This week we’re talking about how we assess management quality, how to invest if you have a lumpy income, a pulled pork on MMS, and (only in the Club edition) Ridley Scott’s appalling Napoleon film.


QAV 648 Club

[00:00:00] Cameron: Welcome to QAV episode 648, TK. And I tell you, I’m glad that I always say welcome

[00:00:15] Cameron: to QAV at

[00:00:17] Cameron: the beginning of every show, because I’ve been doing these transcripts of our old episodes lately, and I’ll do like 10 at a time. So it’ll end up as, uh, was one big long document. All I need to do is search for the bit where I say welcome.

[00:00:28] Cameron: And I know that’s the beginning of the next episode. We’re recording this, uh, 28th of November, 2023. And I

[00:00:37] Cameron: tried to pull the pin on the show this morning because I had literally nothing to talk about, but you came up with something, which is great. Just a quiet week. No questions. Nothing much has happened in my week.

[00:00:48] Cameron: Investing wise, just been kind of a bit of a ho hum

[00:00:52] Cameron: week.

[00:00:53] Tony: It been a good week for me.

[00:00:54] Tony: Like happy ASX cam. It’s been, uh, . Some of the stocks have turned around, which is always [00:01:00] nice.

[00:01:00] Tony: Yeah, I was traveling. I went up to Brisbane for a, for a 60th birthday party for my brother-in-Law. So big shout out to

[00:01:06] Tony: Wall, great party. And my sister, and she won’t listen, but Wal might pass it on.

[00:01:11] Tony: Um, and my nieces and nephews and all of their friends, it was lovely and family.

[00:01:16] Tony: It was lovely. Uh,

[00:01:16] Tony: party up

[00:01:17] Cameron: That’s great. And we got to have lunch

[00:01:19] Cameron: with you on

[00:01:19] Cameron: Saturday in the family, which was nice. It’s

[00:01:22] Tony: Yes. Alex came up and Sean, it was a, it was, yeah, really nice family

[00:01:25] Tony: quality

[00:01:26] Cameron: Yeah, um, well, I, I did want to point out that the CVL pulled

[00:01:32] Cameron: pork, pulled, pulled, pulled, pulled, pulled,

[00:01:36] Cameron: pork curse turned around.

[00:01:38] Cameron: CVL rebounded

[00:01:41] Cameron: after we did the show last week.

[00:01:43] Cameron: Um, so that’s good. So the pulled pork

[00:01:46] Cameron: curse, hopefully people didn’t buy it, then had to rule one and

[00:01:50] Cameron: then it turned

[00:01:51] Cameron: around. I actually,

[00:01:53] Tony: maybe they, maybe they took a while to listen to the podcast and now they’re buying it

[00:01:56] Tony: en

[00:01:57] Cameron: right. I actually, I added some [00:02:00] to a light portfolio yesterday, I think. So this is why I noticed it had turned around again. Uh, what else happened this week? Oh, I posted my Python script for sentiment checks to the group, so a couple of people were excited about that, a couple weren’t. Ed

[00:02:16] Cameron: Nixon said it was all like gobbledygook, and it is.

[00:02:20] Cameron: But,

[00:02:21] Cameron: you know, that’s if you’re going to become coders.

[00:02:23] Cameron: I need to learn how to understand code. Anyway, I hope that helps some people. Let me know, I haven’t heard feedback yet from anybody who,

[00:02:31] Cameron: uh, said they were going to give it a go. But, um, I hope it helps. Like for me, I can run a couple of hundred sentiment checks.

[00:02:37] Cameron: I can, I just rerun, every Monday I run my

[00:02:40] Cameron: 3PTL update

[00:02:43] Cameron: script. So it, Um, gives me the latest sell prices for a couple of hundred stocks, which I can just drop into the spreadsheet. They’re all updated every

[00:02:50] Cameron: week. Um…

[00:02:52] Cameron: So, uh, let me know if anyone wants that. It’s good stuff.

[00:02:57] Cameron: What else? Portfolio

[00:02:59] Cameron: performance. I did [00:03:00] my weekly report this morning.

[00:03:02] Cameron: Our dummy portfolio hasn’t had a good month, last 30 days. It’s underperformed, the STW. But, um,

[00:03:12] Cameron: I look at the, since inception, we’re still doing about two and a half times.

[00:03:17] Cameron: Uh, the STW for the financial year we’re doing, um, a lot better than the s st. I think the STW for the financial

[00:03:28] Cameron: year is negative half a percent.

[00:03:33] Cameron: And, uh, the dummy portfolio is up 3%.

[00:03:37] Cameron: But, um, if you look at the capital gain, it’s actually down a quarter

[00:03:42] Cameron: of a percent. Um, all of the upside is in dividends.

[00:03:47] Cameron: So,

[00:03:49] Cameron: it’s

[00:03:49] Cameron: not ideal. That’s

[00:03:51] Cameron: okay,

[00:03:51] Tony: it’s okay.

[00:03:52] Cameron: it’s better than nothing.

[00:03:53] Tony: dividends. They’re important. Yeah. And we score them in the

[00:03:56] Tony: checklist, right? So

[00:03:57] Tony: they are

[00:03:57] Cameron: yes, but you’ve told me that [00:04:00] in the past, traditionally dividends account for what about 20%, 25%?

[00:04:05] Cameron: Do you think if you’re upside?

[00:04:08] Tony: Yeah. 20 to 30 percent

[00:04:09] Cameron: Not a hundred percent, 110%.

[00:04:13] Tony: a short

[00:04:13] Tony: timeframe. So I’m willing to take it.

[00:04:15] Cameron: Oh, that’s true. And if I look at, but if I look at inception, uh, which is over four years now, the capital gain is only 5 percent

[00:04:25] Cameron: and the

[00:04:25] Cameron: income return is nine and a half

[00:04:27] Cameron: percent. Over that time. So it’s, you know, been the, the thing,

[00:04:34] Cameron: keeping our dummy portfolio performance up since inception too. I don’t know what that means, but I get it better than nothing. STW includes income as well and

[00:04:47] Cameron: outperforming that by quite a lot. So it works at the end of the day.

[00:04:53] Cameron: That’s. Literally everything I have to talk about for the for the

[00:04:58] Cameron: episode, Tony.[00:05:00]

[00:05:01] Tony: That’s all right. Well, I’ve got a couple of things to talk about. Um,

[00:05:04] Tony: and, uh, I’ll do a pulled pork

[00:05:06] Tony: on Macmillan Shakespeare in a minute. Um, I, I wanted to talk about the results of, uh, the analysts. Analysis into buying from the top of the buy list versus buying from the bottom and rule ones and 10 percent versus 20%.

[00:05:24] Tony: So we can separate that. And I think Alex is going to come on soon with a question. So I’ve got those three things to cover and you can pick

[00:05:31] Tony: the order.

[00:05:32] Cameron: Okay. I’ll stitch ’em

[00:05:33] Tony: Oh, sorry. There was a fourth thing too. Um, so I just had a thought. Um,

[00:05:39] Tony: I listened to the free half hour show.

[00:05:42] Tony: Well, I listened to it, um, occasionally. And it’s kind of striking me that if you’re coming in new to the show, you wouldn’t be getting a flavor of what QAV is.

[00:05:54] Tony: And also I did an interview with Phil Muscatello on Shares for Beginners recently, [00:06:00] and listening back to that, it, you know, he asked a few questions, you know, about what QAV is. And I think it might be worthwhile just doing a quick recap on one part of QAV. At the top of the show, or the first half hour of the show, just to give people a flavour, who are new, as to what it is.

[00:06:17] Tony: And I guess the people who aren’t new might enjoy a

[00:06:20] Tony: recap onto

[00:06:21] Tony: things.

[00:06:22] Cameron: So when you say a recap, what are you thinking? Like the,

[00:06:24] Cameron: the, the, an o an an

[00:06:26] Cameron: overview of the entire process or pulling out

[00:06:29] Tony: No, no,

[00:06:30] Tony: just yeah, pull out

[00:06:31] Tony: one

[00:06:31] Tony: piece

[00:06:31] Tony: of it so people can, might even ask questions about it. But, uh, and they did in the early days. They’ve kind of dropped off now, but to give you an example, when Phil and I were talking on his show, uh, he was asking, how do I judge management’s quality?

[00:06:44] Cameron: Mm-Hmm.

[00:06:45] Tony: Because oftentimes investment analysts talk about, you know, how important the culture of management is, how important, uh, good management is.

[00:06:53] Tony: to a company. And Phil said, how do I do it? And I said, well, to judge the quality of the management, you’ve got to look at the [00:07:00] quality of the figures, because management’s always going to spin a story. And if you want a good story, go to a bookstore, don’t, don’t buy a stock. So that’s an example, right? And, and we see management quality in the numbers.

[00:07:13] Tony: We, we see good return on assets. We see, um, sorry, good return on equity. We see, um, uh, good debt management. Um, Dividend Management, all those kinds of things. Earnings per

[00:07:24] Tony: share growth, which are part of our

[00:07:26] Tony: checklist process. So, a lot of, you know, a lot of people either get turned off by investment, or they focus entirely on the forward looking statements for a company.

[00:07:37] Tony: And that’s important, and we, we look at forecast earnings per share growth in, um, in our checklist. Uh, but, what I find is, what you’re doing when you, my experience is if you’re looking at what, The company says it will

[00:07:51] Tony: do, or what you think the company will do.

[00:07:55] Tony: You’re basically telling a story,

[00:07:57] Cameron: Yeah.

[00:07:57] Tony: right? You don’t, you don’t have any [00:08:00] figures or facts that you can pull out to just,

[00:08:02] Tony: you can pull out plenty of figures and facts to justify the story, but you don’t have any hard data.

[00:08:06] Tony: You’re, you’re doing almost like a probabilistic scenario of, you know, what if interest rates go up or down? What if there’s no, um, war going on somewhere in the world? What if oil prices are up or down, et cetera, et cetera. And therefore you’re. Projecting what you think the company might be worth. And that, that to me is a best of statistical game and, and at worse,

[00:08:31] Tony: dumb luck to try and do that. So all we have to work on is what we have. Um, in the company reports that they’ve already done and then find a category or a type of company or a profile of company that we think gives us the best odds of seeing it improve over time. So as we said, we look at the quality of the company, um, low, low debt, good financial health.

