QAV #704 — Investor Fatigue

QAV 704 Club

[00:00:00] Cameron: Oh, wel­come to QAV, TK! We’re record­ing this on Tues­day, the 23rd of Jan­u­ary.

[00:00:19] Cameron: It’s episode 704. how was the barn boogling, Tony?

[00:00:24] Tony: Yeah, real­ly good. Great fun. Uh, first cou­ple of days were very windy, which made golf dif­fi­cult, but You know, that’s part of golf. And then, um, third day was love­ly. But yeah, the whole thing was just great. Good food, good golf, good place. We, um, we flew into Launce­s­ton and it’s about an hour and a quar­ter, hour and a half.

[00:00:45] Tony: North east of there, it’s on the coast, beau­ti­ful, beau­ti­ful scenery. Lit­tle town called Brid­port, a fish­ing vil­lage near­by, and we went in there one night for, for din­ner to a place called The Bunker, which I think is the um, the RSL club in town, and it was just real­ly good food. I don’t drink, um, some­times I feel like I would­n’t be, would­n’t mind

[00:01:07] Tony: hav­ing one, and they’re the kind of nights that, um, I was­n’t tempt­ed, but you know, like it was good wine and good food and good set­ting.

[00:01:18] Tony: So it was love­ly. But then, you know, the next day you get up and play golf and there’s a lot of sore heads and I’m just glad I did­n’t drink. So that was

[00:01:24] Cameron: How long have you been off the booze now?

[00:01:27] Tony: Uh, 15 months at the end of this

[00:01:30] Cameron: Wow, well over a year. That’s impres­sive.

[00:01:33] Tony: Oh Yeah.

[00:01:34] Cameron: Rud­dy with you and Tazzy?

[00:01:36] Tony: he was­n’t, no, it’s, this is a dif­fer­ent group of

[00:01:38] Tony: friends, basi­cal­ly rac­ing peo­ple from the Hunter

[00:01:42] Cameron: Tay­lor sent me a pho­to of Rud­dy’s face this morn­ing.

[00:01:47] Tony: know Tay­lor was in Wag­ga Wag­ga or Rud­dy was in L. A.

[00:01:51] Cameron: He had a Face­Time where he got a pho­to from. Appar­ent­ly, Rud­dy had an acci­dent over the week­end.

[00:01:58] Tony: real­ly? I had­n’t heard.

[00:01:59] Cameron: He was muck­ing around with his nephews. I think he was on a BMX

[00:02:05] Cameron: and he tried to go over a jump and he stacked it and face plant­ed. And he’s said, Tay­lor pho­to, his face is all cov­ered in blood, you know, grazes on his upper lip and

[00:02:15] Cameron: every­thing. Tay­lor said, my dad did the exact same thing off my, on a scoot­er of mine, like 10, 11, 12 years ago.

[00:02:25] Tony: Oh, no. I’ll have to give him a call. Well, that’s Tay­lor’s fault because his nephews, um, I don’t know if they met Tay­lor or they heard of Tay­lor, but they’ve been bug­ging Rud­dy for a long time to,

[00:02:39] Tony: like, make Tik­Tok videos. And, um, and I don’t know how old his nephews are, I’m going to say they’re like 12, but, um, Rud­dy’s been say­ing no, no, you’ve got to be 18

[00:02:50] Tony: to go on Tik­Tok, so he’s been putting them off and putting them off.

[00:02:52] Tony: And they keep see­ing Hunter’s stuff on Tik­Tok and they’re going, he does­n’t look 18, what’s going

[00:02:57] Tony: on?

[00:02:57] Cameron: does­n’t look 18 real­ly.

[00:02:59] Tony: Well, maybe a cou­ple of years ago when he start­ed.

[00:03:02] Cameron: He’s 23 now. So he was def­i­nite­ly 18 when he start­ed. Um, right. Well, we don’t have a lot to talk about today, Tony, no ques­tions today. And that sort of. Brings me to the first arti­cle for the day, which is from the ASX, Retail Traders are Retreat­ing from the ASX. This is the AFR, not the ASX, the AFR, talk­ing about the ASX.

[00:03:26] Cameron: This is Jonathan Shapiro, uh, came out yes­ter­day. The army of day traders that stormed the Aus­tralian share mar­ket dur­ing the pan­dem­ic. Is show­ing signs of fatigue, but could mount a come­back in 2024 if the Reserve Bank starts cut­ting inter­est rates. Mor­gan Stan­ley’s equi­ty strate­gists, who have close­ly tracked the activ­i­ty of retail trad­ing, said Decem­ber’s data revealed a fur­ther decline in the share of mar­ket trad­ing vol­umes account­ed for retail traders.

[00:03:56] Cameron: Also known as day traders. By their num­bers, retail traders account­ed for less than 5 per­cent of total trad­ing vol­umes down from the 8. 3 per­cent peak reached in Feb­ru­ary, 2021. That share is also down from 6. 2 per­cent last Jan­u­ary. So that’s a pret­ty big drop from 8. 3 per­cent down to 5 per­cent over the course of the last, uh, what’s that, three years, I guess.

[00:04:20] Cameron: Um. And I was talk­ing to Steven Mabb, Chair­man of the Aus­tralian Share­hold­ers Asso­ci­a­tion and QAV club mem­ber yes­ter­day, and uh, I men­tioned that we’d seen a big drop off in QAV mem­ber­ship over the last year or two, year in par­tic­u­lar as well. And he said they’ve seen a big drop off in ASA mem­ber­ship as well over the course of the last year.

[00:04:45] Cameron: But he said, you know, it tends to grow in bull­ish years. And then declines in volatile or down years.

[00:04:54] Cameron: The peo­ple who stay dis­ci­plined,

[00:04:57] Cameron: uh, suc­ceed when those peo­ple come in, and they did, they, like, when they came in, they brought a ton of mon­ey into the mar­ket,

[00:05:05] Cameron: and, as we know, a lot of it was­n’t invest­ed wise­ly, it went into shares like Appen, which we’ll talk about in a minute,

[00:05:14] Tony: ha.

[00:05:16] Cameron: And, uh, you know, they don’t have a dis­ci­pline of trad­ing through the upswings and the down­swings, so they come in with fresh mon­ey, fresh blood, and we prof­it from that because we’re in the mar­ket already when they come in with all that mon­ey because we’re ful­ly invest­ed and we go through the upswing.

[00:05:35] Cameron: And then they all get scared when the mar­ket has a down­turn, par­tic­u­lar­ly, we’ve had a par­tic­u­lar­ly bad down­turn. And I was say­ing to him, like, you know, and the thing that gets me is we bang on on this show all the time about stay­ing ful­ly invest­ed, stay­ing dis­ci­plined, up mar­ket, down mar­ket, and our lis­ten­ers know that.

[00:05:56] Cameron: It’s not like they don’t know because we go, we, we reit­er­ate that point over and over. And I know that, you know, I get emails from some mem­bers of say­ing, you know, I got one from some­body this morn­ing say­ing that he’s sort of basi­cal­ly cashed out a lot of his invest­ment port­fo­lio cause he’s buy­ing a prop­er­ty and peo­ple lose jobs or they lose mar­riages or they move or, you know, there are lots of legit­i­mate rea­sons why.

[00:06:21] Cameron: Peo­ple have to, uh, you know, sell off their share port­fo­lio and they’re no longer active investors because life takes them in dif­fer­ent direc­tions. But I’m sure there’s a per­cent­age of peo­ple too that just suf­fer from fatigue. Capit­u­la­tion, as you call it.

[00:06:39] Tony: Yeah, well, I think the oth­er, the oth­er dimen­sion. Yeah, every­thing you said there I agree with and I think it’s true. There’s anoth­er dimen­sion to all this and that is that dur­ing COVID times, the fed­er­al gov­ern­ment allowed peo­ple to draw down from their super, um, as a way of, you know, stay­ing afloat if they lost their job or what­ev­er oth­er hard­ships they had.

[00:07:02] Tony: And we know, anec­do­tal­ly, that a lot of those peo­ple just took that mon­ey and because there was­n’t as much sport going on and they could­n’t bet on what they nor­mal­ly bet on, they took, they draw down from super and put it into Bit­coin, put it into the share mar­ket, sat on their couch and trad­ed shares or coins or what­ev­er they did.

[00:07:23] Tony: And you know, the oth­er poten­tial rea­son why they’ve left the mar­ket is because they lost all their mon­ey. Well, they lost a sig­nif­i­cant part of it. So I think that’s part of it too. The inter­est­ing stat though, out of all of that was I think you said that the share of now, the AFR calls them day traders or their source calls them day traders.

[00:07:43] Tony: I think we just got to clar­i­fy that ter­mi­nol­o­gy. They’re basi­cal­ly say­ing they’re retail investors. Day trad­ing as a term means some­thing else, which is basi­cal­ly peo­ple whose busi­ness it is to sit at a screen all day and open their account in the morn­ing, put it in the mar­ket and close it down at night, um, and just trade per day rather than, um, over a longer time­frame like we do.

[00:08:06] Tony: Um, but retail investors, the small end of the mar­ket, um, it’s inter­est­ing, I think you said it was down by Uh, about 3%, so down from 8 to 5, but else­where in the arti­cle, it also says the share mar­ket, I think, or the mon­ey invest­ed, or new mon­ey com­ing in, I for­get now what the term was, is also down, so if retail investors are down as a per­cent­age plus the over­all num­ber that their per­cent­age of job is going down and it’s actu­al­ly even worse than what those num­bers look. But yeah, I mean, if fatigue, capit­u­la­tion, you know, I had this con­ver­sa­tion with a guy in Barn­ber­gle. He was ask­ing me how the pod­cast is going. I said, it’s all good. Our dum­my port­fo­lio is track­ing along nice­ly at dou­ble mar­ket. It’s been going for four years. And I said, how­ev­er, we have had low­er sub­scriber num­bers in the last 12 months.

[00:08:59] Tony: Um, And, you know, ask­ing around in the indus­try, that’s pret­ty stan­dard as the mar­ket comes off. Uh, that peo­ple, you know, stop, stop, either, either can­cel their sub­scrip­tions or stop invest­ing. And, you know, I said it’s just a clas­sic. Retail investor who buys high and sells low and just chas­es the next, the next idea and it’s, or the next sto­ry.

[00:09:22] Tony: And as we’ve said, we, you don’t want to lis­ten to sto­ries and we’ll, and like, you know, Lion­stown, the com­pa­ny that’s a lithi­um min­er and Core Lithi­um, which has now shut its mine, um, You know, they’re doing ter­ri­ble. But last year, all we could hear about was lithi­um stores and how good that was going to be and how Elon Musk had knocked on all these doors and want­ed to sign up deals to take life­times amounts of, of lithi­um and nick­el.

