Hello QAVvers

Now Little Johnny Jewel
Oh, he’s so cool
He had no decision
He’s just trying to tell a vision
But some thought that this was sad
And others thought it mad
They just scratching the surface

“Little Johnny Jewel” by Television, a song about TK trying to explain the QAV process for long-term success at investing. Some think he’s sad, others think he’s mad

Speaking of mad… the AORD had another rocky week… and this is why we can’t have good things…


Let’s have a look at the portfolios.


The Dummy Portfolio is performing well against the benchmark over most time frames.



SINCE INCEPTION (15/04/2019)

Our portfolio is still doing roughly double market p.a. since inception (roughly five years). In real terms, the value of the portfolio has increased 75% in 5 years.



We’re outperforming the benchmark for the FY, too. Even though this month hasn’t been kind to either of us.



In the last 7 days we sold KAR and CNU and bought MSV and SRV.



The Australian Stockopedia portfolio actually had a good week and still catching up to the index.


The US portfolio also had a pretty good week. 



During the last week, we also traded some stocks in our Light portfolios. Details here.

** As always, please check our work, DYOR, and consult a financial advisor before making any investing decisions.


Each week we produce a buy list that we share with our members. The intended primary purpose of this buy list is for club members to use as a reference for comparing their own buy list. In theory, all of our buy lists should look pretty similar each week.

As always, please check our work, DYOR, consult a financial advisor before making any investing decisions.



The AORD dropped this week, as did BOQ, TK does a Pulled pork on RSG.

Also in the Club edition: WOW’s CEO threatened with time in the big house, FND does an Indian ATM deal, TK talks about the Pulled Pork and Billionaire Portfolios.

Episode Transcription

QAV 716 C

[00:00:00] Cameron: gimme 1, 2, 3 again.

[00:00:08] Tony: 1, 2, 3, again.

[00:00:11] Cameron: Oh, you’re funny. This is the two Ronnies . It’s good night from me and it’s good night from him. Good night.

[00:00:17] Tony: 2, 4 candles, please.

[00:00:19] Tony: Well,

[00:00:24] Cameron: episode 7 1 6, the 16th of All Aries fallen below 8,000. Today Tony below 7,900. Actually lowest point since the 15th of February, two months. Wiped out. In the last week, I had to rule one DTL and OML from my super today. And I had three parcels of DTL for some reason.

[00:00:48] Cameron: I went to sell DTL out of my super and went. That’s a big number. That doesn’t look right. I had three parcels for some reason and only one of them was a rule one, technically. The others weren’t. One was like up 1%, the other was down 4%, but when I dollar cost averaged the three parcels, it was still a rule one.

[00:01:07] Cameron: So, I, uh, I had to let it go.

[00:01:11] Tony: that’s bad luck. I’m looking forward to when the regression testing gets verified and we can change rule 1 to 20 percent rather than 10 percent if that’s the case. If that’s how

[00:01:20] Tony: the numbers

[00:01:21] Tony: crunch.

[00:01:23] Cameron: by the way, Matt Walker’s offered to come on the show and talk about how he set it up and we can go through some details. So I’m going to work out a date with him to do that. Yeah. He said, he thinks some of the problems I’ve been having, some of the issues are because he’s relying on Yahoo finance pricing for some of the calculations.

[00:01:39] Cameron: And he thinks the Yahoo finance. Numbers are a little bit flaky sometimes. So we’re experiment, he’s experimenting with, um, some other data sources for that to try and, um, nail that. But I think we’re always going to have data

[00:01:54] Tony: the Breadlater has them too with Google Finance occasionally, so yeah, Stock Doctor has them with wherever their feed comes from.

[00:02:01] Cameron: Yeah. Nothing’s ever going to be perfect. But why is the market down, Tony? Explain it to me, Oh Lord.

[00:02:08] Tony: Oh Lord.

[00:02:08] Tony: Ha ha

[00:02:10] Cameron: Sorry. I’ve been watching Three Body

[00:02:11] Cameron: Problem.

[00:02:12] Tony: ha. Uh, well the market’s down for two reasons. Um, one because of the Iran Iraq, uh, sorry, Iran Israel

[00:02:21] Tony: instability. Uh,

[00:02:23] Cameron: I ran so far

[00:02:24] Tony: yeah, flock of seagulls we’ll call it. Um, and uh, the other one is because I think people are finally realising that uh, rate cuts are, you know, going further and further into the distance.

[00:02:38] Tony: There’s been a couple of good numbers coming out of the US in the last day or so, which tend to get people thinking the economy is strong, which you’d think would be a good thing, except that the market wants the economy to be bad so that they can expect a rate cut, which will debt fuel the

[00:02:54] Tony: whole shebang

[00:02:55] Tony: again, start the whole process off again.

[00:02:57] Cameron: Oh, so the economy needs to be bad so the rate cuts will come in which will make the

[00:03:01] Tony: Yeah, and then politicians can say they’re good economic managers, recruiting the economy to

[00:03:06] Tony: get the share

[00:03:07] Tony: market up.

[00:03:08] Cameron: Right. Alright, I get it now. Makes perfect sense. Yeah.

[00:03:12] Tony: Yeah, So those two things have combined this week to, to, um, give the market a pause.

[00:03:18] Cameron: Well, speaking about things collapsing this week, you’re uh, pulled Pork from a few weeks ago. Bank of Queensland! Collapsed faster than Bruce Lehrmann’s credibility the last week faster than channel seven’s, hooker and cocaine budget for interviews. It’s, uh,

[00:03:38] Tony: Disappeared faster,

[00:03:39] Cameron: it’s an o it’s an omni shambles. As the judge of the Bruce Lehrmann’s civil trial said an omni shambles on rumors that they’re gonna take, I think it was a 40%.

[00:03:53] Cameron: Profit hit when their results come out on the 17th, which is tomorrow. Now, I’m not going to ask you for inside information because I know, A, you don’t have any even though. Mrs. Kynaston sits on the board of Bank of Queensland. But tell her I’m not happy. Tell her I’m not, not happy.

[00:04:12] Tony: went to her and showed her the share price drop a couple of days ago when it dropped and she was like, oh, okay.

[00:04:20] Tony: I’m like, it’s not

[00:04:21] Tony: good.

[00:04:21] Tony: Yeah, that’s all she had. Yeah, no, it’s a sorry tale. I didn’t have any inside information. I don’t think, I haven’t asked Jenny. I think it was a bit of a surprise to her that, Share

[00:04:34] Tony: prices dropped

[00:04:35] Tony: as well.

[00:04:36] Tony: Um, we,

[00:04:37] Cameron: Hopefully it’s not a surprise to her that the profit announcement, they’re taking a 40 percent hit on their profit in

[00:04:42] Tony: well, we’ll find out

[00:04:43] Cameron: She wouldn’t tell

[00:04:44] Tony: wouldn’t

[00:04:44] Tony: tell me now, but

[00:04:46] Cameron: she’s a

[00:04:46] Tony: yeah.

[00:04:47] Tony: Um, yeah. So

[00:04:50] Tony: look, I, I personally, I thought Bank of Queensland had a lot of bad news already baked into its share price,

[00:04:56] Tony: but

[00:04:56] Tony: obviously not.

[00:04:58] Cameron: but here’s my serious question. Who’s getting the rumors? Like, how are they spreading that the profit’s going to be 40 percent down to the, to the point where it’s dropped by what? 10, 10 percent share price is down by 10 percent in the last, uh,

[00:05:15] Tony: Yeah.

[00:05:15] Cameron: Uh, who’s, how does that

[00:05:17] Cameron: happen?

[00:05:19] Tony: I don’t know in this particular case, it’s either a very, um, a very savvy banking analyst has crunched some numbers and made some, made some hypotheticals in their spreadsheet, or someone’s leaked, which is also possible.

[00:05:31] Cameron: Well, it’s an omni shambles. I tell you, I had to sell it from a

[00:05:34] Tony: Yeah, but look, you’ve raised a really good question and, and the A SX should be on top of these kinds of things and asking that exact question. And the, the problem is, in the past when they’ve asked the question, the, the management at the company concern

[00:05:48] Tony: just goes, we

[00:05:49] Tony: dunno. Sorry.

[00:05:51] Cameron: Oh, they did a Brett Banducci. Brad Banducci,

[00:05:54] Cameron: sorry.

[00:05:57] Cameron: This is one of the stories I added at the last minute today. Woolworths CEO Brad Banducci threatened with six months prison for holding Senate in contempt.

[00:06:06] Cameron: The Senate inquiry into supermark pricing has threatened Woolworths boss Brad Banducci with contempt for failing to answer simple questions.

