QAV #651 — Happy ASXMAS

QAV 651 Club

[00:00:00] Cameron: All right, wel­come back to the QAV.

[00:00:06] Cameron: Hap­py share mar­ket. Tony.

[00:00:08] Tony: Hap­py ASX Cam,

[00:00:10] Tony: and Mer­ry

[00:00:10] Tony: Christ­mas

[00:00:10] Tony: too. It’s com­ing up.

[00:00:12] Cameron: Mer­ry Christ­mas to you too. It’s, uh, it’s, it’s a mer­ry Christ­mas for the all ordi­nar­ies. Tony,

[00:00:18] Cameron: a look just before we went to air. It’s almost back at, its all time high. I think we’re about one and a half per­cent off the all time high, which hav­ing a quick look through my lit­tle chart on Yahoo Finance is about, I reck­on the end of August 2021, it hits 7826.

[00:00:40] Cameron: It’s cur­rent­ly at 7701 today, which is about one and a half per­cent below 7826.

[00:00:48] Cameron: So, that’s been a fun two and a half years.

[00:00:52] Tony: Well, we had a cou­ple of good years,

[00:00:54] Tony: and

[00:00:54] Tony: then we’ve had a cou­ple of side­ways

[00:00:55] Tony: years. So it’s it’s been the usu­al ride on the ASX, but it’d be a good [00:01:00] Christ­mas present if we got back to the, uh, the all

[00:01:02] Tony: time high.

[00:01:04] Cameron: Yeah,

[00:01:05] Tony: Yeah.

[00:01:06] Cameron: opened my notes. I was like, can we move on now? Are we done with that whole peri­od? Is that phase

[00:01:11] Tony: Well, I think the mar­ket thinks you can because I noticed that, uh, both STW and, um, AFI, the two sort of big mar­ket index­es, ETFs and LLCs, have both crossed over into buy line

[00:01:26] Tony: ter­ri­to­ry. So, uh, the trend is telling us that the, uh,

[00:01:31] Tony: yeah, it could be a hap­py Christ­mas and a good 2024, but we’ll see.

[00:01:34] Cameron: We’ll see. Uh, let me talk about our port­fo­lios while I’m on

[00:01:41] Cameron: the sub­ject of things in the mar­ket, et cetera. I did a week­ly report today for the Stock Doc­tor dum­my report.

[00:01:50] Cameron: It’s doing a lit­tle bit bet­ter than dou­ble mar­ket since incep­tion. I

[00:01:54] Cameron: think we’re up. just a lit­tle bit under 17 per­cent per annum over the

[00:01:59] Cameron: last,

[00:01:59] Cameron: [00:02:00] what­ev­er it is, four and a bit years. Um, ver­sus, uh, what did that say, 8, uh, for the STW, 8. 25.

[00:02:09] Tony: That’s pret­ty bloody good. 17. Per­cent per annum for the last

[00:02:13] Tony: four years. Let’s

[00:02:15] Cameron: that is pret­ty

[00:02:15] Cameron: bloody

[00:02:16] Tony: a moment and reflect on that. That’s pret­ty

[00:02:17] Tony: good. No,

[00:02:20] Cameron: I mean, and, you know, I’ve run it, I’ve run

[00:02:22] Cameron: it for, what, I guess, the last three years. I don’t think you’ve had much involve­ment in the deci­sions for the last three years. And I know

[00:02:28] Cameron: fuck­ing noth­ing about invest­ing. So, if I can, well, I did­n’t five years ago. So,

[00:02:36] Cameron: if, if lit­tle dum­my me can learn how to run this thing and get dou­ble mar­ket con­sis­tent­ly over the last, uh, four and a half, five years.

[00:02:45] Cameron: I mean, that’s,

[00:02:47] Cameron: I mean, I, I, I take it for grant­ed

[00:02:49] Cameron: now. That it’s doing that well. Like, it’s not, like, it’s not even a thing. Like, yeah, it’s doing a bad dou­ble mar­ket. Bor­ing, you know, you know, but it is, like, it’s real­ly insane. It’s [00:03:00] the, the, it’s, it’s, it’s all the sys­tem. Uh, for the finan­cial year, we’re doing 1.

[00:03:06] Cameron: 6 times bet­ter than the STW. We were up

[00:03:08] Cameron: as much as three times last

[00:03:10] Cameron: week, but we’ve slipped a lit­tle bit this week. Um And for the 30 days, we’re slight­ly below. We’re up about 4. 5 per­cent though, per annum for the last 30 days, STW is up about 5. 5%. But, one thing I want­ed to point out, we’ve talked about this a bit over the last cou­ple of years, uh, the, the break­down in our port­fo­lio per­for­mance between cap­i­tal gain and income return.

[00:03:33] Tony: yep,

[00:03:34] Cameron: for a long time there, income was dri­ving most of it. In fact, if I look at the all time Stats, cap­i­tal gain is worth about sev­en and a half per­cent of that 17. Uh, income returns about 10, 10 and a half per­cent

[00:03:51] Tony: right,

[00:03:53] Cameron: per annum. But if I look at the finan­cial year, cap­i­tal gains five and

[00:03:57] Cameron: a half, income returns 3.

[00:03:59] Cameron: 8.[00:04:00]

[00:04:00] Cameron: so cap­i­tal gain has been the major

[00:04:02] Cameron: dri­ver in our return so far in the last six months.

[00:04:06] Tony: yeah, div­i­dends tend to mean, are more mean­ing­ful

[00:04:10] Tony: over time. So, you know, you buy a

[00:04:12] Tony: stock and it’s 5%, that’s fine in the first year, but if you keep it for a cou­ple of

[00:04:17] Tony: years and that, you know, if it’s dou­bled in val­ue in four years time,

[00:04:20] Tony: the div­i­dend yields dou­bled in val­ue as well, so you’re kind of get­ting a guar­an­teed 10 per­cent

[00:04:24] Tony: straight away.

[00:04:25] Cameron: Yeah, right. Okay.

[00:04:26] Tony: Yeah.

[00:04:27] Cameron: In the last 30 days, our big per­form­ers have been DUR up 25 per­cent in the last 30 days per annum. Uh, MTO up just, you know, just slight­ly under 15 per­cent per annum, SUL up 12. 7, FPR up 12. 32. Oh! Got some­thing to say about FPR. So Alex F., Alex Franklin pinged me. And said he noticed that FPR was on this list as, as being one of the strong per­form­ers, but was­n’t on the buy [00:05:00] list and he did­n’t know why.

[00:05:02] Cameron: And I tried to fig­ure out why. I went back, I looked at my down­load, was­n’t in my down­load this week, was­n’t in Alex Kynas­ton’s down­load. And I was try­ing to fig­ure out why. I went back through a cou­ple of down­loads and it was­n’t show­ing up. I went to Stock Doc­tor and start­ed going through the num­bers and they report­ed on the 13th of Novem­ber and they report­ed neg­a­tive net oper­at­ing cash flow.

[00:05:29] Tony: Yeah, right. I can see

[00:05:30] Tony: that from the Sep­tem­ber num­bers. Yeah. Okay.

[00:05:32] Cameron: Yeah. So I’ve got, I actu­al­ly went to their web­site. Report their annu­al report in case it was a Stock Doc­tor mis­take, which would­n’t be the first time, but no, this is legit. Oper­at­ing cash flow, cus­tomer receipts 815 mil­lion for FY23, pay­ment to sup­pli­ers and employ­ees 413 mil­lion, income tax paid 10. 8 mil­lion, net inter­est paid 51.

[00:05:57] Cameron: 8 mil­lion. [00:06:00] Uh, but then they’ve got a pur­chase of oper­at­ing

[00:06:04] Cameron: finance lease vehi­cle 611. 3 mil­lion. Pro­ceeds from sale of oper­at­ing leased vehi­cles, 215. 1, leaves them with net oper­at­ing cash flow of 56. 8. so good. busi­ness, doing well, but it’s

[00:06:21] Cameron: the nature of their busi­ness, right? They’re out there buy­ing a lot of vehi­cles

[00:06:25] Cameron: and it puts them in a neg­a­tive.

[00:06:27] Cameron: So it does­n’t even show up in our down­load because what our fil­ter is You have to have Oper­at­ing Cash Flow greater than zero. So

[00:06:34] Cameron: it’s one of the few fil­ters that we have that actu­al­ly does fil­ter out com­pa­nies. Because most of them, most of our fil­ters say any, any, any, any,

[00:06:42] Cameron: any, but Net Oper­at­ing Cash Flow

[00:06:44] Cameron: is one that we actu­al­ly want them to have pos­i­tive.

[00:06:48] Tony: Yeah. And it’s, it’s been some­thing which I’ve noticed in the past that when some­thing goes from a string of pos­i­tive cash flow halves to a neg­a­tive one, it can be a lead­ing indi­ca­tor for a down­turn. Um, I haven’t [00:07:00] done the research on that, but it’s, it’s kind of on the list. But, um, it may not be the case for Fleet Part­ner, because as you say, if they’ve decid­ed to bulk up and buy all the cars that are going to be leased out, then It might be a short term occur­rence.

[00:07:17] Cameron: uh, just if peo­ple

[00:07:18] Cameron: are

[00:07:18] Tony: just just on that too, Cam.

[00:07:20] Cameron: was­n’t on the list, that’s why.

[00:07:21] Tony: Yeah, thanks. Just on that too, I, I spoke last week about, um, whether you were bet­ter off buy­ing all three list­ed fleet, uh, man­age­ment com­pa­nies, um, fleet part­ners and, uh, SIQ, Smart Group, and MMS Macmil­lan Shake­speare. And that was on the basis of Macmil­lan using, los­ing a con­tract and, It’s like you pick­ing it up.

[00:07:43] Tony: Um, yeah, so for this year it would have worked out well. It would have beat­en the index, um, but over five years it was under­per­form­ing the index and,

[00:07:54] Tony: um, I did a cou­ple of oth­er peri­ods in between and it still looks like you’re bet­ter off buy­ing the best one [00:08:00] out of the three at the time. So Fleet Part­ners has been that for us.

[00:08:04] Tony: It’s been on the buy list all year and it’s out­per­formed this year com­pared to its two cohort.

[00:08:09] Cameron: There you go. There you go. Well, that’s Good bit of analy­sis. Thank you. Just stay­ing on the reports, a cou­ple of things I want to men­tion. I, I have men­tioned on here over the last cou­ple of months that I’ve been work­ing on Stock­o­pe­dia ver­sion of the check­list and test­ing that out

[00:08:27] Cameron: both with an Aus­tralian dum­my port­fo­lio built

[00:08:30] Cameron: pure­ly from Stock­o­pe­dia and a US dum­my port­fo­lio.

[00:08:34] Cameron: And I thought start­ing this week I’ll report on how those are going and over Christ­mas one of my plans is to sort of clean up the stock­o­pe­dia ver­sion of the check­list so I can share it with peo­ple because I’ve had some peo­ple reach out and express inter­est in hav­ing a look at that. There’s a lot of met­rics that we use in our reg­u­lar check­list that we can’t get out of stock­o­pe­dia [00:09:00] because they don’t track things like Own a Founder or PE His­to­ry, things like that, at least not in a way that’s easy to get access to.

[00:09:10] Cameron: But, um, just by the by, the AU dum­my port­fo­lio that I’ve built, Using Stock­o­pe­dia. It’s per­form­ing about the same over the last 30 days as the Stock Doc­tor one.

[00:09:24] Cameron: It’s up about a lit­tle bit more than 4 per­cent ver­sus 5 point some­thing for the,

[00:09:29] Cameron: uh, STW. So it’s doing about the same. Um

[00:09:33] Cameron: And the US one, I have mia cul­pa, I did send out my report this morn­ing and said it was killing it, it was like four times as good, and I can’t, how many times do I have to do this mia cul­pa?

