The IMF on China, Diller on Trump Social, Bitcoin and Beanie Babies, pulled pork on A1M.

Also in the Club edition: Cash and Armaguard, Anscombe’s Quartet, Regression testing, Tesla veers to the EV slow lane, Ex-defence minister Pyne is Hanwha’s man in Canberra, Karoon plots path from oil junior to major through Gulf of Mexico, and a thought experiment about when TK would sell if the stock market didn’t give live prices.


QAV 715 C

[00:00:00] Tony: One, two, three.

[00:00:03] Cameron: Welcome back to QAV, episode 7 1 5, the 9th of April, 2024. You had another bloody birthday last week. tk.

[00:00:13] Cameron: I can’t keep track of your birthdays. I swear to God you have like three a year.

[00:00:18] Tony: Well, um, I adopt the convention of having them on the same date every year, so you can put it in your diary.

[00:00:24] Cameron: I have. Multiple times! And it never reminds me. Somebody posted, I think it was Cosmin posted happy birthday to on Facebook and my initial thought was, ah, what are you doing Cosmin? That’s not his bloody birthday. And

[00:00:38] Cameron: then I looked at the date and I was like 4th of April. See, that sounds right.

[00:00:43] Tony: Yeah, fourth of the fourth, just remember that.

[00:00:46] Cameron: Happy birthday. What did you

[00:00:48] Tony: Thank you. I’ve just got back from Wagga. I went down to Wagga for four days. and hung out with Ruddy and, uh, had a break from Sydney and it was raining cats and dogs when I left and it’s raining again when I’m back, so we played a couple of days of golf, watched the races, bet like crazy on anything that was happening, um, which was a lot of fun, and I actually had a birthday tipple.

[00:01:12] Tony: I took a bottle of scotch down and, um, managed to have, I think, Uh, three nips of Scotch, which will do me for another year.

[00:01:22] Cameron: Three nips!

[00:01:23] Tony: Three nips. Yep. .

[00:01:24] Cameron: Were the nips getting bigger?

[00:01:27] Tony: They could have, they could have easily gotten outta hand, but no, they didn’t. I got to that nice sort of warm feeling, you know, that nice warm feeling, relaxed feeling.

[00:01:35] Tony: And you start to think, wow, if I feel this good after three sips, how am I gonna feel after , after half the bottle? But I went, no, don’t be silly. So, um, yeah, that was good. Good fun, good break, nice and relaxing. Roddy’s a great host.

[00:01:50] Cameron: That’s good. Did you, any of your bets win?

[00:01:55] Tony: Uh, nah, nah, but didn’t lose much. It was a big race day in Sydney, Doncaster mile day.

[00:02:01] Tony: So I think I lost about a hundred bucks betting on the races there. Um, and then I had, so Ruddy and I just watched the golf and put 5 on different players and frayed our fortunes and stuff. I had 5 on this guy the night before the final round. He finished up running second, but I thought, it was 6 1, and I thought, gee, he could win this.

[00:02:25] Tony: He’s a much better player than the guy who’s leading. And he got, he made up all the ground, got to a playoff, and then, uh, hit the ball in the water on the first playoff hole. Uh, there’s one good thing about punting is you always find the new way to lose money.

[00:02:44] Cameron: Well, speaking of losing money,

[00:02:48] Cameron: Tony, China stumbles back!

[00:02:51] Tony: Share Mark. It’s up today. What are you talking about?

[00:02:53] Cameron: no, I’m not gonna, get straight into the share market. It’s boring. It’s too, it’s too boring these days. It’s just up, it’s nothing going on. It did slide back a little bit last week, but nothing major. Uh, we’ve been talking a lot about China and, um, in my research on China’s economy, I stumbled on the IMFs website over the last week.

[00:03:12] Cameron: International Monetary Fund, There was a, an article posted December 23 by ade. Dunno who he is, but he’s writing on the IMF’s website. Says growth slows, risks abound, but economic and financial collapse can be avoided. China’s economic performance has been stellar over the past three decades, with remarkable and persistent high growth that lifted the economy from low income to upper middle income status, blah de blah de blah.

[00:03:43] Cameron: Uh, China has been the main driver of the world’s economic growth, accounting for 35 percent of global nominal GDP growth, while the United States accounted for 27 percent over the last decade and a half, this is. But basically, he’s saying, um, detractors have long argued that China’s economic collapse was imminent, pointing to numerous fragilities.

[00:04:05] Cameron: Country’s growth has been powered by investment in fiscal capital, especially real estate, that has been financed by an inefficient banking system. Still not really sure what that means, an inefficient banking system.

[00:04:16] Tony: Hmm.

[00:04:17] Cameron: With domestic debt levels high and rising, the property market unravelling and the labour force shrinking, some analysts say the day of reckoning has finally arrived.

[00:04:26] Cameron: But then he says, they are likely wrong. Unbalanced reforms that have kept the institutional structure weak, a schizophrenic approach to the role of the market versus that of the state, and strains in financial and property markets could result in significant volatility in coming years, but none of this means a financial or economic collapse is inevitable.

[00:04:47] Cameron: And his summary at the end is the underpinnings of, hold on, he’s a professor at the Dyson School at Cornell University, senior fellow at the

[00:04:57] Cameron: Brookings Institution, and author of The Future of Money, so

[00:05:00] Cameron: that’s his cred.

[00:05:02] Tony: Is the Dyson Institute, is that like a vacuum

[00:05:06] Cameron: Yeah, they make, they make vacuum cleaners and air conditioners.

[00:05:10] Tony: It’s the, the Godfree Institute.

[00:05:14] Cameron: It might have been, might have been funded by him.

[00:05:16] Tony: Yeah.

[00:05:16] Cameron: Uh, the Charles H.

[00:05:19] Tony: probably be Freeman. It’d be Freeman die. Oh, it’s not.

[00:05:22] Tony: It’s not Freeman Dyson,

[00:05:24] Cameron: the Charles H. Dyson School of Applied Economics and Management. Charles H. Dyson was an American businessman and philanthropist, the founder of the Dyson Kissner Moran Corporation and the Dyson Foundation. Not sure what they did. Hold on, here we go. The Dyson Corp, no, no Wikipedia link for that. That’s, oh, because it’s changed its name.

[00:05:48] Cameron: No, nothing for that either. So I don’t know what they did. Anyway, he died in 1997. Back to, back to this article. The, the, the summary at the end is The underpinnings of China’s growth seem fragile from historical and analytical perspectives, even if no crisis materialize, crises materialize. Unfavorable demographics, high debt levels, and an inefficient financial system will constrain China’s growth.

[00:06:12] Cameron: Yet, If the government plays its cards right, one could equally well envision a more benign future for the Chinese economy with moderate growth that is more sustainable from an economic, social, and environmental perspective. So I thought it was a, it was a more, uh, um, sort of positive outlook coming from the IMF.

[00:06:32] Cameron: Of all places for the future of China’s

[00:06:35] Cameron: economy than anything I’ve read in the Australian media in the last five years.

[00:06:40] Tony: Yeah, it was a very, um, two by beach way article, isn’t it? It may crash or it may not, is the, uh, is the, uh, summary.

[00:06:50] Cameron: He is an economist after

[00:06:52] Tony: Yeah, exactly. I’m trying to find a quote. It’s a quite

[00:06:56] Tony: long article. I can’t find it now on the fly, but there was a quote in there about how economists tend not to like China or China’s future because it’s not a democracy and it’s not, doesn’t have a, um, a market economy and a few other things that they look for.

[00:07:10] Tony: Uh, as, as indicators of a solid, uh, and prosperous economy. And I’m thinking, yeah, you’re not going to find a better or more solid and prosperous economy than China over the last 20 or 30 years. So, uh, yeah, I think the economists have got it wrong there about democracy and free markets. Um, yeah, I mean, he makes a very good point that we’re in a centrally managed economy.

[00:07:33] Tony: They’re, they’re very well placed to bolster the sectors that need bolstering and regulate the sectors that need regulating. And, um, and you know, they’ve had a very long track record of growth, so I wouldn’t be betting against them. And I guess the reason why it’s of interest to us is because China is such a big trading partner for us.

[00:07:53] Tony: And, you know, they were about to, about a month away, we’ll get a budget handed down. I’m fairly certain it’ll be bolstered by coal royalties and iron ore royalties, iron ore in particular, um, through trading with China. So China’s economy is important to us. But as long, I mean, I think probably, I remember through my investing career, there was a, there was a very bullish sentiment towards China maybe 20 years ago when it was growing at even double digit.

[00:08:22] Tony: per annum increases. And then it slowed down a bit and you started to see people posting photographs of apartment towers where no one lived in and, um, you know, roads to nowhere and all that kind of stuff. But I was always fairly skeptical of that ad hoc sort of analysis of the Chinese economy because it’s such a big place with such a big population that if there’s a couple of disused highways, it’s not going to make a scaric difference to the economy.

[00:08:48] Tony: And the numbers have always been consistently good. Sure, they’re slowing down now, but balancing that is the fact that there’s, you know, they brought so many people out of poverty into middle class lifestyles, and that’s got to be good for the economy going forward. It won’t grow as fast, but, but it’ll still grow.

[00:09:04] Tony: And, you know, one of the things that China seems to be doing well is to balance that, uh, you know, being the sweatshop for the, for the world, uh, and transitioning from there to being a services based economy. Um, You know, we’ve been in areas like IT for example, so, um, seems to be doing okay.

[00:09:22] Cameron: one of the big pushes over there at the moment is to

[00:09:24] Cameron: move towards self sufficiency.

[00:09:26] Tony: Right. As it is everywhere. That’s probably,

[00:09:31] Tony: yeah, exactly. Yeah. They probably wouldn’t be pushing that if America wasn’t pushing it first.

[00:09:39] Cameron: Uh, yeah, possibly, but I do think, you know, they’re cognizant of the fact that they need an economy which isn’t, doesn’t survive on exporting, you know, being the world’s manufacturer, the world’s sweatshop, you know, that they need to, Be able to, uh, run off the basis of a domestic economy to a large extent, um,

[00:10:00] Tony: Correct.

[00:10:00] Cameron: uh, consumption.

[00:10:02] Cameron: Anyway, so interesting. Uh, you know, it’s like, uh, I’ve said on this show, and we talk about this on the bullshit filter all the time, just the, the level of. Skepticism and cynicism about China that’s in the Australian media is overwhelming. It’s just wall to wall skepticism and it’s really hard to take seriously.

