QAV #641 — Dumb Money

 

[00:00:00] Cameron: Wel­come to QAV episode 641. We’re record­ing this on the 10th of Octo­ber 2023. Tony’s back down at Cape Schanck

[00:00:15] Tony: I am?

[00:00:16] Cameron: bit, lit­tle bit chilly down there, Tony.

[00:00:18] Tony: It is. Yeah, I can. Yeah, I am. It’s, it is chilly, but still love­ly. It’s, it’s rare that it’s still, which I think is one of the rea­sons why it’s cold, but, that’s great for golf. Not play­ing in three club winds. It makes it much bet­ter and eas­i­er and more enjoy­able.

[00:00:34] Cameron: That sounds pret­ty cold for this time of the year in Vic­to­ria, does it nor­mal­ly get that cold at Cape Schanck in Octo­ber?

[00:00:39] Tony: No, no, it’s nor­mal­ly, well, it’s spring, so it’s nor­mal­ly sort of high teens. It’s prob­a­bly about five degrees cold­er than nor­mal, I guess.

[00:00:47] Cameron: Hmm. And why are you back down there? Is it hors­es?

[00:00:51] Tony: Yes, I came down to watch a horse run last Sat­ur­day. one of my friends texted me and said, how come I only have slow hors­es? [00:01:00] I went back and said, it’s even worse for me. I pay train­ers to train them slow­ly.

[00:01:05] Cameron: Ha ha ha ha ha. Oh, that’s no good.

[00:01:08] Tony: we went, we had a great day at Flem­ing­ton. Rud­dy and I went out, we, went to the din­ing room, had a love­ly lunch, but yeah, did­n’t, that horse came last, so we did­n’t take away any prize mon­ey with us.

[00:01:19] Cameron: Oh, I’m sor­ry to hear that. Speak­ing of prize mon­ey, the RBA gets the prize mon­ey for not lift­ing rates last week. You said you hoped that they would­n’t do it, and they did­n’t do it. For now,

[00:01:32] Tony: For now,

[00:01:33] Cameron: like they’re still say­ing they might do it.

[00:01:36] Tony: Yeah, plen­ty of peo­ple are say­ing they should do it, but I dis­agree. It’s, I don’t see how, when infla­tion’s caused by oil prices. A lot of infla­tion is caused by oil prices, how rais­ing inter­est rates stops that one damn bit.

[00:01:51] Cameron: Because peo­ple need oil. They’re not going to stop buy­ing oil because you raise inter­est rates, right?

[00:01:56] Tony: Well they might, I guess, you know, if they’re broke, like if they [00:02:00] can’t pay their mort­gage and put the car up on stumps, I don’t know, but it’s pret­ty strange.

[00:02:06] Cameron: Yeah.

[00:02:07] Cameron: Well, speak­ing of oil prices, the whole sit­u­a­tion in Israel and Gaza, which is very sad and unfor­tu­nate,

[00:02:15] Cameron: but I men­tion that part­ly because it’s trag­ic and part­ly because there is talk that oil prices might go up and I checked just before we got on the show today, oil prices are in fact going back up. They had been head­ing down, they’re going back up. Still a Josephine for us.

[00:02:32] Cameron: I think it’s about 88 now, it needs to get up around about 93, I think, for it to break its sec­ond buy line, become a buy again for us, but that’ll be some­thing we’ll be watch­ing next week. But, it’s just a, you know, anoth­er one of these glob­al geopo­lit­i­cal fac­tors that mess­es with our mar­ket, and, we’re a lit­tle bit hostage to it.

[00:02:54] Cameron: Mar­ket crash last week. I think it was US relat­ed fig­ures [00:03:00] again. It’s

[00:03:00] Tony: US bond yields. Hmm.

[00:03:02] Cameron: It’s recov­ered quite a bit, but, I think we’re still at a six month low today. So it’s kind of frus­trat­ing as an investor to spend six months dili­gent­ly fol­low­ing a process and then the mar­ket just cuts you off at the knees yet again for the

[00:03:18] Cameron: umpteenth time in the last cou­ple of years.

[00:03:21] Tony: Yes, no, you’re right, it is frus­trat­ing, but it hap­pens, that’s, that’s the busi­ness we’re in, unfor­tu­nate­ly, or for­tu­nate­ly, in the long run, for­tu­nate­ly, in the short run at the moment, not so great, and I guess also, too, like, my note for today was, the hunt for Red Octo­ber, because, Octo­ber’s always the witch­ing the stock mar­ket for some rea­son, and, the 87 crash hap­pened in Octo­ber, the GFC, plen­ty of starts for the GFC, but I think, maybe Lehman Broth­ers col­lapsed in Octo­ber, I don’t know.

[00:03:49] Tony: yeah, like Octo­ber always seems to be the, the thinnest ice in the stock mar­ket. So hope­ful­ly we’re, we’re, we’re going ahead, but, would­n’t mind that this could, [00:04:00] this week could be a dead cat bounce, unfor­tu­nate­ly, we’ll see.

[00:04:03] Cameron: I was blam­ing QAV club mem­ber Reg Travaskas because he said to me, the end, towards the end of last month, Octo­ber’s always, you know, quite often the worst month. And I went back over the last five years and actu­al­ly the last five years, Octo­ber’s been rea­son­ably a good month. I said, I don’t know about it.

[00:04:18] Cameron: He goes, oh, I read it on a forum some­where.

[00:04:21] Tony: Yeah,

[00:04:21] Cameron: I said, I don’t know. I don’t know, Reg, I think you might be a lit­tle bit pes­simistic about your Octo­ber, of course. Very first day of Octo­ber, the mar­ket crashed. So I was blam­ing Reg, but you’re back­ing him up that there is a his­to­ry of Octo­ber relat­ed

[00:04:34] Tony: look, it’s been. It is a mar­ket myth and it’s been debunked, but it is coin­ci­dence that, you know, the Wall Street crash that kicked off the Great Depres­sion hap­pened in Octo­ber, 87 hap­pened in Octo­ber, GFC kind of got under­way in Octo­ber. And the old myth is sell and may and go away. That’s until the end of Octo­ber.

[00:04:57] Tony: But again, there’s been plen­ty of research that shows it. [00:05:00] You would­n’t have made or lost mon­ey if you adopt­ed either of those strate­gies, but I mean, sell­ing in Octo­ber or, or sell in May and go away. But yeah, it’s a skin­ny month.

[00:05:10] Cameron: Well, on more enter­tain­ing news, I read this thing in the finan­cial review last week. We did­n’t get a chance to talk about it on last week’s show, but it’s about Kei­th Gill. The hero of the, AMC, deba­cle last year, was it last year or the year before that that hap­pened? 2021, I guess it was a cou­ple of years ago.

[00:05:33] Cameron: GameStop and AMC.

[00:05:35] Tony: right. Yeah, I took a pho­to­graph of a GameStop shop when I was over in the States in April. I should post that. It was, it was, there was­n’t a cus­tomer in sight.

[00:05:47] Cameron: Yeah, well, I’m sure peo­ple, we don’t need to go over the sto­ry, peo­ple remem­ber it, Wall­Street­Bets was the sub­red­dit, and this, it was start­ed by this guy, Kei­th Gill, who went by a num­ber of alias­es online, but there’s a new [00:06:00] movie appar­ent­ly com­ing out, this month, based on his sto­ry called Dumb Mon­ey, star­ring Paul Dano.

[00:06:08] Cameron: There’s Kei­th Gill, and I thought this was just a real­ly inter­est­ing sto­ry, I don’t know if you had a chance to read it in the Fin Review, but he was kind of pret­ty much a nobody, as they say in this, he was an unre­mark­able finan­cial ser­vices guy liv­ing in an unre­mark­able rent­ed house in an unre­mark­able Boston sub­urb, one of many mil­lions of ordi­nary decent Amer­i­cans, and But at night, he would post YouTube videos and write posts on Twit­ter and Red­dit’s Wall­Street­Bets about which stocks were catch­ing his eye.

[00:06:38] Cameron: He mixed this advice with his thoughts on Bel­gian beers and would cel­e­brate big gains by dunk­ing chick­en gou­jons in one of those beers or per­haps in a glass of Pros­ec­co if he was feel­ing flash. Some­times he would con­sult UNO cards or a Mag­ic 8 Ball, a nov­el­ty toy shaped like a pool ball which offers 20 pos­si­ble answers to any yes no ques­tion.

[00:06:59] Cameron: I [00:07:00] like that who­ev­er wrote this felt like they had to explain what a Mag­ic 8 Ball was,

[00:07:03] Tony: that’s what I thought when I read it too. This guy’s being paid by the word.

[00:07:07] Cameron: It’s the lat­est tech­nol­o­gy that peo­ple might not have caught up with yet, the Mag­ic 8 Ball. He went by Roar­ing Kit­ty on YouTube and Twit­ter and deep eff­ing val­ue on Wall­Street­Bets, but just the sto­ry about, you know, how he just got behind GameStop and how just peo­ple jumped on board and he, like, appar­ent­ly he got out and made a Buck­et load

[00:07:34] Tony: Mm hmm.

[00:07:34] Cameron: mon­ey, which he man­aged to hold on to.

[00:07:38] Cameron: He got out at the right time and a lot of peo­ple lost a lot of mon­ey, but he got out of it with about 20 mil­lion US dol­lars.

[00:07:47] Tony: good on him. Yeah, well, he was, I mean, what he was focus­ing on is… Com­pa­nies that were being short­ed and then he was try­ing to cre­ate what’s called a short squeeze. So I, I don’t know if he hon­est­ly believed that [00:08:00] GameStop was a good invest­ment, but it was for him because he could see it was heav­i­ly short­ed.

[00:08:04] Tony: And it makes sense because they’re try­ing to sell you phys­i­cal games, game car­tridges in the day and age when every­thing’s being streamed. It’s a bit like Block­buster Video was towards the end. and Yeah, so, heav­i­ly short­ed com­pa­ny, may even have been prof­it­less, going broke, but he had enough fol­low­ers to dri­ve the share price up, which then forced a short squeeze, which was all the peo­ple who’d short­ed the stock were then wor­ried about unlim­it­ed loss­es if the share price kept going up, which hap­pens when you’re short.

[00:08:39] Tony: and so they had to sell, which was, well, but first of all, they had to buy the stock and then give it back to the per­son that they bor­rowed it from to short it, so that pushed the price up as well, and then he got out, but unfor­tu­nate­ly, in all the sort of, eupho­ria and memes and to the moon post­ings, [00:09:00] the retail So, Peo­ple who sup­port­ed him did­n’t get out and then the short squeeze was over and GameStop dropped back to what it was orig­i­nal­ly in terms of its share price.

[00:09:10] Cameron: Yeah. And I remem­ber we, we were talk­ing about it at the time and you were posit­ing that there were prob­a­bly major play­ers that were mak­ing a lot of mon­ey. And just laugh­ing at the whole dumb mon­ey thing flow­ing in and the Finan­cial Review sort of backs that up. It says, Inevitably, the real pic­ture is not as clear cut as the David and Goliath nar­ra­tive where retail investors make a killing while Wall Street takes the hits.

[00:09:37] Cameron: Plen­ty of hedge funds made seri­ous mon­ey, both from their own stakes and from lend­ing out stocks to pan­ick­ing short sell­ers. Mudrick made 200 mil­lion, Sen­vest 700 mil­lion, Black­Rock more than 2 bil­lion. The hedge funds which did go under did so because rivals kicked them when they were down. GameStop might have brought the [00:10:00] likes of Melvin to its knees.

[00:10:02] Cameron: But it was Melv­in’s com­peti­tors who did­n’t let it get back up. And for every small time investor who cashed in, there were many oth­ers who held on to their stock too long and nev­er saw a prof­it. GameStop is now trad­ing at less than 18 a share, around the same lev­el it was before the short squeeze began.

[00:10:21] Cameron: WSB is full of young aggres­sive traders who ignore fun­da­men­tal risk man­age­ment prin­ci­ples and regard let­ting go of stock as weak. So, I like this quote from an ana­lyst, Michael Pachter. He said, The guys who got in because of the struc­tur­al short, that was a smart move and that was the right thing to do.

[00:10:38] Cameron: The guys who stayed in because they believe in GameStop’s new Exec­u­tive Chair­man Ryan Cohen? Dum­b­ass­es. Kei­th Gill’s army may have won a bat­tle, but Wall Street won the war. It usu­al­ly does.

[00:10:52] Tony: yeah. Also he’s done well to make 20 mil­lion, but that’s pal’s insignif­i­cance com­pared to what Wall Street made.

[00:10:59] Cameron: [00:11:00] Yeah. So I thought that was, like, just, just anoth­er one of those sto­ries of, peo­ple get­ting excit­ed, fol­low­ing the hype, and many of them, most I would guess, get­ting burnt.

[00:11:18] Tony: And look­ing to Tik­Tok for finan­cial advice, or Red­dit or wher­ev­er,

[00:11:23] Cameron: what­ev­er. Yeah,

[00:11:24] Tony: yeah, and not check­ing it out them­selves. And we’re see­ing a ver­sion of that in reverse now, real­ly, all the doom and gloom that’s going on. I saw a, I saw a post the oth­er night on Face­book about how many Cana­di­ans were sell­ing their hol­i­day homes in their boats.