[00:09:47] Tony: And in the nick­el mar­kets almost shut as well now because, well, not shut, but the Aus­tralian mines are shut­ting down because Indone­sia is flood­ing the mar­ket with. Um, with cheap­er nick­el and nick­el prices way down. Some­thing else which is you need­ed for the elec­tri­fi­ca­tion thing that’s going on. So yeah, that’s, I mean, that’s a, that’s a point we make in on our cof­fee mugs.

[00:10:09] Tony: If you want to buy a sto­ry, go to a book­store because there’s a lot more that goes on. than just the sto­ry. And yes, um, elec­tric vehi­cles will be a thing. And yes, poten­tial­ly there will be no more inter­nal com­bus­tion engine vehi­cles one day. Um, but there are even now sto­ries that I’m read­ing say­ing that lithi­um won’t be used in bat­ter­ies for, uh, for elec­tric vehi­cles going for­ward.

[00:10:33] Tony: That there’s a dif­fer­ent way of stor­ing ener­gy, which is far more 20 min­utes, um, using some oth­er. Um, min­er­al besides lithi­um. So, you know, that’s just a fac­tor of min­ing and of busi­ness in the min­ing busi­ness is that they go through booms and, and bus cycles and, you know, and it’s the old, uh, taxi­cab tip­ster or Uber dri­ver tip­ster.

[00:10:55] Tony: When you get a tip from your, from your taxi­cab dri­ver, you pret­ty much know it’s very, very late in

[00:11:01] Tony: the, in the cycle because just think of how many hands or how many years that

[00:11:05] Tony: tip has passed through before it gets to you sit­ting in the back of a, an Uber or a cab.

[00:11:12] Cameron: The Lion­stown Lion­Town arti­cle in Chan­ti­cleer says, uh, Gina Rine­hart’s lithi­um love affair faces Lion­town test. Lion­town is the poster child for lithi­um’s

[00:11:24] Cameron: price plunge and the news is get­ting worse.

[00:11:28] Cameron: So it says, Lyon­town will need to dras­ti­cal­ly scale back its ambi­tions at Kath­leen Val­ley. The 3 mil­lion tonne per year mine set to start pro­duc­tion this year will go ahead, but the devel­op­ment work for the mine’s even­tu­al 4 mil­lion tonne per year under­ground expan­sion will be put on ice.

[00:11:47] Cameron: And, uh, talks about Gina Rein­hardt’s involve­ment in it, but it says, I like this, on Octo­ber 15th. So that’s, what, three months ago? The com­pa­ny was sit­ting on a 6. 6 bil­lion takeover offer from US lithi­um giant Albe­mar­le. But Lion­town soon­er aban­doned its bid the fol­low­ing day, and just 14 weeks down the track, Lion­town is worth just 2.

[00:12:13] Cameron: 2 bil­lion. The stock crashed anoth­er 21 per­cent on Mon­day to 94 cents. With hind­sight, it would appear Albe­mar­le’s deci­sion to walk had much to do with the loom­ing lithi­um price crash. But at the time, it was blamed large­ly on the inter­ven­tion of Rein­hardt, whose invest­ment vehi­cle Han­cock Prospect­ing spent 1.

[00:12:32] Cameron: 3 bil­lion, or 3 a share, to build what was effec­tive­ly a block­ing stake in Lion­town, one of sev­er­al stakes in Lithi­um Crit­i­cal Min­er­als Junior’s it took stakes in last year. So, uh, that’s a big drop.

[00:12:48] Tony: It’s a huge drop, and, um, it’s inter­est­ing, the whole Gina Rein­hart dimen­sion I think is inter­est­ing as well, because she stepped up because she thought the com­pa­ny was going to be tak­en over and tak­en over­seas, and she want­ed to block that. But she’s tak­ing the sort of, but she’s also tak­ing the sort of clas­sic approach to this which a lot of retail investors don’t do.

[00:13:10] Tony: She’s not putting all her eggs in one bas­ket, she is, um, she knows that the, you know, the min­ing indus­try can go boom and bust, so she’s, A, she’s diver­si­fy­ing away from iron ore, and B, she’s putting her eggs in a lot of dif­fer­ent bas­kets, not just Line­town, so she can absorb. When one does­n’t go as well. I sus­pect that it might play out, um, depends on what her appetite is, that she’ll loan the mon­ey that the com­pa­ny needs to open, I think there’s a, um, a new devel­op­ment, a new min­ing ten­e­ment they’re try­ing to devel­op and that was one of the rea­sons for, um, get­ting Abi­mar Um, and the col­lapse in the share price yes­ter­day, I believe, was because the banks refused to lend it the mon­ey to do the nec­es­sary devel­op­ment work because they did­n’t see a future.

[00:13:58] Tony: at a lithi­um price, um, in the, in the medi­um term recov­er­ing. So, um, they’re left high and dry. Now whether Gina steps up and puts that mon­ey in, I don’t know, but that’s a pos­si­bil­i­ty, so she could help in that way. But my point is that she did­n’t just bet on one lithi­um com­pa­ny. She’s not just bet­ting on lithi­um com­pa­nies.

[00:14:16] Tony: She’s got a whole min­ing port­fo­lio of invest­ments. Um, and she knows to do that to ride out the storm, but a lot of retail investors will have one or two lithi­um com­pa­nies in their, in their port­fo­lio, and a whole heap of oth­er com­pa­nies out­side of that sec­tor in their port­fo­lio, which is fine, but, um, it’s diver­si­fi­ca­tion as well, but if you’re going to play in a spec­u­la­tive space like that, it can work out real­ly well.

[00:14:41] Tony: Uh, cause the, you know, in the ear­ly days you were buy­ing lithi­um com­pa­nies before they were hav­ing any sort of income and when they start­ed to pro­duce and sell and the lithi­um price went up, you did real­ly, real­ly well. And there’s plen­ty, been plen­ty of sto­ries in the Fin Review this last 12 months about peo­ple who’ve made tens of mil­lions of dol­lars, retail investors who put, you know, 80, 000 into a lithi­um mine as a stock invest­ment.

[00:15:06] Tony: And it was spec­u­la­tive. And now they’re, they’re worth 50 or 60 mil­lion dol­lars. So that can hap­pen. But you, you, unless you have some kind of detailed knowl­edge and you’re, and you’re a retail investor, you’re more,

[00:15:19] Tony: the more pru­dent thing to

[00:15:20] Tony: do is to just to make it a very small part of your port­fo­lio. Um, but the even bet­ter thing to do is to focus on com­pa­nies that make

[00:15:27] Tony: mon­ey and have exist­ing proven busi­ness mod­els and have qual­i­ty busi­ness mod­els, just as well.

[00:15:33] Tony: Mm

[00:15:35] Cameron: Yeah, I’m going back through our show notes over the last year or so about lithi­um. We’ve talked about lithi­um a lot. I think we flagged that it became a sell back in July,

[00:15:47] Cameron: which meant I think I got out­ta PLS

[00:15:50] Cameron: because of that.

[00:15:51] Tony: hmm.

[00:15:52] Cameron: But I was look­ing back ear­li­er, about a year ago, 18th of Jan­u­ary, we had a sto­ry.

[00:15:58] Cameron: Um, some­body had sent us a screen­shot from Livewire. They were talk­ing about the most tipped small caps for

[00:16:08] Cameron: 2023. One of them was Line Town Resources. Um, it was trad­ing at, let me see, what was it trad­ing at back then, LTR, it was trad­ing at 1. 54 back then, then it went up to, I think it peaked at about 3. 15 in June, uh, it’s cur­rent­ly at 91 cents, so, it was, it did have a good year until Sep­tem­ber, and then the price caught up with it. Coal Lithi­um was anoth­er one. They were pre­dict­ing, they were say­ing it was most tipped, CXO, CXO a year ago was trad­ing at 1.

[00:16:54] Cameron: 11, it’s now trad­ing at 0. 195, there

[00:17:01] Tony: Mm hmm.

[00:17:02] Cameron: was a few oth­ers on

[00:17:03] Tony: And, yeah, this reminds me of the Game­Stock saga when you, when you read out all the, uh, Wall Street invest­ment funds who’d made a lot of mon­ey out of short­ing Game­Stock even though they did­n’t, um, they may have lost some on the way up. Um, this is clas­sic. Wall Street behav­ior, right? It’s peo­ple get­ting into things late and then los­ing all their mon­ey on the way out.

[00:17:24] Tony: Um, and I imag­ine there were plen­ty of invest­ment firms who were short, I don’t remem­ber doing the pulled pork on call with you, man, that had a very high amount of, um, short, uh, short sell­ers in there on their reg­is­ters. So, yeah, I mean, there are, yeah, I’m These things can hurt. If you’re buy­ing a sto­ry, um, be very care­ful of buy­ing at the peak.

[00:17:47] Tony: Um, just because some­one made a lot of mon­ey on the way up and you did­n’t.

[00:17:51] Tony: I know we’re bang­ing on about this, Cam, but it’s so, it’s, it’s almost teach­ing the QAV sto­ry. by invert­ing it.

[00:17:59] Cameron: mm,

[00:18:00] Tony: we, I mean, I owned Pil­bara Min­er­als at some stage last year, and as you said, the com­mod­i­ty was a three point sell, and I sold out of it.

[00:18:09] Tony: I can’t remem­ber if I made mon­ey, or if I did, it would­n’t have been that much, I don’t think. I think it paid a good div­i­dend from mem­o­ry at the time, because it was a lithi­um mine that was pro­duc­ing, and that’s why I liked it. Um, but I’m intact. The mon­ey I used to buy Pil­bara is still there, invest­ed in some­thing else.

[00:18:29] Tony: I haven’t tried to write it all the way down. Um, so all the things that we talk about in QAV, about not fol­low­ing sto­ries, about not fol­low­ing booms, about not lis­ten­ing to the fear of miss­ing out, about find­ing com­pa­nies that are at least mak­ing mon­ey, so you can look at the num­bers and see how prof­itable they are, and you can decide whether they’re worth invest­ing in or

[00:18:48] Tony: not, has all played out in this lithi­um boom.

[00:18:51] Tony: So it’s, it’s, it’s unfor­tu­nate­ly, it’s the same

[00:18:53] Tony: sto­ry that keeps play­ing out time and time again. And it leads to the sto­ry you led off with,

[00:18:59] Tony: which was that retail investors get burnt and they leave the

[00:19:02] Tony: mar­ket.

[00:19:04] Cameron: yeah, I’m just look­ing at, uh, PLS for the light port­fo­lios. Yeah, so, we owned it in, uh, a cou­ple of light port­fo­lios. I had it in my super port­fo­lio as well, we had it in the dum­my port­fo­lio, bought them all around June or July, around about 4. 80 in June, up to 5, 5. 05 I think, the dum­my port­fo­lio, but then we got out when it became a sell.