[00:10:21] Cameron: So interesting that the IMF is writing something a little

[00:10:24] Cameron: bit, um, less cynical. But speaking of cynical.

[00:10:30] Tony: I mean, there is really a dichotomy in public life about China, isn’t there?

[00:10:33] Tony: On the one hand, it’s our biggest trading partner, um, and we should be treating it like a good, you know, good customer. And on the other hand, we’re doing orcas deals to have nuclear submarines in case the customer turns against us.

[00:10:44] Tony: It’s, it’s, uh, I don’t think people can get their heads around that really.

[00:10:49] Cameron: It’s straight out of that episode of Utopia.

[00:10:51] Tony: Hmm. Yeah.

[00:10:55] Cameron: Gearing up to, go to war with our biggest trading

[00:10:58] Cameron: partner.

[00:11:00] Tony: Yeah. We need to, we need to protect the Asian trade routes. So what would be the most, uh, Dominant one that we need to protect, uh, I can’t say.

[00:11:11] Cameron: How about I say it and you just nod. Would it be China?

[00:11:18] Tony: Yeah.

[00:11:18] Cameron: That’s such a great, such a great scene. Um, speaking of cynicism, I saw this and it just cracked me up. I love this is, this is all, this is Barry Diller. I mean, Like, gee, Barry, what can you say about Barry Diller.

[00:11:33] Cameron: His career, um, he’s sort of been everywhere,

[00:11:38] Tony: In the Mediascape, anyway.

[00:11:40] Cameron: yeah, I mean, and, and, not really known as a softie, not really, he was not what I’d call a, uh,

[00:11:47] Cameron: you know, a, a softie, lefty Republican by any means, um, but, but,

[00:11:52] Tony: some of my friends like to say, a woke

[00:11:54] Tony: snowflake.

[00:11:56] Cameron: Yes. Uh, you know, he ran

[00:11:59] Cameron: Fox for a long time and QVC and, uh, God, whatever else. I’ve even lost

[00:12:05] Tony: he involved in Disney? I think he ran Paramount.

[00:12:07] Tony: Yeah. Yeah,

[00:12:09] Cameron: I saw this interview with him recently talking about Trump social, or whatever, Truth Social, Trump Media’s thing, um, hopefully you can hear this, shake your head if you can’t hear this when I click now.

[00:12:22] Cameron: Not a political question about former President Trump, but actually a

[00:12:25] Cameron: business question about Truth

[00:12:28] Cameron: Social. You’ve seen this stock on the move in this, in this, I’ll call It

[00:12:32] Cameron: remarkable, maybe even crazy way. I’m going to say two words, GameStop. GameStop. That’s what you think is going on here. I mean, It’s ridiculous. the

[00:12:41] Cameron: company has no revenue. But do you think it could ever be a bigger business? Do you think if he wins the presidency,

[00:12:47] Cameron: it becomes Why? Why would it be

[00:12:50] Cameron: bigger? Look, he’s only interesting now because he’s out there entertaining the folks. I hope if he does get elected, he just plays golf for four years.

[00:12:57] Cameron: But, So do you think That all of the investors, investors in this are, are getting

[00:13:02] Cameron: scammed?

[00:13:02] Cameron: Do you think they think this is a transference of wealth from one side to the other, and that’s the goal? What do you think

[00:13:08] Cameron: is happening? I think they’re dopes. I mean, who would buy

[00:13:11] Cameron: a company that literally, as, I mean, I think, what does it have, 30 of

[00:13:16] Cameron: revenue? Uh, why would you put a, how could you put a value on it

[00:13:21] Cameron: They’re buying it for other reasons, just like they bought theaters when there was no theater business, or they bought GameStop or whatever. It’s stupid. It’s stupid stuff. It was a thousand times revenue, I think. What? Okay. It

[00:13:34] Cameron: wasn’t four million, it was Four million? Four million dollars in revenue? That’s four million dollars?

[00:13:40] Cameron: It was ridiculous. I’m not saying it’s not Four million Why are you even talking about this? It’s a scam, just like everything he’s ever been involved in is some sort of con.

[00:13:52] Tony: It’s refreshing to hear someone say something straight up and down in public, isn’t it?

[00:13:59] Cameron: Yes. Particularly a guy like Barry Diller who, um, you know, as I said, worked at Fox, all those sorts of things. But yeah, I thought that was great. It’s a scam. It’s a con. Why? And where’s the value? It’s not making any money. I don’t know. Just get Barry Diller on the show. Yeah,

[00:14:15] Tony: the line that if he gets elected, I hope he plays golf for four years.

[00:14:20] Cameron: well, he will, no doubt. But, uh, among screwing other stuff

[00:14:26] Tony: That was funny. Well, I mean, Truth Social, Truth Social, Truth Social, that’s hard to say. Truth Social was merged in, backed or listed into another company. Basically, so Trump could pay his bond to, uh Be able to keep living in Trump Tower and Fifth Avenue. So it had to work from that point of view, but yeah, I doubt if it’s got any real legs as a media empire.

[00:14:52] Cameron: Lindsay Fox, Tony, LAU was uh, good QAV stock, um,

[00:14:57] Tony: You’ve made the same mistake someone made on the

[00:15:00] Tony: QAV group. LAU is Lindsay

[00:15:02] Tony: Australia,

[00:15:03] Cameron: Oh, Lin

[00:15:05] Tony: a listed, listed company. LinFox is a public company, a

[00:15:08] Tony: private

[00:15:09] Tony: company, sorry, owned by Lindsay Fox. Different companies.

[00:15:14] Cameron: I make that mistake every time with Lindsay. Alright, well I’ll edit that out. And this time, I’ll remember to edit that out.

[00:15:22] Cameron: Last week, you said edit that out, and I didn’t remember until I’d already published it, so,

[00:15:27] Tony: oh dear.

[00:15:28] Tony: Okay.

[00:15:28] Cameron: edit it out. Edit that out. Let’s

[00:15:33] Cameron: see if I remember that this time.

[00:15:35] Tony: We can talk about, um, ArmourGuard if you like, but

[00:15:39] Cameron: Nah, it’s not really

[00:15:40] Tony: relevant. Well, I think it’s relevant to society. I mean, I think, well, yeah, I mean, even when I was working at Coles, there was a cost associated with cash, right? People think cash is free. But if you’re a retailer, you’ve got to count the money, you’ve got to collect the money, you’ve got to bank the money.

[00:15:55] Tony: So, um, You’ve got to outsource that to ArmourGuard. You can’t do it yourself, right? Because someone will jump you with a, with a knife and, and, uh, take it from you. So, um, yeah, it’s a cost. I think, I can’t remember the numbers now, but it was like one or two cents in the dollar was the cost of processing cash.

[00:16:11] Tony: Um, yeah. And Lindsey’s now saying it’s more than that because there’s less cash in circulation. So he’s got a, he’s lost some efficiencies in that, um, in that market. I mean, the way I think it’ll finish is that, uh, the, the banks and the supermarkets and the large retailers will have to pay more. to keep ArmourGuard running, or, which probably means what they’ll do is they’ll start putting a surcharge on things, on sales for cash, or they’ll stop taking it.

[00:16:37] Tony: Cash just won’t be allowed as a, as a legal tender in stores. And that, that may not even be legal. I’m not sure if you can do that, but, um, they’ll try and find ways to incentivize you to use cards, which have a service fee anyway, but, um, cash will either get charged a service fee or it will stop, or it will disappear.

[00:16:54] Cameron: the implications of a society with no cash? Like, it’s still amazing to me

[00:17:00] Tony: Positive, I think.

[00:17:01] Cameron: Yeah. How quickly when COVID hit, businesses

[00:17:05] Cameron: just went, we don’t take cash anymore. It was

[00:17:07] Cameron: almost like

[00:17:07] Tony: exactly. And that’s, and that’s what’s killed ArmourGuard. Really. Um, but yeah, it’s, it’s, I mean, the ATO has been trying to get rid of cash for years because it’s, cash is the black market economy. You don’t, um, they don’t collect enough GST because if, uh, you know, if I ring up and want someone to come in and do some work for me, it’s a reasonable chance they’ll say it’s, um, here’s your invoice or it’s 10 percent off for cash, which means they’re not paying GST.

[00:17:34] Tony: So, um, yeah, that’s going on and they’re trying to, you know, Crackdown, apart from money laundering and the black market economy, um, in, you know, bootleg product like cigarettes. Um, yeah, I mean, the government would love not to have cash in the economy.

[00:17:51] Cameron: Mm hmm. Right. So, we end up in a society without cash, less black market, less,

[00:17:59] Cameron: except for Bitcoin. Everything goes to Bitcoin then.

[00:18:03] Tony: Well, Bitcoin’s better because at least it can be, well, it can’t be tracked, can it? It’s supposed to be anonymous. You can track it as you enter and exit the system on the Coinbase, um, sites when you transfer cash in and out, but, or, or transfer money in and out. But, um, yeah, we all pay less, we should all pay less tax if the people who are now not paying tax start to transact using FPOS or credit or whatever and get tracked and pay the right amount of tax.

[00:18:32] Cameron: Mm hmm. I saw, I saw, um, our friend Alan Kohler, on the ABC earlier today talking about how the government’s tax revenues are at like a record high. They’ve gone up

[00:18:45] Cameron: massively in the last 10 years.

[00:18:47] Cameron: Maybe that’s because there’s less cash

[00:18:50] Tony: Well, no, I think, I haven’t heard that interview, but I’m fairly certain Alan Cole’s point will be bracket creep. And apart from the fact that the states are now levying more taxes to pay for their COVID debt, especially in Victoria. on land taxes and COVID recovery taxes. But I mean the Stage 3 tax cuts which got watered down or redistributed were meant to make up for bracket creep which is a real thing in taxation.

[00:19:17] Tony: So instead of having a tax system which says, you know, 100, 000, you pay 0. 30 in the dollar tax, and at 200, 000, you pay 0. 40 in the dollar tax, and above that, you pay 0. 47 and a half, which is, you know, kind of what we’re meant to do. If all those brackets are actually indexed for inflation, then, um, They, they change, they move with, uh, you know, move with the times, so to speak.