[00:08:56] Tony: All those kinds of things. And then we look at how much cash flow, we [00:09:00] put a big emphasis on how much cash flow it’s got. Um, positive cash flow, obviously. And, you know, we look at things like, is the equity increase, net equity increasing consistently? All those kinds of things. And then we put the value overlay on it because…

[00:09:14] Tony: We know that, um, if something is priced to perfection and the future isn’t perfect, which it often isn’t, then it’s got more chance of being, of coming down and being volatile. So, yeah, so I just wanted to kind of just recap on a point of QAV to try and paint a picture of what QAV

[00:09:30] Tony: is if someone comes in

[00:09:31] Tony: you.

[00:09:32] Cameron: You know, what I normally do, nearly every free episode, it may not have been the case last week, but nearly every free

[00:09:38] Cameron: episode has your pulled pork in it.

[00:09:41] Cameron: Because I figure the pulled pork is the

[00:09:43] Cameron: case study for how you think about valuing stocks. You’re pulling it apart and looking at all of the numbers.

[00:09:52] Cameron: But I think last week we had a lot of chit chat about other stuff that I thought was interesting, so I threw all that in instead, but

[00:09:58] Cameron: yeah. But we can do [00:10:00] another bit of a breakdown and add it in too,

[00:10:02] Cameron: that’s all

[00:10:02] Cameron: good.

[00:10:05] Tony: just a thought. Maybe people can let us know what they would like to hear and raise some

[00:10:09] Tony: questions about it.

[00:10:10] Cameron: Good idea.

[00:10:11] Cameron: Hi

[00:10:11] Cameron: Alex!

[00:10:12] Alex: Hi.

[00:10:14] Tony: Hi,

[00:10:15] Tony: hun.

[00:10:16] Alex: Hi,

[00:10:17] Tony: Nice painting behind you.

[00:10:19] Alex: Thank you.

[00:10:21] Alex: Good, because I am covered in paint right now.

[00:10:24] Alex: I’m scared to touch my laptop because I’ve got so much on my hands.

[00:10:30] Tony: What, you think you’re painting, are

[00:10:31] Tony: you?

[00:10:31] Cameron: It’s

[00:10:31] Alex: Yeah,

[00:10:32] Alex: pretty much.

[00:10:33] Cameron: good to see you on the

[00:10:33] Cameron: weekend.

[00:10:35] Alex: Yeah, the weekend. was

[00:10:36] Cameron: to see you.

[00:10:36] Cameron: both.

[00:10:38] Cameron: What have you got for us this week, AK?

[00:10:40] Alex: Well, I pre screened this

[00:10:41] Alex: question with dad and I’m still not sure

[00:10:43] Alex: it’s the greatest question of all. But, um, I was thinking. Uh, one’s investing strategy would change if, say, they were a, you know, professional artist or something like that, where you have a, you know, a [00:11:00] big chunk of your income coming at, you know, from a sale three times a year or something

[00:11:04] Alex: like that.

[00:11:05] Cameron: Hmm.

[00:11:06] Alex: Um, so

[00:11:07] Cameron: Just a…

[00:11:07] Cameron: couple of million dollars here, a couple of million dollars there, a couple of million

[00:11:10] Cameron: dollars

[00:11:10] Cameron: there,

[00:11:13] Tony: Yeah, you won’t have to invest. You’ll just live off the proceeds of your sales the rest of your life.

[00:11:18] Tony: Yeah, invest more, invest more time in doing your art and producing more art.

[00:11:24] Tony: Yeah, don’t worry about

[00:11:25] Cameron: But half of that has to go to

[00:11:26] Cameron: heroin and then the other half goes to

[00:11:28] Tony: Oh, don’t say that.

[00:11:30] Cameron: Isn’t that what all great artists

[00:11:31] Cameron: do? It’s like, isn’t it fueled by heroin or is it

[00:11:34] Cameron: just

[00:11:35] Cameron: Brett Whiteley I’m thinking of? the

[00:11:39] Alex: it’s not a…

[00:11:41] Alex: much, of a jump.

[00:11:43] Cameron: paint fumes are the gateway drug.

[00:11:45] Cameron: Yeah,

[00:11:46] Cameron: that’s how you get started.

[00:11:47] Alex: terps.

[00:11:48] Tony: ha

[00:11:48] Tony: ha ha ha.

[00:11:49] Cameron: All right. I don’t want to

[00:11:50] Cameron: encourage your drug habit. Continue. Your

[00:11:53] Tony: Yeah, is that

[00:11:54] Cameron: your father’s giving

[00:11:54] Cameron: me dirty looks, encouraging your

[00:11:55] Cameron: drug habit.

[00:11:57] Alex: He gave

[00:11:57] Tony: I’m not.

[00:11:58] Alex: Sting, not Sting, um, [00:12:00] Flea’s latest

[00:12:00] Alex: autobiography. Is it something for the children.

[00:12:03] Alex: Drugs for the children? Acid.

[00:12:06] Alex: And he, before he

[00:12:07] Alex: gave

[00:12:07] Alex: it

[00:12:07] Alex: to me,

[00:12:08] Alex: Flea,

[00:12:09] Alex: from,

[00:12:09] Cameron: Oh, Flea. Oh, yeah, right.

[00:12:12] Cameron: I love Flea. I

[00:12:17] Alex: now I’m not encouraging you to take drugs.

[00:12:22] Alex: That’s the purpose of

[00:12:23] Alex: me

[00:12:23] Alex: receiving this book.

[00:12:25] Tony: ha ha ha

[00:12:27] Cameron: found it yesterday. This is completely off the track. You know, Alanis Morissette’s big first track, You Oughta Know. Um, Flea played bass on that track. I saw somebody do a breakdown of that track on TikTok the other day, and it’s Flea playing bass. Yeah, he’s doing like a guest bass shot

[00:12:45] Cameron: on that. Anyhoo!

[00:12:48] Cameron: Back

[00:12:48] Cameron: to your question, Alex, when you’re making a million

[00:12:50] Cameron: dollars a painting, yes,

[00:12:53] Alex: or just anyone that I don’t know how common this is, but anyone who doesn’t have

[00:12:58] Alex: consistent cashflow.[00:13:00]

[00:13:00] Tony: Look, it’s very common, not just from the arts community, but, uh, like when I was working corporate, um, sometimes up to half my income would be paid as a bonus once a year. So my investing could be very lumpy on

[00:13:13] Tony: that basis. So, but

[00:13:16] Tony: like. In your circumstances, I think,

[00:13:18] Tony: and also it was in mine, um, you’ve got to almost budget what you think your needs are going to be for the year and make sure you have enough cash to cover that

[00:13:27] Tony: because you don’t want to tie up um, cash in an investment and then find it’s gone down and then find

[00:13:35] Tony: you have to sell it.

[00:13:36] Tony: because you need it. Money to pay the rent or for

[00:13:40] Tony: food or whatever. So I think budgeting is an important part of it. Sort of plan out your year and say, I need this much for rent and this much

[00:13:46] Tony: to eat and live

[00:13:47] Tony: and this much for travel and, and, you know,

[00:13:51] Tony: having

[00:13:51] Tony: fun, all those kinds of things. Uh, and then work out of

[00:13:55] Tony: that, um, how much above that you’re going to, do you expect to

[00:13:58] Tony: get from your, [00:14:00] um, Irregular income.

[00:14:01] Tony: So I’m, I’m assuming, well, even if it was just all from art sales

[00:14:05] Tony: and it comes in irregular, you’d still have to do that process and make sure you have enough to live on. Um, or you just simply wait till the year and see if you’ve got some left over as well, but have a fair idea of what you

[00:14:16] Tony: need for the next year.

[00:14:17] Tony: Uh, but I’m also,

[00:14:19] Tony: Guessing you’ve probably got some kind of part time job going

[00:14:23] Tony: as well. So a lot of

[00:14:24] Tony: your, your basic needs are met.

[00:14:26] Tony: Um, and one of the, so I guess a couple of guiding principles. One is if you think that you’re going to invest in the share market, but you might need to take it out for an emergency or if you, um, haven’t budgeted well or something unexpected comes along, you, you do run the risk of having That

[00:14:43] Tony: That money go down

[00:14:44] Tony: in value.

[00:14:45] Tony: The share market’s gone down in the intervening period because over the long term it goes

[00:14:49] Tony: up, over the short term it

[00:14:50] Tony: can be volatile. So that’s got to be taken

[00:14:53] Tony: into consideration. So you might

[00:14:54] Tony: decide that, You know, you’d rather put some of the money into the bank

[00:14:59] Tony: for a rainy [00:15:00] day in case you need to

[00:15:00] Tony: pull it out.

[00:15:01] Tony: And then after it’s been there for 12 months,

[00:15:03] Tony: decide then to put that into the share

[00:15:05] Tony: market, for example. Um, but yeah,

[00:15:07] Tony: it’s, it’s, it’s basically saying here’s what I need to live on.

[00:15:11] Tony: Here’s a bit of a buffer, a contingency, and then the rest goes

[00:15:14] Tony: into the share market. It’s almost like dollar cost averaging.

[00:15:16] Tony: If you have sort of three income spurts during the year and you think you can

[00:15:22] Tony: put some aside

[00:15:23] Tony: then you know buy

[00:15:24] Tony: into the index fund or buy into the next

[00:15:25] Tony: share on the buy list that you want

[00:15:27] Tony: to buy at that time but just make sure that

[00:15:29] Tony: you can commit to having it there

[00:15:31] Tony: for a longer period of

[00:15:32] Tony: time and it’s not going to have to get pulled out because you may run the

[00:15:35] Tony: risk of crystallizing a loss when

[00:15:37] Tony: you don’t want

[00:15:37] Tony: to

[00:15:38] Alex: Makes

[00:15:39] Alex: sense.

[00:15:39] Alex: Thank you.

[00:15:41] Tony: any follow up

[00:15:42] Tony: questions

[00:15:43] Alex: when we were

[00:15:43] Alex: chatting

[00:15:43] Alex: before, you said something about investing in things that you can pull your money out of quickly. Was

[00:15:48] Alex: that?

[00:15:50] Tony: well i think i think that’s the benefit of the share market yeah so i’ve always I’ve always

[00:15:55] Tony: actually slightly preferred the share market to say putting money

[00:15:58] Tony: into property, which I still

[00:15:59] Tony: [00:16:00] do, um, because I can’t sell a

[00:16:03] Tony: house quickly, but if I do need to

[00:16:05] Tony: to access the cash for

[00:16:07] Tony: whatever reason, um, I

[00:16:09] Tony: can, I can sell shares immediately

[00:16:11] Tony: and get the money within two days.