[00:11:40] Tony: at the moment because their mort­gages were stress­ing out and how that was going to be the end of the end of the world for the Cana­di­an stock mar­ket. Well, maybe, but, you know, again, fol­low­ing a post on Face­book and sell­ing all your stocks is not good finan­cial advice.

[00:11:56] Cameron: Hmm. Well, in [00:12:00] oth­er sad news, your favorite finan­cial review jour­nal­ist, Joe Astin, is leav­ing.

[00:12:04] Tony: yeah, that is sad. He’s been com­pul­so­ry read­ing for me every day because he’s the only per­son, who­ev­er real­ly expos­es much in the finan­cial mar­kets. Most jour­nal­ists, just like most fund man­agers have to keep on the good book, in the good books for the CEOs and CFOs so they can con­tin­ue to have access to them.

[00:12:24] Tony: but Joe just told it like it was.

[00:12:29] Cameron: I did­n’t real­ize how young he was. This arti­cle in BNT says, Joe took over the helm of Rewin­dow in 2011 at Just 28 years old, and over the last dozen years, he has turned it into Aus­trali­a’s must read busi­ness and polit­i­cal col­umn. Grad­u­at­ing from cor­po­rate star spot­ting to high lev­el cor­po­rate analy­sis, he turned a gos­sip col­umn into a form of jour­nal­ism like nev­er before seen in Aus­tralia, and arguably the world.

[00:12:57] Cameron: Don’t know about that, I mean, I think it was a lit­tle bit [00:13:00] Crikey esque a lot of the time,

[00:13:01] Tony: Yeah, true, true. And a lit­tle bit Hunter S. Thomp­son at times as well,

[00:13:06] Cameron: yeah,

[00:13:07] Tony: And he still did a lot of star spot­ting. I mean, you know, when the Aus­tralian Ten­nis Open is on, for exam­ple, or Mel­bourne Cup’s on, that’s all rear win­dow is, is pho­tographs of who’s with who. So there’s still a bit of star spot­ting going on.

[00:13:20] Tony: But yeah, I mean, in terms of his analy­sis on Qan­tas, and, you know, recent­ly, but many oth­er com­pa­nies before that, he, he’s the only per­son who’s been telling truth to pow­er, real­ly.

[00:13:32] Cameron: So do you know, have you heard where he’s going, what he’s

[00:13:35] Tony: No, but I’m wait­ing to find out because it’d be, it’d be great to fol­low him wher­ev­er he goes. If he still stays in the indus­try, I guess. Maybe he’s like Steven Mayne and he’s lost his house to,

[00:13:45] Cameron: I

[00:13:45] Tony: to some­one who’s suing him for libel. I don’t know.

[00:13:48] Cameron: think Fair­fax prob­a­bly has bet­ter lawyers.

[00:13:51] Tony: Or Chan­nel 9

[00:13:52] Cameron: Yeah. I just want­ed to update every­one on Har­vey Nor­man, because I had men­tioned a cou­ple of times that [00:14:00] the num­bers in Stock Doc­tor, the mar­ket cap num­bers and the own­er founder hold­ings seem a lit­tle bit wonky. They’ve got the mar­ket cap around 730 odd mil­lion.

[00:14:14] Tony: As opposed to Stock­o­pe­dia and Yahoo Finance that have it at 4. 91 bil­lion. And they have, I think, Har­vey, Ger­ry Har­vey’s hold­ings at 343 per­cent of the stock. these days.

[00:14:30] Cameron: and they’ve been at the top of the buy list, well, near the top of the buy list the last cou­ple of weeks and I’ve been cau­tion­ing every­one, but So I went back after our show last week, I went back to Vic­tor at Stock Doc­tor, cause I’ve been wait­ing for him for about a month to clar­i­fy the num­bers.

[00:14:45] Cameron: He said they still haven’t got any clar­i­fi­ca­tion, but I re ran the score with the Yahoo Finance mar­ket cap. And I just put direc­tor’s hold­ings at zero, [00:15:00] which prob­a­bly isn’t, but just to

[00:15:02] Tony: No, it would­n’t be.

[00:15:02] Cameron: of the equa­tion.

[00:15:04] Tony: Ger­ry Har­vey does have a sig­nif­i­cant hold­ing.

[00:15:06] Cameron: I’m sure he does, but it still came out with a score of like 0. 36 or some­thing, I think.

[00:15:12] Tony: Okay, let me,

[00:15:14] Cameron: came out look­ing pret­ty good.

[00:15:16] Tony: let me do a deep dive and check the fig­ures in because I haven’t looked at it. And, when I saw it on the buy list, it has been on the buy list in the past. When I saw it there, I thought that looks a bit strange. So, I’ll, I’ll do a deep dive and get back to you.

[00:15:28] Cameron: Okay. well, what else have you got before we get into Q& A TK? Oh, so jok­ing­ly on the show last week, I said, Hey, if you run into my wife in Syd­ney, say

[00:15:39] Cameron: hi, the next day, she sends me a pho­to. Guess who I bumped into in the mid­dle of Syd­ney.

[00:15:45] Tony: Yeah.

[00:15:46] Cameron: Now, I don’t know if she’s stalk­ing you or you’re stalk­ing her or you’re stalk­ing each oth­er.

[00:15:52] Cameron: What’s going on there, Tony? It’s like, what, 6 mil­lion peo­ple in Syd­ney. How do you bump into my wife?

[00:15:59] Tony: [00:16:00] very slow­ly . no, it was a com­plete coin­ci­dence. I was in town. I had to drop a pack­age off to, a mate and then, grabbed a bit of lunch

[00:16:09] Tony: and,

[00:16:10] Cameron: fishy.

[00:16:11] Tony: oh no, I was, I played golf with a guy and inad­ver­tent­ly took his vest home with me. ’cause we had both the same sort of vest. So I dropped it back into town where he worked.

[00:16:19] Tony: and, I was walk­ing back and, you know, sort of a direct line from town to our place goes past the Art Gallery of New South Wales, and there’s a, if you walk down past it into Wool­loomooloo, there’s a foot­bridge across the free­way, and I was just walk­ing there, and I looked up and I thought, you know what?

[00:16:37] Tony: That looks like Chris­sy, about 20 meters ahead. And then I remem­ber you told me her niece was there, and I thought, oh, that looks like lit­tle Chris­sy from behind. So I yelled out, and then even­tu­al­ly they turned around. Yeah, it was just amaz­ing. They’d been to the art gallery, and now we’re head­ing to Wool­loomooloo for lunch.

[00:16:53] Cameron: Yeah. That’s crazy.

[00:16:55] Tony: It is, yeah.

[00:16:57] Cameron: That’s the odds of that. That’s

[00:16:58] Tony: And then we were going to [00:17:00] catch up for din­ner, but I could­n’t make it in the end, because I decid­ed to head off ear­ly for Wag­ga Wag­ga to come down here. My plans changed.

[00:17:08] Cameron: So you want to do a pulled pork?

[00:17:10] Tony: I do, I did pre­pare one. I know we said that we had lots of ques­tions, but I start­ed to do it before we agreed not to, so we may as well do it. We can always hold a ques­tion over to next week if you like.

[00:17:21] Cameron: Yeah. All right. Let’s do

[00:17:22] Tony: And one of the rea­sons for doing it was I was­n’t famil­iar with this com­pa­ny. When I had a look at it, I thought this is inter­est­ing and it’s worth talk­ing about.

[00:17:30] Tony: So, small cap stock, so I’ll just get that out there first. ADT is only 111, 000, so it will only suit small port­fo­lios. The com­pa­ny is South­ern Cross Elec­tri­cal Engi­neer­ing, SXE, SEXY is the code,

[00:17:46] Cameron: Oh, I like it already.

[00:17:48] Tony: and it’s in the name, what it does, it’s An elec­tri­cal con­trac­tor, it works across a num­ber of indus­tries, resources, com­mer­cial infra­struc­ture, retail, start­ed off as a very small com­pa­ny in Perth [00:18:00] back in 1998 and then grew by organ­ic means.

[00:18:03] Tony: Many in the resource sec­tor, but also through merg­ers and acqui­si­tions list­ed in ASX. along the way, South­ern Cross Elec­tri­cal Engi­neer­ing bought or merged with oth­er com­pa­nies. one was called Datel, or Data­tel, sor­ry, one was called Hay­day Group, SJ Elec­tric, SEME Solu­tions, and TriVan­tage is the most recent.

[00:18:28] Tony: and the rea­son for men­tion­ing that is it gives them… A broad­en­ing area of spe­cial­iza­tion, exper­tise in tele­coms, they do super­mar­ket, elec­tri­cal work and retail fit outs, store fit outs. They do elec­tron­ic secu­ri­ty and they’re get­ting big into switch­board man­u­fac­tur­ing and instal­la­tion. So they’re cov­er­ing a lot of the, a lot of the water­front there for elec­tri­cal engi­neer­ing.

[00:18:52] Tony: and the, I think the real inter­est­ing prospect for that and for them is, in one of the pre­sen­ta­tions they made recent­ly, [00:19:00] where they said if Aus­tralia is to meet its tar­gets for, emis­sion reduc­tion by 2050, and then there’s the whole heap of stats to what has to hap­pen. There’s got to be a 30 times increase in the bat­tery stor­age area, a 9 times increase in wind and solar con­nec­tion to the grid, a 5 times increase in dis­trib­uted solar, which I guess is solar on the roof and fac­to­ries, etc.

[00:19:24] Tony: A 2 times increase in elec­tric­i­ty usage. I guess pri­mar­i­ly to replace gas and then decom­mis­sion­ing of the gas and coal plants from the grid. So there’s a large poten­tial for this com­pa­ny to ride the, that kind of elec­tri­fi­ca­tion wave, which is, you got to say, even if Aus­tralia does­n’t meet its tar­gets, which is prob­a­bly doubt­ful because they’re fair­ly ambi­tious.

[00:19:47] Tony: it’s still going to mean a lot of work for elec­tri­cal engi­neers, in the next, 25 odd years. So that caught my eye. and just sort of to back that up, some of the recent high­lights for this com­pa­ny, they’ve just [00:20:00] fin­ished, Staff Vil­lage Accom­mo­da­tion, I guess the wiring for those, for Rio and BHP, and, a lithi­um mine I had­n’t heard of, they’ve just fin­ished, wiring up a solar farm, the not, the Tom Price bat­tery stor­age facil­i­ty.

[00:20:15] Tony: They’re start­ing work on the West­ern Syd­ney Inter­na­tion­al Air­port. They’ve just won the elec­tri­cal instal­la­tion at the Atlass­ian Build­ing, which is being built in Syd­ney, and the Shoal­haven Hos­pi­tal. They have mul­ti­ple data cen­ter con­tracts in New South Wales. So they’re pick­ing up lots of work. It’s expand­ing.

[00:20:32] Tony: The work­force is cur­rent­ly greater than 1, 400 peo­ple. And the oth­er inter­est­ing thing is recur­ring rev­enue for this com­pa­ny is 35 per­cent of the work they’re doing. So the high­er that is, the bet­ter because that gives them smooth­ing of their earn­ings going for­ward. Cause, you know, ten­der­ing for project work can be up and down and fol­low the cycles of the indus­tries they’re in.

[00:20:56] Tony: so yeah, I thought this was a, an inter­est­ing play on that kind of [00:21:00]electrification of the, Of the, net of the indus­try and, and, Aus­tralia, I guess going to the num­bers, the share price is cur­rent­ly 78 cents, which is, greater than IV one, but less than net equi­ty per share, plus 30%. So nets for this com­pa­ny is 70 cents and book plus 30 is 91 cents.

[00:21:21] Tony: So it’s trad­ing below its book val­ue. it’s a high yield­ing stock at 6.4%, but it. Just falls below our cut­off, which has now risen to about 6. 5 per­cent because of ris­ing mort­gage rates. The Prop­Caf, how­ev­er, is 4. 23 times, and this com­pa­ny had, I’m just try­ing to find the stat, a 46 per­cent increase in cash flow year on year.

[00:21:47] Tony: It’s pick­ing up the work and it’s pick­ing it up fast. And they’re also debt free, which I should men­tion. and so that’s one of the rea­sons why they’re start­ing to pay out the div­i­dends at a high­er rate than they have been. direc­tors hold 3 per­cent of this [00:22:00] com­pa­ny in Stock Doc­tor. How­ev­er, the orig­i­nal founder, a guy called Frank Tomasi.

[00:22:05] Tony: Frank Tomasi nom­i­nees, I guess his com­pa­ny, has 18%, but I could­n’t find him on the board or any, any­one named Tomasi, so it’s, it’s quite pos­si­ble that’s, that’s, he’s retired, or moved on, and, it’s a pas­sive invest­ment, so I, I can’t quite give them own­er founder sta­tus, but there’s still a, a fair bit there from the own­er founder in terms of share­hold­ings, con­sis­tent­ly increas­ing equi­ty is a zero, but it was close, there was only one half When the equi­ty went down a lit­tle bit, oth­er­wise it’s been going up nice­ly.

