QAV #640 — Chris from Stockopedia

QAV 640 Club

[00:00:00] Cameron: well. wel­come to QAV. This is episode 640.

[00:00:12] Cameron: We’re record­ing this on the 3rd of Octo­ber, 2023. How are you, Tony?

[00:00:19] Tony: Oh, I’m well. Very good.

[00:00:22] Cameron: That’s good.

[00:00:22] Cameron: If you see my wife walk­ing around Syd­ney, say hel­lo to her for me. She

[00:00:26] Tony: I did­n’t.

[00:00:27] Cameron: there today with her, niece. They’re doing a quick cou­ple of days see­ing the sights of Syd­ney. She said to me just as she was gonna the air­port, whoa, what, what should we do in Syd­ney?

[00:00:39] Cameron: I dun­no what to do in Syd­ney. Go to the opera house. That’s about it. Noth­ing else to do in Syd­ney real­ly. Gallery of Art, Syd­ney Art Gallery. That’s about it. That’s all I

[00:00:47] Cameron: know.

[00:00:47] Tony: Very good. Well, I’ll get her to make, to reach out. We’ll

[00:00:50] Tony: catch up.

[00:00:51] Cameron: Real­ly?

[00:00:52] Tony: Yeah, why not?

[00:00:53] Cameron: Oh, okay. I’ll let her know. She said I did­n’t even get a chance to talk to Tony about it when he was here the oth­er day. I did­n’t even get a chance to [00:01:00] say hi. Any­way, with us today, sit­ting qui­et­ly in, Syd­ney him­self, a spe­cial guest today, All the way from the coun­try of stock­o­pe­dia, Chris Batch­e­lor.

[00:01:10] Cameron: Wel­come to the show, Chris.

[00:01:13] Chris: Thanks Cameron. Great to be with you here today.

[00:01:16] Cameron: What do you, what do you do at Stock­o­pe­dia, Chris? What’s your offi­cial title and, job there?

[00:01:22] Chris: Ah, well, I’m the jack of all trades. I’ve the c e o when I want to be, and I clean the toi­lets when that needs to be done too. , so,

[00:01:32] Cameron: I know that feel­ing. yeah.

[00:01:34] Tony: think the mar­ket’s done that to us today,

[00:01:36] Cameron: It’s clean the toi­let. Yeah. Yeah. Yeah.

[00:01:38] Chris: I do a lot of invest­ment analy­sis work and I also help out with the, the mar­ket­ing and the sup­port side of things. So yeah, my back­ground is in invest­ment analy­sis.

[00:01:51] Tony: Oh, where at? Who with?

[00:01:53] Chris: I used to run a com­pa­ny

[00:01:54] Chris: called Scaf­fold, which is a stock mar­ket research busi­ness.

[00:01:58] Cameron: Oh, Scaf­fold. [00:02:00]

[00:02:00] Tony: Ah, Let’s talk about,

[00:02:02] Cameron: Let’s talk about, can you talk about

[00:02:04] Cameron: Scaf­fold? We tried to buy Scaf­fold.

[00:02:08] Chris: Yeah, right. Yeah, I actu­al­ly tried to do that too at one stage, but, did­n’t hap­pen.

[00:02:13] Tony: Used to be part of our QAV process

[00:02:15] Tony: until it went

[00:02:16] Cameron: Well, under the post Scaf­fold name, which was share. Advi­sor, share some­thing. What was it called a

[00:02:26] Chris: went

[00:02:27] Chris: to, yeah, share analy­sis, I think, some­thing like that. Yeah, yeah. Yeah, so myself and Roger Mont­gomery found­ed that busi­ness and built it up and then we sold it and then the new own­er took it in a dif­fer­ent direc­tion, shall we say.

[00:02:44] Cameron: Yeah.

[00:02:45] Chris: Yeah.

[00:02:45] Cameron: The,

[00:02:46] Tony: kaput. Down. Got the com­pa­ny

[00:02:50] Tony: mov­ing.

[00:02:53] Cameron: Yeah, we actu­al­ly, we reached out to Roger, when it went off, when share analy­sis went off the air, we reached out to [00:03:00] Roger to see if he knew who we could talk to about maybe buy­ing the under­ly­ing, you know, code base or what­ev­er. And he was like, nah, and he said it was all very com­pli­cat­ed and I don’t know, so Yeah, any­thing you want to con­tribute to that or is it just com­pli­cat­ed?

[00:03:15] Chris: oh yeah, it got a bit messy. Yeah, it end­ed up in, Admin­is­tra­tors and so on. So Yeah,

[00:03:21] Tony: which is a shame because it was

[00:03:22] Tony: anoth­er good tool for retail

[00:03:24] Tony: per­son­al investors.

[00:03:26] Chris: yeah, no, exact­ly. It was dis­ap­point­ing to see that hap­pen, but we move on.

[00:03:31] Cameron: Well,

[00:03:31] Chris: got a new tool.

[00:03:33] Cameron: well, it’s one of the rea­sons why I’m excit­ed about hav­ing Stock­o­pe­dia as anoth­er tool. Obvi­ous­ly, our audi­ence knows that we use Stock Doc­tor most­ly, but it was good when share analy­sis was, when share analy­sis Was around to have two data sources and you can com­pare the analy­sis from both.

[00:03:55] Cameron: And we could look at things like intrin­sic val­u­a­tion or [00:04:00] con­sen­sus val­u­a­tions. And we can com­pare the two and get a bit of a heat map for how dif­fer­ent busi­ness­es were view­ing it. But we’ve only had the one, data source for Aus­tralian stocks, real­ly, that we’ve used since share analy­sis went away, but in using.

[00:04:14] Cameron: Stock­o­pe­dia, our lis­ten­ers know that I’ve been play­ing around with it for six months and it has, helped me pick up, some flaws in Stock Doc­tor’s data from time to time and, you know, I, I end up in email sand­wich­es between Link and Indi­ca­tors and your­self and Elio say­ing, Your data’s dif­fer­ent and both, both peo­ple go, Ah, our data, we stand by our data.

[00:04:39] Cameron: So then I have to… Become Sher­lock Holmes and build spread­sheets and try and work out who I agree with, which tends to be you guys. so,

[00:04:48] Tony: And to be fair though, it’s, I think it’s usu­al­ly a prob­lem with the data feed provider to,

[00:04:52] Cameron: oh yeah.

[00:04:53] Tony: you know, to the inter­me­di­aries that we use, the tools that we

[00:04:56] Tony: use. Yeah.

[00:04:58] Cameron: So,[00:05:00] let’s, talk a lit­tle bit about Stock­o­pe­dia then, Chris, and we’ll, you can tell us how you got involved with it and what it does and that kind of stuff. Where, where did Stock­o­pe­dia come from? How long has it been around?

[00:05:11] Chris: yeah, sure. So Stock­o­pe­dia was found­ed in 2012 by a chap called Ed Croft and a few of his col­leagues over in the UK. And they, Ed orig­i­nal­ly start­ed design­ing this prod­uct because he got real­ly burnt dur­ing the GFC and he thought there’s got to be a bet­ter way. He was work­ing in the city as they called it, Lon­don, at the time and, they were work­ing for Gold­man Sachs and yeah, his, port­fo­lio did­n’t do so well dur­ing that time.

[00:05:38] Chris: So he set about, study­ing all the aca­d­e­m­ic research and real­ly try­ing to come up with a solu­tion to how to invest in stocks in a way that is safer And he came up with this, it’s not a new con­cept, but he put togeth­er this, prod­uct around the con­cept of fac­tor invest­ing. And fac­tor invest­ing, I won’t bore you [00:06:00] to snores with the details, but it, it dates back to the ear­ly 90s when some aca­d­e­mics, did some analy­sis and dis­cov­ered that there are cer­tain fac­tors that do dri­ve returns in stock mar­kets.

[00:06:11] Chris: You know, back when I was in uni, back in the ear­ly, ear­ly 90s, we were all taught that, stock mar­kets were effi­cient, and the cap­i­tal asset pric­ing mod­el was the mod­el to, to fol­low, and that you real­ly could­n’t, out­per­form the mar­ket. And then, iron­i­cal­ly, the same chaps that were push­ing that, that par­tic­u­lar the­o­ry, a, a guy called Fama, or two men, Fama and French, came up with a, a paper which said that, actu­al­ly, we’ve done some fur­ther analy­sis and dis­cov­ered that there are cer­tain fac­tors.

[00:06:39] Chris: That do show a ten­den­cy to out­per­form mar­kets over peri­ods of time. so we’ve built a mod­el, a prod­uct around those fac­tors. We’re focus­ing on three, a qual­i­ty fac­tor, a val­ue fac­tor, and a momen­tum fac­tor. And use those to rank all the stocks, not only in our stock mar­ket, but across glob­al mar­kets. Of course, it [00:07:00] orig­i­nat­ed out of Lon­don, so that, you know, the focus has been the UK, but it’s now a glob­al prod­uct.

[00:07:06] Chris: And myself and Elio D’Am­a­to got involved, about 12 months ago. I’ve known Ed for five years or more, and I got in touch with him and said, you know, I know you’d like to make a push into Aus­tralia. You know, Elio and I are look­ing for a new gig. We’d be keen to get involved with you. And so, you know, we nego­ti­at­ed and that all came togeth­er.

[00:07:27] Chris: And so now, Elio and I run the Aus­tralian side of the busi­ness. Man­age all the Aus­tralian cus­tomers, look after sup­port, do analy­sis, write,blog posts and so forth about Aus­tralian stocks as well as New Zealand and, and of course liaise close­ly with the team in the UK who are the in charge of all the devel­op­ment and that side of things.

[00:07:49] Cameron: And of course, many of our lis­ten­ers will remem­ber Elio from his days with Stock Doc­tor, and I think we had him on the show a few years ago, after he left and was [00:08:00] doing some oth­er

[00:08:00] Cameron: stuff. So Yeah, both of you obvi­ous­ly with a long, a lot of expe­ri­ence in ana­lyz­ing the Aus­tralian mar­ket, which I’m sure is of great val­ue to Stock­o­pe­dia.

[00:08:12] Cameron: So what’s, what’s the vision for Stock­o­pe­dia in the Aus­tralian mar­ket, Chris? What do you guys hope to do?

[00:08:19] Chris: Yeah, we hope to be one of the major play­ers in the stock mar­ket research space. You know, we, real­ly believe that this prod­uct real­ly helps investors. It’s quite sim­ple and intu­itive in its approach. but it gives peo­ple, I don’t like to use the term an edge, but it helps peo­ple who are time poor to ana­lyze the mar­ket quick­ly, get them­selves down to a short list of stocks that they can then dig into in more detail and come up with a port­fo­lio that suits them.