[00:09:46] Cameron: When some­thing looks bet­ter than it should be, You would think there would be part of my bra like, in every oth­er aspect of life,

[00:09:55] Tony: You’re a

[00:09:56] Cameron: it’s a polit­i­cal thing, I’m a skep­tic. I’m like, oh, hold on a cot­ton [00:10:00] pick­ing minute, that can’t pos­si­bly be right, but this, nah, my red alarm did­n’t go off. I went, oh, yeah, that’s leg­endary, because I did know that some of the stocks have been doing real­ly well.

[00:10:10] Tony: right.

[00:10:11] Cameron: Um, but then get­ting ready to do the show, I was drilling down on those stocks so I could talk about one of them, uh, I would talk about them and why they were doing so well. One of them, WLFC, Willis Lease Finance, I believe their catch­phrase is what you’re talk­ing about, Willis.

[00:10:27] Cameron: Um, I had screwed up the buy price when I was, uh, putting the trans­ac­tion into, uh, Stock­o­pe­dia

[00:10:36] Cameron: put it in at a quar­ter of what it real­ly

[00:10:38] Cameron: was, so that, uh, blew those gains away when I adjust­ed it.

[00:10:43] Cameron: But some are up real­ly well. Like A AMC net­works is up 24% since I bought it. Le Lands end is up 26% gas. Stealth gas, GASS, is up 34%. [00:11:00] Um, pret­ty sure I did­n’t screw that one up, but maybe I should look at that too.

[00:11:09] Tony: Land’s End, is that the direct mar­ket­ing cloth­ing com­pa­ny?

[00:11:13] Tony: Do you know?

[00:11:15] Cameron: Uh, uh, yes, yes it is.

[00:11:18] Tony: Oh, that’s fine. I used to sell Land’s End cloth­ing in Aus­tralia through MyerDi­rect. Yeah.

[00:11:25] Tony: When­ev­er that was, 20 years

[00:11:26] Tony: ago. Yeah.

[00:11:27] Cameron: Uh, I thought you meant like you were like going door to door.

[00:11:30] Tony: no, no, no, no, no,

[00:11:31] Cameron: you like to buy some

[00:11:32] Cameron: Land’s End cloth­ing?

[00:11:33] Tony: no, it was one of the brands that my direct, uh, Retailed in Aus­tralia. We had a deal with Land’s End in the U.

[00:11:38] Tony: S. In fact, I think it was the U. K. from, from mem­o­ry, but

[00:11:41] Tony: any­way. Um,

[00:11:43] Cameron: gas, the gas buy price is right. I just dou­ble checked it by the way. So that’s all good.

[00:11:48] Tony: AMC, isn’t that, was­n’t that one of

[00:11:50] Tony: the game stock to the moon?

[00:11:52] Cameron: It was! It

[00:11:53] Tony: So it’s come good, has it?

[00:11:55] Tony: Any­way.

[00:11:56] Cameron: Wow. I mean, it’s not up, you know, a thou­sand [00:12:00] per­cent, uh, like they thought it was going to be or what­ev­er, but it’s, it’s, you know, it’s doing okay from when I bought it. Um, yeah, I bought that at, uh, 15

[00:12:16] Cameron: and what is it now? 19. 37.

[00:12:21] Cameron: So yeah, it’s had a lit­tle bit of a

[00:12:22] Cameron: spike. Any­way, so I’ll keep report­ing those each week and you know, where, just to let peo­ple know where my head­’s at with all of this stuff is because we’re miss­ing a lot of data points and we don’t have the tools yet to sort of. Do large scale regres­sion test­ing with his­tor­i­cal data to see whether or not these data points are going to be long term impor­tant or not, or how impor­tant.

[00:12:50] Cameron: I’m sure they are impor­tant, but how impor­tant? Uh, so I’m just suck­ing this and see­ing it for a while, test­ing it out, run­ning it, see­ing how things seem to per­form. Um, [00:13:00] So far so good, but, you know, it’s only been a month or two, so, um, we need, obvi­ous­ly, more time than that. One oth­er thing I did want to men­tion about the report today is I have a my lit­tle cod­ing project this morn­ing was to col­late all of the com­mod­i­ty sta­tus his­to­ry, um, over the year or 18 months or so that we’ve been ad putting it in our buy list each week.

[00:13:30] Cameron: Into a sin­gle sheet. Which I’ll have in the buy list each week. It’ll be a sin­gle tab. I think it’ll prob­a­bly replace the exist­ing tab. So rather than the exist­ing tab in the buy sheet each week, which just has the com­mod­i­ty sta­tus for this week, it’ll be a, um, uh, uh, his­tor­i­cal view with the lat­est. This week will be the lat­est, uh, col­umn in the sheet.

[00:13:53] Cameron: Because I fig­ure it might be inter­est­ing, uh, in some of our analy­sis to go back and have a look at the com­mod­i­ty sta­tus. I know you [00:14:00] and I were talk­ing off air before about regres­sion test­ing and How do we get that data? We’re going to try and fig­ure that out, but I thought it might be inter­est­ing just to have a look at it and go, okay, well, when, at any point in time, so when did iron ore last become a buy?

[00:14:14] Cameron: When did it become a

[00:14:14] Tony: yeah, right. Yeah, good.

[00:14:16] Cameron: a look. So,

[00:14:17] Tony: That’s real­ly use­ful because what we found was using the four years worth of buy list was our own regres­sion data­base. Um, you don’t have to try and go from scratch to find source data. We’ve got it if we keep, you know, build­ing it in a, in a uni­form way over time. So that’s a good

[00:14:34] Tony: idea.

[00:14:35] Cameron: and as Gary knows, cause he said this on Face­book, it gets real­ly addic­tive when you real­ize you can sort of, I was sit­ting there like yes­ter­day, last night, I was think­ing, wow, I won­der if I can just write some script that will go through. 18 months worth of spread­sheets and just pull out all of the data I want and

[00:14:55] Tony: Wow.

[00:14:55] Cameron: it.

[00:14:56] Cameron: I went into GPT this morn­ing and said, Hey, can I, can you help me do that? Yeah, [00:15:00] absolute­ly. No prob­lem, mate. And, um, half an hour lat­er, it was done. A lit­tle bit of test­ing, lit­tle bit of back and forth debug­ging, all done. So yeah, it’s fan­tas­tic. I love it. Yeah. Um,

[00:15:14] Tony: the Stock­o­pe­dia port­fo­lio, the Aus­tralian one and our dum­my port­fo­lio, how sim­i­lar are they? How many stocks are in both?

[00:15:24] Cameron: Um, but I can, I can work it out.

[00:15:27] Tony: That’s all right.

[00:15:28] Cameron: just have a look. No, it’s let’s do that. You’re not going to be here for the next cou­ple of weeks. Tony’s tak­ing his Christ­mas vacay as a usu­al. I’m gonna, I’m going to do some real­ly, real­ly just, you won’t believe how good the things are

[00:15:44] Tony: can I put my hand up and say, don’t play all my bad pulled porks this time in the Christ­mas com­pen­dia.

[00:15:51] Cameron: What?

[00:15:52] Tony: Pick out the good ones.

[00:15:56] Cameron: Hey, that was for sci­ence. I was see­ing [00:16:00] how they went. Cause, cause they recov­er, like half the time they recov­er and it’s all good. Okay. So I’m look­ing, uh, I’ve got the two buy lists side by, uh, two, sor­ry, port­fo­lio side by side, look­ing for com­mon­al­i­ties. Um, ASG is on both. FPR is on both. LAU is on both, MTO is on both, now obvi­ous­ly these were start­ed at dif­fer­ent times, you know, so, the, the, the, Stock­o­pe­dia one’s far more recent, TRS, the reject shop is on both, and VVA, Viva Leisure, but, I’ll just, I’ll run through the, uh, sor­ry, the, the Stock­o­pe­dia one, so you, you can see the, the stocks that are on here, ABG, Aba­cus Group, ALD, Ampol,

[00:16:50] Tony: That’s just off our buy list from mem­o­ry, or it was any­way, at

[00:16:53] Tony: the bot­tom.

[00:16:54] Cameron: Yeah, it just came on. I think I did one late. I think I put it in the light port­fo­lio [00:17:00] too late last week. I saw it turn up when I did one Thurs­day. After­noon, this is Stock­o­pe­dia, oh sor­ry, Stock Doc­tor, uh, buy list for light, ASG, ERD, Eroad, uh, Fleet Part­ners, JYC, Joyce, Lind­sey, McMa­hon, MAH, MTO, NAB, NZM, OML, AK, see, I feel like I’m read­ing the alpha­bet here, TRS, SSM, Ser­vice Stream, SKT, Sky Net­work, SXE, South­ern Cross Elec­tri­cal, Viva Leisure, and Vysan, V Y S.

[00:17:34] Cameron: So they’re all,

[00:17:35] Tony: NAB’s the only one that’s either not on our buy list or close to our buy

[00:17:39] Tony: list.

[00:17:40] Cameron: and I think I added that to light last week too, I think that

[00:17:43] Tony: Ah, okay,

[00:17:45] Cameron: week on, uh, my, let me just check that. I think, I think I did find that turn up when I did a buy list on Thurs­day.

[00:17:53] Tony: so they’re fair­ly sim­i­lar.

[00:17:55] Cameron: Oh no, it was­n’t NAB, I did­n’t add NAB. What was the big, there was a real­ly big one that I

[00:17:59] Tony: Yeah, [00:18:00] I added ANZ a cou­ple of weeks ago, so it could have been ANZ on the Stock Doc­tor

[00:18:04] Tony: buy list.

[00:18:06] Cameron: I do have A and Z and a cou­ple, um, oh, Blue Scope Steel, it might have been. When did I add that?

[00:18:14] Tony: No, Bluescope’s been on our buy list, but I think it’s been a com­mod­i­ty sell for a while, with steel.

[00:18:19] Cameron: uh, real­ly? Steel a com­mod­i­ty sell?

[00:18:23] Tony: Oh, I thought so. Well, it was when it was on the buy list, because I could­n’t buy

[00:18:25] Cameron: no, this is the one that I added, um, last week. It was BSL. That was, God, how could I have missed that? Steel’s a buy on our, uh, com­mod­i­ty sheet TK. Let

[00:18:39] Tony: well, I’m going back a month or so, so maybe it’s, uh, it’s just become a buy.

[00:18:44] Cameron: me just, uh,

[00:18:46] Tony: Well, maybe BlueScope was a three point.

[00:18:49] Tony: Any­way, last time I looked at try­ing to add BlueScope Steel, I could­n’t do it

[00:18:52] Tony: for some rea­son.

[00:18:54] Cameron: well, you know what I can do, Tony? Um, I can look at the com­mod­i­ty his­to­ry tab [00:19:00] that I just built and I can tell you now exact­ly when steel became a buy. It became a buy, Oh, quite a while ago. Um, 30th of Octo­ber, it became a buy.

[00:19:14] Tony: Yeah, okay. Well, that’s a cou­ple of months ago, which is prob­a­bly when I was look­ing at BlueScope Steel

[00:19:17] Tony: then. Okay.

[00:19:20] Cameron: for three, no, four report­ing peri­ods before that, then it was a buy in Sep­tem­ber, Josephine, buy. Last time it was a sell was, uh, late August, it has been a Josephine for a few report­ing peri­ods, a few weeks, sor­ry, I mean, there. Oh my god, this is so cool! sta­tus, his­to­ry, I knew I was gonna need that at some point.

[00:19:42] Cameron: God, I, I impress myself some­times, I tell you,

[00:19:44] Tony: Oh, that’s always a great way to be to impress your­self. Um, well, you keep impress­ing your­self. I’m just going to take a step away from the micro­phone for a minute and turn some fridges off, which I can hear whirring in the back­ground, which may impede the

[00:19:58] Tony: qual­i­ty. Hang on.