[00:22:37] Tony: what else? The PE was­n’t the high­est or the low­est in the last six halves, so can’t we score it a zero there. Does have a rea­son­ably recent new upturn, so it gets a one there. Goes back to June this year. so all in all, it’s a QAV score of 0. 16. So it’s not high up the buy list, [00:23:00] but, inter­est­ing com­pa­ny.

[00:23:01] Tony: And you’d have to think if it can, if it can keep going the way it has been going and Ride this wave of elec­tri­fi­ca­tion, the future looks bright. Par­don the pun.

[00:23:12] Cameron: Hmm. Oh, you should quick email them and sug­gest that as a new slo­gan, tagline for their adver­tis­ing charge them a mil­lion dol­lars for it. I added it to one of our port­fo­lios back in August. I think it’s up maybe 1 per­cent since then. It’s gone from

[00:23:30] Tony: Yeah, and,

[00:23:31] Cameron: cents to 78 cents or some­thing.

[00:23:34] Tony: and the hard part is in find­ing a stock to even look at today, they’re all Josephines at best right across the boards. So

[00:23:41] Cameron: real­ly hard to find any­thing to

[00:23:42] Tony: yeah, and this one’s a Josephine as well, but it has been going up nice­ly since its results came out.

[00:23:47] Cameron: Thank you, SXE. I had a request from Arash just before we start­ed record­ing today for one on Per­en­ti.

[00:23:56] Tony: Okay, next week.

[00:23:57] Cameron: next week, yeah.

[00:23:59] Tony: I think we’ve done [00:24:00] that one, haven’t we? But I’ll have a look.

[00:24:01] Cameron: I had a quick look on my notes, I know we’ve talked about it a few times, I’m not sure you’ve done one, but I thought you had, but I searched and could­n’t

[00:24:09] Cameron: quick­ly find it.

[00:24:10] Cameron: I’ll check again. yeah, what a, what a tough week I’ve been again. Sit­ting on some cash this week because I had to sell stuff and the sys­tem would­n’t let me buy any­thing.

[00:24:22] Tony: Yeah. I haven’t gone to cash yet because, I, I decid­ed that the two stocks which had breached their 10 per­cent rule once I would use as a tri­al for 20%, rule ones, and they haven’t reached that far down and they’d be com­ing back up again towards 10. So we’ll see. I won’t do any more than 10 or two stocks, sor­ry, just as a tri­al, but I thought I might as well since they were next calves off the rank to sell.

[00:24:47] Cameron: Right.

[00:24:49] Tony: But oth­er­wise, I would have been sit­ting on some cash too, which is what we’re sup­posed to be doing. I mean, I kind of look, look, it’s tough at the moment. I’m not going to sug­ar­coat it. Mar­kets, not react­ing well [00:25:00] to high­er 10 year bond yields in the U. S. And it kind of oscil­lates a lot between, we’re going to have a soft land­ing to, we’re going to have a reces­sion as each new data point comes out.

[00:25:11] Tony: So that’s Mr. Mark being man­ic, Mr. Mar­ket being man­ic depres­sive. But, you know, my kind of longer term take on this is. I’m just, I’m think­ing back over the last 30 odd years when I paid atten­tion to this kind of data. And I reck­on inter­est rates have always been around on aver­age around the lev­el they’re at now.

[00:25:32] Tony: We’ve just gone through a peri­od because of COVID and I guess after the GFC, where they were neg­a­tive in some years and writ­ten down to zero or half a per­cent. for long peri­ods of time, which, you know, was man­na for heav­en if you were invest­ing to bor­row in the stock mar­ket or to, or for prop­er­ty or what­ev­er else, or to invest in your own busi­ness.

[00:25:55] Tony: and that’s, it’s the rate of increase and the quick­ness of increase, which is catch­ing some peo­ple [00:26:00] out. And, and peo­ple have been talk­ing all the way along about zom­bie com­pa­nies, com­pa­nies with too much debt that could sur­vive when inter­est rates were low, but they can’t sur­vive when they’re a bit high­er.

[00:26:09] Tony: I’ve got­ta say, I mean, I’m, I, I’ve used this term before, it’s sit­u­a­tion nor­mal, for the stock mar­ket. I mean, inter­est rate, cash rates between, I mean the, the R B A wants the cash rate to be between two and 3%. So even if it comes down, it’s not gonna come down much below that. And I would’ve thought for most of the time I’ve held a mort­gage, the inter­est rate’s been six or 7%, which is where it is now.

[00:26:33] Tony: You know, sort of the aver­age. I mean, some­times it’s been a lot more than that. Some­times it’s been low­er, but men­tal­ly, when­ev­er I’m doing sums on what I can afford, I use a 7 per­cent mort­gage rate, because I think that’s where it’s going to fall nat­u­ral­ly in time. So I think, you know, this is a peri­od of tran­si­tion, which is nev­er great for stock mar­kets.

[00:26:49] Tony: But, I, you know, my, my, my instinct is it’s sit­u­a­tion nor­mal and yeah, it could get worse, could get bet­ter, but over time it’ll be fine.[00:27:00]

[00:27:00] Cameron: When you say sit­u­a­tion nor­mal, you mean the posi­tion that inter­est rates are in or the way that the mar­ket is just swing­ing wild­ly around and seems to have been… Going through rapid depres­sions. Because I know your port­fo­lio suf­fered the last cou­ple of years, my super

[00:27:18] Tony: Mm hmm. Mm

[00:27:19] Cameron: my super port­fo­lio in the same way.

[00:27:20] Cameron: I think we’ve got a ques­tion lat­er on, we might get into that. like, and I know you’ve had bad years before, but the last cou­ple of years have been real­ly bad. You know, two bad years, real­ly bad years in suc­ces­sion. That’s not sit­u­a­tion nor­mal, is it? Or is it the fact that those cycles come around once a decade that’s the nor­mal part?

[00:27:41] Tony: Yeah, it’s more the sec­ond part. I can’t recall hav­ing a run of bad years like this before. It could have hap­pened, and I’ve had two bad years in a row before, I’d have to look

[00:27:50] Tony: at the

[00:27:51] Cameron: GFC, I think 2008, 2009 you did, and then you rebound­ed mas­sive­ly in 2010 or some­thing.

[00:27:58] Tony: yeah, exact­ly. [00:28:00] so I have had a cou­ple of bad years and this does kind of, my per­for­mance kind of reminds me a lit­tle bit of the GFC. It’s not quite as bad as that. but this kind of pro­longed mar­ket skit­tish­ness as it read­justs to, I’ll call them nor­mal inter­est rates rather than low inter­est rates. yeah, so that, but that is sit­u­a­tion nor­mal for the stock mar­ket. And I guess the rea­son why I’m rais­ing that is You know, it’s human nature and I’ve cer­tain­ly been doing it look­ing back over the last cou­ple of years say­ing what are the signs and what could I have done dif­fer­ent­ly, etc, etc. but the worst thing to do is to…

[00:28:30] Tony: is to capit­u­late now and sell out now. And it may be the best thing to do if Octo­ber, if there’s a mar­ket crash from here in Octo­ber, not, notwith­stand­ing that, even if we do have that, I should say, it’s going to rebound. I mean, inter­est rates are going to nor­mal­ize. Com­pa­nies are going to get com­fort­able with it and it’s going to be busi­ness as usu­al.

[00:28:51] Tony: And the mar­ket, which is now cheap­er than it was two years ago, is going to rebound back to the aver­age top con­di­tions.

[00:28:59] Cameron: I was [00:29:00] just remem­ber­ing a cou­ple of years ago when inter­est rates were zero and near­ly neg­a­tive in some cas­es. My moth­er telling me that she heard from some­one that inter­est rates were going neg­a­tive and that banks would start charg­ing you to hold onto your deposits.

[00:29:22] Tony: Well, I kind of did because, you know, at the, at the depths of that. low inter­est rate for bank deposits. A lot of banks were charg­ing you an admin fee and if you did­n’t have enough mon­ey in the account, you’re earn­ing 1. 1 per­cent inter­est on it, you were actu­al­ly out of pock­et pay­ing the admin fee.

[00:29:39] Cameron: Yeah, good point. Alright, well I, we’ll get into port­fo­lio per­for­mance lat­er on and I’ll do the dum­my port­fo­lio per­for­mance then, but, you know, it has­n’t had a good week, but, It’s still doing well com­pared to the bench­mark, bet­ter than my super port­fo­lio is doing, and maybe we’ll be able to talk about why.[00:30:00]

[00:30:00] Cameron: Let’s get into some ques­tions. First one’s from Max. Hey Cam, I fol­low a US val­ue investor that fil­ters com­pa­nies based sole­ly on their qual­i­ty met­rics. He then sits and waits for them to become under­val­ued and then buys in. He’s an avid Buf­fett fan and uti­lizes the Buf­fett and Munger met­rics. I remem­ber in the ear­ly days that Tony used to buy com­pa­nies that scored at least 75 per­cent in qual­i­ty and also had a QAV score over 0.

[00:30:24] Cameron: 1. Just curi­ous as to why he stopped this. I’m assum­ing he did some back­test­ing and found that the qual­i­ty score in iso­la­tion had No cor­re­la­tion to growth. It’s just inter­est­ing that Buf­fett prefers great com­pa­nies at a fair price over fair com­pa­nies at a great price. My guess is that once you’re invest­ing bil­lions, you’re lim­it­ed by what you can buy.

[00:30:44] Cameron: So the qual­i­ty becomes super impor­tant. Cheers, Max.

[00:30:49] Tony: Yeah, so, the QAV of 0. 1 cut­off and the qual­i­ty score of 75 per­cent cut­off when I was using it are fair­ly arbi­trary num­bers. I picked the [00:31:00] QAV score of 0. 1 because it just seemed that that was giv­ing me a buy list that was long enough to be use­ful and not too long to be unuse­ful and too hard, too unwieldy.

[00:31:09] Tony: And it was about sort of 70 to 100 stocks every week, which was a good enough group to focus on. same with the qual­i­ty score. So I did use it for a cou­ple of years and that was reduc­ing the size of the buy list. And then some weeks it was reduc­ing it right down to a low num­ber. and, but what I found was it was­n’t mak­ing, I did­n’t do, I did­n’t actu­al­ly do a regres­sion test on it.

[00:31:31] Tony: It was more obser­va­tion that, I was get­ting enough. Enough of a qual­i­ty score and just hav­ing a QAV cut off of 0. 1 because the qual­i­ty score feeds into the QAV score. So if you look at the buy list now, there are cer­tain­ly stocks on the, on there below 75%, but they’re usu­al­ly in the 50s or 60s. So there’s still rea­son­ably, rea­son­ably good qual­i­ty.

[00:31:52] Tony: And cer­tain­ly towards the top of the list, they’re usually,a high num­ber. So yeah, so rather than be too [00:32:00] pre­scrip­tive, I, I dropped the 75 per­cent thresh­old for qual­i­ty. but did­n’t do any regres­sion test­ing. I’d invite, Max to do some and let me know if it’s, it’s a bet­ter out­come than, than the way I do it now.

[00:32:14] Cameron: I’m just look­ing at this week’s buy list from top to bot­tom, ranked by QAV score, the qual­i­ty scores are 67, 62, 92, 100, 65, 100, 108, 108, 65, 75, 108, 92, Viva Leisure, 87, 73. Yeah, so most of them are, you know, close to 70 and above, a cou­ple of excep­tions. Look­ing down the list. Okay, there’s one right down the bot­tom.

[00:32:50] Cameron: Estia, EHE at 50%. There’s anoth­er one at 57. Macmil­lan, Shake­speare, MMS. Yeah, but [00:33:00] most of them are up there. Oh, 55%. What’s that? NZM. But yeah, I mean, out of what’s that 70 odd stocks, I’d say 70 out of 75 stocks, about 70 of them are sort of 70 and above qual­i­ty score.

[00:33:14] Tony: Yeah. So it was becom­ing a bit redun­dant fil­ter­ing it down again to 75 per­cent and above the qual­i­ty. so that’s why I don’t do it. I did want to spend a lit­tle bit of time talk­ing about Buf­fett and Munger. I think it’s, I think a cou­ple of things. There’s so much writ­ten about. What Buf­fett does that, peo­ple lose track of what he did when.

[00:33:33] Tony: So he’s been invest­ing, obvi­ous­ly, since the 60s, and has a ter­rif­ic record and all the rest of it. But he, he open­ly admits along the way that he changed the way he invest­ed and qual­i­ty. It was real­ly Char­lie Munger who made him into a qual­i­ty Investor, and so he went from being buy­ing com­pa­nies because they were super cheap to buy­ing com­pa­nies because they were good qual­i­ty at a fair price.

[00:33:56] Tony: And that was­n’t, I’m not sure exact­ly when that hap­pened, but that [00:34:00] was­n’t near the start of his invest­ing career. He was mak­ing a lot of good mon­ey, by buy­ing deep val­ue stocks at the start of his career and then changed. And pos­si­bly part­ly because the funds were get­ting… Big­ger and big­ger, and he could­n’t get into the small sit­u­a­tions, a bit like what I’m doing with the buy list now.