[00:19:37] Cameron: When, uh, lithi­um became a sell, it’s now trad­ing at 3. 30. So it’s fall­en a long way from where we bought in. I’d hate to think, you know, where we would be if we kept hold­ing it while lithi­um went down, but yeah, the com­mod­i­ty sell, it was a rule one sell for the dum­my port­fo­lio, my super, but for the lights, port­fo­lios.

[00:19:59] Cameron: It was, um, we got out of the com­mod­i­ty sell, only lost 2 3 per­cent on it, because we got out so quick­ly when lithi­um became a sell.

[00:20:09] Tony: Yeah, right.

[00:20:10] Cameron: ver­sus what we would have lost if we did­n’t have the com­mod­i­ty sell giv­ing us a tip off.

[00:20:16] Tony: I was going to say, of course, lithi­um has­n’t been the only boom in the last 12 months. And the Fin Review had anoth­er sto­ry today about it as well, um, about anoth­er com­pa­ny called Appen. Appen’s been around for a long time. I was just try­ing to look up, uh, what it did when it start­ed.

[00:20:36] Tony: My mem­o­ry of it is it was mak­ing cir­cuit boards, um, for com­pa­nies. So it was the, it was seen as being the picks and shov­els, um, for any sort of tech, uh, you know, boom that was going on. And it’s had a real boom and bust. Life­cy­cle. And as these tech com­pa­nies do they piv­ot and the thing that Appen piv­ot­ed into most recent­ly was the pro­vi­sion of huge data sets to peo­ple like Google to hone their AI large lan­guage mod­els and so anoth­er AI, I know the AI boom is dear to your heart, peo­ple piled into Appen because of the piv­ot into, uh, into pro­vid­ing large Data sets to Google, um, about 12 to 18 months ago.

[00:21:24] Tony: And of course, um, just recent­ly, in the last day or so, Google’s walked away and said, No, we’ve got enough data now, thank you very much. And the app and share price has tanked as well. So, again, anoth­er sto­ry. I mean, I think, I think this is inter­est­ing, Cam. It’s, it’s, peo­ple need to fun­da­men­tal­ly think about How they view the stock mar­ket and what its role is.

[00:21:45] Tony: It’ll always have a role to play in terms of spec­u­la­tion, uh, because, because, uh, a lot of com­pa­nies who are on the, on the ASX or any stock mar­ket do so because they can’t take a busi­ness plan to the bank and get a loan for it, um, because it’s, um, it’s large­ly unproven or it’s, or it’s, um, It’s on a new sort of fron­tier, like AI or what­ev­er, um, and so they rely on peo­ple to back them.

[00:22:10] Tony: And, and, and pri­vate equi­ty does that, and ven­ture cap­i­tal does that, but again, they’re, they have a lot of expe­ri­ence at doing it, and they, they have very large port­fo­lios of these invest­ments, so their risk is reduced across any one com­pa­ny going broke, and it’s also reduced on the upside if they don’t, if they, if they only have one or two com­pa­nies that do real­ly well, then the port­fo­lio gets the kind of aver­age return.

[00:22:33] Tony: Like across the whole, the whole band­width. But, um, Unless you’ve got insid­er infor­ma­tion or some kind of deep indus­try knowl­edge, it’s real­ly hard as a retail investor to make mon­ey that way, to be spec­u­la­tive. Unless you’re a min­ing expert and under­stand the mar­ket and under­stand, you know, the life cycles of mines and all that kind of stuff, it’s hard to get in on at the right time.

[00:22:56] Tony: I mean, you know, I remem­ber Geoff Wil­son from Wil­son Asset Man­age­ment say­ing, 20 or 30 years ago, the best time to buy a min­ing stock is when it’s on its high­est PE. You know, that’s when it’s cheap­est. And that’s kind of iron­ic because, um, you know, it’s that way because it’s not mak­ing any mon­ey. So it’s the time when it’s least investable, but he often finds that’s the time to buy in because it’s the most spec­u­la­tive. The same goes for things like AI booms as well. I mean, yes, peo­ple have made mon­ey out of NVIDIA and invest­ing in that, and the Mag 7 are doing well in the States. Um, but I don’t know how long that will go for as well, because it’s being, it’s being dri­ven by the, by the FOMO, by fear of miss­ing out now. Um, so it’ll prob­a­bly all, all these things are priced to per­fec­tion.

[00:23:39] Tony: And, um, that’s not a great time to buy. So, I think in terms of what is this teach­ing us, it’s teach­ing us how we view the mar­ket and what we are. Are we spec­u­la­tive investors? Are we sort of try­ing to be qua­si ven­ture cap­i­tal­ists and actu­al­ly do a bet­ter job than the pro ven­ture cap­i­tal­ists? Or are we say­ing, no, no, there are a lot of, we’re investors and there are a lot of

[00:24:04] Tony: It’s qual­i­ty, sol­id mon­ey mak­ing

[00:24:07] Tony: busi­ness­es out there, and all we have to do is find them and then decide if it’s the right price or

[00:24:11] Tony: not that we’re pre­pared to pay. And I think that’s the eas­i­est thing to do

[00:24:16] Tony: in terms of, and the safest

[00:24:17] Tony: thing to do in terms of invest­ing in the share

[00:24:19] Cameron: Hmm.

[00:24:20] Tony: Mm

[00:24:21] Cameron: Yeah, look, I do think AI is going to absolute­ly rev­o­lu­tion­ize life as we know it over the course of the next decade. But, who’s gonna win, if any­one is gonna win, that race? I don’t think any­one can know. I mean, I think the Mag 7 are a rel­a­tive­ly safe bet. NVIDIA maybe not, because, you know, there are Plen­ty of oppor­tu­ni­ties for peo­ple to come along and build new chipsets to run this thing, run AI farms on, and every­one is get­ting into that now.

[00:25:01] Cameron: Microsoft are talk­ing about it. Meta are talk­ing about it. Ope­nAI are talk­ing about build­ing their own. Chi­na’s work­ing on a bunch. And NVIDIA kind of Has a lit­tle bit of a monop­oly on the GPU space for run­ning AI farms at the moment, but that won’t be the case for much longer, I don’t think. The oth­er guys, the oth­er big tech com­pa­nies are safe to an extent that it costs a lot of mon­ey right now to build.

[00:25:32] Cameron: a large lan­guage mod­el that can per­form at the lev­el of Chat­G­PT 4. You’re talk­ing hun­dreds of mil­lions, up to bil­lions of dol­lars to buy the GPUs and then to run them. Sam Alt­man, the CEO of Ope­nAI, has been bang­ing on a lot about this recent­ly. Like, we need way more pow­er gen­er­a­tion on the plan­et to run these things.

[00:25:58] Tony: Yeah,

[00:25:58] Cameron: But

[00:25:59] Tony: Ha ha.

[00:26:00] Cameron: The flip side to that argu­ment is, what he and oth­ers are also say­ing, is, we’re very ear­ly on in the AI rev­o­lu­tion right now, we still real­ly don’t under­stand how it works. Even Ilya Sutskev­er, the guy who, until the failed coup, 6 weeks ago, was the Chief, um, research offi­cer at Ope­nAI and, uh, was the, one of the mas­ter­minds behind Chat­G­PT.

[00:26:29] Cameron: You know, even I, I watched inter­views with him late last year. It was like, the thing is we don’t know how it works. We, you know, we had a sense a cou­ple of years ago that if you threw more. com­pute at this thing and scaled it up. It could prob­a­bly do some amaz­ing things. So they just start­ed throw­ing thou­sands and thou­sands of GPUs at it.

[00:26:52] Cameron: And all of a sud­den it devel­oped some form of emer­gent intel­li­gence. And like, we don’t know why. We don’t know why it is doing that, but it is. But here’s the thing is that every­one that I pay atten­tion to this space, which is those guys and Kurzweil and Wol­fram and, uh, you know, Musk and all of these guys, Gates, that are think­ing deeply about it.

[00:27:16] Cameron: Is that we will fig­ure it out at some point. And when we fig­ure out how it’s doing, what it’s doing, we will prob­a­bly real­ize that the mod­els don’t need to be as big as they are. You know, we’ve, we’ve just like thrown a whole bunch of shit at a wall and even­tu­al­ly we’ll work out, Oh, it’s just this bit here where the mag­ic hap­pens.

[00:27:39] Cameron: We can get rid of all of that. And when that hap­pens, you won’t need. 50, 000 GPUs to run a large lan­guage mod­el. You’ll be able to do it on much less com­pute, which makes it more acces­si­ble to more busi­ness­es and more com­pa­nies. And you don’t nec­es­sar­i­ly need to have the where­with­al to throw, you know, 10 bil­lion at it to, uh, scale it up.

[00:28:01] Cameron: So, any­way, I guess my point is just that it’s very ear­ly days and we real­ly don’t know how it’s going to play out over the next few years and, you know, every­one thinks Microsoft­’s got this mas­sive moat now because of its stake in Ope­nAI and it does­n’t actu­al­ly con­trol Ope­nAI as a lot of peo­ple seem to think, it just has, uh, a deal where it gets like 51 per­cent of the prof­its that it gen­er­ates in the short term, but, um, You know, that does­n’t nec­es­sar­i­ly mean any­thing.

[00:28:31] Cameron: Ope­nAI could, I keep say­ing, could be the Netscape of the brows­er wars, you know? Netscape for a few years there back in the mid 90s looked like they were going to rule the world and very quick­ly they tum­bled and fell and dis­ap­peared and became a divi­sion of Ora­cle, I think, at some point. You know, after Microsoft crushed them.

[00:28:53] Cameron: I was part of that.

[00:28:54] Tony: Yeah.

[00:28:54] Tony: and that’s, so let me ask you the ques­tion. You have a lot more

[00:28:57] Tony: knowl­edge on the AI space than I have. Um, where would, if you had, first of all, do you feel com­pelled to invest in it? And sec­ond­ly, where would you if you did feel

[00:29:08] Cameron: Um, no and no. I would­n’t. No, absolute­ly. Like, to me, it is like Bit­coin. Like, it’s prob­a­bly going to be some­thing, but how it’s going to

[00:29:18] Cameron: play out and who’s going to be on top when it

[00:29:20] Cameron: does, I don’t think any­body knows. And I think you’re fool­ing your­self if you think you do know. So, why would I invest in some­thing where I have no idea how it’s going to play out?

[00:29:30] Cameron: Now, with that said If I’m right, an AI is going to be as rev­o­lu­tion­ary as I think it is going to be over the next 10 years. It prob­a­bly has mas­sive con­se­quences for the glob­al cap­i­tal­ist econ­o­my as a whole. So, our tra­di­tion­al ways of assess­ing the future of any busi­ness, uh, is up in the air as well. You know, Sam’s got this great Simon, I was read­ing a bunch of his recent quotes this morn­ing, actu­al­ly, and the thing that he says that I think peo­ple all need to think about is he says the peo­ple that most, the thing that most peo­ple don’t get about what’s hap­pen­ing right now is about the cost, he calls it the cost of cog­ni­tion.