[00:19:59] Cameron: I’ll qui­et­ly go [00:20:00] and impress myself while you do that, yeah. Just kid­ding, folks. I don’t impress myself. I’m being face­tious. I’m nev­er impressed with myself. I’m strug­gling just to keep up and be half as smart as most peo­ple. I was at Kung Fu the oth­er day and my Sifu walked past and said, you got it? And I said, I’ve nev­er got it. You know I’ve nev­er got it. I don’t know what I’m doing.

[00:20:20] Tony: I don’t know. I saw you on the Face­book group list­ed as Kung Fu

[00:20:22] Tony: expert.

[00:20:24] Cameron: yeah, which I thought Face­book had worked out, uh, but then it turns out I must have done that myself at some point.

[00:20:31] Tony: Real­ly?

[00:20:32] Cameron: I think it, well, it, it, it gives you sug­ges­tions about what you can be an expert in. And I think I was like, sure, that’d be fine.

[00:20:38] Tony: How would Face­book even know you did

[00:20:40] Tony: Kung Fu?

[00:20:41] Cameron: I don’t know. I think you, you put in your inter­ests, what are your hob­bies? You know, that kind of stuff. I think I put that in. Hey, speak­ing of peo­ple that aren’t experts, we did that poll after last week’s show about PRN. And I asked peo­ple, you gave them four options in the poll. They sold it Mon­day when [00:21:00] it first became a three point trend­line sale, Tues­day, which was the next day, uh, the third option was I own it, but I haven’t sold it because I don’t fol­low the rules.

[00:21:09] Cameron: And the fourth option was I don’t own it. Uh, last time I looked at this was last night, 73 per­cent of peo­ple who respond­ed said they don’t own it, which is not real­ly a use­ful piece of infor­ma­tion, but okay, uh, the major­i­ty of peo­ple who own it did­n’t sell it, and uh,

[00:21:27] Tony: Yeah, but if you take out the 73 per­cent who did­n’t own it, about a third of the peo­ple who did own it sold it Mon­day, Tues­day.

[00:21:35] Cameron: Uh, well, yeah, maybe, because I’m not sure about that. Sold it Mon­day. Last time I looked at that, I think there was only one per­son. I think it was Daryl. I’m just bring­ing it up here. So yeah, only Daryl sold it on the Mon­day. three peo­ple, includ­ing me sold it on the Tues­day.

[00:21:56] Cameron: Eight peo­ple said they own it, but haven’t sold it. [00:22:00] So yeah, you’re right. There’s a third, even when I do it that way. A third of the peo­ple sold it Mon­day or Tues­day.

[00:22:06] Tony: Yeah, but I think you, you iden­ti­fied some­where else that the vol­ume was quite heavy on that day, so it would­n’t have been an issue, I don’t think.

[00:22:14] Cameron: No. And I feel bad for the peo­ple that haven’t sold it because at least when I checked last night, it had kept falling. see where it is today. Oh, it’s down again

[00:22:27] Tony: just shows that peo­ple aren’t good robots, they don’t fol­low the rules.

[00:22:32] Cameron: So I sold it at 1. 04, it’s cur­rent­ly at 0. 97.

[00:22:37] Tony: A good AI would have fol­lowed the rules, it would have sold

[00:22:41] Tony: straight away.

[00:22:42] Cameron: yes. So, well, I hope for the peo­ple that haven’t sold it, that, um, it turns around. But so far, uh, it does not look good for

[00:22:52] Cameron: them.

[00:22:54] Tony: Hmm.

[00:22:54] Cameron:

[00:22:54] Cameron: point­ed out in our Face­book chat that CCP’s been on an [00:23:00] absolute tear this week. We love CCP. I went and had a look and they have, they’ve been doing well since Looks like the mid­dle of

[00:23:09] Cameron: Octo­ber, but I RULE 1’d it back in Octo­ber when it plum­met­ed.

[00:23:15] Cameron: Remem­ber they came out with their results and just the bot­tom fell out of it? I RULE 1’d it at 17. 31. And today it’s at 15. 93, so glad I sold it when I did, but um, yeah, it’s had a, it’s had a good cou­ple of weeks, it’s gone from 12 bucks up to near­ly 16 bucks, but um, yeah, Rule 1 did me well in that instance.

[00:23:53] Tony: It did real­ly well and I remem­ber at the time com­ment­ing that this is, I’ve seen this before and Cred­it Corp are [00:24:00] real­ly cau­tious about their guid­ance and like to under promise and over deliv­er and I think the mar­ket’s work­ing out now that it prob­a­bly over­shot when it sold off that quick­ly. Well,

[00:24:14] Cameron: in the mar­ket are work­ing out some­thing that you’ve been telling me about CCP for five years. ’cause you, you always tell me that about CCP, even I know

[00:24:24] Cameron: that about c ccp. What are these high­ly paid pro­fes­sion­als doing?

[00:24:27] Tony: we see it every half that the stock price goes down after they release their results and it recov­ers ground steadi­ly and gets to new highs after they mar­ket digest

[00:24:38] Tony: what

[00:24:38] Cameron: So why don’t we sell it a week before their results or the day before the results are due out in future?

[00:24:44] Tony: And that’s, yeah,

[00:24:46] Cameron: or

[00:24:46] Tony: that’s a good idea. I don’t, I don’t think this, this big down­turn that hap­pened recent­ly was after their results. I think they came out with an announce­ment about, um, the U. S. [00:25:00] The US busi­ness not going as well as they

[00:25:02] Cameron: Uh, it was a con­fes­sion.

[00:25:04] Cameron: Hel­lo, Alex!

[00:25:06] Tony: Hi, Al. I just want­ed to say that we found out recent­ly that Alex grad­u­at­ed

[00:25:10] Tony: with her Mas­ter of Fine

[00:25:11] Tony: Arts and she’s on the

[00:25:12] Tony: Dean’s List,

[00:25:14] Tony: which means she did real­ly, real­ly well.

[00:25:16] Alex: Yeah. I still

[00:25:17] Alex: haven’t fig­ured out what it means exact­ly, con­sid­er­ing I did not attend my grad­u­a­tion.

[00:25:24] Tony: Why not?

[00:25:25] Alex: Uh, I don’t know. It’s a lot of effort. I, and I, um, it’s like six months out

[00:25:30] Alex: from me actu­al­ly fin­ish­ing my degree and a whole year after I did my grad show, so I did­n’t

[00:25:35] Alex: feel the par­tic­u­lar need to go to Mar­ble Sta­di­um

[00:25:38] Alex: and spend a

[00:25:38] Alex: cou­ple hun­dred dol­lars rent­ing a gown and a cap for

[00:25:41] Alex: a day,

[00:25:42] Tony: fair enough.

[00:25:43] Alex: minus, um,

[00:25:44] Cameron: I

[00:25:44] Alex: extra tick­et costs, but, oh well.

[00:25:46] Cameron: I

[00:25:47] Cameron: I knew, I

[00:25:47] Cameron: liked you, Alex. That’s exact­ly how I feel about things. I did­n’t, I did­n’t go to my high

[00:25:54] Cameron: school

[00:25:55] Cameron: prom. I was like, real­ly? Why would I want to do

[00:25:58] Cameron: that?

[00:25:58] Cameron: I’m going out to din­ner with my [00:26:00] girl­friend.

[00:26:01] Alex: I was prom queen, so what can I say?

[00:26:03] Cameron: Wow. Prom Queen. Wow. I bowed down. We’re not wor­thy. Wow.

[00:26:12] Alex: thank you.

[00:26:13] Cameron: Do we have pho­tos? Do we have pho­tos, of that? Do I have a pho­to of that some­where?

[00:26:19] Cameron: Have you ever sent me a pho­to?

[00:26:20] Tony: I will

[00:26:21] Alex: I’ve got

[00:26:21] Alex: pho­tos, yeah. I should say I was­n’t like some extreme­ly pop­u­lar per­son in high school. I just was in a steady rela­tion­ship. So every­one decid­ed to vote for us.

[00:26:30] Alex: It was the eas­i­est, least con­tro­ver­sial pick for

[00:26:34] Alex: prom queen and king.

[00:26:38] Tony: Yes, you were the com­pro­mise can­di­date. It’s always a good place to be in

[00:26:41] Alex: Yes.

[00:26:41] Cameron: The safe bet. Yeah.

[00:26:45] Cameron: Well, do you have a

[00:26:46] Cameron: ques­tion

[00:26:46] Tony: Any­way, so I seem to remem­ber from high school and uni­ver­si­ty in Toron­to,

[00:26:50] Tony: Dean’s List was

[00:26:51] Tony: the

[00:26:52] Tony: top 10%, I think, of grad­u­ates, was­n’t it?

[00:26:54] Alex: what it was

[00:26:55] Alex: when I was in

[00:26:55] Alex: high school. Um, some peo­ple have said it’s the top 1%, [00:27:00] I doubt that. Some peo­ple say it’s the top stu­dent from the grad­u­at­ing class, um, which could be true, I don’t

[00:27:06] Alex: know. Uh, but I’m hap­py about it, so that’s

[00:27:09] Tony: won­der how RMIT, I

[00:27:11] Tony: won­der how RMIT, feels when they call out who the top

[00:27:14] Tony: stu­dent was and she said, I

[00:27:15] Tony: can’t be

[00:27:16] Tony: bug­gered buy­ing a gown for 200 bucks

[00:27:18] Alex: I hope that they have some seri­ous reflec­tion, is what I hope they

[00:27:22] Cameron: and and she does­n’t even know what it means or care very much by

[00:27:25] Cameron: the sounds

[00:27:26] Cameron: of it. She’s like, yeah, so?

[00:27:28] Tony: Well, that’s

[00:27:28] Tony: good you did­n’t turn up,

[00:27:30] Tony: you prob­a­bly would find out what it means

[00:27:31] Tony: if

[00:27:31] Cameron: Yeah. If they, If they, they, stood up and said, and every­one wel­come Alex Kynas­ton to the stage. And they’re like,

[00:27:37] Cameron: Alex?

[00:27:39] Alex: You’re right. Next time I’ll send a proxy or some­thing. So at least some­one’s there

[00:27:43] Cameron: Like Mar­lon Bran­do

[00:27:45] Cameron: send­ing a lit­tle feath­er

[00:27:47] Cameron: to the Oscars.

[00:27:47] Alex: Yeah. absolute­ly. I rewatched that recent­ly. It’s great.

[00:27:50] Cameron: make a,

[00:27:51] Cameron: speech say­ing, uh, you know, protest­ing

[00:27:53] Cameron: some­thing, racism, yeah.

[00:27:58] Cameron: And she was­n’t even Native

[00:27:59] Cameron: [00:28:00] Amer­i­can, right? She was a fake Native Amer­i­can who got up and

[00:28:03] Cameron: protest­ed, uh, racism

[00:28:05] Cameron: and the treat­ment of the Native Amer­i­cans.

[00:28:08] Alex: Was she?

[00:28:09] Tony: And so next year they had a

[00:28:11] Tony: Indi­an Actress

[00:28:12] Tony: Award for best

[00:28:14] Tony: per­for­mance by a non Indige­nous per­son.

[00:28:18] Cameron: I think that’s the sto­ry. Don’t call me to that. All right. You got a

[00:28:22] Cameron: ques­tion

[00:28:22] Cameron: for us this week, okay?

[00:28:25] Alex: Yes. I was read­ing through Dav­e’s ques­tion and I decid­ed to leave

[00:28:28] Alex: that to you two. So I’m going to read Jim’s.

[00:28:31] Tony: Okay.

[00:28:32] Cameron: Right.

[00:28:32] Alex: Um, so Jim says, Hi Cameron, I hope

[00:28:35] Alex: You are well. Can I request to pull pork on two inter­est­ing com­pa­nies cur­rent­ly on the buy list, which are ERD, E Road Lim­it­ed, and CXO, Core Lithi­um Lim­it­ed.