[00:34:16] Tony: So that’s cer­tain­ly part of it. and, and the quote that sticks in my mind to use rac­ing par­lance that Char­lie Munger, quot­ed was, War­ren went from being a speed hand­i­cap­per to a qual­i­ty hand­i­cap­per, which made he went, he went from focus­ing on how fast the thing ran to how good it was, what, what its qual­i­ty was.

[00:34:35] Tony: and, If you go sort of fur­ther into the, the folk law, there’s the whole insur­ance indus­try thing and the con­cept of free float. So Berk­shire Hath­away does­n’t have to bor­row mon­ey because it makes us mar­gin on all the mon­ey lying around in its insur­ance funds, wait­ing for redemp­tions even­tu­al­ly or not to be redeemed for expi­ra­tion.

[00:34:55] Tony: So that’s a big leg up to Berk­shire Hath­away. And the final thing I want to say [00:35:00] is that it’s prob­a­bly been in the last maybe 20 years that War­ren’s open­ly admit­ted that he’s even changed how he invests a lit­tle bit since becom­ing a qual­i­ty investor. And I should just explain what he sees as being qual­i­ty.

[00:35:12] Tony: It’s his con­cept of moat that’s impor­tant in that. And by moat, he means how dif­fi­cult is it for some­one, a com­peti­tor, to get start­ed in the indus­try and to take down the incum­bent? And how easy is it for the incum­bent to raise their prices at any stage in the cycle? And so that’s why his­tor­i­cal­ly when you start­ed…

[00:35:33] Tony: Me becom­ing a qual­i­ty investor. He was buy­ing things like, Proc­tor and Gam­ble and Amex and Coke, even though there were spe­cif­ic val­ue rea­sons why he did that. There was a scan­dal with Amex. He worked out that, that Coke had, over depre­ci­at­ed or over, yeah. And Depre­ci­ate had a larg­er depre­ci­a­tion charge and it was going to need, would there­fore write it back in time.

[00:35:55] Tony: So things like that hap­pened. but in the last 20 or so years he’s got­ten into. [00:36:00]Industries that he calls high­ly gov­ern­ment reg­u­lat­ed. Now, not every pur­chase fits that cat­e­go­ry. but if you look at things like the Berk­shire Hath­away Ener­gy busi­ness, which is all about, elec­tric­i­ty gen­er­a­tion and increas­ing­ly solar pow­er, it oper­ates in states where the gov­ern­ment sets, sets the price.

[00:36:18] Tony: Pret­ty much, or at least that’s the guide­lines for the price and they have, or they have large com­mer­cial con­tracts which have esca­la­tors in them, like a CPI auto­mat­ic increase each year, for exam­ple, in price. Why is that impor­tant to Buf­fett? it gets back to this idea of a qual­i­ty com­pa­ny being able to rise, raise its prices at any stage in the cycle.

[00:36:38] Tony: What it means is he can do a dis­count­ed cash flow on future earn­ings with some kind of cer­tain­ty, which, you know, I’ve often argued is a, is a prob­lem with dis­count­ed cash flows, that if we’re look­ing at a com­pa­ny like SXE, like we did today, Who the hell knows what’s going to hap­pen in five years with that or 10 years with that.

[00:36:55] Tony: So fac­tor­ing in all those things I talked about, like increas­ing [00:37:00] solar in the grid and decom­mis­sion­ing pow­er plants and more data cen­ters and things like that will have an effect on them. What, what, how much effect on the cash flow? I don’t even think they know. So that was the prob­lem Buf­fett was hav­ing when he came to invest.

[00:37:15] Tony: He want­ed to use dis­count­ed cash flows, but they were so opaque. In the most part, except for these com­pa­nies that had strong notes, like your Wal­marts and like your Cokes and those kinds of com­pa­nies, where you could rea­son­ably say, this com­pa­ny is going to be around in 20 years time or 30 years time, and B is going to be mak­ing more mon­ey than it is now.

[00:37:34] Tony: And you could look back over the years, it’s been run­ning and kind of work out what, what sort of lev­el of increase to put into his DC, DCF going for­ward. it’s even eas­i­er if you’re in Berk­shire Hath­away Ener­gy and you’ve got to deal with the gov­ern­ment. 10 years of elec­tric­i­ty sales or some­thing like that.

[00:37:51] Tony: So it’s pre­dictable cash flow that real­ly dri­ves him at the moment. so what he’s doing is tak­ing that pre­dictable cash flow and com­par­ing it to a 10 [00:38:00] year bond or, or a 20 year bond or anoth­er invest­ment which might be bet­ter val­ue but hard­er to pre­dict. And when he’s got these bil­lions to put in, that’s what he’s doing.

[00:38:09] Tony: So I think that’s why he’s focus­ing on qual­i­ty. It’s not just the qual­i­ty of the com­pa­ny. It’s the qual­i­ty of the cash flow going for­ward. And it’s a, for any­one start­ing out, it’s, it’s still not a bad way to invest, but it, it’s not going to give you the same sorts of returns as QAV will. and so at some stages, even the mar­ket will be in an index fund.

[00:38:29] Tony: So he’s got dif­fer­ent needs now to what peo­ple in kind of our shoes do.

[00:38:34] Cameron: Won­der how Apple fits into that. Obvi­ous­ly it’s got a pret­ty good moat

[00:38:39] Tony: Yeah. Good moat.

[00:38:40] Cameron: of the brand.

[00:38:41] Tony: And it rais­es its prices dur­ing any sort of mar­ket cycle. Every year, an iPhone or every two years, an iPhone comes out. It’s nev­er cheap­er than the last one. They always go up. So, yeah. Yeah. And, and to be fair, War­ren did­n’t invest in Apple. One of his invest­ment in Apple. Todd or Ted, the two guys he took on to take over from him, found [00:39:00] Apple and brought it to him, and he under­stood it.

[00:39:02] Tony: So, yeah, I mean, there are always, I mean, War­ren isn’t wear­ing hand­cuffs and only invest­ing in one way. He is open to sit­u­a­tions, like he’s invest­ed in all com­pa­nies. And the last of the while, because he thinks that’s, you know, all prices are going to go up. So, yeah, but, but when he, when he invests large chunks of Berk­shire Hath­away, he tends to try and find some­thing that’s pre­dictable.

[00:39:24] Tony: And that’s why he’s now called a qual­i­ty investor.

[00:39:26] Tony: Okay. Thanks, TK. Thank you for the ques­tion, Max. All right. We’ve got Alex. Alex sent 400 ques­tions last week. And to be fair, I did do a shout out for ques­tions before I remem­bered that we’re hav­ing Chris Batch­e­lor on from Stock­o­pe­dia. so I think Alex was help­ing me out here. that’s

[00:39:45] Cameron: do a cou­ple, we’ll do a cou­ple of Alex’s and then maybe por­tion the rest out over the next four years of shows.

[00:39:54] Cameron: I wel­come the ques­tions. I mean, Alex’s ques­tions are always good.

[00:39:57] Cameron: They are good. there’s just a lot here. Let’s [00:40:00] start with this one. How did Tony man­age mar­ket down­turns when he was lever­aged? Or asked anoth­er way, where does the cash come from to pay off the loan in a falling mar­ket?

[00:40:11] Tony: yeah, good ques­tion. So I am still lever­aged at the moment and it’s, it’s always div­i­dends, which pays off the mort­gage. And I want to stress, I’m talk­ing about inter­est only loans there. So, You know, if you’re pay­ing off prin­ci­pal as well, it’s a dif­fer­ent ket­tle of fish, but at the moment, there are plen­ty of stocks on our buy list which are yield­ing enough to cov­er the mort­gage rate on an inter­est only loan, which is about sort of six and a half to sev­en per­cent.

[00:40:38] Tony: and if you take into effect, you get a frank­ing cred­it, which is a tax rebate. When your stock, when your tax return comes around, gen­er­al­ly you’ll be able to cov­er the cost of the, of the, inter­est on the mort­gage. and if you have a prod­uct like I used to have, but haven’t got at the moment, because they are, being clamped down on, which was,An over­draft type facil­i­ty for as a retail investor, [00:41:00] so an inter­est only loan that would amor­tize the inter­est and allow you to make lumpy pay­ments at some dif­fer­ent stages.

[00:41:08] Tony: As long as you’re below the sort of max­i­mum draw­down for the loan, you did­n’t have to make a month­ly pay­ment. Then you could wait for div­i­dends and pay them off that way in large Lumps twice a year, pay off your inter­est that way. So that’s how I did it. it did­n’t make much dif­fer­ence whether the mar­ket was going up and going down.

[00:41:25] Tony: And Alex, I don’t know if you have, but go back and lis­ten to one of our ear­ly episodes when we had Steve Sam­marti­no on and he was talk­ing about the Sam­marti­no method and he makes a real­ly good point. And so the Sam­marti­no method in short is. He took his lump sum when he was, retir­ing from work and want­i­ng to set up invest­ments, put it into index funds, and then just for­got about it.

[00:41:48] Tony: And the rea­son why he was com­fort­able doing that is that com­pa­nies are very low to cut their div­i­dends. And even dur­ing the GFC, some com­pa­nies cut their div­i­dends, but it was gen­er­al­ly only by about 25 or [00:42:00] 30%. So The cash was still com­ing in, from invest­ments. They do, they cut their div­i­dends last.

[00:42:06] Tony: They’d rather raise cap­i­tal. Yet, yet some com­pa­nies who are in real­ly strange sit­u­a­tions where they were bor­row­ing to pay their div­i­dend, that’s how des­per­ate they are not to cut their div­i­dend. So even though the stock price might drop, If you ignore the cap­i­tal move­ments on your port­fo­lio, gen­er­al­ly, you’re still going to get at least sort of 70 per­cent of your div­i­dends, even in the depths of the GFC.

[00:42:28] Tony: so you can cov­er your inter­est, you know, if you set it up prop­er­ly and make sure you’re not over gear­ing, you can cov­er your inter­est from div­i­dends at all, in all mar­ket cycles.

[00:42:37] Cameron: Okay, the next ques­tion from Alex is how does TK plan to live off his port­fo­lio in retire­ment in down years? I’m

[00:42:46] Tony: I think I’ve

[00:42:47] Cameron: there will be Yeah,

[00:42:50] Tony: I was just going to say, I think I’ve just answered that. So, even­tu­al­ly when, it’s more when Jen­ny retires, she’s still active on boards. and so, you know, she gets enough income for us to live off and [00:43:00] then div­i­dends pay for the mort­gage, etc. but that can’t go on for­ev­er. So, we’ll, we will rejig our finances, pay down our debt.

[00:43:08] Tony: I would think we’ll prob­a­bly sell our, our apart­ment in Syd­ney and… Pay off the mort­gage, which isn’t that that big at the moment, com­pared to the val­ue of the prop­er­ty and, you know. Prob­a­bly move to Mel­bourne, it depends where Alex set­tles down, puts down roots and then use what’s left to, to buy some­thing and invest, and then live off the div­i­dends with what’s left.

[00:43:29] Cameron: so just liv­ing off the div­i­dends.

[00:43:30] Tony: Yeah, exact­ly. Yeah. That’s, that’s what should be, all peo­ple should aim for that, I think, is to live off their div­i­dends.

[00:43:38] Cameron: in down years when the cap­i­tal val­ue of your port­fo­lio declines, you’re still get­ting the div­i­dends.

[00:43:46] Tony: Cor­rect. Yep. Yeah. So the cap­i­tal gen­er­al­ly declines, well, the cap­i­tal declines, but the yields. Goes up ’cause a div­i­dend dol­lar amount does­n’t. Now look, you know, there’ll be one or two com­pa­nies, which, which will stop pay­ing a div­i­dend for a year. and [00:44:00] they will, their share price will drop ’cause it’s the sort of the last act of a des­per­ate com­pa­ny.

[00:44:04] Tony: but most of them will con­tin­ue to pay. Some of them will cut. So yeah, I would­n’t bank on get­ting a hun­dred per­cent or year in, year out of what you’re get­ting now. But, you saw the 70% would be good to plan. your num­bers are in, yeah.

[00:44:17] Cameron: Okay, well let’s skip the rest of Alex’s ques­tions for now because we’ve got a few more and we’re Get­ting on in time. We might come back if we have some more time lat­er. Phil, at the begin­ning of the month, there can be a lot of Josephines. Why was begin­ning of the month cho­sen and not a rolling 30 day price?

[00:44:35] Cameron: Is it pos­si­ble to have a rolling 30 day price com­par­i­son? And does this influ­ence when stocks are bought, i. e. less at the begin­ning of the month and more at the end?

[00:44:47] Tony: Yeah, we’ve talked long and hard about Josephine’s, it’s a good idea. to be hon­est, the way it’s set up now is my lazy way of doing it, because I can just look up the clos­ing month end price in Stock Doc­tor pret­ty eas­i­ly. [00:45:00] And if you want to code a rolling 30 days, I don’t know any sort of data source that gives us a rolling 30 days com­par­i­son.