[00:19:43] Tony: And, and the amount of tax you pay, um, moves with the times as well. But what tends to happen is that because governments like to give tax breaks to people, they don’t index the brackets. And so, um, As our wages go up with inflation and the brackets haven’t changed, people have moved from earning the 100, 000, you know, below the 100, 000 bracket to being above the 100, 000 bracket and they’ve suddenly start paying an extra five or ten percent tax.

[00:20:13] Tony: Which is, which is a windfall for the government. And because there hasn’t been a hand back or readjustment of the brackets for the last, whatever it is, Alan Collar says 10 years, whatever it is, um, the government says, yo, you’re a beauty, you know, now, now I can give it back to you. Are they a good economic manager?

[00:20:30] Tony: It really is the reverse. They should just make tax brackets indexed and, um, find some other way to pork barrel when they’re in government.

[00:20:40] Cameron: I see. Well, good luck. Congratulations

[00:20:44] Tony: That’s all academic for you, you don’t pay tax do you? Ha

[00:20:47] Cameron: have an income either, so it’s all academic, yeah. I like, congratulations to people whose incomes have been indexed to inflation for the last 10 years.

[00:20:56] Tony: ha

[00:20:58] Cameron: Must be nice. Well, speaking of black, uh, black economy stuff, Tony, I saw this, made me laugh too.

[00:21:06] Cameron: Uh, the, um, President of the Federal Reserve in, where is it, Minneapolis or somewhere. He, uh, says, uh, he was being interviewed recently. You’ve already said on record that you have an unlimited supply of dollars, doesn’t it make sense to trade some of them in for a currency with a hard cap? Jennifer Ablan, Editor in Chief of Pensions and Investments, asked this guy Kashkari during a LinkedIn Live event on behalf of an audience member and referring to Bitcoin’s fixed supply of 21 million Bitcoin.

[00:21:42] Cameron: What is that hard cap, Kashkari, the President of the Federal Reserve Bank of Minneapolis, responded? The hard cap could be zero for Bitcoin. It could go down to zero. Just replace the word Bitcoin with Beanie Babies. Should the Fed buy Beanie Babies because Beanie Babies were a fad for a while? For Bitcoin’s hard cap of 21 million to be changed, it would require a majority of Bitcoin miners who maintain the network to In exchange for Bitcoin to vote for a change, this would fork the network with the minority of miners continuing to maintain the Bitcoin with a 21 million hard cap.

[00:22:16] Cameron: Kka said that like Beanie Babies, Bitcoin has no actual utility in the economy other than being a nice toy that some people enjoy owning and trading. Adding that the only use for Bitcoin is trying to subvert banking regulations, get around either marijuana banking or elicit activities. Bitcoin. He says, has been around for more than a decade, and more than a decade later, there’s still no legitimate use case in an advanced democracy.

[00:22:44] Cameron: Warning, there’s a lot of fraud,

[00:22:45] Cameron: hype, and confusion, so I am worried from a consumer perspective.

[00:22:50] Tony: Well the use case is

[00:22:51] Tony: fraud, money laundering and Ha ha ha ha She’s just

[00:22:56] Tony: outlined what they were Ha ha

[00:22:58] Tony: ha

[00:22:58] Tony: ha

[00:23:00] Cameron: Yes.

[00:23:01] Tony: very good analogy, it is exactly like that isn’t it? Just like, uh, when Nike Brings out a limited release number of sneakers. It’s, uh, it’s just like Bitcoin. There’s only 21 million, or whatever it is, 21 billion worth of it.

[00:23:13] Tony: Getting, getting quick. Yeah, it’s, yeah, it’s the same, exactly the same sort of thing. Yeah. What was that? That was part of the, um, uh, influence

[00:23:22] Tony: book that, uh, there’s a, there’s a marketing premium to, um, having a limited edition of things.

[00:23:29] Cameron: Yeah. Which is a good time to announce limited edition QAV, uh, memberships. Um, we’re only, only ever allowing 500. So get yours today

[00:23:42] Cameron: before the price goes up or something.

[00:23:45] Tony: People, there’s a fork in the road and a new hard cap.

[00:23:49] Cameron: That’s right. Yeah. Um, Housel. Morgan Housell’s, uh, little idea for the week, Tony. This one, uh, I need your

[00:23:58] Cameron: help to understand. Anscombe’s Quartet. You ever heard of this before?

[00:24:03] Tony: I haven’t, no. I looked it up, though, when you shared it with me.

[00:24:06] Cameron: Anscombe’s Quartet, according to Wikipedia, comprises four datasets that have nearly identical simple descriptive statistics, yet have very different distributions and appear very different when graphed. The household explanation says that they look identical on paper, mean, average, variance, correlation, etc, but look completely different when graphed.

[00:24:29] Cameron: It describes a situation where exact calculations don’t offer a good representation of

[00:24:35] Cameron: how the world works.

[00:24:37] Cameron: So

[00:24:38] Tony: that’s the corollary of that saying which says that their statistics can be used like a drunk man uses a lamppost for support rather than illumination.

[00:24:50] Cameron: oh I like that,

[00:24:51] Tony: It’s the same thing, isn’t it? If you look at the stats, you can have an average. Well, the same average could apply to all sorts of different data sets, same with standard deviation and mean.

[00:24:59] Tony: So you don’t know that until you lay it out and have a look.

[00:25:02] Cameron: right, so um, yeah, so there’s, I’ve got these four data sets all graphed out here in Wikipedia and they do sort of have the, uh, Um, same sort of, uh, line, trend line going up, but they’re all over the place, the data points. So you can, when you actually see them charted out, you realize that the, the, um, trend line is not really giving you an accurate representation of what’s happening.

[00:25:35] Cameron: Which, as I understand it, is why it’s important to actually graph things out sometimes, so you can, you know, Make more sense of the data.

[00:25:44] Cameron: Any application of that, do you think in the investing world, Tony?

[00:25:49] Tony: that’s a good question. Um, I mean, we can go down the rabbit hole of sharp ratios, etc. And so you’re taking, you’re trying to risk adjust returns. So you’re not just looking at, you know, I mean, the classic example. Um, it may not be germane to this, but if you’ve got, um, two investments and they both return 10 percent CAGR, which one do you invest in?

[00:26:09] Tony: What’s the one that’s less risky? And of course, a classic economist will say, we’ll measure risk by volatility, which is not necessarily right either. Um, but yeah, that, that could be an example of it. If you, you don’t know how, maybe you don’t know how volatile the option A is over option B until you graph it and have a look at it.

[00:26:29] Tony: You see that one’s more squiggly in terms of its ups and downs than, um, the other one.

[00:26:36] Cameron: I’ve been trying to think for the last couple of years about ways to use more visual tools with our checklist, like in turning them into an infographic or some sort of beautiful looking thing that, uh, helps us tell one stock from another and highlights this or that. And I’ve, I’ve played around with different things.

[00:26:57] Cameron: And at the end of the day,

[00:27:00] Cameron: the numbers seem to do just as good a job. I haven’t

[00:27:04] Tony: an interesting thought.

[00:27:05] Cameron: that makes

[00:27:06] Tony: Hadn’t thought of that. Why don’t you ask your friend

[00:27:07] Tony: ChattyGBT if they can come up with a solution to it.

[00:27:11] Cameron: Chatty GPT. Really? Is that a wow? I saw, uh, I heard an interview with Elon Musk earlier today where he said that by the end of next year, he expects we’ll have an AI that’s more intelligent than any human on the planet. And I

[00:27:29] Cameron: thought, try selling that to TK Elon

[00:27:34] Tony: No, I think that’s probably true, but I just, I’m not sure I believe that human intelligence is the pinnacle of intelligence. It’s like, you know, I suspect that AI will suddenly work that out and go off on a different tangent and we’ll just, it’ll just disappear.

[00:27:48] Cameron: Oh, right.

[00:27:50] Tony: Yeah,

[00:27:50] Cameron: were gonna say you think it’s actually octopuses that it needs to compete with not humans.

[00:27:54] Tony: possibly. Or dolphins as, um, was that Douglas Adams said?

[00:27:58] Cameron: Yeah,

[00:27:59] Tony: so long and thanks for all the fish. Yeah,

[00:28:04] Cameron: Uh, well my last thing today before we get onto some other stuff is, um, the regression testing.

[00:28:11] Tony: Ooh,

[00:28:12] Cameron: I’ve done a bunch, um, in the last week since we last spoke of isolating different indicators and having a look at their cagr. Now I’m gonna preface this by saying. I still, I still have some questions for Matt, um, cause I started to drill into these results and look at the, um, underlying buys and sells, and I’m looking at the data behind the results.

[00:28:36] Cameron: And some of it, I’m not, I’m not able to make sense of, doesn’t mean that it’s wrong, could just mean that I’m dumb. So I’m asking him to clarify how it works for me, but for what it’s worth, just comparing, um, isolations, um, by themselves, assuming that they’re somewhat correct. Um, I’ll run through them, uh, a couple of the top ones anyway.

[00:29:00] Cameron: So out of all of the things that I’ve isolated. Keeping all of our metrics, but changing rule one from 10% to 20% has delivered the highest results so far over a 2000, over the period of 2006 to 2023, where the STW as I said last week, was 2% CAGR over that period because of the,

[00:29:23] Tony: so low, isn’t it?

[00:29:25] Cameron: Well, as you said,

[00:29:26] Tony: the GFC.

[00:29:27] Cameron: GFC crashed everything in 2007, eight, um, the 20% rule one over that period delivered a f.

[00:29:35] Cameron: 14. 9%, say 15 percent CAGA over that period. But just isolating

[00:29:42] Cameron: financial health as a trend delivered 14. 6%.

[00:29:46] Tony: So sorry, when you say just ICE, so you ran it, that was the only item on the checklist that you selected stocks in the portfolio based on.

[00:29:54] Cameron: Yes. It’s still at a 10 percent rule one. It still did a 3PTL sell. So those things were still there, but in terms of

[00:30:03] Cameron: buying, determining what to buy, it was just financial health trend.

[00:30:08] Tony: So no, nothing else. No,

[00:30:11] Tony: you know, IV1 calculations, IV2, nothing else. Okay. That’s interesting, isn’t it? Wow.

[00:30:16] Cameron: Just financial hell.

[00:30:18] Tony: Yeah.