[00:28:46] Alex: Not sure if mul­ti­ple requests are a good form. Um, would also love to hear Tony’s thoughts on. the poten­tial Wood­side and San­tos merg­er. In clos­ing, thank you both for cre­at­ing a won­der­ful plat­form, and I know it is ear­ly, but Mer­ry Christ­mas to and yours. Cheers, Jim.[00:29:00]

[00:29:00] Cameron: Thank you, Jim.

[00:29:01] Tony: Uh, well, I’ve got two pulled porks

[00:29:04] Tony: ready to go on those com­pa­nies.

[00:29:05] Tony: would, would you believe I spent like three hours

[00:29:08] Tony: doing pulled porks and I haven’t looked at the Wood­side

[00:29:10] Tony: San­tos Merg­ers? I can’t answer that

[00:29:13] Cameron: Okay, so just

[00:29:14] Cameron: Pulled

[00:29:14] Tony: ha ha ha. You just pulled pork. Sor­ry about that, Jim. I can hold it over until the new year and

[00:29:19] Tony: do it

[00:29:20] Cameron: Will it be rel­e­vant then? Prob­a­bly.

[00:29:23] Tony: Yeah, well, I don’t think the merg­er’s going ahead just yet,

[00:29:26] Tony: so it should still be rel­e­vant by then.

[00:29:27] Tony: So this, this was request­ed by Jim. It’s a pulled pork first. There’s two pulled porks, first of all, on Core Lithi­um and then on E Roads.

[00:29:35] Cameron: Actu­al­ly folks, Cameron, in the edit­ing booth here. Tony record­ed three pulled pork’s today. It seems like a lit­tle bit overkill to put them all in the one episode, par­tic­u­lar­ly when I’ve got to do a cou­ple of episodes with­out him over the next cou­ple of weeks we’ll do a Core lithi­um today and then I’ll save the oth­ers for the next cou­ple of weeks.

[00:29:55] Cameron: So you have some­thing to lis­ten to. Over Christ­mas.

[00:29:58] Tony: Um, and I [00:30:00] have to

[00:30:00] Tony: say Uh, they may have been on the buy list recent­ly, but they’re both just off the buy list at the moment. So bear that in mind if peo­ple are lis­ten­ing to this, they should do their own research.

[00:30:11] Tony: Start­ing with Core Lithi­um, which is a North­ern Ter­ri­to­ry Lithi­um explor­er and now min­er. They’ve start­ed to export mine into Chi­na. Uh, their, their biggest, well, their Their big project, which is just get­ting into oper­a­tional sta­tus now, is the Finis Lithi­um

[00:30:31] Tony: project, which is just south of Dar­win, about 88 kilo­me­ters south of Dar­win.

[00:30:36] Tony: So that’s a, that’s a bonus for them because they’re not run­ning an hour out­side of the

[00:30:41] Tony: port of Dar­win, which is where they need to export their stuff. So that’ll be a cost sav­ing for them rather than being in the mid­dle of the West­ern Aus­tralian

[00:30:49] Tony: desert or some­thing and hav­ing to build a rail link to the port.

[00:30:52] Tony: So that’s good. Um, They have already signed off take agree­ments with two large Chi­nese lithi­um com­pa­nies, [00:31:00] Sichuan Yahua and Gan­feng, Gan­feng Lithi­um, both of which I’ve nev­er heard of.

[00:31:07] Tony: But, um, it’s always good for a min­er to have an off take agree­ment, so it’s guar­an­teed sales. Uh, they’re also grow­ing because they, uh, Pro­gress­ing a sec­ond ten­e­ment area known as BP33, which may end up being big­ger than Finis.

[00:31:25] Tony: And that’s not too far away from hav­ing a go no go deci­sion on devel­op­ing a mine. So, they should, they should grow if that goes through, or they will grow if that goes through. And they’re going to grow any­way because they’re going to, this year, The lat­est fig­ures don’t have much in the way of sales, so as they ramp up the min­ing at their cur­rent ten­e­ment, their sales will increase as well.

[00:31:48] Tony: A cou­ple of things about Core Lithi­um. They’re a small com­pa­ny. They’ve adopt­ed an inter­est­ing style of min­ing, so they They talk about hav­ing a [00:32:00] lot of lit­tle mines in close prox­im­i­ty to each oth­er rather than one big mine. Um, that may or may not work out, but it’s a lit­tle bit dif­fer­ent to how we nor­mal­ly expect a mine to look.

[00:32:11] Tony: Um, they famous­ly turned down an off take agree­ment ear­ly on with Tes­la. So Elon Musk came knock­ing, uh, before these Chi­nese off take agree­ments were secured. Uh, and they talked for a long time. The mar­ket went crazy on the fact that You know, Tes­la were inter­est­ed in a small Aus­tralian com­pa­ny, which did­n’t even have a mine oper­a­tion, I don’t think, at that stage, or was in the stages of doing that.

[00:32:35] Tony: Um, but they could­n’t come to an agree­ment, and I think Tes­la’s had a bit of his­to­ry of going into start­up mines to do deals at low prices, and so it did­n’t come to an agree­ment. When that did­n’t hap­pen, the share price went down. There is a bit of a pre­mi­um if you can get a big cus­tomer like Tes­la on the books.

[00:32:59] Tony: All of the [00:33:00] ESG investors tend to look at you even more so, although they look at all lithi­um com­pa­nies. A cou­ple of oth­er things about this one. It’s one of the most heav­i­ly short­ed stocks on the ASX and it cur­rent­ly has 12 per­cent of its shares short­ed.

[00:33:14] Cameron: Hmm.

[00:33:15] Tony: The price for this com­pa­ny has dropped dra­mat­i­cal­ly.

[00:33:17] Tony: Since August 2022, which was its high point, it’s down from 1. 40 to 0. 31. Hav­ing said that, it still remains above its buy line, so that’s in its favour, even though it’s a falling knife. Um, this is prob­a­bly a chick­en or egg sit­u­a­tion, I’m not sure whether the share price is down because it’s being heav­i­ly short­ed, or because it’s down because the short­ers are pay­ing atten­tion to the lithi­um price, which is also down dra­mat­i­cal­ly in a sim­i­lar sort of peri­od.

[00:33:48] Tony: Its high was 600, 000 a tonne in Novem­ber 22, and the lithi­um price is now down to below 100, 000 today, around 97, 500. So um, It’s [00:34:00] down dra­mat­i­cal­ly as well. I sus­pect the min­ing com­pa­nies are fol­low­ing the com­mod­i­ty prices. They usu­al­ly do. So that’s why the price is down. Um, but one of the pos­i­tives for this com­pa­ny is that if the lithi­um price does look like improv­ing and turn­ing around and the short sell­ers will prob­a­bly All have to do what’s called a short cov­er, sell their stock and give it back, oth­er­wise they don’t lock in their prof­its, in case the core price takes off, but just that process of um, of get­ting out, because what they actu­al­ly have to do is buy the core stock to return it to the peo­ple they bor­rowed it from, because if you’re short­ing, you bor­row the stock, sell it, and then buy it back at the bot­tom and give it back to the per­son you’ve been You’ve rent­ed it from in the first place and that gen­er­al­ly cre­ates a bit of a price spike just just that process alone and and if 15 per­cent of the stock has to do that, we might

[00:34:53] Tony: see

[00:34:53] Tony: it turn around.

[00:34:55] Cameron: I think it’s known as a miniskirt, Tony.

[00:34:57] Cameron: Short cov­er. [00:35:00] Keep going.

[00:35:01] Cameron:

[00:35:01] Tony: yeah. Uh, so the num­bers for this pulled pork, um, This is a large ADT com­pa­ny of near­ly 6 mil­lion, so that’s a pos­i­tive. The share price when I did the analy­sis was 0. 305 per share, less than con­sen­sus tar­get, and almost IV2, 03, IV2 is 0.

[00:35:26] Tony: 29, so not quite. Below IV2, but fair­ly sim­i­lar. Does­n’t have a yield because as you’d expect with these sort of start­up min­ing com­pa­nies, all of their cash flow goes back into set­ting up the oper­a­tions and expand­ing. Stock Doc­tor give this com­pa­ny finan­cial health of strong and a trend of recov­er­ing, which we like to see.

[00:35:49] Tony: So it gets a good score for that. Uh, if we were scor­ing on PE alone, we’d get a bad score because the PE is 51 times, um, and there­fore it fails our test, [00:36:00] uh, for the last, uh, three years, but, um, that should turn around because it’s expect­ed to grow. Uh, the earn­ings are expect­ed to grow next year. Um, hav­ing said that though, price to oper­at­ing cash flow is 7, just over 7 times, 7.

[00:36:14] Tony: 23. So it’s just off the bot­tom of our buy list. But again, that could turn around with a, um, fluc­tu­a­tion in the share price, if that hap­pens. Net earn­ings per share is 16 cents, uh, so it does­n’t score. For us on that basis, book plus 30 share price is just over 0. 30, so we can’t score it based on its assets.

[00:36:38] Tony: Earn­ings per share fore­cast growth, how­ev­er, is 400 per­cent and that’s due to the mine ramp­ing up. So growth over P. E. is near­ly eight times, which is way above our thresh­old of 1. 5, so it scores well for that. Uh, inter­est­ing­ly enough, no own­er, founder, direc­tors hold 1 per­cent that I could see any­way. So I can’t score it for that.

[00:36:58] Tony: Some­times you do see that in [00:37:00] these small min­ing com­pa­nies, but not the case here. Uh, equi­ty is con­sis­tent­ly increas­ing. So it gets a tick for that. So all in all, the qual­i­ty score is 9 out of 14 or 64%. And the QAV score is 0. 09, which is just below our cut­off of 0. 1. Hav­ing said that, I mean, the 0. 1 is arbi­trary.

[00:37:21] Tony: So if some­one did like this com­pa­ny and want­ed to buy it they could look at it at 0. 09 I would have thought but it is a falling knife at the moment so I wait until sen­ti­ment turned. I sus­pect when sen­ti­ment turns it’s going to turn strong­ly because the short sell­ers will be buy­ing stock to give back to their lenders.

[00:37:38] Tony: And it’ll kick off quite nice­ly. So that’s a pos­i­tive for it when it does even­tu­al­ly turn. Neg­a­tives and, well, risks, I guess. Um, the lithi­um price is prob­a­bly the biggest risk. It’s still depressed and trend­ing down. And I’ve seen this before with, with, um, mines and com­modi­ties. Uh, it’s a com­mod­i­ty that a cou­ple of years ago was in high demand, large­ly [00:38:00] because of its role in elec­tric vehi­cles and oth­er elec­tric.

[00:38:03] Tony: Um, uses, elec­tri­fi­ca­tion uses, uh, so it meant the play­ers who are already in the field did real­ly well, but it also invit­ed lots of new mines to, or lots of min­ing com­pa­nies to explore for lithi­um. And so there is, um, uh, more lithi­um in the mar­ket now, so that’ll set­tle down to an equi­lib­ri­um that works out in the long term and is eco­nom­i­cal for, um, most par­ties.

[00:38:27] Tony: But at the moment it’s, um, it’s now in over­sup­ply. Oth­er risks, um, prob­a­bly the oth­er biggest risk I can think of is that there has been nois­es made, um, in Aus­tralia, but also in the U. S. about, uh, export­ing, um, cer­tain min­er­als to Chi­na, and, uh, the two off tank agree­ments this com­pa­ny is rely­ing on are both in Chi­na.

[00:38:53] Tony: Now, the gov­ern­ment has­n’t come out and said that they have a pol­i­cy against send­ing lithi­um to Chi­na. I think they have [00:39:00] called out some cer­tain min­er­als to Chi­na. To, um, reg­u­late exports over­seas, but I don’t think the the­me’s on that list yet, but it may hap­pen if they decide to expand their, their, um, reg­u­la­tions of, uh, of, uh, Pre­cious min­er­als too, or min­er­als that aren’t freely avail­able to Chi­na.