[00:45:06] Tony: but if you want­ed to cal­cu­late the cod­ing, it’s got to take into account. 30 days ago, maybe in a week­end or a pub­lic hol­i­day, and make all those excep­tions. So it’s a lot more com­pli­cat­ed. If we could lean on Brett to change the bread lat­er to do it, I’d be hap­py to use it. but, we’ve already used up a lot of his good graces, I think, and the great work he’s done for us now.

[00:45:25] Cameron: And he just got a new job,

[00:45:26] Tony: He did. Okay. What’s he doing? Good.

[00:45:30] Cameron: he did­n’t say it was con­fi­den­tial, so I’m just going to put it out there, Brett. he works, he’s got a job at BlueScope as a IT guy, you know.

[00:45:40] Tony: Well, he can give us some insight into how they’re going, because I think BlueScope’s often on the buy list from time to

[00:45:46] Cameron: They are. Yeah.

[00:45:47] Tony: Yeah. Yeah. Maybe that’s why, maybe that’s why he chose to work there.

[00:45:51] Cameron: Yes. So he can feed, it’s all about QAV and that’s, it’s all he thinks about. Morn­ing, noon, and night. How can I help [00:46:00] QAV mem­bers?

[00:46:01] Tony: Well, he might, but I think it’s also… I’ve always thought, I’ve nev­er done this myself, because it just has­n’t worked out that way career wise, but it’s a good way of get­ting cheap QAV stock, or cheap stock in a com­pa­ny that’s on the buy list, because you know, hope­ful­ly he’s got, stock issuance as part of his com­pen­sa­tion pack­age, he’s not pay­ing for it.

[00:46:21] Tony: Yeah.

[00:46:23] Cameron: Good, good think­ing Brett. But, yeah, I’m sure we could prob­a­bly do it in, stock his­to­ry in Excel as well, with my Josephine cal­cu­la­tor. So I’ll ask my oth­er Brett, Chat­G­PT for help in doing that. I’m sure we can work it out.

[00:46:38] Tony: Yeah, good idea. Thanks, mate.

[00:46:40] Cameron: Paul, asked about Alpha Spread, and he, well he point­ed to Alpha Spread, and he sent me an apol­o­gy, ear­li­er say­ing I’m sor­ry I sug­gest­ed this the same week you had Stock­o­pe­dia on, but that’s okay, more the mer­ri­er. Alpha Spread looks like it might be an inter­est­ing even­tu­al com­peti­tor to Stock Doc­tor.

[00:46:56] Cameron: It does­n’t have quite the detail that Stock Doc­tor does. How­ev­er, it does have some inter­est­ing [00:47:00] val­u­a­tion tools, includ­ing a dis­count cash flow. Val­u­a­tion tool and a rel­a­tive val­u­a­tion tool, which are the main two tools used by boffins who val­ue com­pa­nies. These look sim­i­lar to our IV1 and IV2 fig­ures, but I’ll do some more com­par­i­son and see how they stack up.

[00:47:18] Cameron: I haven’t looked at alpha spread before of you, Tony.

[00:47:21] Tony: no, I haven’t.

[00:47:24] Cameron: how­ev­er, one inter­est­ing tool it does have, Paul con­tin­ues, which I haven’t seen before, is the val­ue trap tool. This mea­sures a com­pa­ny’s price ver­sus its intrin­sic val­ue over 10 years. If there’s an ongo­ing and sig­nif­i­cant gap between them, the com­pa­ny is labeled a val­ue trap as not ever com­ing close to its intrin­sic val­u­a­tion.

[00:47:45] Cameron: Has Tony ever come across such a val­u­a­tion or tool before and could it add val­ue to our check­list?

[00:47:52] Tony: I haven’t come across that tool. I’ve, I’ve heard the term val­ue trap and I tend to use it a lit­tle bit dif­fer­ent­ly. it’s, it’s nor­mal­ly a com­pa­ny [00:48:00] that’s cheap for a rea­son and sen­ti­ment tends to han­dle that for us because. You know, the mar­ket’s worked out that this com­pa­ny is going broke or, you know, has a seri­ous prob­lem, which isn’t com­ing through in the cur­rent num­bers yet, that kind of thing.

[00:48:13] Tony: So that’s my def­i­n­i­tion of a val­ue trap. But again, yeah, inter­est­ing con­cept. my, my ques­tion about it would be, We’ve seen com­pa­nies, and I think I spoke about Nick Scali a cou­ple of weeks ago, that from time to time come back and reap­pear on the buy list and, nev­er seem to sort of go away long term from the buy list and, and I think that’s because they’re gen­er­al­ly not rat­ed, you know, with a high P.

[00:48:40] Tony: E. by the stock mar­ket, but they still go up. I mean, Nick Scali, if you look at its graph over the long term, I mean, I think it float­ed at about a buck and I don’t know what its share price is now, 14, 15 or some­thing like that. So they still go up, even though they can be on a low PE. So I’d need to see some fig­ures around this val­ue trap met­ric before I [00:49:00] decid­ed to take any action with it.

[00:49:02] Cameron: Hmm,

[00:49:03] Tony: And look at FMG. I mean, I don’t know what the P is at the moment for FMG, but it won’t be high. so you could always argue that, you know, it’s sit­ting below it’s, it’s true val­u­a­tion as well, but it always does. so I guess my point is you can have com­pa­nies that look like val­ue stocks for a long time, but you can still make a lot of mon­ey out of them.

[00:49:21] Cameron: hmm. And, like, intrin­sic val­ue for us isn’t the be all and end all met­ric either,

[00:49:30] Tony: No.

[00:49:31] Cameron: it’s part of the scor­ing matrix, but it does­n’t real­ly, weigh super heavy, I think, on the over­all QAV score.

[00:49:43] Tony: No, just before I answer that com­ment, Cam, so I just looked up FMG, so it’s cur­rent PE is 8. 9 times, and the mar­ket aver­age PE is 17. 5 com­pared to Stock Doc­tor, so, you know, who knows which way FMG is going, but it’s always [00:50:00] tend­ed to trade at Much low­er P. E. than the mar­ket, but as you can see from its graph, you can make good mon­ey out of it.

[00:50:07] Tony: yeah, so, yeah, so get­ting back to how, how use­ful a met­ric is in intrin­sic val­ue. as part of a val­u­a­tion process, I think it’s okay. So as part of a heat map, I guess, is the term I use for, Val­u­a­tion, but it gets back to this DCF prob­lem I have is, you know, you’ve got to pol­ish a crys­tal ball to see what you put into the DCF mod­el 10 years hence with any sort of cer­tain­ty at all. So that’s, that’s a, that’s a prob­lem I have with DCFs and even with intrin­sic val­ues, they’re indi­ca­tors rather than being defin­i­tive val­uers of a com­pa­ny.

[00:50:39] Cameron: Yeah. I mean, that kind of reminds me of the clas­sic start­up entre­pre­neurs pitch to a ven­ture cap­i­tal firm say­ing, we’re going to make a tril­lion dol­lars in our fifth year. I mean, every busi­ness I’ve ever been part of mak­ing pro­jec­tions very far into the future. No one has any idea real­ly what’s [00:51:00] going on.

[00:51:00] Cameron: It’s all sticky tape and chew­ing gum and fin­gers in the air. Right. It does­n’t mat­ter what

[00:51:05] Tony: I remem­ber Shell went through a long, when I was work­ing, he went through a long detailed process of mak­ing five year busi­ness plans, a bit like the Com­mu­nist Par­ty in Chi­na. And after I’d been there for a few years, they all look like the Nike swoosh. They were all, you know, we’re going to go down next year, but then after that, hal­lelu­jah, it’s to the moon.

[00:51:24] Tony: And it’s just, and then I’ve seen that so many times in the stock mar­ket as well. It’s just, it’s all bull­shit.

[00:51:29] Cameron: It’s all bull­shit. I mean, there’s noth­ing wrong with hav­ing a busi­ness plan and it gives you some­thing to focus on and work towards and strive towards, but yeah, our abil­i­ty to think very far into the future is obvi­ous­ly not very good, so.

[00:51:43] Tony: and that’s one of the rea­sons why the stock mar­ket has these unset­tling times is because, this, yeah, I’m try­ing not to use the term this time was dif­fer­ent because it’s not, it’s, this is what hap­pens, but gen­er­al­ly, when­ev­er there’s a prob­lem, it’s always a dif­fer­ent prob­lem. Ignit­er for it. [00:52:00] So like the GFC was, what do they call them?

[00:52:02] Tony: Nin­ja loans, no income, no job. Loans in the States. That’s not hap­pen­ing now, as far as I’ve heard or can tell. you know, in, in 87, it was all the, the cow­boys like the Christo­pher Scac­ers who were high­ly lever­aged and it did­n’t take much to throw them off their perch. A lit­tle bit of that going on now, but again, inter­est rates are.

[00:52:21] Tony: They’re high­er than they have been, but they’re low­er than they have been longer term as well. So I don’t think that’s going on. So it’s kind of like the mar­ket gets into this jit­tery phase. Oh, 10 year bond yields are up. Well, that, you know, that, that cor­re­lates with, you know, as a, as a pre­dic­tor for mar­ket crash­es in the past.

[00:52:39] Tony: Well, yeah, it cor­re­lates with a lot of things too. So, you know, they only pull out what they want to see and they get jit­tery. But, yeah, it’s five years ago, no one would have said that. No DCF would have said there was going to be a COVID out­break. so, so how do you do a DCF with any sort of clar­i­ty at all?

[00:52:57] Cameron: Black Swan events and, you know, wars break­ing [00:53:00] out and all that kind of stuff, no one

[00:53:01] Tony: Hmm. Yeah.

[00:53:02] Cameron: And it’s one of the things that I val­ue about QAV is that our assump­tions are pret­ty sim­ple and con­ser­v­a­tive. Mar­ket tends to go up over the long haul, well run com­pa­nies, when you can get them at a dis­count, tend to out­per­form not well run com­pa­nies or com­pa­nies that you’re pay­ing a pre­mi­um for.

[00:53:22] Tony: Mm hmm.

[00:53:23] Cameron: That’s it. Very, very

[00:53:25] Tony: Yeah. Lots, lots of cash is good.

[00:53:27] Cameron: yeah.

[00:53:28] Tony: is good. Lots of debt is bad.

[00:53:30] Cameron: Yeah, like at the very heart of it, it’s just very, very sim­ple log­ic that’s very hard to argue with.

[00:53:39] Tony: Yeah. And we, I tried to put a bit of math around it so we can scan the mar­ket quick­ly. Yeah.

[00:53:43] Cameron: Yeah. And humans have a ten­den­cy to over­com­pli­cate things. A lot of peo­ple come into QAV and want to over­com­pli­cate it. I

[00:53:56] Tony: I think it’s, I think it’s over­com­pli­cat­ed at the moment, so I could prob­a­bly do with the [00:54:00] trim.

[00:54:01] Cameron: yeah, yeah, yeah. It’s a bit like, Chat­G­PT. I mean, the boffins com­put­er sci­ence peo­ple that are try­ing to work out how large lan­guage mod­els do what they do, guys like Kurzweil has been say­ing this, that when we, it’s real­ly impor­tant that we under­stand how it does what it does because nobody seems to under­stand it.

[00:54:26] Tony: Hmm.

[00:54:27] Cameron: He says, I think when we under­stand how it does what it does, we will real­ize that we can get it to do what it does with 10 per­cent of the effort that we’re cur­rent­ly putting into it.

[00:54:36] Tony: Yeah. Good point. Yeah. And QAV is prob­a­bly the same.

[00:54:41] Cameron: hmm,

[00:54:41] Tony: we had a crack at try­ing to change the weight­ings in QAV, but it’s just been a mam­moth task to work out which ones gen­er­ate the bulk of the returns and by how much.

[00:54:52] Cameron: give me six months and I’ll get Chat­G­PT to do it.

[00:54:55] Tony: That’d be great.

[00:54:56] Cameron: Steven

[00:54:57] Tony: I’ll say, sor­ry, can I make, sor­ry, [00:55:00] before we go, can I make a com­ment about regres­sion test­ing?

[00:55:03] Tony: and it’s just anoth­er one of my mus­ings, but, I’m start­ing to lean towards for­ward test­ing rather than regres­sion test­ing. I’ve been going through the results of, of Ryan’s work that he’s fin­ished off now on buy­ing from the top of the buy list ver­sus buy­ing from the bot­tom and, and rule ones and big cap ver­sus small cap, et cetera.

[00:55:20] Tony: and it’s, it’s good stuff and it, it’ll, tell us what to do and. when we, when I final­ly get to a stage where I can present it, which should­n’t be too far away. I’ll do that. but then I’ll tri­al it going for­ward with a, you know, the dum­my port­fo­lio on paper first to make sure it does­n’t have any, to make sure the back­test­ing was­n’t just fit for that sort of last four years of QAV.

[00:55:41] Tony: but by the same token, I’m, I’m, Almost, I’ve also set up some dum­my port­fo­lios any­way, like with the Renko test­ing. And I’m almost, I’m start­ing to think now that if peo­ple have ideas like on, on, val­ue traps or what­ev­er else we’ve talked about today that changes the QAV might be, it’s [00:56:00] almost like, well, go to the buy list, pick out the stocks that fit that pat­tern and put them into a port­fo­lio and see how they per­form going for­ward against the dum­my port­fo­lio.

