QAV 728 — Fixing The U.S. Checklist

QAV 728 Club

[00:00:00] Cameron: Wel­come back to QAV. This is episode 7 28. Uh, we’re record­ing on the 9th of July, 2024. How are you, tk? Very well, thank you. Very good. Good. Um, uh, con­grat­u­la­tions on your hors­es, uh, or horse. I think you had a, he had a win. I saw.

[00:00:23] Tony: Yeah, Indu­bitably. Won in Beaudesert of all places. But it was actu­al­ly well placed, because uh, it picked up a cou­ple of bonus­es because it was a Queens­land horse.

[00:00:34] Tony: Queens­land sold horse. I think maybe Queens­land bred as well. Um, yeah, so, like, there was a, there was uh, more prize mon­ey involved than what had appeared in the race book. So it was good.

[00:00:45] Cameron: Where did the Indu­bitably name come from? It’s a bit of a mouth­ful.

[00:00:49] Tony: It is. Yeah. Uh, one of our mates, that’s the way he speaks and he came up with it.

[00:00:56] Tony: So, and we kind of laughed at it cause we, any­time you want to, I like names that trip up the race callers just to stick it to them a lit­tle bit. Right. Indu­bitably on the blablabla.

[00:01:06] Cameron: Yeah, exact­ly. Indu­bitably on the

[00:01:09] Tony: blablabla. Yeah, so that was a bit of fun.

[00:01:13] Cameron: Oh, con­grat­u­la­tions. Always good to hear that. Any

[00:01:15] Tony: oth­er horse, um, cha cha changes, uh, actu­al­ly bled after the race, so that’s why it did­n’t per­form well.

[00:01:23] Tony: Bled from both nos­trils, which means it has to have a manda­to­ry three month rest.

[00:01:28] Cameron: Did­n’t it just have a win recent­ly or a good run? Ran

[00:01:30] Tony: sec­ond, yeah, it just missed out on win­ning in its last start, so it start­ed like a 1. 45 favourite, so every­one thought it was going to win this one, but unfor­tu­nate­ly it bled.

[00:01:39] Tony: So, um, it gets the rest.

[00:01:42] Cameron: That’s no good. Oh, ch ch ch changes. Well, this is going to be our sec­ond U. S. show. We did the first one about a month ago, and we’re going to try and do one on a reg­u­lar basis. Um, the, uh, per­for­mance of the U. S. port­fo­lio has­n’t been as good over the last month. It’s now run­ning a lit­tle bit behind the bench­mark since incep­tion.

[00:02:07] Cameron: I think it was up about 1 per­cent over the last month ver­sus the bench­mark, which was up about 4%. But, I had to sell a stock yes­ter­day. I had to, uh, I think 3PTL one of the stocks. And then I had to, of course, do a new buy list. Had­n’t done one for a few weeks. And there were a cou­ple of stocks at the top of the list that I was look­ing at and I was like, yeah, I don’t think these stocks should be in the buy list.

[00:02:37] Cameron: I don’t think the buy list is work­ing, is it? Sure. There are a cou­ple of tech stocks, uh, in par­tic­u­lar that I looked at that weren’t mak­ing any prof­its, um, might’ve been val­ue traps. And, um, uh, it just made me think, yeah, I need Tony to look over this in more detail. And we need to, we did talk about this last time that we need­ed to re jig maybe some of the, the num­bers, par­tic­u­lar­ly the ones that are kind of try­ing to replace the Stock Doc­tor, um, Star Stocks and those sorts of things that look at the finan­cial health.

[00:03:14] Cameron: of a com­pa­ny we need to play around with. Stock­o­pe­dia have their own vari­a­tions of that, but the scor­ing is dif­fer­ent. It’s not as clear cut. Um, and we need to maybe adjust some of the num­bers and look at some oth­er things. So, um, I then decid­ed on a stock yes­ter­day to add to the port­fo­lio, which was GTN.

[00:03:35] Cameron: Gray Tele­vi­sion. Uh, and then you point­ed out to me in an email this morn­ing that I com­plete­ly missed the fact that they were flag­ging that as a bank­rupt­cy risk. So, obvi­ous­ly a lot more work needs to be done on how we, uh, engi­neer the U. S. port­fo­lio. And I’ve also got some stocks in the U. S. that are in the news, uh, some of the port­fo­lio stocks that we have.

[00:03:59] Cameron: Hold­er in the news, which I thought it’d be inter­est­ing to talk about as well. And if we have time, we can talk about some Aus­tralian stuff as well. I’ve got some sur­vey results in from some mem­bers, um, got some news out of the Aus­tralian mar­ket, but any­way. So you had a look at my US check­list over the last 24 hours, and you’ve high­light­ed some con­cerns, some issues.

[00:04:20] Cameron: And I said, let’s do it on air, man. Let’s, let’s be trans­par­ent about it because you know, these are good things for. I think our mem­bers to be think­ing about, under­stand­ing, not only if they’re look­ing at build­ing their own US check­list, but just gen­er­al­ly speak­ing, you know, as we’re try­ing to iden­ti­fy good com­pa­nies and get­ting out of the safe­ty zone of Stock Doc­tor, you know, we’ve got that check­list, you’ve been refin­ing it for decades, it runs well, we’re com­fort­able, there’s always room for improve­ment, but we’re com­fort­able that it’s doing a good job of High­light­ing the sorts of com­pa­nies that we want to invest in, and more impor­tant­ly, elim­i­nat­ing the sorts of com­pa­nies we don’t want to invest in.

[00:05:01] Cameron: But, um, you know, this one still needs some refin­ing.