[00:06:15] Cameron: He was warned he could face six months in prison or a 5, 000 fine. If he was held in contempt by the Senate committee. So now I’m thinking 5, 000 fines ain’t no thing to Brad Banducci, but, uh, six months in the slammer might be. Things went awry when Green Senators Nick McKim, committee chair, asked, asked Mr.

[00:06:35] Cameron: Banducci if return on equity was an important measure of corporate profitability. Seems like a pretty simple question to answer. Mr. Banducci refused to answer the question. And he repeatedly refused to answer it, despite the question being asked over a dozen times. The back and forth between Senator McKim and Mr.

[00:06:59] Cameron: Banducci became so repetitive, that Mr. Banducci was warned that the committee could hold him in contempt. I’m not interested in your spin or your bullshit, Senator McKim said. Ooh, and everyone else on the panel went, Ooh, that escalated quickly. And after Mr. Banducci continued to refuse to answer the question, Senator McKim suspended the committee to discuss the issue of contempt with his committee colleagues.

[00:07:29] Cameron: When proceedings returned and the inquiry picked up again, Mr. Banducci was given one final warning about answering simple questions. With a thread of contempt in the air, Mr. Banducci told senators that if it helped to push the hearing forward, he would happy to say he didn’t know what the return on equity was for Woolworths Group last financial year.

[00:07:50] Tony: just looked it up. No,

[00:07:54] Cameron: looked it up, it was 30. 02%,

[00:07:58] Tony: and

[00:07:58] Tony: that’s the

[00:07:58] Tony: highest for a while too,

[00:08:01] Cameron: it’s the highest for a while, but I went to Investopedia and asked it, what’s, what’s sort of retail average return on equity look like, according to Investopedia, retail ROE is about 26 percent on average, it said, Uh, but it varies depending on obviously the industry you’re in and the kind of business you’re in.

[00:08:19] Cameron: For example, Walmart’s ROE as of July 31st, 2022 was 15. 68%. Macy’s ROE for the same period was 45. 93%. Um, and I’m sure if you looked at Apple’s, it would be like A thousand million percent, but um, I, I have no idea why Mr. Banducci, A, couldn’t answer if it was an important measure, or B, wouldn’t want to talk about Woolworth’s ROE.

[00:08:48] Cameron: I mean, it’s public, it’s on record, it is what it is, so what’s the point of not answering the question in front of a Senate committee? What’s he trying to achieve

[00:08:57] Tony: he,

[00:08:58] Cameron: Doesn’t want to talk about profit?

[00:08:59] Tony: got some, either getting some really terrible PR training or, um, well, he’s, he’s leaving Woolworths based on his Performance in an ABC Four Corners interview on supermarkets where he got up and didn’t want to answer the question. So there’s a bit of, bit of form here, I guess. He obviously didn’t want to say ROE was an important metric because Woolworths is at its high point for ROE.

[00:09:21] Tony: Um, so what? It’s, it’s like, uh, you know, the, the, the line that the supermarkets have been pushing, which I think is reasonable, is to say they’re making two and a half to 3 percent net profit margins. So they could have a high return on equity, but if they’re not making more than 2 or 3 percent margins, that’s a pretty powerful argument to say there’s an awful lot of competition in the supermarket industry.

[00:09:50] Cameron: Hmm.

[00:09:51] Tony: So he’s, I mean, I, you know, I’ve just rattled it off without even any notice or thinking about it. He couldn’t do that in the Senate Estimate Committee. He’s made an even bigger news article out of something which would have just been ignored.

[00:10:05] Cameron: Seems to me he’s, he’s trying to be Kerry Packer, basically just thumbing his nose at the whole operation and like, uh, I don’t have to answer your questions. You’re a, you’re a pack of idiots. Um,

[00:10:17] Tony: arrogant stance to take, isn’t it? And generally arrogant people who don’t own their entire company don’t last very long in

[00:10:24] Tony: Australian public life.

[00:10:25] Tony: Yeah,

[00:10:29] Cameron: So he was appointed Managing Director and CEO in February 2016. Prior to that, he was Managing Director of Woolworths Food Group from March 2015. Director of the group’s drinks business between 2012 and March 2015. Joined the group in 2011 with the acquisition of the Cellar Masters Group, where he was the CEO from 2007 to 2011.

[00:10:52] Cameron: Prior to that, Chief Financial Officer and Director at Tyro Payments, and a Vice President and Director with the Boston Consulting Group, where he was a core member of their retail practice for 15 years. So he’s been in retail, long time, um, knows his stuff, probably knows what the average profit margins and return on equity of retail would be, just doesn’t like answering questions from journalists or senators,

[00:11:21] Tony: which is strange, isn’t it? I mean, the guy’s had a good track record, obviously return on equity of that number, 30 percent odd, is a good result for Woolworths. So he’s managed the company very well. He’s thought of highly. Why would he want to leave with this kind of

[00:11:34] Tony: legacy? I just don’t

[00:11:34] Tony: get it.

[00:11:36] Cameron: Well, my question, the reason for bringing this up, Tony, my question is, um, you know, Woolworths, WOW has been a, um, a QAV stock from time to time. Some of our listeners might hold it. Is it a red flag if the CEO goes to prison for contempt? Is

[00:11:57] Tony: is leaving. So he’s already on his last

[00:11:59] Tony: days.

[00:12:01] Tony: Yes,

[00:12:02] Cameron: Uh, he’s on his

[00:12:03] Tony: after the four corners, the bar call

[00:12:05] Cameron: Oh, that’s right. They said that

[00:12:06] Cameron: was it. He was, and he was like, ah, it’s got nothing to do with that. I was, I was leaving anyway. Yeah. Yeah. You don’t, I was leaving the party anyway. Hey, you’re not kicking me out of the party. I had already decided. I just hadn’t told anyone I was leaving the party, but I was leaving the party.

[00:12:22] Tony: I’m going to kick the chairs over on the way

[00:12:24] Tony: out.

[00:12:27] Cameron: Yeah, well their share price, um, hasn’t, well no one’s share price is doing well today to be fair, but, uh, yeah, their share price hasn’t been faring well of late. Um, March 2024, end of March it was trading at 33 bucks, now it’s down 31. 69, so, yeah, it’s like a 10%, I guess, give or take.

[00:12:50] Tony: that’s, that’s quite a

[00:12:50] Tony: bit.

[00:12:51] Tony: Oh,

[00:12:53] Cameron: yeah, but if I go back to, uh, January, uh, it was at 36, 36 bucks down to 31.

[00:13:05] Cameron: That’s a 20 percent drop. Well, 10 percent is three bucks roughly.

[00:13:12] Tony: what sixth year 18%.

[00:13:17] Cameron: So, uh, yeah, not good if you’re a Woolworths, uh, shareholder. I don’t know how much of that has to do with his performance versus other things going on in the

[00:13:27] Tony: Yeah. Well, there’s an inquiry into the supermarkets over the cost of living and whether or not they’re price

[00:13:31] Tony: gouging.

[00:13:32] Cameron: Well, you know, look at Coles over the same period. January it was trading at 16. It’s still trading at 16, went up to 17 at one point, still trading at 16. So Coles is basically where it was at the end of January. He’s down 18, 20%. So, Hmm, I don’t know. Anyway, not a red flag. If, uh, the CEO goes to jail,

[00:13:58] Tony: if they’ve already

[00:13:58] Tony: quit.

[00:14:00] Cameron: is it a red flag?

[00:14:00] Cameron: If the CEO doesn’t know what return on

[00:14:03] Tony: Yes, that’s definitely a red flag.

[00:14:05] Tony: I think

[00:14:06] Tony: so.

[00:14:08] Cameron: It’s just not a red flag because he’s making so much money he doesn’t want to talk about it in

[00:14:13] Tony: Maybe, maybe his BCG background was coming to the fore and he was, what he was really saying was, I can tell you the answer, but it’s going to cost you 5, 000 a day.

[00:14:24] Cameron: I think a consultant takes your watch and you pay them to tell

[00:14:30] Tony: Yeah, that’s right. Steals your watch and then they charge you the time.

[00:14:34] Cameron: Yeah. Uh, well, moving right along, um, light portfolios STW, Tony. I did my report, well that was yesterday, I haven’t looked at it

[00:14:44] Cameron: today, but looking at the light portfolios, yeah, as of yesterday as a group. Since inception they were up about 6. 5 percent and the STW was up about 9 percent over the same period.

[00:14:57] Cameron: It was going down and we were going up. Uh, when I looked yesterday, so yeah, they’re starting to catch up, which is good. Of course, the dummy portfolio I looked at, uh, today, I did my weekly report on it today. Still, um, performing very well. Dummy portfolio, basically roughly double market since inception.