[00:08:46] Chris: The oth­er thing that it’s real­ly good at is it’s not, par­tic­u­lar­ly ori­ent­ed towards one invest­ing style only. So, you know, I have my par­tic­u­lar bent and oth­ers will have their par­tic­u­lar bent when it comes to invest­ing, but Stock­o­pe­dia is fair­ly style agnos­tic, [00:09:00] so, you know, short term traders. long term investors, val­ue investors, momen­tum investors, what­ev­er, way you like to cut it, you can find val­ue in Stock­o­pe­dia and find it to be a very use­ful source of infor­ma­tion.

[00:09:16] Tony: Yeah, I think one of the, one of the great things in the last prob­a­bly 10 years or so is the abil­i­ty for retail investors to be able to screen the mar­ket because of, I guess, improve­ments in the inter­net and IT. and that’s, that’s a real bonus for, you know, peo­ple who aren’t in the indus­try or run­ning or work­ing for fund man­agers, et cetera, and have access to Bloomberg screens and that kind of stuff that was only avail­able to stock­bro­kers in the past.

[00:09:41] Tony: And I guess my, my kind of take on all of that is that it does­n’t real­ly mat­ter. It may not mat­ter which tool you use, but if you use a tool prop­er­ly, dili­gent­ly, and with the right process, you should be able to beat the mar­ket. Fair­ly, fair­ly eas­i­ly, fair­ly com­fort­ably, and it just comes down then to, as you say, what, [00:10:00] what style do you pre­fer and how dis­ci­plined are you at apply­ing that style and stick­ing to it?

[00:10:05] Tony: so, so know­ing that, do, do you guys mea­sure, with some kind of dum­my port­fo­lio, the, the returns that some­one using Stock­o­pe­dia would gen­er­ate? And I know it’s, it’s across all dif­fer­ent types of styles, but do you, do you have

[00:10:19] Tony: like a CAGA return that we can bench­mark you with?

[00:10:22] Chris: sort of, yeah, so we don’t have a done port­fo­lio per se, but what we do do is we back­test all of our, stock ranks. So we cal­cu­late, as I men­tioned, we have qual­i­ty, val­ue and momen­tum as the key rank­ing met­rics that we use. And then we cal­cu­late what we call the stock bank, which is basi­cal­ly just a com­pos­ite of those three, com­po­nents.

[00:10:44] Chris: And, and we use that across the mar­ket. We rank every stock from one to a hun­dred. And then what we do is we in back­test those, dif­fer­ent bands, so we break it down into deciles. And we back­test them across all the data that we have. So [00:11:00] for the Aus­tralian mar­ket, for exam­ple, that goes back to 2016. And we can com­pare, stocks that are ranked 90 to 100.

[00:11:08] Chris: If we, set up a hypo­thet­i­cal port­fo­lio, we rebal­ance that quar­ter­ly. And then we com­pare that to stocks that are ranked north to 10. Well, it actu­al­ly out­per­forms on a cumu­la­tive basis by about 150 per­cent­age points, and it also out­per­forms your ordi­nary index. So you know, we have those sorts of met­rics.

[00:11:29] Chris: Now have to caveat all of that with, this is hypo­thet­i­cal. It’s not an actu­al port­fo­lio that you could repli­cate. There’s no trad­ing costs tak­en into account, for exam­ple. but what it does do is give you a good indi­ca­tion of the types of, you know, the types of returns, the direc­tion of returns that fol­low­ing the stock rank­ing, method­ol­o­gy can lead to.

[00:11:53] Tony: Sor­ry, just so I under­stand that 150 points above the index or 150 points above

[00:11:59] Tony: what?

[00:11:59] Chris: [00:12:00] No, so sep­a­rat­ing the top from the bot­tom group of stocks,

[00:12:05] Tony: Okay. And that is the top group of stocks, the top group of qual­i­ty, val­ue and momen­tum stocks, or is it the top of the qual­i­ty, top of the val­ue and top of the momen­tum looked at sep­a­rate­ly?

[00:12:17] Chris: it’s the top of

[00:12:20] Tony: The com­pos­ite. Okay.

[00:12:21] Chris: that’s right.

[00:12:22] Tony: Okay. and how does that top decile per­form over time, from a CAGR point of view or a mar­ket out­per­for­mance point of view?

[00:12:33] Chris: Give me a sec­ond, I can speed that up for you.

[00:12:39] Tony: I guess while you’re doing that too,

[00:12:41] Cameron: how’s it doing today?

[00:12:45] Chris: So, yeah, so I can tell you over the last, eight years that it’s done a cumu­la­tive return of 73%, that’s, that’s not per annum, that’s [00:13:00] oppo­site. That’s cumu­la­tive.

[00:13:02] Tony: you

[00:13:03] Chris: if you want­ed to look, just say at the last year, it’s, it’s basi­cal­ly flat, basi­cal­ly zero. So it has under­per­formed over the last year.

[00:13:16] Tony: Last year being crown­ing the last 12 months or

[00:13:18] Chris: 12 months, yeah.

[00:13:19] Tony: yeah, okay, gotcha, alright. And can I also then say, why qual­i­ty val­ue and momen­tum and can you do oth­er ones like growth, for exam­ple,

[00:13:29] Tony: or oth­er asset class­es?

[00:13:32] Chris: yeah, so we’ve cho­sen those three because we’ve found that they had the biggest impact on stock returns. So in the­o­ry, we’ve rid of that. Oth­ers, growth, there are var­i­ous growth met­rics in the sys­tem and very ear­ly ver­sions of the sys­tem did have a growth com­po­nent, but it was decid­ed by the team in the UK.

[00:13:53] Chris: This hap­pened many years ago, but they decid­ed to just bring it back to those three to keep it sim­ple. And because they were the [00:14:00] ones hav­ing the great­est impact. There was a fair bit of over­lap between, I think par­tic­u­lar­ly the qual­i­ty rank­ings and the growth rank­ings.

[00:14:08] Tony: Real­ly? That’s inter­est­ing, isn’t it? Okay. Yeah, good, good. And, So you kind of got to those three through expe­ri­ence. is it based on research or is it

[00:14:19] Tony: just based on the expe­ri­ence of the devel­op­ers?

[00:14:22] Chris: Most of it is research. There’s a lot of aca­d­e­m­ic stud­ies that have gone into it, and most of those are actu­al­ly acces­si­ble through the pro­gram. There’s a, what we call the Learn sec­tion, so you can dig into that detail if that’s of inter­est to the view­ers, to lis­ten­ers. and then of course there, there has been the, the test­ing of the actu­al mod­els, both what you can see in the sys­tem as well as, back test­ing with data when the sys­tem was being devel­oped.

[00:14:49] Tony: And the back­test­ing sup­ports the fact that you’re bet­ter off hav­ing a port­fo­lio of the top in each of those cat­e­gories, rather than just say the top qual­i­ty stocks or the top val­ue stocks,[00:15:00]

[00:15:00] Tony: for exam­ple,

[00:15:00] Chris: yeah, we don’t push a par­tic­u­lar angle there. I mean, over­all, the, the over­all stock rank gives you the best expo­sure to all three dif­fer­ent fac­tors, and the advan­tage of that is that dif­fer­ent fac­tors will out­per­form at dif­fer­ent times. So, you know, at cer­tain peri­ods of time, that val­ue will be doing real­ly well, and then it won’t do so well for a while, but momen­tum will do real­ly well.

[00:15:23] Chris: And so by spread­ing your­self, or by tak­ing that com­pos­ite, you’re get­ting expo­sure to all three of those, fac­tor dri­vers.

[00:15:32] Tony: you using for momen­tum? Is it like a, a long term over short term

[00:15:35] Tony: type cross? Is that the idea?

[00:15:37] Chris: there’s two ele­ments to the momen­tum score. One is based on share price, and it’s look­ing at pri­mar­i­ly, well, it’s look­ing at the rel­a­tive of the share price ver­sus, you know, the mar­ket. And it’s look­ing at it par­tic­u­lar­ly in the 6 to 12 month peri­od. And then also we look at, ana­lyst earn­ings. So there’s a [00:16:00] earn­ings com­po­nent.

[00:16:00] Chris: So if ana­lysts are revis­ing their earn­ings up, then that’s pos­i­tive for the momen­tum score. So there’s those two, com­po­nents that are tak­en into account. And it’s a num­ber of met­rics under­ly­ing each of the two broad groups that Dri­ve that momen­tum score. So it’s not pure­ly a share price momen­tum,

[00:16:19] Tony: Right. Okay. And rel­a­tive strength, is that the same as the rel­a­tive strength index that we often hear talked about?

[00:16:25] Chris: cor­rect?

[00:16:26] Tony: Yeah. Okay. Good. And I guess that’s one com­po­nent of putting a port­fo­lio togeth­er. Does, Stock­o­pe­dia or your­selves rec­om­mend things like the size of the port­fo­lio or, whether you’re buy and hold or rebal­ance or trade, what, what are the sort of rec­om­men­da­tions along the

[00:16:42] Tony: trad­ing ele­ments of putting a port­fo­lio togeth­er,

[00:16:45] Chris: Yes. Yeah, Stock­o­pe­dia per se does not, give a rec­om­men­da­tion on that. I do have a per­son­al view,

[00:16:53] Tony: which is,

[00:16:53] Chris: which is I, I think a port­fo­lio of around 15 to 20 stocks gives you good diver­si­fi­ca­tion with­out [00:17:00] mak­ing it over­ly com­pli­cat­ed. And most, a num­ber of stud­ies have shown that you get the biggest bang for your buck in terms of diver­si­fi­ca­tion ben­e­fits around that 20 stock mark.

[00:17:10] Chris: After that it starts to taper off a bit. so that’s cer­tain­ly, cer­tain­ly my own invest­ing. I have about 20 stocks in my port­fo­lio. And then to your oth­er ques­tion about, you know, strate­gies, trad­ing ver­sus buy and hold, etc. as I men­tioned at the top, the prod­uct itself is style agnos­tic. So, It is used by peo­ple that like to trade on a fre­quent basis and they tend to focus on momen­tum, where­as those who tend to like to buy and hold for a longer term, and that’s more me, tend to be more focused on qual­i­ty and val­ue fac­tors.

[00:17:49] Chris: Per­son­al­ly, The way I tend to invest is I look for stocks that I think have a lot of long term poten­tial, that are high qual­i­ty busi­ness­es, but also trad­ing at a rea­son­able val­u­a­tion. [00:18:00]And then I ide­al­ly hold them for long peri­ods of time. A lot of the stocks in my port­fo­lio I’ve had for sev­en, eight, nine years now.

[00:18:08] Chris: so pro­vid­ed my the­o­ry proves cor­rect, and that I’ve picked the right stocks, then what I do do is I rebal­ance. So if a stock goes well and it starts to become high­ly weight­ed with­in my port­fo­lio, I trim that back to a, you know, a tar­get weight­ing. Like­wise, if a stock falls and pro­vid­ed it still meets all the val­u­a­tion cri­te­ria and the fun­da­men­tals of the busi­ness are still sol­id, then I’ll add to that weight­ing from that stock.