[00:05:07] Tony: Yeah, well, uh, I think, I think you’re right. I think from my look­ing at the, the buy list you sent through to me today to have a look at, I think we need to tight­en up the qual­i­ty side of things. So the dum­my port­fo­lio, I went through those stocks as well, and a lot of those have the same risk pro­file as Grey TV, um, in terms of their finan­cial health.

[00:05:30] Tony: So I think the dum­my port­fo­lio for the US stocks at the moment is bet­ter. More of a val­ue port­fo­lio with­out the qual­i­ty over­lay that we’re used to, but it should­n’t be too hard to improve that. So, there’s a cou­ple of things in Stock­o­pe­dia, which I had a look at. One is called the Z score. And this is not Stock­o­pe­di­a’s IP, it’s Z Score’s that talked about, gen­er­al­ly in finance, it’s a way of try­ing to work out the finan­cial health or risk of a com­pa­ny.

[00:05:58] Tony: Anoth­er one called the F Score, which I guess is prob­a­bly the most anal­o­gous to the Stock Doc­tor finan­cial health trend, so it’s look­ing at the trend over time. Um, so they’re two met­rics that I think can replace, um, With Stock­o­pe­dia data, what we usu­al­ly use in our own check­list was Stock Doc­tor’s data.

[00:06:17] Tony: Um, in terms of what the cut­off scores have to be, I, you know, I don’t know those two scor­ing sys­tems well enough to guess an answer. So what I’m going to sug­gest is next time you do a down­load, just to stack rank them based on those two met­rics, and then we can cut it off at maybe a hun­dred stocks, which is, you know, Real­ly the lim­it of what we want in a buy list, I think, any­thing more than 100 becomes unwieldy, but 100 gives us enough to work with, so we can find stocks that meet our oth­er cri­te­ria from that uni­verse.

[00:06:46] Tony: And then we can work out what the code into the check­list is, you know, if a 100 stock has a QF score of 5 out of 10, or 7 out of 10, or 10, then we can put that in as our hard code. man­date for our check­list. Uh, and like­wise too, uh, Stock­o­pe­dia has a qual­i­ty rank­ing. So they stack rank stocks based on these kinds of cri­te­ria.

[00:07:07] Tony: So that’s the oth­er option is that we work out the top hun­dred stocks and put a, um, a hard code, a qual­i­ty at that score in our check­list. So we’re not drop­ping too far down the qual­i­ty, um, lay­ers. Cause I think that’s, what’s miss­ing from the port­fo­lio at the moment. Um, a lot of the stocks, uh, show­ing poor finan­cial health that are in the dum­my port­fo­lio at the moment.

[00:07:31] Cameron: So they do have this thing, as you men­tioned, the qual­i­ty rank. And that was, it is one of the things that I use in the scor­ing com­po­nent of it. So, uh, their expla­na­tion on their web­site of the qual­i­ty rank. says that they look at, um, our approach to cal­cu­lat­ing the qual­i­ty rank mir­rors that tak­ing for the val­ue rank, momen­tum rank, and growth rank scores.

[00:08:00] Cameron: Our qual­i­ty rank is based on a com­pos­ite of care­ful­ly select­ed com­pa­ny fac­tors based on the lat­est aca­d­e­m­ic research into under­stand­ing qual­i­ty. The fac­tors used are inspired by the writ­ings of War­ren Buf­fett, Joseph Piotrows­ki, Edward Alt­man, and Mesod Beneish, as well as recent papers from Robert Novy Marx.

[00:08:20] Cameron: of the Marx Broth­ers, no, of the Uni­ver­si­ty of Chica­go, and Nation­al, he was the fourth broth­er, there was Grou­cho, uh, Chico, um, Har­po, Zip­po, that was the oth­er one, the good look­ing one, Zip­po, and then Robert, yeah, he was the qui­et one. Each com­pa­ny in the mar­ket is, I’m jok­ing, jok­ing, each com­pa­ny in the mar­ket is going from 1 to 100, oh, there’s anoth­er one, seri­ous­ly?

[00:08:47] Cameron: I think

[00:08:47] Tony: it was Gum­mer, yeah, could be wrong, def­i­nite­ly Zip­po. I’m a huge Marx Broth­ers fan.

[00:08:53] Cameron: Appar­ent­ly. Uh, it’s ranked from 1 to 100 for each of these qual­i­ty fac­tors, and a com­pos­ite score is cal­cu­lat­ed as a weight­ed aver­age of all these val­ues. The qual­i­ty rank is then cal­cu­lat­ed between 0 and 100 for this com­pos­ite score, where 100 is best and 0 is worst.

[00:09:11] Cameron: And so it says they’re look­ing at things like long term aver­age return on cap­i­tal employed, Long Term Gross Prof­its to Assets, Long Term Aver­age Free Cash Flow to Assets Ratio, Long Term Oper­at­ing Mar­gin Sta­bil­i­ty, Long Term Sales Growth Con­sis­ten­cy. Then the F Score is look­ing at whether or not it is an improv­ing com­pa­ny.

[00:09:32] Cameron: Piotrows­ki F Score. We weight, we heav­i­ly weight the F Score giv­en its effec­tive­ness, espe­cial­ly among small caps. And then, is it a safe com­pa­ny? Bank­rupt­cy and earn­ings risk. Num­ber one, the Alt­man Z score, a bank­rupt­cy meter. Num­ber two, the Beneish M score, an earn­ing manip­u­la­tion flag. And num­ber three, the Cur­rent Lever­age Net Debt to Assets.