[00:30:13] Cameron: I tend to refer to it as the cost of intel­li­gence. The cost of intel­li­gence is about to drop through the floor. So we’re used to being in a world where if you want to Devel­op an intel­li­gence. You need to take a human, you need to raise them, give them pri­ma­ry edu­ca­tion, sec­ondary edu­ca­tion, ter­tiary edu­ca­tion.

[00:30:37] Cameron: Then they need to go and devote them­selves with a pas­sion and a focus to a par­tic­u­lar domain for decades to become real­ly, real­ly good at it. And then you’ve got an intel­li­gence, some­body that’s real­ly intel­li­gent on med­i­cine or biol­o­gy or invest­ing or what­ev­er it is. And those peo­ple have lim­it­ed time, lim­it­ed ener­gy that they can devote to any par­tic­u­lar exer­cise.

[00:31:05] Cameron: If you want to hire them and they hire a bull. Not doing their own thing. It costs you a lot of mon­ey because there’s a lot of com­pe­ti­tion for them because they’re an expert in this par­tic­u­lar domain and then they’re going to die one day and all of that’s gone. That exper­tise, they might’ve writ­ten some books or what­ev­er, but some­body then needs to read those books and spend 40 years devel­op­ing an intel­li­gence.

[00:31:29] Cameron: What’s about to hap­pen is the cost of intel­li­gence is going to become near zero. Like the cost of com­mu­ni­ca­tions did over the last 20 years. You remem­ber the days when you used to ring some­body inter­state and it would cost you 2 a minute, or inter­na­tion­al­ly,

[00:31:44] Tony: Oh, yeah. And dad’d be, dad’d be like in the back­ground say­ing, come on, that’s

[00:31:49] Cameron: Yeah, well,

[00:31:50] Tony: It’s cost­ing me a

[00:31:51] Tony: for­tune.

[00:31:51] Cameron: her mum who has Alzheimer’s in Ari­zona, and she still says, well, this must be cost­ing you a for­tune. Um, you know, if you had said to some­body, imag­ine going back to 1990,

[00:32:04] Cameron: And say­ing, you know what, by

[00:32:07] Cameron: 2010,

[00:32:09] Cameron: you’ll be able to speak to any­body, any­where in the world, for as long as you like, full video, and

[00:32:15] Cameron: it won’t cost you any­thing.

[00:32:18] Cameron: It’s basi­cal­ly free, because you’re pay­ing for basic inter­net access. What’s that? Don’t wor­ry about it, you’ll find out. You’re pay­ing for it, like, 50 bucks a month some­where else, and it’s all just bun­dled in, and you can talk to any­one for any length of time. Peo­ple would have been like, nah, that’s not That’s not going to hap­pen, but the cost of telecom­mu­ni­ca­tions dropped to near zero, right?

[00:32:43] Cameron: That’s what’s about to hap­pen with intel­li­gence in the next 10 years. As Sam says, imag­ine that any­body can have 10, 000 experts on hun­dreds of dif­fer­ent domains, work­ing on a prob­lem or a busi­ness for them for next to zero dol­lars. What are the impli­ca­tions of that? to soci­ety, when we all have thou­sands of high­ly intel­li­gent minds avail­able to us, and not just in the West­ern world, but in Africa and devel­op­ing coun­tries and Asia and every­where in the world, where every­one can tap into this.

[00:33:19] Cameron: Like, we’ve nev­er gone through a rev­o­lu­tion like this before. That’s gonna hap­pen at this speed, with this low bar­ri­er to entry. It’s gonna be, uh, fun­da­men­tal­ly, if it plays out like I think it will, it could all come to a crash­ing halt for a vari­ety of rea­sons. But if it plays out like it is gonna play out, it’s gonna be, it’s gonna have far reach­ing impacts on the econ­o­my in gen­er­al.

[00:33:49] Cameron: And, um,

[00:33:50] Tony: yeah, look, look, I agree with you. How­ev­er, I think there’s a cou­ple of guide­lines that I can draw on, and that kind of, that kind of speech, I think I heard a lot in the dot com boom, right, because we have gone through a gen­er­a­tional cost of intel­li­gence quan­tum shift, it hap­pened in 2000, when you could type into Google, tell me about or Define, or Help Me Do, etc, etc, what­ev­er it was, and get access to a lot of infor­ma­tion very, very quick­ly.

[00:34:23] Tony: And that led to huge pro­duc­tiv­i­ty gains, and that’s prob­a­bly been the only thing that’s been dri­ving pro­duc­tiv­i­ty gains in the last 20 or 30 years in most West­ern economies. It’s been the dig­i­ti­za­tion of knowl­edge and how it’s used. And I think, so, I agree with you, once you get access to Chat­G­PT on steroids or what­ev­er it’s going to look like, that’ll go through it again.

[00:34:44] Tony: But I think there’s a cou­ple of Caveats I’ll put on that. I actu­al­ly think the big mon­ey will go to the per­son who pro­duces the GUI inter­faces for AI. And I think the, you know, you’d hope there’s some­body out there right now who’s

[00:34:59] Tony: think­ing that if I, what if I have this kind of, you know, float­ing genie screen and if I have a, An emo­tion­al prob­lem, right?

[00:35:09] Tony: If my boyfriend dumps me or my girl­friend dumps me, I can go and talk to the big blue genie and they can give me real­ly, real­ly good advice.

[00:35:16] Cameron: will it talk to you in Robin Williams voice and then do a song and a dance?

[00:35:20] Tony: yeah, it could be, but that, but that could be the win­ner out of AI, right? Because regard­less of how. Well, you and I use AI. The vast pop­u­la­tion out there could­n’t give a shit about intel­li­gence.

[00:35:34] Tony: That’s the prob­lem with the human race camp. Like I was going for my walk today and I saw any num­ber of young women with their bare midriffs and their six packs and I thought, I thought, that’s what you’ve opti­mized your life for. You know,

[00:35:51] Cameron: you com­plain­ing about

[00:35:52] Tony: evo­lu­tion­ary. I’m not com­plain­ing about it, but, but tell me, tell me what they’re going to ask AI

[00:35:59] Tony: about, or how super­in­tel­li­gence is going to help their life, except for per­haps in get­ting bet­ter sup­ple­ments

[00:36:05] Tony: and, and bet­ter exer­cise rou­tines. So it’s the, it’s the, the per­son who pro­vides the GUI inter­face for peo­ple who don’t think they need AI, but do

[00:36:14] Tony: need answers, is going to prob­a­bly kill

[00:36:16] Cameron: Well, it’ll

[00:36:17] Tony: But it’ll be some­thing left field

[00:36:18] Cameron: it’ll be built into all of our devices with­in the next cou­ple of years. It’ll be built into your phone. It’ll be built into your watch. It’ll be built into your glass­es. It’ll be built into every­thing. Um, but I think the, the anal­o­gy that you made with

[00:36:34] Cameron: the inter­net is the clos­est thing that we have.

[00:36:36] Cameron: But the dif­fer­ence. As I think of it, is the inter­net gave us access to infor­ma­tion. It democ­ra­tized and reduced to near zero access to infor­ma­tion. You did­n’t need to go by the Ency­clo­pe­dia Bri­tan­ni­ca if you want­ed to learn some­thing. You know, first of all, it was Encar­ta on a CD ROM. And then it went from Encar­ta to Wikipedia and the inter­net.

[00:36:58] Cameron: And I, I lived through, you know, that. I was at Microsoft for some of those years and You know, I’ve prob­a­bly, I don’t know if we’ve talked about this sto­ry on this show before, but I’ve talked about it some­where before.

[00:37:09] Cameron: You know, the sto­ry of Encar­ta is fas­ci­nat­ing. Um, it’s in a Microsoft his­to­ry book some­where that I remem­ber read­ing.

[00:37:16] Cameron: Like Microsoft went to Ency­clo­pe­dia Bri­tan­ni­ca, first of all, in the ear­ly nineties and said, we’re com­ing out with this com­put­er called, this oper­at­ing sys­tems can be called Win­dows 95. The com­put­ers are going to be shipped with CD ROMs. We want to work with you to put Ency­clopæ­dia Bri­tan­ni­ca on a CD ROM.

[00:37:33] Cameron: And they were like, why would we ever do that? We sell these things for 2, 000, we’ve been doing it for a hun­dred years, we own the world, screw you and the horse you rode in on, we’re not going to do it. So Gates went, okay. Fine, I get it. And then he went back and said, we’ll build our own and they built Encar­ta and Bri­tan­ni­ca basi­cal­ly went out of busi­ness with­in five years.

[00:37:58] Cameron: Um, scaled down their busi­ness, you know, but yeah, they just, no, no, no one was buy­ing Ency­clo­pe­dia Bri­tan­ni­ca any­more when you could get Encar­ta for 29. 95 on a CD ROM. And then Encar­ta dis­ap­peared when, uh, Wikipedia and the inter­net came along, but the inter­net gave us access to infor­ma­tion. AI is going to give us access to intel­li­gence which is a step fac­tor above that.

[00:38:25] Cameron: I don’t need to read some­thing and learn it now because the AI will know it. I’ll just say do this, fig­ure out that prob­lem for me, solve can­cer. And you’ve got­ten to lunchtime, because I’ve got some­thing else for you to do after lunchtime. Any­way, peo­ple can lis­ten to my Futur­is­tic Show if they want to hear us talk more about that.

[00:38:48] Cameron: How’s the prop­er­ty sale of the Sky Palace going, Tony?

[00:38:53] Tony: Oh, ear­ly days. We got our first inspec­tions tomor­row.

[00:38:56] Cameron: Right.

[00:38:57] Tony: Yeah. Yeah. And, uh, but, but just been busy. It’s on the mar­ket. It was list­ed last week­end. Um, all the pho­tog­ra­phy was done on Fri­day while I was away. Um, been a heck of a lot of work of mov­ing our fur­ni­ture out into stor­age and. and staged fur­ni­ture in so every­thing’s themed and low

[00:39:17] Tony: pro­file to high­light the views and all that kind of stuff.

[00:39:21] Tony: Um, and there were, I think there was some­thing like 50 email inquiries to the estate agent on the week­end ask­ing about the prop­er­ty and a cou­ple of inspec­tions sched­uled for tomor­row. So yeah. We’ll see. Fin­gers crossed. It’s rolling along.

[00:39:34] Cameron: And I was talk­ing to some­body yes­ter­day, and the sub­ject of your move

[00:39:39] Cameron: came up, and they said, why does Tony still have a

[00:39:41] Cameron: mort­gage? He’s sure­ly eager to afford to pay off his mort­gage, why does he still have

[00:39:46] Cameron: a mort­gage? And I gave them my answer, but I thought I’d throw it out to you and let you answer for your­self.