[00:18:38] Chris: I gen­er­al­ly hold for, as I said, years, but of course, the thing that will trig­ger me to change that is if I dis­cov­er that the busi­ness has changed, either I’ve made a mis­take, or the busi­ness itself decides to take a slight­ly dif­fer­ent direc­tion, or a very dif­fer­ent direc­tion, you know, if the assump­tions around rev­enue and earn­ings, if they prove to not be [00:19:00] play­ing out, or around the bal­ance sheet struc­ture, or cash flow, You know, if that changes sig­nif­i­cant­ly, or even just the ongo­ing strat­e­gy of the busi­ness gen­er­al­ly, we have an under­stand­ing that, you know, there’s a par­tic­u­lar strat­e­gy this busi­ness fol­lows.

[00:19:14] Chris: If they change that dra­mat­i­cal­ly, then I’ll look to sell because the fun­da­men­tals of why I bought that busi­ness no longer stand.

[00:19:23] Tony: that mean that you need to set alerts or fol­low a busi­ness that you own care­ful­ly to look for those kinds of trig­gers for sell­ers or, or you’re pret­ty hands

[00:19:32] Tony: off?

[00:19:33] Chris: yeah, I’m not that hands on. I mean, I do watch it dai­ly. And do I set alerts? I set price alerts for that. Yeah, but what I men­tioned, the trim­ming. Sort of thing. So, I’ll, you know, most stocks in my port­fo­lio, I’m gen­er­al­ly look­ing to, if one gets 20 per­cent over­weight rel­a­tive to my tar­get. Then I’ll look to trim, so I set the price alerts for those.

[00:19:59] Chris: Stock­o­pe­dia does allow [00:20:00] you to set alerts on any num­ber of dif­fer­ent met­rics. I use that a lit­tle bit, but I don’t, do that a lot. Main­ly because I’m very close to my port­fo­lio, I guess because it’s my job. You know, I’m look­ing at this stuff every day, and, you know, keep­ing a close eye on how this busi­ness is doing.

[00:20:16] Tony: So what kind of peri­od do you nor­mal­ly

[00:20:19] Tony: rebal­ance? Is it an annu­al thing or a short­er or

[00:20:22] Tony: longer time?

[00:20:23] Chris: No, it’s not based around a time fac­tor for me, it’s based around those share price move­ments. So I will rebal­ance, when­ev­er a stock gets out of whack in terms of the per­cent­age of my port­fo­lio. so that could be, you know, at any point in time.

[00:20:40] Tony: And what about rebal­anc­ing due to changes in the scores? How often do the scores change enough to drop some­thing or bump some­thing up the decile lad­der, so to speak? Is it after new num­bers come

[00:20:51] Tony: out in the report­ing sea­son or is it chang­ing all the time?

[00:20:54] Chris: yeah, so it depends on the fac­tor. So for the qual­i­ty score, the, well, it [00:21:00]pretty much just comes down to when new num­bers are released. So half the elite for Aus­tralian stocks. the, momen­tum fac­tor changes on a dai­ly basis, as you would imag­ine, and then val­ue, it change, it can change on a dai­ly basis, it tends to be more steady, but val­ue of course is relat­ed to price, and so if price moves con­sid­er­ably, then the val­ue met­rics will change as well.

[00:21:27] Chris: It can also change due to changes in ana­lyst fore­casts and so on, but as I said, that tends to be more grad­ual, unless there’s some sort of announce­ment which dras­ti­cal­ly alters the per­cep­tion of a busi­ness.

[00:21:43] Tony: So do you have any oth­er sell trig­gers out­side of rebal­anc­ing? If, if some bad news came out or the CFO resigned or some­thing like

[00:21:51] Tony: that, would you sell a stock? And what are those rules?

[00:21:54] Chris: Yeah, well, I do look at val­u­a­tion

[00:21:55] Chris: met­rics, and I cer­tain­ly con­sid­er sell­ing when val­u­a­tion [00:22:00] met­rics get high. But in my case, that’s more like­ly to be some­what extreme. I don’t, I gen­er­al­ly just trim when val­u­a­tions get high rather than sell right out. But, there have been occa­sions when I have sold com­plete­ly because I just thought this is.

[00:22:17] Chris: Val­ued, you know, ridicu­lous­ly well, and I might as well take advan­tage of that and get out. and then the third sit­u­a­tion is, you know, I men­tioned I gen­er­al­ly keep to around 20 stocks. Well, if I find some­thing that’s a real­ly com­pelling buy­ing oppor­tu­ni­ty, but I don’t have any spare funds avail­able, well, I’ve got to look to sell some­thing.

[00:22:36] Chris: So I’ll go through my port­fo­lio and say, which is the least attrac­tive of these exist­ing hold­ings. And that one will get sac­ri­ficed to bring in the new one.

[00:22:45] Tony: Least attrac­tive being the

[00:22:46] Tony: low­est score in Stock­o­pe­dia some oth­er way of doing that?

[00:22:50] Chris: that, that’s, yeah, that’s cer­tain­ly a fac­tor, but then I’ll also look at some of the oth­er met­rics that I like to focus on. I, I like to look at the bal­ance sheet. So [00:23:00] if a com­pa­ny’s debt pro­file has got­ten worse, then that’s obvi­ous­ly a neg­a­tive in my per­spec­tive. I, I look at cash flow. I think cash flow is a very impor­tant met­ric to keep a close eye on.

[00:23:13] Chris: Bear in mind that it’s, it’s volatile and vari­able, but nev­er­the­less. over time, cash flow should be strong for a busi­ness to be strong. And then I’ll also look, of course, at rev­enue and earn­ings and the pro­jec­tions for those and how the busi­ness is track­ing rel­a­tive to what is pro­ject­ed in the past.

[00:23:32] Chris: So all of that fac­tors into the stock ranks, but I’ll also pull them out sep­a­rate­ly and look at those fac­tors myself. Peo­ple use Stock­o­pe­dia in dif­fer­ent ways. Some peo­ple just want to keep it pret­ty sim­ple and focus on the stock ranks. But oth­ers, you know, like myself, who’ve been in this game for quite a while, like to dig into the detail and, and, look at the actu­al under­ly­ing num­bers as well as the stock ranks.

[00:23:56] Chris: The two should cor­re­late, but it’s, it’s [00:24:00] also help­ful just to look at the under­ly­ing met­rics.

[00:24:04] Tony: Yeah, and are you agnos­tic when it comes to the size of the com­pa­ny or do you tend to stick to a cer­tain mar­ket cap

[00:24:11] Tony: size or aver­age dai­ly trad­ing val­ue size?

[00:24:14] Chris: Yeah, pret­ty much agnos­tic. I know if you look at my port­fo­lio, it’s def­i­nite­ly skewed towards the small caps. I tend to find there’s more oppor­tu­ni­ties in that space, and that’s just tends to be the space where I play the most. I do have some larg­er stocks, but for the most part I’m focused on the small caps.

[00:24:32] Chris: The stock APU itself is large­ly neu­tral. we do find, par­tic­u­lar­ly with the val­ue met­ric, that some­times you get more oppor­tu­ni­ties in the small­er end of the mar­ket. Main­ly because, the big insti­tu­tion­al investors, they have dif­fi­cul­ty play­ing in that space. And so some­times that skews the val­u­a­tion a bit and throws up oppor­tu­ni­ty for small­er, more nim­ble investors who are able to get into those stocks, you know, with­out dis­turb­ing the share price.

[00:24:56] Chris: Obvi­ous­ly, when you get down to the real­ly small stocks, you’ve [00:25:00] got to watch liq­uid­i­ty. And, It’s not only relat­ed to mar­ket cap, it’s also relat­ed to how wide­ly held the stock is and whether there’s a lot tied up with one or two indi­vid­u­als. But gen­er­al­ly, if you’re patient, and you’re not look­ing to invest too much mon­ey, you can get a decent posi­tion in most stocks.

[00:25:20] Chris: It may take a few days to get into that, you know, with­out upset­ting the mar­ket. But gen­er­al­ly, yeah, I’ve got some real­ly tiny stocks, I’ve got a cou­ple of large ones, and then most of them are prob­a­bly in that 1 to 200 mil­lion, up to 2 bil­lion sort of mar­ket cap.

[00:25:40] Tony: So with the rank­ing process, you get the mar­ket ranked on those three met­rics from top to bot­tom. Have you, do you or have you heard of any­one using the bot­tom of rank­ing stocks to short the mar­ket

[00:25:54] Tony: at all?

[00:25:55] Chris: Yes, yes, I don’t, but yeah, peo­ple do do that. And we actu­al­ly have [00:26:00] six pre built, short sell­ing screens with­in Stock­o­pe­dia. So peo­ple can just click onto those screens and see at a glance what stocks are the most attrac­tive in a short sell­ing per­spec­tive. which means they’re prob­a­bly the most unat­trac­tive.

[00:26:16] Chris: And that will focus large­ly on the low scor­ing stocks, but it also takes oth­er indi­ca­tors into account. yes, they’re based around what we call guru screens. So they’re based around a par­tic­u­lar short sell­er’s strat­e­gy for short sell­ing. And it might be that they focus on three par­tic­u­lar met­rics. And so, you know, we’ll ana­lyze those met­rics and look for the ones that meet those cri­te­ria.

[00:26:41] Chris: But of course, there tends to be a very strong cor­re­la­tion with those and low rank­ing stocks.

[00:26:48] Tony: And do you have guru screens then for the

[00:26:50] Tony: oth­er end, for buy­ing stocks?

[00:26:53] Chris: Absolute­ly, yeah. So most of our guru screens, you know, we have val­ue, we have momen­tum. We have qual­i­ty, we [00:27:00] have growth, and our end income, of course, and we have some income screens as well. I

[00:27:08] Tony: No, we could

[00:27:08] Tony: add a QAV guru screen to

[00:27:12] Chris: cer­tain­ly do not have

[00:27:13] Chris: a ques­tion here.

[00:27:17] Tony: Stock­o­pe­dia. Good stuff. do you adopt any macro screens or macro views or

[00:27:21] Tony: posi­tions in Stock­o­pe­dia?

[00:27:23] Chris: Yeah, now, Stock­o­pe­dia

[00:27:24] Chris: does­n’t take a macro view per se. How­ev­er, the one qual­i­fi­er I would add to that is that we do use con­sen­sus ana­lyst fore­casts. And of course, when ana­lysts are gen­er­at­ing those fore­casts, they’re con­sid­er­ing the macro fac­tors when they’re deriv­ing their num­bers. But yeah, Soc­cer­pe­dia is a very com­pa­ny focused tool, rather than focus­ing on met­rics, macro met­rics.

[00:27:51] Chris: And per­son­al­ly, I invest that way as well. I tend to look at the com­pa­ny. I’m of the view that, ide­al­ly, you want com­pa­nies that are going to pros­per [00:28:00] irre­spec­tive of the eco­nom­ic cir­cum­stances. Now, of course, that does­n’t mean they’re going to be immune to it. Most com­pa­nies will be impact­ed in some way by ris­ing infla­tion or slow­ing eco­nom­ic growth, but good com­pa­nies will have the strength to ride through those peri­ods of time.