[00:09:57] Cameron: So, um, as I said, I’m pret­ty sure I have this, um, in my scor­ing met­rics. I’m just try­ing to find Okay. Yeah, so under, when I’m doing the health rat­ing, in the Stock­o­pe­dia ver­sion of this, I have a scor­ing for qual­i­ty rank and the way that I set it up, and hon­est­ly, when I did this, you know, six months ago, I was just lick­ing my fin­ger and hold­ing it up in the air and tak­ing, you know, fig­ur­ing out a start­ing point.

[00:10:37] Cameron: I’ve got equal to or greater than 51, giv­ing it a one score and below that, giv­ing it a zero. So I think, as a start­ing point, I need to increase the cut­off for the qual­i­ty score, qual­i­ty rank.

[00:10:57] Tony: Yeah, well if you can do a down­load and see What the score is for the hun­dredth stock, if you stack rank from the high­est qual­i­ty down.

[00:11:06] Tony: That’s prob­a­bly a good start­ing point to up your score for that check­list item. Right,

[00:11:13] Cameron: so Do a down­load of What Though, like Uh, all of the stocks that I’m cur­rent­ly doing and then stack rank them just based on the qual­i­ty score, qual­i­ty rank. Is that what you’re say­ing?

[00:11:31] Tony: Yeah, good ques­tion. I, um, I was think­ing do a down­load of the top hun­dred qual­i­ty stocks in Stock­o­pe­dia.

[00:11:42] Tony: And get that score. Um, that may make the buy list too small though, if you’re fil­ter­ing for a lot of oth­er things, but I’d, I’d start, yeah, yeah. So I’d start, I’d start maybe there and then, uh, and then see what you get the, when you do a nor­mal down­load with that score in there and then maybe try and get to 50 to a hun­dred stocks.

[00:12:08] Tony: that meet all the cri­te­ria, but using the top qual­i­ty scores.

[00:12:13] Cameron: Right. I’m won­der­ing if I look at my most recent down­load.

[00:12:19] Tony: Yeah, is it there already? Or does Stock­o­pe­dia have the abil­i­ty to be able to go and query it now online, and we can see what the 100th qual­i­ty stock is?

[00:12:29] Cameron: Uh, yeah. Yes, baby. Yeah, it’s a bit hard to set up.

[00:12:37] Cameron: You’d have to cre­ate basi­cal­ly their equiv­a­lent of fil­ters and all of that kind of stuff, which is a bit of dick­ing around. But, okay, so the, like the down­load that I did on Mon­day, yes­ter­day, um, I think has three and a half.

[00:12:53] Tony: Hang on, sor­ry. Hang on. It’s on their front page. I’ve got, I’ve got a down­load now for U.

[00:12:59] Tony: S. stocks. They’re, they’re using a QV, which I guess is qual­i­ty. Is it? What’s QV? Oh, that’s qual­i­ty and val­ue.

[00:13:07] Cameron: Yeah, I

[00:13:08] Tony: don’t know if I can just get qual­i­ty.

[00:13:11] Cameron: So I down­loaded three and a half thou­sand stocks on Mon­day, and I have qual­i­ty rank as the sec­ond to last thing that I’m look­ing at. So if I do them in descend­ing order Mm hmm.

[00:13:27] Cameron: Oh, here we go.

[00:13:27] Tony: Qual­i­ty rank. Sor­ry.

[00:13:30] Cameron: Qual­i­ty rank a hun­dred going down.

[00:13:33] Tony: Mm hmm,

[00:13:34] Cameron: right? You’re not gonna, you’re not gonna believe who’s the num­ber one Stock.

[00:13:43] Tony: Is it Microsoft?

[00:13:44] Cameron: Fortes­cue.

[00:13:46] Tony: Are you talk­ing about Aus­tralians or US, Aus­tralian stocks, eh?

[00:13:49] Cameron: No, this is US stock. I’m just look­ing to see if it’s the same Fortes­cue.

[00:13:53] Cameron: FSUGY. Fortes­cue Lim­it­ed, for­mer­ly Fortes­cue Met­als Group Lim­it­ed, is an Aus­tralia based inte­grat­ed green tech­nol­o­gy ener­gy and met­als com­pa­ny. So, um, yeah. This is list­ed on the New York Stock Exchange and it has a qual­i­ty score of 100.

[00:14:16] Cameron: Now, well that’s, that’s not the ones you

[00:14:20] Tony: down­loaded because I’ve just gone to their front page. I can do a qual­i­ty rank, um, down­load and the hun, the only item with 100 is BMI, Bad­ger Meter, who­ev­er they are.

[00:14:33] Cameron: Well, they are the oth­er stock that I’ve got in my down­load with a 100, but it’s also got Fortes­cue.

[00:14:41] Cameron: And then it goes down to Google with a 99 qual­i­ty score. Meta, NVO, Novo nor disk, uh, 10 cent hold­ings 99. And so any­way, yeah, there’s a bunch with 90 nines. Lot of, oh my god, a lot of 90 nines.

[00:14:57] Tony: Yeah. ’cause it looks like the hun­dred stock on stock, EDIA is rank­ing is gonna be 95. It has a score of 95. So that’s on, maybe 94.

[00:15:10] Tony: I’m just sort of arbi­trar­i­ly pick­ing the mid­dle here.

[00:15:13] Cameron: Well, in my down­load, if I go down 100, uh, it’s, they’re still in the 98s.

[00:15:24] Tony: Okay. Well, I’m just using the top qual­i­ty rank but­ton in Stock­o­pe­dia for US stocks.

[00:15:33] Cameron: Right. And I’ve got,

[00:15:35] Tony: it’s on the front page.

[00:15:37] Cameron: We’re on the front page.

[00:15:39] Tony: Okay. Let me, I’m just try­ing to get back to it. Hang on. Pop­u­lar Screens, so it’s in Browse, and then the first tab is called Pop­u­lar Screens, and if you go to the right, Top Qual­i­ty Rank, and that gives you 200 stocks.