[00:16:12] Tony: So I think, um, you know, even though I wouldn’t, I wouldn’t tell you to use the share market like a

[00:16:18] Tony: bank, use the bank for things you might have to pull out within the next 12 months, but

[00:16:22] Tony: certainly if you ever do have a. a really pressing need to liquidate some of the portfolio, you can get the

[00:16:28] Tony: money out quickly. And that’s

[00:16:30] Tony: different to if you bought, um, you know, a property or something else, which is, requires a, um, a

[00:16:35] Tony: time to, to liquidate.

[00:16:38] Alex: Oh, thank you.

[00:16:40] Cameron: well That’s it.

[00:16:42] Alex: that’s

[00:16:42] Alex: it.

[00:16:43] Alex: I did text Sean to see if he had any

[00:16:45] Alex: questions and he said he

[00:16:46] Alex: chatted with you on Saturday. So when?

[00:16:51] Alex: Yeah. Oh,

[00:16:52] Tony: We did.

[00:16:52] Tony: Yeah.

[00:16:53] Cameron: tell him to,

[00:16:53] Cameron: save it,

[00:16:54] Tony: At the, at the

[00:16:55] Cameron: tell him to save it for the

[00:16:55] Cameron: show

[00:16:56] Cameron: next time, it’s a waste talking to Tony off air, I [00:17:00] don’t get to

[00:17:00] Cameron: use

[00:17:00] Cameron: it,

[00:17:01] Alex: Yep.

[00:17:02] Cameron: content,

[00:17:03] Alex: No worries.

[00:17:04] Tony: Yeah, I tell all the good stuff

[00:17:05] Tony: off

[00:17:06] Cameron: yeah,

[00:17:06] Alex: I’ll start recording all conversations.

[00:17:10] Cameron: you, that would be,

[00:17:12] Cameron: that would be

[00:17:13] Cameron: good,

[00:17:14] Cameron: alright thanks

[00:17:15] Cameron: Alex, have

[00:17:16] Cameron: a great week,

[00:17:17] Tony: Thank you.

[00:17:18] Tony: Yep. Back to those million dollar

[00:17:20] Tony: paintings.

[00:17:21] Alex: all right, bye!

[00:17:23] Tony: Bye. Alrighty. It’s a good question. That’s, um, probably fairly common. I would have

[00:17:31] Tony: thought.

[00:17:31] Cameron: yes, I imagine so, I mean I’m sure a lot of people have spurts of extra

[00:17:37] Cameron: income that they want to invest.

[00:17:41] Tony: Okay. Should I do a

[00:17:42] Cameron: Let’s do that, Tony. I was just looking up to see if you’ve ever done Macmillan Shakespeare before. I can’t

[00:17:48] Cameron: find any pulled pork in it before,

[00:17:51] Cameron: but I feel like we’ve talked about it a number of times,

[00:17:55] Tony: Well, I think that might be because we’ve talked

[00:17:57] Tony: about fleet partners or what was called Eclipse, which [00:18:00] is a competitor of Macmillan

[00:18:01] Cameron: right?

[00:18:01] Cameron: I always think Macmillan

[00:18:02] Cameron: Shakespeare is a book company. Uh,

[00:18:05] Tony: Yeah,

[00:18:06] Cameron: Cause Macmillan Press is a book company. and Shakespeare wrote books,

[00:18:10] Cameron: but not a book company. It’s kind of

[00:18:13] Cameron: confusing.

[00:18:16] Tony: Yeah, got it. Yeah, no, it’s not. It’s a, it’s a

[00:18:19] Tony: Novated Leases and Salary Packaging

[00:18:22] Cameron: Right. BSL.

[00:18:26] Tony: things, can you tell me if we, if I’ve done Blue Scope Steel, because I was also thinking about doing that, but I thought I might’ve done it recently.

[00:18:36] Cameron: Hmm. Not coming up as a pulled pork,

[00:18:38] Cameron: no.

[00:18:40] Tony: Alrighty, I might do BlueScape Steel then, because it came up on the buy list as well. Yeah, okay, so Macmillan Shakespeare, as I said, Salary Packaging, Innovative Lease Manager, Fleet Manager, a little bit of financing for vehicles and insurance, people who are working in corporates or institutions, like, uh, [00:19:00] Teachers or hospitals or something like that may have their salary packaged, including a car.

[00:19:07] Tony: And so companies like Macmillan Shakespeare do that service. They generally outsource it. So you don’t have to have a large and complex HR department to run this kind of packaging service for your staff. You can outsource it to companies like Macmillan Shakespeare, or you can just do the vehicle part of it.

[00:19:27] Tony: But yeah, so Novated leasing, um, is a, if people don’t know what that is, if they don’t lease their vehicles or haven’t, it’s just very simply that you, rather than buy the car, you lease it for a period. It’s usually around three years. And the, I guess the important things are the value of the car, the interest rate, and what’s called the balloon payment at the end.

[00:19:50] Tony: So as we know, as soon as you drive a new car out of the lot, it goes down in

[00:19:54] Tony: value. And so, uh, that, that affects the

[00:19:58] Tony: balloon payment. [00:20:00] So typically, and, and the, the sort of amounts you assign to each of these allocations will affect how much you pay in lease payments. But if, for example, you have, um, a large balloon payment at the end.

[00:20:14] Tony: In other words, when the lease finishes, you still owe the rest of the payments on the car in one payment. It’s called a balloon payment. Um, and you can either. Uh, put the car through an auction and sell the vehicle and use the proceeds to pay off that balloon payment. Or you can, um, essentially pay it yourself and buy and own the car.

[00:20:35] Tony: So it does come down two and three years time, you know, whether it’s a good deal for you or not, and whether you can recover the money from the sale or not, um, at auction for the balloon payment. And so that therefore some people will have a very, um, will try and lower their balloon payment, but that means that they’re paying more often the lease.

[00:20:52] Tony: In monthly lease payments. And some people will do the reverse. They’ll say, um, I’ll, I’m happy to be aggressive on the balloon payment [00:21:00] and,

[00:21:00] Tony: um, accept a bigger one and pay less

[00:21:02] Tony: as I go. So that’s what Nova Leasing is. Um, a few moving parts, but it’s handled by this company. And as I said before, there are other.

[00:21:09] Tony: Two other main companies that I know of that do it, MMS, which has probably only come on the buy list in the last, uh, since the last results, um, the last couple of months. Um, and there’s a fleet partners, which used to be called Eclipse, which has been on the buy list for quite a while. And another one, which we haven’t seen, I don’t think on the buy list

[00:21:26] Tony: called, I think it’s called Smart Group, SIQ.

[00:21:30] Tony: They’re the three, um, the three main ones. Um, These companies, I guess, are

[00:21:36] Tony: having a bit of a, um, a tailwind at the moment because a lot of

[00:21:41] Tony: people are wanting to novate, uh, electric vehicles, uh, because of the, I guess, their, um, there’s a transition to that kind of, uh, motor vehicle. But also, recently, in the last, I think it was the last budget, the government changed the rules so that there’s no fringe benefits tax [00:22:00] payable on, um, certain EVs up to a certain value.

[00:22:05] Tony: So, um… And fringe benefits tax is one of the reasons why this whole lease, sort of, novated lease business sort of grew up out of people trying to minimize or trying to, um, find a way of getting a benefit from their company, i. e. a car package, without, whilst minimizing the FBT for the company. So… Um, paying no FBT on electric electric vehicles, even though they might be a bit more expensive, makes them more attractive to people who are leasing them through corporations.

[00:22:35] Tony: And so, for example, um, this company, MMS, Macmillan Shakespeare, have said that, uh, new EV leases were 36 percent of their, of their business in the last quarter. And that, um, New leases have increased 28 percent year on year. So there’s certainly a tailwind happening in the car leasing business, and you can see it in the clips, sorry, Fleet Partners as well [00:23:00] around EV leasing.

[00:23:02] Tony: A couple of other things that are happening with this business at the moment. Uh, one of the other listed car dealership stocks called APEgers, A P E is their code, has bought a 6 percent stake in Macmillan Shakespeare, and, uh, neither company has come out and provided any commentary on that, um, but, uh, analysts are sort of assuming that It’s going to help Macmillan Shakespeare’s supply chain for EVs because AP Eagers has just gotten into some dealerships for brands such as BYD, the electric car company, and one of the issues and one of the risks for Apple.

[00:23:40] Tony: Companies like MMS’s is some kind of problem with supply chain for new electric vehicles. If there was a problem with, you know, supply of chips or, or any other, for any other reason why EVs were in high demand and they couldn’t be, couldn’t be bought, then they’re more likely to have [00:24:00] a supply from one of their own shareholders.

[00:24:02] Tony: But they haven’t come out and said that there’s a, there’s a Definitive supply chain tie up or any sort of contract, but I suspect that’s, um, that’s what’s potentially driving it. Uh, I’m going to jump now into the numbers, but I will come back and talk about some of the issues and some of the positives, I guess, for a company like this, um, at the end.

[00:24:21] Tony: So doing my analysis on a share price of 17. 45. Um, it’s, I noticed today the mar the Share price was up, um, this morning when I started doing the analysis it was down, so, um, it might be slightly higher than 17. 45 now, but not by much. ADT for this company is high, so it’s 3. 2 million on average per day, so that’s quite good.

[00:24:44] Tony: And this is one of the, um, One of the companies on our buy list that is a star growth stock in the Stock Doctor universe and also a star income stock, so Stock Doctor highly rates this company and we score it as a 1.

[00:24:57] Tony: 5 because of that. The interesting thing [00:25:00] I found in doing this analysis though was that the Stock Doctor financial health is satisfactory and deteriorating, so I thought it was interesting that they were giving it a star stock.

[00:25:09] Tony: Rating, um, even though it had what they call deteriorating financial trend, but I think that’s because it, um, has dropped from strong

[00:25:18] Tony: and it’s now down to satisfactory

[00:25:20] Tony: and Stock Doctor still rates. And as we do satisfactory as being, um, a score that we

[00:25:26] Tony: give it a score, Stock Doctor rate is being acceptable as well.