[00:15:20] Cameron: And, uh, for the financial year, dummy portfolio is up 14. 3 percent versus the STW up 12%. So we’re beating it, um, pretty much on every metric I look at. Current holdings of just, uh, some of the stocks. This is, uh, all time, you know, of the things that we currently hold. Lindsay Australia, not to be confused with Lynfox.

[00:15:48] Cameron: Lindsay Australia up 73 percent per annum, um, since we’ve had that, CAGR. Uh, MLX, Metals X up 71 percent per annum. DUR up 70%, FPR up 66%, KOV up 36%, KSC up 35%, CVL up 21%, CAA up 21%, VVA 17%, ASG 17%, TRS 16%, and then a few single digit things. And the only stock that we currently hold that’s below water is ANZ, which is down about a point.

[00:16:33] Cameron: Since we’ve had it, which isn’t that long, I think. But anyway, things are going well on all the portfolio fronts. Thanks to the magic of QAV. I made a list of pulled porks. Somebody suggested that, uh, the last week or so I’ve started making a list as a spreadsheet. You can find on the club member page down the bottom, a list, at least the last year of pulled porks.

[00:16:54] Cameron: I haven’t gone back earlier than that yet, but I’ll try and get them all in there. Although I guess at some point they’re a little bit irrelevant and they get a little bit old, a little bit long in the tooth. Like us.

[00:17:05] Tony: So I looked at that. Thank you. How much do you, as a portfolio of stocks? How, how good or bad do you think

[00:17:14] Tony: they’ve returned over that 12 months?

[00:17:17] Cameron: ah, well, I, I know the answer, but I’m going to play devil’s advocate here. Being, knowing about the pulled pork curse, I would guess that they suck.

[00:17:28] Tony: No, they beat the

[00:17:29] Tony: market. So

[00:17:32] Cameron: By how

[00:17:32] Tony: buy and hold, um, no three point trend line trading or whatever. They’re up. So I start, this is from when the Actually, it’s actually longer than, a little bit longer than 12 months, because I think you put Rio in there from January 2022. Uh, there are, the portfolio, every stock in the pulled pork list up 8%, and the STW over the same period up 6%.

[00:17:56] Tony: And I didn’t bother going to the trouble of adding dividends to that, so it’s 8

[00:18:01] Tony: percent plus

[00:18:01] Tony: dividends.

[00:18:04] Cameron: And, uh, you, uh, adding them to a portfolio at the time you did the pulled

[00:18:12] Tony: I am,

[00:18:12] Tony: yes. So I got the

[00:18:15] Cameron: And one of the interesting thing about that

[00:18:16] Cameron: is you got the

[00:18:17] Tony: got the share price at the time that we did the pulled pork

[00:18:21] Tony: and compared it to STW from the, from January 2022, which is when the

[00:18:24] Tony: first stock was

[00:18:25] Tony: added.

[00:18:26] Cameron: the interesting thing, um, about that is, the pulled porks don’t have any real theme to them either, except they’re on the buy list usually,

[00:18:33] Tony: And some of them are questions too. So there’s a couple in there which aren’t on the buy list. Although I think they depress, they depress

[00:18:40] Tony: returns.

[00:18:41] Tony: Yeah.

[00:18:43] Cameron: Well, that’s, you know, that’s proven once and for all that the pulled pork curse is the, what’s the opposite of a curse? Uh,

[00:18:50] Tony: Yeah. A

[00:18:51] Tony: blessing,

[00:18:51] Cameron: pork

[00:18:52] Cameron: blessing.

[00:18:53] Tony: Yeah. Well, it’s, it’s helped. There’s a couple of really outstanding ones. Uh, Findi is up, um, two and a half times. Yeah. And that’s from January this year. Uh, Southern Cross Electrical engineering’s up 50%. So is, uh, Vale, Rodan, co. Westfield and Fleet Partners and Elia. So there’s a few stocks on there, which have, have done really well.

[00:19:21] Tony: A few turkeys in there, of course, and New Zealand down 30%. Uh, baby Bunting down 26. Uh, probably the worst was Core Lithium. Down 59. But at the time I said, don’t buy Core Lithium when I did the pulled pork. So you can

[00:19:36] Tony: probably back that one

[00:19:37] Tony: out.

[00:19:38] Cameron: true. Maybe we should do a Tim Lincoln and we should have like, uh, just the pulled pork index and, um, you know, we’ll just. Track that as a portfolio. You don’t need to do anything else. Just buy Tony’s pulled pork.

[00:19:52] Tony: Well, one thing that did make me think, and I have been thinking about this for a while, is what the performance of a portfolio would be if it bought the most recent new top of the buy list stock. And put it into a portfolio. So in other words, as soon as something appears on the buy list, it goes into a portfolio and how would that perform?

[00:20:11] Tony: But I haven’t had a chance to do that kind of analysis, but that’s an interesting thing

[00:20:16] Tony: up because that’s how I try and identify pulled porks. I try and find a new stock on the buy list and preferably it’s a large ADT stock on the buy list.

[00:20:25] Cameron: Hmm. Hmm. Well, that’s something we can add to the regression testing at some point. Be able to softwareize

[00:20:32] Cameron: that. I mean, I’ve got that, that, um, sheet now in the buy list each week, which has the buy list week to week. So I can run some code over that and just, um, grab stocks when they were added and then add them to the portfolio on that date, find out what the price was and track it from there.

[00:20:48] Tony: Yeah. Do it going forward. Just get the first one or the largest ADT or something or both.

[00:20:54] Cameron: Yeah, that thing doesn’t have the largest ADT. We don’t put the ADTs in the week to week list. Uh, well, speaking of FND, that was my next news story. Uh, I did reach out to the CEO of, uh, FND in the last week, Mr. Smedley, Nicholas Smedley, the chairman, asked him, invited him, uh, on the show. He did reach out to us a little while ago after we did the pull pork, you did the pull pork, um, said he’d be happy to come on, but he was going to India, Followed him up, haven’t heard anything.

[00:21:23] Cameron: But there was an article about them, April 15th, uh, yesterday, in The Fin. Payment provider Findi lands license for branded ATMs in India. ASX listed payment provider Findi, backed by Wilson Asset Management and the Flannery family, is set to gain a license. Enabling it to splash its name on thousands of branded ATMs across India.

[00:21:47] Cameron: The fintech junior stock is up 430 percent over the past year and settled at 3. 20, earning it a 168 million market cap before it went into a trading halt on April 11th. The market is starting to understand the opportunity we have in India, Nicholas Smedley, Findi’s Chairman, said. We have significant Australian based funds investing in the company.

[00:22:10] Cameron: What do you see as the, uh, upside of them having their names on ATMs in India, Tony?

[00:22:16] Tony: Yeah. Well, it, um, it could mean a lot. Uh, again, you know, the business model I saw when I did a pulled pork was that India was ripe for moving from a cash economy to a digital economy. So that will help. It’ll be a huge branding exercise for them. But also too, if those ATMs are going into retailers, um, Findi did have a couple of cases where, you know, they were putting money into the retail to smarten up its shop.

[00:22:44] Tony: So that’s, um, that’s a good loyalty exercise, I would have thought, for having Findi branding. on better looking stores in the other retail outlets and then having an ATM in that store or nearby, um, would be a really strong first mover network through India. So I think it’s a good thing.

[00:23:04] Cameron: Hmm. Well, I haven’t looked at what the market has done since this announcement came out.

[00:23:12] Tony: Uh, it’s in the trading hold, isn’t

[00:23:13] Tony: it? Didn’t you

[00:23:14] Tony: say?

[00:23:15] Cameron: well it was, is it still in?

[00:23:16] Tony: I’m not

[00:23:17] Tony: sure.

[00:23:18] Cameron: I don’t know. Ah, shares collapsed today, so no.

[00:23:23] Tony: They collapsed. Why? What

[00:23:24] Tony: happened?

[00:23:25] Cameron: Yeah, I don’t know. The shares were trading at 3. 36 on the 8th of April. As of today they’ve collapsed down to 2. 46.

[00:23:35] Tony: a big drop. Did they come out of the trading hold

[00:23:37] Tony: today? Did they?

[00:23:39] Cameron: Ah, it looks like it too, yes. No? I don’t know, I’m looking at 9th, 10th 15th. 12th. Yeah, 15th. Yesterday they came outta the trading halt

[00:23:52] Tony: right.

[00:23:53] Cameron: then promptly collapsed this morning down to $2 46, back up to $2 76 as of two 30 this afternoon. But, um,

[00:24:04] Tony: the market doesn’t agree with me about branding ATMs in India.

[00:24:11] Tony: Uh, Yeah. Edit this one out, Cam, next week. I want to put in that I think it’s a terrible idea that they put their brand on

[00:24:18] Tony: ATMs in

[00:24:19] Tony: India.