[00:15:54] Tony: So I’m think­ing we want, for good qual­i­ty com­pa­nies, we want prob­a­bly a score of 90 or bet­ter, is my guess.

[00:16:00] Cameron: Right.

[00:16:01] Tony: So I code that into the check­list. The next time you do a down­load, see if that does­n’t fil­ter out too many stocks, if you still have sort of 50 to a hun­dred to play with.

[00:16:10] Cameron: Okay. 90 or bet­ter?

[00:16:13] Tony: Yeah. That’s based on the fact that it looks like just from this quick look at the Stock­o­pe­dia rank­ing, the sort of hun­dred stock is gonna be around, uh, 96.

[00:16:26] Tony: Not all of those a hun­dred stocks are gonna be val­ue stocks, so we’ll prob­a­bly just low­er the rank­ing a lit­tle bit to try and get a list.

[00:16:31] Cameron: Um, well, I’ll tell you what I’ll do right now, live on air, is I’m going to make a copy of the buy list that I did on Mon­day. I’m going to, I’m going to go into the, uh, scor­ing for this, uh, piece of infor­ma­tion, qual­i­ty rank, health, uh, finan­cial health. Yes. Um, Hold on, no, not that, the scor­ing, uh, health rat­ing, here we go, and I’m going to change it to equal to or bet­ter than 90,

[00:17:06] Cameron: um, okay, so that has left me with, rVYL and BOXL are still in here, Tony.

[00:17:22] Cameron: That can’t be right.

[00:17:23] Tony: What were those com­pa­nies, sor­ry? RV, RVYL.

[00:17:28] Cameron: RVYL and BOXL and GTNA. So, okay, yeah, well, they, they’re get­ting a zero. So I haven’t fil­tered them out because of that. They’re get­ting a zero for finan­cial health. But their scores, their QAV scores are still high, right? I’m not elim­i­nat­ing them, I’m just not scor­ing them, they’re not get­ting a score for finan­cial health.

[00:17:51] Cameron: But the rest of their scor­ing is still strong enough that they’re com­ing up at the top of the buy list.

[00:17:56] Tony: Yeah, right. How did we get around that

[00:17:59] Cameron: with the stock? Well, they weren’t get­ting a health score before any­way, because their scores were below 51. So they already weren’t get­ting a 1 for finan­cial health, but still com­ing up at the top of the list.

[00:18:10] Cameron: Because their, you know, their price to oper­at­ing cash flow is crazy low, like 0. 35, 0. 54. By the way, there’s anoth­er one above them, QRTEA, Curate Retail, which I looked at too. That’s the com­pa­ny that owns QVR. But, um, they are about to be delist­ed, I noticed, because their share price is less than a dol­lar.

[00:18:37] Cameron: And appar­ent­ly, if your share price is less than a dol­lar for a cer­tain peri­od of time, uh, you get delist­ed from the NASDAQ.

[00:18:44] Tony: Oh, wow. Okay.

[00:18:46] Tony: with our nor­mal check­list though, we’ve got a num­ber of finan­cial health Met­rics, don’t we? We have, is it a star stock? Is it, what’s the stock doc­tor finan­cial health? What’s the stock doc­tor finan­cial trend? Do we have any­thing else? I’m just try­ing to think how we knock out poor qual­i­ty stocks in the cur­rent check­list.

[00:19:08] Tony: Because if we only have one thing, I can see what’s hap­pen­ing in this, in the stock oppor­tu­ni­ty check­list. It’s not fil­ter­ing out poor qual­i­ty com­pa­nies.

[00:19:18] Cameron: Unless we make it a neg­a­tive.

[00:19:20] Tony: Yeah, unless we make it a hard score, like a hard cut off, because I’m look­ing at Stock­o­pe­dia rank RYVL as a 38 on qual­i­ty, 6 on momen­tum, but 90 on val­ue, and then the com­bined score is 38, so they’re obvi­ous­ly weight­ing their scores as well.

[00:19:40] Tony: There’s a win­dow wash­er appear­ing at my win­dow, you might hear him, sor­ry.

[00:19:45] Cameron: Ask him what he thinks.

[00:19:47] Tony: I think he’s from, he’s prob­a­bly from Mor­gan Stan­ley, we’re just try­ing to steal our IP.

[00:19:51] Cameron: Yeah, yeah, prob­a­bly. Um, yeah, so, uh, you know, there’s this oth­er thing that they’ve got, the, you know, the Z2 score, the bank­rupt­cy risk.

[00:20:02] Cameron: The Z2 You know, I could, I mean, I think any com­pa­ny that’s a bank­rupt­cy risk is an auto­mat­ic no for us. I think so too. That’s one of the, that’s one of the rea­sons we look at qual­i­fied audits is any com­pa­ny that’s could not be able to meet its oblig­a­tions. We just imme­di­ate­ly, uh, take off the table. I could add anoth­er met­ric in here that looks at the, uh, bank­rupt­cy risk score and if it’s you know with­in the realms of dis­tress um make that a hard go no go too.

[00:20:40] Tony: Yeah I think that’s prob­a­bly the way to do it Cam because look­ing at this par­tic­u­lar com­pa­ny it’s got a bank­rupt­cy risk score of dis­tress which is the low­est and it’s a score 6 so I’m guess­ing any­thing with a pos­i­tive score is going to be safe and any­thing with a neg­a­tive score is going to be some­thing we want to prob­a­bly avoid.

[00:21:01] Cameron: Yeah right.