[00:25:28] Tony: So even, uh, even though it’s deteriorating, it’s going from strong to satisfactory. So we, um, we take one off for that, um, deteriorating trend, but. That might be a bit harsh in this case, but we’ll see. This company, uh, has, um, 100 percent of profits being paid out in dividends, which is an interesting, uh, phenomenon, I think.

[00:25:49] Tony: And certainly a different, um, approach to capital management or to Profit management compared to its competitive fleet partners, which people can go back and [00:26:00] check the pulled pork on that, but they don’t pay a dividend unless they’ve changed recently. And they, they do an ongoing share buyback with their excess capital.

[00:26:09] Tony: Coming from profits. Interestingly enough though, I kind of wondered which one was the better strategy and I overlaid their share, their share price graphs and they both sort of correlate pretty strongly. Um, but I think Macmillan Shakespeare, depending on when you start, I guess had slightly a better result over time than, than Fleet Partners, but they do both track very similar, um, share price graphs.

[00:26:34] Tony: But it does mean the yield on this company is over 7%, which is good for us. So we give it a tick for that. Um, What else can I talk about? The return on equity was strong at 35%, even though we don’t score on that. I know some people are interested in it. Uh, the PE for this company was reasonably high for a stock on the buy list at 16 times.

[00:26:56] Tony: Um, but it’s in the middle of its range, not the highest or lowest, um, [00:27:00] over the last three years, but it is high, which is getting up there. So there might be a slight issue with valuation on this company because also too, Uh, it was way above our IV1 and IV2 calculations, and it was, uh, net equity per share was 2.

[00:27:16] Tony: 09, um, and even at book plus 30, which would be 2. 72, it’s way below the current share price of 17. 45. It’s not scoring well on those kinds of valuation metrics, but its PropCaf is about six times. So it’s scoring well on that metric of having lots of cash being thrown off. Uh, Earnings Per Share forecast growth of 12%, which is pretty healthy, but not scoring for us because growth over P is 0.

[00:27:45] Tony: 76 and we look for a 1. 5. Threshold. And I think the reason why it’s below our target is because of that high ish P. E. of 16 times. Uh, the checklist scores [00:28:00] it for having an owner founder because two of the directors hold 13%, but when I dug into those, they’re not actually founders in the company, but they are experienced individuals in terms of investment.

[00:28:13] Tony: Um, One runs a fund and one’s been a, um, has a long history of, uh, uh, working in the investment space. So I didn’t want to change the score, even though it’s not an owner founder. You have two directors holding 13 percent and they’re very experienced in investing in capital markets. So I think that’s still a good thing for the company.

[00:28:34] Tony: Uh, Didn’t get, I got a zero for consecutively increasing equity. So that was an interesting thing. Uh, and it wasn’t a recent upturn in the, in the share price on the buy list. It, it was above its buy price by a long way and trending upwards, but, um, not since the last, uh, results came out. So can’t score it for that.

[00:28:54] Tony: So all in all, um. The company on the quality basis gets 9.5 outta 15, which is [00:29:00] 63%, and just sneaks into the bottom of the bio list with a qav score of 0.11 based on that, um, that good prop calf. So have a look at it. Uh, if the share price keeps going up, it may not be on the bio list for too much longer.

[00:29:14] Tony: And if you like something which pays you a, a, a high dividend yield, this might

[00:29:18] Tony: be something to have a look at for your

[00:29:20] Cameron: And don’t just sell it because Tony did a pulled pork on it and try and bring about the pulled

[00:29:25] Cameron: pork curse for shits and giggles.

[00:29:27] Cameron: Stop it. Cut it out, people. We

[00:29:30] Cameron: hold it.

[00:29:31] Tony: And I hope, I hope it doesn’t, because I should disclose as well that I own shares in

[00:29:35] Tony: Macmillan Shakespeare.

[00:29:35] Cameron: I don’t, but we have a couple of parcels in the light portfolios that are up three percent since I added them at the end of October. But I gotta say, FPR has been a good one. Um, It’s up 25 percent since we added it at the end of June, beginning of July in, yeah, I do hold that one, and it’s in the dummy, and it’s in

[00:29:54] Cameron: light.

[00:29:55] Cameron: Um, it’s had a corker of a

[00:29:58] Cameron: financial year so [00:30:00] far.

[00:30:01] Tony: and sorry, I just wanted to come back to

[00:30:04] Tony: the rest of what I wanted to talk about. Um, I, I wanted to do an outline of the risks for the, for this company, and it’s one of the reasons why sometimes these novated lease companies, businesses get on the, on our buy list is because there are, um, people have been burnt in the past and so there is some risks involved.

[00:30:21] Tony: Um, one of them is government policy and there was a time under the RUG government when they changed FBT rules which affected these companies and they, they dropped quite quickly after budget night. Um, policy was then reversed because of that. Not just because the share prices went down, but because a lot of companies complained they couldn’t manage their FBT liabilities as well as they were under the old rules.

[00:30:44] Tony: So that’s one thing to be mindful of. So if there is a change to FBT legislation in the future, it will affect this

[00:30:50] Tony: company. They’re currently going

[00:30:52] Tony: through this big EV

[00:30:54] Tony: bump, so there could be some roadblocks or some speed bumps along the way on that. That [00:31:00] could come about because of changes to EV policy.

[00:31:04] Tony: Um, from, from governments, if they change from time to time, or, um, or that FBT, um, benefit for, for buying an EV could go away. So, there’s certainly some

[00:31:14] Tony: government policy risk in this company. There’s also risk in terms of if EV,

[00:31:18] Tony: if electric vehicles are somehow,

[00:31:21] Tony: um, Either

[00:31:22] Tony: becoming difficult to source

[00:31:24] Tony: because of chip demand problems or

[00:31:26] Tony: bottlenecks, or they’re becoming more expensive because they are, because demand’s increasing, that could be a problem.

[00:31:32] Tony: So the fact that these companies

[00:31:34] Tony: are wedded to EVs now could

[00:31:37] Tony: be an issue for them. But I guess that also applies to any vehicle. I remember during COVID there was difficulty sourcing vehicles from overseas. And Australia doesn’t manufacture vehicles anymore, so it’s not like you can just Buy a Holden for the next three years

[00:31:51] Tony: or a four, you’ve still got to wait for something to come from overseas generally.

[00:31:56] Tony: Um, the other thing that was, that I want to highlight

[00:31:58] Tony: is that analysts [00:32:00] do have problems valuing the future cash flows for these businesses. And

[00:32:03] Tony: that’s a, um, because of the nature

[00:32:05] Tony: of them, they, they tend to tender for work. So, you know, Woolworths might put its novated lease business out for its employees out to tender.

[00:32:14] Tony: One of the big players will pick it up, but it’s usually. Commercial Incompetence, what the terms

[00:32:19] Tony: are and what the length of the contract is. So it can be hard to do a DCF and

[00:32:23] Tony: make the right assumptions when you sort of try and sum up all these opaque contracts. So that’s one thing that I’ve heard

[00:32:29] Tony: analysts complain about in the past. What else is there? The dividend payout ratio of 100 percent I think is an

[00:32:36] Tony: interesting one. I don’t know if it’s always been at that level. It is for this

[00:32:40] Tony: year, but obviously if the profit goes down, the dividend goes down and that is, if that’s a reason why someone’s buying the

[00:32:47] Tony: stock, it might lead to some selling. Um, it also is interesting too, that if they’re paying out all their profits in, in dividends, what are they investing in the company? Now I did see in one of the Management results, I [00:33:00] had a look at that. They were putting CapEx into the company. So, um, the 100 percent payout ratio might just be, uh, something peculiar to this current period, and they might

[00:33:09] Tony: change it going forward.

[00:33:11] Tony: But, um, eventually a company will need to reinvest in itself. So, 100 percent isn’t sustainable. Um, Getting back to contracts, I’ve seen industries that operate in this kind of environment and, for example, the

[00:33:26] Tony: mining service contractors, when a company is in a competitive space

[00:33:33] Tony: up against some strong competitors.

[00:33:35] Tony: And basically most of their income is coming from winning contracts that creates a

[00:33:40] Tony: highly competitive

[00:33:42] Tony: environment and it often leads to margin

[00:33:44] Tony: erosion. So even though the margins on

[00:33:46] Tony: these companies are reasonable now and quite good, um,

[00:33:50] Tony: if, uh, there is some kind of, um,

[00:33:53] Tony: you know, if the number of contracts out there starts to lessen for whatever

[00:33:56] Tony: reason, um, you know, like a downturn in the economy, we [00:34:00] could see a strong Erosion in margins

[00:34:03] Tony: as they compete fiercely for contracts. Um, having said all that though,

[00:34:07] Tony: um, some of the positives, uh, the industries that these companies tend

[00:34:14] Tony: to work in, uh, I’ll call them defensive industries. So the companies which generally need their employees to

[00:34:21] Tony: have a car or companies where the

[00:34:23] Tony: employees have grown used to having a car. So like, like, I said, like

[00:34:27] Tony: Woolworths or Safe or, um, Coles, but in particular, like even hospitals and.

[00:34:34] Tony: Um, the education department needs to send staff out and, you know, um, uh, what’s the word, uh, um, teach a class when the teacher’s sick, whatever that term is, I forget now, relief teaching, um, or send people on, on, you know, six month assignments out into the country, uh, and they need a car, uh, um, health workers who need to visit people in their homes.

[00:34:56] Tony: A lot of times, these contracts are kind of very stable. [00:35:00] And, um, and that’s a plus for these companies that they, uh, they do tend to do well through all parts of the cycle, economic cycle.

[00:35:11] Cameron: I wonder what the implications for these companies are if and when we move

[00:35:17] Cameron: towards self driving cars to change

[00:35:20] Cameron: their business model at all.

[00:35:24] Tony: Yeah. It’s a good question. I mean, you, I guess that the answer

[00:35:27] Tony: to that is whether you buy it and it drives you or whether you just call it up on your phone and it turns

[00:35:33] Tony: up. So yeah, I don’t know.

[00:35:34] Cameron: I mean, that’s kind of the vision that I hear out of Tesla and Uber and people who are sort of, uh, bullish about that is no one will own a car. I keep telling Fox, he’s probably never going to have to get a driver’s license. He’s probably never going to have to own a car in his life. If you need to get anywhere, you’ll just call up a car, it’ll turn up in your

[00:35:57] Cameron: doorstep a minute later and it’ll take you where you [00:36:00] want to go and

[00:36:01] Cameron: drop you

[00:36:01] Cameron: off and Bob’s your uncle.

