kind of education consultancy.

[00:25:29] Tony: Anyway, if you’re out there listening, let us know. But yeah, look, if, if Richard wants to pursue it, he could look at just even paper testing when the, you know, go back into Stock Doctor or wherever and look at the long term and look at when the sales would have been, and then look at going into beta shares, Hedged or beta shares, short and, and then see how you would have gone.

[00:25:49] Tony: I did do that analysis last time this happened and it was, wasn’t, the results weren’t that great because, using three point trend lines anyway, you sort of, The stock market [00:26:00]comes down, which means your returns in the stock market are reduced when you sell and you buy into hedge and it goes up, but then it needs to come down to be a sell, and so you weren’t getting great returns out of that strategy, but, it’s worth another look if someone’s interested.

[00:26:14] Cameron: okay, there was, I do have something from, this is only from October last year, Doug was talking about shorting the market, and Ed was talking about looking at major triggers of a general downward trend in the market. But there’s no mention of, Beta, shares, hedging,

[00:26:38] Cameron: and this.

[00:26:39] Tony: I could have that wrong. It could be Doug. It could have been Doug Vass. I think his name

[00:26:43] Tony: was.

[00:26:43] Cameron: Yeah, Doug

[00:26:45] Tony: Yeah, all right. Okay. Well, Doug, if you’re listening, I’m pretty sure you’re the person I’m thinking of. If

[00:26:51] Tony: you’ve

[00:26:52] Tony: got some research into, into hedging. Yeah. Give us

[00:26:55] Tony: a shout.

[00:26:55] Cameron: Yeah.

[00:26:56] Cameron: No, I know Doug’s still a member. So, I haven’t spoken to Doug for a while. But yeah, [00:27:00] he’s living in Spain. I think his wife’s got a job in Spain or something. Anyway, X? No? Yeah. All right. Well, Doug, update us. You know, you know what Tony’s talking about, Doug. Let us know how that went.

[00:27:14] Cameron: All right. Well, that’s it, Tony. that’s it. That’s the show, apart from After Hours. What have you been After Hours ing, Tony, now that you’re back in Sydney?

[00:27:25] Tony: Yeah, after rousing and carousing up on the Gold Coast,

[00:27:28] Tony: that was lovely. back in Sydney now, back to the grind, we’ve

[00:27:32] Cameron: A grind.

[00:27:32] Tony: oh yeah,

[00:27:33] Tony: we’ve had a horse run on the weekend, so Poifect ran

[00:27:36] Tony: third, which was, you know, great

[00:27:37] Tony: result.

[00:27:38] Cameron: I was in a cafe today and I said, I’ll have a muffin, that looks poifect. And I thought, oh my god, now I’m saying poifect. You’ve infected my brain with poifect. My new word now.

[00:27:51] Tony: yeah, everyone’s doing it.

[00:27:52] Cameron: So sorry, how did poifect

[00:27:53] Cameron: go?

[00:27:55] Tony: it.

[00:27:55] Tony: ran third, so it wasn’t quite Poifect, but it was a good run. And she’ll, she’ll race in [00:28:00] the… She’ll race in the Edward Manifold Saturday week in Melbourne, October 7th. in the Edward Manifold Stakes, so Group 2, so hopefully she’ll do well there. I might go down and see her too.

[00:28:11] Tony: and then, Caste, unfortunately, is out for the spring. She was the Great White Hope, but, luckily she didn’t have any sort of bone damage to her knee, which they thought first was the problem, and they did lots of x rays, and

[00:28:24] Tony: it just seems to be a bit of jarring. and some internal bruising, but she’ll be out

[00:28:28] Cameron: This is the one that tumbled last week.

[00:28:31] Tony: didn’t tumble, it ran two weeks ago and pulled up a little bit lame after the race. Yep, and they’re looking at what that, what might the, what the cause might be. And, it looked like something died there for a moment, because if a horse, you know, loses its leg, it’s, it’s not, not a great future for the horse.

[00:28:49] Tony: But,

[00:28:49] Cameron: dog food factory.

[00:28:52] Tony: but, well, off to the breeding barn more likely in her case. But,

[00:28:54] Tony: but no, she’ll race on next year.

[00:28:56] Cameron: Yeah. That’s what the dog,

[00:28:59] Cameron: the dog [00:29:00] food factory is called the breeding barn. Yeah. Yeah.

[00:29:02] Tony: Well, we had, we had one,fall a couple of days ago, so that was good. Since the following season is just starting now in spring. So we have a few broodmares, one of them just fall, which is lovely. Always good to see. and haven’t really seen much. I started watching What’s the, there’s the new thing on, I think it’s Prime, it’s the part of the, John Wick franchise, Universe,

[00:29:24] Cameron: Continental. Is that out

[00:29:26] Tony: yeah,

[00:29:27] Cameron: with Mel Gibson?