[00:21:02] Tony: Yeah,

[00:21:03] Cameron: and make it a hard,

[00:21:06] Tony: yeah,

[00:21:06] Cameron: hard stop,

[00:21:08] Tony: yeah,

[00:21:10] Cameron: that’ll

[00:21:10] Tony: take out all the stocks in the cur­rent dum­my port­fo­lio by the way,

[00:21:14] Cameron: right,

[00:21:15] Tony: yeah, I had a look at that today, which is okay because the port­fo­lio is a deep val­ue port­fo­lio and it’s been per­form­ing but it just does­n’t have the qual­i­ty over­laid or the like.

[00:21:26] Cameron: Yeah.

[00:21:27] Tony: You don’t want to wake up tomor­row and find out this com­pa­ny that you’ve owned has gone bank­rupt.

[00:21:31] Cameron: No, that’s nev­er fun. So, uh, what should, what should I do with the exist­ing stocks? Like, just use the nor­mal rules, uh, or ditch them and replace them?

[00:21:44] Tony: My gut says to use the nor­mal rules and as you need to replace one, do a new buy list and then go with that.

[00:21:51] Cameron: Yeah. Okay. Just track their three point trend line and their real ones and all those sorts of things. Okay.

[00:22:00] Tony: Yeah. How many stocks are in the DP for the U. S. port­fo­lio now?

[00:22:04] Cameron: Thir­teen, I believe. Okay.

[00:22:07] Tony: So it’ll take a while to turn that over.

[00:22:12] Cameron: Some of them are doing great.

[00:22:14] Tony: Yeah. But like, you know, I had a look at Land’s End today, which I think is being One of the bet­ter per­form­ers.

[00:22:20] Tony: Cause you sent me a link say­ing it’s just real­ly some, uh, bad results. And I look at its bank­rupt­cy score and it’s, it’s the low­est it can be. So it’s not sur­pris­ing.

[00:22:33] Cameron: Oh, wow. It’s pret­ty bad. Yeah. It’s not as bad. It’s not as bad as RVYL, but it’s still pret­ty bad.

[00:22:40] Tony: Yeah. So why don’t we do this? Are you able to set up a sec­ond US dum­my port­fo­lio with a new buy list? Um, call it a tri­al port­fo­lio, I guess, because, you know, we don’t know yet whether we’re going to make a lot more changes to it.

[00:22:55] Tony: I think we prob­a­bly will. So it’s no point hard cod­ing some­thing, set­ting up a new port­fo­lio at this stage. But it might be worth­while just set­ting up a tri­al one that we can play around with and tin­ker until we get it right.

[00:23:07] Cameron: Yeah. Okay. Good idea. Let me just, uh, make a note of that.

[00:23:13] Cameron: I mean, we can even just col­lapse this one. I mean,

[00:23:16] Tony: yeah, we prob­a­bly can actu­al­ly. You’re right. It’s, it’s real­ly a tri­al port­fo­lio too, isn’t it?

[00:23:20] Cameron: Yeah. I mean, it was designed. specif­i­cal­ly for this pur­pose to start to work out what the scor­ing should be, you know, what it should look like, what works, what does­n’t work in the US mar­ket.

[00:23:33] Cameron: Um, okay, what oth­er, uh, things should I look at? Tony, have you dis­cov­ered any oth­er major flaws?

[00:23:42] Tony: Um, I don’t know if they’re laws in the stock­o­pe­dia data or, or it’s. Not being picked up in the buy list, but I could­n’t see, so I did a pulled call from a com­pa­ny called, um, Willis Lease Finance, so if you have a look at that one, it does­n’t have an IV,

[00:24:02] Cameron: hi folks came in the edit­ing booth here. So the next 10 or 15 min­utes was Tony and I going through. Some oth­er data points that he thinks I need to rejig to get the buy list work­ing prop­er­ly. Uh, we need to look at how we’re scor­ing things. Like IV1, price less than book, price less than yield. Um, we talked about how we can go about adding the PE his­to­ry and

[00:24:31] Cameron: Whether or not it has a new three point upturn. And a bunch of cod­ing projects for me, basi­cal­ly. I decid­ed to edit all of that out because I think it would bore you to tears. Basi­cal­ly the bot­tom line is. All right, so that’s giv­en me a lot to work on.

[00:24:49] Tony: Yeah.

[00:24:51] Cameron: So what I’ll do is I’ll, I’ll rejig the check­list with all of that, run a new buy list, cre­ate a new port­fo­lio based on that, and then run that past you and see what you think.

[00:25:03] Tony: Yeah. Well, and, um, I guess you’ll see it when the check­list comes down. Does it have enough stocks or not that we can make it work?

[00:25:12] Tony: Yeah. Yeah.

[00:25:13] Cameron: Yeah.

[00:25:14] Tony: You might have to play around with the finan­cial cut­off before you, um, get a usable num­ber.

[00:25:20] Cameron: Yeah. Okay, but the key thing is going to be using that Z2 score to take out any­thing that’s a bank license risk. Yeah, I think so. Just rely on the scor­ing.

[00:25:30] Tony: Yep.

[00:25:31] Cameron: Alright, thank you for that. Um, I had some news that just, apart from the QVR par­ent com­pa­ny that was going to get delist­ed, which I thought was inter­est­ing, just some of the oth­er inter­est­ing things, uh, you know, with a dif­fer­ent mar­ket and dif­fer­ent, you know, kinds of news that I’m used to see­ing.

[00:25:50] Cameron: Grindrod, which is one of the com­pa­nies that we hold in this port­fo­lio that we’re about to col­lapse. Um, but they’ve done well for us. They’re up 52 per­cent Grindrod ship­ping, but they also have a very low Z2 score. They’re in dis­tress and their share price has turned around. Uh, but, um, I saw on the news for them, it says that they’re expect­ed to show a fall in quar­ter­ly rev­enue when it reports their results on Fri­day.