[00:36:03] Cameron: Huh?

[00:36:05] Tony: You think that’s actually a reality? I mean, I’ve heard lots of analysts saying it’s always on the horizon that these driverless vehicles are coming and they’ll never

[00:36:12] Tony: actually get here. It’s too hard.

[00:36:14] Cameron: Well, they

[00:36:15] Cameron: exist. And they’re on the roads now

[00:36:19] Cameron: in California.

[00:36:22] Cameron: I’ve seen videos of people jumping in driverless Uber kind of things, taking them

[00:36:28] Cameron: places.

[00:36:29] Cameron: So the technology is there whether or not it reaches mass

[00:36:32] Cameron: scale. I don’t know. I guess that depends on a whole bunch of factors.

[00:36:37] Tony: Yeah, right. Yep. That’s a good question. I

[00:36:40] Tony: can’t

[00:36:41] Tony: answer it. We’ll

[00:36:42] Cameron: Yeah. And we don’t, we don’t try and predict, et cetera, et cetera, but it will be interesting to see how that plays out. Like I can, I mean, the only question I have is like, okay, if I want to drive up to Bundaberg to visit my mom, or if you want to go on vacation somewhere, it’s a five hour drive. Are you going to?

[00:36:59] Cameron: Rent [00:37:00] an electronic car for the whole, I mean, a self driving car for the whole period, or not? Probably. I mean, if I think about what it costs to buy and own and maintain a car, if you’re only using it on a long journey, Once a year, twice a year to go on vacation, probably makes sense economically just to rent one for the week or the

[00:37:26] Cameron: two weeks of the month that you’re going on your vacation, depending on what

[00:37:29] Cameron: the prices are going to be like, but yeah, even just

[00:37:33] Tony: Yeah, I would

[00:37:34] Tony: have thought, I would have thought

[00:37:35] Tony: if that was a compelling argument that you’d see more of those go cars and zip cars and things like that around, you just don’t, I see, there’s always a car space nearest for the, the rent car, the share car, but

[00:37:48] Tony: it generally just sits there from what my

[00:37:50] Cameron: Well, but that’s because we live in a society where people do value car ownership and they have their own cars, right? But I’m thinking 10, 20 years from now, [00:38:00] by the time Fox is 20,

[00:38:02] Cameron: so what’s that, 11 years from now, whether he will own a car. Uh, whether or not that will even be a practical consideration or a necessary consideration between Zoom and driverless cars or ridesharing even, depending on how much time you spend in the car.

[00:38:21] Cameron: Like, we still live in a world where a lot of people go to the office, they go to the city. It’s interesting, you know, uh, during COVID there was this whole thing about people won’t go into the office anymore after COVID. And, uh, as far as I can tell from the Fin Review, corporations and employers are trying to shut that shit down over the last year, forcing people back to the office. I haven’t really drilled into it to understand why, because it doesn’t affect me, but, um, do you understand why they’re trying to push people back to the office? Is it just a management

[00:38:55] Cameron: oversight

[00:38:55] Cameron: thing? Yeah. [00:39:00]

[00:39:00] Tony: guess it is partly that. Maybe there are three reasons. The two reasons I can think of that

[00:39:04] Tony: I’ve read about is, uh, the company’s paying rent on the space, so

[00:39:08] Tony: they want to use it. Um, but, you know, that’s, that argument doesn’t exist in perpetuity because eventually the lease will be up

[00:39:15] Tony: and they can lease less space.

[00:39:18] Tony: Um, but the, the argument that people like Jenny use is

[00:39:21] Tony: that, um, there’s not enough networking

[00:39:24] Tony: and informal mentoring going on. So people aren’t learning enough about

[00:39:30] Tony: the business and, um, And now, you know, some people say, well, I can jump on a Zoom call and ask

[00:39:35] Tony: the question of anyone. So that’s, yeah, I don’t, maybe that’s just the way Jenny operates.

[00:39:39] Tony: I don’t know. Um, and then I have got, you know, a friend who, um, really wanted people sitting outside his office because he didn’t want to have management control and oversight of them, but that’s, that’s their style. So there is, you know, people, companies are starting to, I think, I think it was one of the gas companies said, you’ve got to come into the office to get your bonus.

[00:39:58] Tony: Um, if you don’t. You don’t [00:40:00] get a bonus, um, but I’ve also, you know, there are also unions pushing back saying, hey, you know, we, we see a lot of benefits in working from home. Um, it doesn’t make sense for me to have, you know, for staff to commute for an hour each way each day. Um, it is actually, yeah, when you take everything into account, it may be more productive to work from home.

[00:40:19] Tony: The staff feel better, they’re motivated, they, you know, they’re on call all the time, um, just because, and they don’t have to spend two hours, lose two hours of their day. So some of that’s going

[00:40:28] Tony: to

[00:40:28] Tony: be available for productive work.

[00:40:30] Cameron: And you think about the impact of that on society in terms of freeing up the roads, less, you know, less requirement for spending on infrastructure, road maintenance, road repair, new highways, road deaths, the reduction in road deaths, the implication of that on the healthcare system, or accidents and all that kind of stuff, insurance implications of lower road deaths, lower Hospitalizations from accidents.

[00:40:59] Cameron: I mean, [00:41:00] I mean, I think it’s a, I suspect that trying to push people back into the office as a 20th century management mindset, that might be a generational thing, because I’m not sure where the Atlassian boys are at, but the last I heard, they were telling people don’t come into the office, we’re scaling down our

[00:41:18] Cameron: offices, work from home.

[00:41:20] Cameron: Can’t remember if they. Turned

[00:41:21] Cameron: around on that or not, but um, it’ll be interesting

[00:41:25] Tony: Well, apparently they are building an office, a wooden office building in

[00:41:28] Tony: this, in Sydney CBD, so they’re going to have to staff it with

[00:41:32] Cameron: a wooden office building.

[00:41:35] Tony: Yeah, they wanted to build the

[00:41:36] Tony: biggest wooden

[00:41:37] Tony: multi storey office building in the world. So if it

[00:41:39] Tony: is the biggest, but that’s that’s their dream. And it’s, I think they’re starting, if they haven’t started work on it already, it’s starting soon down near the central train station, I think. Yeah. Um, yeah, I think it’ll be a blend of what, um, one trend I thought might happen and I haven’t seen it happen and maybe I’m just not aware of it is, if, if there is legs to this [00:42:00] argument of the, the commuting is actually detrimental to productivity, um, I would have thought, and companies are freeing up leases in the, in the, in the city and CBD office floors, I would have thought someone would have said, you know, like a com bank or someone big would have said, okay, we’re going to free up leases.

[00:42:18] Tony: This floor in the central office, but we’re going to put a little hub out in Parramatta or Liverpool and Sydney because, you know, 10 or 20 percent of our office workers come from out in the western suburbs in Penrith or something like that. And so,

[00:42:34] Tony: you know, they can still come in and get

[00:42:36] Tony: enough interface with other workers and enough interface with local

[00:42:39] Tony: management.

[00:42:39] Tony: But it’s only going to be a 15 minute commute for you rather than the full hour.

[00:42:46] Tony: But I haven’t

[00:42:46] Tony: seen

[00:42:46] Tony: that

[00:42:46] Tony: happen yet.

[00:42:48] Cameron: Again, it might be a 20th century mindset. I mean, like, this is the, this week is the 19th anniversary of when I started G’day World. And I [00:43:00] left Microsoft six months, well, five months before that

[00:43:02] Cameron: So I’ve been working from home more or less. I mean, I had a stretch when I was in the ad agency in the Valley, um, just after the GFC and I ran the Cigar Lounge for a couple of years, but.

[00:43:17] Cameron: More or less, I’ve been working from home for the last 19 years and I can’t imagine,

[00:43:24] Cameron: uh, having to go into an office every day, even when I did work in the ad agency in the lounge, you know, it was sort of, I was rocking up it. 10, 10 30 in the morning and leaving at two, you know, a lot of the time it was, I’d go in and show my face and wave the flag and go in for a meeting or something with a client, but then I’d work from home the rest of the time.

[00:43:47] Cameron: just can’t, I can’t imagine having to get back into that mindset of spending an hour each way in peak hour traffic to get to an office. Like that just sounds like hell on [00:44:00]

[00:44:00] Cameron: earth. I get to listen to a lot more

[00:44:02] Cameron: podcasts,

[00:44:03] Cameron: but, um, I think the downsides.

[00:44:06] Tony: Yeah, and people adapt, you know, they read books on the

[00:44:08] Tony: train. A lot of, you know, people I’ve worked with actually started work and I jumped in their car and put their car phone on and, you know, listen to all their voicemails, return all their calls, that kind of thing. I don’t know how

[00:44:17] Tony: safe that is, but that’s what they did.

[00:44:19] Cameron: You can make

[00:44:20] Tony: And for probably half, half my life, I was in,

[00:44:23] Tony: at head

[00:44:23] Tony: office and then would try and live reasonably

[00:44:26] Tony: close. to the CBD to keep the commute to half an hour or so, um, which is doable. Uh, but the other half, I was out in the field, you know, running businesses. Um, you didn’t, didn’t want to be in the office. You needed to be out closest to the, to the shop front.

[00:44:41] Tony: Um, and that worked. That’s exactly how it should have worked. It worked fine. So, um, and you came in like once a quarter or once a month for a meeting and caught up with your boss and met your colleagues and, you know, joked around and passed shared experiences and things. If that works.

[00:44:57] Cameron: Yeah, it does. It’ll be interesting to see how it [00:45:00] plays out. Anyway, uh, that’s that. Thank you for that Paul Pork on MMS, Tony. I wanted to ask you, since our conversation about Charlie Munger over the last couple of weeks, have you given any more thought to the Magnificent Seven idea that Charlie had, where

[00:45:17] Cameron: we’ve got to be buying

[00:45:19] Cameron: the tech

[00:45:20] Cameron: companies if we

[00:45:21] Cameron: want to

[00:45:22] Cameron: stay competitive?

[00:45:24] Tony: I haven’t, um, and I’m not going to say Charlie’s wrong. Uh, but yeah, well, I found out that he, he said that he was buying Apple when it was 10 times earnings. I thought that was more like the Charlie Munger I know. So yeah, if there’s a downturn at some stage and those companies become cheap, like I guess I’d look at them, but I’m not, I’m not investing overseas.