[00:24:22] Cameron: I’m just, uh, going to Stock Doctor’s announcements to see if there’s anything else that

[00:24:28] Tony: No,

[00:24:29] Cameron: the last announcement is Findi granted white label APTM license. Market did not like that. Or maybe it was just profit taking. Maybe people were just like, you beauty,

[00:24:39] Tony: it could be.

[00:24:40] Cameron: time to get out.

[00:24:41] Cameron: Who

[00:24:41] Tony: And the market’s having

[00:24:42] Cameron: And look, the market’s taken a

[00:24:43] Cameron: hit of it. Yeah. But Findi’s down 12%. Market’s down 2%. It’s down

[00:24:49] Cameron: 12%. So a little bit more than market related issues, but maybe people were taking some profit from that to pay off other problems. Who knows?

[00:25:00] Tony: Yeah, well, hopefully Daniel will come on and tell us all about it.

[00:25:04] Cameron: Nicholas

[00:25:05] Tony: sorry.

[00:25:05] Tony: Yes.

[00:25:06] Cameron: even. I’m looking at their ADT, 500, 000. So it’s not big, but it’s not tiny either.

[00:25:18] Tony: It’s a lot bigger than it was.

[00:25:21] Cameron: Hmm. Uh, the only other news that I have this week, Tony, is Victor at Stock Doctor got back to me and said they fixed the URW numbers. This was yesterday before the buy list went out. Um, No, after the buy list went out, sorry, I didn’t really look to see where U if URW was still on it, but, um, I did, he said they’ve,

[00:25:46] Cameron: they’ve corrected the shares on issue. One of our listeners picked up that that was wrong again. Um, I did ask him if they could maybe make a note in their diaries to review it the next time their results come out. So, uh, our listeners don’t need to do their, uh. Detective work for them. So, uh, he hasn’t replied back to that yet, but we’ll see what he said.

[00:26:10] Cameron: Could you do your job, please? Uh, thanks. That’d be great. That’s all my talking points for today, TK. What do you got?

[00:26:22] Tony: A couple of things. I had a lovely visit to Belmain to talk with Phil Muscatello on shares for beginners about takeovers. So that was an interesting conversation. We went over ASB again, which we did as a pull, I did as a pull pork a couple of weeks ago. Talked about APM, another company that’s been taken over and then just talked about takeovers in general and the different, Two different types, basically, the hostile bid and the scheme of arrangement.

[00:26:48] Tony: So if anyone’s interested in learning more about that, then they can listen to Shares for Beginners, which, uh, if

[00:26:53] Tony: it’s not up yet, it’ll

[00:26:53] Tony: be up soon with me on it.

[00:26:55] Cameron: Your last time, probably, because Phil’s moving to sunny

[00:26:59] Tony: he is. He’s going up to the Sunshine Coast. He was busy with painters in his place. Doing an upgrade, an update before his, um, sale process.

[00:27:07] Tony: So I commiserated with him on that. Cause I know how difficult it is preparing something for sale. Yeah. But look, um, he said he’d come back to Sydney a lot. Uh, and, uh, of course we can always do Zoom interviews going forward. So I doubt if it’s the last time I talked to Phil,

[00:27:23] Tony: but it was

[00:27:23] Cameron: What else you got?

[00:27:24] Tony: Uh, I’ve got a couple of, we talked before about the pulled portfolio, but a couple of other ones. Last week I talked about Buffett stocks on the ASX and pulled out a couple of suggestions that may have met Warren Buffett’s criteria for companies that had a moat and a strong brand that could raise prices through the cycle.

[00:27:48] Tony: And we talked about the supermarkets and the banks and the insurance companies. So I went back to 2006 and pulled out Woolworths ANZ, NAB. Westpac, CBA, QBE, and IAG. I couldn’t do Coles because back then it was CML and then it was West Farmers and then it was Coles when it relisted, so it was a bit difficult to work my way through all that.

[00:28:09] Tony: But taking the other ones, um, what was clear to me is that the tagger on the growth in the capital for those stocks was almost non existent over that time. Um, But they did perform at about 5 percent if you added dividends in. And I did a bit of a fudge to work out what the dividend payments were over the years because they vary.

[00:28:31] Tony: So I took an average and used that. But yeah, so I think you said CAGR over that time period when you were doing the regression test was about 2%. And this group of stocks had a 5 percent CAGR when you included dividends. It was hard to calculate the CAGR without it because it was almost zero, basically.

[00:28:51] Tony: Commonwealth Bank did really well, went from 45 up to 111, but, uh, National Australia Bank has gone backwards over that time and so has QBE. So, um, bugger all CAGR from the group, uh, over that 18 year period, But when you added in the good dividends they pay, it was about 5 percent over that period, versus 2 percent in the market.

[00:29:14] Tony: So it was, as Berkshire Hathaway does, performing at, you know, double market. Um,

[00:29:20] Cameron: Hmm.

[00:29:20] Tony: uh, as a buy and hold strategy, I guess that’s good, but 5 percent CAGR over that time period isn’t great compared to, uh, more actively managed processes like QAV.

[00:29:33] Cameron: Yeah. Well, based on some of the results that I got from Matt’s system,

[00:29:38] Tony: and my experience too, over that time period.

[00:29:40] Cameron: 12%, 14%. Yeah.

[00:29:43] Tony: One other one I’ve been tracking for a while since, uh, October last year, uh, I call it the billionaire’s dummy portfolio. So when, um, when the rich list came out, I sat down and looked at the rich list and then worked out which companies were behind each, uh, individual who was on that list and put them into a portfolio.

[00:30:05] Tony: And, uh, Market weighted the portfolio and cut it off at 10 stocks, which was about 75 percent of the market cap of the entire portfolio, because it was about, I think there’s 200 people on the rich list. And, um, some of their companies were quite small, so it wasn’t worth including them. So the top 10 stocks were accounted for 75 percent of the market cap.

[00:30:26] Tony: So companies like Fortescue Metals and, um, Mineral Resources. Some of them, of course, are unlisted like, uh, uh, Gina Hancocks. Gina Reinhart, sorry, portfolios. Um, but that, that portfolio, again, just buy and hold, didn’t try and trade it using three PTLs. That portfolio is just beating the market. So it’s up 12 percent versus STW at 10%.

[00:30:49] Tony: Um, again, that, that 12 percent doesn’t include dividends. So it’s doing slightly better than that. Uh, stocks like, um, Fortescue Metals and Goodman Group was the best performer, uh, largely on the back of its data center. Network that it’s getting into, uh, and then some poor performance, which, which is still on the portfolio.

[00:31:09] Tony: I didn’t take out Lionstown Resources was down a lot as was Domino’s Pizza. So I just like, you know, get these thoughts from time to time and decide to have a crack and see if it Pays off and it did, it beat, it beats the market. My plan was to rotate the shares when the new Rich List comes out. So, um, I’ll see how that portfolio is tracking then.

[00:31:30] Tony: And if it’s, it’s still above market, maybe I’ll do that and just see going forward, whether this is a, um, not a bad way of beating the market with very

[00:31:38] Tony: little effort.

[00:31:39] Cameron: So you’re putting that just down to the amount of control and incentive these people have in the performance of the company?

[00:31:48] Tony: Look, I think that’s a highly likely factor, big contributing factor, that these are pretty much owner founder stocks, um, I think they probably all are, uh, so that’s got to be a factor. It was more just the thought that if these people are so successful they’re on, you know, the list of Australia’s richest people, then their company should be doing well as well.

[00:32:11] Tony: And should be beating the market. Some are, some aren’t. We could probably get a better return if I could be bothered three point trendline trading it, but didn’t have the time or inclination to do that. So it’s a simple buy and hold strategy for these.

[00:32:25] Cameron: Yeah. Very

[00:32:28] Tony: Yeah. I like looking at things like that, um, just to see if I can beat the market without too much work. And, uh, I’d encourage listeners to pick it up and run with it or think of other ways to do it. Cause it’s, um, uh, if you can do that, it’s even less work than QAV for a decent sort of return.

[00:32:45] Tony: Not a bad way to invest.

[00:32:46] Cameron: What did you call it? The

[00:32:47] Tony: I call it the billionaire dummy portfolio,

[00:32:52] Tony: for want of a better headline.

[00:32:54] Cameron: The BDP.

[00:32:56] Tony: uh, so that’s all I’ve got. The last thing I’ve got to talk about, that’s the last news I’ve got, the last thing I’ve got to talk about is a pulled pork on a company called the Resolute Mining,

[00:33:04] Tony: RSG.

[00:33:05] Cameron: RSG. What kind of mining is RSG,

[00:33:09] Tony: miner. It’s a gold miner in West Africa. So it’s, you can put it in the camp with Perseus and West African mining, which have been on the buy list as well for a long time. I think Resolute may have just come back on soon. Oh, I’m sorry, lately. And it’s way down the bottom compared to the other two.