[00:39:54] Tony: Yeah, sure. A cou­ple of rea­sons. It’s, um, just like a busi­ness, it’s good to have some gear­ing. So, um, I’ve been good at invest­ing in the stock mar­ket over the years, so it’s, um, it’s use­ful to gear. And, um, so there’s that, uh, it’s, um, we’ve talked about this before about, you know, my, I think my secret sauce over the years, apart from the QAV sys­tem has been to buy a prop­er­ty, gear it up, um, pay it down, then re gear and put the mon­ey into the share mar­ket.

[00:40:29] Tony: So you’ve got, you know, more mon­ey. Um, earn­ing for you and then let the div­i­dends pay off the mort­gage and then rinse and repeat as the prop­er­ties increase in val­ue, sell them, start again, take out a mort­gage. So it’s a bit of a left­over from that. Um, I’ve always adopt­ed the same. Rule of thumb that I use for com­pa­nies and that’s a gear­ing lev­el of no more than 50 per­cent.

[00:40:54] Tony: Uh, you know, ours is much less than that now. It’s prob­a­bly 25 or 30 per­cent, um, of the, of the prop­er­ty val­ue because, um, things can go wrong and you don’t want to be forced, a forced sell­er. So, but you want to have more expo­sure to things that work for you. So it’s kind of that fine, for me, the fine bal­ance between that, the effi­cient.

[00:41:14] Tony: The effi­cient fron­tier, as econ­o­mists call it, is, um, is around the 30 per­cent gear­ing rate. And then the third rea­son I do it is, um, as, uh, uh, some­one point­ed out to me many years ago, it’s actu­al­ly a form of asset pro­tec­tion. It’s, um, less rel­e­vant now at this stage in our life, but if some­one ever does take a legal action against, um, GENI for being on a, a direc­tor on a com­pa­ny or me through some of the small­er com­pa­nies I’ve run.

[00:41:40] Tony: Over the years, um, and you’ve got a mort­gage on your house, then it’s, it’s a lit­tle bit more dif­fi­cult for them to take that asset away from you. They’ve got to take it away from the bank. So, um, there’s that too. So there’s a, um, and you know, that argu­ment, take it to extreme,

[00:41:57] Tony: says you should have the mort­gage at 100 per­cent of the

[00:42:00] Tony: asset val­ue all the time Um, so I haven’t done

[00:42:05] Tony: that because I don’t want to take the risk, but that, that

[00:42:07] Tony: was the, that is the best asset

[00:42:09] Tony: pro­tec­tion. So for those three rea­sons, that’s

[00:42:11] Tony: why I have a mort­gage.

[00:42:12] Cameron: And at this stage of your life Now that you don’t have an income, you haven’t had an income out­side of div­i­dends for a long time and Jen­ny has semi retired, apart from the boards, she does­n’t real­ly have an income. If you did need to go and get a debt facil­i­ty for some rea­son, how do you think you’d go?

[00:42:33] Cameron: Uh, yeah.

[00:42:37] Tony: Yeah, so Jen­ny and I have been talk­ing about this. We have most, our mort­gage is bro­ken into two. So, and the small­er part of it is an inter­est only. Over­draft type facil­i­ty, which is how, which is the kind of mort­gage I rec­om­mend for peo­ple who are draw­ing down to invest in shares because, you know, the div­i­dends get paid twice a year and you can, you can let the, the prin­ci­pal, um, and we can let the inter­est accu­mu­late until those div­i­dends come in and then pay it down in one hit.

[00:43:07] Tony: Um, so that’s the best, the best type of loan, but the bank would­n’t give us a hun­dred per­cent. of that kind of loan because we came back to Aus­tralia posthang, um, so we could­n’t get 100%. Um, so we do have a P& I with an off­set account, but, um, yeah, I’d, I’d strug­gle to get either of those. So we will prob­a­bly keep the inter­est only por­tion of our mort­gage going for­ward just to act as an over­draft for us, um, and give us a buffer.

[00:43:31] Tony: Uh, if I had to, I would prob­a­bly have to go to a mort­gage bro­ker and take out a loan from a non tra­di­tion­al provider at a high­er rate than what the banks are, the major banks are offer­ing. And we spoke about a com­pa­ny that I think in the last book called Res­i­mac who spe­cial­izes in doing those kinds of loans for peo­ple.

[00:43:48] Tony: So that’s where I’d go. I’d go to a

[00:43:50] Tony: mort­gage bro­ker.

[00:43:51] Cameron: Yeah, because I guess on paper a bank would look at you and

[00:43:54] Cameron: say, well You, uh, don’t have

[00:43:58] Cameron: a nor­mal job. You

[00:43:59] Cameron: don’t have an income. It’s your income is based on shares and no one knows what’s going on with shares. And, uh,

[00:44:08] Cameron: and you prob­a­bly don’t car­ry a lot of cred­it card debt that they’re mak­ing mon­ey off of over from month to month.

[00:44:14] Cameron: So not real­ly a good propo­si­tion for them. Right.

[00:44:18] Tony: no, cor­rect. Yeah. So that’s, that is some­thing to be aware of if you’re going into retire­ment phase like we are.

[00:44:23] Cameron: Speak­ing of Res­i­mac, um. A week ago, uh, it was trad­ing at 1. 10. It’s now trad­ing at 1. 14. So, uh,

[00:44:34] Cameron: look­ing at how it, how it did.

[00:44:35] Cameron: It’s had a good run.

[00:44:38] Tony: Sense the pulled pork. Yeah, good.

[00:44:40] Cameron: Speak­ing of pulled porks, Tony, do you have one for us today?

[00:44:44] Tony: I do. And, um, I guess before I get into it, I’d just like to say if peo­ple did­n’t like that last talk about AI and boom and bust com­pa­nies, um, send us some ques­tions next week. Hand some requests for pulled

[00:44:58] Cameron: Shut us up. Yeah.

[00:45:00] Tony: Yeah, because I was going down our buy list, and I think I’ve done a pulled pork on almost every com­pa­ny.

[00:45:06] Tony: Um, at some stage, so I might have to start going back and redo­ing them, but I did find one today I had­n’t touched before, nor did I know much about, and it’s called FINDI, F I N D I. And it’s a, it’s a Fin­Tech pay­ments and ATM provider. And I think the real­ly inter­est­ing thing is it’s based in India. So we have a com­pa­ny on the ASX, but its oper­a­tions are based in India.

[00:45:30] Tony: And I think that’s his­tor­i­cal. I think the orig­i­nal founders may have been Aus­tralian. Um, and again, this is anoth­er kind of com­pa­ny that’s been through a few piv­ots over the years as well. Um, but that’s what they cur­rent­ly do. And they have a net­work of 6, 000 mer­chants and 21, 000 ATMs in India. And just to put that in per­spec­tive, they’re, they have 21, 000 ATMs in India, and they’re not. I guess by any stretch of the imag­i­na­tion, the biggest play­er, but, um, there are 26, 000 ATMs in Aus­tralia, so, you know, Indy is such a big place that a small com­pa­ny like Findy can have a, a mean­ing­ful mar­ket share or a mean­ing­ful pres­ence as a busi­ness, um, almost the same sort of Pres­ence is the whole bank­ing sys­tem in Aus­tralia in terms of ATMs, um, but they’re still a small com­pa­ny.

[00:46:20] Tony: They employ, um, a bit over 650 employ­ees, and they’re also apply­ing to become a full dig­i­tal pay­ment bank in India. And I think that’s inter­est­ing as well. So, India has banks, retail banks like we have here. Um, but it’s, you’d have to say from what I’ve read any­way, the coun­try’s rea­son­ably under­banked and is still large­ly a cash econ­o­my.

[00:46:43] Tony: So, you know, going back to that dis­cus­sion we just had, it’s pret­ty hard if your, if your job is rid­ing a deliv­ery cycle. Or some­thing in the, in the out, out back of one of the small­er provinces in India to go to the bank and apply for a loan and, and get mon­ey to build your busi­ness, um, or to, um, even to, to build a house.

[00:47:06] Tony: So it’s, it’s an under­banked econ­o­my, a cash econ­o­my. But there’s also been a fair bit of leapfrog­ging of, of the way banks have evolved in Aus­tralia. A lot of bank­ing in coun­tries like India has done phone to phone. It’s a dig­i­tal envi­ron­ment, and so, uh, you know, I kind of think that Find­i’s tap­ping into this, and, um, the fact that they’re apply­ing for a dig­i­tal pay­ments bank­ing license, which is only a new thing in India, is, is, you know, quite pos­si­bly a good thing for them.

[00:47:37] Tony: Uh, The shares are up in the last 12 months, and they’re up 80%. And that’s large­ly on the basis of their, their roll­out of, um, of ATMs and, and in par­tic­u­lar, FPOS mer­chants. And I think the inter­est­ing busi­ness mod­el, um, they, when they go out to a small mer­chant and do a deal to pro­vide their FPOS ter­mi­nal, they also go usu­al­ly, well, they often go one step fur­ther and they rebrand the mer­chant as a Fin­di Pay­ment Cen­ter.

[00:48:07] Tony: Um, again, because peo­ple are. used to being able to go to a par­tic­u­lar loca­tion and top up their mobile phone or pay a bill or deposit cash or all those kinds of things. And if you go to the Fin­di web­site, you’ll see what I mean. So if you think about what might be, um, in Aus­tralian terms, a very small dag­gy cor­ner store milk bar in the sub­urbs, that’s just sort of stan­dard.

[00:48:32] Tony: Shop in a lot of these towns in India and, um, and if they sign up with Fin­di, they get a full sort of shop refit and rebrand and, you know, um, paint and, uh, inter­nal fit out and bet­ter coun­ters, bet­ter, yeah, dis­play prod­uct bet­ter. And then they get a big sign above the door say­ing it’s a Fin­di pay­ment cen­ter.

[00:48:51] Tony: So, um, that could be behind why they’re pick­ing up so many mer­chants and they’ve actu­al­ly increased their retail mer­chants by 90 per­cent in the last six months. So. They seem to be doing well in this space. Uh, what else can I say about them? They don’t just offer FPOS and ATMs, they offer bill pay­ment ser­vices, cred­it card pay­ments, these are all on the phone, domes­tic mon­ey trans­fers, some over­seas trans­fers like India and Nepal, and they’re a cash drop mer­chant and pre­paid recharges.

[00:49:25] Tony: So they’re sort of fill­ing out what would look like a dig­i­tal bank. And, uh, and the license will cer­tain­ly help if they get that to do that. Uh, going, look­ing at the num­bers now, um, you can see if peo­ple have access to the bread loader, they can see it’s a buy, but it’s a, it’s a pret­ty tough graph to see what’s hap­pened in the last year or so, because it’s had a, um, over the last five years, the share prices dropped from a high of 80 down to a low of a dol­lar.