[00:30:18] Cameron: next, the next one that, uh, well, the one that

[00:30:21] Cameron: comes third is No Rule 1, delivered 14. 4%. I don’t know, because the

[00:30:26] Tony: Wasn’t that different to what you said last time? Did you say no real one versus 10 percent real one? You might have said that.

[00:30:35] Cameron: 10 percent rule one comes in at number 7 here, 12. 8. Hmm.

[00:30:42] Tony: might have been that. Because I saw this today when you sent it through and I thought, Oh, I thought no rule one was the best outperformed 20 percent rule one. But then I sort of thought about it and thought, Maybe you compared it to 10 percent rule one.

[00:30:54] Cameron: Must have been, because these are still the same results.

[00:30:57] Tony: Yeah. Okay.

[00:30:57] Cameron: early last week. Um, number 4 was book plus 30, it returned

[00:31:02] Cameron: 13%. Again, that’s the only buyer, uh, only buying, well, only thing I was scoring on for buy, for buyers was book plus 30, well, price, um, less than book plus 30. Price less than forecast

[00:31:17] Cameron: was, uh, about the same, around 13%.

[00:31:23] Tony: Wow, that’s, that one surprises me

[00:31:24] Tony: because, you know, I’d say how many, what, 75 percent of the buy list is less than its consensus forecast?

[00:31:34] Cameron: Well, we don’t have consensus forecast for a lot of stocks. Um, so I don’t, it’s eliminating

[00:31:40] Cameron: the ones that don’t have that too, I guess, that don’t have analysts looking at them.

[00:31:45] Tony: Well, that’s something to test, I think, because I think that would. I would suspect they would outperform

[00:31:51] Tony: the stocks without a consensus forecast.

[00:31:54] Cameron: Yeah. Hmm. Don’t know how I do that. I did that. I can see on the thing, like the one that came in the worst was just star stocks. It came in with a negative kagger,

[00:32:03] Tony: Oh,

[00:32:04] Cameron: but when I looked at what it was buying, it was hardly buying anything from. 2006 through to 2010. So I suspect, I haven’t gone in and drilled into the Stock Doctor data from those years, but I, I suspect there’s not a lot

[00:32:21] Cameron: of stocks showing up as Stock Doctor, uh, Star Stocks in that period.

[00:32:25] Cameron: I don’t

[00:32:26] Tony: No,

[00:32:26] Cameron: they

[00:32:26] Cameron: really started using star stocks or maybe our data is a bit flaky

[00:32:32] Tony: you know what? What possibly happened is they changed the nomenclature. They may have changed the

[00:32:36] Tony: naming because it, um, I think they were all called star stocks at one stage and now they, and then they broke them off into star gross stocks and star income stocks and borderline gross stocks and borderline income stocks.

[00:32:49] Cameron: So anyway, I, I sort of discounted this one as there’s probably a problem with the data, but going down the list of, um, best to worst. So price less than forecast financial health just by itself returned 12. 9, 10 percent rule one, 12. 8, just looking at the 3PTL was 12%.

[00:33:11] Tony: Okay.

[00:33:12] Cameron: comes in at 11 and a half.

[00:33:14] Tony: Yeah, that’s interesting, isn’t it?

[00:33:15] Tony: Dylan did work on regression testing where he thought PropCaf was one of the big drivers. Yeah.

[00:33:20] Cameron: Yeah, yeah, um, so it came in fairly way down, uh, my list of tests, uh, next was just a new upturn, it was about 9. 3%, lower than IV2, same, about 9. 2%, uh, lower than IV1, about 5%, and then Starstocks, as I said at the bottom. So, again, I’m, you know, I, I, I’m not a hundred percent confident in how the system is buying things.

[00:33:49] Cameron: Um, I’ve got some questions that I’m still working through with Matt, but anyway, for what it is, that’s been an interesting, um, process to run through. And the fact that the 20 percent rule one came at the top, um, which again, it isn’t

[00:34:07] Cameron: consistent with the sort of regression testing you’ve done

[00:34:11] Tony: Correct. Yeah. And, and I’ve been trying a 20 percent rule one and it’s, my portfolio is very stable at the moment, but I don’t know if that’s because of the way the market’s performing or whether it’s a 20 percent rule one trial is working better.

[00:34:25] Cameron: Well,

[00:34:27] Cameron: you know, all of the portfolios that I manage are stable at the moment.

[00:34:31] Tony: Yeah, okay, so that’s probably that

[00:34:33] Cameron: and I’m using 10 percent still. I mean, I’ve had to sell a couple of things, but I think, you know, a couple of commodity sales and things like that, but, you know, maybe a 3PTL sale, but,

[00:34:44] Cameron: there’s not a lot of rule one selling going on for me at the

[00:34:46] Tony: Mm hmm. Mm hmm. So, I mean, when can we start actioning some of this and I guess do further

[00:34:54] Cameron: Well, my, my sort of plan is, you know, getting Matt, I’ve asked Matt a few questions, as I said, and, uh, once he’s, um, helped me understand why it’s buying some things and not buying other things. I think this came up when I was looking at, um, The Ivy one, I think it was the IV one. It was one of the, one of the things I was a book, no, it was book plus 30.

[00:35:19] Cameron: I was drilling down into that, just trying to work out how the modeling’s working and how it’s, uh, choosing to buy certain things and other, other things. Uh, my plan though was to run, isolate all of the indicators, run them over this timeframe, and then pick a different time period. And run them again, maybe say 2013 to 2023 over a 10 year period,

[00:35:44] Tony: Yep.

[00:35:45] Cameron: rerun them, then pick another one.

[00:35:47] Cameron: So I run like the full set of tests on three to five different timeframes and see if they’re consistent and if not, what the differences are. But um, I was able to get, you know, 10 of these done in the last week

[00:36:04] Cameron: now. So, um, Yeah, Starting to gather some data anyway,

[00:36:09] Tony: Yeah, that’s

[00:36:10] Tony: amazing. And I think, you know, um, it’ll help because if, like, yeah, very simply, if 20 percent rule 1 works better than no rule 1 or 10 percent rule 1, that’s what we should move to. Um, but it’ll get a bit tricky when we start to look at, you know, Things like PropCaf, like, we need to test whether a cutoff at 7 is better than a cutoff at 5 versus a cutoff at 10.

[00:36:32] Tony: Like, we have to test a few different things there, I think, rather than just turf PropCaf out as a metric or derate it in the score.

[00:36:40] Cameron: Yeah, but if, you know, the 20 percent rule 1 includes all of our standard metrics as well, including

[00:36:48] Cameron: PropCaf, so we would

[00:36:49] Tony: Yeah. Well,

[00:36:52] Cameron: right?

[00:36:53] Tony: I guess so. But, um, if PropCaf is, as you say here, returns 50 percent less CAGA, um, maybe we can improve that if we have a 20 percent rule 1, everything in, but PropCaf is cut off earlier or later than what it is now.

[00:37:10] Cameron: Right, I see what you’re saying, Yeah.

[00:37:12] Cameron: So we can actually play with the scoring of all the indicators as well, moving them up and down and saying, Yeah.

[00:37:18] Tony: Yeah. Cause I mean, I, I took seven from a, that book Outliers when, um,

[00:37:23] Tony: someone said that they, they built their network out of, uh, buying companies that, uh, Had a PropCaf of 7, um, but that was never a researched number, so to speak.

[00:37:33] Cameron: Hmm.

[00:37:34] Tony: Um, so there’s that, but also too, I think, if I can encourage you, maybe just, if you can, can you test the manually entered data? Information at all. So it looks like you’ve done one of those there, which is the, uh, uh, a recent updo, I suppose, yeah, recent upturns of manually entered data piece, but, um, consistently increasing equity and PE less than three years, because if we can find it, if, if they’re not having an effect on Kaggle and we can just take them out of the system and save ourselves some work, if everything else is automated,

[00:38:12] Cameron: Yeah. Okay. I’ll have a look at those.

[00:38:15] Cameron: Uh, anyway. Yeah. So that’s that. Just wanted to

[00:38:18] Tony: It’s good. No, It’s great. Good work. Thank you.

[00:38:21] Cameron: been an interesting process. So thank you. Congrats to Matt Walker. He’s, um, done an amazing job getting this to where it’s at. What have you got

[00:38:30] Cameron: in terms of news stories, TK? What’s taken your interest this week?

[00:38:35] Tony: a lot of QAV stocks in the news at the moment,

[00:38:39] Tony: so I just pulled out three articles from the Fin over the last week. The first one isn’t a QAV stock of course, it’s about Tesla, but it caught my eye because I’ve long thought that Tesla, even though it’s a good company now, it’s not going to maintain market dominance forever, as we’ve seen.

[00:39:00] Tony: Very few companies ever do. You know, Apple has its Google competitor and all those, Android and all those kinds of things. So, Um, and that seems to be happening now for Tesla. So there was an article in the Fin Review, Uh, which starts off, well the headline is Tesla veers to the EV slow lane and markets lose confidence in Musk.

[00:39:19] Tony: Tesla appeared to be losing command of the market it effectively created after it reported a stunning drop in quarterly sales on Tuesday, this is Tuesday last week, raising fresh questions about Elon Musk’s leadership of the company. The sales decline caught investors off guard as rivals such as BYD of China And Kia and Hyundai of South Africa, sorry, South Korea, reported increases in electric vehicle sales, suggesting that slower overall demand for battery powered models was not the only explanation for Tesla’s problems.

[00:39:51] Tony: So yeah, so the Tesla’s actually down quite a bit. Um, I was having a look at its graph and the bread later and it reached a high point of 385 a share back in November 21. And it’s now 175 a share. So it’s pretty much halved since, um, since the COVID peak. Uh, and it just, I just, the only reason that, um, I’m mentioning it is because, you know, we have questions from time to time about these rocket ship type stocks and To the Moon, Situations, and I just thought I’d just highlight once again that even though growth companies grow fast, they can also Crash fast and ungrow fast.

[00:40:33] Tony: Yeah, no tree grows to the sky and tall timber drops quickly. So, and I think Tesla’s just going to continue to face strong competition in the, in the EV markets. Um, the other one that caught, the other article that caught my eye again in the Fin Review, it’s about the Hanwha bid for Uh, ASB, Austal, the shipbuilding company we spoke about last week.