[00:28:15] Chris: And they may even emerge out the oth­er side in a stronger posi­tion because their com­peti­tors may well have suf­fered more than they did. So that’s what you’re look­ing for.

[00:28:25] Tony: yeah, do I take it from that then that you stay ful­ly invest­ed the whole time?

[00:28:29] Chris: Yeah. that’s, that’s cor­rect.

[00:28:31] Tony: Okay. And, what about stock weight­ings in your port­fo­lio? Is it, is it 15 to 20 equal weight­ings that you start off with or do you favor those high­er scor­ing stocks

[00:28:41] Tony: with a larg­er part of the port­fo­lio?

[00:28:44] Chris: Yeah, what I do per­son­al­ly, I break my port­fo­lio into two seg­ments. I call them bot­tom draw and top draw stocks. So bot­tom draw are the ones that I’ve held for years that I’m real­ly com­fort­able with. basi­cal­ly ones that don’t cause me stress. And I [00:29:00] give those a high­er weight­ing. So I, with­in that group, they’re equal­ly weight­ed, but that group gets a high­er weight­ing.

[00:29:07] Chris: And then the top draw stocks are the ones that I’m keep­ing a close eye on because, you know, they’re great right now, but I’m not 100 per­cent con­fi­dent that they’re going to be great for a long peri­od of time. And, and so as a group, that gets a small­er weight­ing, which means that each indi­vid­ual stock, whilst equal­ly weight­ed, has a small­er weight­ing than the bot­tom draw stocks.

[00:29:27] Chris: So yeah, there’s a skew there.

[00:29:30] Tony: Okay. What’s, what’s a good exam­ple of a stock that’s in each of those two draw­ers?

[00:29:36] Chris: sure. So Nick Scali or Kodan, they’re stocks that I’ve owned for a long time and I’ve trimmed at times. I’ve added to them at times. So Kodan, I was buy­ing it when it got down to 4 last year. I was sell­ing it when it was at 19, A core hold­ing, well not always, [00:30:00] but for a long time, I’ve had a lot of core hold­ing in that. top draw stocks, so I’ve got some lit­tle sort of min­now stocks. I’ve got Mag­el­lan, for exam­ple, that’s not a min­now, but it’s one that keeps me up at night. If I wor­ry about what should hap­pen there. It looks attrac­tive, pro­vid­ed they can turn it around, but that’s a big pro­vid­ed. And then some of the small­er sort of tech stocks, I have dab­bled in a cou­ple of those, so I, I have very few stocks that have no earn­ings or, you know, don’t have pos­i­tive earn­ings, but I do have a small hand­ful of lit­tle tech stocks.

[00:30:40] Tony: Your point about the bot­tom draw­er stocks, some­thing that I’ve noticed From invest­ing over the years is that some stocks just keep appear­ing on the, what we call it, qual­i­ty val­ue score sheet. I imag­ine it’s the same thing for Stock­o­pe­dia. Why do you think that is? I mean, you men­tioned Scali before it’s been on and off my buy list [00:31:00] now for prob­a­bly 10 years.

[00:31:01] Tony: why do val­ue stocks stay val­ue stocks? And, and, you know, the, the the­o­ry is that they’re meant to grow up and become blue chips. So it does­n’t seem to always hap­pen that way. Do you have any insight into

[00:31:11] Tony: that or thoughts?

[00:31:13] Chris: yeah, well, my, my thoughts are that, I mean, using Scali as an exam­ple, it’s a very well run busi­ness. Now, fur­ni­ture is not going to shoot the lights out, it’s not like AI or some­thing, but it’s some­thing that we all need and we’re going to con­tin­ue to need. For­ev­er in a day. And of course there’s quite a few busi­ness­es in that space, but Nick Schol­ar­ly, just, just a very well run busi­ness, they have quite flush and they’ve, real­ly trans­formed that busi­ness and now gen­er­at­ed real­ly strong mar­gins from that busi­ness.

[00:31:44] Chris: So whilst they’re, you know, we’re not a we chip stock, they, they have grown quite a lot over the last 10 years or so and they churn out the div­i­dends. So if you just sit there col­lect­ing the div­i­dends, you’re doing pret­ty nice­ly.

[00:31:59] Chris: And it’s [00:32:00] just one of those ones where you’re pret­ty con­fi­dent that Antho­ny Scal­i’s just got it.

[00:32:04] Chris: He’s high­ly invest­ed in him­self, so it’s in his inter­est to make sure that the busi­ness is run well, and he does that, and you pret­ty much sit back and let him man­age your mon­ey. As I said, when the mar­ket sells down because of some exter­nal event, That’s when you can pick up more at a good val­u­a­tion. And then, you know, it was at 12, 18 months ago, they got quite high.

[00:32:28] Chris: So, I think they got up to 14, 15. And yeah, I took that oppor­tu­ni­ty to trim a bit. But over­all, I think it’s just a very steady busi­ness pay­ing a great

[00:32:39] Chris: div­i­dend. Just a nice under­hand thing.

[00:32:42] Tony: Yeah, I think it’s a great busi­ness, but it’s just always sur­pris­ing me that it trades on a low PE, when, as you’ve out­lined elo­quent­ly, what all the good things are about it, and yet the instos haven’t real­ly jumped onto

[00:32:53] Tony: the reg­is­ter in a big way.

[00:32:55] Chris: Yeah, and it’s inter­est­ing that they will often cite things like, Oh, we’re look­ing at a prop­er­ty to [00:33:00] find their sales and lever­age to the prop­er­ty mar­ket. And that’s true. But that’ll

[00:33:07] Tony: is,

[00:33:09] Chris: be a, it’ll be a,

[00:33:10] Chris: blip.

[00:33:10] Tony: except resources, no, they are too.

[00:33:12] Chris: Well, yeah,

[00:33:13] Chris: that’s right. And what will hap­pen is,

[00:33:15] Chris: yeah, sales might decline a bit, but that’s just a lit­tle blip, you know, they’ll come back.

[00:33:20] Chris: And you can look through their his­to­ry, like the GFC, their share price tanked. And yeah, their earn­ings fell a bit too, but they bounced back quick­ly, you know, and if you seized them at that time, you would have done real­ly well.

[00:33:33] Tony: Yeah, I think that’s my answer to the ques­tion is that you, the GFC saw a lot of those busi­ness­es which are always on the val­ue list, declined dra­mat­i­cal­ly, Cred­it Corp, Nick Scali come to mind straight away. But, as you say, if you take that 12 months out of the, stock mar­ket graph over the long term, they’ve been ter­rif­ic invest­ments.

[00:33:52] Tony: which means that that 12 months was a great buy­ing oppor­tu­ni­ty, not a sell­ing oppor­tu­ni­ty.

[00:33:56] Chris: Yeah, that’s right, and it was the same dur­ing the pan­ic of 2020 at the start [00:34:00]of the pan­dem­ic, you know,

[00:34:00] Chris: if

[00:34:01] Tony: With COVID, yeah.

[00:34:02] Chris: the, and the courage, there were some great

[00:34:04] Chris: oppor­tu­ni­ties there.

[00:34:06] Tony: Any­way, inter­est­ing to s aside from some­one who’s, like you, been in the mar­ket for a long time look­ing at these stocks, and I guess research. From what I’ve seen, Stock­o­pe­dia plays a big part in the devel­op­ment of the prod­uct. Can you out­line some of the, I guess, more salient pieces of research that have gone into it?

[00:34:23] Tony: I know you spoke before about Eugene Fama, but there

[00:34:26] Tony: prob­a­bly are some oth­er ones too.

[00:34:29] Chris: Yeah, sure. So, there’s, well, I’m not a big expert on momen­tum, you’ve prob­a­bly picked that up by now, it’s not my style, but there’s had been stud­ies. done on Momen­tum and also a lot of prac­ti­tion­ers of Momen­tum, guys like Richard Try­house. The name of the guy who did the big study is just escap­ing me right now, but there was a study done in the ear­ly 90s that real­ly iden­ti­fied Momen­tum as a key fac­tor. then, yeah, they’re, they’re prob­a­bly the [00:35:00] two ones, the, the Fama and French paper called the Cross Sec­tion of Expect­ed Mar­ket Returns in 1992. That, that’s a real dri­ver behind all of this. And then there’s, I don’t know, spe­cif­ic papers around dif­fer­ent ele­ments of it, you know, be it qual­i­ty, be it val­ue,

[00:35:19] Tony: I know, lis­ten­ing to Ed Croft in the past speak, he’s a big fan of the Zulu prin­ci­ple. So that was anoth­er one that, peo­ple might want to look up.

[00:35:26] Chris: yeah, that’s right,

[00:35:28] Tony: And there was anoth­er one too, whose name escapes me, which caught my eye. some research was sug­gest­ed that it was very hard to find the per­fect stock because find­ing the stock, which was great at qual­i­ty and val­ue and momen­tum might be impos­si­ble, but you can get the same sort of char­ac­ter­is­tics if you spread that over 10

[00:35:45] Tony: stocks, which I thought was an inter­est­ing con­cept as well.

[00:35:49] Chris: yes, I know the one, it’s like, you know, I can’t think of the exact name, but I have read that one too. One guy who does do a lot of research in this space is Arnott. He’s a hedge [00:36:00]fund man­ag­er in the US, but he’s prob­a­bly the most famous of the fac­tor invest­ing hedge funds. He, you know, real­ly pop­u­lar­ized this strat­e­gy back in the 90s and still to today he’s run­ning that fund.

[00:36:14] Chris: It’s, it’s a well known fund and he’s done very well.

[00:36:19] Tony: Very good. I guess, you know, before you go, do you have any sort of, war sto­ries from your time run­ning Scaf­fold or with Roger Mont­gomery or being around the mar­kets for a long time that sort of, you can share with our

[00:36:30] Tony: lis­ten­ers that might be help­ful?

[00:36:34] Chris: Award sto­ries. I mean,

[00:36:37] Chris: we’ve all

[00:36:37] Tony: do dur­ing COVID?

[00:36:39] Chris: yeah, COVID was an

[00:36:40] Chris: inter­est­ing time. I, I, I did buy. I did­n’t have enough cash because I had­n’t sold for, I did, I trimmed a cou­ple of things just at that, around Feb­ru­ary, you know, Feb­ru­ary 2020. I thought, I remem­ber trim­ming Mag­el­lan when it was up around 70, [00:37:00] but again, did­n’t sell out.