[00:33:29] Tony: Uh, but similar sort of mining company. Resolute Mining, interesting name. Uh, the shareholders have had to be Resolute over the years cause it’s, uh, it’s, it’s under new management now after a period of underperformance. So, uh, good, good name. And, and do you recall from the West Wing where HMAS Resolute ended up, Cam?

[00:33:50] Cameron: No.

[00:33:51] Tony: It’s the, uh, Timber was used to make the desk in the Oval Office for the President,

[00:33:57] Cameron: Ah,

[00:33:58] Tony: Desk, anyway, bit of trivia on Resolute, I don’t know if it takes its name from the Resolute Desk or HMS Resolute, or HMS Resolute, I should say, sorry, it was a British ship, but Resolute Mining, uh, what else can I say about it?

[00:34:10] Tony: Uh, I think it’s timely that there’s a gold miner on our buy list because the gold price is going up. And it’s been going up for a long time, but, you know, with the war in Ukraine and inflation and COVID, all those kinds of things have contributed to the gold price going up. But, uh, it’s, you know, in the last week or so with the unrest in the Middle East, it’s taken a bit of an upturn.

[00:34:32] Tony: So it’s, it’s probably timely to have a look at a gold miner. Uh, Resolute itself has been going for more than 30 years and, uh, they claim to have operated 10 gold mines over that time. Uh, only two of which remain. And one called SIAMA, S Y A M A, in Mali, and MAKO, M A K O, in Senegal. The company is now dual listed on the ASX and the London Stock Exchange.

[00:34:58] Tony: It’s based in Perth, but it has shifted some back office functions to London, as I think they’re getting tired getting up in the middle of the night to talk to people in Africa. So, London’s closer to the people. TimeZone in West Africa, which they see as a benefit. Both of those two mines are fully operational and mature, and there is a lot of nearby exploration going on and drilling, because one of them at least is getting closed within a couple of years to the end of its mine life, so they’ll want to find some strikes to extend that mine.

[00:35:29] Tony: RSG is also exploring in Guinea, another nearby I’m going to read, um, pretty much the rest of this analysis from a really good article I picked up, uh, from a website called Investors Chronicle, uh, which is a UK website. And it’s about RSG. The headline is this back to basics miner is about to bounce. This is, this is about three weeks old, March 21, 2024.

[00:36:00] Tony: Uh, it starts off with the, the motto, mine gold, create value. Which used to be the motto of, uh, RSG, and now a new management team will do just that. Uh, Resolute’s, Resolute Mining’s motto used to be mine gold, create value, but for several years it did little to be done. A new management team has torn up the more ambitious ideas of the previous board, however, and earnings now look as though they’re about to bounce.

[00:36:27] Tony: A slimmer, more effective, and less risky mining company is also emerging. Before Resolute listed, uh, in London in 2019. Adding to its primary Australian listing, it had an expansionist approach across West Africa and a legacy mine in its home country. Troubles with processing and getting consistent grades of ore out of the ground pushed the share price down between 2020 and 2023.

[00:36:51] Tony: Things are turning around, however. It now has only a handful of early stage exploration projects and two operating mines, the ones I spoke about. The company Pruning has included selling one mine, Bibbiani, for 90 million, which the previous chief executive, John Wellborn, had said in 2018, would be was likely to produce 10 years, with the all in cost of just 765 per ounce.

[00:37:16] Tony: Four years later, the mine was for sale, so much for the key growth asset initially pitched to shareholders. The new management team has also spent nearly three years reworking the Siema plant and paring back some of their grander ambitions of the mine. Richard Hatch, a commentator from Berenberg, said last month that the company had completed a successful turnaround with room to grow.

[00:37:39] Tony: He predicted that the 2024 would lift the EBITDA margin from 26 percent to 32 percent and he sees it climbing again in 2025 to 38%. A turnaround suggests you might end up going back where you came from. But the Resolute bosses have plenty to keep them occupied for the next few years. The current ore bodies at Siama and Mako do not have long left, so mining will have to shift to new areas nearby to keep production going.

[00:38:06] Tony: In terms of gold resources, Siama is on firm footing. Resolute has already defined a resource of 2. 7 million ounces at the Siama North site. This ore body is shallower than the current sulphide ore going into the larger plant, and so will be mined with an open pit. The overall objective is to increase the production profile of CIAMA to over 250, 000 ounces per annum and reduce the cost profile by up to 200 an ounce, the company said.

[00:38:31] Tony: The CIAMA underground mineral reserves are still at 2. 4 million ounces, so there are plenty of years left, plenty of years for production. left there. The situation at the Mako mine is more uncertain. Mako has just two and a half years left from the current ore body and needs more to stay in operation.

[00:38:48] Tony: Hollahan, who’s the CEO, said it was a three horse race for which satellite ore body is going to feed into the plant next. The leading candidate, Tom Boron Koto has a resource of just 403, 000 ounces, all 4 years of production at the current capacity, but exploration continues. But for Resolute to get beyond half a million ounces, it will need to build out one or more of its exploration properties, a serious investment.

[00:39:14] Tony: To continue the geographic spread, its key pre revenue projects are not in Mali or Senegal, but in Guinea. Closest to turning into a mind is Mansala, in the north of the country, a first estimate of the contained gold is expected in coming months. This is where the company has to watch its step, building up new operations is difficult and resolute shareholders have already been burned once by management looking for significant growth and loading up the balance sheet.

[00:39:39] Tony: But the base is stable and the high gold price means the near term work, such as expanding the Sciama plant, can come to fruition. This should be the moment investors get back into the company. Buying into a company at 5x forward earnings that offer over 300, 000oz a year with falling costs is a golden opportunity.

[00:39:58] Tony: I should add, no pun intended. A gold miner with a golden opportunity. So,

[00:40:04] Tony: that’s,

[00:40:04] Cameron: think that was deliberately

[00:40:05] Tony: yeah, those, who ever said financial analysts don’t like to have fun? So that was, that’s the story behind this. It’s, um, how to check a career, two mines left, bit of exploration, um, costs are down, looking good with the gold price rising.

[00:40:22] Tony: That’s the summary. The numbers, uh, to go through those, it’s a large ADT stock, 2. 4 million traded per day in Australia. I’m doing my analysis of the price of, uh, gold. 49. 5 cents, which is less than consensus target. Uh, and it’s, it’s around about IV1 of 51 cents and, uh, uh, and just above IV2 of 45 cents, uh, has 0 percent yield.

[00:40:48] Tony: So it’s not paying a dividend. Uh, because it’s trying to explore to continue to increase the existing mine loss where it is, uh, Financial Health and Stock Doctor and Trend are strong and steady. Brad Banducci, you’ll be interested to know the ROE is 27. 8 percent in this company, or maybe he won’t be. Uh, he’d probably stick with Woolworths where it’s 30.

[00:41:11] Tony: PE is 4. 94 times. Uh, it’s the lowest, um, in the last three years, but we’ve only got two. Uh, because it hadn’t made any money in the majority of the last three years, but it scores for that. PropCaf is 5. 88 times, so that’s pretty good. Uh, net equity per share is 39 cents, so book plus 30 is 51 cents, and the share price is under that at 49 and a half, so it scores for that.

[00:41:36] Tony: Now, Stock Doctor has earnings per share growth as minus 54 percent, but that doesn’t gel with, uh, Both the comments from the company I researched today and that last bit of analysis from Berenberg, which just talked about EBITDA going up. So I think that might be out of date, however, I’ve taken that point off it for negative earnings per share growth.

[00:41:58] Tony: Uh, there’s no owner founder, the new management have taken over, but no one’s got a significant holding in the company themselves. So we can’t score it for that. There is a new three point upturn, so the company is turning around from a sentiment point of view. It hasn’t had increasing equity consistently, so we can’t score it for that.

[00:42:17] Tony: So, all in all, the company gets a quality score of 10 items out of 16, 63 percent for quality, and a QAV score of 0. 11. So it’s towards the bottom of the buy list. And I guess, um, I can rehash some of the pros and cons from the investor and that investment analysis I read. It’s a turnaround, so its financials are improving.

[00:42:40] Tony: It’s under new management. Its costs are coming down. They’ve sold assets, which has reduced debt and the gold price is strong. So that’s the pros for investing in this company. The cons, the mine life at Myer, if they can’t find somewhere else to expand to, might be an issue for them. And the flip side is successful exploration may lead to a fundraise.

[00:43:03] Tony: So if they do find, if they do find gold in Guinea, then they may have to, uh, raise that either with more debt or by asking shareholders to pony up. And I guess the flip side of that is if they do have, if they don’t find gold in Guinea, then it might be even more problematic for the company and its growth profile going forward.