[00:26:21] Cameron: Um, well, June 28th. So I guess that’s been in gone. The Sin­ga­pore based com­pa­ny is expect­ed to report a 50. 5 per­cent decrease in rev­enue. To 38 mil­lion from 76. 79 mil­lion a year ago, accord­ing to the esti­mate from one ana­lyst. Don’t know what they actu­al­ly report­ed when it came out, but, uh, imag­ine if we saw that in Aus­tralia, a 50 per­cent decrease in rev­enue year to year, uh, how would you react to that?

[00:26:53] Tony: Oh, look, it may be a red flag, but, um, it did­n’t hurt the share price, which I found inter­est­ing, but I think that’s good. Can that be because of what you talk about next, which is the fact that they look like they’re buy­ing back lots of shares. So that might be it. Yeah, well, the next sto­ry was that they had

[00:27:11] Cameron: an extra­or­di­nary gen­er­al meet­ing on the 20th of June, um, just before their results were due to come out.

[00:27:17] Cameron: Approval of the pro­posed selec­tive cap­i­tal reduc­tion of the com­pa­ny. So that’s, uh, prop­ping up the share price, do you think?

[00:27:26] Tony: I think so, yeah. It was an inter­est­ing, uh, link you sent me. It looks like. This com­pa­ny is list­ed in a num­ber of dif­fer­ent juris­dic­tions and they have to sat­is­fy require­ments in each of them, like Sin­ga­pore and the UK and the US.

[00:27:37] Tony: And, uh, look, the link you sent me said they were can­celling their shares and they were seek­ing Sin­ga­pore approval to do that, and then they were can­celling shares but return­ing the val­ue of the shares back to the the share­hold­ers. So that to me sounds like a com­pul­so­ry buy­back. of some kind and there­fore and they have to be val­ued on by the share­hold­ers which makes sense if they’re hav­ing their shares acquired uh yeah so it looks like they’ve under­tak­en a mas­sive buy­back Maybe that’s what’s prop­ping up the share price.

[00:28:10] Tony: Hey, I’m look­ing at them in Stock­o­pe­dia. This is a GRIN, Grind Rod, Grind Rod, Ship­ping Hold­ings. Their bank­rupt­cy risk score is cau­tious or just under cau­tious, but the score is Numer­i­cal­ly 1. 14, so I said before we might have to look for pos­i­tive com­pa­nies, uh, pos­i­tive scores for com­pa­nies as our cut­off, but it might have to be high­er than that.

[00:28:35] Cameron: Yeah, I, um, I’ve made a note to have a look at the Alt­man Z score and see how they score it, but accord­ing to their, um, lit­tle web­site, Expla­na­tion on it. They say a Z score above 2. 99 are safe zones. The com­pa­ny is con­sid­ered safe based on the finan­cial fig­ures only. Below that down to 1. 8, there is a good chance of the com­pa­ny going bank­rupt with­in the next two years of oper­a­tions.

[00:29:05] Cameron: And then below 1. 8 is dis­tress zones. So we want a score above 2. 99. 2. 99?

[00:29:12] Tony: Yeah, I think so. So it’s safe. That sounds, sounds, um, good. I know when we first start­ed talk­ing about US stocks, I, Pulled togeth­er Z scores and com­pared it to Stock Doc­tor’s finan­cial health and they did­n’t line up, so even though I don’t doubt Z score’s a good bank­rupt­cy avoider score, it does­n’t, it’s not the same as the Stock Doc­tor finan­cial health, but it’s what we have avail­able, so I think we have to use it.

[00:29:38] Cameron: Well, you know, their qual­i­ty rank has all those oth­er finan­cial mea­sures fac­tored into it too.

[00:29:45] Tony: Yeah, okay.

[00:29:46] Cameron: Maybe I can take some­thing like Fortes­cue or BHP and com­pare the Stock Doc­tor health score and the Qual­i­ty Rank score and try and line them up.

[00:29:57] Tony: Yeah, don’t do that.

[00:29:58] Cameron: It’s going to be hard to tell.

[00:30:00] Tony: Yeah, that’s what I did as an exer­cise last year when I was try­ing to do all this from hand by hand and they did­n’t line up.

[00:30:06] Cameron: Oh, right. Even with the Qual­i­ty Rank score?

[00:30:10] Tony: I don’t know if I used Qual­i­ty Rank. I think I was using Zed score for mem­o­ry.

[00:30:14] Cameron: Right. Yeah.

[00:30:16] Tony: Any­way,

[00:30:16] Cameron: well, anoth­er stock in the news, as you men­tioned, is Land’s End, uh, which is up about 90 odd per­cent since I added it to the US port­fo­lio. So I’ll be sad to have to let that one go, but they, they got a news announce­ment that came out that said.

[00:30:33] Cameron: Um, shares were down after quar­ter­ly report shows rev­enue decline and widen­ing, widen­ing loss. Land’s end shares last trad­ed at 12. 83 after hit­ting a low of 11. 78, its low­est lev­el since April 10 and was on track for its fourth straight day of declines after its report. Um, again, some­thing like this, like a bad, we, you know, we talk about con­fes­sion sea­son in the US.

[00:30:59] Cameron: Sor­ry, in Aus­tralia. And I’m not sure what the equiv­a­lent is in the U. S. mar­ket if they have some­thing equiv­a­lent to a con­fes­sion sea­son where com­pa­nies are expect­ed to give investors warn­ing that they’re not going to meet expec­ta­tions. Are you aware of any­thing?