[00:40:58] Tony: Uh, this is headlined, Ex Defense Minister Pine is Hanwha’s man in Canberra. Not sure if I was a company wanting to lobby a Labor government, I’d hire a liberal, uh, ex minister as my lobbyist, but anyway. Um, maybe there aren’t any Labor Defence contractor lobbyists out there. Uh, goes on to say Hanwha Group, the Korean conglomerate behind a billion dollar bid for ASX listed Austal, has engaged former Defence Minister Christopher Pyne as it accelerates its local lobbying efforts.

[00:41:28] Tony: Pyne and Partners is the latest heavyweight consultancy advising Hanwha, which has had a significant presence in the local defence industry. Austal rejected Hanwha’s 2. 20 bid. 28 per share offer, telling investors it was unlikely it would be granted approval in Australia and the United States given its sensitive defense contracts.

[00:41:47] Tony: But Hanwha rejected those suggestions and said it was a credible bidder with long term ambitions in Australia. I bet. It said Hanwha had extensive shipbuilding experience which would expand Austal’s growth potential. So yeah, interesting twists and turns in this takeover defense. Um, It’s obviously a thing.

[00:42:08] Tony: Uh, if you need government, uh, approvals both here and in the US to, um, to allow, uh, Australian defense contractor to be taken over, you need to do a fair bit of lobbying to convince the government that, um, you’ll do the right thing. Uh, the, the share price is hovering around that 2 28 price. So the, the market seems to think the share, the, the takeover may go through.

[00:42:33] Tony: However, I just wanted to point out that not only does Hanwha need to convince the Australian and U. S. governments, but they have to convince Twiggy Forrest, who owns 19. 5 percent of this company, and the original owner founder, John Rothwell, who owns about 9%, so something like 28, 29%, has to agree for the takeover, as well as the Australian government and the U.

[00:42:58] Tony: S. government. So it seems like Hanwha have their Their work cut out for them.

[00:43:04] Cameron: And Christopher Pines, um, Strategic Advisory and Public Affairs Firm, um, which I believe

[00:43:11] Cameron: is called Mincing Poodle Agency. The Mincing Poodles.

[00:43:16] Tony: You believe that or you actually know that?

[00:43:19] Cameron: That was what Julia Gillard called him, wasn’t it? She called him a Mincing Poodle. No, he didn’t call his advisory firm that. I think he really missed an opportunity there. I think that was a,

[00:43:33] Tony: he

[00:43:33] Tony: needed a Barry and Stan to conduct some marketing for him.

[00:43:36] Cameron: exactly.

[00:43:37] Cameron: Mincing Poodle. Anywho.

[00:43:41] Tony: Anyway. Yep. And the last article I’ve got here is about Caroon, um, another company I did the Pulled Pork on. Uh, I think towards the end of last year maybe, and um, at the time I was talking about them being a, uh, an acquirer of a, an oil and gas field in Brazil, and that they had plans to diversify, and it looks like those plans have come off now.

[00:44:04] Tony: So again from the AFR last week, Caroon Energy is moving swiftly to try to capitalize on its 1. 1 billion acquisition of oil and gas interests in the Gulf of Mexico, with a new drilling campaign. That could lift the company’s total reserves by more than a third to about 70 million barrels. The drilling of the Houdat East and Houdat South wells, great names.

[00:44:27] Tony: Barry and Stan obviously got involved in that. The first of which starts next month could add 18. 3 million barrels to Caroon’s pre acquisition reserves of about 51. 8 million barrels. The Melbourne based oil and gas junior has more than doubled its capital spending budget for this year as a result of its share of the worth expected to be Between 67 million US and 77 million US.

[00:44:50] Tony: Carone, which owns 40 percent of the Houdat East Venture and 30 percent of Houdat South, now puts spending this year at as much as 134 million US, mostly in the US. But the final figure is likely to be higher again once a third well planned at the same project in the September quarter is included. Any guesses what that might be?

[00:45:09] Tony: Who dat? Who dat North? Who dat there? Anyway, so just an update on Caroon. They’re, um, they’re expanding in the US and, and, uh, it’s probably a good thing. The article goes on to say that, um, the Brazilian, the Wells, the Bawana, B A U N A, B A U N A, field in Brazil is, um, it will eventually run out, or it’s in decline, so not a bad idea to diversify.

[00:45:37] Cameron: Who Dat is, uh, the chant that the New Orleans Saints fans

[00:45:45] Tony: Oh,

[00:45:46] Cameron: apparently. Who Dat, Who Dat, Who Dat say they gonna

[00:45:50] Cameron: beat them Saints.

[00:45:52] Tony: okay. Well, it’s in that area. That’s the Gulf of Mexico. So it could be related through that. Um, the other thing I wanted to point out about this article was that, uh, in order to diversify into the Gulf of Mexico, they, uh, Caroon, um, Raised some money and that the retail shareholders left 74 million on the table for the underwriters who have since made 10 percent on their share purchase, um, if they held their shares to now.

[00:46:20] Tony: So the share price is rising and it’s back on our, on our buy list, but, um, always something to be aware of. It could be a conscious decision on the behalf of retail investors not to take up rights issues, but hopefully they didn’t just ignore the offer and leave it for the underwriters to, to bank the profits.

[00:46:37] Cameron: Mm. Speaking of which. One of the stocks in my US, uh, Stockopedia portfolio, Grin, G R I N, which I think is Grin Road Shipping, shot up 30 percent yesterday, or the day before, um, and when I looked into it, they, it’s a capital reduction. Looks like they’ve got a takeover offer of some shares and they’re basically delisting and privatizing the company via some sort of capital reduction.

[00:47:13] Cameron: So it shot up 30 percent uh, sort of hovering around that and I have to decide whether or not I’m just going to exit it and go buy something else or wait and see what happens. It’s got to go to the shareholders I think to

[00:47:29] Cameron: vote on this, but um,

[00:47:31] Tony: Well, if it’s going to do this, you don’t want to be stuck in a private company. So you need to sell the shares before that happens.

[00:47:37] Cameron: Yes, but it needs to go to the shareholder vote first. I guess I’m just waiting to see if anyone comes in with a last minute bid to take it over, push it up. But, um, yeah, something to keep

[00:47:49] Cameron: track of. But that’s always nice when a share goes up by

[00:47:52] Cameron: 30%,

[00:47:53] Tony: it’s great. Well done. Yeah, very good. I’ve got a pulled pork to talk about next, if that’s okay.

[00:48:01] Cameron: Who are you pulling today, Tony?

[00:48:04] Tony: I’m pulling a one MA, uh, a IC mines code A one M, which I thought was an interesting code of the Barry and Stan idea to put a new numeric into the code. I guess it differentiates ’em from a two MA two milk, but this is a mining company, a copper mine, a copper gold miner, although I don’t think they’ve got any gold yet.

[00:48:27] Tony: But, um, certainly selling copper. So on the buy list, um. It’s a wa well, it’s actually headquartered in WA but they’re, they’re mines in Queensland, so, and they’re all over Australia, so it might just be like where their sort of headquarters is, uh, formally called Intrepid Mines. Uh, and they, they, uh, they merged with another company, um, in about 2019 to become a one M uh, there, as I said, there.

[00:48:59] Tony: Their largest mine and their producing mine is called Aloise Copper, and it’s near Mount Isa in Queensland, and it sells copper concentrate. But they do have another seven exploration projects across most states in Australia. They acquired Aloise in 2021 and have since successfully explored in the area to just about, well, probably more than double mineral reserves.

[00:49:25] Tony: So they’re very much in growth mode. This company not paying a dividend because of that and pouring a lot of money into capital expenditure to try and grow around the company. That paid off for them in Alois’s case because there’s a proposed mine called Jericho in the same area area and it’s at the funding stage.

[00:49:43] Tony: So again, this company is another example of a bit like Caroon that may raise money to help fund its growth. Although I think in terms of Jericho, they’re talking about taking on debt and potentially even debt funding from customers of the copper offtake when the mine goes into production, which is an unusual way to fund mines in the U.

[00:50:07] Tony: S.

[00:50:10] Tony: I’ve got to say, the copper price is increasing, so it’s a buy on the commodity graph, and the company points out that this is being driven by increasing needs for copper in the production of wind turbines, battery storage units, EVs, solar panels, and in just generally upgrading the electricity transmission network, oftentimes needed to get access to the grid from.

[00:50:36] Tony: Uh, wind turbines or other sort of, um, uh, new facilities. Uh, gold prices also doing well, but, um, at this stage, I couldn’t see anything in their numbers that, that, uh, suggested they were actually had much or any gold, um, sales to, to speak of. Uh, it seems to be all copper concentrate from the Eloise mine. Uh, but it’s, it’s pretty good.

[00:51:00] Tony: been spectacularly growing. Latest results show that sales are up 58 percent and profit is up 143 percent and it actually turned the profit this half from a loss last time. So it looks like they’re doing well. It seems like they’ve been able to fund all of their capital needs, even for that big exploration program of seven.

[00:51:20] Tony: different sites around Australia and um, expanding LOEs. They’re funding it from cashflow. I guess that that’s a great thing. Um, the downside is that of course it means that they’re not having, even though they’ve termed profitable, that they’re not making much profit. And so their PE is quite high. Uh, and to run through the numbers, I’m going to use a share price of 37 and a half cents.

[00:51:42] Tony: The company has an ADT of 122, 000, um, on average. So. Large ish, but it may not suit big investors, but might suit a lot of people anyway, at that sort of level. Um, the, interestingly enough, this is a company where the share price is only almost half the consensus forecast. So the brokers think there’s plenty of upside in the share price.

[00:52:05] Tony: Uh, but we don’t. IV1 is 18, so, um, not on an IV basis will we buy this company. However, The IV is going to be driven by earnings per share, and a lot of those earnings are used to fund mine upgrades and exploration, so it’s understandable. The company has no yield. Stock Doctor financial health and trend is strong and steady, so that’s good.

[00:52:32] Tony: Anyone interested in ROE would not look at this company because it’s only 1%, but again, that’s driven by The earnings being ploughed back into CapEx. P is 102, which um, gives, scores us a minus one, and that Uh, is because, as I said, it’s, um, it’s, the cash is flowing in, but it’s flowing out in terms of CapEx for exploration, uh, not to the bottom line.