[00:43:21] Tony: So it’s a two edged sword with that one, but that’s, that’s definitely one to watch what happens with that.

[00:43:26] Tony: So that’s Resolute. Be Resolute.

[00:43:30] Cameron: they’re a turnaround. Every now and then they get a little bit lonely. Cause they never come around. Turn around every now and then I get a little bit tired of listening to the sound of my tears. Every now and then I get a little bit nervous that the best of all the years have gone by. Turn around every now and then I get a little bit terrified, but then I see the look in your eyes.

[00:43:58] Cameron: Bright eyes. Every time I feel like I’m gonna fall apart. Oh, I love that song.

[00:44:07] Tony: Very good. Every now and then I get a little bit tired too, but, uh, that’s for a different reason.

[00:44:11] Cameron: You know who wrote that song?

[00:44:13] Tony: Uh, total eclipse of the halves. Is that Bonnie? I was going to say

[00:44:16] Tony: Bonnie Wright, but

[00:44:16] Tony: it’s Bonnie Tyler. Yeah,

[00:44:19] Cameron: Well, she performed it, but do you know who wrote it?

[00:44:22] Tony: I do not.

[00:44:24] Cameron: The greatest songwriter of the 20th

[00:44:28] Tony: David Lee Roth.

[00:44:33] Cameron: It’d be so funny if that was a David Lee Roth song. No, Jim Steinman.

[00:44:39] Tony: right. Okay. Yeah, it

[00:44:42] Cameron: I mean, it’s classic Jim

[00:44:43] Cameron: Steinman. So yeah.

[00:44:46] Tony: doesn’t it?

[00:44:48] Cameron: So outside of Meatloaf, the big hits that he had were Total Eclipse of the Heart for Bonnie Tyler and Air Supply’s Making Love Out of Nothing at All.

[00:44:59] Tony: Ah.

[00:45:00] Cameron: And they’re both like, you know, total Jim Steinman y songs.

[00:45:05] Cameron: Big, operatic, melodramatic, rock opera. Love it.

[00:45:12] Cameron: Always wanted to, uh, interview Jim Steinman. He passed away 2021, sadly. Uh, never got to, never got to interview him, but like, uh, yeah, man. It’s one of my favorites. He’s, he put out a solo album, late 70s, early 80s, very, not very well known, um, called Bad For Good.

[00:45:36] Cameron: You ever heard

[00:45:37] Tony: I haven’t. I do recall him, vaguely recall seeing a film clip back in the 70s or 80s with him at the piano. Did he have sort of a glam rock sort of outfit on when he

[00:45:47] Tony: was doing it? Yeah.

[00:45:49] Cameron: Oh, he was yeah, he was very glam. He’s like, dude, he wrote the songs for Meatloaf. What are you expecting? He’s like,

[00:45:55] Tony: ha. Ah.

[00:45:57] Cameron: but yeah, I think at one point, um, He and Meatloaf had fallen out or Meatloaf was not available or something. So he did this album, Bad For Good, and he sang all of the vocals and, um, himself and he’s not Meatloaf, but, um, it’s one of my favorite albums.

[00:46:14] Cameron: And it’s one of those albums that like, I’m, I’m the, I know one other guy

[00:46:17] Tony: Ha ha.

[00:46:18] Cameron: that I used to come to my events down

[00:46:19] Cameron: there who was another big fan. But yeah, yeah. You, if you like that kind, if you’re a big Meatloaf fan, then first of all, God bless you.

[00:46:27] Tony: Ha ha. What

[00:46:30] Cameron: Bad For Good.

[00:46:30] Cameron: If you’ve. Never checked that out. It’s a classic. Came on, I was in the car with Fox yesterday and it came on and I started singing it at the top of my voice and you didn’t know what the hell was going on.

[00:46:42] Tony: did he say? Every now and then I feel a little bit tired. Turn it down. I mean turn around.

[00:46:51] Cameron: Turn around and let me out this car. I can’t stand you singing. Well, that’s it. No

[00:47:00] Tony: Yeah, where are the questions? Come on.

[00:47:02] Cameron: week too.

[00:47:03] Tony: We took that, well, we took that one without notice from Brad Banducchi. What is ROE? Does that count?

[00:47:12] Cameron: Yeah. If Brad’s got any other questions for the show next week, um, let us

[00:47:16] Cameron: know. Or if the, uh, green Senator wants to ask us any questions.

[00:47:21] Tony: can turn up and talk about supermarkets, can’t we? To the

[00:47:25] Tony: estimate. And now we have in the green chamber, uh, Barry and Stan

[00:47:29] Tony: answering questions on ROE.

[00:47:31] Cameron: Yeah. Like, like Roy and HG doing live instead of the,

[00:47:36] Tony: Yes. Yes.

[00:47:36] Cameron: the rugby finals. Yeah. We’re just doing

[00:47:39] Cameron: commentary on the supermarkets inquiry in the Senate. Uh, Tony, no one knows more about retail, uh, return on equity, the new Tony.

[00:47:51] Tony: Yes. Yes.

[00:47:52] Cameron: cam, I remember

[00:47:53] Tony: you. Thank you, Cam. Well,

[00:47:55] Cameron: when I

[00:47:55] Cameron: was,

[00:47:56] Cameron: uh,

[00:47:56] Tony: That was, I was out, uh, Gosford way, I think. I went to the track to see Rooting King run in the mile, the Gosford mile. On the way back, I thought, I’ll reward him with a bunch of carrots from Woolworths. And, you know what I found, Cam? I couldn’t believe it. Do you know how much carrots are in Gosford at Woolworths?

[00:48:28] Cameron: What else you been up to, Tony? What’s after hours been for you this week?

[00:48:31] Tony: Oh, after hours. Yeah. Watching the US Masters, which was a lot of fun. Great to, uh, to, to watch the players negotiate the course and know how hard it is after being there, how steep it is. Um, where, you know, where all the mistakes can be made. It was a really good tournament. And they, um, they had to deal with a lot of heavy winds, so it’s always good to see pro golfers struggle a bit.

[00:48:55] Tony: Just like, brings them back down to earth. But that was good fun.

[00:48:59] Cameron: Just a lot of farting going on, on

[00:49:01] Tony: Not that kind of win. No, a lot of smoking. I mean, that’s one thing that struck me when I was over there. A lot of guys smoking cigars and girls smoking cigars in the crowds. It’s outdoors. So it doesn’t really matter, but you wouldn’t see that at a golf tournament in Australia. I

[00:49:15] Tony: wouldn’t think, yeah,

[00:49:17] Cameron: no, not allowed to smoke on a golf course in Australia.

[00:49:20] Tony: actually you’re not, no, which is more about bushfires and anything, but, um, not the case in America. So that was good. I actually had a bet on the guy who ran second, a young chap from Sweden called Ludwig Eiberg, who, um. I think it’s going to be the next sensation in golf and I put a bet on at the end of last year when he turned pro at 50 to 1.

[00:49:44] Tony: So I was standing to make a bit of money but he ran second unfortunately. But, incredible performance, first time ever in a big tournament, or in the major anyway, and ran second, so he’s got a bright future.

[00:49:56] Cameron: Hmm.

[00:49:57] Tony: So that was the US Masters. I went to the races on Saturday, big race day in Sydney, and there was a horse there which again did something for the history books, if anyone’s interested in horse racing and hasn’t heard about Pride of Jenny.

[00:50:10] Tony: Not my Jenny, but J E N N I. It had a, an amazing win, um, in the big race, uh, the Queen Elizabeth Stakes. Uh, it, it went to the front and went hard and was leading by about 20 lengths and, um, held on to still win by a significant margin at the end, something you don’t see in horse racing every day. So that was a, one for the books.

[00:50:31] Tony: I’ll still be talking about that in a long time in the future, that race.

[00:50:36] Cameron: Wow.

[00:50:36] Tony: Yeah. So two sporting

[00:50:38] Cameron: And don’t you have a,

[00:50:39] Cameron: you got a horse running this

[00:50:40] Tony: I do, and the Groneys runs on Thursday at Race 1 in Hawkesbury. Up there in Gosford area. , I’m not quite Gosford, but Yeah. Might, might bump into Roy and

[00:50:50] Tony: Hsg.

[00:50:52] Cameron: Chairman Mabb? Got a piece

[00:50:54] Tony: he?

[00:50:54] Tony: does. He likes a Negroni. He’s got, he’s got some, he’s got a share in Negronis. Yes. And Negroni’s. Uh, half sister won the blue diamond steaks. So Negroni’s half sister is called Hay Sugi. And um, we are hoping that Negronis can perform half as well as, uh, the younger sister. And get some, get some prize money for us.