[00:31:17] Tony: I’m not, no, but I do know the dif­fer­ence between the U.

[00:31:21] Tony: S. and the Aus­tralian mar­ket is they do quar­ter­ly earn­ings reports, so they may not have to come out and do full dis­clo­sure like they have to legal­ly in Aus­tralia, but cer­tain­ly report­ing every quar­ter would mean they’re pret­ty much doing that any­way, I think. It’d be, I think it’d be dif­fi­cult to form an opin­ion that you’re not going to meet mar­ket con­sen­sus in any­thing under a quar­ter.

[00:31:45] Tony: I mean, con­fes­sion sea­son in Aus­tralia is usu­al­ly on a six month basis. And, you know, in the month five, peo­ple are com­ing out and say­ing, Hey, we are, or we aren’t going to make tar­get. We’re going to exceed it or we’re not. But if you’re doing quar­ter­ly earn­ings, I think you pret­ty much are com­ing out straight away with a, um, an item that needs dis­clos­ing as quick as you can.

[00:32:07] Tony: But no, I’m not, I don’t know what the legal oblig­a­tions are in the US. Good ques­tion.

[00:32:12] Cameron: Some­thing to look into. What are the legal oblig­a­tions? Hel­lo, let me ask my, uh, co host.

[00:32:20] Cameron: Hey, Chat­G­PT, states for giv­ing advance notice to the mar­ket if they’re not going to hit their, uh, finan­cial tar­gets that they’d pre­vi­ous­ly pub­licly expressed.

[00:32:36] Chat­G­PT: In the Unit­ed States, pub­licly trad­ed com­pa­nies have a legal oblig­a­tion to dis­close mate­r­i­al infor­ma­tion that may affect investors deci­sions. This includes the oblig­a­tion to give advance notice if they are not going to hit their pre­vi­ous­ly pub­licly expressed finan­cial tar­gets.

[00:32:52] Chat­G­PT: The key reg­u­la­tions and prin­ci­ples gov­ern­ing these oblig­a­tions include 1. Secu­ri­ties Exchange Act of 1934. Rule 10b 5. This rule pro­hibits any act or omis­sion result­ing in fraud or deceit in con­nec­tion with the pur­chase or sale of any secu­ri­ty. Com­pa­nies must dis­close mate­r­i­al infor­ma­tion to ensure that all investors have equal access to sig­nif­i­cant infor­ma­tion that might influ­ence their invest­ment deci­sions.

[00:33:19] Chat­G­PT: 2. Reg­u­la­tion Fair Dis­clo­sure. Reg FD. This reg­u­la­tion requires that all mate­r­i­al non pub­lic infor­ma­tion be dis­closed to all investors at the same time. If a com­pa­ny dis­clos­es such infor­ma­tion to cer­tain indi­vid­u­als or enti­ties, it must also make the infor­ma­tion pub­lic. This pre­vents selec­tive dis­clo­sure and ensures that all investors have equal access to impor­tant finan­cial infor­ma­tion.

[00:33:44] Chat­G­PT: 3. Mate­ri­al­i­ty. Infor­ma­tion is con­sid­ered mate­r­i­al if there is a sub­stan­tial like­li­hood that a rea­son­able investor would con­sid­er it impor­tant in mak­ing an invest­ment deci­sion. Miss­ing finan­cial tar­gets that were pre­vi­ous­ly pub­licly expressed is typ­i­cal­ly con­sid­ered mate­r­i­al infor­ma­tion. 4. Tim­ing of dis­clo­sure.

[00:34:07] Chat­G­PT: Com­pa­nies must dis­close mate­r­i­al infor­ma­tion in a time­ly man­ner. There is no spe­cif­ic time frame man­dat­ed by law, but the dis­clo­sure should be made prompt­ly upon the com­pa­ny becom­ing aware that it will not meet its finan­cial tar­gets. 5. Earn­ings Guid­ance and Pre Announce­ments Many com­pa­nies pro­vide earn­ings guid­ance to investors and ana­lysts.

[00:34:27] Chat­G­PT: If it becomes appar­ent that actu­al results will dif­fer sig­nif­i­cant­ly from the guid­ance, com­pa­nies often issue a pre announce­ment to man­age investor expec­ta­tions and avoid mis­lead­ing the mar­ket.

[00:34:40] Cameron: All right, so, yeah, it sounds like that. Fair­ly sim­i­lar. Some­thing sim­i­lar, yeah.

[00:34:44] Tony: And like, I guess that’s with­in the frame­work, too, of class actions.

[00:34:48] Tony: I mean, the U. S. is even more liti­gious than Aus­tralia. And there’s been plen­ty of class actions in Aus­tralia where a com­pa­ny has You know, being deemed to have mis­led the mar­ket and there­fore share­hold­ers get some rec­om­pense from them. So the same thing would hap­pen in the US. So that’s it. That’s prob­a­bly, it may even be a big­ger stick than the reg­u­la­tions in the US.

[00:35:09] Cameron: Yeah. Okay. Good to know. All right. Well, uh, that’s the U. S. com­po­nent of the show, I think, unless you want­ed, you’re going to still want to do a pull pork?

[00:35:23] Tony: Yeah, I’ve real­ly enjoyed look­ing at this com­pa­ny. I’m not sure it’s going to be on your new, your new port­fo­lio though. Yeah. But I will, I will. I’ll go through it.

[00:35:33] Tony: Um,

[00:35:34] Cameron: sure.

[00:35:34] Tony: The com­pa­ny’s called Willis Lease Finance Cor­po­ra­tion. This is my pulled pork today. It’s a U. S. stock list­ed on the Nas­daq. Um, it’s inter­est­ing. I, I mean, the Nas­daq I think is just a com­peti­tor of the stock mar­ket to the New York Stock Exchange. But, um, I know that kind of, I think of it as being the tech index or the tech, um, list­ing place.