[00:56:09] Tony: You know, if that has some legs, then we can do some fur­ther research from there. Because it is, it is a ball break­ing task going back and try­ing to back­test in gran­u­lar form this process with a large amount of data.

[00:56:22] Cameron: Mmm, yeah, okay. Steven, Cam, out of curios­i­ty, are you able to share the per­for­mance of your per­son­al port­fo­lio and TK’s port­fo­lio for this finan­cial year? I’m cur­rent­ly down 7%. I under­stand the DP is up 5 per­cent but holds a lot of low ADT stocks. My per­for­mance in the last three years has been sim­i­lar to TK’s per­for­mance.

[00:56:47] Cameron: I believe I’m fol­low­ing the sys­tem as accu­rate­ly as pos­si­ble. It would be good to com­pare with TK for this finan­cial year to con­firm this. Thanks. And I said to Steven, I don’t know about Tony’s, but I went and had a [00:57:00] look at my super funds per­for­mance for this finan­cial year, and it was down about 6%, and it’s lim­it­ed to high ADT, ASX 300 stocks.

[00:57:13] Cameron: So it’s per­for­mance isn’t as good as the dum­my port­fo­lios, but obvi­ous­ly I’m fol­low­ing the same process. It’s not quite as old as the dum­my port­fo­lio, but it’s been run­ning for, I don’t know, 18 months or so, I think, two years maybe. So, and I know that last year it had a bad year. I think at the end of the finan­cial year we were about the same.

[00:57:35] Cameron: It was about, I think last finan­cial year was down 15, 17%, some­thing like that. It had a shock­er. so I told him what my num­bers were and yeah, it’s, it does­n’t cor­re­late with the dum­my port­fo­lio. And so I, I do won­der if the low ADT stocks are help­ing the dum­my port­fo­lio. What do you think?

[00:57:58] Tony: Yeah, so my per­for­mance is sim­i­lar. [00:58:00] I’m down 10 per­cent this finan­cial year. So it has­n’t been a good run for the last cou­ple of years. my, so my thoughts on that are that. Yeah, if we look at the sort of ques­tions that peo­ple have raised over the last three or four years of QAB, it gen­er­al­ly coa­lesces around two things.

[00:58:17] Tony: One, it’s the sell process is 10 per­cent rule one, right as a num­ber. And so we’ve been doing some back­test­ing on that and it’s sort of indi­cat­ing 20 per­cent might be bet­ter and that’s at the stage it’s at. I’ll try and get the num­bers defin­i­tive­ly worked out. and I’m doing a test now any­where on 20%, because I think, what’s, you know, my, my feel­ing from the last cou­ple of years is there’s just been too many con­sec­u­tive sells.

[00:58:41] Tony: So I sell some­thing, I find some­thing else on the buy list, I have to sell it. I find some­thing else, I have to sell it. So rather than being like the GFC, which was stocks fell off a cliff or like in COVID, this has been just a slow burn of decline, decline, decline, decline. And part of that has been sort of con­sec­u­tive rule one.

[00:58:59] Tony: [00:59:00] So I’m think­ing about chang­ing that. We’ll see what hap­pens. And the oth­er ques­tion that peo­ple have had con­sis­tent­ly is, I’m up 30 or 40 per­cent on a stock and it’s way above its sell line. How do I avoid giv­ing that back? And so I’m test­ing the Ren­co process as well, which may be a solu­tion to that. I haven’t made my mind up on that yet.

[00:59:18] Tony: Let’s see how it plays out. So yeah, I mean, I’m not sort of sit­ting idly by and accept­ing 10 per­cent loss this finan­cial year. I’m try­ing to work out what we can tweak. but it’s, yeah, it’s cer­tain­ly my num­bers match your num­bers, which also match­es, Steven’s num­bers. And yeah, I, I, unfor­tu­nate­ly this hap­pens.

[00:59:39] Tony: From time to time in the mar­ket, and, and what will also hap­pen is we’ll wake up one day and there’ll be peace in the Mid­dle East, and, Zelen­sky will get a Nobel Prize, and the oil indus­try will be on its knees, and the Fed will be mark­ing down inter­est rates, and, the stock mar­ket will, you know, dou­ble in the space of a [01:00:00] month, so it’s just how it goes, unfor­tu­nate­ly, it’s hard to pre­dict, but yeah, all I’d read of the rate is, It’s bet­ter to be in the mar­ket fol­low­ing a process than to be a pris­on­er of your emo­tions dur­ing these times and try­ing to sec­ond guess and try­ing to work out anoth­er way of doing things.

[01:00:17] Tony: To your ques­tion about large ADT and small ADT stocks, I’ve researched that before and peo­ple can do it now them­selves. There are index­es for, as you said, Large cap stocks and small cap stocks, and they’re avail­able on the inter­net. I think Dow Jones prob­a­bly has them or S& P has them. And over time, they gen­er­al­ly come out even­ly, but from time to time, small caps will beat big caps or big caps will beat small caps.

[01:00:44] Tony: And I think we’re going through a peri­od at the moment where, at least in terms of the val­ue of the mar­ket, the small caps are doing bet­ter than the big caps.

[01:00:52] Cameron: why would that be? What’s the the­o­ry behind that?

[01:00:54] Tony: I don’t know, Cam, and if I… So to pay atten­tion to oth­er mar­ket com­men­ta­tors, they reck­on that [01:01:00] the small caps end of the mar­ket is doing poor­ly.

[01:01:02] Tony: But it does­n’t seem to be our per­cep­tion of what’s going on. But I think they might be influ­enced by the high growth stocks which have come back to earth, which are usu­al­ly small cap type stocks. I don’t know. I sus­pect, you know, we’re in the big cap end of the mar­ket and it’s not too, we’re try­ing to pick the eyes out of the index, I guess is one way to put it.

[01:01:24] Tony: and so we, you know, up to this stage, we’re under­per­form­ing the index, but not by a dra­mat­ic amount. And I sus­pect that that’s just the way it works. Some­times we under­per­form and some­times we over­per­form, but in the long term, on aver­age, we over­per­form.

[01:01:37] Cameron: Yeah, I’d sug­gest­ed to Steven that I could, run some analy­sis over the dum­my port­fo­lio and, you know, break down the best per­form­ing stocks and deter­mine their ADT sta­tus and see if there’s a cor­re­la­tion between our best per­form­ing stocks and their ADT. Because [01:02:00] obvi­ous­ly we’re fol­low­ing the same process with the dum­my port­fo­lio that you and I and Steven are fol­low­ing and the per­for­mance is some­what dif­fer­ent.

[01:02:07] Cameron: I mean the dum­my port­fo­lio is up around about five and a half, no sor­ry, three and a half per­cent as of this morn­ing when I looked at it. After the decline from the last cou­ple of days it was up around six a cou­ple of weeks ago. Three and a half CAGR per annum for the finan­cial year ver­sus the STW down two and a half.

[01:02:26] Cameron: For the finan­cial year. but, and I don’t think my super fund’s giv­ing me a CAGR fig­ure. It’s prob­a­bly a time weight­ed return fig­ure as well. So there’ll be some dif­fer­ences in the cal­cu­la­tions, but still there’s a, there’s a pret­ty big dif­fer­ence between up three and a half and down six, what­ev­er it is.

[01:02:44] Tony: I asked Ryan to have a look at that in the four years worth of buy lists that he was churn­ing num­bers through. And he, he made I guess the insight, and nei­ther of us know if it’s uni­ver­sal or not, but his insight was that if you look at the small cap stocks, even though, [01:03:00] even though both large cap and small cap stocks have both been churn­ing over these last few years, so his, his analy­sis was for the first cou­ple of years of the, the buy lists, they were doing sim­i­lar type returns.

[01:03:12] Tony: But for the last cou­ple of years, they’ve both been churn­ing, but what, and by churn­ing, I mean, there’s been lots of sell­ing and buy­ing as things have breached rule one or three point trend line sales or com­mod­i­ty sales. but his insight is that there’s been a larg­er num­ber of small cap stocks, which have large increas­es.

[01:03:31] Tony: So very spe­cif­ic one off stocks that have gone up, say 300 per­cent or 400%. and you only need a cou­ple of those in the port­fo­lio to improve your per­for­mance, enough to be. The big cap stocks, which aren’t, we tend to see large increas­es in them of being a dou­bling at the most. so that’s his analy­sis as to why the small cap stocks are doing bet­ter than the large cap ones.

[01:03:52] Tony: But again, it could just be a stage in the cycle that we’re at.

[01:03:56] Cameron: Well, if I look at, I can do a quick analy­sis, I guess. [01:04:00] In Navexa, so if I look at the dum­my port­fo­lio this finan­cial year, SMR is up 38%. SMR’s mar­ket cap is…

[01:04:15] Cameron: 3.2 bil­lion for Stan­more Resources. So up 38%. That’s kind of a large cap stock.

[01:04:22] Tony: Yep.

[01:04:23] Cameron: TRS up 25%.

[01:04:27] Tony: That’s rea­son­ably large too. But I think if you look at Ryan’s exam­ple, you’ll, you might find there’ll be a small cap stock, which has gone up more than that. So the big cap stocks tend to go up. The ones that do well, go up 30 or 40%, maybe dou­ble at the most, but the small cap ones can dou­ble or triple.

[01:04:43] Tony: TRS’s mar­ket cap is about 359 mil­lion at the moment.

[01:04:48] Tony: That’s small­ish,

[01:04:49] Cameron: ASG up 23%,

[01:04:52] Cameron: mar­ket cap, 502 mil­lion. That’s still a large mar­ket cap from our per­spec­tive, right?

[01:04:59] Tony: [01:05:00] from yours.

[01:05:02] Cameron: Ha, ha, ha, ha, ha. That would­n’t make them top 300.

[01:05:06] Tony: pos­si­bly, yeah. But have a look at what are some of the small cap stocks we’ve got that have done well. Lind­say, LAU, I think is a small cap stock from mem­o­ry.

[01:05:14] Cameron: Yeah, not this finan­cial year.

[01:05:16] Tony: Oh, okay. It’s down, isn’t it?

[01:05:18] Cameron: down, yeah. And the next one on the list is HZN, VVA is up 14%, NHC is up near­ly 13%, CVL, KOV, NZM, there’s a lot, MTO, yeah, but they get down. But cer­tain­ly the big per­form­ers in the dum­my port­fo­lio for this finan­cial year, SMR, TRS, ASG, big ish, par­tic­u­lar­ly SMR, which is the big­ger of the three.

[01:05:45] Tony: Yeah, right. And I guess the oth­er prob­lem that, that I have, and I guess you might in the ASX 300 and Steve might, I don’t know his, his, port­fo­lio size, but if he’s focus­ing on large ADT stocks, it’s rea­son­able in size, I imag­ine. The prob­lem is the alter­na­tive is if you want to [01:06:00] focus on small cap stocks, cause you think they’re going to out­per­form, you’ve got to have a large port­fo­lio of small cap stocks.

[01:06:05] Tony: And I’ve, I’ve tried that. My expe­ri­ence is that the prob­lem with that is, You’re buy­ing titling amounts in small com­pa­nies to not sort of, like, to not dri­ve the price up when you’re buy­ing, so you’re try­ing to buy 20 per­cent of their ADT, maybe even a lit­tle bit more than that, and you end up with a 50 stock port­fo­lio, and then what I found is that it was, it was always the larg­er weight­ings that drove the per­for­mance, because if you had, you know, 10, 000 of some­thing which went up 100%, and it was only 1 50th of your port­fo­lio, it was the thing that you had, you know, 100, 000 in, that went up 30%, which is going to be a much big­ger dri­ve of the port­fo­lio.

[01:06:44] Tony: So you may as well allo­cate more of your cap­i­tal towards those posi­tions any­way, because they’re going to dri­ve your port­fo­lio.

[01:06:51] Cameron: The oth­er thing I noticed look­ing at the best per­form­ing stocks in the dum­my port­fo­lio is Stan­more. We’ve owned since Octo­ber last year.[01:07:00] TRS we’ve owned since July last year, ASG we’ve owned since August last year, Hori­zons a new buy, only bought that August this year, but, those oth­er ones, you know, we’ve held them for a long time, they’ve been very sta­ble.

[01:07:17] Cameron: And, you know, Stan­more’s had a cork­er, it’s up 100%, oh hold on, no, if I look in the last 12 months, Lind­say’s up 100%, DUR is up 63%, where’s Stan­more? 35%, so all of Stan­more’s growth has come this finan­cial year actu­al­ly, but we held on to it for, we’ve had it for a year.

[01:07:38] Tony: So maybe the tide, maybe the tide’s turn­ing when we’re get­ting out of that sort of churn­ing phase of the mar­ket that we’ve been in,

[01:07:45] Cameron: yeah, I don’t know, TK. Don’t, who knows? It’s, it’s, I thought that a week ago.

[01:07:52] Tony: Yeah.