[00:45:45] Tony: I prefer to invest in Australia. Um, just to be, just to be closer to the news and the, um, and, uh, and touch and feel and know the people who are running the companies, all that kind of thing. Um, you know, Apple’s got a high enough [00:46:00] profile, it probably qualifies to do it from overseas, but, um, yeah, I just prefer investing in

[00:46:04] Cameron: hmm,

[00:46:05] Cameron: hmm,

[00:46:07] Tony: I haven’t, no, I haven’t given any more thought to it. And potentially that’s hurting me.

[00:46:13] Tony: I mean, I have seen other articles saying that, yes, the last five years, I think it was, or seven years, has, um, if you look at the U. S. stock market without those, I mean, they’ve changed names over, over the period. The FAANG stocks, the Super 7, or whatever they’re called now.

[00:46:27] Tony: Um. You know, it’s pretty flat. The index is pretty flat and all the growth has come from those stocks. But I wonder, you know, I, I don’t like jumping onto the train after it’s left the station. It’s, yeah, if, if, if they’ve had that tremendous amount of growth, will it continue? And are you paying too high a price for that growth to

[00:46:48] Tony: continue now? It would be my

[00:46:50] Cameron: hmm, hmm,

[00:46:53] Cameron: All right. Well,

[00:46:55] Cameron: I think maybe we can draw a line under this episode for [00:47:00] now. Tony, we can do a bit of after hours chit

[00:47:01] Cameron: chat, and then we can get into the,

[00:47:03] Cameron: um, Ryan analysis for

[00:47:06] Cameron: our next episode. What do you

[00:47:07] Cameron: think?

[00:47:08] Tony: Okay. Yeah. We’ll do that today rather than

[00:47:10] Cameron: Yeah, we’re coming up to sort of 50 minutes for

[00:47:13] Cameron: this

[00:47:13] Cameron: episode.

[00:47:14] Tony: Okay.

[00:47:15] Cameron: Well, after hours, I’ve had a big week of after hoursy

[00:47:19] Cameron: stuff.

[00:47:19] Cameron: Tony, uh, do you have anything you want to get in

[00:47:21] Cameron: before I start ranting and raving about

[00:47:24] Cameron: Napoleon and other

[00:47:25] Cameron: things?

[00:47:26] Tony: Ah, no, I think we probably covered it, it was good to go up to Brisbane for the weekend, see you guys, see my siblings and their families and people I hadn’t seen for a long time, so lovely, lovely party, happy

[00:47:39] Tony: 60th as well, it was a good night,

[00:47:41] Cameron: happy 60th. Well, and, well, if you’re listening to this, I believe you’re now a beekeeper and we

[00:47:46] Cameron: go through a ton of honey. So you need, you need to hook us up with some of that honey, sweet, sweet honey, wall honey, wall’s honey. Well, Tony, um, as you know, [00:48:00] I went to see the Napoleon film with Hunter and Taylor last week, Ridley Scott.

[00:48:04] Cameron: Now, you know, maybe some of the people listening to this, what kind of a role Napoleon has played in my life. Very big, insanely big role Napoleon has played in my life. I became sort of

[00:48:19] Cameron: obsessed with Napoleon when I was about 19 or 20. A good friend of mine, Michael Sewards, who’s now the CEO of, um,

[00:48:28] Cameron: uh, whatever the airport

[00:48:30] Cameron: bus company

[00:48:31] Cameron: is in Melbourne.

[00:48:31] Cameron: Can’t remember what its current name is. They changed names, but.

[00:48:34] Tony: Yeah, it’s changed names recently, it was

[00:48:37] Tony: just Skybus, but now it’s bigger than

[00:48:39] Cameron: He’s now the co CEO of Skybus, uh, but Mike and I worked together when we were

[00:48:43] Cameron: like 19, 20, and, and we were good buddies, still

[00:48:46] Cameron: are, but we went into a bookstore, there’s a little bookstore down near, um,

[00:48:50] Cameron: the, uh, Skybus. Um, what’s the,

[00:48:53] Cameron: what’s the

[00:48:54] Cameron: big park in the middle of

[00:48:56] Cameron: Melbourne?

[00:48:58] Tony: Albert

[00:48:58] Cameron: No, no, no, no. the [00:49:00] main one.

[00:49:00] Cameron: Um, the big, the

[00:49:02] Cameron: Botanical Gardens, Botanical

[00:49:03] Cameron: Gardens.

[00:49:05] Cameron: There was a little bookstore

[00:49:06] Cameron: on the, on the sort of South Yarra side of the Botanical Gardens. We were in there one day,

[00:49:11] Cameron: again, this is like, I don’t know, early nineties, late

[00:49:14] Cameron: eighties, early nineties. And

[00:49:16] Cameron: we’d just been for a run around

[00:49:17] Cameron: the TAN, and he said, um, you ever read, there was a book on Napoleon, he said, you ever read anything about Napoleon?

[00:49:22] Cameron: I said, no. He said, oh man, you got to read this. It’s amazing. So I bought Vincent Cronin’s biography on Napoleon. It’s written in like 71. And it blew my mind. And, uh, I became sort of quietly obsessed with Napoleon. And over the course of the next 10 years, read a hundred books on Napoleon. And then of course, uh, started the podcast with David Markham, um, in 2006, I think it was my first history podcast and it was the first ever long form

[00:49:53] Cameron: history podcast in the history of

[00:49:54] Cameron: podcasting in the story of podcasting.

[00:49:57] Cameron: We did

[00:49:57] Cameron: like

[00:49:59] Cameron: I don’t know, 70, [00:50:00] 80

[00:50:00] Cameron: episodes, many of which were three hours long, um, over the course of the next few years. As a result of

[00:50:07] Cameron: that podcast, he invited me to a JARXIO, to a Napoleon conference in

[00:50:12] Cameron: 2008. He was going to present me with a medal for my contributions to Napoleonic history. That’s where I met Chrissy.

[00:50:21] Cameron: Uh, so

[00:50:22] Cameron: it had a big impact on my life. So the Ridley Scott film, uh, that’s just come out was sort of a big deal. I was skeptical from the

[00:50:30] Cameron: get go, A, because I think Ridley’s best years are well behind

[00:50:34] Cameron: him. B, because I thought Joaquin Phoenix,

[00:50:37] Cameron: though being a great actor and I love nearly everything he’s done.

[00:50:40] Cameron: I thought he was too old to

[00:50:42] Cameron: play a young Napoleon and not the right

[00:50:46] Cameron: guy to play Napoleon. Anyway, my boys got. Uh, tickets to the preview of it last week because they’re hotshots and they took me along.

[00:50:56] Cameron: It was god awful. Um, I’m still doing [00:51:00] rants

[00:51:00] Cameron: about it on TikTok. For anyone out there who’s thinking about going to see it, my money would be don’t.

[00:51:07] Cameron: It’s gonna be on Apple TV anyway, but it’s just terrible. Absolutely shocking. As a Napoleon buff, he got It left out all the good stuff. The things that he did include, he got wrong or handled badly, misrepresented. That’s what happens when you let a Brit make a film about Napoleon. Just doesn’t understand Napoleon.

[00:51:34] Cameron: Basically presented him as a thug who… May have had some military successes but it wasn’t because of his genius or his brilliance or his work ethic, uh, like he

[00:51:49] Cameron: just got everything wrong and it was incoherent, it was messy, my boys who know nothing

[00:51:56] Cameron: about Napoleon afterwards, I said before I [00:52:00] gave them my opinion, I said what did you

[00:52:01] Cameron: think and they were like, it was boring and we couldn’t make sense of what was going on, it just jumped around too much and They didn’t like it either, so it’s not just me.

[00:52:09] Cameron: But anyway, absolutely. I was infuriated when I got home.

[00:52:15] Cameron: Chrissy said, Oh God, I can tell you’re really

[00:52:18] Cameron: upset.

[00:52:22] Tony: I haven’t seen it yet, but I’m not going to until it comes out

[00:52:24] Tony: onto Apple, I don’t think. But I mean, from my perspective, I mean, I, I think Napoleon’s an interesting figure because until I listened to you and David Markham on the Napoleon podcast, I probably had the British idea of Napoleon as being the little emperor marching through Europe, almost like You know, a po, uh, a Putin or a, um, uh, a Hitler

[00:52:50] Tony: going through Europe, trying to, trying to annex countries and expand the empire.

[00:52:55] Tony: And then, um, through Hubris, lost the battle at Waterloo,

[00:52:58] Tony: um, to the good guys, [00:53:00] just like they did in World War ii. Yeah, the good guys have won again. Um, and that, that idea was just flipped on its head when I listened to the, the Napoleonic podcast. So that’s the first thing. And, and I, you know, as you say, Ridley Scott’s a Britt and he’s.

[00:53:15] Tony: Probably produce something more of the former than the second. But I think for me, the thing that’s, um, if I pick the eyes out of all the things I’ve learned on the podcast that you guys did, I have very clear recollections of, of why Napoleon was special. And they start with, um, the

[00:53:35] Tony: way he changed military warfare.

[00:53:38] Tony: So, uh, and I have two memories of, of events around that. The one was the, I think it was the Siege of Norway, where the, the boats would, you know, line the harbour and then the defending boats would line the harbour and the cannons would all line up and fire at each other and last man standing would be the winner.

[00:53:59] Tony: Whereas Napoleon [00:54:00] started coming in. in serial and the first ship would cop a lot of gunfire as he sort of went from left to right across all the defending ships but the second ship would cop less than the third and so there was a new way of approaching the siege from from that point of view and then there was also one of his earliest um Infantry battles, where prior to Napoleon, you’d have guys in very, very bright, polished dress uniforms taking to a, almost like a football field with, you know, 50 a side, um, lining up at a certain distance apart and taking one shot at each other.

[00:54:36] Tony: And that would decide the whole fate of the battle. But Napoleon came in and said, no, no, I’m playing for keeps and, and, you know, overrun the other side. And used all kinds of new military tactics and broke all the conventions of warfare. And that was groundbreaking as well. So he was an innovator. He was a, he was like, I need to, to win this.