[00:49:56] Tony: And so it’s a huge, huge spike in the months, sort of four and five of the five year graph. Sor­ry, years four and five of the five year graph. And it’s down to almost a flat line if you look at it in those terms. But if you do have access to a, like a Stock Doc­tor graph or per­haps Yahoo Finance, you’ll see that if you do it over a three year time peri­od, that it’s, it’s, um, it’s eas­i­er to see it as a buy.

[00:50:18] Tony: So it’s, um, it’s still gone down a lit­tle bit.

[00:50:29] Tony: ADT for this stock is 126, 000, so it’s rea­son­ably small, but will suit a lot of lis­ten­ers. I’m doing my num­bers based on the price of 0. 98, which was the price on the week­end, but I did notice it jumped again yes­ter­day to 1. 10, so my num­bers are going to be a lit­tle bit out. Per­haps not by too much. And giv­en it’s, this is the num­ber three stock on the buy list, even if I’m out by a lit­tle bit, it’s not going to make a big dif­fer­ence to the QAV score.

[00:50:57] Tony: A cou­ple of things to note. There’s no con­sen­sus tar­get for this com­pa­ny, which I think is a good thing. I’ve actu­al­ly set up a tri­al port­fo­lio on com­pa­nies which have no con­sen­sus tar­get to see if they do out­per­form our nor­mal, our nor­mal buy list. But I think it’s a good thing because we’re not, we’re not attract­ing insti­tu­tion­al mon­ey.

[00:51:16] Tony: Um, to this com­pa­ny, no one’s, uh, of note is research­ing it and there­fore we have a chance to, um, to, to be first in. Um, Stock Doc­tor do have a, uh, uh, finan­cial health, uh, a finan­cial health mea­sure for it. I’m just try­ing to find it now. It’s, it’s, uh, it’s sol­id and recov­er­ing. Um, but the inter­est­ing thing in the, in the Stock Doc­tor num­bers is that they have free cash flow per share as a neg­a­tive num­ber.

[00:51:43] Tony: And we have. Um, a very good Prop­Caf for this, for this com­pa­ny, um, which is pos­i­tive, obvi­ous­ly. So some­thing’s, some­thing, if I see this kind of dis­par­i­ty between free cash flow and oper­at­ing cash flow, the mon­ey has to have gone some­where and it usu­al­ly goes in CapEx. So if any­one wants to look at the, the cash flow state­ments for this com­pa­ny, they’ll see that, uh, oper­at­ing cash flow has been increas­ing recent­ly.

[00:52:10] Tony: And this, this lat­est half is 25 mil­lion. But the. Invest­ing cash flow is neg­a­tive by 49 mil­lion and they’ve recent­ly raised 20 mil­lion, they now have 20 mil­lion of debt on the books and they also did the share issue for 5 mil­lion, so this com­pa­ny is very much in growth mode. I did­n’t go into research what the CapEx was used for but I’d be very sur­prised if it was­n’t used for either buy­ing ATMs and FPOS devices or it was used for rebrand­ing these stores to grow mer­chants.

[00:52:44] Tony: But clear­ly they’re fund­ing the growth of the busi­ness, part­ly through cash flow and part­ly through debt. Which is not a bad thing but I just want to call out the dif­fer­ence between free cash flow and oper­at­ing cash flow. Uh, no div­i­dend yield as expect­ed in the growth stock, um, yeah, Stock Doc­tor Finan­cial Health is strong and recov­er­ing.

[00:53:06] Tony: Direc­tors hold approx­i­mate­ly 12 per­cent of this com­pa­ny, so that’s good, but I, just look­ing at them, I don’t think they are the founders for this com­pa­ny. Like, again, I don’t think that’s a bad thing because this com­pa­ny has been through a num­ber of iter­a­tions and piv­ots. And the direc­tors who do own a large chunk of this com­pa­ny are basi­cal­ly invest­ment bankers.

[00:53:30] Tony: And so this is a bit like the one we had last week, where we don’t have a founder, but we have a very expe­ri­enced invest­ment banker with a large stake in the com­pa­ny. And I think even though it does­n’t You would­n’t think it scores there for as being an under­founder. I think it deserves a score for hav­ing some­one with vast expe­ri­ence and skin in the game that we can invest beside.

[00:53:53] Tony: One of those direc­tors I’ll call out is a guy called Nicholas Med­ley, who’s an invest­ment banker from Aus­tralia, and it’s only of note to me because he’s the son of Peter Smed­ley, who’s an Ex Shell CEO that I used to work for. He was, um, he was very sharp. So if the Apple

[00:54:12] Tony: ROE for the com­pa­ny 17%, PE is 10. 3 per­cent which is The low­est in three years. But that’s only real­ly because there’s only been two halves where the com­pa­ny has had a pos­i­tive PE and, and been prof­itable. So, um, uh, even though, we’ll, we’ll score it for that, it, it’s, um, it’s a lit­tle bit mean­ing­less. Uh, prop cap for this com­pa­ny is 1.44 times, which is very, very low.

[00:54:36] Tony: And as I said before, they, they do have to take on debt to get, um, to get the CapEx bill paid. So just be aware of that. But prop calf is, you know, price to oper­ate in cash flow is very low. Um. IV1 for this com­pa­ny is 0. 48, and there’s no IV2, so we’re not buy­ing it below that price, so we can’t score it. Uh, same with Net Equi­ty Per Share, so, um, we can’t buy it for book, which is 0.

[00:55:00] Tony: 64, or book plus 0. 30, which is 0. 83. Uh, has been increas­ing, but not con­sis­tent­ly over the last three years. So it’s been increas­ing in the last year or two, but not for the full six halves. So we can’t score it for that. But all in all, this com­pa­ny gets 100 per­cent qual­i­ty score. So the things we can score it for gets 11 out of 11.

[00:55:22] Tony: And that’s because some of these, um, rat­ed two. And it gets a QAV score of 0. 69, which is num­ber three on our buy list. So that’s, that’s a real­ly good score. Um, the inter­est­ing thing, I guess, is that we have a fin­tech growth com­pa­ny on the val­ue invest­ing buy list, so that’s, um, an unusu­al thing to see, but it’s hap­pen­ing now.

[00:55:43] Tony: And I did actu­al­ly won­der if that was the case, one, because Fin­di, um, obvi­ous­ly burnt a lot of peo­ple in drop­ping from an 80 share price to a 1 share price, and so it’s being ignored. By a lot of, um, of insti­tu­tion­al investors, but I also won­dered whether, um, being a fin­tech pay­ment com­pa­ny, whether, you know, that just was­n’t fla­vor of the month in terms of, um, the style of invest­ment of inter­net com­pa­nies that peo­ple are invest­ing now, which tend to have an AI type fla­vor to them.

[00:56:12] Tony: Plen­ty of risks in a small com­pa­ny like this, not, you know, not the least of which is the fact that it’s on the ASX, but it’s oper­at­ing in India. So it’s not like we can. Go for a walk and see how the Fen­di stores are doing and whether they’re being pop­u­lat­ed with cus­tomers or not. We can’t do that eas­i­ly.

[00:56:28] Tony: But I think there are real risks that there could be fur­ther cap­i­tal rais­ings or increased in debt. I don’t know at what stage they are in terms of their growth into the ATM mar­ket or the mer­chant mar­ket or whether they’ll need. Um, increase cap­i­tal invest­ment if they get their dig­i­tal bank­ing license.

[00:56:45] Tony: But a lot of these com­pa­nies, you’ve just got to go into them know­ing you’ll prob­a­bly have to put more in lat­er. Um, there’s a risk, of course, that they don’t get the bank­ing licens­es that they want or require and that they, their growth could be there­fore. Cur­tailed because of that. Uh, and the last risk I’ll high­light is that if the com­pa­ny is suc­cess­ful, it does invite big­ger banks to mus­cle in.

[00:57:05] Tony: So that could be good if they, if they try to take over Fin­di and there’s a, um, a takeover pre­mi­um, or it could be bad if they just sort of, um, mus­cle in and make it very, very dif­fi­cult for a small com­pa­ny to com­pete. Um, they’re the, they’re the risks on the pos­i­tive side of things. A lot of peo­ple are say­ing India is the new Chi­na.

[00:57:23] Tony: So, as Chi­na gets more and more of a mid­dle class, India sort of, which is about, I’m going to say, a sim­i­lar pop­u­la­tion size, and I know there are prob­a­bly hun­dreds of mil­lions of peo­ple dif­fer­ent, but it’s still a very large pop­u­la­tion, and, um They’re still ear­ly days in terms of their expan­sion of the mid­dle class, back where Chi­na was when it was start­ing out to do that.

[00:57:45] Tony: Um, the need for bank­ing ser­vices is huge and there’s a strong demand for mobile bank­ing. So they’re kind of bypass­ing

[00:57:53] Tony: the idea of hav­ing branch­es every­where and peo­ple using lap­tops to do bank­ing or across the Cana­da to do bank­ing. So, yeah, inter­est­ing com­pa­ny. Have a look, do your own research. It’s a growth com­pa­ny, it will have growth com­pa­ny risks, but at the moment it’s good buy­ing.

[00:58:10] Cameron: And what hap­pened in 2020

[00:58:13] Cameron: and like March 2021, where it’s sort of the share price

[00:58:17] Cameron: plum­met­ed, as you say, um, inter­est­ing­ly, like if

[00:58:21] Cameron: I look at it, the bread lat­er,

[00:58:23] Cameron: you can see that big plum­met from 80, 90 real­ly in August, 2020. Down to where it is today. But if you look at, uh, Stock Doc­tor, even over five years, it’s adjust­ed the pric­ing.

[00:58:40] Cameron: Like if you go back to August, 2021, it has the share price at 4. 42, not 90. So some sort of a con­sol­i­da­tion, it sug­gests, but I’m going back

[00:58:53] Tony: I’m not famil­iar.

[00:58:54] Cameron: I’m going back through their announce­ments in Stock Doc­tor around about that time. I can’t see any­thing about a con­sol­i­da­tion. There was a return of cap­i­tal, but, um, I can’t real­ly, uh,

[00:59:08] Cameron: fig­ure out why that. Uh, would cause the share price to be adjust­ed to that degree. They returned, um, that 20 mil­lion of cap­i­tal to share­hold­ers. Um, part of these a div­i­dend and part­ly as just a cap­i­tal, uh, return. So.

[00:59:29] Tony: Shame they did that because they bor­rowed 20 mil­lion dol­lars in the last year or so so they could have used it.