[00:51:15] Tony: But just the fact that her sister won a group one means she’s valuable as a broodmare when we decide to stop racing with her.

[00:51:23] Cameron: Hmm. Good

[00:51:25] Tony: Yeah, thank you.

[00:51:25] Cameron: And tell me about the luxury

[00:51:27] Cameron: strategy.

[00:51:27] Tony: Book I started reading on the weekend, Luxury Strategy, by two chaps called Kapferer and Bastien, who I believe worked in the, one of the luxury houses in Europe, and they’re writing a book about luxury strategy, which seems very dry. It’s all about, you know, how to market products in the luxury category, and what the secrets are behind Hermes, and Bristol, and those kinds of things, and Versace, and all that.

[00:51:50] Tony: But, um, Really got me in. The first chapter was really interesting about the history of luxury and how religions played a part of that and how powers played a part of that and, and stratification of societies played a part of that. So I’ve really gone into the, the anthropology of, of luxury, which is an interesting opening chapter.

[00:52:09] Tony: So yeah, interesting

[00:52:10] Tony: read.

[00:52:11] Cameron: Something, something that we can apply to marketing QAV.

[00:52:14] Tony: I always, I always try and turn it to that care. So if I come up with an insight, you’ll be the first to know.

[00:52:21] Tony: Yeah.

[00:52:22] Cameron: luxury strategy. I like that. Yeah,

[00:52:26] Tony: Yeah.

[00:52:27] Cameron: very good. Well, I’ve done very little this week. I’m still reading my biography on Dong Xiaoping. Learned about the guy that was sat between him and Mao, the guy who was the chairman of the party between him and Mao, which I’d never, who I’d never heard of before, Hua Guofeng.

[00:52:47] Cameron: He was appointed to be Mao’s successor just before Mao died in, uh, 76?

[00:52:54] Tony: Who’s on the phone?

[00:52:55] Cameron: Yeah.

[00:52:56] Tony: Who’s on the

[00:52:57] Tony: phone?

[00:52:58] Cameron: Who? Hua. Hua. Hua. Guofeng.

[00:53:02] Cameron: He didn’t, didn’t last very long. He was the chairman, um, of the party, but from October 76 to June 81, when, um, Dong took over, but Dong was sort of You know, Vice Premier, I think, for, from about 79 onwards.

[00:53:20] Cameron: But this guy, according to the book I’m reading, this guy, you know, deserves a bit of the credit for turning, um, China around. The first thing that he did, literally, day three after Mao died, was arrest the Gang of Four. Who I didn’t know a lot about. I’d heard of them, but didn’t know a lot about the Gang of Four.

[00:53:37] Cameron: So

[00:53:38] Tony: Punk group

[00:53:39] Cameron: a lot about

[00:53:39] Tony: 70s.

[00:53:41] Cameron: Yes. I actually, one of their songs came on Spotify yesterday too. I was going to use it as my song of the week, but, uh, I couldn’t figure out how to make it fit.

[00:53:52] Cameron: But, uh,

[00:53:54] Cameron: now the Gang of Four, uh, for people who don’t know in, in China during Mao’s last couple of decades was his wife.

[00:54:03] Cameron: And three other guys who were sort of the head of the propaganda department that were really supporting, uh, the Great Leap Forward and the Cultural Revolution and attacking anyone who was seen to be critical of either of those things, uh, including Dong. And they were like, Mao’s wife was dead against Dong and, you know, considered him a rightist.

[00:54:29] Cameron: And another thing I didn’t know is that, you know, from So the Dong, Cultural Revolution, Dong was away for six or seven years, you know, sent out to the country for labor, re education. And then he came back for about 18 months and had a senior position and then they kicked him out again. He got removed again for a couple of years because he was, he was refusing to support the Cultural Revolution verbally.

[00:54:56] Cameron: He would not publicly endorse the Cultural Revolution. Because, according to this book, he knew that Mabb was gonna die, and then he was gonna have to undo everything, and if he was, if he had publicly supported it, he couldn’t publicly undo it all as being a huge bitch. They called him the Chinese Khrushchev and that was Mao’s big fear towards the end of his life is that when he was dead, they would undo everything that he’d done like Khrushchev did to Stalin when he died in 53 and that he would be, um, his legacy would be destroyed.

[00:55:37] Cameron: So anyway, yeah, interesting. But this Hua Guofeng did also introduce some, um, economic reform a little bit. A little bit of foreign investment reform, a little bit of economic reform. Mostly building on the work that Dong had been trying to do before him though, but yeah. Interesting. That’s it. Watched another episode of, uh, the thing last night, the, um,

[00:56:02] Tony: Three

[00:56:03] Cameron: three body

[00:56:03] Tony: Yep.

[00:56:04] Cameron: eh,

[00:56:05] Cameron: yeah,

[00:56:06] Cameron: it’s okay, but again, eh, it’s moving moving too quickly, I

[00:56:11] Tony: Nah. Okay.

[00:56:13] Cameron: it. But it’s kind of Got to the bit last night where they basically, the cops or whatever they are, infiltrated the religious meeting of the people and said, they were like, we’re going to be here in 400 years.

[00:56:33] Cameron: And everyone’s like, oh, really?

[00:56:35] Cameron: 400 years? Oh, okay.

[00:56:37] Tony: And Jonathan Price is talking to the AI.

[00:56:41] Cameron: Yes! Hmm. And doesn’t seem to know a lot

[00:56:46] Cameron: about them, considering he’s been part of the cult for, I don’t know, 60 years or whatever at this point.

[00:56:54] Tony: And is very secretive about them, too, which cements his power.

[00:57:00] Cameron: Hmm. Anywho, I’m looking forward to them getting into the physics side of it, because I think that was the most interesting part

[00:57:08] Tony: Yeah, I think so,

[00:57:09] Cameron: this idea that highly advanced civilizations have a completely different, um, understanding of physics, like their understanding of physics compared to ours is like ours today compared to where our understanding of physics was 200 years ago.

[00:57:25] Cameron: Like it’s no, no, no, no, no, no, no, no. It’s, there’s all these other dimensions of physics that we haven’t even been able to unpick yet. And their ability to manipulate the laws of physics, uh, as a result is way advanced. Anyway,

[00:57:39] Tony: That’s coming.

[00:57:40] Cameron: to seeing how they do that.

[00:57:41] Tony: As is the nanofibers. That’s an

[00:57:43] Tony: interesting scene. I thought you’ll see it in the next

[00:57:45] Cameron: Yes, I’m looking forward to seeing that. Yeah. Oh, the next episode already.

[00:57:49] Tony: I think it is Yeah.

[00:57:50] Cameron: quickly. Yeah. Um, I’m still doing my maths book, still doing the, um, AFSL stuff. Haven’t made a lot of progress. Did a lot of coding this week. Uh, not with regression testing, but trying to code, um, uh, a way of automating, um, lowest PE and, uh, consistently increasing

[00:58:17] Tony: Right.

[00:58:18] Cameron: into the buy list.

[00:58:21] Cameron: Didn’t get very far. Um, kept hitting a lot of, a lot of hurdles trying

[00:58:25] Tony: Right. Is that? Is that part of Matt Walker’s code for the regression

[00:58:30] Tony: testing?

[00:58:31] Cameron: Uh, I think it is. Yeah. Let me, let me just see if that’s a thing. I’m beginning to check

[00:58:40] Tony: Yeah, so just copy and paste it if it is.

[00:58:44] Tony: Hopefully it is.

[00:58:45] Cameron: growth, high growth to PE, PE greater than yield, lowest PE,

[00:58:53] Cameron: no. Oh, hey, yes it is. Score record low PE. Yeah, it is. Um, equity, equity increasing. Yeah, it is. Yeah. Yeah. Yes. But, uh, his approach is a little bit different to the approach that I’m trying to take for the buy list. Um, yeah, I’m trying to download it, you know, day by day, rather than using a pre existing historical data source that we can run over.

[00:59:25] Cameron: Anyway, um, it’s been one of those things where I start coding something and, um, You know, it’s always, it’s always, it’s always nearly, nearly working. You know, you think, Oh, if I just tweak it one more time. Four days

[00:59:43] Tony: Yeah.

[00:59:45] Cameron: go, what the hell am I doing? I’ve spent four days trying to tweak this code, iteration 473, and I’m like, I’m almost there.

[00:59:52] Cameron: If I just, and I’ll be lying in bed at 1130 or midnight and going, oh, if I just go, hold on, I’ll pull my laptop out. I, if I just try this. No, that didn’t work. I wanna put, and then it’s like one 30 in the morning. I’m like, okay, I, I should probably turn it off

[01:00:08] Tony: Yeah. That’s the Pareto Principles. What they used to drill us and drill into us at university in computer science was get your architecture right, do the plans on paper first, and you won’t, you’ll eliminate that last bug before you start

[01:00:20] Tony: coding. But most people just

[01:00:24] Tony: pick up the laptop and start coding.