[00:39:20] Tony: So, um, yeah, it’s, I think it’s a watch. I’ll be watch­ing the lithi­um price before I bought into this one, but, um, longer term it prob­a­bly should do okay. So that’s core. And I mean, again, before I leave core lithi­um, it was only a cou­ple of, maybe even a year ago that, um, at least, at least one friend, cou­ple of friends approached me and said, You know, I’ve been told I should get into lithi­um.

[00:39:45] Tony: It’s the next best, biggest thing. And it was a boom and it was, the price was up dra­mat­i­cal­ly and com­pa­nies were, um, min­ing lithi­um and their share price had gone up four or five times. Um, and of course that was right about the time that lithi­um peaked [00:40:00] and start­ed to drop and it’s dropped, uh, five sixths of its, to five sixths of its price, so it’s dropped a long way down from that high.

[00:40:07] Tony: It’s the old clas­sic proverb, when the, when the tip hits the retail mar­ket, you hear it from peo­ple who don’t usu­al­ly. Buy stocks, it’s the time to get out.

[00:40:16] Tony: So, that held true in this boom, but lithi­um boom, it holds true in most booms.

[00:40:21] Cameron: yeah, I think my sis­ter was one of those peo­ple. One of my sis­ters said to me, Hey, uh, what do you think about invest­ing in lithi­um? I’ve heard lithi­um’s the place to be. Prob­a­bly from some­body at a church. I said, yeah, yeah, be care­ful with that.

[00:40:43] Tony: yeah, so it’ll prob­a­bly have its day again, but at the moment it’s, it’s depressed. So that’s Core Lithi­um.

[00:40:50] Cameron: Thank you TK.

[00:40:51] Tony:

[00:40:51] Cameron: Alright, that was real­ly good. Um, don’t own CXOs, I’m not wor­ried about the pulled pork curse on that,

[00:40:59] Cameron: [00:41:00] Uh, let’s Look at oth­er ques­tions. Dave from Newey. I got to apol­o­gize. Dave sent me this a cou­ple of weeks ago and it got lost in my emails.

[00:41:10] Cameron: Hi Cameron, hope you’re well. Was hop­ing I could ask for a pulled pork with a twist. My dad has been talk­ing about REITs for most of this year. It’s a qui­et morn­ing here in Newey, so I did a deep dive on the sec­tor. Gee. There is some val­ue start­ing to come through. A bunch of them have bounced off 5 year lows and are down 30 50 per­cent over 3 years.

[00:41:33] Cameron: The 11th of Decem­ber score­card is near­ly all of the REITs with a score between 0. 01 and 0. 07. URW is the only buy and it’s been on a stel­lar run the last lit­tle bit on big vol­ume. Dis­clo­sure, he owns it. Could Tony pull apart one of the REITs, e. g. CMW, ECF, COF, and use the num­bers to help under­stand the fol­low­ing.

[00:41:58] Cameron: What will it take to get a bas­ket of [00:42:00] REIT buys com­ing through on the QAV list? Price alone? Or is the qual­i­ty for­ev­er going to hold them back? Are REITs like banks? Rather than putting mon­ey into an REIT, would an investor be bet­ter off buy­ing the par­ent com­pa­ny, assum­ing list­ed, e. g. Char­ter Hall, CHC?

[00:42:19] Cameron: Stock Doc­tor has a good write up of risks on the CHC 9 Gold­en Rules page. In short, Occu­pan­cy ver­sus work from home the­mat­ic, bond yields ris­ing impact­ing com­pe­ti­tion for invest­ing dol­lars, costs of mon­ey for REITs with flow on impacts to yields. Any oth­er obvi­ous risks the finan­cial ana­lysts have missed?

[00:42:40] Cameron: I’ve been sniff­ing around com­mer­cial prop­er­ty here in Newy in the Hunter recent­ly. Prices have gone sig­nif­i­cant­ly high­er, so yields at present are below the norm. I don’t get why prices are high­er when inter­est rates are high­er. Maybe the smart mon­ey has moved from the low­er yields com­pared to inter­est rate expense in res­i­den­tial to com­mer­cial, there­fore dri­ving up [00:43:00] prices.

[00:43:00] Cameron: So how does this all play out in sen­ti­ment terms? 1. Inter­est rates peak and decline, so div­i­dends can rise and REIT prices start get­ting bid up again. 2. Com­mer­cial prop­er­ty prices cor­rect. which returns yields and div­i­dends back to nor­mal lev­els. There was a sharp jump in price in some of the REITs after the US Fed said last week that they were now fore­cast­ing rate cuts in 2024.

[00:43:24] Cameron: Seems a clas­sic con­trar­i­an oppor­tu­ni­ty com­ing up, but I’m con­fused as always. And would appre­ci­ate Tony’s per­spec­tive, as always. Off for a bat­tered QAV, Dave from Newey. A bat­tered QAV. I like that.

[00:43:39] Tony: A bat­tered QAV.

[00:43:41] Cameron: Uh, wow. All okay. All of

[00:43:43] Cameron: that’s

[00:43:43] Tony: Yeah. Gosh. I think, I think Dave, Dave may have exhaust­ed his num­ber of ques­tions for a lit­tle while too. We could prob­a­bly do a whole show on REITs, but I’ll I’ll go through and answer these. Um, [00:44:00] so answer­ing his ques­tions first, and then I’ll do the pulled pork. What does it, what will it take to get a bas­ket of REIT buys com­ing through on the QAV list?

[00:44:09] Tony: Well, I think it will be, um, rice, because I guess the busi­ness struc­ture of the REITs is there, so let me go back, let me explain what an REIT is, um, which is prob­a­bly a good way to start, um, it’s a real estate invest­ment trust, and they’re basi­cal­ly just a way of buy­ing into large chunks of of com­mer­cial prop­er­ty that indi­vid­ual investors, retail investors, prob­a­bly would­n’t have the funds to do by them­selves.

[00:44:45] Tony: So it’s a real estate invest­ment fund, basi­cal­ly. It’s a man­aged fund that invests in real estate, just like there are man­aged funds that invest in the ASX and oth­er com­modi­ties, etc. And it’s usu­al­ly a trust [00:45:00] struc­ture, which it does­n’t have to be, but it gen­er­al­ly is. And the ben­e­fit of a trust struc­ture is that If, uh, if a trust dis­trib­utes, um, more than, I think, 90 per­cent of its income or prof­it, then it does­n’t pay tax.

[00:45:13] Tony: The tax is paid by the recip­i­ent of the trust, just like a fam­i­ly trust. That’s how a fam­i­ly trust works. Um, you know, if you have shares that are, that are, um, invest­ed in the fam­i­ly trust, then the div­i­dends can be dis­trib­uted to, um, a mem­ber of the, a recip­i­ent of the trust, so some­one who’s in the trust, a mem­ber, but it can be divert­ed to the per­son with the low­est income.

[00:45:35] Tony: So like a, if, if you’re a, um, a cou­ple and one per­son­’s at work and one per­son­’s at home, you can dis­trib­ute the prof­its to the per­son who is at home and they pay tax based on their mar­gin­al tax rate, which is low­er than the per­son who’s at work usu­al­ly. So, um, that, that’s the ben­e­fit of a trust struc­ture.

[00:45:54] Tony: It does­n’t pay tax until it gets to the, um, the trust unit hold­ers, um, [00:46:00] hands and then they pay tax, uh, on that, which makes, makes it attrac­tive to SMSF. Uh, hold­ers, because super­an­nu­a­tion tax­a­tion is light com­pared to per­son­al tax­a­tion. So, if the trust does­n’t pay nor­mal cor­po­rate tax rates and the unit hold­er is pay­ing super­an­nu­a­tion tax rates, which are usu­al­ly 15 per­cent or zero after retire­ment, um, it could be a tax free income to some­one.

[00:46:26] Tony: So, REITs have tra­di­tion­al­ly been, um, pur­chased by peo­ple as a retire­ment income. Um, for that rea­son, it can be either low­ly taxed or tax free, but also because Uh, the yield on prop­er­ty, um, when it’s, you know, a well man­aged fund can be high. So some­times, you know, some of the, some of the names that Dave has talked about are pay­ing up to 10 per­cent yield and that’s tax free.

[00:46:55] Tony: Now, because it’s going through a trust struc­ture, there’s no frank­ing cred­it attached to it because there’s been no tax [00:47:00] paid on it. Um, uh, so it might be a 10 per­cent yield, but you’re not get­ting a frank­ing cred­it. How­ev­er, if you’re in a Retire­ment phase pen­sion in your super fund, then you’re not pay­ing any tax any­way, so it’s 10 per­cent you’re get­ting tax free and that’s attrac­tive both for the income side of things when you’re retired, but it’s also, if you think about it, um, you know, throw­ing a bit of cap­i­tal growth in the fund, which, you know, prop­er­ty prices Go up in the long term, you’re actu­al­ly beat­ing the mar­ket, being the, um, the ASX, which gen­er­al­ly gets about 10 per­cent over time.

[00:47:34] Tony: So it’s a good way to invest depend­ing on tax struc­tures and depend­ing on your need for yield or not. Even if you don’t need the yield, you’re pay­ing lit­tle tax, you can always rein­vest the yield back into the fund and, and buy more units or more shares and you’re still get­ting a Um, a pret­ty good return, uh, with expo­sure to com­mer­cial prop­er­ty, which goes, like I said, goes up in the long, in the long term.

[00:47:58] Tony: How­ev­er, it [00:48:00] does, it can still be a lit­tle bit volatile and, and the area that’s volatile at the moment and has been depressed has been office, um, Office real estate and office real estate front funds. And that, that’s maybe what Dave wants me to focus on because he men­tioned CMW, ECF and COF, and they’re all three office funds, um, which have been depressed late­ly because of the work from home trend fol­low­ing COVID.

[00:48:26] Tony: Um, that’s not the case across the REIT sec­tion, how­ev­er, I has­ten to add there are REITs, which, um, for exam­ple, own Data Cen­ters, and they’ve done spec­tac­u­lar­ly well in the last cou­ple of years because that’s a grow­ing area. There have been REITs that house, uh, that own ware­hous­es. Which I’ve also done well because of the trend, espe­cial­ly dur­ing and fol­low­ing COVID, to deliv­er­ies, home deliv­er­ies, so there’s more, um, elec­tron­ic or e tail­ing activ­i­ties going on, elec­tron­ic retail­ing activ­i­ties, and so those, those, [00:49:00] uh, REITs are doing well.

[00:49:04] Tony: So there are REITs for every­thing, and as Dave Um, called out, there is one on our buy list, which is URW, Uni­bail, Redam­co, West­field, which is the old inter­na­tion­al divi­sion of West­field, if you can think about all the shop­ping malls around the world that badge West­field. And I think Uni­bail and Redam­co also had some oth­er ones as well.

[00:49:22] Tony: So that’s a, um, a shop­ping cen­tre trust. And, um, it’s now doing well as we’ve come out of COVID and peo­ple going back to shop­ping malls, but for a while there it was doing poor­ly, which is why it came onto our buy list. And to get back to Dav­e’s answer, if you think about the struc­ture of these things, um, they’re, they’re, even if they’re yield­ing 10%, um, which, which means they’re, Uh, well, what am I try­ing to say?

[00:49:55] Tony: They don’t come on the buy list often because we have a price to oper­ate in cash flow thresh­old of [00:50:00] 7. So, which means I’ve got a, that the prop­er­ty has to, on a net basis, be return­ing 14 per­cent because 1 over 7. Is is rough­ly 14 bit over 14. Um, and that’s on a net basis. So not only do they have to find prop­er­ty, which is has rental yields above 14%, it’s also got­ta be after their costs, um, and bor­row­ings.