[00:52:56] Tony: PropCaf, however, um, is 4. 75 times, so there is plenty of cash coming in through the front door, and it’s, it seems to be, um, judiciously used if sales have jumped by, um, by 58 percent in the last half. NEP’s net equity per share is 0. 34 and if we add 30 percent to that 0. 44 it means we can buy this company for less than book plus 30 percent so that’s probably how the market’s valuing this.

[00:53:25] Tony: It’s markets understanding that Um, Profit is being eaten away with growth, um, but the assets are there and it’s trading around book plus 30. Forecast earnings per share is really good, um, it’s the, it’s the growth of nearly 400, over 400%, which means our, our metric that we like to score these on growth over P.

[00:53:45] Tony: E. is 4. 05 times when we’re looking for a good company to have at least 1. 5, so we score it well there. Uh, a company which has, um. Uh, uh, I guess you could call it an underfounder. It hasn’t been in existence for that long, but um, there are two people on the board. Uh, the chair, Joseph L. Ragee, holds 8%. Sorry, there are more than two people on the board, but there are two who have large shareholdings.

[00:54:10] Tony: Uh, Joseph L. Ragee, the chair, holds 8%. And there’s a director called Jonathan Young, who, uh, is associated with a fund manager called FMR Investments, and FMR holds 17. 8%. So between those two, the directors hold 26 percent of the company. So we’ll score it for an owner founder. Uh, it’s been a recent, uh, second buy line cross, but, um, it’s actually been a buy for quite a while.

[00:54:36] Tony: Uh, other manually entered data, no consensus, uh, no, sorry, consistently increasing equity. Uh, so we can’t score it for that. And, uh, the PE is quite high, so we’re not scoring it as the, it’s actually scoring a negative as being the highest in the last three years. So all in all the quality score for this.

[00:54:54] Tony: Stock is 11 out of 15, or 73%, and the QAV score is 0. 15, so it’s kind of in the middle of our buy list. Um, but if, uh, people are interested in Speccy Miners, this one seems to be well run. And that leads me into my positives and negatives. Uh, positives was the, the, You would expect there’d be a fair bit of upside from new mine development.

[00:55:19] Tony: Um, exploration is progressing at Eloise slash Jericho. Um, there’s a couple of other promising projects. One in Charter’s Tower called, Tower’s called the Pyramid Project. Another one called Delamerion, um, near Broken Hill. However, they are seeking to divest two of their current Projects, um, Mary Myer and Lemuel, um, which suggests that they, they don’t get everything right.

[00:55:45] Tony: So, um, this, this is the kind of stock that will go up and down based on releases of how much, uh, resources are under the ground for these kinds of exploration projects, um, and it’ll also go up and down, um, As new minds come online, so it’s something to be aware of. It’s these companies tend to be driven by news and can be a bit specky because who knows what’s under the ground until I drill the holes and, and, and get a fair idea of what’s going on.

[00:56:16] Tony: What the resource levels are themselves. The negatives for a stock like this is that successful projects will require funding. So that’s one thing to find copper underground, but you’ve got to get it out. And so that that will mean either an increase in debt for the company or potential Financial raisings from, from shareholders in the future.

[00:56:38] Tony: Um, however, this company, at least to date, has a, you know, seems to have a very good management track record of navigating their way through that. And the last negative, um, that we should highlight is, uh, potential commodity risk. So copper’s looking good now, gold’s looking good now, but, um, with a one, one or two commodity type miner, um, they will turn down when the commodity prices turn down.

[00:57:01] Tony: So that’s, uh, yeah. A one M.

[00:57:07] Cameron: A1M and the copper price is looking good.

[00:57:11] Cameron: Gets driven by all sorts of things, right?

[00:57:15] Tony: Oh yeah. Not the least of which is new mines coming into production. As we saw with lithium. One of the reasons why it, you know, went through a great run and then a great fall was because there weren’t many lithium, lithium mines in production. And then the whole heat came online all at once.

[00:57:29] Cameron: Yeah,

[00:57:29] Cameron: right. And obviously copper is very big in electronic vehicle, as well as construction and all those sorts of things. Batteries. Yeah. Lots of things driving it. Hmm. And difficult to mine too, I believe. It’s, uh, difficult. Take, it takes a long time to get a copper mine online, um, and there’s, uh, lots of problems with some of the existing ones, aging infrastructure,

[00:57:58] Tony: okay.

[00:57:59] Cameron: places like Chile and Peru often have geopolitical tensions, they’ve got some big copper belts in those countries.

[00:58:07] Cameron: Um, which can affect the price, you know. Anywho,

[00:58:12] Cameron: thank you, Tony. A1M, not a milk company. That’s

[00:58:16] Tony: No, that’s A two

[00:58:17] Tony: M. Yeah. A one and a two different

[00:58:21] Cameron: the milk.

[00:58:21] Cameron: Copper and milk go together like chocolate and

[00:58:26] Tony: B one and B two. Yeah.

[00:58:30] Cameron: Only one question this week. This is from Jordan. Uh, if the stock market didn’t give live prices and instead it operated similar to say selling a house, would TK have a price to operating cash flow value or other metric that he would consider a good price to sell? I’m just thinking that if less than seven represents good value to

[00:58:53] Cameron: buy, is there a number that represents a good price to sell?

[00:58:58] Tony: Well, that’s, that’s been an age old question for me and I haven’t been able to find a good price to sell except to look at market sentiment. So it’s, I guess it’s a bit hard if the stock market’s closed. Um, but, um, you know, as I’ve been saying, there are companies on our Our downloads, I wouldn’t say they’re on the buy list, but they’re in our buy list spreadsheet, which have got PropCafs greater than 100, so they’re in triple digit ProfCafs, which means they’re not, they’re not generating much cash yet, but their share prices are going up strongly because they’re growth stocks, basically, and people are buying this story that something better is going to come.

[00:59:34] Tony: Um, so PropCaf, Is a great way to find value stocks, but it’s not just the value stocks that go up and, um, you know, I’ve, I actually trialed at one stage selling stocks that had risen above our PropCaf cutoff, so using seven. Um, and above. I think Dylan encouraged me to, um, to rebalance out of the one that was, out of the stock that had the highest PropCaf in the portfolio and buy the cheapest one, but it didn’t work for me.

[01:00:06] Tony: And I’ve found that companies can, can keep on going up, their share price can keep on going up, their PropCaf can keep on going up, um, and the market might still love it. Um, Macquarie Banks brings to mind in that sort of circumstance. Um, I think Nickel Mines may have been one that, uh, I looked at and again, you know, we bought well out of it, but, um, the, the PropCaf number kept going up and up and up and up and up.

[01:00:32] Tony: Um, but the share, so did the share price, so there wasn’t a correlation. But the, I’ve only found PropCaf useful in determining Deep value companies, um, when I can, I’m trying to buy a dollar for a dollar of cash return. So, um, that’s, that’s the use of PropCaf. So, no. Um, it’s always an interesting question though, and the idea of shutting the market or, or thinking about your investments as if the market was shut.

[01:00:58] Tony: Um, as far as I know, it comes from Buffett. You may have stole it from somewhere else, but, um, he’s encouraged people to think about, you know, buying a stock and then. Turning off the market noise and pretending the market’s shut. But that kind of, um, reflects his needs to buy bigger and bigger companies.

[01:01:14] Tony: And, um, he’s, even though he still trades stocks, by the way, um, you know, when he’s buying something really big to deploy Berkshire Hathaway’s cash, um, he’s not going to be able to flip that quickly, um, in the, in the market. Uh, and if he tried to, I think it would mean the sentiment would, would, you know, question why, what was wrong with the stock, why is Buffett selling, and the price would go down.

[01:01:38] Tony: So you find it hard to, to flip it. Um, so he’s, he’s kind of, I guess, evolved from being the kind of value investor that we are, which is looking for cheap things in the market, cheap quality stocks, quality stocks we can buy cheaply to, as he says, um, good companies that, that he can buy the fair price. So he focuses on things like predictable cash flow.

[01:02:02] Tony: Uh, so if he buys it, he knows he can’t sell it, so he’s gonna hold it for a long time. So I’d like to know that into the future, the cash flows are going to be strong and going up. So he’s found that the way to predict that is to find companies that have what he calls a. So that they can withstand competitive pressures better than companies that don’t have a moat.

[01:02:23] Tony: And, um, and therefore, you know, as their ability to raise prices in all kinds of markets continues, their share price continues to go up as well. Um, and, you know, companies like Coke, Amex, Procter Gamble spring to mind that Buffett’s owned for a long time and he’s happy to pay a fair price for those companies and wait for downturns to buy more, for example, when they first bought Apple.

[01:02:47] Tony: Yeah, the price was depressed, but, um, yeah, it’s wouldn’t say it was a cheap value stock and by any stretch of the imagination, um, but what I found is I’m not sure that that strategy works in Australia, but I mean, I could buy, Hathaway, but I could buy, you know, Amex or Coke or Apple overseas, but I’ve concentrated on buying Australian stocks to eliminate currency risk and any sort of tax discrepancies.

[01:03:12] Tony: Um, and, you know, you don’t get franking credits on dividends from overseas stocks. Um, but if you looked at trying to apply that sort of moat mentality and predictable cash flow style of investing to Australia, you’re probably looking at what the big four banks maybe, maybe some of the large insurance companies, maybe the supermarkets.

[01:03:31] Tony: Yeah, that’s, that’s, what’s the difference between that basket and the index? You’re really becoming an index investor, I think, in Australia if you adopt Buffett’s style of investing. So it, um, I haven’t been able to apply that here to beat the market. I think it’s not a bad way to look at things if you’re trying to maintain capital in retirement or something like that.

[01:03:52] Tony: But, um, as a market beating strategy, I’m not sure it applies to Australian stocks. It’s a, it’s a smaller market and heavily picked over as well.

[01:04:02] Cameron: But if the market didn’t exist and you own stocks in companies, you’re basically a business owner then, right? You’re, you’re owning shares in a business and you would probably sell it if you thought the prospects for the business weren’t very good, you

[01:04:15] Tony: Yeah. Yeah. So if I owned a mine and the mine price went down, I guess the benefit of, well, first of all, I don’t know how you sell it because the market’s shut, but I’m assuming you can still, it opens one day a year or something. Can you do a mad flurry of March

[01:04:29] Cameron: the same way you sell real estate. How’s selling real estate going for you

[01:04:33] Cameron: at the moment?