[00:37:01] Chris: and so I had some cash and so I did buy a num­ber of my favorite stocks dur­ing that peri­od of time. of course, what was inter­est­ing in that time was, It was the big unknown. yeah, it’s all very well to say, oh yeah, you look at the graph now and it dropped and it came straight back. But at that time, it was the first time in liv­ing mem­o­ry that busi­ness­es actu­al­ly shut down. no one knew how long they were shut­ting down for. So I looked at my stocks and said, can these com­pa­nies sur­vive six months with next to no rev­enue? And Nick Scali was one. You look at it and you say, well, they’ve got very lit­tle debt. They’ll obvi­ous­ly cut their expens­es right back, and yeah, sure, their rev­enue will go to Pro­mo­Cero, but yes, I can see they would sur­vive.

[00:37:49] Chris: ARB was anoth­er one, yeah, they’ll sur­vive. The ones that were high­ly lever­aged, Vir­gin was a clas­sic, you know, they’re toast in a sit­u­a­tion like [00:38:00] that, because once… Once the cash flow dries up and they can’t ser­vice their debts, they’re in trou­ble. Yeah. So yeah, I, I did an analy­sis of all my stocks and said, how would they go if this goes on for six months and there’s, there’s no rev­enue com­ing through the door?

[00:38:16] Chris: And I was com­fort­able that they would sur­vive. I knew they’d take a whack, but they would sur­vive. And as we know, all my stocks sur­vived. Most com­pa­nies did sur­vive, but there were some that real­ly strug­gled. A lot had to raise cap­i­tal, so whilst they sur­vived, Rais­ing cap­i­tal at real­ly low prices you can argue is actu­al­ly going broke because if you’re hav­ing to do that you’re dilut­ing your share­hold­ers and if you’re not, if you can’t sur­vive with­out that cap­i­tal then you’re effec­tive­ly in a dire sit­u­a­tion.

[00:38:52] Tony: Yeah. And we’re see­ing that with Star

[00:38:53] Tony: Enter­tain­ment Group at the moment too, with their cap­i­tal rais­ings recent­ly.

[00:38:57] Chris: Cor­rect, yeah. And we’ve got a webi­nar com­ing up in a [00:39:00] week or so where we’re going to talk about avoid­ing dis­as­ters and that’s one of the exam­ples that we will high­light because Stock­o­pe­dia, you know, do you have any warn­ing sig­nals about that?

[00:39:12] Tony: Yeah, right. Good. Cam, over to you. Do you have any ques­tions to add? No.

[00:39:17] Cameron: Just some, I guess, ques­tions about the prod­uct itself, Chris. I guess the first one every­one lis­ten­ing to this is going to be ask­ing is, what’s the unique val­ue propo­si­tion vis a vis Stock Doc­tor? Most of our mem­bers lis­ten­ing to this are already Stock Doc­tor mem­bers. Some new mem­bers may not be though yet.

[00:39:37] Cameron: If peo­ple already have Stock Doc­tor, do you see Stock­o­pe­dia as a A sec­ondary tool, like a com­ple­men­tary tool, or is it an either or sit­u­a­tion?

[00:39:50] Chris: I would think it’s com­pli­men­ta­ry. So, Stock­o­pe­dia does­n’t, attempt to usurp any par­tic­u­lar process. So, I’m no expert on Stock Doc­tor, [00:40:00] but I gath­er they focus on their, sort of, the health of com­pa­nies and their star stocks. You can then use Stock­o­pe­dia to ana­lyze those stocks and get a dif­fer­ent per­spec­tive.

[00:40:10] Chris: Obvi­ous­ly, it’s the same under­ly­ing data, but you’ll see how is that stock rank­ing in terms of its qual­i­ty, in terms of its val­ue, in terms of momen­tum. I would imag­ine this, this type of the stocks they rec­om­mend that would be more qual­i­ty and val­ue stocks, but as I said, I’m not an expert on their sys­tem.

[00:40:28] Chris: so the real thing we bring is this hot fac­tor invest­ing con­cept. And the stock ranks, which make it quite sim­ple for peo­ple to see at a glance. What is the dri­ving fac­tors behind the returns of a par­tic­u­lar stock? And then you know, okay, this stock is, real­ly scores strong­ly in terms of momen­tum.

[00:40:50] Chris: I’m not real­ly a momen­tum investor. That’s not my area. So that’s not one that I’m going to be look­ing at. I’m going to focus on these ones over here, which are qual­i­ty or [00:41:00] great val­ue stocks.

[00:41:04] Cameron: Okay, so com­ple­men­tary, one of my only bug­bears so far with using Stock­o­pe­dia are the down­load lim­its. You can only down­load 200 stocks at a time. When I’m doing an Aus­tralian down­load, okay, that just means I have to do like four or five down­loads to get the full list of stocks I want to look at. But as our lis­ten­ers know, I’ve been using it to try and build a US ver­sion of our check­list.

[00:41:33] Cameron: In which case I have to down­load about 20 pages of stocks to get through the full 3, 000 that I want to fil­ter. Any expla­na­tion for why the lim­its and any chance that they’re going to get removed? What do we have to do? Who do we have to com­plain to about that, Chris?

[00:41:54] Chris: I think you would have to,

[00:41:55] Cameron: chain to, the UK?

[00:41:57] Chris: well, I think you’d actu­al­ly have to go high­er than that and that, [00:42:00] that’s because it’s, it’s due to the data provider, that’s a refini­tive restric­tion. Yeah,

[00:42:05] Cameron: We’re good friends with Refini­tiv. We can reach out to them and, have a crack at them. yeah, okay.

[00:42:10] Chris: yeah, yeah. And the rea­son they have that is, it’s meant to be, you know, they’re sell­ing a data sub­scrip­tion to Stock­o­pe­dia based on this being a retail prod­uct.

[00:42:19] Chris: And if, if it starts to look more like a, insti­tu­tion­al grade prod­uct, then they want to charge insti­tu­tion­al prices. So that’s, that’s why there’s that restric­tion.

[00:42:29] Cameron: Fair enough. final ques­tion. The report­ing, the port­fo­lio, port­fo­lio, report­ing. I think it’s time weight­ed return you guys use. we pre­fer to have a CAGR report.

[00:42:41] Cameron: Is there any way of get­ting a straight up CAGR report, or is that, beyond your, toolset at the moment?

[00:42:49] Chris: yeah, it is beyond what we’ve said at the moment. I know what we can do is put through a request to the devel­op­ment team. I’m not sure where that would rank in [00:43:00] terms of the pri­or­i­ties. Obvi­ous­ly they’ve got a large wish list of peo­ple request­ing dif­fer­ent things, but yeah.

[00:43:08] Cameron: Tell ’em Tony asked. Tony Kynas­ton. I’m sure they know who Tony is. TK says. See how that goes. Alright. and I believe you’ve got an Oprah deal for our lis­ten­ers today, Chris.

[00:43:22] Chris: yeah, that’s right. So,

[00:43:23] Cameron: gets a car.

[00:43:25] Chris: yeah, well, not quite, but every­one can have 10 per­cent off if they, if they choose to sub­scribe. What we’ve done, we’ve set up a web­page, y. stock­o­pe­dia. com for­ward slash QAV. And if you go along to that, you’ll, we’ll be offered a 10 per­cent dis­count on any one of our plans. So, you know, we’ll start with Aus­tralia only is our cheap­est plan, but you can go right through to the whole glob­al pack­age or Aus­tralia and US, for exam­ple, is 720 per annum, which is very com­pet­i­tive com­pared to some of the alter­na­tives that are out there. [00:44:00]

[00:44:00] Cameron: And that’s Y as in W H Y dot stock­o­pe­dia, not the let­ter Y, just in case peo­ple are won­der­ing. Well, thank you. That’s very gen­er­ous of you. And, you know, it is, I know that some of our mem­bers are inter­est­ed in inter­na­tion­al mar­kets, not just Aus­tralia. Up until this point, we’ve only focused on the Aus­tralian mar­ket, but I know we’ve got lis­ten­ers in the UK.

[00:44:21] Cameron: The USA that have been ask­ing us to help them build check­lists. So that’s one of the things I’m excit­ed about Stock­o­pe­dia being an option for us is we can use that for these inter­na­tion­al audi­ences. So, go check it out. why.stockopedia.com/QAV. Thanks very much for com­ing on and hav­ing a chat, Chris, and Thanks, for the deal for our mem­bers, and good luck with the build­ing of the Stock­o­pe­dia Empire in the Aus­tralian region for you and Elio, I hope it does very [00:45:00] well.

[00:45:00] Chris: Thanks, Cameron. Thanks, Tony. It was real­ly great to chat with you guys today.

[00:45:04] Tony: Yeah, thanks, Chris. Thanks for your

[00:45:06] Tony: time, mate.

[00:45:07] Tony: now 2. 56pm, when are we? Octo­ber 3. I think the RBA is meet­ing as we speak, or is about to, announce what’s going to hap­pen with inter­est rates, but, I real­ly hope they leave them on hold. I, I just, I’m just find­ing this whole macro envi­ron­ment top­sy turvy at the moment, if I can put it polite­ly.

[00:45:30] Tony: And I’m not lying, Sol­ly Lew came out dur­ing the week and said inter­est rates have gone too far, and I… I real­ly agree with Sul­ly, but I tend to agree with him on that. I just don’t see how rais­ing inter­est rates now is going to reduce the price of oil. It’s, it’s, it’s just non­sen­si­cal to even think about doing it now.

[00:45:49] Cameron: and of course, as we, hint­ed at dur­ing the chat with Chris, the mar­ket dived this morn­ing. I think it’s at a six month low as of now, we’re [00:46:00] cur­rent­ly, 7. 150. 70 at the moment is the All Ords, down from 7. 43. 150 a year ago. Big crash today, led by bond yields, I read in the Fin this morn­ing in the U. S.,

[00:46:15] Cameron: hit­ting a record.

[00:46:17] Tony: And new yields, yeah. Which is usu­al­ly a sign that, you know, the peo­ple buy­ing and sell­ing bonds think that there’s going to be some kind of mar­ket ruc­tion or down­turn or prob­lems with the econ­o­my. open the win­dow guys. I mean, the infla­tion came down in the U S it’s came down here. At least core infla­tion did.

[00:46:37] Tony: yes, there are, all prices are going up, but, but rais­ing inter­est rates does­n’t help that. It’s com­plete­ly decou­pling is com­plete­ly decou­pled from all prices. But, you know, but also two bonds do this, they go up and down and, and Wall Street adjusts their DCF spread­sheets based on that because it feels in field, it feeds into their, their hur­dle rates.

[00:46:59] Tony: But, you [00:47:00] know, I’m, I’m kind of over it real­ly. I don’t think it’s a, a rel­e­vant, it’s a rel­e­vant fac­tor because the mar­ket moved and you’ve always got to lis­ten to what the mar­ket does. but it does­n’t change what I do. I think, you know, I think. Bond traders on Wall Street can have their say and we can look at com­pa­nies and go, they got a bit cheap­er today.

[00:47:20] Tony: Aren’t we lucky?