[00:29:29] Tony: yeah,

[00:29:29] Cameron: Is that any good?

[00:29:31] Tony: what’s the first episode, it’s okay, but, yeah, I’ll persist.

[00:29:35] Tony: It’s, it’s worth watching if you’re a fan, but not as great as Keanu Reeves.

[00:29:39] Cameron: Right.

[00:29:40] Tony: Yeah. So that’s that. And I’m reading a book called punters. If, if anyone does like horse racing, like I do, it’s, it’s a great rip roaring, history of Paddy Powell, the Irish bookmarker who grew to be a big player in the worldwide industry of betting.

[00:29:54] Tony: it’s a fun read as much for the cheekiness of their marketing as, as, you know, the sort of history of, [00:30:00] of, bookmaking when it went from sort of. You know, dingy stores in retail outlets and pubs through to the online era and the sort of quant era and how that all that sort of Wall Street now sort of risk management

[00:30:15] Tony: and managing large data sets came to the market.

[00:30:17] Tony: So yeah, very interesting read, if anyone’s

[00:30:19] Tony: interested.

[00:30:20] Cameron: That’s a player in punting, horse

[00:30:23] Tony: Paddy Power is, yeah, now, now,

[00:30:25] Tony: sorry?

[00:30:26] Cameron: for, for horse racing. They use quant analysis and all that kind of stuff. Oh, I didn’t know that. I didn’t know it had made its way to

[00:30:33] Cameron: that.

[00:30:34] Tony: You haven’t seen my spreadsheets, have you?

[00:30:36] Cameron: No.

[00:30:37] Tony: But, no, they do. They use large data to, to rake over what the, because the bookmarkers have to set the odds. So they’re trying to minimize risk. So they, they rake over large sets of data to set the odds.

[00:30:47] Cameron: Wow. Hmm.

[00:30:50] Tony: But it was always sort of done by gut feel up until, you know, the birth of the internet and data sets became larger and, and tools became [00:31:00] available to, crunch the numbers.

[00:31:02] Tony: Yeah.

[00:31:03] Cameron: Have you tried applying ChatGPT to horse race bedding?

[00:31:09] Tony: I haven’t, but when I’ve tried to apply it to other things, it says, I don’t have live data. So it gets out of it that way.

[00:31:15] Cameron: Yeah, doesn’t have live data.

[00:31:17] Tony: Yeah.

[00:31:18] Cameron: Fascinating. Well, I’ve,

[00:31:20] Tony: that’s all I’ve got.

[00:31:21] Cameron: I’ve been reading lots of stuff as I told you off air, but,

[00:31:24] Cameron: like some of the highlights have been, I’m reading this book by a guy called Neil Gershenfeld, I mentioned, who, his book is called Designing Reality. It’s from 2016, so a few years old now.

[00:31:39] Cameron: And I started reading his book because I, Saw him interviewed on Lex Friedman’s podcast, which is a recent interview. Gershenfeld runs something at MIT called the Center for Bits and Atoms, Bits and Atoms, CBA. And he’s sort of the guy, one of the guys that’s on the forefront [00:32:00] of trying to get us to nano.

[00:32:02] Cameron: bots and nanofabricators. They’re building machines that build machines, is their design, their, their sort of design goal. He said he’s got a prize for his, like PhD students at the moment. No one’s claimed it, but a few people have gotten close. The prizes for the first student Whose thesis, whose master’s thesis can walk out of the printer on its own steam and contain within itself the instructions for how to replicate itself.

[00:32:34] Cameron: that’s what they’re aiming towards. So something can get printed and walk out of the printer under its own steam. But he

[00:32:46] Tony: Which has got to be the, which has got to be the secret to colonize the universe, hasn’t it? If you can stream data at the speed of light and doesn’t, it doesn’t matter if it takes a million years to get somewhere and you do it enough in enough directions. [00:33:00] And one of them strikes a Goldilocks planet and then has the

[00:33:02] Tony: instructions to build itself and start again over there.

[00:33:05] Tony: Yeah. That’s, That’s,

[00:33:06] Cameron: Well, in the Lex Freedman interview, he talks

[00:33:09] Cameron: about it from the perspective of colonizing Mars. It’s okay, that’s what they think about. Okay, what would you need in terms of robots and building blocks to send to a planet like Mars? That could, under their own steam, build a civilization infrastructure, or an infrastructure for a civilization that humans could then go and populate.