[00:54:55] Tony: I’m going to win this. And I’m going to think about it. And then there was a time, I think it was before [00:55:00] he’s married to Josephine, where he’s in the bath and he’s got the maps. all over the floor planning a campaign when he’s about to get married and now’s time he’s going no no i’ve got to work i’ve got to get ready for this military encounter and you know he’s got generals coming in and people coming in and saying you’ve got to get ready for your you’re waiting but he’s going no no look at this map This is what we have to do.

[00:55:19] Tony: And he’s planning all the time. So that was another sort of apocryphal story for Napoleon. And then you’ve got the other side of things about, about what he did for France in terms of, you know, the, the raising of science to a higher level and education to a higher level, um, the, the, um, I guess it wasn’t necessarily just him, but the, the, the reduction of the emphasis of church in state affairs, um, all those kinds of things.

[00:55:46] Tony: So all those things, you know, stick in my memory for Napoleon as being an innovator, as being a planner. as being, um, detail driven, you know, and then if you throw on top of that, the whole fact [00:56:00] that he was basically defending himself the whole time, even if he was being offensive, he was basically doing it to defend France from attack from somewhere else because all the royal families were lining up across Europe against him.

[00:56:12] Tony: So yeah,

[00:56:13] Tony: it’s my learning through your podcast just flipped my whole

[00:56:16] Tony: idea of who and what Napoleon

[00:56:18] Cameron: And that’s why I became obsessed with him, because before I read Vincent Cronin’s book, you know, I, I, I’d never really been interested in history up until that point. You know, I, I ignored it in high school, like most of us do, and, but the, the idea that I had that sort of had come through to me from osmosis growing up in the Commonwealth was that he was an early version of Hitler, ambitious, warmonger kind of guy.

[00:56:42] Cameron: And Vincent Cronin, who was an American. Gave a very

[00:56:45] Cameron: different 180 degree perspective. And so not only did

[00:56:49] Cameron: it introduce me to a different side of Napoleon, it also started me thinking about the way that history is brought down to us. The, cause The, question I had was, well, why did I have this [00:57:00] one idea if there’s a completely

[00:57:02] Cameron: opposite idea?

[00:57:03] Cameron: So then I went and read another book on

[00:57:05] Cameron: Napoleon and it, it more, it was a

[00:57:07] Cameron: negative. I’m like, okay, well, which one of

[00:57:10] Cameron: these is true? They can’t both be true. And that started me on my

[00:57:14] Cameron: journey of, well,

[00:57:16] Cameron: okay, history is written by the victors. And also history is a little bit about

[00:57:22] Cameron: the facts, but also interpretation of the facts.

[00:57:25] Cameron: And I’ve spent the rest of my life in

[00:57:27] Cameron: many ways, trying to figure out that

[00:57:29] Cameron: story,

[00:57:29] Cameron: you know, And and unpicking things, right?

[00:57:33] Tony: And funnily enough, Napoleon was a big propagandist. He said us from the front would, you know, paint military

[00:57:39] Tony: successes when he

[00:57:40] Tony: was in retreat. So it’s

[00:57:41] Cameron: He understood propaganda, um, as a weapon, as much

[00:57:44] Cameron: as anyone.

[00:57:46] Cameron: You’re right, and this is, so the, the, the Ridley film starts off

[00:57:49] Cameron: with the revolution and, and the execution of Marie Antoinette, and then it pretty much goes straight into

[00:57:56] Cameron: Napoleon being sent to Toulon, skips

[00:57:58] Cameron: over, you [00:58:00] know, his childhood, and, you know, if you don’t understand that, you

[00:58:03] Cameron: don’t really understand Napoleon growing up in Corsica, which had been an Italian,

[00:58:09] Cameron: country, uh, ran about up until the time he was born

[00:58:13] Cameron: when it got taken over by the

[00:58:14] Cameron: French. So he’s kind of an Italian

[00:58:17] Cameron: kid. His

[00:58:18] Cameron: family had been aristocracy, but had lost all of their money. But he’s got an uncle who’s a cardinal who manages to get him sent

[00:58:27] Cameron: to a private military boarding school, basically,

[00:58:29] Cameron: when he’s 10 years old. So he gets sent to live in this French

[00:58:35] Cameron: Military school, when he’s 10, he can’t speak French,

[00:58:39] Cameron: all the kids there are mostly aristocrats, this is before the revolution, they make fun of him, so

[00:58:46] Cameron: his character is sort of carved out of his experience as a young boy, and he devotes himself to study.

[00:58:54] Cameron: And he becomes obsessed with studying the campaigns of Julius Caesar [00:59:00] and Alexander

[00:59:00] Cameron: the Great. And he wins

[00:59:02] Cameron: campaigns as a kid in, in, in the schools when

[00:59:06] Cameron: the kids are against each other.

[00:59:07] Cameron: He becomes like the general of the kids. His

[00:59:10] Cameron: brilliance starts to come, his understanding of strategy and tactics is obvious as a

[00:59:16] Cameron: child. Then when the revolution breaks out, He

[00:59:20] Cameron: doesn’t fight for the

[00:59:21] Cameron: revolution. He goes straight to Corsica to try and

[00:59:25] Cameron: support the Corsican revolution against the French. He’s trying to create an

[00:59:30] Cameron: independent Corsica, but the guy, uh, Paolo Paolini,

[00:59:35] Cameron: who’s running the, the Corsican revolution, doesn’t like the Bonapartes. So he doesn’t let them

[00:59:41] Cameron: play a significant role. So Napoleon and his brothers say, well, screw you. They go back to

[00:59:46] Cameron: France. Napoleon joins the Revolutionary Army, he’s nearly executed by Robespierre for being

[00:59:54] Cameron: part of the Royal Army, he manages to survive

[00:59:57] Cameron: that, but then again, so the film just picks up in [01:00:00] Toulon, and they’re fighting the,

[01:00:01] Cameron: British,

[01:00:02] Cameron: and Ridley never explains why they’re fighting the British.

[01:00:06] Cameron: Got out of the film, I said to my boys, do you understand why he was

[01:00:09] Cameron: fighting the British at Toulon? And they’re going, no, what,

[01:00:11] Cameron: what, what did the British have to do with it? As you say, the, the

[01:00:15] Cameron: key to understanding Napoleon, which Didn’t

[01:00:18] Cameron: come across is

[01:00:20] Cameron: Nepal, you know, when, when the, the French executed their royal family, the monarchs of Europe, they’d already had the American revolution.

[01:00:30] Cameron: Now they had a European revolution. They’re like,

[01:00:32] Cameron: Oh, hold on a cotton picking minute. You can’t have the

[01:00:35] Cameron: people going around killing kings.

[01:00:38] Cameron: If a king, if a, if a king kills another king, that’s okay. If a wannabe king kills another king, that’s kind of okay. But you can’t have the people rising up against the nobility.

[01:00:49] Cameron: That, that’s not acceptable. So the royal families of Europe tried to shut down the French revolution and restore the Bourbon monarchy because it was highly unacceptable. to them, [01:01:00] because the idea might catch on. We’ll have revolutions everywhere if we let them get away with this bullshit. So Napoleon inherited these wars against the European monarchs, and for the rest of his career, he would fight a battle, win a battle, Lee, he didn’t overthrow any of the other monarchies.

[01:01:19] Cameron: He always said, you’re my brother. Uh, you know, let’s be friends. Let’s, he would sign a peace treaty. Let’s all be friends. Let’s, I just want to rebuild France. Let’s all get along. Then they would form a coalition against France. and attack France again, and he’d go fight another war, and he’d win, and then he’d set all these peace treaties in place, and this just went on and on and on.

[01:01:42] Cameron: As you say, it was defensive battles, but Ridley never explains that, and at the end of the film, he points out all the people who died during the Napoleonic Wars, like it was Napoleon’s fault! It wasn’t Napoleon’s fault! So, you know, he just

[01:01:56] Cameron: gets everything wrong. It was infuriating, but on [01:02:00] a

[01:02:00] Cameron: happier note, David Tennant’s back in

[01:02:02] Cameron: Doctor Who.

[01:02:03] Cameron: Tony,

[01:02:04] Tony: Yeah, I saw that. What a great

[01:02:06] Cameron: Wasn’t it Wasn’t it just fun? It was stupid. It made no

[01:02:11] Cameron: sense, but it was just

[01:02:13] Cameron: joyous,

[01:02:16] Tony: I thought so too. And kid

[01:02:17] Cameron: kid like. It was just glorious fun. I had this

[01:02:22] Cameron: big shit eating grin on my face through the whole thing. I had tears in my eyes. I was just so happy. Oh, thank

[01:02:31] Cameron: you to Russell T Davies for coming

[01:02:34] Cameron: back and bringing back Tenet for a few episodes.

[01:02:37] Cameron: It was wonderful.

[01:02:38] Tony: yes. I,

[01:02:39] Tony: I I share that wholeheartedly.

[01:02:41] Tony: I

[01:02:41] Cameron: Alex, I forgot to ask Alex, uh, did she enjoy it.

[01:02:44] Tony: Well, I I texted her

[01:02:45] Tony: off

[01:02:45] Tony: ’cause she was talking about it on the Sunday and then, um,

[01:02:49] Tony: which reminded me to watch it when I got got home and she said it was okay. She didn’t, didn’t, she thought it was good, but not great. So I was surprised by that, but I, I just saw that was really

[01:02:58] Tony: really

[01:02:59] Cameron: loved it. It [01:03:00] was stupid, but hilarious, just fun.

[01:03:03] Tony: Yeah.

[01:03:04] Cameron: Um, I’ve been reading this book I mentioned to you earlier off air, Lysenko’s Ghost. Um, so… You know, uh, Lysenko was Stalin’s favorite agronomist, and he was, ended up the head of, sort of, biology in, in the Soviet Union for decades, up until, I think, 65. Um, and he’s infamous in, I guess, scientific and political historian circles for, Basically carrying a lot of the blame for the death of 50 million people, for his bad ideas about

[01:03:38] Cameron: agriculture. And the thing was, he sort of rejected… Mendelian genetics and was more, uh, supportive of Lamarckian, um, inheritance of acquired characteristics. He was a big believer, as many people were at that time [01:04:00] around the world, even in the West, but particularly in Europe, that if you, and if you, um, Treated an animal or a plant or a human well that they would adapt and they would pass on certain characteristics to the next generation because of their treatment, not because of their genetics, but because of how they’ve been treated, the way that you might, um, uh, domesticate animals.