[01:04:34] Tony: Slow. Yeah. So, um, yeah, yeah, well maybe that’s, that’s the way, but yeah, you’d use the non sort of sentiment indicators to sell the commodity prices going down, so you sell your shares in the mine, or, um, you know, you’re a coffee shop owner and, uh, the price of coffee’s gone up, which it has, it’s gone up tremendously, cocoa anyway, it’s gone up tremendously this year, um, so you might decide to, you know, Sell your business on that basis because you can’t afford to buy coffee beans and put the price up, um, to recover that input cost.

[01:05:08] Tony: So, yeah, so there are those kinds of things which you’d look at the time you’re selling.

[01:05:13] Cameron: You know, it’s not that much different from the way that we trade now, right? We, uh, we, we think about these things as businesses. We’re looking for businesses

[01:05:22] Tony: Mm hmm.

[01:05:22] Cameron: are undervalued, but have a bright future based on what we can tell from the numbers. And, um,

[01:05:29] Tony: Mm hmm.

[01:05:30] Cameron: but we, we only sell them

[01:05:32] Cameron: when they breach one of our selling indicators.

[01:05:36] Cameron: You know, we’re not really looking at. Um, the financial projections and determining. We don’t base our selling

[01:05:46] Cameron: on those. We base them on the market’s reaction to those, sometimes.

[01:05:51] Tony: really good point. So, you know, I, I wouldn’t be an expert in, you know, For example, coffee shops or how the commodity prices affect the ability to raise the price of coffee to your customers, but there’s someone out there in the market who is and they’re driving the market. So I’ll, I’ll benefit off their wisdom, the wisdom of crowds and use that change in sentiment to sell the time I sell.

[01:06:13] Cameron: It’s like the bad news sell. I think, um, Alex, uh, F, one of our subscribers mentioned on the Facebook group today, the DGL, he just picked up the DGL, uh, announced that their CFO was leaving and they were looking for a replacement. I think he said it happened a couple of weeks ago, end of the month or so a week ago.

[01:06:32] Cameron: And, um, whether or not it was a bad news sell and I looked at, uh, the market’s reaction to it

[01:06:39] Cameron: and share price

[01:06:42] Cameron: doesn’t seem to have moved a great deal since that announcement came out. So, yeah.

[01:06:47] Tony: That’d be a blow to your ego if you were the CFO who resigned and the market went, yeah, okay, see ya. Don’t let the door hit you on the way out. well,

[01:06:58] Cameron: and it didn’t go down.

[01:06:59] Cameron: they’re

[01:07:00] Tony: I think the full story though, I saw, I saw the article. I think the full story is they’re

[01:07:05] Tony: relocating from New Zealand to Australia and

[01:07:07] Cameron: To Sydney. Yeah.

[01:07:08] Tony: didn’t want to move.

[01:07:08] Tony: So that makes sense. It’s, it’s more of something happens in a vacuum. Like we can’t work out why the person’s left, but, um, yeah, that’s, that’s more of an issue, I think.

[01:07:19] Cameron: But also we tend to look at how the market reacts. And my, you know, my assumption is that there are people that, that know this business, know the industry, are paying way more attention to it than we are. And if they

[01:07:31] Cameron: react badly to the news, then we suspect something might be afoot.

[01:07:37] Tony: We have gone against the market occasionally. Fortescue Metals comes to mind when they’ve had a number of exoduses, particularly from the finance area in that company. We’ve decided to bench it. Share price has gone up because iron ore’s gone up. It’s coming back a bit now, but, um, yeah, I lost a bit of confidence in that company when, um, the finance people lost confidence in the company and left.

[01:07:58] Tony: Not a good look.

[01:08:00] Cameron: But their share price hasn’t been great. I mean, it’s been going down since the beginning of the year. Since January, it peaked at about 30 bucks. It’s down to 25 now. So, uh, I don’t think we missed out on much there. All right. Well, there you go, Jordan. Hope that helps. No other

[01:08:19] Cameron: questions for this week, Tony. So that’s a wrap. We’re into after hours. I think you’ve already

[01:08:23] Cameron: told me most of your after

[01:08:24] Tony: Yeah, I have pretty much.

[01:08:26] Cameron: Birthday nipple. Wagga Wagga

[01:08:28] Tony: Tipple, not nipple, birthday tipple, not nipple.

[01:08:32] Cameron: Oh yeah. Tipple, nipple. It’s the nips. It was the tipple of the

[01:08:37] Tony: Oh, the nips, yes, the nips were getting bigger,

[01:08:40] Tony: all three of them.

[01:08:43] Tony: Yeah, uh, well, it’s, it’s, because it’s my birthday, it usually coincides with, um, often coincides with the US Masters, so that’s on this week, which I’ll be posting on the Perched on the couch watching Eagly on the weekend, but it’ll also be kind of nostalgic because, um, it was a great holiday last year on my 60th to go overseas and attend Augusta National and watch the Masters live, and it was a real highlight.

[01:09:07] Tony: Um, it’ll be fun to sit on the couch and, and, you know, being to the course, we can see how hilly it is and how steep it is and how, how, how undulating the greens are and difficult to play, so it’ll be good fun to, to watch it from with that sort of hindsight as well. So I’m looking forward to that.

[01:09:24] Cameron: Hmm. That’s it.

[01:09:27] Tony: Yeah, look, I haven’t had a chance to really watch anything apart from races and

[01:09:30] Tony: football with Ruddy and, uh, um, and I’ll be watching golf next week. So yeah, that’s pretty much it.

[01:09:38] Cameron: I did watch one more episode of The Three Body

[01:09:42] Tony: Mm hmm.

[01:09:42] Cameron: the third episode. And it’s, they’re rushing it, is my feeling for it. They’re rushing it. I said to Chrissy, are you enjoying this? She goes, yeah, it’s alright. So I’m like, okay then. For me though, having recently read the trilogy, it just seems like they’re really gen like I can tell, I’m guessing that The guy who’s got pancreatic cancer is the guy whose brain’s going to end up in the thing that goes out into the universe.

[01:10:12] Cameron: And the woman that he’s in love with is the woman who was supposed to be running the whole tripwire system, which was like a hundred years later after they found out the aliens were coming in the book. And now it’s happening where they don’t, they’ve just finding out that the aliens are coming and it’s like, they’ve compressed the first 150 years of the story

[01:10:33] Tony: Right.

[01:10:33] Cameron: weeks.

[01:10:34] Cameron: And I’m like, Oh, okay. And

[01:10:36] Tony: Yeah.

[01:10:37] Cameron: I’m jumping ahead of my thing, but anyway,

[01:10:41] Cameron: it’s interesting.

[01:10:42] Tony: yeah, I really enjoyed it. I think it’s a great

[01:10:44] Tony: series. Oh, I

[01:10:46] Cameron: Oh, that’s about all I’ve watched this week, except I’ve been going back and watching the Wire. I read some, I know you never got into The Wire, did you? You really need to

[01:10:56] Tony: watched the first season. I fell asleep on the last episode. I just, I just, yeah, I probably missed something. I loved, there was one episode I loved when all I said was shit all the way through the episode. Oh, fuck, sorry. Yeah, that was, it was, that was

[01:11:10] Cameron: No, not the whole episode. It’s like the first couple of minutes, but yeah.

[01:11:13] Tony: yeah,

[01:11:14] Cameron: When they’re investigating a shooting and they’re just, you know, Putting all the pieces together is very clever. No, I, I still think it’s, um, one of the great, uh, great series of all, most, most intelligent series I’ve ever watched, just the way that it sort of, uh, took apart.

[01:11:31] Cameron: Well, it’s what David Simon felt was wrong with US, but I read this interview with him again over the weekend from 2008 when the series had just finished. And he was saying, look, maybe we’ve got it all wrong. Maybe America’s not as broken as we thought it was. Maybe 15 years from now, people will say, ah, these guys

[01:11:48] Cameron: didn’t know what they were talking about.

[01:11:49] Cameron: Everything’s great. And I was reading it and going, no,

[01:11:52] Tony: really? yeah, ha ha

[01:11:55] Cameron: much, pretty much picked it. But I’ll read you some quotes from this, uh, from this interview. Again, this is 2008. Um, cause the last season, which you didn’t see, so the first season they’re looking at the cops.

[01:12:10] Cameron: And then the second season, they were looking at the docs.

[01:12:13] Cameron: Then the third season was about, I think, uh, the education system, third and fourth system for third and fourth season, were looking at the education system. Um, and they also looked at, they looked at drug legalization actually in the third two and the fifth season. The final season was about the media. Uh, ’cause David Simon was a journalist at, uh, the Baltimore.

[01:12:36] Cameron: Son, I think for 15 years. And they were talking in this thing about, in this interview about how they got rave reviews. The media loved the show for the first four seasons, but when the fifth season dropped and it was about the media. They got a ton of criticism from the media,

[01:12:55] Cameron: but, um, he says this, uh, he says, I think the people you saw react to it were journalists, school administrators and politicians and longshoremen and drug dealers and cops and police administrators, they don’t blog and they don’t write.

[01:13:09] Cameron: trouble with journalism right now, there’s a lot of troubles, and one of them’s fundamentally economic, but I believe the meta narrative that journalists have embraced right now is, we were doing nothing but making the world safe for democracy, doing our jobs, being heroic, and then the economic climate and technology changed, and the internet is now eviscerating us, and it’s falling apart, and we are victims.

[01:13:31] Cameron: But I took the third buyout from my newspaper before the internet even existed as a concept. When journalism was profitable, extremely profitable, newspapers did not improve and hone their product and make the product more meaningful, they concentrated on that which was not particularly relevant, which Which was a little bit ononistic and self absorbed, and then, when the internet did arrive, they had an inferior product that wasn’t something they could charge for online.

[01:13:58] Cameron: So it was a two step process by which that industry was utterly mismanaged. And it’s all fun and games when you’re saying nasty shit about Police Administrators, or the Mayor, he’s talking about other seasons that

[01:14:10] Cameron: they have, Royce and his Chief of Staff. But the moment you say it about the journalist who’s feeling only the victimization of what’s happened over the last few years, it’s infuriating.

[01:14:21] Cameron: So then he talks about what The Wire was all about. He says, yeah, it’s about the decline of the American empire. It’s about a culture that can no longer recognize or acknowledge its own problems, much less begin to solve them. You look at The Wire and it explains New Orleans. I mean, we may be wrong, we took our best shot, but it explains New Orleans, he’s talking about the floods and everything that happened there, he did another series about that later on called Treme.