[00:33:32] Cameron: You, the first humans arrive there and it’s already built. There’s a, you know, a city ready for you to inhabit. And he says there are basically 20 building blocks of nearly everything, 20 basic building blocks that you can build almost anything with, and they’re trying to figure out how to build machines that can build those things, and a fascinating guy, but he started this thing in 2003, accidentally, called a, [00:34:00] what they call a Fab Lab, Fabrication Lab, basically a lab at MIT, the first one was, that had Fabrication Has a, a milling machine and now has a 3D printer and all the things you need to make those work and big and small and whatever.

[00:34:16] Cameron: sort of a lab with all the machines that you can use to build lots of different cool things. And he started running a course at MIT called How to Build Almost Anything, or How to Make Almost Anything. And then they had… People from all around the world say, oh, could we build one of those labs here?

[00:34:36] Cameron: And there’s now about two and a half thousand of these fab labs around the world, all with the same design, with the same components. They have like a, it’s like a McDonald’s, right? They have, here’s how you, here’s all the stuff that you need. It costs like a hundred grand or two hundred grand to build a fab lab.

[00:34:53] Cameron: Here’s all the videos for how to work everything. So, but they have anyone from the local communities, and these are like in [00:35:00] developing countries, they have a lot of these things, anyone can go in, watch the videos, learn how to use all the machines and all the software, and then just start building things, you know, designing, coming up with ideas, designing it, building it.

[00:35:15] Cameron: And the idea is that these things will become more and more powerful, cheaper to set up and establish, more and more capable of, of, you know, building machines that can build machines is the idea. Until you get to a point where you have a nanofabricator that can just download a blueprint for almost anything and build it.

[00:35:39] Cameron: And of course, as, you know, I’ve been saying for, since I’ve been thinking about this stuff for 20 odd years, like the first nanofabricator, if, if I was rolling these things out, you’d have a nanofabricator that you would give away to somebody for free, but hardwired into it is the contract that the first thing [00:36:00] you have to build with it is a copy of itself that you need to give to somebody for free.

[00:36:06] Cameron: And when they register that they’ve received it for free, then yours gets unlocked and you can make anything else you want with it. But then they need to build a replica and give it to somebody for free. And then you just… undercut the basis for capitalism in a year. Everyone has free nanofabricators and they can

[00:36:24] Cameron: build pretty much anything they want as long as they have the blueprint.

[00:36:28] Cameron: But he, like, so this guy, it’s a really interesting, talk on Lex Friedman, a really interesting book, just about this idea of how, and he makes the point in the Friedman show, obviously the book came out before we had AI, but he was saying the, the same NVIDIA chipsets that became available a That enabled large language models to happen.

[00:36:53] Cameron: are the things that they’ve been waiting for to drive the nanotechnology revolution, because it’s really about [00:37:00] computational power to solve all of the problems that they’ve been trying to figure out for how you build, nano scale machines and simulate, you know, basically the ability to do billions of simulations of different.

[00:37:16] Cameron: Models for how this would work and coming up with the most, viable, methodologies to put into actual physical research. So you don’t need to test them all physically, you test them virtually and to do that takes a lot of computational power. He had this great line, he said something about the human brain runs at like 10 to the power of 15 MIPS, millions of instructions per second.

[00:37:40] Cameron: millions of instructions per second, yeah. And the NVIDIA chipset now is doing 10 to the 15, something like that. And he was basically saying, if we didn’t create artificial intelligence with that, we’d have to be asleep at the wheel. Like if you have, as soon as you have chipsets that can process the same level of [00:38:00] instructions per second as the human brain to not do something like artificial intelligence with it, you’d have to be just not trying.

[00:38:06] Cameron: I mean, that’s basically what brains do, right? They think. And of course, Moore’s Law being Moore’s Law, these things are going to be twice as powerful per dollar, 18 to 24 months from now, and then twice as powerful again a year after that. And you and I have been big fans of guys like Ray Kurzweil for 20 years.

[00:38:28] Cameron: I had him on G’day World, I think in 2007, 6, 7, I think, talking about this stuff. it’s starting to… Starting to happen. Like this is, this is the decade that he’s been, we always said 2030, 2035, these things start to become real. And we’re just starting to hit that part of the curve between 2023 and 2035.

[00:38:54] Cameron: The next 10 years is where all of this stuff comes online. You know, there’s [00:39:00] super computing platforms that are cost effective. You know, businesses that can afford to spend 10, 000 a processor and buy 10, 000 of them, right? Which is what Elon Musk just did. He just built his own AI lab, the XAI lab, and bought like 10, 000 NVIDIA processors at 10, 000 a pop, whatever they were to, to make it happen.

[00:39:25] Cameron: It’s doable.