[01:00:25] Tony: They don’t think about

[01:00:26] Cameron: yeah,

[01:00:27] Tony: trying to do and how to plan it.

[01:00:29] Cameron: Well, the problem is I, I, I, I wouldn’t be able to plan it ’cause I dunno what I’m doing. Right. I’m just going, Hey, GPT code this for me. No, now, no, no, no. I’m waiting to the tool. I, I, you know, I wish the tools were a lot better than they are, but, uh, they are where they are. Anyway,

[01:00:47] Tony: it’s a shame. I was looking forward to catching up today and you were telling me that you’ve done some more regression testing

[01:00:52] Tony: and have some more

[01:00:53] Tony: insights.

[01:00:54] Cameron: Hmm. I will stop coding and I will get back to regression testing this week. Yeah. See where I get

[01:01:01] Tony: Well, as long as the regression testing is worth it. I mean, it’s no point doing it if

[01:01:04] Tony: we’re not sure it’s

[01:01:05] Tony: bug free yet.

[01:01:07] Cameron: Well, you know, and I think it’s not, I think, you know, the last I heard from Matt, and we should get him on the show and we can talk about it, but I think this, um, the Yahoo Finance pricing is probably a bit of

[01:01:19] Tony: Okay.

[01:01:20] Cameron: um, weak link in the chain at the moment, so we have to, I reached out to Andre about getting hold of his code too, seeing where that’s at, might be able to get his code, because he’s working on regression testing too.

[01:01:32] Tony: Yeah. Okay. Well, yeah, may or may not help, but maybe suggest to Matt that he gets the pricing information the same way he gets all of the other information without mentioning where he gets it from

[01:01:44] Tony: on air. Okay.

[01:01:45] Cameron: He’s got

[01:01:45] Cameron: that, but, uh, there, there are some problems with that

[01:01:48] Cameron: too. But, um, anyway, yeah.

[01:01:52] Cameron: Anyhoo,

[01:01:54] Tony: Well, this has got to be our shortest episode for a long time, Cam.

[01:01:58] Cameron: Yeah, I know. You want to talk about something else for a while?

[01:02:02] Tony: Well, we had that big long chat beforehand.

[01:02:05] Cameron: We

[01:02:05] Tony: We did, yeah.

[01:02:06] Cameron: We can talk about talk

[01:02:07] Cameron: about Iran and Israel,

[01:02:12] Tony: Yes.

[01:02:12] Cameron: the Iran and Israel thing. It,

[01:02:14] Cameron: you know, I’ve been reading a lot of the analysis on that all over the place on Reddit, in the media. Um, it’s partly amusing and partly frustrating. To read a lot of this stuff. I mean, all of, you know, there’s a lot of discussion of people saying, well, you know, Israel bombed their embassy in Syria, so this is justified retaliation.

[01:02:40] Cameron: People going, well, hold on, you’ve got to understand that Iran’s been funding Hamas and Hezbollah for years, and therefore, You know, they’re basically saying they’re the first mover, uh, if you go back far enough, but that, okay, if you’re going to

[01:02:54] Tony: Yes.

[01:02:55] Cameron: you got to go right back.

[01:02:58] Tony: To when Israel took over

[01:02:59] Tony: Palestine.

[01:03:01] Cameron: Yeah. Well, actually, partly that, um, and also partly when the U. S. overthrew the government of Iran in 1953. And then, um, installed the Shah. Uh, and then when they had their, Iran had their second revolution in 79, Ayatollah Khomeini came in and then the U. S. funded Saddam Hussein’s chemical war against them for 10 years.

[01:03:27] Cameron: Um, so, you know, Iran, and then Iran sees Israel as the U. S. ‘s proxy in the region, probably correctly.

[01:03:37] Tony: The US sees Israel as

[01:03:38] Tony: the US’s

[01:03:38] Tony: proxy in the region.

[01:03:40] Cameron: Yeah, I’m not sure Benjamin Netanyahu sees Israel as the US’s proxy anymore.

[01:03:46] Tony: No, true.

[01:03:47] Cameron: uh, he’s doing a Saddam basically going, listen, screw you, I can do

[01:03:51] Cameron: whatever the hell I

[01:03:52] Tony: Yeah, he is, isn’t

[01:03:53] Cameron: Saddam circa 1990,

[01:03:56] Tony: think that’s one thing I’ve had to be careful of, is criticizing Israel or the Jewish people. You really criti I’m really criticizing Netanyahu’s approach to the

[01:04:06] Tony: situation.

[01:04:08] Tony: More than anything.

[01:04:09] Cameron: well, it’s, you know, but, you know, Israel’s been doing a lot of horrible things to the people of Palestine for a very long time. Okay, back to the The 30s, the 20s, even, uh, well before they took control over there. Um, my mum made the mistake the other night. My mum’s still staying with us. She sat down, she goes, can you explain the history of Palestine to me?

[01:04:38] Tony: Boy, she’s a glutton for punishment. There’s nothing on TV that night, hey?

[01:04:43] Cameron: I said, you want the short version or the long version?

[01:04:47] Tony: I hope she said the

[01:04:47] Tony: short.

[01:04:50] Cameron: she

[01:04:50] Cameron: said the short. So about three hours later, she said that was the short version. I was like, yeah, well, I’ve done like a hundred hours of podcasts on it. So. Three hours, you’re getting off lightly.

[01:05:05] Tony: But, you know, so, but where does it, you say you go back into history, where does it, where does it end and where do you, you know, apportion blame, as you said to me before, The Jewish people went back to Palestine after World War II because no one else would take them in.

[01:05:24] Tony: So

[01:05:24] Cameron: Well, that’s not exactly true, there were Other offers, including Australia. There was offers for them to have an area in the middle of Australia. There were offers of Uganda was another suggestion. They could go to Uganda. Um, but they didn’t, well, some of them were happy with those. There was a lot of debate in the Zionist communities about where they should go and all that kind of stuff.

[01:05:49] Cameron: But the overwhelming majority of them wanted to go to Israel

[01:05:54] Tony: the promised land.

[01:05:55] Cameron: as it was.

[01:05:58] Tony: Mm.

[01:05:59] Cameron: But anyway, yes, the history of Iran, the tensions between Iran and Israel go back to the, you know, at least the late 40s and even earlier, even earlier than that. Like, um, Iran was, uh, critical of the Zionist movement into Palestine before that. Um, but certainly on the creation of Israel, Iran was not in favor of that.

[01:06:25] Cameron: There was a period of detente when the Shah, who’s an American puppet really, was running things from 53 to 79. But certainly since the revolution in 79, for most of the time they haven’t been on very good

[01:06:39] Tony: Mm.

[01:06:41] Cameron: Um, There have been a couple of brief periods when they had a bit of a detente, but, uh, yeah, mostly, uh, Israel, Iran sees themselves as the defenders, one of the few remaining defenders of the Palestinian Muslim people, and that’s why they support Hamas and Hezbollah, because they’re in their views, uh, fighting for the freedom of oppression for

[01:07:07] Tony: Mm hmm.

[01:07:08] Cameron: Palestinian Muslims.

[01:07:10] Cameron: In the West, we call them terrorist organizations. They see them as, uh, you know, guerrilla freedom operations.

[01:07:19] Tony: Yes, I’m always reminded of the Ronald Reagan quote when it comes to freedom fighters. We’ve, we’ve got those Sandinistas on the run. Uh, Mr. President, aren’t they the freedom fighters? Oh, no, yes. Fighters from freedom. Fighters from freedom.

[01:07:39] Cameron: Yes. Yes. Anyway, the propaganda in the Western media in the last week, uh, around this whole situation has been wall to wall and astoundingly brash, as usual. Like,

[01:07:54] Cameron: their ability to just write whatever they want. I don’t know who they think they are, Bruce Lerman or something. I don’t know. They just think they can, what did the judge say?

[01:08:02] Cameron: It’s like the man who escaped from the lion den and went back to get his hat.

[01:08:08] Tony: That’s exactly true, isn’t it? Guy really strategically blundered there. Good anyway.

[01:08:13] Cameron: and his

[01:08:14] Tony: Yes,

[01:08:15] Tony: correct.

[01:08:17] Cameron: Alrighty then, well before I get myself into more trouble, let’s draw a line under that, and I’ll talk to you next week. Have a good week,

[01:08:24] Tony: Yes. Happy ASX. I hope it’s a better week for stock markets in general around the world.


In the interest of full disclosure, we would like to advise that as of the date of this post, the QAV team currently hold these stocks:


If you’re interested in learning more, please review our trading and disclosure policy.

That’s it for the week! 


Got a question?