[00:50:23] Tony: And, um, these funds can con­tain bor­row­ing. So it, it does hap­pen that you get either price, depres­sion in the fund. Life hap­pened with URW, um. or you get some fan­tas­tic real estate which has gone up and is yield­ing say 15 to 20 per­cent and there­fore the Prop­Caf Com­pare to the share price can get above our sev­en times thresh­old, but gen­er­al­ly the REITs don’t, don’t do that.

[00:50:48] Tony: So they don’t appear on our buy list usu­al­ly. Um, so it’s gen­er­al­ly an extreme sit­u­a­tion. Now, a cou­ple of these that Dave talked about are get­ting up close to the buy list. And, um, [00:51:00] you know, the, uh, CMW, Cromwell Prop­er­ty is cur­rent­ly a score of 0. 08. And ECF, um, Eleono­ra. Com­mer­cial Eleanor office is now up at 0.

[00:51:11] Tony: 07. Um, so they are get­ting close and, and I think, um, it’s pos­si­ble that the man­u­al, man­u­al­ly entered data has­n’t been updat­ed for those for a while, so they could even be close to the buy list. Um, but gen­er­al­ly some of the oth­er ones I spoke about, so the big ones like Good­man, GMG, which um, is, is basi­cal­ly ware­hous­ing and has done well because of that.

[00:51:34] Tony: Uh, their QAV score is like 0. 01, but they are a buy on the, on the bread lat­er for sen­ti­ment. So, um, that’s the thing. Um, oth­er big ones, Dexus has a score of 0. 04. Um, it’s close to a buy on the bread loader, but the price is still below its sell, uh, price. Um, GOZ is 0. 03, Vicin­i­ty, which is a shop­ping cen­ter one, anoth­er [00:52:00] shop­ping cen­ter one, a local one, is 0.

[00:52:02] Tony: 03, Char­ter Hall, 0. 03. So that’s gen­er­al­ly about where they, they fall because of the fact that they can’t get above our Prop­Caf of, of, um, sev­en times or less than sev­en times. So I guess that’s some­thing to, to notice, um, to answer Dav­e’s ques­tion about why we don’t see many REITs. On the buy list, that’s the first thing.

[00:52:21] Tony: Um, he talked about, are REITs like the banks? Rather than putting mon­ey into a REIT, would an investor be bet­ter off buy­ing the par­ent com­pa­ny? Assum­ing it’s list­ed, Char­ter Hall being one of those. So gen­er­al­ly you’re bet­ter off buy­ing the par­ent com­pa­ny, the man­ag­er of these things, rather than buy­ing the fund.

[00:52:39] Tony: But it depends on your needs. So the funds suit peo­ple who want a retire­ment income or a high div­i­dend income and have a sit­u­a­tion where they’re not pay­ing much tax. Um, but for growth, you’re bet­ter off usu­al­ly buy­ing the man­ag­er, because their fees go up over time as these, these com­pa­nies or trusts grow.

[00:52:58] Tony: Um, I’m not [00:53:00] 100 per­cent sure Char­ter­hall is just a straight man­ag­er, but it could be. I’m not famil­iar with it. But that’s gen­er­al­ly what you need to do. So the yield on Char­ter­hall, for exam­ple, is much low­er than the yield on some of these oth­er list­ed REITs. Uh, to para­phrase Dave, he’s ask­ing about what are the risks of, um, of these REITs, includ­ing Occu­pan­cy ver­sus work from home, bond yields, cost of mon­ey, etc.

[00:53:27] Tony: The biggest risk that he did­n’t men­tion is is reval­u­a­tion risk and this is one that I think is is hurt­ing the office trust. It gen­er­al­ly works in favor of office funds. It’s often called out as an abnor­mal, but we real­ly should be tak­ing into an account the fact that, uh, prof­it is impact­ed by these funds revalu­ing their, their port­fo­lios every, usu­al­ly every half, I guess, but some­times annu­al­ly, um, or peri­od­i­cal­ly any­way.

[00:53:58] Tony: And so what they love [00:54:00] doing is to say that, look at us, the office build­ings or the ware­hous­es or the shop­ping cen­ters we’ve invest­ed in are now worth more than they were this time last year, and so we’re going to put that as a val­u­a­tion increase on the assets, but to do that we have to put it through the prof­it and loss account, and so that’s what His­tor­i­cal­ly sup­port­ed the P& L of these com­pa­nies, even though it’s often treat­ed as abnor­mal.

[00:54:24] Tony: That depends whether you look at, you know, stan­dard or, um, nor­mal­ized or abnor­mal, um, prof­it for these com­pa­nies. Uh, in the case of office funds at the moment, it’s, it’s, it’s hurt­ing them. for the same rea­son. So, you know, it’s, it’s now being called out as an abnor­mal or high­light­ed as an abnor­mal. It’s not usu­al­ly high­light­ed, um, when things are going up, uh, it’s just treat­ed as part of the prof­it.

[00:54:47] Tony: Um, but it’s me being cyn­i­cal, but yeah, so, uh, Office build­ings are gen­er­al­ly being writ­ten down because of the work from home trend, espe­cial­ly in the CBD. And [00:55:00] so that write down of asset val­u­a­tions is knock­ing out the prof­it of some of these com­pa­nies that, or some of these REITs that Dave spoke about.

[00:55:08] Tony: So that’s an issue that you should pay atten­tion to, I think. Can’t real­ly com­ment on Dav­e’s ques­tion about com­mer­cial prop­er­ty and New­cas­tle as to why it’s going up and I’m not sure whether when he refers to com­mer­cial prop­er­ty if he’s refer­ring to offices or fac­to­ries or some­thing else but cer­tain­ly every­thing oth­er than office build­ings have been going up and office build­ings in region­al areas haven’t been too bad because It’s real­ly the CBD offices that are being hurt by the work­ing from home trend.

[00:55:40] Tony: Um, per­haps they are in New­cas­tle, but it’s also prob­a­bly the case that peo­ple going into work at New­cas­tle don’t have the kind of com­mute that peo­ple going into the CBD office in Syd­ney from the out­skirts do, so it may not be as much of an issue. And cer­tain­ly one of the ones that I’m going to go through and for a pulled pork has called that out as being a a ben­e­fit of their [00:56:00] fund is that it has more, um, or less CBD office spaces than some of the oth­er funds.

[00:56:04] Tony: So that could be why. The com­mer­cial prices are going up in New­cas­tle. Uh, inter­est rates, you’re right Dave, inter­est rates will have an impact on these. Gen­er­al­ly, the trusts aren’t over­ly geared. Um, it’s usu­al­ly a rea­son­able amount of gear­ing, 20 to 30 per­cent per­haps, maybe 40 in some cas­es. So, they should be able to han­dle inter­est rate ris­es, but it’s going to be an issue.

[00:56:29] Tony: Um, you spoke about com­par­i­son to bond yields. That’s always an issue for these com­pa­nies because, um, REITs are often called a bond proxy, which I’ve spo­ken about before. They’re com­pa­nies which pay a yield, which, um, uh, peo­ple can get into eas­i­ly because they’re list­ed, um, and some­times eas­i­er than buy­ing a bond, which, um, often aren’t list­ed, but they are in, in the same mar­kets.

[00:56:52] Tony: Um, so they do try and, um, com­pare them­selves to bond yields. And if bond yields are going up, which they have [00:57:00] been, then the, the yields on these, the div­i­dend yields on these trusts have to as well. Um, He spoke about the REITs going up in val­ue after the U. S. Fed last week because we’re peo­ple are now fore­cast­ing rate cuts in 2024 and that cer­tain­ly, again, goes back to this theme of com­par­i­son to bond yields and inter­est rates being an issue.

[00:57:22] Tony: So, yeah, um. His last ques­tion, he talks about, uh, he asked a ques­tion about, um, look­ing at these things with­out using the buy list and, and so first of all, like, so how would you look at these REITs and decide which ones to buy and not to buy? Um, first of all, look at sen­ti­ment, so the bread loader will still apply to these, um, Trusts, even though they’re not on our buy list, it’s still, they still are sub­ject to sen­ti­ment.

[00:57:54] Tony: Um, and they’ve gen­er­al­ly been turn­ing up as Dave has high­light­ed, um, prob­a­bly because inter­est rates look like they may not [00:58:00] rise much fur­ther. Um, so the first thing I do in terms of buy­ing REITs is to still use the buy list. So UIW is the clear­ly stand, the stand­out one for me. Um, but anoth­er one which is tra­di­tion­al­ly used in this area is to buy them when they’re priced below their NTA.

[00:58:19] Tony: And so, uh, That’s the case with the office funds at the moment, and it’s both good and bad, but it’s still a buy­ing oppor­tu­ni­ty, so peo­ple are pay­ing less for these unit trust prices, the REIT prices for the office funds, because they think that the, the offices haven’t been writ­ten down far enough, so again, that’s always been an issue with these things, they’re, they’re The office build­ings are inde­pen­dent­ly val­ued, and there’s cer­tain­ly pro­fes­sion­al com­pa­nies who do that, um, but the ques­tion is always whether they’ve been writ­ten down far enough, um, and, and, you know, what kind of met­rics have been used to do that?

[00:58:59] Tony: [00:59:00] Because there weren’t many sales dur­ing COVID when the, when the, um, Office build­ings were emp­ty. And of course, because the office build­ings are depress­ing in price, the only sell­ers at the moment are four sell­ers. Peo­ple are tend­ing to hold on to them for longer. So it’s hard to get com­pa­ra­bles or enough com­pa­ra­bles to make a mean­ing­ful deci­sion.

[00:59:20] Tony: And there­fore, the investors in these REITs are ques­tion­ing whether the office build­ings have been writ­ten down far enough. And, but that’s a buy­ing oppor­tu­ni­ty because we can, um, Buy them below what the inde­pen­dent experts have priced those retail build­ings at. So we’re buy­ing them for less than NTA, which I think is anoth­er way to treat these.

[00:59:40] Tony: A bit like buy­ing LICs when they have a dis­count to their NTAs. So you’re pay­ing 80 cents in a dol­lar for um, For office build­ings, which is not a bad thing to do, because even­tu­al­ly I think they will, the sit­u­a­tion will ride itself. I don’t think the CBD build­ings are going to go to zero. Um, com­pa­nies are forc­ing [01:00:00] more peo­ple to come back to work and, you know, prob­a­bly through a leas­ing cycle.

[01:00:03] Tony: They’ll work out that they may or may not need less leas­ing space, but it will sort itself out as these trends often do. So that’s my com­ments on REITs.

[01:00:13] Tony: Dave, I hope that answers all your

[01:00:15] Tony: ques­tions.

[01:00:16] Cameron: Cameron in the edit­ing booth again, at this point, Tony did a pulled pork on COF Cen­turia office REI T. But again, I’m get­ting a, hold that back for some time over the next cou­ple of weeks. We, I seem to recall, we had some issues with buy­ing URW a while back. It’s, uh, a CDI out of France, and there was a French tax. Some bro­kers would­n’t let you buy it, some would. I think Dave said he got it via Self­Wealth with no issues. I think Steven Mabb bought it using one of the bro­kers, but some oth­er peo­ple had trou­bles.

[01:00:53] Cameron: I end­ed up just putting a note in my buy list that it was­n’t some­thing we could real­ly look at because it was too, [01:01:00] um, I don’t know, dif­fi­cult to get your hands on.

[01:01:05] Tony: Yeah, right. Which could also be depress­ing the price, which is why it’s on the

[01:01:09] Tony: buy list.

[01:01:10] Cameron: Um, uh, get­ting back to, well, talk­ing about this broad­er issue of work from home, I read Chan­ti­cleer’s arti­cle in The Fin this week. They did their sur­vey, their CEO sur­vey, and it was one of the big issues, and it seemed, I mean, their con­clu­sion was, uh, peo­ple, work from home is here to stay. It seems about half the week.