[00:39:26] Tony: Yeah, or they just do what you

[00:39:28] Tony: said. Every time you buy one you have to replicate it and give it to someone

[00:39:32] Tony: else.

[00:39:32] Cameron: It’s not that, you can’t do that yet. You need,

[00:39:34] Cameron: you need to have

[00:39:35] Cameron: tens of thousands of these things to get to the point where you can do that in the first place. But yeah, but we’re not far away from that. No, I think, you know, we’re a decade or so away from having machines that can build a microprocessor for you in your.

[00:39:48] Cameron: Bedroom.

[00:39:49] Tony: yeah,

[00:39:50] Cameron: Which means China doesn’t need to take over Taiwan because they’ll be able to build their own, if you have the IP, I guess, then it all comes down to the [00:40:00] IP. do you know, can you get the blueprints for building these things? the, the building of it becomes a secondary issue at some point.

[00:40:07] Cameron: Yeah.

[00:40:08] Tony: well, I mean, as the internet taught us, you can get blueprints for anything really, so it’s, it’s hard to, to IP, to protect IP in this modern world, but all that talk about sending out replicators that can replicate themselves and have the instructions I had, reminds me of a, an article I read years ago about the Star Trek, you know, Beam Me Up Scotty, Transporter room and how this, the author of the article said, well, one way to solve the Star Trek problem is that you have, you transmit all the data up, but then you build the person from scratch at, on the enterprise.

[00:40:42] Tony: So they’re down on the planet, they come back, they get built from scratch. And if that person has all the data that they had when they entered the transporter, all their memories, all their personality, et cetera. How do they know it’s a different person even though you built them from scratch? Is it the same person or not?

[00:40:59] Tony: Interesting [00:41:00] debate whether, you know, if that’s the case then yeah, you could send, you could decode Cameron Riley, put him in a, an ion beam, send him across to Mars or further afield and a million light years, when a million years passes and he’s traveled a million light years, replicate him and for all intents and purposes it’s the same person who left, continuing on.

[00:41:20] Cameron: Yeah, if all of your memories are encoded in molecules in your brain and we can read the position and energetic state of each of those molecules at a specific point in time, record the data points for those, you should be able to theoretically rebuild an exact molecular oratory. Replica of that at any given point in time.

[00:41:41] Cameron: It also means you can back up that person too. I remember in, I think it was Cory Doctorow’s book, Down and Out in the Magic Kingdom, his first novel, I think it was 20 or 25 years ago, people in that built into their bed head. Was like a [00:42:00] brain, molecular brain scanner. So every night when you went to sleep, your bed, while you were sleeping, your bed just updated the molecular blueprint of your brain.

[00:42:10] Cameron: So you, you had a nightly backup of where your brain was at. And you get hit by a bus, they just rebuild you, based on your last backup. Yeah, and the idea of teleportation is always, you know, the Star Trek version of it is that the person literally gets deconstructed atom by atom at point A and then rebuilt atom by atom at point B.

[00:42:32] Cameron: Wouldn’t have to do it at an atomic level, you do it at a molecular level. Gets rebuilt as an exact replica of where they were.

[00:42:41] Tony: Yeah, although they could, they could equally just be killed at point A and then rebuilt at point B, and the person who gets rebuilt at point B thinks that they are a continuum from the person who

[00:42:51] Tony: was killed at

[00:42:52] Tony: point A.

[00:42:52] Cameron: Well, you are killed if your molecules get pulled apart, if you get deconstructed. That is kind of a [00:43:00] death, but if you’re rebuilt exactly the same way Point B, then, are you really dead? It’s a bit like Jesus. If he came back after three days, was he ever really dead? I mean, that’s just, that’s a nap.

[00:43:10] Cameron: That’s a long nap. It’s not like he died for our sins. He took a nap for our sins for three days and then he came back. Not really as good a story. Yes. Yeah. Yeah. Yeah. He took a nap for our sins. Doesn’t really have the same marketing impact.

[00:43:25] Cameron: yeah, so I’m reading that, which is great. so many books I got on the go at the moment.

[00:43:29] Cameron: So I discovered this guy, Graham Allison, who wrote a book about the Thucydides trap. the whole idea that Sparta went to war, with Athens, the Peloponnesian War, because Athens started to become a rival. to Sparta and they, they couldn’t stand that. It actually kind of gets back to our conversations over the last few months about the Dark Forest hypothesis, right?

[00:43:54] Cameron: If you, if you see a potential rival coming, you don’t know if they’re going to be passive or aggressive towards you if they [00:44:00] catch up to you. So strategically, it kind of makes sense to try take them out before they have the potential to take you out, just in case they do try and take you out. Graham Allison runs the, or ran, I think he’s still involved, he’s quite old though now, he’s in his 80s, the Kennedy Center for Government at Harvard or something.