[01:04:29] Cameron: And if you domesticate an animal over generations, you end up with animals that are friendly to humans. There’s an example at the beginning of the book about Siberian foxes that it was done with. But, uh… His, his view, his approach wasn’t very scientific, and his attempts at domesticating wheat to be grown in the tundras didn’t work, and millions of people died because of famines, largely as a [01:05:00] result of his bad science.

[01:05:02] Cameron: And so that’s always been known as Lysenkoism, and his name is kind of dirt, even in, I think in 65, the Soviet Union, you know, basically brandished him a criminal. And he was taken, he lived until the early 70s, but he was removed from his position. They said he, you know, killed millions of people. And as part of the de Stalinification of the Soviet Union, they brought, they sort of tarnished his contributions as well.

[01:05:30] Cameron: Of course, In the 21st century, we now understand about epigenetics and how if you do certain things that happen to an organism during their lifetime can activate certain genes which can then be passed

[01:05:46] Cameron: on Thank in a Mendelian sense to future generations. So it’s not a hard either or, there’s actually a combination.

[01:05:54] Cameron: So this, um, historian who wrote this book, Lysenko’s Ghost, who actually did meet Lysenko when [01:06:00] he was still alive on one occasion, his name is Lauren Graham. He’s a. Um, you know, uh, very respectable American, uh, scientific historian who wrote this book. You know, he’s sort of talking about, well, is it time that we sort of pay Lysenko his due, that he was actually one of the early thinkers about epigenetics.

[01:06:20] Cameron: He was just way ahead of his time and maybe he doesn’t deserve the harsh treatment that history has given him. So that’s,

[01:06:28] Cameron: it’s interesting, but it’s also just

[01:06:29] Cameron: interesting like the way that it evolved because

[01:06:32] Cameron: You know, Lamarckian views on inheritability of acquired characteristics was very popular, as I said, around the world until we started to understand more about genetics.

[01:06:42] Cameron: But by the time we started to understand more about genetics, that mostly happened in the West and that had happened after the Soviet

[01:06:48] Cameron: West split after the Bolshevik revolution when there wasn’t a lot of dialogue between the East and the West in scientific circles. They weren’t able to get together at conferences [01:07:00] and share what they knew.

[01:07:01] Cameron: And they distrusted each other and so the political ideology and the political

[01:07:07] Cameron: competition between the East and the West sort of didn’t allow that free transmission of

[01:07:12] Cameron: ideas and it’s a really complicated and fascinating story

[01:07:17] Cameron: that sadly led to the deaths of millions of

[01:07:21] Cameron: people.

[01:07:25] Tony: Well, it wasn’t just Lysenko. I mean, if you, um, there’s a great book called Bloodlands about all the large swathes of people who died around that time and, and, it generally happened in that, in sort of part of Russia and Poland and some of those other areas similarly located. where there was always shifting borders and invasions and things.

[01:07:44] Tony: But that goes into, you know, the almost prison camps that were set up to farm for production quotas in the Soviet Union, and how people were shot if they didn’t, meet their quota and all that, and the politics around that, um, and how it was [01:08:00] just, the yields on the crops just, went down under that kind of system too.

[01:08:04] Tony: So it’s

[01:08:05] Tony: partly that.

[01:08:06] Cameron: Yes, partly that. I’m not a fan of Timothy Snyder who wrote that book, but you know, when you, when you look at it from a deeper perspective, when the Bolsheviks took over Russia, they had a population that was, you know, close to 200 million people and it was growing rapidly. They had missed. Largely the industrial revolution.

[01:08:26] Cameron: So they were behind the West. They had mostly, you know, um, small, they’d come out of serfdom, but it was basically small sharecropping, basically a bit like it was in Ireland during the famines in Ireland and, you know, the Bolsheviks realized that they couldn’t, they weren’t going to be able to feed.

[01:08:45] Cameron: They’re growing, rapidly growing population for a start. Secondly, um, they believed that they were going to be attacked by the West at some point in the near future, be it by the Germans or the [01:09:00] Europeans, and they were, I mean not many people know this, but like the Americans and the British both invaded Russia during the white revolution, or during the revolution to support the, the Royalists, um.

[01:09:12] Cameron: And you know, coming out of World War I, they were in a tough situation, they’d lost a lot. So they knew they needed to

[01:09:18] Cameron: quickly

[01:09:19] Cameron: get up to speed. They had,

[01:09:22] Tony: Mechanized and

[01:09:23] Cameron: yes. And

[01:09:24] Cameron: basically Stalin’s viewpoint was, you know, you’re either on board with the plan or you’re not. We can’t afford to screw around. And if you, if you don’t get on board with the rapid Progress that we need to make, then you’re going to the gulag.

[01:09:41] Cameron: I mean, I don’t have time to screw around. You have to get with the plan or not. It was a bit, I always say it’s a bit like the trolley problem, right? He’s got 200 million people he needs to feed. If a million people are going to get in his way. and try and stop that from happening because they don’t want to give up their crops for the [01:10:00] greater good of the society then he’s like okay well it’s either you or the other 199 million people i have a responsibility to feed everyone and to build lots of tanks and a big army because we’re

[01:10:12] Cameron: about to get invaded And as it turns out he was too late i

[01:10:16] Cameron: mean he wasn’t ready by the time hitler invaded anyway but it’s a

[01:10:19] Cameron: tough

[01:10:20] Tony: And I think that’s crossing over it though, the million people who were trying to hang on to their lands, I mean, they had,

[01:10:25] Tony: um, the, the, it’s almost like they tried to, the government tried to industrialize without any industrialization, it was just all you people work harder, and we’ll build a big, a big wall around you and put guards in towers to shoot you if you, if you don’t work harder, and, uh, and there’s, and all sorts of political ramifications around that, so you had, you know, Children who are becoming politic, you know, Politburo members and their job was to weed out the people who weren’t on board and shoot them and all this kind

[01:10:55] Tony: of stuff. It

[01:10:55] Tony: was it was a very

[01:10:56] Tony: complex

[01:10:57] Cameron: It was very messy, no doubt, and it, and it [01:11:00] obviously failed miserably. But there’s great, there’s great conversation that has been recorded. I think it might have been at Yalta when Stalin met with Churchill and he basically explained his situation to Churchill as, you know, I’ve got these recalcitrant farmers that don’t want to follow the plan.

[01:11:21] Cameron: I, you know, I got to force them either to Be part of the plan or get out of the way. We, we can’t afford to have them slowing things down. And Churchill was like, yeah, I get it. You know, it’s, it’s, uh, I, I don’t envy your situation. Anyway, as I always say to people, if you were Stalin, it’s 1935 or 1930, whatever.

[01:11:44] Cameron: 31, 32, 33. Hitler’s come to power.

[01:11:48] Cameron: Hitler’s saying he’s going to invade the Soviet Union. Um, you’ve, you’ve got the Americans that have broken off ties. You’ve got the British that have broken off ties.

[01:11:58] Cameron: You’ve got the Japanese

[01:11:59] Cameron: [01:12:00] fighting over the Manchurian border. What do you do? You’ve got 200 million

[01:12:05] Cameron: people that you’ve got to feed.

[01:12:06] Cameron: You’ve got to rapidly industrialize.

[01:12:09] Cameron: It’s a really tough situation to be in. I don’t envy

[01:12:13] Cameron: Stalin or any of those guys. But anyway, Lysenko’s Ghost, really

[01:12:17] Cameron: interesting book. I made a pumpkin pie for Thanksgiving.

[01:12:20] Cameron: Tony, my first pumpkin pie, worked a treat

[01:12:24] Tony: Why are you celebrating Thanksgiving in

[01:12:26] Tony: Australia?

[01:12:26] Cameron: my wife was very sad that I didn’t celebrate it. And, um, she feels like I don’t value

[01:12:32] Cameron: her most important tradition.

[01:12:38] Tony: okay, it’s supposed to be thankful for giving, for lasting through, you know, the crops that we were able to gather during the summer and the harvest and you’re giving thanks for that. So do it in March. Don’t do it in,

[01:12:51] Tony: uh,

[01:12:52] Tony: don’t do it in

[01:12:53] Tony: October

[01:12:54] Cameron: go, marry an American woman and come back and tell me

[01:12:57] Tony: Yeah, I know. It’s a big thing for

[01:12:58] Tony: them,

[01:12:58] Tony: isn’t it? I was

[01:12:59] Tony: always

[01:12:59] Tony: [01:13:00] surprised by that.

[01:13:00] Cameron: I figure there are lots of things I’m thankful for, Tony, including you and our QAV

[01:13:06] Cameron: listeners. It doesn’t hurt me to. Make a, learn how to make a pumpkin pie. And it was bloody good too. I got to tell you, bloody good pumpkin pie. Thank you to ChatGPT for

[01:13:15] Cameron: giving

[01:13:15] Cameron: me the

[01:13:15] Cameron: recipe. Thankful for ChatGPT as well.

[01:13:19] Cameron: All right. That’s after hours for me, Tony.

[01:13:23] Cameron: No, I’m also, I’m also watching

[01:13:24] Cameron: Dolomite, but I

[01:13:25] Cameron: can talk

[01:13:25] Cameron: about that in the next episode.

[01:13:28] Tony: Okay.

[01:13:28] Cameron: right.

[01:13:29] Cameron: See you next, QAV a good week, everyone.

[01:13:33] Tony: Yeah. Happy ASX.

[01:14:00] [01:15:00]


QAV 724 – Our First U.S. Episode

In this episode of QAV, Cam and Tony explore the U.S. market for the first time, with a brief introduction of Tony and his QAV system of value investing, a discussion of value v growth investing, a discussion of the performance of our U.S. dummy portfolio, a deep dive or ‘Pulled Pork’ segment on Reinsurance Group of America (RGA), and a review of the FY survey results we’ve received so far from club members.

QAV 723 – The Vulcan Fudge

Join Tony and Cameron in episode 723 of QAV as they discuss a variety of topics ranging from American barbecue joints to the Hunter Biden lawsuit. Tony talks about his relaxing golf trip down the East Coast and the challenges of selling a house. Then we discuss Vulcan level emotional detachment in investing, recent market movements, and specific stocks like CUE, MME, and PRN. There’s also an exploration of dividends and portfolio performance. In after hours, we’re talking about ‘The Blues Brothers’ Sidney George Reilly (Ace Of Spies), Nicholas Cage in “Dream Scenario” and our plans for our first U.S. episode.


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