[00:47:24] Cameron: And I know that, you know, your port­fo­lio, a lot of our port­fo­lios have strug­gled over the last cou­ple of years as the, every­thing’s been going on, but you know, we don’t real­ly have much choice, right? We just have to ride it out and they’re going to do what they’re going to do. And we’re going to have to keep doing what we’re doing.

[00:47:41] Cameron: And, you know, I did, I did look at when I was doing the. Dum­my Port­fo­lio reports, this morn­ing. and this is before the mar­ket opened. I’m going to, I just want to pref­ace with that. So I don’t know what it’s going to look like, after today’s, events, [00:48:00] but the dum­my port­fo­lio was look­ing real­ly strong on all fronts.

[00:48:03] Cameron: since incep­tion, it was doing two and a half times the index finan­cial, finan­cial year to date. It was up 5 per­cent ver­sus the FTW which was down 2 per­cent and again that’s before the mar­ket opened today. Over the last 30 days we were pret­ty much neu­tral 0. 36 per­cent but the STW was down near­ly 5 per­cent for the 30 days and over the last 12 months we were up 15.

[00:48:32] Cameron: 4 per­cent ver­sus the STW up 12. 66 per­cent and that’s the first time real­ly in the last year that we’ve been back ahead of the STW. We’ve been under­per­form­ing it for the, for the last 12 months. So we were back ahead. So I looked at that at nine o’clock this morn­ing and thought, yeah, all right. Things are, things are back, back to nor­mal.

[00:48:52] Cameron: I’m not sure what it’ll look like when I check it tomor­row,

[00:48:55] Tony: But then that word nor­mal is a good thing to use. It is sit­u­a­tion nor­mal. Mar­kets kind of move [00:49:00] around on bond trades and changes to hur­dle rates and things, but we kind of just, that’s Mr. Mar­ket becom­ing moody and I’m just going to ignore it for now. I might have to do some trades if, you know, the sys­tem says to do them, but, yeah, I’m not tak­ing posi­tions based on 10 year bond yields.

[00:49:17] Tony: That’s for sure.

[00:49:19] Cameron: I was actu­al­ly pleas­ant­ly sur­prised that the only alerts I got this morn­ing were for Vir­gin UK, VUK. That became a rule one sell in some of our port­fo­lios. And, but then I, I just watched it. First of all, I was like, I jumped to Vir­gin UK’s, announce­ments page and I was like, what’s going on? Why is Vir­gin UK crashed?

[00:49:41] Cameron: Could­n’t see any­thing, noth­ing going on. I’m like, what? And then I hap­pened to see what hap­pened to the All Ords. The graph for All Ords looked exact­ly the same as the graph for Vir­gin UK. But it was the only alert that I got today out of the 120 stocks that I owned. Every­thing dropped 3, 4, 5 per­cent but [00:50:00] did­n’t trig­ger any oth­er alerts and I think Vir­gin UK is Thank you.

[00:50:03] Cameron: Thank you. Prob­a­bly recov­er­ing back above the Rule 1 line where it was, so that’s good. Shows that there’s a lot of buffer that’s been built up in there over the last cou­ple of months with the rest of our stocks, but, Yeah, it’s dis­ap­point­ing to see that, you know, the mar­ket is back, you know, below where it was six months ago,

[00:50:21] Tony: yeah, it’s dis­ap­point­ing and it’s also I think rather strange. like I said, I think, you know, I don’t real­ly care what’s going on in the macro­econ­o­my, but I think the bond traders might have this wrong and they’ve been sur­prised a fair bit. you know, if you wind the clock back six months ago, you The the­mat­ics were, there’s going to be lots of inter­est rate ris­es, we won’t see any sort of flat­ten­ing out until 2024, and the U.

[00:50:47] Tony: S. is going to go into reces­sion. then the mar­ket took off, and infla­tion came down. It was like, They get it wrong, is I guess my point, so, I don’t rely on them, you know, I [00:51:00] do what I do, as Chris said in the Stock­o­pe­dia inter­view, you focus on the com­pa­nies rather than the macro envi­ron­ment, but yeah, it’s a fact of being a stock mar­ket investor that the mar­ket is going to move around and push our port­fo­lios around as well, but that’s, that in some respects is the mar­ket, and in some respects it’s noise as well,

[00:51:20] Cameron: hmm, yeah, you know, again, as we’ve been say­ing over and over again for the last cou­ple of years, it’s tough for peo­ple that just start­ed invest­ing in the last cou­ple of years. It’s tri­al by fire, but, sor­ry, blame the, blame the glob­al mar­kets,

[00:51:36] Tony: Blame Wall Street. Blame the bond traders. The bond vig­i­lantes, as they like to call them­selves. They’re get­ting upset about US debt lev­els and gov­ern­ment shut­downs and all that kind of stuff. And, you know, do they have rel­e­vance in Aus­tralia? Not real­ly. So, any­way, a cou­ple of oth­er things on the com­pa­ny front, I was inter­est­ed to see that Wood­side lost a [00:52:00] deci­sion in the Fed­er­al Court dur­ing the week about being able to do some sig­nif­i­cant invest­ment into the Scar­bor­ough Gas Project off the coast of Dar­win.

[00:52:08] Tony: Or North wa and the only rea­son I raise it, I mean, these things hap­pen all the time. Anoth­er, the only rea­son I raise it is, is that the chair­man of Wood­side is Richard Goy­der, who’s the chair­man of Qan­tas. And,I, if I think of, I don’t wan­na put words in Chair­man Mab­b’s. mouth, but if he was here, he’d prob­a­bly say that being the chair of two large com­pa­nies is a heavy work­load and prob­a­bly should­n’t be allowed to occur, but it, but it has.

[00:52:33] Tony: And, yeah, we’re not see­ing many good news sto­ries com­ing out of either of those com­pa­nies at the moment. I’ll leave it at that. and the oth­er one that was inter­est­ing is I did a pull talk about a month ago on a com­pa­ny called Endeav­or Group, which is not. But one of our lis­ten­ers request­ed it.

[00:52:48] Tony: So I did. And I think my head­line from that pulled pork was, there’s no rea­son to own this com­pa­ny. And, in the last week, there’s been a fair few erup­tions on the board. The larg­er share­hold­er, I think prob­a­bly agrees [00:53:00] with me and he’s try­ing to, Tip over them, the man­age­ment, or at least add a board mem­ber who can, bring some retail­ing now, some dis­ci­pline to that group.

[00:53:09] Tony: And, inter­est­ing­ly enough, and one of the rea­sons for talk­ing about it is the per­son that, that, Mr. Math­e­son, who’s the investor I’m talk­ing about, he’s want­i­ng to nom­i­nate is a guy called Bill Wav­ish, who used to be involved in Wool­worths many years ago, maybe 20 years ago, had also some. direc­to­r­i­al posi­tions after that, notably in Myer and in, Dick Smith before it, it float­ed, and so has been a lit­tle con­tro­ver­sial because both of those com­pa­nies, tanked after float­ing and Dick Smith went broke, I’m not sure how involved he was or in the cause of that, prob­a­bly not much.

[00:53:43] Tony: but I want to go back 20 years ago, cause it’s an inter­est­ing con­cept that he devel­oped while at Wool­worths called the, the dou­ble loop or some­times called the vir­tu­ous cycle, and he, I think he was CFO of that wrong, but we’re going back to [00:54:00] the. era of Roger Cor­bett run­ning the com­pa­ny. And Wool­worths was very suc­cess­ful and it was suc­cess­ful in large part because of this dou­ble loop con­cept, which I’m going to just talk a bit about now because it’s inter­est­ing for, for sort of retail nerds like myself and investors who might not have come across it.

[00:54:16] Tony: But, the dou­ble loop con­cept in retail, and I guess it applies to oth­er com­pa­nies as well, is you cut costs as much as you can out of the com­pa­ny. And you give it back as price dis­counts to cus­tomers. So you keep some of it, a small amount goes to the bot­tom line of the com­pa­ny, but a large amount goes in prices.

[00:54:33] Tony: And, and that sort of cre­ates a vir­tu­ous loop where sales increase and bot­tom line improves, due to cost cut­ting. And,that cer­tain­ly worked for them. It cre­ates a kind of Mobius strip. Like, sort of, a graph, I guess, of, decreas­ing costs and then increas­ing sales. And, there’s two kind of pric­ing the­o­ries which, retail­ers need to decide which one they want to be in or be a part of.

[00:54:58] Tony: High, high [00:55:00] low pric­ing or EDLP, every­day low pric­ing. And Wool­worths was, more in the EDLP. And cer­tain­ly by try­ing to have low costs and then low prices, it was adopt­ing that kind of method­ol­o­gy that com­pa­nies like Wal­mart in the US pio­neered. It’s, it, I don’t think any­one’s ever said one strat­e­gy works bet­ter than the oth­er one, but because high low gives a retail­er the chance to, to con­trol its mar­gins by gen­er­al­ly hav­ing high­er prices than the EDLP play­er, but then hav­ing very spe­cif­ic tar­get­ed dis­counts, which are low­er, prices than the EDLP play­er, typ­i­cal­ly called lost lead­ers, in front, you know, from a retail point of view.

[00:55:41] Cameron: that’s what, that’s what high low

[00:55:42] Tony: That’s high low, yeah. Yeah, so, but yeah, Bill Wav­ish brought this idea of a dou­ble loop con­cept to Aus­tralia, pio­neered it with Wool­worths very suc­cess­ful­ly, and I imag­ine if he gets to be a direc­tor on the Endeav­or Group, that’s what he’ll try and imple­ment there. So, just as back­ground to [00:56:00] what’s going on in the news, it’s an inter­est­ing con­cept and you can read about it fur­ther online, I guess.

[00:56:05] Tony: And the last thing I want­ed to talk about, is one of my sort of rumi­na­tions and I’m going to throw it out there I guess as a seed of an idea and see if oth­er peo­ple might run with it and come up with a bet­ter way of think­ing when it comes to this idea but it’s to do with the Super­fund indus­try and I think one of the issues that’s that’s like start­ing to appear When peo­ple talk about super­an­nu­a­tion is are you bet­ter off hav­ing a strong super sys­tem like we do in Aus­tralia where 10 per­cent plus of your wages goes into super and then you get to have a And,I guess the safe­ty net and retire­ment, or are you bet­ter off putting that 10 per­cent towards buy­ing a house and ensur­ing that you have some­where to live rent free when you retire, or do you do a bit of both?

[00:56:54] Tony: And so the idea I’ve come up with, which, I’ll just float out there because I don’t have a super fund that can do this, but, [00:57:00] some­one out there might in the indus­try or, or some­one else might see a way of set­ting up a busi­ness around it. But why would­n’t a super fund, pro­vide a hous­ing to their mem­bers?