[01:14:45] Cameron: It explains Iraq, it explains the disconnect between facts on the ground and policy. The Wire made no mention of New Orleans, it made scant mention except allegorically at points. Points of the war in Iraq, and yet it was about those things and about this particular time, we didn’t reference the mortgage crisis and the drama on Wall Street because we didn’t know about it yet.

[01:15:05] Cameron: But it makes perfect sense in the construct of this narrative. It’s too simple to say it’s corruption or evil or anything as simple as that. This is about a country that’s become nothing more than a pyramid scheme, and the people in the pyramid are looking to salvage themselves and aggrandize themselves, and nobody has their eyes on the community.

[01:15:24] Cameron: That’s what the Wire is about. You can say it’s about urban America, but what is America other than urban? 80 percent of us live in cities. At the Republican convention, all that nonsense about small town values, fuck small town values. That’s 20 percent of the country. I’m worried about where 80 percent of us live.

[01:15:41] Cameron: I need big city values to matter. I need big city sensibilities to prevail. I need to know how lots of us are going to live together in a small confined area, because that’s how we live. So, you know, saying the wires about urban America is saying it’s about who we are. Anyway. He does, like the series to me was like this really great explanation about how the most advanced capitalists, uh, civilization the human race has ever seen is just falling apart because it, it, it focuses on the wrong things and it incentivizes the wrong things.

[01:16:20] Cameron: I mean, that’s,

[01:16:20] Tony: Yeah,

[01:16:21] Cameron: Like, his season, the season they did on the education system, they just highlight the fact that the schools get

[01:16:27] Cameron: funded by test scores. So what do they focus on? Test scores.

[01:16:32] Tony: Same here. Same here. Naplan scores. ha ha

[01:16:36] Cameron: Well, and, and, and, and the way they tell the story is there’s a cop, one of the cops in the early seasons, um, ends up getting pushed out of the police force and he ends up as a teacher. And then he just sees the same patterns. He goes, Oh, it’s Duke and the Stats. He says to one of the guys, let’s duke in the stats. This is what we do in the police force. You know, if, if they’re folk, if the mayor wants the chief of police to focus on drug rips, busts, that’s what they focus on is on busts.

[01:17:05] Cameron: They don’t focus on the, the, the root problem of why there are, why there are drugs in the system. It’s just about drugs on the table. So there’s a press conference in the six o’clock news and the mayor gets to wave the flag and say, look at all the stuff that we’re doing. And so it’s,

[01:17:22] Cameron: it’s what.

[01:17:23] Tony: yeah.

[01:17:24] Cameron: What gets incentivized is what gets focused on and it’s

[01:17:27] Tony: Oh yeah. Charlie Munger said that.

[01:17:30] Cameron: Yeah, right?

[01:17:31] Cameron: So that’s what the Y is all about. That’s why it’s, yeah, I think the greatest TV shows, because it reveals all of this kind of stuff, whether it’s in journalism, they did the same thing with journalism, you know, and they took down journalism as being all about, you know, grabbing eyeballs, whatever grabs eyeballs today, because that drives advertising.

[01:17:50] Cameron: And it’s not about actually addressing the

[01:17:53] Cameron: sort of real stories that really make a difference to what’s going on,

[01:17:58] Tony: Well, um, Simon made that point in the article that we don’t that America doesn’t even recognize the problems that it has. And I know and that’s because of journalism, really. The only way they can recognize the problems is if the journalists Uncover the problem and bring it to daylight. But if they’re focused on selling Bitcoins or getting ads from washing machine makers, and, um, yeah, it’s not going to happen.

[01:18:22] Tony: Um, interesting. We were, you’re talking about the Beanie Baby analogy for Bitcoin. I went to the Forbes article on their website and there was, must’ve been about 20 or 30 clickbait ads for crypto trading strategies, and it was an article saying how bad crypto was.

[01:18:42] Cameron: But no ads for Beanie Babies, that’s where they should have been. There, I

[01:18:47] Tony: Yeah, well that’s,

[01:18:48] Cameron: I think Zach Galifianakis was in a film, like a biopic about Beanie Babies a little while ago, about that sort

[01:18:56] Cameron: of fad, the guy who ran the Beanie Baby business.

[01:19:01] Tony: But yeah,

[01:19:01] Tony: when you talk to Americans when you’re there, and you’ve been there as well, and

[01:19:06] Tony: the last thing you want to do is raise one of these problem issues with them, they’ll just say, oh you don’t get it, or, you know, we’re still the best country in the world, and blah blah blah blah blah, so just head in the sand, um, ignore the problem, it’s amazing.

[01:19:21] Cameron: He says at the end, um, talking about the why, I think it’ll stand as an integrated story that was about something. And I hope we’re wrong. I hope that what we think it’s about doesn’t turn out to be true in the long run, because what it’s about is the end of empire. I’m hoping that what we were saying doesn’t seem prescient 10 or 15 years from now, and when people stick those DVDs in, DVDs.

[01:19:46] Cameron: I’m hoping that it seems overly pessimistic, and maybe it will, but we took our shot. It’s what we actually believe. It’s what seems to be occurring in a consistent framework with regard to everything from the subprime mortgage disaster to New Orleans to the war in Iraq. It seems as if we’re overextended as a culture, and if the capacity to address problems And as if the capacity to address problems is no longer within our grasp, that’s what The Wire was about.

[01:20:14] Cameron: And that’s, you know, I think he was spot on. I think

[01:20:18] Tony: Oh, absolutely.

[01:20:19] Cameron: bad to worse since that show finished. And, and I think that’s why China’s eating their lunch, because China’s focusing on

[01:20:27] Cameron: building a country rather than watching it go down the tubes, you know.

[01:20:32] Tony: well, who knows? I mean, there’s certainly been reported corruption in China as well. Um, but,

[01:20:39] Cameron: just

[01:20:39] Tony: I was,

[01:20:40] Cameron: I mean, Xi Jinping has spent the last 10 years trying to fight corruption, you know, it’s been one of his, the mainstays of his whole,

[01:20:49] Cameron: um, time in power is trying to curb corruption, yeah.

[01:20:54] Tony: And you know, and like, we still don’t have a federal ICAC in Australia. That was the point I was going to make is that, um, it’s, I don’t want to sound like I’m pointing the finger at America as being the failed empire. It’s just, it’s Applicable to Australia. As I was driving back from Walgore, I was listening to the news, the news, um, ABC News radio station.

[01:21:13] Tony: And, uh, you know, the Israel reports come out about the, um, the missile that killed the Australian aid worker. And, uh, they had an expert on, on that. And he was being asked, you know, should there be a further inquiry into this? Is this enough evidence to prosecute Israel for war crimes? And he said, it doesn’t matter.

[01:21:34] Tony: We’ve, we’ve sat on inquiries for 20 years from Iraq and Afghanistan in Australia, where patently there’s evidence that Australian soldiers killed local people and we’ve done nothing about it. Do those first, before you start pointing the finger at a different country.

[01:21:49] Cameron: Yeah, I like that. We didn’t care about the 33, 000 civilians that got killed in Gaza until an Australian aid worker got killed and all of a sudden,

[01:21:59] Cameron: You know, now we suddenly care. We didn’t care about the other 33, 000.

[01:22:03] Tony: yeah, and why is that? Because

[01:22:04] Cameron: completely

[01:22:05] Tony: yeah,

[01:22:07] Cameron: I mean,

[01:22:07] Tony: it’s become a political 24 hour news cycle event and that’s all it

[01:22:12] Tony: is, unfortunately. I say that with a heavy heart because someone died and as you said, thousands of people have died through this conflict. Yeah.

[01:22:22] Cameron: Yeah. No, like Australia suffers from a lot of the, I mean, but Australia follows the U S in most of these things.

[01:22:28] Tony: Mm hmm. 51st state.

[01:22:32] Cameron: I think we’ve done a, you know, well, it’s the old Goff Whitlam story, right? I think Goff did a great job setting us up in the 70s. And, uh, you know, various administrations have been trying to unwind everything that Goff put into place 50 years ago.

[01:22:50] Cameron: Uh, we, you know, and my concern has always been that we don’t want to move closer to the way America runs because it’s spiraling out

[01:22:58] Cameron: of control. We need to distance ourselves from that and protect

[01:23:04] Tony: should be, we should, yeah, we should be able to be able to pick and choose the best from different places. And I guess the two biggest places now are US and China. Um, yeah.

[01:23:15] Cameron: And do we want to attach ourselves more to the empire that’s in decline or the empire

[01:23:19] Cameron: that’s on the rise?

[01:23:22] Tony: If you ask Paul J Keating, it’s, um, look to the North, not the North East.

[01:23:29] Cameron: Makes sense to me, but anyway. All right. That’s the

[01:23:33] Tony: good. Thank you. Good to catch up as usual.

[01:23:36] Cameron: Yeah, good to talk to you and uh,

[01:23:39] Cameron: happy birthday,

[01:23:41] Tony: Yeah, thank you.

[01:23:43] Cameron: I’ll remember next

[01:23:44] Tony: No worries. Yeah.

[01:23:47] Tony: All right. Have a good week. Happy

[01:23:49] Tony: ASX.

[01:23:50] Cameron: happy share market, go have a good week.


QAV 721 – Dr No

In 721 we discuss the pain of FND, why Aussie investors keep investing in unprofitable companies, and TK does a Pulled Pork on SRV.

In the club edition only: the myth of the ‘new normal’, why LIC AFIC is selling below its NTA, how Aussie investors can benefit from the AI boom, what we should do about copper prices being up, how to interpret the number of buys going down, how often is TK is making purchases based on factors outside the numbers, and how to interpret the resignation of the PRN CFO.

QAV 720 – Boom!

The Budget cometh, Lessons in Kindness from Buffett, and a Deep Dive into Boom Logistics.

Also in the Club edition: Reflections on Jim Simons and Quant Investing, Navigating Market Fluctuations: FND and FPR Updates, Exploring VYS’s Surge, Elon Musk’s Suggestion to Warren Buffett, Marcus has a question about applying quality score to existing holdings, Jim asks about Life 360, Stock Doctor Data Integrity Issues, Nick asks about Josephine rules, Trent asks about AGL and LNG


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