[00:59:34] Cameron: Well,

[00:59:34] Tony: Yeah, but I, I mean, this com­pa­ny’s piv­ot­ed and piv­ot­ed and piv­ot­ed. I think it’s now sort of, you could almost say it’s emerg­ing from the ash­es of Fin­di, the way it used to be. Even on Stock Doc­tor, it’s referred to as a, almost like a ven­ture cap­i­tal fund where they co invest with, um, with entre­pre­neurs.

[00:59:50] Tony: Um, then it plays down the bank­ing side, but if you go to the Fin­di web­site, it’s all about the dig­i­tal bank­ing side of things, which is its cur­rent busi­ness. So, it’s obvi­ous­ly had a num­ber of iter­a­tions and some of them prob­a­bly weren’t

[01:00:01] Tony: suc­cess­ful. And, um, this guy Nicholas Med­ley, um, who, uh, you know, by all accounts is a sharp bloke, has spot­ted a niche and, um, is now using Fin­di to fund his expan­sion into

[01:00:15] Cameron: hmm. Um, inter­est­ing­ly, April 2021, Bor­ders received fur­ther notices

[01:00:24] Cameron: seek­ing to remove recent­ly appoint­ed Inde­pen­dent Non Exec­u­tive Chair­man Nicholas Smed­ley.

[01:00:30] Cameron: urges share­hold­ers to vote against all res­o­lu­tions of the gen­er­al meet­ing to be held on the 19th of April 2021. Com­pa­ny now forced a con­sid­er­able cost of con­ven­ing a fur­ther gen­er­al meet­ing of share­hold­ers due to waste­ful ongo­ing actions by req­ui­si­tion­ing share­hold­er.

[01:00:47] Cameron: So there was some sort of hos­tile action on them.

[01:00:50] Tony: I’m sure.

[01:00:53] Cameron: so

[01:00:53] Tony: Yeah, I’m sure there’s an inter­est­ing, inter­est­ing book in the his­to­ry of a com­pa­ny like this. Would have chopped and changed them being lots of dra­ma, I

[01:00:59] Tony: would have thought,

[01:01:00] Cameron: Hmm, hmm,

[01:01:02] Tony: Speak­ing of books, I read in the paper today that Joe Astin is writ­ing a book on

[01:01:05] Tony: Qan­tas.

[01:01:06] Cameron: oh right,

[01:01:09] Tony: Yeah, it’s called The Chair­man’s Lounge, which will be very

[01:01:11] Cameron: won­der if that was, uh, why he left the Fin.

[01:01:16] Tony: pos­si­bly.

[01:01:17] Cameron: That should be a good read. The Chair­man’s Lounge, haha­ha­ha, good for him, that’ll be great. Well thank you for that on Findy Tony,

[01:01:29] Cameron: uh, well. all I’ve got for the show today, Tony. After hours, what have you got for us?

[01:01:38] Tony: Well, we spoke about Barn Bugle, but, um, speak­ing of good books, I’m about halfway through Going Infi­nite, Michael Lewis’s book on Sam Bankman Freed, and,

[01:01:51] Cameron: I said, Oh God, Sam Bankman Freed. Wow.

[01:01:55] Tony: like, I haven’t been able to put it down. It’s, it’s one of the best things. I mean, I’m a huge Michael Lewis fan since I read, you know, Lies Pok­er back in the mid 80s, um, and Mon­ey­ball and all the oth­er ones, these real­ly good ones he’s writ­ten.

[01:02:10] Tony: I hard­ly rec­om­mend any of them to peo­ple. This one’s ter­rif­ic. And I haven’t even, like I’ve writ­ten, I’ve read prob­a­bly 120 to 150 pages and it has­n’t even got­ten to Bit­coin. And the real­ly inter­est­ing things are all about, uh. You know, how Bankman Free got to be recruit­ed into a Wall Street fund.

[01:02:29] Tony: Effec­tive altru­ism, if you’ve heard about that, and how that all works. But the thing that real­ly What caught my atten­tion and got me real­ly inter­est­ed was the oper­a­tions of the com­pa­ny that Bankman Freed first worked for, which is called Jane Street Cap­i­tal. And it’s a, um, an invest­ment, an invest­ment, a Wall Street invest­ment firm.

[01:02:50] Tony: And it kind of, you know, the chap­ters on that, as it’s so inter­est­ing, their recruit­ment tech­niques, who they look for and what they do. If peo­ple want to have a good under­stand­ing of how Wall Street works now, or did a year or two ago, uh, it’s worth. worth read­ing. And just to pick on a cou­ple of anec­dotes of inter­est.

[01:03:11] Tony: So, I mean, first of all, Michael Lewis says that if you think Gold­man Sachs or Mor­gan Stan­ley is Wall Street, for­get it. You know, they’ve basi­cal­ly become much more like, um, a reg­u­lar bank due to reg­u­la­tion changes since the GFC. The real action is in these small trad­ing com­pa­nies like Jane Street Cap­i­tal.

[01:03:32] Tony: And they’re the ones that, you know, are mak­ing, are mak­ing out­size returns based on their CapEx size. And what they look for is peo­ple who can, in a very quick time, price a mar­ket and decide whether the invest­ment or the bet is good or not. And so the way they recruit is, first of all, they look for peo­ple who’ve done things like run, won math con­tests.

[01:03:56] Tony: So Bankman Free was a, it’s prob­a­bly on the spec­trum, you know, just the Some­one who com­plete­ly had no inter­per­son­al skills, par­ents were aca­d­e­mics, but loved maths, did well on his maths com­pe­ti­tions at some of the big Ivy League uni­ver­si­ties, got onto the radar of Wall Street recruiters and appar­ent­ly it’s a thing that they all look for physics or maths.

[01:04:21] Tony: Brad’s who were pre­co­cious to go into Wall Street, paid him a lot of mon­ey. But the way that Jane Street recruit­ed SBF was to just, um, take all the poten­tial recruits for a day and just keep run­ning games by them. And, you know, just with­out going into a lot of detail, the two that sort of stuck in my head were, um, Bankman Freed would be asked by, uh, by one of the Jane Street Cap­i­tal peo­ple and gen­er­al­ly it’s the oth­er traders who are doing the recruit­ing, so, uh, a Jane Street Cap­i­tal trad­er asks Bankman Freed, what are the chances that, uh, any of my rel­a­tives is a, is a pro­fes­sion­al base­ball play­er?

[01:05:01] Tony: And, and then they judge, not just what the answer is, because it’d be pret­ty hard to, to work out what the odds were, but the process that, SPF got there and the ques­tions they asked, so SPF asked, well, you know, define rel­a­tive and the trad­er said, well, okay, imme­di­ate fam­i­ly plus cousins and uncles and aunts, okay.

[01:05:22] Tony: Now define pro­fes­sion­al base­ball play­er and the guy said, okay, um, major league base­ball play­er, cur­rent. Okay. or retired, or minor league base­ball play­er. So Sam Bankman Fried sort of came up with a num­ber of, there might be 30, 000 peo­ple in that cohort and got to the pop­u­la­tion size and came up with a num­ber.

[01:05:41] Tony: But then he said to him­self, Huh, why is this guy ask­ing me this ques­tion? If he did­n’t have a rel­a­tive who was a base­ball, pro­fes­sion­al base­ball play­er, why would he have even have thought to men­tion that? Um, and not ask, what’s the chance of one of my rel­a­tives being a fire­man or a car­pen­ter? Um, so he said, okay, I’ve cal­cu­lat­ed what the, you know, per­cent­age of the pop­u­la­tion are of the base­ball ath­letes, but that’s wrong.

[01:06:10] Tony: That’s wrong. And he came up with a num­ber of 1 in 50. And that was wrong too, but it was so much clos­er to the right num­ber because the guy said, yes, my cousin is a Major League Base­ball play­er. And, but they liked Sam under­stand­ing to ask the ques­tion or to think that the only rea­son he’s ask­ing this is because it’s prob­a­bly true.

[01:06:29] Tony: And so it’s going to be way less than the per­cent­age of pop­u­la­tion. And there’s a few oth­er ones like that. When they all start as interns, um, every day they get giv­en a hun­dred bucks to, to lose and the traders keep com­ing up to them, offer­ing them bets and test­ing them. And they had to cap it at a hun­dred dol­lars because ear­ly days peo­ple were just los­ing their pay­checks on these bets because they’re so sort of hyped to, to make the deal and take the bet quick­ly.

[01:06:54] Tony: And one of them was, um, A trad­er walks up to a guy and says, uh, what’s the, what’s the chance of me hav­ing, um, a num­ber of dice in my hand, in my pock­et, a num­ber of, you know, gam­bling dice, gam­ing dice in my pock­et. And the guy came up with a num­ber which basi­cal­ly hinged on there being five or less. And, um, And the, the trad­er offered him the deal that if he would pay him, um, I think it was like 10 for every dice less than five, but then the guy tak­ing the bet had to pay 10 for every dice more than five.

[01:07:29] Tony: And the guy, the intern took the bet and then the trad­er pulled out a, um, pouch of minia­ture dice and there was 750 of them in his pock­et. So like, again, it’s like the, the guy tak­ing the bet did­n’t ask enough ques­tions, did­n’t, did­n’t frame the mar­ket prop­er­ly and, and got an out­size.

[01:07:46] Cameron: Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm hmm.

[01:07:49] Tony: So, there’s just a cou­ple of the sto­ries.

[01:07:52] Tony: Real­ly worth read­ing if you like that kind of stuff. And just real­ly inter­est­ing at how the Wall Street trad­ing firms work. Because SPF’s first job, this Jane Street Cap­i­tal, was to trade ETFs. And so he had to very quick­ly, what would hap­pen for exam­ple was, um, he’d get rung up and said when the mar­ket opens in India tomor­row I want to buy the Indi­an ETF.

[01:08:20] Tony: You know, the index ETF for the Indi­an mar­ket and, um, give me a price. And so Bankman Free would have to look at what the price it closed at, quick­ly scan the news. Has any­thing hap­pened like a nuclear explo­sion or war with Pak­istan? And then try and fig­ure out what price to charge for the, this per­son who want­ed to buy the Indi­an ETF before it opened.

[01:08:40] Tony: And then trade as well the ETF to try and, you know, if you got it wrong, recov­er the mon­ey. So it’s, um. Even that alone tells you a lot about how ETFs work, that there are play­ers in the mid­dle try­ing to make very small mar­gins out of the stocks under­ly­ing the ETF com­pared to what the ETF is. And so, Bankman Free was putting big bets on large Indi­an com­pa­nies who might dri­ve the ETF, and then giv­ing a price to the per­son

[01:09:07] Tony: for the ETF when it opens.

[01:09:09] Tony: That’s inter­est­ing,

[01:09:09] Tony: I thought. No, I saw the ad for it

[01:09:12] Cameron: good stuff. The thing about ask­ing the ques­tions reminds me of the new sea­son of True Detec­tive. Have you watched any of that?