[00:57:10] Tony: in exchange for that 10 per­cent that would go into the super fund, still going there, but in some way pay­ing off the loan, on that house, so that over a cer­tain peri­od of time, a long peri­od of time, 20 years, maybe, 25 years, a sort of stan­dard mort­gage time, you’ve still been con­tribut­ing to super, super’s been act­ing like a bank in that they can bor­row and at a whole­sale rate, and then I guess notion­al­ly lend it to you at a retail rate, so your Super­fund con­tri­bu­tions give them, give the Super­fund a mar­gin, but after 25 years, you pay down a house, and you then have a house rent free.

[00:57:46] Tony: If you’re still work­ing, you put your mon­ey into Super in the tra­di­tion­al way, and they invest it for you. but, you know, I kind of see this solv­ing both. Prob­lems for, the indus­try and, and kind of a neat way of, of solv­ing the hous­ing cri­sis while we’re at it too. So [00:58:00] any­way, food for thought and I’ll throw it out

[00:58:02] Cameron: I’m going to put a lot of, you know, fund man­agers work­ing at Super­funds out of work,

[00:58:09] Tony: makes it much sim­pler, does­n’t it? And there might be some, sor­ry,

[00:58:15] Cameron: dou­ble, dou­ble loop ben­e­fits for the Super­fund because they cut their costs, fire a cou­ple of hun­dred fund man­agers who are under­per­form­ing the mar­ket and just put it into real estate.

[00:58:26] Tony: there might be some tweaks on it, that’s the Super­fund takes equi­ty in the house, and that’s how they make some extra prof­it for their mem­bers as well. Although you have to have some kind of liq­ui­da­tion event, which I’m not sure helps or hin­ders in the process, but that’s, that’s one option too.

[00:58:39] Tony: But any­way, it’s I haven’t heard it talked about, and it’s a thought I had, and I thought it was worth try­ing out there.

[00:58:46] Cameron: We need, we need a seg­ment like Tony’s.

[00:58:49] Tony: Soap­box. Yeah, crazy idea. Yeah, that’s a good one.

[00:58:55] Cameron: I’ll get a jin­gle for it.

[00:58:58] Tony: Oh, speak­ing of jin­gles, I’m going to [00:59:00] go into after hours now.

[00:59:02] Cameron: Oh, before you do that, I’ve got some stock stuff to ask you. Do you still own

[00:59:05] Tony: No.

[00:59:07] Cameron: It’s still on our

[00:59:08] Tony: Oh, thank you. I’ll take it off. My mis­take.

[00:59:11] Cameron: I’ve been won­der­ing, I thought you men­tioned last week that you’d got­ten rid of it. You final­ly had to rule one it, I think. And just an update, oh, okay, an update on some­thing we talked about, last week.

[00:59:22] Cameron: Some­body asked about whether or not we should fac­tor in a div­i­dend into the Josephine price and the sug­ges­tion that that should be fac­tored into the buy list. I did try and do that this week but the prob­lem that I’m fac­ing is that, I can’t down­load div­i­dend pay­ment dates in Stock Doc­tor. Like, I can down­load the div­i­dend amount, and the frank­ing amount, and the X date, but I can’t down­load the pay­ment date, so I don’t have an auto­mat­ed, I can’t build a script for an [01:00:00]automated way of back­ing the fact, the div­i­dend out of the, you know, the, the, the Josephine price.

[01:00:05] Cameron: What I have, what I do with my own alerts sheet, when I’m fig­ur­ing out my 3PTL pric­ing and my Real1 pric­ing and fac­tor­ing in div­i­dends is, I man­u­al­ly check the pay­ment date every time some­thing goes ex div. I check it, I put it in my spread­sheet. But I don’t want to have to do that every week. I mean, I could get…

[01:00:25] Cameron: Alex to do it, but she said load it up with enough bits and pieces. so I have emailed Vic­tor at Stock Doc­tor and asked him if there’s any way that we can, you know, get some sort of back­door to down­load div­i­dend pay­ment dates. I had a look at Stock­o­pe­dia to see if they could do that, but they don’t pro­vide any div­i­dend infor­ma­tion.

[01:00:45] Cameron: So, well, well, they, some ratios, but not actu­al div­i­dend X dates and that kind of stuff. So that’s no

[01:00:53] Tony: Well, I’m just won­der­ing whether you can raise this an alert in Stock Doc­tor for, or even in Yahoo Finance or [01:01:00] some­thing for the div­i­dend notice from the com­pa­ny.

[01:01:05] Cameron: Yeah, but we’re gen­er­at­ing a buy list each week that’s got 80 stocks on it. Some­body has to get all of that data and put them into a spread­sheet and mon­i­tor it every week. And it’s just a lot of extra work­load. so any­way, I’ll keep work­ing on it, but just that’s for, for the time being, peo­ple are going to have to do it them­selves.

[01:01:23] Cameron: If you want to buy, if you want to buy a stock and it says it’s a Josephine, but that, you know, it’s got a div­i­dend, work it out. Fig­ure out what you want to do. I’ll keep try­ing to work out an auto­mat­ed way of doing it. yeah, that was my update. Sor­ry about that. Okay, after hours, TK. What’s after hours for you?

[01:01:43] Cameron: Alright.

[01:01:44] Tony: a few things actu­al­ly. It’s been a… Busy, it’s been a long week­end in Syd­ney, not that that means much to me, but, want­ed to talk about, I men­tioned last week I was read­ing a book called Pun­ters, about Pad­dy Pow­er and the gam­bling indus­try, the gam­ing [01:02:00] indus­try, and I fin­ished it, and it’s real­ly good.

[01:02:02] Tony: If any­one’s, a stu­dent of Mar­ket­ing and guer­ril­la mar­ket­ing and data ana­lyt­ics, or in the sort of Stephen main camp of, gam­bling, being addic­tive and, and need­ing to be more excit­ed than it is. It’s, it’s a real­ly good book. I real­ly enjoyed it. It’s, it’s actu­al­ly writ­ten by a cru­sad­ing jour­nal­ist who was try­ing to expose addic­tion in the gam­ing indus­try, but he did, does spend a lot of time talk­ing about some great guer­ril­la mar­ket­ing cam­paigns that, Pad­dy Pow­er have run, includ­ing, Send­ing Den­nis Rod­man to North Korea to set up a bas­ket­ball game with the North Kore­ans.

[01:02:36] Cameron: Oh yeah, I

[01:02:37] Tony: Yeah. And the trou­ble was try­ing to get Den­nis to wear a pad­dy pow­er cap when he was stoned all the time and drunk all the time.

[01:02:47] Cameron: So this is the book by Aaron

[01:02:48] Tony: Rogan

[01:02:48] Tony: Yes. Yep, so that’s a good one. And I’ve just start­ed read­ing The Fall, the new Michael Wolff book about the Mur­dochs and [01:03:00] Rupert’s step aside. It’s pret­ty good. I’ve only got­ten to the first few chap­ters, but it’s worth a read as well, espe­cial­ly if you like suc­ces­sion.

[01:03:12] Cameron: I’ve read a cou­ple of books about Rupert over the years, and they’re always fas­ci­nat­ing. I am plan­ning on read­ing that one

[01:03:19] Tony: Well, this one is, like it’s a chap­ter per play­er. So there’s a chap­ter with Roger Ailes, there’s a chap­ter with all of the Mur­doch chil­dren, et cetera, et cetera. So it goes into detail and I just find it amaz­ing. although I have with Michael Wolfe’s books that these peo­ple like let him in, do inter­views with him and they know he’s going to, you know, write.

[01:03:42] Tony: If not a skew­er­ing book about them, you know, a very dis­sect­ing book about their lives, but they still, you know, hap­pi­ly let him sit in the meet­ings, take inter­views with him. Yeah,

[01:03:54] Cameron: Well, that gets, gets back to the psy­chopath book, Tony. Psy­chopaths don’t [01:04:00] care what you say about them. They don’t, they don’t think it mat­ters. They’re going to win any­way. You can say what­ev­er you want. As long as you’re talk­ing about me, that’s

[01:04:07] Tony: Yeah. And they’re almost flat­tered by the fact that they’re being inter­viewed. It’s great. I’m being, you know, that’s the sign of, that’s a badge of hon­our. It’s a sta­tus sym­bol.

[01:04:16] Cameron: Yeah. Yeah. Yeah. Who cares what you think and who cares what you write and who cares what peo­ple think about it. Does­n’t mat­ter. I’m a win­ner. You’re a los­er. Any­one who does­n’t think I’m a win­ner is a los­er by def­i­n­i­tion.

[01:04:27] Tony: and like, in the first chap­ter of the book, Roger Ailes is being inter­viewed after he’s been oust­ed by the boys, by Lach­lan and James from Fox News, and then Rudy Giu­liani calls up and it’s like, you know, these two oust­ed

[01:04:43] Cameron: don’t say any­thing bad about my

[01:04:45] Tony: I don’t need to, read the book. Even Ailes is like hold­ing the phone and then mouthing what an idiot Giu­liani is. To the inter­view­er, yeah.[01:05:00]

[01:05:00] Cameron: Yeah, when, when you’re too crazy for Roger Ailes. You know, I was read­ing some­thing, I think it was in the, in the Finn or some­where over the week­end about this whole thing and how, you know, they’re still say­ing that. I think it comes from this book that the Mur­doch fam­i­ly, includ­ing Rupert, sort of hates Fox News.

[01:05:23] Cameron: I hate what Fox News has become, but it makes a shit ton of mon­ey, and there’s a shit ton of pow­er, so they’re kind of lumped with this Franken­stein’s mon­ster that Roger Ailes built for them, it makes a buck­et load of mon­ey and has influ­ence, but they’re kind of per­son­al­ly Dis­gust­ed by it. And it, it was James that was, I said on the last work­shop, I thought Lach­lan was the one that want­ed to clean it up, but it was James was the one who want­ed to clean it up, but he’s out, so it does­n’t mat­ter what he thinks.

[01:05:55] Tony: Yeah. And it’s, yeah, that’s, that’s all in the book too. It’s, it’s very inter­est­ing that it’s almost [01:06:00] like cog­ni­tive dis­so­nance. It’s like, shit. We built this Franken­stein’s mon­ster, but it’s very prof­itable. Franken­stein’s mon­ster. We don’t like it ugly, ugly fuck­er, but let’s,

[01:06:09] Cameron: yeah,

[01:06:09] Tony: pull the plug just yet.

[01:06:12] Cameron: well, we’ve all got one of those chil­dren, don’t we?

[01:06:14] Tony: I’ve only got one and she’s love­ly.

[01:06:19] Cameron: yeah, well, for those of us that have more than one, we’ve always got at least one that you’re like, you know what? I don’t like you, but what am I going to do now? It’s too late. I’m going to say which of mine that is. yeah, good stuff. Any­thing

[01:06:32] Tony: the Wes Ander­son short movie? I think it’s on Net­flix. Mr. Sug­ar, The Fab­u­lous Mr. Sug­ar? Mr. Sug­ar, any­way.