[00:44:20] Cameron: So anyway, I was reading his book, Destined for War, about Thucydides trap, specifically looking at the U. S. and China and how the U. S. sees China as a threat. But he talks a lot about Lee Kuan Yew in this and how Lee Kuan Yew was sort of the world expert on China and all these presidents and world leaders over decades would go and meet with Lee Kuan Yew and ask him what was going to happen with China.

[00:44:44] Cameron: And he wrote a book, Graeme Allison wrote a book, about Lee Kuan Yew and interviewed him in 2013, a couple of years before he died, about his views on China, among other things. And so I’ve been reading that as well, and it, which is fascinating, his views on [00:45:00] not just China, but how he built Singapore, you know, the enlightened dictatorship, if you like, or the pro capitalist dictatorship.

[00:45:09] Cameron: the, the, the dictator that the West loved, Lee Kuan Yew, he just ran a dictatorship like any other dictatorship, but the West, the West loved him because it was a pro. Capitalist dictatorship.

[00:45:22] Tony: Yeah.

[00:45:23] Cameron: Very successful dictatorship if you were, if you were on the right side of

[00:45:29] Tony: Mm

[00:45:30] Cameron: the government anyway. But yeah, that’s fascinating.

[00:45:33] Cameron: And he’s just talking about his view of China and basically that, yeah, China’s going to run, China’s going to rule the world. It’s just inevitable. And in his view, they would do it just by trying to avoid. A hot conflict for as long as possible, because he said they saw what happened to Germany and Japan during World War II.

[00:45:54] Cameron: They saw, and they also learned from the mistakes that the Soviets made during the Cold War, [00:46:00] which was to be forced to invest or over invest in military. at the cost of being able to build their infrastructure and manufacturing base and the engines of their economy because they had to defend themselves against a potential all out war with the U.

[00:46:20] Cameron: S. and the West. So China’s plan is just to try and not look like a threat for as long as possible until they’re so big that they’re basically a black hole and all of the economies. First, he talks about Southeast Asia just getting sucked in, like you basically have to become part of the Chinese economic bloc because the alternative is you miss out.

[00:46:46] Cameron: He said, he said China always, and this is like pre Xi Jinping, they talk about Xi Jinping as being the, you know, sort of the guy who was supposedly, looked like he was gonna become the next, president, [00:47:00] but he said, you know, China comes and talks to us and they say, listen, we’re all equals. We, we, we don’t think we’re better than you or more importantly, we’re all brothers in Southeast Asia.

[00:47:13] Cameron: We all have an equal voice, but if you don’t give us what we want, you’re going to make 1. 3 billion people unhappy. So listen, you can do whatever you want. We’re not trying to push you into doing anything, but if you want access to 1. 3 billion people, might want to consider what we’re like. It’s this soft power kind

[00:47:35] Tony: Oh, yeah.

[00:47:37] Cameron: to it.

[00:47:37] Cameron: So.

[00:47:38] Tony: Yeah, which is what the U. S. have done for years.

[00:47:41] Cameron: Whaaaat. Yeah. Kind of. I think it’s more of a direct, military threat. If you believe, the guy who wrote Confessions of an Economic Hitman, John, I remember his last name, worked for the World Bank for a long time. [00:48:00] And he said, we, the way that it works is, you know, we roll into, you know, a Latin American country or whatever it is, and we say, okay, here’s what we want.

[00:48:12] Cameron: The US wants access to all of your resources and all of your markets. Give it to us, give us what we want, or else we’ll replace you with someone else who will, you know, we just, we will, find a general, a disaffected general in your army, or a general who, you know, is ambitious. And we’ll roll up our media engine to say that you’re a communist or you’re corrupt or you’re this that or the other and your general will roll over you and we will support the incoming government as being better for the people and you know la dee da dee da and if we can’t find a general then we’ll roll in our troops or we’ll roll in some proxy troops or we’ll roll in our troops.

[00:48:57] Cameron: But either way, we’re going to get what we want, so you might as well just [00:49:00] give it to us now, because, you know, it’s, at the end of the day, there was always a threat, there’s always sort of a threat of, not just, you don’t get access to the IMF and the World Bank and investment, it’s like a real threat, we will replace you if you don’t, play ball, you know.

[00:49:16] Cameron: One way or the other, we’ll get what we want. You can have it the hard way or the easy way, it’s up to you, you know. Anyway. Subs That’s his view of it.

[00:49:24] Tony: Yeah, it’s a, I mean, it’s a compelling view. The, as we said offline, the question in my mind is whether the U. S. has left it too late to strike against China, because the, you know, the dark forest problem is you strike early as soon as you start to identify the rival.