[01:07:53] Cameron: look at this, mar­ket’s up over six months, things are like sta­bi­liz­ing, and then it crashed and burned. [01:08:00] Who knows?

[01:08:01] Tony: Yes. Thank you, Mid­dle East.

[01:08:04] Cameron: All right, well,

[01:08:04] Tony: 10 year bond yields. Yep.

[01:08:06] Cameron: let’s wrap, let’s talk, let’s go into after hours. apart from Slow Hors­es and Cape Schanck, what else have you got

[01:08:12] Tony: That’s it. Slow hors­es in Cape Schanck. Yeah, no, hav­ing a won­der­ful time down here play­ing golf. It’s been love­ly. Bud­dy’s been great com­pa­ny. yeah, yeah. Been hav­ing fun.

[01:08:24] Cameron: That’s good.

[01:08:25] Tony: Yeah. no, good fun.

[01:08:28] Cameron: I did­n’t think he was that great when he emailed me and told me what, how much I had to pay for my BAS pay­ment yes­ter­day. I’m like, ah, shit. So that time again,

[01:08:37] Tony: That’s a good thing though.

[01:08:38] Cameron: BAS, is

[01:08:39] Cameron: it?

[01:08:39] Tony: pay­ing, pay­ing tax, yeah, means you’re mak­ing mon­ey.

[01:08:43] Cameron: Yeah, in the­o­ry, yeah. well… You know, I, start­ed to real­ize one of your entre­pre­neur­ial visions,

[01:08:51] Tony: Wow.

[01:08:52] Cameron: from years ago. Do you remem­ber you had the idea, 10 years ago, maybe, for a device that you could like take a pho­to­graph of a [01:09:00] plate of food and it would tell you how many calo­ries are in it? Well, GPT.

[01:09:06] Tony: Wow.

[01:09:07] Cameron: I’m not tak­ing a pho­to of it yet, but it’s the next best thing. Now there’s this new ver­sion of GPT that’s rolling out at the moment where you can take pho­tos of things straight into GPT, and it’ll tell you what you’re look­ing at, but you know, I’ve been using a calo­rie track­er again for the last six months to try and lose more weight.

[01:09:26] Cameron: And it’s one of those apps, you know, you have to look up the thing and fig­ure it out. And if it’s some­thing that’s com­pli­cat­ed, like it’s not some­thing you can scan a bar­code on, you have to kind of work it out. What I had been doing for a while is ask­ing GPT to work out the calo­ries of things and then putting that into the calo­rie app.

[01:09:45] Cameron: And I just worked out this week, what the hell, I’ve just used GPT as my calo­rie track­er. So now I lit­er­al­ly say to it, Hey, I just had a chick­en thigh and a boiled egg. And, in a bowl of veg­gies and [01:10:00] maybe quar­ter cup of rice. And it’ll just work out what the calo­ries are and it’ll keep track of it for me.

[01:10:08] Cameron: And then, and I can ask it ques­tions as I go. I can say, you know, what should I have? Like how many, what, what’s my calo­rie deficit? What, what’s my, what are my macros? It says, Oh, you’re prob­a­bly a lit­tle bit low on pro­tein today. Okay. What should I, what should I look at that’s going to give me the pro­tein, but be under my calo­ries and blah, it’ll, it’ll make, give me sug­ges­tions.

[01:10:29] Cameron: It’ll talk to me, tell me what it thinks I can, you know, just ask it for recipe sug­ges­tions in the process. Just talk it, hav­ing, it’s like a nutri­tion­ist and a calo­rie

[01:10:41] Tony: Wow.

[01:10:42] Cameron: And a fit­ness instruc­tor I can just talk to and it just is there wait­ing for me to tell it what I can just tell it. Oh, I ate this and a bit of that and this thing had a dress­ing on it.

[01:10:54] Cameron: Not sure what it was, but prob­a­bly, you know, hon­ey soy dress­ing and it’ll just [01:11:00] ball­park the calo­ries for you

[01:11:02] Tony: That’s bril­liant.

[01:11:03] Cameron: It is fan­tas­tic, I’d tell ya. And I can’t wait till I get the new photo,version. I’m gonna try just tak­ing a pho­to of a bowl of food and say­ing, what do you reck­on the calo­ries of this are and see what it can work out.

[01:11:16] Tony: That’s per­fect. Because that was my idea, because I used to go to restau­rants and strug­gle with work­ing out what they were serv­ing me, what was cooked, and all the rest of it. But then my oth­er idea was to take that and turn it into a recipe book, so a cook­book. So, you know, if you’re want­i­ng to go no more than 2000 calo­ries a day, here’s the recipes for your day. Or what­ev­er the num­ber is. And so there’ll be a series of cook­books. Yeah.

[01:11:42] Cameron: Well, it’s a good thing you did­n’t both­er, because now Chat­G­PT just does it all out of the box.

[01:11:46] Tony: The oth­er fun­ny thing about human nature, I remem­ber that time when I was prob­a­bly 10, 15 years ago, I’d meet for lunch with peo­ple who I thought might be able to help me progress an idea like that. And they’d lis­ten to me and I’d go, that’s a great idea. Now let me [01:12:00] tell you about my idea. And then they’d spend the rest of the lunch telling me about their entre­pre­neur­ial idea.

[01:12:06] Tony: So it was just a com­plete waste of time meet­ing with peo­ple talk­ing about ideas because there’s this whole. Shat­ter­ing class of peo­ple going out to lunch, exchang­ing ideas, nev­er lis­ten­ing to what any­body else ever says, and nev­er doing any­thing. So I gave up. Awww.

[01:12:20] Cameron: You talk­ing about me there? Was I one of those peo­ple?

[01:12:24] Tony: Yes, but not specif­i­cal­ly about you.

[01:12:28] Cameron: I remem­ber that idea that you had, and think­ing it was a great idea, and also think­ing, how the hell would you do that?

[01:12:35] Tony: Well, fun­ni­ly enough, it was, it was what’s now called large lan­guage mod­el. My idea was to col­late all the pic­tures from restau­rants, because a lot of times, like this was after dot com boom, restau­rants would have pic­tures of what they were serv­ing on their web­sites. So col­late all the pic­tures and then have some way of fast sort­ing through them and say­ing whether it was like an index data­base so that you could type in I’m at [01:13:00] You know, this restau­rant, eat­ing a steak, what’s the calo­ries?

[01:13:04] Tony: And it could look it up and work it out that way. Or, the other,other thought I had was you have, you just have chefs sit­ting in a, you know, room some­where 24 7 just look­ing at the pic­ture you sent them and said, Oh yeah, that’s bro­ken down into these ingre­di­ents. Put that into the data­base and come back with the, with the calo­ries.

[01:13:20] Tony: So yeah, that’s great. If Chat­G­PT can do that, that’s fan­tas­tic. Because the oth­er aside from that whole time was when I was liv­ing in Cana­da, they brought in a law which said that fast, chains of, chains of restau­rants, I guess it was aimed at the fast food chains, had to have the calo­rie amount of each item on the menu. And so if you walked into McDon­ald’s, it would say there’s, you know, 500 calo­ries in the big mac or what­ev­er the num­ber was. Yeah.

[01:13:46] Tony: 5, 000 kilo­joules maybe, but that was around 500 calo­ries from mem­o­ry. and, but I remem­ber going to a steak­house that I used to vis­it and because the steak­house, I had a cou­ple of, you know, out­lets, even though it was­n’t a chain as [01:14:00] such, it fell under that law.

[01:14:01] Tony: And I’m look­ing at the menu for what I nor­mal­ly thought was a rea­son­ably healthy sort of meal, you know, steak and coleslaw or what­ev­er. And it’s like, nah, that’s my whole day’s worth of calo­ries in that one meal. So yeah, I was fool­ing myself. So it was great to get that awak­en­ing into how impor­tant it was to get the num­ber right.

[01:14:20] Cameron: that’s the main rea­son I track these things. It’s not like, I don’t real­ly try inor­di­nate­ly hard to stay under the dai­ly lim­it. Like if I go over it, I go over it in a cou­ple of days of the week. I usu­al­ly go over it in a cou­ple of days of the week. I’m mas­sive­ly under it, but it’s just that. process of know­ing what I’m putting in my mouth and what the things are worth.

[01:14:49] Cameron: And, you know, I’ve been doing this now for a few months, as I said, and still not los­ing as much weight as I think I should be, par­tic­u­lar­ly with the amount of exer­cise that I do now. So I said to GPT, look, here’s the thing. I’ve been [01:15:00] track­ing my calo­ries. I’m stay­ing under the lim­it, doing a lot of exer­cise, not los­ing as much weight as I think I should be.

[01:15:06] Cameron: What’s going on? It said, well,

[01:15:09] Tony: Did it say, did it say, okay, fat boy, let me, let me tell you,

[01:15:13] Cameron: that’s what Fox says. Fox calls me fat­ty all the time. Hey, fat­ty. I, I man­aged to export out of the app that I was using my diet with what I’ve been eat­ing for the last month. And I uploaded it into Chat­G­PT and said, have a look at this. This is what I’ve ate for the last month eat­en.

[01:15:30] Cameron: What do you think? And it said, I think your macros prob­a­bly need some work. You’re very low on pro­tein. You’re get­ting all your calo­ries from carbs and fat

[01:15:40] Tony: right, right. Yeah.

[01:15:42] Cameron: we don’t eat, we stopped eat­ing meat, we don’t eat meat much, and I was­n’t eat­ing a lot of boiled eggs, we’d have eggs maybe once a week, but you know, it was­n’t a big part of the thing, and we eat a bit of yogurt, Christy makes yogurt every day, but I don’t eat much, like a few table­spoons of yogurt a day, so it said, you know, you prob­a­bly want [01:16:00] to, you know, calo­ries from Pro­tein are dif­fer­ent than calo­ries from carbs or calo­ries from fat.

[01:16:07] Cameron: So we prob­a­bly want to increase your pro­tein com­po­nent. Just, it’s just amaz­ing, TK. I got to

[01:16:13] Tony: yeah, right. Okay.

[01:16:14] Cameron: GPT there to talk to about this kind of stuff is, has been a rev­e­la­tion.

[01:16:19] Tony: That’s a great step for­ward.

[01:16:22] Cameron: Yeah.

[01:16:22] Tony: to the Chat­G­PT that I use or do you have some kind of spe­cial sub­scrip­tion?

[01:16:27] Cameron: Well, I’m using the pre­mi­um ver­sion, but I think the 3. 5 free ver­sion will prob­a­bly do just the same thing for this. So, you know, pre­mi­um ver­sion real­ly comes into its own when you’re doing cod­ing or stuff like that where you need, you know, a high­er lev­el of com­pute. But I think the 3. 5 could prob­a­bly stitch togeth­er calo­rie track­ing for you, yeah.

[01:16:47] Tony: Yeah, cool. And I must admit, like, back when I was doing it reli­gious­ly around that time, 10 years ago, and it real­ly worked for me, I don’t, my take out from it was, yeah, count­ing calo­ries and being vig­i­lant is real­ly good, [01:17:00] but it was prob­a­bly after about six months I worked out where the real road­blocks were, whether, you know, stop eat­ing gar­lic bread, stop eat­ing ice cream, you know, and once, once those sort of big tick­et items came out of my diet, that was the real turn­ing point.

[01:17:15] Tony: Yeah.

[01:17:15] Cameron: Yeah, and I’ve gone through this process sev­er­al times over the last 10 years, and I’ll tend to use a calo­rie track­er for a while, and then I’ll fig­ure I’ve got a han­dle on it, and I stop

[01:17:26] Cameron: using it, and then a year lat­er, I’m putting on weight again, and I’m like, oh, right.

[01:17:32] Tony: Yeah, but by the same token, I remem­ber in first year psych, being told the body has a glu­co­sta­t­ic num­ber, so, you know, you can, you can, you can reduce weight for a while and you can exer­cise and bulk up for a while, but you’re always going to end up back up that glu­co­sta­t­ic sit­u­a­tion over time,

[01:17:52] Cameron: Right,

[01:17:52] Tony: which is kind of depress­ing.

[01:17:54] Tony: Yeah, but that’s cer­tain­ly been, that’s cer­tain­ly been my expe­ri­ence any­way. I’ll get, I’ll get reli­gion and, you [01:18:00] know, lose weight or, or gain mus­cle and then it just gets all too hard.

[01:18:08] Cameron: Yeah. Any­way, hope­ful­ly these tools are going to make it bet­ter and eas­i­er and,

[01:18:12] Tony: yeah,

[01:18:13] Cameron: and of course it’s, they’re also going to give us, bet­ter tools for health and, all those sorts of things.

[01:18:19] Tony: In a cou­ple of years time, they’ll give us the pro­tein pill which will feed us and we’ll become depen­dent on them. Then they’ll with­hold it and then

[01:18:26] Tony: we’re fucked.

[01:18:27] Cameron: huh.

[01:18:28] Tony: Because we shut down the agri­cul­tur­al indus­try in the mean­time.