[01:01:30] Cameron: A lot of major com­pa­nies have sort of accept­ed some­where between two and a half to three days a week is where most com­pa­nies are land­ing. It’s where they think employ­ees are going to be. They seem to be try­ing to sell them on the fact that being in the office is good for career devel­op­ment. Um, don’t know.

[01:01:49] Cameron: I haven’t worked in an office for 20 years, so what do I know? But that sounds like bull­shit to me. Uh, but I’m try­ing to fig­ure out, like, when peo­ple are writ­ing down the val­ue of these offices, what do they [01:02:00] think’s going to hap­pen? That these cor­po­ra­tions are going to decide that they need less space because they’ve got less peo­ple in the office full time.

[01:02:08] Cameron: But the build­ings aren’t going to go emp­ty, right? There’s gonna Find oth­er uses for those build­ings you would expect. Is it just that the rev­enue might not be as high as sell­ing it to cor­po­rates for offices and, uh, their rev­enues would take a hit?

[01:02:25] Tony: Yeah, I must admit, I would have thought this would have played out more extreme­ly since COVID. That was my sort of hypoth­e­sis. Because if you think about it, I think you’re right. I think peo­ple are only going in maybe half time. Cer­tain­ly it’s dif­fer­ent across dif­fer­ent SME space, which Cen­turia seems to be ser­vic­ing, but I know the bank CEOs, for exam­ple, came out and said about half their staff are in the office, um, at one time, so you’d think that would mean they’d be get­ting rid of.

[01:02:56] Tony: Leas­ing space, um, or try­ing to sub­lease it. [01:03:00] So that to me says that when these leas­es come up for renew­al, they won’t renew. And they’ll manip­u­late their port­fo­lio over time to get out of spac­ing, get out of space. Whether that means the rents come down because there’s going to be less demand for, to, you know, when they go out to relist, when the REITs go out to relist, release these.

[01:03:22] Tony: Office spaces, or whether it means that peo­ple just aren’t build­ing new office build­ings, and that soaks up the lack of demand. I’m not sure, but yeah, it has­n’t worked. I mean, cer­tain­ly, um, these REITs have been doing ter­ri­bly. They’ve come down a lot, the office REITs, um, since COVID, so it’s played out in that respect.

[01:03:43] Tony: The val­u­a­tions haven’t been, I mean, they’ve been writ­ten down, but not like you saw with this one. It’s an office build­ing REIT, exclu­sive office build­ing REIT, and they only wrote down the val­u­a­tions 4 per­cent um, this year. So, you know, whether they have some kind of scope to smooth it over [01:04:00] time or, or whether the, um, expert val­uers.

[01:04:04] Tony: Don’t think it’s going to be as bad as what, you know, inex­pert bystanders like you and I think it might be. But I, I tend to agree with you and cer­tain­ly the buy­ers of the shares in these REITs do because they’re buy­ing shares at 30 per­cent less than NTA, which means I think the val­u­a­tion is going to come down.

[01:04:23] Tony: Um, but yeah, it’s when­ev­er you’re buy­ing some­thing below NTA, you’ve got to con­sid­er it because it’s, um, it’s nice to buy assets for less than what the, the experts think they’re

[01:04:34] Cameron: gov­ern­ments can buy up all of the, uh, free office space and use it to house the home­less peo­ple.

[01:04:39] Tony: Yeah, I remem­ber the last time com­mer­cial prop­er­ty, par­tic­u­lar­ly offices, had a big down­turn. I’d just moved to Mel­bourne. It was like late 80s after the share mar­ket crash and com­pa­nies were clos­ing and going bank­rupt, down­siz­ing dra­mat­i­cal­ly. And that kicked off a boom in con­vert­ing offices into apart­ments, which was a, you know, alter­na­tive use and suc­cess­ful alter­na­tive use.

[01:04:59] Tony: And I think the [01:05:00] BP build­ing became the Quay­side Apart­ments or Key West Apart­ments in Mel­bourne. The IBM build­ing in Mel­bourne was con­vert­ed into apart­ments. So yeah, it does­n’t mean just because peo­ple aren’t going to use the space for office work that they won’t be able to rent it out for some­thing

[01:05:14] Tony: in time.

[01:05:15] Cameron: Yeah, it’s inter­est­ing. I’ve been try­ing to get my head around it for a while, why peo­ple are so neg­a­tive on that whole space and what’s going to hap­pen with it, and also why com­pa­nies are try­ing to force peo­ple back into the office. Instead of just, like, this whole thing about, well, they net­work bet­ter and it’s bet­ter for career devel­op­ment.

[01:05:33] Cameron: Yeah, real­ly? I mean, can’t you just say, okay, we’ll sched­ule Zoom calls and Zoom meet­ings or cafe meet­ings or some­thing like that? I would have thought Com­ing out of COVID that offices would be jump­ing at the chance. Busi­ness­es would be jump­ing at the chance to have less peo­ple in at the

[01:05:49] Cameron: office. So they could, you

[01:05:50] Cameron: know,

[01:05:51] Tony: cor­rect. Let’s low­er our

[01:05:52] Cameron: low­er the over­heads.

[01:05:53] Cameron: Peo­ple want to cov­er their own costs by work­ing at home for their office. Like fan­tas­tic, you beau­ty, low­er fleet [01:06:00] costs, et cetera, et cetera.

[01:06:01] Cameron: Uh,

[01:06:09] Tony: you know, I’d say, sure, come in and I’d have secu­ri­ty meet them at the door and fire them on the spot for being lick ass­es and being absolute­ly unpro­duc­tive. And polit­i­cal for you to hang around with the CEO. Uh, you know, and that would also be a way of, um, sav­ing costs as well.

[01:06:28] Cameron: nice. Alright, well thanks for going over all of that. Real­ly, it is a real­ly inter­est­ing space, which I under­stand noth­ing about,

[01:06:35] Cameron: but I find it

[01:06:36] Tony: It is. Yeah, and it, like, because of the, these things, um, tend to be div­i­dend yield focused and not nec­es­sar­i­ly growth focused. They don’t pop up in our invest­ment talks much, but there is cer­tain­ly a mar­ket for peo­ple who are going into retire­ment to, to buy these REITs, um, and get a great yield.

[01:06:52] Tony: to live off.

[01:06:53] Cameron: Alright, well, last ques­tion for the year is from Kane. Hey [01:07:00] Cam, ques­tion for Tony today. Does he have any thoughts on why BFG is hav­ing a run? I’m up more than 30 per­cent over the last 5 weeks. Good for you, Kane. BFG, big

[01:07:13] Cameron: friend­ly

[01:07:14] Tony: Well, I

[01:07:14] Tony: Bell Finan­cial Group. Well, I’ve been on the buy list in the past. I don’t think they are at the moment because, again, they have neg­a­tive cash flow for this half as well. So they’ve fall­en off our fil­ter­ing. Um, so I haven’t paid atten­tion to them for a long while. Um, so I can’t, I can’t answer Kane’s ques­tion with any sort of defin­i­tive answer.

[01:07:35] Tony: All I can do is Tell you what my research uncov­ered, which may or may not be the case. Um, I think it looks like the share price start­ed increas­ing when, uh, the exec­u­tive chair retired, a guy called Alis­tair Provan. And I don’t think that in itself was enough to cause the share price to grow, but there was an arti­cle on the AFR.

[01:07:56] Tony: Which report­ed some rumors that, um, one of [01:08:00] the founders who passed away dur­ing the year and had a large stake in the com­pa­ny and the retire­ment of Alis­tair Provan may have been enough to kick off, um, a takeover offer for BFG, whether it would be up for sale or not. And the fact that Alis­tair Provan was quot­ed as Swat­ting away that rumor, men­tion­ing it dur­ing his retire­ment speech to staff and say­ing it def­i­nite­ly was­n’t the case.

[01:08:24] Tony: It was kind of unusu­al too, because you don’t sort of do that unless there is talk about, um, offers being made for the com­pa­ny. So all I can put it down to is per­haps there’s some takeover spec­u­la­tion for this com­pa­ny. Um, the alter­na­tive hypoth­e­sis I would have is that Bell Finan­cial Group is a basi­cal­ly a stock­broke, stock­broking.

[01:08:45] Tony: Com­pa­ny does have wealth man­age­ment and funds man­age­ment and super, um, annu­a­tion plat­forms and super man­age­ment. But giv­en that the mar­ket’s going up, you would, you would think that that would also, um, with a bit of a rock­et under the share price of [01:09:00] BFG and any oth­er stock­broking com­pa­nies as well. So that could be the case as well.

[01:09:05] Tony: But that’s all I’ve got. I can’t real­ly explain why. And it did have neg­a­tive cash flow, which could be for all sorts of rea­sons with a stock bro­ker. Uh, yeah, so I can’t say it’s, it’s gone up because of buy list rea­sons or QAV rea­sons, but yeah, it’s poten­tial­ly just a bit of hype on whether some­one’s going to Pounce on it.

[01:09:29] Tony: Uh, and it has­n’t been on the buy list in the past. So those, that does hap­pen to those kinds of stocks, or it could just be that the share mar­ket’s turn­ing around and peo­ple are start­ing to fac­tor that into their fore­cast for a stock break­ing com­pa­ny.

[01:09:43] Cameron: Try­ing to fig­ure out when I last owned it. It’s been a while.

[01:09:45] Cameron: Had a cou­ple of bites of BFG over the years, but yeah, they’re not on, not in any of my port­fo­lios right now.

[01:09:51] Cameron: Well, I, I, con­grat­u­la­tions to Kane if he’s still hold­ing it. Um, it looks like it’s doing well.

[01:09:59] Tony: Mmm. [01:10:00]

[01:10:00] Cameron: that is the Q& A for the year, Tony.

[01:10:03] Cameron: It has been a big year, been a, been a very, um, year full of tri­als and tribu­la­tions for investors in the mar­ket. It’s been a very tricky year for QAV. Uh, mem­bers too, I know a lot of peo­ple have Suf­fered and strug­gled, but you know, as I said at the begin­ning of the show, the mar­ket has been on a tear just recent­ly.

[01:10:27] Cameron: It’s near­ly back up to its all time high. So, you know, maybe it’s, you know, good. It’s going to be a good year. We’ll see. Who knows? We can’t pre­dict.

[01:10:39] Tony: Cor­rect. Yeah, it’d be nice to get a year off from all of the buy­ing and sell­ing we’ve done

[01:10:44] Tony: this year.

[01:10:45] Cameron: Well, let’s get into After Hours. Tony, what have you been into in your, uh, you know, hol­i­days down south?

[01:10:53] Tony: Yeah, hol­i­day­ing, play­ing golf. Um, Jen’s there with me now, which is love­ly. So we’ll be tak­ing a real hol­i­day from [01:11:00] tomor­row onwards. Yeah, the only thing I can report watch­ing, I can think of, is um, uh, a doc­u­men­tary on Shane McGowan, who was the lead singer from the Pogues, and I should say RIP Shane, he passed away a cou­ple of weeks ago, I think his funer­al may have been last week, and um, there was Clips on var­i­ous plat­forms of peo­ple singing at the funer­al.

[01:11:25] Tony: I think Nick Cave may have sung at the funer­al. Um, but I remem­ber going to the Pogues con­cert when they came to Mel­bourne in about 1987 or 88. It was a fan­tas­tic con­cert full of life. It was an amaz­ing con­cert. Um, and, and so yeah, this doc­u­men­tary came out, uh, very recent­ly made by Julianne Tem­ple, who, um, any­body who has my back­ground would know was the, the mak­er of the, um, Great rock and roll swin­dle back in the day.

[01:11:55] Tony: So he’s made one called Rock of Gold about Shane McGowan. And it’s, I thought [01:12:00] it was real­ly great. It’s not going to be every­one’s cup of tea because Shane is, um, a noto­ri­ous drinker and drug tak­er and, um, basi­cal­ly drunk and drugged him­self to death at a very young age. Or he’s like, he’s about my age actu­al­ly.