[00:49:40] Tony: Rather than waiting until It’s an equal fight, which, you know, kind of negates your chances of success, of

[00:49:45] Tony: succeeding.

[00:49:45] Cameron: It’s a bit hard when you’ve outsourced all of your manufacturing to the

[00:49:48] Cameron: rival.

[00:49:49] Cameron: quotes from Graham Allison’s book, Destined for War, though, which I’ll read to you. Like, he’s got some really interesting stats, and this book, again, is [00:50:00] not recent. I think it’s a few years old, but, He says, In a single generation, a nation that did not appear on any of the international league tables has vaulted into the top spot.

[00:50:12] Cameron: In 1980, China’s gross domestic product was less than 300 billion. By 2015, it was 11 trillion. Making it the world’s second largest economy by, by, by market exchange rates. In 1980, China’s trade with the outside world amounted to less than 40 billion By 2015, headed in it had increased 100 fold to 4 trillion for every two year period.

[00:50:38] Cameron: Since 2008, the increment of growth in China’s g d P has been larger than the entire economy of India. Even at its lower growth rate in 2015, China’s economy created a Greece every 16 weeks and an Israel every 25 weeks. I thought that was interesting.

[00:50:59] Tony: yeah, it’s [00:51:00] incredible. And, and I guess we’ve been the benefit of that through companies like Fortescue Metals Group, BHP, et cetera, selling commodities over there. so I think Australians are well aware of the growth rate of China and, and, I think the, the message that’s been lost recently is that China’s still growing at four to 5% even this year when the news is full of how terrible it is over there and how they’re having problems and how builders are going bust and the shadow banking networks about to collapse, et cetera, it’s still growing.

[00:51:30] Tony: You know, it has a growth rate

[00:51:31] Tony: that any western country would would kill for.

[00:51:34] Cameron: Yeah, I like this. He says, When Americans complain about how long it takes to build a building or repair a road, authorities often reply that Rome was not built in a day. Someone clearly forgot to tell the Chinese. By 2005, the country was building the square foot equivalent of today’s Rome every two weeks.

[00:51:54] Cameron: Between 2011 and 2013, China both produced and [00:52:00] used more cement than the U. S. did in the entire 20th century. In 2011, 11. A Chinese firm built a 30 story skyscraper in just 15 days. 3 years later, another construction firm built a 57 story skyscraper in 19 days. Indeed, China built the equivalent of Europe’s entire housing stock in just 15 years. So,

[00:52:29] Tony: Yeah, and that’s, that’s both good and bad. I mean, commentators like Roger Montgomery have pointed out that there are plenty of apartment buildings which are, which aren’t filled and will never be filled. So, but when, when you’re building at that rate of growth,

[00:52:41] Tony: that’s really on the fringe.

[00:52:43] Cameron: yeah. So anyway. That’s what I’ve been reading. Oh, and in terms of watching stuff, there’s the ABC has got a two part documentary on the Brett Whiteley fraud. Have

[00:52:53] Tony: Yes, I’ve

[00:52:53] Tony: been watching

[00:52:54] Cameron: you know, isn’t it great? What a story.

[00:52:58] Tony: Yeah. And I think, [00:53:00] you know, that’s, it’s great that the person who was defrauded is being interviewed because I mean, it just… It’s almost, it’s mind blowing. It’s like the psychopath book where, you know, psychopaths will openly tell you they’re psychopaths.

[00:53:13] Tony: It’s like this guy just openly says, yeah, I just like buying art, bought heaps, heard about this one, bought

[00:53:18] Tony: it. Like, it’s just, it was just like grist of the mill for him, even though he was defrauded of millions of

[00:53:22] Tony: dollars.

[00:53:23] Cameron: One of

[00:53:23] Cameron: them spent 1. 1 million sight unseen on a Whiteley. You saw a photo. And the other guy spent two and a half million. The guy who bought the big blue spent two and a half million, sight unseen, because his art expert advisor told him it was a good buy. Sight unseen! For what he thought was a Whiteley.

[00:53:45] Cameron: But the, the, the best part of the story is the two guys that got charged, the artist and the art dealer, Peter Gant, the art dealer, and the other guy who was the, supposedly the artist doing the fraud, when [00:54:00] a couple of guys working in their studio were taking photos of them painting these paintings, well, one of the artists painting them, like they could see the, the progression of it being painted, they get, they get found guilty by a jury.

[00:54:13] Cameron: And then they appeal it, and the appellate judge gets, lets them off, says, well yeah, the jury, you know, they, they, they couldn’t have decided that there was not reasonable doubt. And their defense attorney, their defense argument was, no, no, no, no, no, no, no, you, you, what, what you saw them painting wasn’t these paintings, they were painting copies of these paintings, and there’s nothing illegal about painting a copy of a painting.