[01:09:22] Tony: last night. Mmm

[01:09:23] Cameron: It’s only two episodes in. Real­ly good. Jodie

[01:09:27] Cameron: Fos­ter is the main cast in it. Christo­pher Eccle­ston turns up in episode two. But Jodie, it’s set in this small town in Alas­ka. Won’t tell you what’s going on but it’s creepy

[01:09:40] Cameron: as hell. But um, Jodie Fos­ter’s sort of this griz­zled old cop and she’s got a young guy who’s her uh, you know, up and com­er, young fresh faced cop.

[01:09:54] Cameron: But one of her things with him is, What are the ques­tions that we ask here? And he’ll come up with ques­tions. She goes, no, you’re ask­ing the wrong ques­tions. You’ll have to stop and he’ll think it. She goes, yes. And what’s the next ques­tion that we ask? No, wrong ques­tion. Keep think­ing. What’s the right ques­tions.

[01:10:10] Cameron: And it’s good. You know, she’s like teach­ing him to think, you know, in the right way to solve the case and. You know, there’s the ques­tions that you ask could deter­mine, uh, you know, your, your answers that you come up with, I guess, you know,

[01:10:26] Tony: Yeah,

[01:10:26] Cameron: kind of reminds me of the, uh, Max Planck book I’ve been read­ing. Hmm. Ask­ing the right

[01:10:34] Tony: and I’ve got to say, have you have you checked out Buki yet? It’s so good.

[01:10:39] Tony: Every­one I’ve rec­om­mend­ed to has come back and said it’s just the best thing they’ve ever seen.

[01:10:43] Cameron: Oh no. I

[01:10:44] Tony: So fun­ny,

[01:10:45] Cameron: add that to my list of TV things to watch. Book­ie, I did watch.

[01:10:51] Tony: because what I, I went back and rewatched the last episode again last night, I just love it so much. And when I fin­ished the stream­er said if you like this check out Mr. in between.

[01:11:02] Cameron: right?

[01:11:03] Tony: It’s like that was a rec­om­men­da­tion for it.

[01:11:05] Cameron: Yeah. Well, good. Uh, good, good call. Um, what was I gonna men­tion? Oh, Roger Roger­son. Died.

[01:11:17] Tony: Blue Mur­der. I watched that a

[01:11:18] Tony: cou­ple of weeks ago

[01:11:19] Cameron: Did you? Where did you find it? I was just going to say, I’d love to find that to watch again.

[01:11:23] Tony: I think, I’m gonna say Net­flix. Could be either Fox­tel or Net­flix. Net­flix. Yeah, and they’ve, they’ve They’ve released it as two episodes, but each episode has two episodes in it, so that’s four episodes com­pressed, but Oh, man, it’s so good.

[01:11:39] Cameron: And I sort of remem­ber that

[01:11:41] Cameron: as being, in my mind, that’s the begin­ning of good TV. Like before Sopra­nos, Blue Mur­der was the first thing I ever remem­ber watch­ing and going, Oh my God, why isn’t all TV this good?

[01:11:55] Tony: Yeah.

[01:11:56] Cameron: don’t think it gets cred­it for that, real­ly. Like, every­one thinks good TV start­ed with Oz or Sopra­nos and, you know, those HBO shows, but, uh, maybe Homi­cide, Life on the Streets, one of David Simon’s ear­li­er shows, but Blue Mur­der was grit­ty.

[01:12:12] Tony: Blues, yeah. Yeah, oh, it’s Going, like, going back to watch it now, you just see all the actors when they were first Start­ing out, he became big. I think it’s Richard Rox­burgh’s first big thing. He plays Roger the Dodger. But the thing that just real­ly blew my mind was just how they did stunts back then.

[01:12:32] Tony: It says, first of all, there’s no CGI. And sec­ond­ly, they just close off as lit­tle as they can of a busy street. So like, there’s a scene

[01:12:42] Tony: in a pub some­where in Syd­ney. Botany or what­ev­er. And the fight spills out in the street and you can see the cars in the back­ground pulling up and peo­ple jump­ing out to see what’s going on as peo­ple, as peo­ple are being pound­ed on the foot­path and then dragged back into the pub.

[01:12:56] Tony: It’s just incred­i­ble.

[01:12:58] Cameron: Oh, I got­ta, I got­ta watch that again. Um, the oppo­site of that is the Bol­ly­wood film that we watched this week, Pathan. So anoth­er Shahrukh Khan, mas­sive action epic from last year. And I watched a bit of a behind the scenes VFX thing on YouTube after­wards. And there’s hard­ly a shot in the film that isn’t com­plete­ly dig­i­tal.

[01:13:27] Cameron: Like the amount of stuff that is just dig­i­tal these days is insane. Like. It’s mind blow­ing how much of a film like that is dig­i­tal, like, yeah, okay, you look at some­thing like an Avengers film or what­ev­er, and you go, yeah, okay, it’s all dig­i­tal, you expect that, but this is, you know, just peo­ple, it’s like more of a Bond film, you know, like, it’s not, they do have super­hero pow­ers in these Bol­ly­wood films. One of my favorite scenes is there’s a big fight on a train and then they take down a heli­copter which is attack­ing. The heli­copter crash­es into a bridge over this mas­sive ravine and then the train goes over the bridge and as the train is going, the two heroes at this stage are on like the front car­riage of the train, and as it’s hurtling over the ravine, they’re run­ning up the car­riage Then leap­ing to the next car­riage and then leap­ing to the next car­riage.

[01:14:26] Cameron: It’s absolute­ly ridicu­lous, but hilar­i­ous at the same time. Um, but like, okay. So you look at stuff like that and you go, yeah, of course that’s CG. But when you see the behind the scenes stuff, like. Near­ly every­thing is CG. It’s 98 per­cent CG. These films. It’s crazy. It’s uh, but yeah, it was enjoy­able. Over the top non­sense.

[01:14:53] Cameron: Um, alright, Blue Mur­der. Got­ta make a note to track that down as well.

[01:14:59] Tony: Oh, it’s so good. Net­tie Smith, Sallyanne Hux­tep and her mur­der. Just all these things you used to read about as a kid.

[01:15:07] Tony: It’s incred­i­ble. And very chill­ing too, what

[01:15:10] Cameron: What were you read­ing as a kid?

[01:15:11] Tony: the cops doing. Well, you open up a paper and

[01:15:14] Tony: there’d be a whole fea­ture about Sallyanne Hux­tep and her mur­der and what the the­o­ries were behind it.

[01:15:20] Tony: All that kind of stuff.

[01:15:22] Cameron: You obvi­ous­ly were exposed to a lot of ter­ri­ble stuff as a kid.

[01:15:27] Tony: Well, the Couri­er Mail mate, or the Sun­day? The Sun­day Mail.

[01:15:32] Cameron: I don’t know, did we, uh, speak­ing of kids, did I,

[01:15:35] Cameron: did, I told you about Fox’s

[01:15:39] Cameron: kinder­garten teacher?

[01:15:43] Tony: You told me about one of the teach­ers, but I’m not sure if it was the kinder­garten

[01:15:46] Tony: teacher.

[01:15:46] Cameron: that got done was, uh, Aus­trali­a’s worst pedophile?

[01:15:51] Tony: No. Real­ly?

[01:15:53] Cameron: when Chris­sy was in Syd­ney with her niece when they ran into you.

[01:15:57] Tony: Mm-Hmm?

[01:15:59] Cameron: the ABC one day

[01:16:01] Cameron: and there was like Aus­trali­a’s worst pedophile and there was a pho­to of this guy and I was like. I know that face

[01:16:08] Cameron: and I kind of tweet, they refer to, they said his name was Ash­ley and I, I went look­ing through Fox’s kinder­garten year­books that they would give us or like there’s the end of the year sort of work and that kind of stuff.

[01:16:22] Cameron: Yeah, so this guy was Fox’s kinder­garten teacher when he was about five, I think, and we sent Fox to this Very high end, award win­ning kinder­garten, not far from where we live, lots of awards, it was very small, owned by this one guy, run, like very sort of touchy feely, friend­ly, which

[01:16:48] Cameron: has a dif­fer­ent con­no­ta­tion now, yeah.

[01:16:50] Cameron: Um. Very, um, you know, very, I was gonna say hands on, again, oh god, very

[01:17:06] Cameron: proac­tive, well run, again, one ton of awards. Um, Best Kinder­garten in Bris­bane kind of thing for years and we man­aged to get him in their pri­vate lit­tle place, you know, not one of the big chains, like a lit­tle pri­vate­ly run thing. And, uh, yeah, this guy turns out, I’ll say for­tu­nate­ly, but not for­tu­nate for the vic­tims, tar­get­ed girls, not boys.

[01:17:35] Cameron: The cops tracked him down. There was a pho­to on the dark web of a girl. On a par­tic­u­lar, with, with some bed sheets on like in a kinder­garten set­ting and the cot, and they did­n’t say where in the world it was or who she was or any loca­tion, some task force in Bris­bane, look­ing into pedophil­ia rings, found out, found this thing, man­aged to.

[01:18:05] Cameron: Trace, the man­u­fac­tur­er or the retail­er of the sheets, found all of the kinder­gartens that had bought these sheets and tracked the pho­to­graph to this par­tic­u­lar

[01:18:19] Tony: Wow.

[01:18:20] Cameron: and tracked, fig­ured out who took the pho­to and I was like, Uncle, why You did a raid on his house and found thou­sands of pho­tos, but he’d worked at dif­fer­ent kinder­gartens in Syd­ney and Queens­land and over­seas.

[01:18:32] Cameron: I think he was in

[01:18:34] Tony: Mm

[01:18:34] Cameron: Italy for a while,

[01:18:36] Cameron: but we just told Fox about that last week. This guy came up in a con­ver­sa­tion. He said, I did­n’t like Mr. Ash­ley. And, um, I thought, okay, maybe now’s the right time to, uh, have this con­ver­sa­tion with him. But, um, yeah, it was real­ly. Shock­ing. You know,

[01:18:55] Tony: Yeah. Well I went to a Catholic school in Bris­bane and we had our fair share as well. So, it’s um, must be a Bris­bane thing.

[01:19:04] Cameron: it’s the heat. It’s the heat that

[01:19:07] Tony: The heat, yes.

[01:19:09] Cameron: All right. Well on that, uh, cheery note, um, where will you be next week.

[01:19:16] Tony: Here, guys, hope­ful­ly it sells with­in the week, but it’s not going to sell with­in the week. Won’t sell and set­tle with­in the week.

[01:19:23] Cameron: Okay.

[01:19:23] Tony: No, I’ll be here for the fore­see­able future.

[01:19:25] Cameron: Good, good. Have a good week. Thanks TK. Have a good week, every­body. Hap­py share mar­ket.

[01:19:30] Tony: ASX.