[01:12:14] Tony: Um, Rea­son­ably young age. Uh, but yeah, it’s great to go back and see old footage of him. Again, this whole theme of, you know, he was, the Sex Pis­tols took the stage and, you know, there was a small audi­ence there and all of them went off and formed bands soon after­wards. And he was one of them. Um, inter­est­ing guy.

[01:12:35] Tony: I mean, you know, an out and out out­cast and mis­fit and drunk and drug­gy and punk rock­er, but, um, very knowl­edge­able and very into the Irish polit­i­cal sit­u­a­tion, the Irish. Lit­er­a­ture Sit­u­a­tion was a big, big read­er of Joyce and, um, oth­er writ­ers, um, talks about Bren­dan Bean a lot, the Irish poet, um, in this [01:13:00] doc­u­men­tary and, and, you know, uses some of those poems, um, in his lyrics for the songs, um, so very knowl­edge­able about Irish lit­er­a­ture and there­fore want­i­ng to, to bring Irish music back into, um, into Vogue, which he did with the Pogues.

[01:13:14] Tony: So yeah, great, great rol­lick­ing doc­u­men­tary, um, they have footage from his 60th birth­day, which must have been fair­ly recent­ly, um, when peo­ple like Bono and Nick Cave and var­i­ous oth­er famous peo­ple got up on stage and sung some of his songs, um, and of course, you know, it’s Christ­mas time and the fairy tale of New York is always my favorite Christ­mas car­ol and comes.

[01:13:37] Tony: comes out this time of year, which I love. Um, and I saw a clip just recent­ly that the, because the line from the Fairy­tale of New York is the boys of the NYPD are singing Gal­way Bay. Um, the boys of the NYPD choir are singing Gal­way Bay. And of course, there isn’t an NYPD choir. They just made that up. But the NYPD got togeth­er this year and formed a choir and sung Gal­way Bay.

[01:13:59] Tony: [01:14:00] in recog­ni­tion of Shane’s pass­ing. So that was one of the clips I saw on YouTube recent­ly as well. But yeah, I real­ly enjoy it. The Crock of Gold comes from a, um, I think it’s a James Joyce sto­ry about the lep­rechaun who holds out the crock of gold as a, as a, um, to tempt peo­ple to To go after it and then of course it’s a mirage and dis­ap­pears and um, kind of an apt title for Shane McGowan’s life.

[01:14:23] Tony: But yep, great doc­u­men­tary if any­one’s into, into Irish music or Irish lit­er­a­ture or even just punk rock.

[01:14:31] Tony: Real­ly great.

[01:14:33] Cameron: Have you seen,

[01:14:34] Tony: Uh, no.

[01:14:37] Cameron: Oh, um, came out a few years ago now. We sort of, you know, I, I’m, I’m the Grinch. I hate Christ­mas, but, um, a cou­ple of things I like about it is watch­ing A Very Mur­ray Christ­mas. So, Sofia Cop­po­la direct­ed it, um,

[01:14:51] Tony: Ah.

[01:14:53] Cameron: five or six years ago, maybe, um, I think it’s on Net­flix. Bill Mur­ray. Uh, the basic [01:15:00] set­up is Bill Mur­ray’s sup­posed to be doing a show, um, like a stand up thing or some spe­cial per­for­mance and he gets snowed in at his hotel.

[01:15:12] Cameron: He can’t leave, he can’t go, so they try and do a live, um, event. And it’s just him, and he pulls togeth­er just who­ev­er hap­pens to be in the hotel, which is most­ly the wait staff, but it’s made up of, uh, Michael Ser­ra’s in it, um, David Johans­son from the New York Dolls is, uh, one of the staff, they do a song, Clooney’s in there, Miley Cyrus, uh, Paul Schae­fer, Jason Schwartz­man, Myer Rudolph, Chris Rock, Amy Poehler are all in it, but, um, They, yeah, they do.

[01:15:47] Cameron: He sings. Well, they all sing as the cast, but he sings Fairy­tale of New York as one of the

[01:15:51] Tony: Ah, fan­tas­tic.

[01:15:52] Cameron: it’s, great. it’s just, you know, Bill Mur­ray being him­self and, uh, just doing Christ­mas songs, a lit­tle bit of a [01:16:00] Christ­massy thing, but depressed, you know, sort of self dep­re­cat­ing over every­thing.

[01:16:06] Cameron: It’s real­ly, real­ly good fun. Check it out. You’ll love it. Um, I saw David Simon, the writer of The Wire and many oth­er shows, I saw him, uh, a Twit­ter thread he did, um, when Shane died, because he used a lot of Pogue songs in The Wire. Usu­al­ly for their Irish cop

[01:16:25] Cameron: funer­als, they’d always have a Pogue song at the pub when

[01:16:29] Cameron: one of the Irish cops died. And he talked about when he met Shane, uh, I think for the first and only time. He was sup­pos­ed­ly work­ing on a, he was work­ing on a book. David Simon was work­ing on a book about Shane’s lyrics. He’s been work­ing on it for years and has­n’t fin­ished it. But he talked about meet­ing Shane and sort of how ter­ri­fied he was.

[01:16:53] Cameron: Meet­ing Shane and what a, what a, what a, um, intim­i­dat­ing duty [01:17:00] was to meet and, uh, yeah, it was real­ly good. It was a good Twit­ter three. I won’t go into it, but it was good fun. That sounds like fun. I got­ta check track that down and check it out. I was a, I was a big fan of Uh, well, we’re near­ly fin­ished watch­ing DDLJ, Tony, the great­est Indi­an Bol­ly­wood film, prob­a­bly of all time. Dil­wale Dul­ha­nia Le Jayenge, I think is how it’s pro­nounced, prob­a­bly bad, I apol­o­gize to any Indi­an lis­ten­ers.

[01:17:33] Tony: I haven’t,

[01:17:33] Tony: no.

[01:17:35] Cameron: me tell you this, Tony, it was made in 1995. It is screened in a the­ater in Mum­bai every day since then. And since 1995, there are peo­ple that have been to see it hun­dreds and hun­dreds of times. It is, it has no com­par­i­son, I think. It’s, uh, I think Index to Infla­tion is the [01:18:00] sec­ond largest gross­ing Indi­an film of all time.

[01:18:04] Cameron: Insane­ly prof­itable, was direct­ed by a 24 year old, writ­ten and direct­ed, uh, was his first film, Adi Chopra, who’s now sort of prob­a­bly the most famous. Um, mod­ern Indi­an Hin­di film direc­tor. His father, Yash Chopra, was a very famous direc­tor, and Adi sort of invent­ed mod­ern Bol­ly­wood films with this thing.

[01:18:27] Cameron: It’s sort of the tem­plate for Bol­ly­wood films for the last, you know, 28 odd years. Stars Shah Rukh Khan and Kajol, who’ve made about 10 films togeth­er, I think. It’s the film that made them both mega stars in India. It goes for three hours. It’s bat­shit crazy. Com­plete­ly bonkers. Um. It’s this love sto­ry, com­e­dy, but it’s like total­ly insane, uh, and just so enjoy­able.

[01:18:59] Cameron: [01:19:00] Chris­sy and I have been try­ing to bite it off half an hour at a time over the last week when we have half an hour at night to sit down while we’re hav­ing some yogurt or some­thing after we get Fox to sleep. But yeah, for peo­ple that have nev­er seen, or peo­ple who have seen it, they’ll know what I mean.

[01:19:14] Cameron: It’s, it’s icon­ic. In India and um, final­ly got around to bit­ing it off, found it on the stream­ing. It’s on Prime Video I think. Lot of fun

[01:19:25] Tony: Yeah, right, I’ll check it

[01:19:27] Tony: out.

[01:19:28] Cameron: it’s absolute­ly, wow, I don’t know if you like it, it’s absolute­ly bonkers. Like, I can’t think of a, I can’t think of an ana­logue, it’s got, you know, singing and danc­ing and over the top sort of ridicu­lous com­e­dy and sort of a Romeo and Juli­et sto­ry but with a Twist and, um, yeah, but it’s like in India, it’s insane­ly, uh, famous, like insane­ly famous, mas­sive, just [01:20:00] enor­mous, I was try­ing to think last night, it’s like if you took the Rocky Hor­ror Pic­ture

[01:20:04] Tony: Hmm.

[01:20:05] Cameron: that lev­el of fame, but it also won every Acad­e­my Award in the year that it came out, like every award avail­able, it won, it cleaned up, And is still just beloved by Indi­ans of all ages today as being one of the defin­ing films of the last 30 years, defined a gen­er­a­tion.

[01:20:27] Cameron: It’s like you com­bine Star Wars with Rocky Hor­ror Pic­ture Show and maybe, I don’t know, some­thing else. What’s one of the most defin­ing films in the last 30 years in Hol­ly­wood that changed every­thing? Matrix, maybe? I don’t

[01:20:42] Tony: Pulp Fic­tion. Yep. Are

[01:20:44] Cameron: All Reser­voir Dogs or Pulp Fic­tion? Yeah, if you threw them all togeth­er. That’d be this film. Zany, it’s got also a zany com­e­dy. Any­way, been enjoy­ing that. And [01:21:00] I think that’s it for me, Tony, this week.

[01:21:04] Tony: head­ing away

[01:21:05] Tony: with the fam­i­ly?

[01:21:07] Cameron: No, my mum

[01:21:07] Cameron: had her eye surgery, uh, last week and she can’t dri­ve for a month. So, uh, we’re stick­ing around to look after her. And, uh, yeah, so that’s it. I’ll be here. Doing my thing, writ­ing code, push­ing out shows.

[01:21:31] Tony: Well, say hi to Jay David for

[01:21:33] Tony: me. It’s a

[01:21:35] Cameron: I already

[01:21:35] Tony: seen him. Yep. Thank

[01:21:37] Tony: you.

[01:21:37] Cameron: I already did last week. And you know, he miss­es you as I’ve already told you.

[01:21:41] Tony: Yeah. Yep. And well, enjoy watch­ing The God­fa­ther on Christ­mas Day, which I think is

[01:21:47] Tony: your Christ­mas rit­u­al.

[01:21:49] Cameron: The God­fa­ther and The Room. They’re my Christ­mas

[01:21:52] Tony: Right.

[01:21:52] Cameron: Yeah. And I think DDLJ, I’ve

[01:21:55] Cameron: just added to that. It’s going to be part of my Christ­mas tra­di­tion now. And you have a, you [01:22:00] have a great Christ­mas. Uh, Hap­py New Year. You’re going to be there for a Cape Schanck for all of that.

[01:22:04] Tony: No, we’re going to head back for New Year’s to

[01:22:06] Tony: Syd­ney. Watch the

[01:22:08] Tony: fire­works. Yeah.

[01:22:10] Cameron: And then come back

[01:22:10] Cameron: down.

[01:22:12] Tony: Uh, not imme­di­ate­ly, but at some stage

[01:22:14] Tony: prob­a­bly. Yeah.

[01:22:16] Cameron: All right. Well, you and I might do a show, um, some­time in ear­ly Jan­u­ary next then, eh?

[01:22:21] Tony: Yeah. Oh, sure. Uh, week after

[01:22:23] Tony: New Year’s.

[01:22:25] Tony: Yeah.

[01:22:25] Cameron: Okay. All right. Thank you for, thank you for anoth­er good year, Tony. Let’s hope that the next one is less, uh, trou­ble­some for investors.

[01:22:36] Tony: Yeah. Well, thank you too, Cam. All the hard work you put in. It’s great.

[01:22:39] Tony: All right.

[01:22:41] Cameron: Thanks, mate. Take care. Bye.

[01:22:43] Tony: All right, mate. Have a good Christ­mas. [01:23:00] [01:24:00]