[00:54:44] Cameron: It’s only illegal if you claim that it’s an original Whiteley, and they never did that. You can’t prove that, you know, these paintings that every expert says are frauds aren’t real, including Wendy Whiteley. No, no, no, no, no. They were painting a copy [00:55:00] of that, and you can’t prove it wasn’t a copy of it. I mean, it’s, it’s, the greatest get out of jail free card of all time.

[00:55:07] Cameron: Well, you can’t prove it wasn’t just a copy of that, not the actual thing, so. Classics.

[00:55:13] Tony: I mean I would have thought you could, there was no providence in the paintings they sold and they were passed off as

[00:55:17] Tony: whitelies, so that would be a way of proving it, but you can’t prove that they painted it,

[00:55:23] Cameron: But they manage. The, Peter Gant managed to come up with a woman who said she worked in his studio in 1988 when the paintings arrived in the studio, direct from Brett Whiteley and there was a photographer that they produced, the Defence produced, who said that he was hired to take photos of the paintings for an exhibition that never actually happened in the 1988, late 80s, so they had two witnesses that said, oh yeah, those paintings were around in 1988.

[00:55:57] Cameron: That’s it. So two witnesses that [00:56:00] said, yeah, yeah, we, we, we saw those paintings in 1988, meaning that they weren’t painted in 2007 when the photographs were taken of things being painted, Wiley dying in 92.

[00:56:10] Tony: Yeah.

[00:56:11] Tony: Right.

[00:56:11] Cameron: but the fact that these people are spending millions of dollars on artwork that they don’t even, that’s money.

[00:56:18] Cameron: I mean,

[00:56:19] Tony: Yeah. And it’s just on someone sort of sidling up to them going, hey, psst, want to buy a painting?

[00:56:25] Tony: Want to buy a Whiteley? Open the raincoat, want to buy a Whiteley?

[00:56:28] Cameron: yeah, I nearly bought a Whiteley?

[00:56:31] Cameron: once, it’s a small one, yeah, it was a drawing of a bird, it was available for 80, 000, this is just right about the time I was at Microsoft

[00:56:44] Cameron: and I was thinking about buying it as an investment, cause, and I’m a big Whiteley fan, always been, you know, I wrote a screenplay about Whiteley back in the

[00:56:51] Tony: know

[00:56:52] Cameron: that I always wanted to make, and, I didn’t buy it.

[00:56:55] Cameron: I funded TPN with that money. Actually. [00:57:00] So yeah, should have bought the Whiteley, you know,

[00:57:04] Tony: what it’s worth now?

[00:57:04] Cameron: hired someone to paint copies of it. no, I, I, I hate to

[00:57:08] Cameron: think. A

[00:57:10] Tony: Yeah. It’s like a stock. You never look back.

[00:57:12] Cameron: network. Yeah. Yeah. Yeah. Never look

[00:57:15] Cameron: back. Yeah. Yeah. And I was this close. I like, I was,

[00:57:18] Cameron: you know, yeah. Anyway, so yeah, that’s a good

[00:57:23] Tony: great story. It is, yeah. Great story. And art is the, the

[00:57:28] Tony: wild west of, of investing, really, isn’t it? There’s no rules. There’s no regulations.

[00:57:33] Cameron: exactly. And that’s what one of the guys on the documentary goes, Oh, it’s like, it’s

[00:57:36] Cameron: complete shit, you know, one of the art dealers who was the one who goes, Oh, the art world is just full of scumbags. It’s a scumbag industry. But yeah, you said that the, one of the guys that. Defrauded, he got his money back though, the, it was like a car sale, a car dealer I think he was who, the guy who lives in Bondi with this amazing house full of amazing art, including some original Whiteleys that he has,[00:58:00] Peter Gant, the guy that was found guilty but then got off, the art dealer guy, who has been found, has been charged with lots of art fraud crimes over the years, and even, He said that one of the Whiteleys was, he bought it off a third party guy, who, who, he had like an affidavit signed by this guy that he’d, he’d, he’d bought the Whiteley direct from Brett and then sold it to Gant, and then when this guy got called as a witness, the middleman in court, he was like, I never signed that, I never owned that, and Gant went, oh, well, no, I, I, I forged that letter.

[00:58:42] Cameron: Because I knew that if I said that I bought it directly from Brent, everyone would, everyone wouldn’t believe me. So I did, I did lie about that, but you know, but he’s on the documentary as well. Just,

[00:58:55] Tony: I know.

[00:58:56] Cameron: yeah, not true.

[00:58:57] Tony: I know. Yeah.