[01:06:39] Cameron: There’s three of them, all based on Roald Dahl books, and Fox is a huge Roald Dahl fan. We’re all huge Roald Dahl fans. Huge, Chris­sy and I are huge Wes Ander­son fans, but it’s been too sort of hec­tic here this week with her niece, so no, I haven’t watched them. I’m wait­ing to watch them when the

[01:06:56] Tony: right. I loved Mr. Sug­ar. It was real­ly good. [01:07:00] Yeah.

[01:07:01] Cameron: I love Wes Ander­son. I haven’t seen his last film, the Atom­ic film either.

[01:07:07] Cameron: But I’m tak­ing Fox to see the new Teenage Mutant Nin­ja Tur­tle film tonight, so that’ll be my view­ing high­light. well we were up in Bundy last week as you know, and, Elise, the niece, and Chris­t­ian Fox and I went out div­ing off of Lady Mus­grave Island

[01:07:23] Tony: Oh, nice.

[01:07:25] Cameron: Fab­u­lous day. If peo­ple ever have the oppor­tu­ni­ty to dive, well snor­kel­ing, we were off the Great Bar­ri­er Reef.

[01:07:32] Cameron: So the sort of the south­ern tip of the Great Bar­ri­er Reef off of Bund­aberg there, just spec­tac­u­lar, like sort of whales, in fact our cata­ma­ran that we took over, it’s like a two hour ride from Bund­aberg over to Lady Mus­grave, near­ly hit a cou­ple of whales, there was a guy who did, a cou­ple of guys that did get hit by a whale, real­ly in Syd­ney, yeah, one of them passed away sad­ly.

[01:07:55] Cameron: Our cata­ma­ran cata­ma­ran screeched to a halt in the water. cause it near­ly ran [01:08:00] into a cou­ple of whales that breached just next to us. And then we saw dol­phins and we saw tur­tles and, snor­kel­ing, just, there’s, I don’t know, like this, it’s only a cou­ple of times I’ve ever done this, but just to be snor­kel­ing and just to be sur­round­ed by hun­dreds and hun­dreds of bright­ly col­or­ful fish that are swim­ming around you, like you ain’t no thing.

[01:08:21] Cameron: And, just to be in that world, it’s just always real­ly fab­u­lous. You know, I it. Want­ed to be a marine biol­o­gist when I fin­ished high school and that could have been my, that’s my slid­ing doors life. I could have, instead of being a pod­cast­er, could have been a marine

[01:08:39] Tony: ha ha ha ha. I can see you in a wet­suit, long white hair, bleached by the sun. Yeah.

[01:08:47] Cameron: Yeah. Same look, just dif­fer­ent attire.

[01:08:50] Cameron: ha ha. I’d be yelling at the fish about, you know, cap­i­tal­ism gone wrong and, Amer­i­can cor­rup­tion and they would pay [01:09:00] just as much as atten­tion as any­one else.

[01:09:03] Tony: Got a cou­ple of hors­es run­ning this week, Cam.

[01:09:06] Cameron: Oh yeah? How did it, how did you ones go

[01:09:08] Tony: well, I did­n’t run last week, week before, so Poi­fect ran third, and she runs again this week, in the Edwood Man­i­fold Stakes in Mel­bourne, so I’ll be head­ing down towards the end of the week to, to watch that. Yeah, and a new one called Negro­nis is hav­ing its first start on Thurs­day at Gos­ford.

[01:09:28] Cameron: Wow. Well,

[01:09:29] Tony: yeah, and that’s, I think Steve Mab­b’s in that one too, so good luck to both of us. Yeah,

[01:09:36] Cameron: I want to thank every­one who, watched the NRL Grand Final and con­se­quent­ly weren’t on the Sun­shine Coast High­way when we were com­ing back from Bund­aberg on Sun­day. I’ll say to Chris­sy, like, it’s nor­mal­ly way busier than this. It was the last day of school hol­i­days, too, and usu­al­ly it’s chock­ers, it’s like snail’s pace on the…

[01:09:58] Cameron: Sun­shine Coast High­way, there was [01:10:00] no traf­fic. And then I sud­den­ly dawned on me why it was. Oh, it’s NRL grand final day and all the Bogans are

[01:10:06] Tony: and Bris­bane was play­ing too.

[01:10:09] Cameron: Yes, yes, so half of the bogans were in Syd­ney for that, and the rest were at home get­ting drunk. So thank you to all of the bogans who got off my road, let me have a clean run,

[01:10:21] Tony: Oh, well I was one of the Bris­bane bogans. I watched it on TV at the Mate’s Place.

[01:10:26] Cameron: did you? I had, this is the, on Sat­ur­day, one of my old mates in Seat­tle, Buzz Brugge­man, texted me and said, I think the Lions could win this. And I had no idea what he was talk­ing about. I said, what, who, what are you going on about? And

[01:10:45] Tony: Go the Chris­tians

[01:10:47] Cameron: I, I final­ly twigged it. There must’ve been a foot­ball game going on

[01:10:53] Tony: It’s the A F L Grand Final on Sat­ur­day. Yeah. Big week­end of sport. Mm. And Thery the cup, which [01:11:00] was the most impor­tant thing I thought was on. And Europe beat the us.

[01:11:06] Cameron: Wow. Well, there you go. Big

[01:11:08] Tony: So, yeah. Let’s see if I, I prob­a­bly can’t if I play this, you won’t hear it, will you? Okay, well I’ll send you a link to the clip where, the Euro­pean team are on a bus cel­e­brat­ing, singing a song say­ing, The US is ter­ri­fied, Europe’s on fire. So, it’s quite fun, I thought.

[01:11:28] Cameron: Well, the big news, for me this week, I don’t know if you’ve seen this, but there’s this new ver­sion of Chat­G­PT that’s rolling out, around the world over the next week or so where it has. audio feed­back. You, you can talk to it and it’ll talk back to you. And Tay­lor actu­al­ly has it. I was quite pissed that he has it and I don’t, but he came over, the boys came over last night for din­ner.

[01:11:51] Cameron: He has it and it’s amaz­ing. For, for every­one who’s used to Siri talk­ing to you, this is astound­ing. It’s, [01:12:00] it’s into­na­tion. It’s, paus­es. It sounds real­ly nat­u­ral­is­tic. talk­ing back to you. It’s real­ly incred­i­ble. So you can talk to your AI now. And Tay­lor did­n’t have this fea­ture yet, but they’re rolling this out around to every, all the pre­mi­um sub­scribers any­way, over the next cou­ple of weeks.

[01:12:20] Cameron: The abil­i­ty to take pho­tos of any­thing into your AI and say, what’s this? And there’s some real­ly inter­est­ing, demo videos that peo­ple have done. There was one woman who took a pho­to of her bike and said, my bike’s not work­ing. What’s wrong with it? And it told her which part. She described it and it told her what part to check.

[01:12:41] Cameron: She zoomed in and got close and took a pho­to and said, this bit. And it said, no, no, not that bit. The bit to the left, go up a bit. You’ll see this is what’s wrong and fix it. And, you know, peo­ple are tak­ing like pho­tos of, their fridge and say­ing, give me a recipe based on this. And it’s, ana­lyz­ing what’s in the fridge.

[01:12:59] Cameron: It’s a [01:13:00] major upgrade to Chat­G­PT. It sounds real­ly inter­est­ing. And then the oth­er major thing that hap­pened, I don’t know if you saw this, but Lex Frid­man, guy who has my old job, doing inter­view­ing tech lead­ers, did an inter­view with Zucker­berg this week using Meta’s new gog­gles. Have you seen any clips of this?

[01:13:24] Cameron: Can’t hear you, you’ve gone mute.

[01:13:26] Tony: There you go. I haven’t seen any clips, but I read about it on the week­end.

[01:13:30] Cameron: Holy

[01:13:31] Tony: of thing where you put the gog­gles on and it says, okay, this is how you make the repair and takes you

[01:13:38] Cameron: No, that was­n’t the… This was just an, they, he inter­viewed Zucker­berg, but it was the lat­est ver­sion of Meta’s new, immer­sive three D avatars in the Meta­verse. So it was, they were talk­ing to each oth­er, but there was avatar ver­sions of them [01:14:00] talk­ing to each oth­er, but it was real­ly life­like. Their avatars are incred­i­bly, almost impos­si­ble to tell that it’s not.

[01:14:10] Cameron: Video. Lex was kind of blown away in it and he’s a very, sort of, what’s the word I’m look­ing for? Stol­lard? Stol­lard? Stol­lard? Sto­ic? Yeah, that’s it. Guy. sor­ry, that’s not actu­al­ly the word I was look­ing for, but that’ll do. He, you know, so the process is they do a very detailed scan of your face, upload that into the sys­tem.

[01:14:41] Cameron: So it has all of your face and you, and you, you, you pull dif­fer­ent expres­sions when it’s doing the scan and it builds all of that struc­ture of your face into the sys­tem. So then when you have the gog­gles on and you’re talk­ing, your lips are mov­ing and your eyes are mov­ing and you’re blink­ing and all that kind of stuff, but it’s pick­ing up just that data.[01:15:00]

[01:15:00] Cameron: to inte­grate with the rest of your facial data that it’s already scanned. And Zuck was say­ing like right now it’s quite a, an elab­o­rate process, but they’re hop­ing they’ll get it to a point where you’ll just be able to hold your iPhone up in front of your face, scan it, pull some expres­sions, take two or three min­utes.

[01:15:18] Cameron: It’ll upload all of that into the sys­tem. And then you’ll have a very, very hyper real­is­tic avatar of your­self that can do all sorts of things. And I’m still not exact­ly sure why I want that or what I’m going to do

[01:15:33] Tony: going to replace me with it, which would be great. I’ll just, I’ll just take a hol­i­day.

[01:15:38] Cameron: Well, so you’d be the first thing you’d go for. Peo­ple are only lis­ten­ing to your voice. I can already take your voice and turn a voice ver­sion of you. It’s your brain that we need, Tony. Not your, not your image or your voice. It’s your brain that we want. any­way, so yeah, there’s big, cou­ple of real­ly big, leaps for­ward in that space [01:16:00] this week, which is quite astound­ing.

[01:16:03] Cameron: So any­way, that’s me.

[01:16:06] Tony: That’s all I got.

[01:16:09] Cameron: All right. Well, I got lots of ques­tions, but we’ll have to push them out for next week.

[01:16:12] Tony: I’ll be call­ing him from Cape Schanck next week.

[01:16:16] Cameron: Oh, love­ly. Well, just when I was get­ting used to what a nice micro­phone you

[01:16:20] Tony: well, it’s the same micro­phone at Cape Schanck. Yeah, I’ve got two.

[01:16:25] Cameron: just more echo

[01:16:27] Tony: Yes, prob­a­bly.

[01:16:29] Cameron: Yeah. All right. Thanks TK. Well, have a, have a good trip. Have a good trip. [01:17:00] [01:18:00] [01:19:00] [01:20:00] [01:21:00] [01:22:00] [01:23:00]