[01:18:30] Cameron: Yeah. There’ll be a monop­oly on pro­tein pills. in terms of watch­ing, we haven’t watched much while Chris­sy’s Niece was here, but we just got back into The Bear last night, which we’re in Sea­son 2 of The Bear, have you watched that at all yet?

[01:18:45] Tony: haven’t watched it yet.

[01:18:46] Cameron: It’s real­ly good. Real­ly good. Yeah. And, I want to thank, shout out to Geoff Flem­ing for one of our club mem­bers, Mel­bourne.

[01:18:55] Cameron: Geoff. Alert­ed me a few weeks ago that Sparks are com­ing [01:19:00] to Aus­tralia. I

[01:19:00] Cameron: had­n’t heard that. So we’ve got tick­ets and we’re tak­ing Fox cause he’s a Sparks fan too. We’re going to see Sparks in a few weeks. So real­ly look­ing for­ward to that. So thank you, Geoff, point­ing that out. I think he saw them. I think he said he saw them in Lon­don in the ear­ly sev­en­ties or some­thing.

[01:19:16] Cameron: So he’s a big fan, but yeah, we’re look­ing for­ward to going and see­ing them. That should be a lot of fun.

[01:19:22] Tony: Yeah. We’ve got tick­ets to Paul McCart­ney com­ing up in a few weeks, which will be good.

[01:19:26] Cameron: Wow. Yeah. Thought

[01:19:28] Cameron: about that.

[01:19:28] Tony: yeah. And then Paul Weller’s com­ing out in Jan­u­ary play­ing the opera house. So we’re going to go and see that too.

[01:19:33] Cameron: Wow,

[01:19:34] Tony: Look­ing for­ward to that.

[01:19:36] Cameron: Sparks are play­ing the Opera House in

[01:19:37] Tony: Yeah, they are. Yeah. Yeah.

[01:19:39] Cameron: crazy. What a crazy cou­ple of years they’ve had. It’s gone from being this tiny cult band to just play­ing the Opera House. That’s

[01:19:51] Tony: Mm-hmm. Yeah,

[01:19:53] Cameron: Yeah, McCart­ney, you’ve seen McCart­ney before, haven’t you?

[01:19:56] Tony: I saw him in Toron­to or just out­side of Toron­to, a place called [01:20:00] Hamil­ton. Yeah.

[01:20:01] Cameron: Right.

[01:20:01] Tony: Real­ly good. Real­ly good con­cert. Such a great con­cert. Yeah.

[01:20:05] Cameron: Yeah, I was talk­ing, the niece, Elise, who was here, big, big, sort of uber, Bea­t­les nerd. And so we watched, we were watch­ing Get Back again while she was here and some YouTubes and that kind of stuff. And I was talk­ing to her in the car on the dri­ve up to Bundy, all the way back, just get­ting this, this, I, I, I often try and won­der what it must be like to be McCart­ney.

[01:20:27] Cameron: Not only hav­ing been one of the most famous peo­ple on the plan­et for the last, I don’t know, 60 years, but. The fact that he does these con­certs and every­one basi­cal­ly wants to hear the songs that he wrote when he was 23. No one cares about, real­ly, what he’s done in the last 50 years. He’s got a cou­ple of hits in the last 50 years, and the fact that he’s still putting out music, and it’s not like the world does­n’t come to a halt when he puts out a new album.

[01:20:55] Cameron: Peo­ple go, hey, McCart­ney’s got a new album, yeah, man, you know, put on a Bea­t­les [01:21:00] album. Like, what, how do you, how does your ego process that? The fact that… Peo­ple think you did your best work when you were in your 20s, he prob­a­bly, as an artist, thinks he’s con­tin­u­al­ly improved and puts as much effort into his song­writ­ing now as he did when he was 25, but peo­ple don’t care, it’s just like what he did in his 20s, that was it, and the rest of it, eh, you know,

[01:21:22] Tony: Well, I kind of, yeah, like, I, I take your point, it prob­a­bly is the same for any sort of musi­cal act, isn’t it? Like Elvis Costel­lo or Spring­steen or all these peo­ple, they, they want to, you know, play born in the u s a, you know, from the 1980s. is still what they have to play. And I like to kind of think of it as a bit like how peo­ple like Michael Caine approached the movies.

[01:21:42] Tony: It’s like, I’ll, I’ll work for them. And then I’ll work for myself and I’ll work for them. And I’ll work for myself. You know, so he’s, I can’t, he’s going, okay, I’ll do a tour. I like tour­ing. I’ll play what they want to hear. I’ll, he cer­tain­ly plays his new stuff in there as well. Mix­es it up. And then he’ll make all the mon­ey.

[01:21:59] Tony: He’ll go off [01:22:00] and record what the hell he likes. So it does­n’t mat­ter. Yeah. There’s a com­mer­cial­i­ty to them. And McCart­ney was cer­tain­ly the most com­mer­cial of the Bea­t­les by a long way. Bit like Mick Jag­ger and the Rolling Stones. Like, I don’t think Kei­th would still be play­ing Brown Sug­ar unless Mick was goad­ing him every now and then to get up on stage.

[01:22:22] Cameron: I watched a bit last night of their, sin­gle launch that they did with Jim­my Fal­lon in Lon­don, did you

[01:22:29] Tony: right.

[01:22:31] Cameron: I like, I can’t get over how skin­ny Mick and

[01:22:35] Tony: Yeah.

[01:22:36] Cameron: would look, but, they’re like skin and bone, those guys, but just the amount of ener­gy Mick has, like such a show­man get­ting out there. He’s like 80, just putting it on.

[01:22:47] Cameron: He’s always, and I, you know, I saw footage of them per­form­ing recent­ly some­where at just the amount of ener­gy he has bounc­ing around the stage at 80 is. Kind of [01:23:00]astounding to

[01:23:00] Tony: It is, isn’t it? I

[01:23:01] Cameron: I could­n’t do that now.

[01:23:03] Tony: I know. Yeah, it’s incred­i­ble, isn’t it? I mean, his father was a PE teacher and he trained him well, but he’s always been very, very fit. Where­as I think Kei­th relies on drugs to get up and per­form,

[01:23:15] Cameron: Heath has been clean for 30 years.

[01:23:18] Tony: oh real­ly?

[01:23:19] Cameron: Hmm. You don’t believe that sto­ry?

[01:23:22] Tony: he’s still as fit as Mick, but he still gets up and plays as much, so he must be a caf­feine addict then or some­thing, there’s some­thing going on, yeah.

[01:23:31] Cameron: It’s an astound­ing, like just, an astound­ing lives these guys have had. They invent­ed pret­ty much rock and roll, not real­ly, I mean, it was around for a few years before then, but they took it to a whole new lev­el and they’re still doing it, 60 years lat­er, like, it’s crazy.

[01:23:50] Tony: It is, isn’t it? And, and, you know, a lot of their com­pa­tri­ots have passed on or they’ve retired or what­ev­er, but, they’re still going. Yeah.

[01:23:58] Cameron: Yeah.

[01:23:58] Tony: incred­i­ble. There’s, [01:24:00] there’s, there’s some peo­ple who just like that kind of life, the jet set lifestyle, tour­ing into dif­fer­ent coun­tries. I would find it hard because, well, I don’t know what they do, but you imag­ine they’re not sort of play­ing a con­cert and then going out and explor­ing the coun­try­side, in each place they go to.

[01:24:15] Tony: It must just look like one Hilton hotel after anoth­er, one sta­di­um after anoth­er. Yeah.

[01:24:19] Cameron: Yeah, prob­a­bly. But like, you think about where rock and roll was in 1963 when they came out with their first albums and to where it is today, I mean, it’s such an incred­i­ble jour­ney and just try­ing to stay rel­e­vant, just try­ing to keep mak­ing music. They real­ly aren’t doing that dif­fer­ent music.

[01:24:41] Cameron: I mean, Paul’s changed up some styles a lit­tle bit over the years, but his more, more recent albums sound like some­thing he could have done in the 70s. They don’t sound dra­mat­i­cal­ly dif­fer­ent. He’s not doing hip hop or tech­no or like Bowie. Bowie was con­stant­ly Exper­i­ment­ing with

[01:24:59] Cameron: new [01:25:00] styles, new sounds, very, very adapt­able, tak­ing what­ev­er was emerg­ing in the club scene and fig­ur­ing out how to make it his own and put his own stamp on it and that kind of stuff, which I real­ly admired.

[01:25:13] Cameron: The guys like McCart­ney, Jag­ger. Richard’s, nah, Kei­th, you know, the Rolling Stones album that’s com­ing out this month is from the first song and from what every­one says is basi­cal­ly their best albums, you know, since, I don’t know, Sticky Fin­gers or some­thing.

[01:25:29] Tony: Spot­ting me up? Yeah.

[01:25:30] Cameron: going right back to the sev­en­ties.

[01:25:31] Cameron: It’s the same, the same sort of open G chords, the same beat, you know, it’s, it’s, I don’t know, I’m kind of in awe of these guys in a way. I think it’s incred­i­ble that they just keep doing what they’re doing. And it

[01:25:46] Tony: Yeah, and I real­ly hope that they’re doing it because they want it and not being sort of prod­ded by the indus­try behind them.

[01:25:52] Cameron: By their grand­chil­dren.

[01:25:54] Tony: Well, or their, or their man­ag­er, or their, you know, stu­dio exec­u­tive, or their, [01:26:00] ses­sion musi­cians, or record pro­duc­ers, or pub­lic­i­ty artists, or who­ev­er. I’ve often thought that about the E Street Band, right?

[01:26:07] Tony: You know, like… They tour with Bruce and they do these good times and then Bruce will put a solo album out and Max Wein­berg will go back to being a drum­mer on The Light Show and Ste­vie will go off and appear in The Sopra­no. It’s like, they’ve got to keep work­ing,

[01:26:21] Cameron: Yeah, well I know Alice Coop­er, I’ve heard him talk about the fact that he tours a lot, and his wife tours with him, she’s part of the act, but, you know, he talks about the fact that they run an indus­try, they have peo­ple that rely on them, they have musi­cians, they have crew,

[01:26:39] Tony: Mm hmm.

[01:26:39] Cameron: his busi­ness, that’s his fam­i­ly, and they rely on Alice going out on tour, he said he loves it too, and I think he gen­uine­ly does, keeps him young, his mar­riage has last­ed for Thank 40 odd years and they tour togeth­er and see the world, but you know, he does see it as, it’s his fam­i­ly, you know, he takes them out and keeps them busy, keeps [01:27:00] them work­ing,

[01:27:00] Tony: Yeah.

[01:27:01] Cameron: an ele­ment of that sense

[01:27:03] Tony: I think there is. Yeah.

[01:27:04] Cameron: or what­ev­er it is, you know, a

[01:27:07] Tony: Yeah. That’s a good, a good thought. I think

[01:27:09] Cameron: like you turn­ing up on this show every Tues­day, Tony, lit­tle indus­try that you’re respon­si­ble for.

[01:27:17] Tony: It kind of feels that way some­times, I’ve got to say,

[01:27:20] Cameron: I’m sor­ry, Tony.

[01:27:21] Tony: that’s all right,

[01:27:23] Cameron: no, we appre­ci­ate you. We love

[01:27:24] Tony: that’s all right.

[01:27:25] Cameron: val­ue you.

[01:27:27] Tony: not wor­thy.

[01:27:29] Cameron: We’re not wor­thy, you know. I do, I do think about that all the time. We’re not wor­thy. Alright, well, speak­ing of which, I’ll let you go play some golf. Thank you, TK. Thank you to every­one who sent in ques­tions. And, talk to you all next week. Hang in there. Keep your head up. Keep your chin up.

[01:27:45] Tony: sor­ry, just on that too. I had a thought today when I was out on my morn­ing walk that, I can’t think of anoth­er invest­ing pod­cast where peo­ple get tak­en through. The detail of how to invest and what to invest in, and then play [01:28:00] along with the investor. I mean, you’ve got peo­ple who bring out things like Stock­o­pe­dia and, you know, that’s, that’s good, but, but they’re not, they’re telling you how to use it and train­ing you into using it, but you’re not invest­ing along with them.

[01:28:13] Tony: It’s QAV’s kind of real­ly unique sort of invest­ment pod­cast.

[01:28:17] Cameron: I’ve always said that, man. It’s what I keep telling the peo­ple at Stock Doc­tor.

[01:28:22] Cameron: Like… Yeah, I’m sure Stock Doc­tor have oth­er suc­cess­ful investors who use their plat­form, but how many of them are will­ing to teach peo­ple how to do what they do every week? It just does­n’t hap­pen. Like it’s a unique thing that you’re doing.

[01:28:37] Cameron: And I think that’s why every­one tunes in and appre­ci­ates it. That’s

[01:28:42] Tony: cool.

[01:28:44] Cameron: we’re part of the Tony Kynas­ton fan club. Small, but pas­sion­ate.

[01:28:50] Tony: I was going to say, we’ll get, we’ll get some t shirts made up, maybe three,

[01:28:54] Cameron: Yeah.

[01:28:54] Tony: many.

[01:28:57] Cameron: It’s a cult fan club. All right. [01:29:00]

[01:29:00] Tony: Thanks mate. Bye.