[00:58:59] Cameron: I don’t know. [00:59:00] It’s fascinating. Just the balls on

[00:59:02] Tony: Yeah, but these people are so flamboyant and so psychopathic almost that they

[00:59:07] Tony: all agree to participate in a documentary which points the finger at them.

[00:59:11] Tony: It’s

[00:59:11] Cameron: Well, I mean, the guy who bought the painting, I mean, he’s mere culpriting the whole thing. Yeah, he says it was the stupidest thing I’ve ever done. It was like, really, really, really stupid. I just had to re And he said that even his art expert was telling him, like, this, this isn’t real, don’t buy this, you know, this is too cheap for a real Wiley.

[00:59:31] Cameron: Peter Gantz involved, don’t go anywhere near it. Made him sign a document saying that I told you not to do this. I think it was his lawyer, or somebody, and he said, and he just ignored it. He ignored all of the advice. He goes, ah, I’m just going to do it anyway. He thought it was a way to make a quick buck on owning a Whiteley for a few years.

[00:59:48] Cameron: Well, I like the fact that he’s just like, yeah, I did it. I thought I could make a quick buck out of it. Bit me on the ass. It was really stupid. Hello. I kind of admire that. You know, at least

[00:59:58] Tony: Well, yeah, but.

[00:59:58] Cameron: to defend himself. [01:00:00] He’s just going, nah, it was, I was just, I was just being greedy.

[01:00:02] Cameron: It was stupid.

[01:00:04] Tony: yeah, So you wonder why the fraud squad aren’t around there checking out all the other paintings he’s got or that he’s

[01:00:09] Tony: sold, if that’s his, you know, if that’s his

[01:00:12] Tony: mentality.

[01:00:13] Cameron: What about the cops that went to get the other painting

[01:00:16] Cameron: and they couldn’t get insurance? The one that was worth two and a half million, potentially, they wanted to get it from Sydney to Melbourne to be used in the trial. They couldn’t get an insurance company to cover the transport. So they went and picked it up in a truck themselves, sort of van and drove it from Sydney to Melbourne.

[01:00:33] Cameron: There’s painting in the back that might be worth two and a half million or could be

[01:00:36] Tony: yeah, mmm.

[01:00:39] Cameron: I think that’d

[01:00:39] Tony: then had to have it taken into court every day and then taken back to a lockup,

[01:00:43] Cameron: yeah. But imagine driving the van

[01:00:46] Cameron: from Sydney to Melbourne. What’s that? 10 hours, eight, 10 hours with a two and a half million dollar painting that’s got to be used. That’s got to be a stressful drive.

[01:00:57] Tony: yeah,

[01:00:59] Cameron: I [01:01:00] loved it. It was good stuff.

[01:01:02] Cameron: I’m done, Tony. That’s after

[01:01:04] Tony: yeah. Yeah, same.

[01:01:06] Tony: Alright mate, enjoy your holidays, enjoy Bundaberg,

[01:01:08] Cameron: Thanks mate. I will. I’ll talk to you next week. You have a good week.

[01:01:12] Tony: [01:02:00] Cheers.


QAV 729 – The Trump Bump

In this episode of the QAV podcast, hosts Tony Kynaston and Cameron Reilly are discussing a record-high in the All Ordinaries index spurred by the ‘Trump bump’, Aussie Broadband’s sudden dive (ABB), portfolio results, more FY survey results, MLX‘s bump, the Shipping Crisis, thoughts about integrating “Buyback Yield” into the checklist, and Tony breaks down the history and market stance of Elders Limited (ELD) in a detailed ‘pulled pork’ segment. They also explore the Apple Vision Pro’s new features and its future alongside immersive tech like Oculus Rift, then shift to the political scene with discussions on Trump’s influence on global conflicts. The conversations touch on AI, Elon Musk’s ventures like Neuralink and SpaceX, horse racing updates, book recommendations, and reviews of ‘Better Call Saul’ and Tom Cruise films.

QAV 728 – Fixing The U.S. Checklist

In this episode of the QAV podcast, Tony Kynaston and Cameron Reilly discuss the necessary improvements and changes to their US portfolio, including updates to their buying checklist and new financial metrics. Tony does a pulled pork on the U.S. company Willis Lease Finance Corporation (WLFC). In Australian news, they delve into market news affecting coal and iron ore prices and cover some more member survey results ad TK updates us on his Rich List Portfolio . IN after hours, they talk about Tasmania’s MONA art gallery and reflect on AI’s future, drawing from insights by Elon Musk and Bill Gates, indoor golf simulators compared to real-life golfing, and their upcoming demo of the Apple Vision Pro, speculating on technology’s impact on real-life experiences.


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