[00:35:56] Tony: And it prob­a­bly is, but this com­pa­ny isn’t the tech stock, but it’s on the NASDAQ any­way. Uh, share price is up strong­ly recent­ly, um, but there’s cur­rent­ly a Josephine, which means that, uh, its cur­rent price is just below the last month clos­ing. Um, it makes it a hold in, in our terms, um, but it’s a weight to buy.

[00:36:17] Tony: I think it’s. Pret­ty close, at least on the momen­tum basis. The thing which struck me about Willis was the busi­ness mod­el, which is unique and inno­v­a­tive, and which is why I chose to talk about it. WLFC is the code, and they lease air­craft engines to peo­ple. Jet engines to air­lines and then pro­vide ancil­lary ser­vices as well.

[00:36:40] Tony: So, um, yeah, leas­ing jet engines, um, inter­est­ing kind of busi­ness mod­el. We don’t see that in Aus­tralia, at least on the ASX. There might be com­pa­nies doing it pri­vate­ly, but, uh, um, inter­est­ing one. And their pitch to, uh, car­ri­ers is that, uh, if you lease your jet engines, it keeps the planes out of the shop and in the air more.

[00:37:00] Tony: Basi­cal­ly, much like leas­ing a car, um, jet engines need more care and main­te­nance as they get old­er, as they age, and leas­ing engines, uh, decreas­es main­te­nance costs and allows upgrades to new­er, more effi­cient engines, uh, mod­els on a reg­u­lar basis. So, um, very inter­est­ing, uh, busi­ness. They’ve been, they claim they’ve been going for, uh, More than 45 years and they claim to be the first com­pa­ny to lease jet engines to com­mer­cial oper­a­tors.

[00:37:30] Tony: They have built up a busi­ness around this and they offer a cou­ple of oth­er ser­vices such as one they call Con­stant Access, which allows cus­tomers access to jet engines when they need them on demand on a world­wide basis. basis with­out, um, with­out any weight. So, uh, you know, I guess if some­thing breaks down and you’re over­seas, like you’re a FedEx or some­thing, um, you have access to their stock­pile of jet engines to quick­ly replace it and then wor­ry about fix­ing it lat­er.

[00:38:00] Tony: And I have anoth­er prod­uct called, you’ll like this Cam, Con­stant Thrust. Where, uh, Willis cov­ers the cost and risk of jet engine main­te­nance, um, by swap­ping out the engines. So, if some­thing has a prob­lem, it just gets swapped out and replaced quick­ly. Planes back up in the air, um, and then Willis wor­ries about refur­bish­ing the engine and putting it back into the stock pipe.

[00:38:21] Cameron: I need to find out who came up with that name for that prod­uct because that is seri­ous­ly genius. Like there’s 50 bor­ing ways you could have gone with nam­ing that ser­vice. Yeah. Con­stant thrust. That’s fan­tas­tic. They should have, who­ev­er came up with that should have won some sort of indus­try award for mar­ket­ing.

[00:38:40] Cameron: That’s fan­tas­tic.

[00:38:42] Tony: Yeah. And so, you know, prod­ucts like this, uh, help car­ri­ers and we’re not just talk­ing about Car­ri­ers of pas­sen­gers here, but freight car­ri­ers who, you know, it’s, it’s very impor­tant for them to keep the planes in the air as long as pos­si­ble, not hav­ing to wor­ry about ground­ing them to main­tain them or replace prob­lem engines.

[00:39:01] Tony: And that’s called, uh, AOG, Air­craft on Ground Time for Oper­a­tors, and they’re always try­ing to decrease it, and this com­pa­ny helps them. Uh, to do that. So by the num­bers, um, share price 67. 82 when you did the buy list. Uh, ADT is 876, 000. I guess one ques­tion I had for you is what the units for ADT are in the down­load you gave me.

[00:39:25] Tony: I think it’s just Just dol­lars. Just dol­lars, yeah. So 867, 000. 876, 000, sor­ry, is the AET for the stock. So not super huge, but big enough for most per­son­al investors. Prop­Caf is very low on this, 1. 85 times, so that’s where it scores well for us. Uh, The book val­ue in 60, so this com­pa­ny trades below book val­ue, and of course, book val­ue plus 30.

[00:39:53] Tony: Uh, but it looks like it drops on the finan­cial health score. Um, and this might be some­thing we need to finesse and our mod­els can, because Stock appeared to give it a finan­cial rank­ing of 65. How­ev­er, they can’t score it on the Zed score, so we don’t know what its bank­rupt risky risk is. And I know this was a thing in Stock Doc­tor for a long time.

[00:40:15] Tony: They did­n’t, they weren’t able to pro­vide a finan­cial health score for finance com­pa­nies, banks, and mort­gage providers, and leas­ing com­pa­nies, because they just have dif­fer­ent busi­ness mod­els to the typ­i­cal indus­tri­al or, you know, busi­ness mod­els. you know, oth­er type com­pa­ny like that. So, um, Stock­o­pe­dia don’t have a Z score for this com­pa­ny, which I think is prob­a­bly caus­ing it to be low­er down in the qual­i­ty rank­ings than it would oth­er­wise be.

[00:40:40] Tony: But on the finan­cial health trend, it scores 8 and just from my look­ing at the com­pa­ny, it seems to be in, you know, pret­ty good finan­cial health, so that might be some­thing we have to look at. The cod­ing might have to be if it does­n’t have a Z score, we low­er the health rank­ing. Cut off for­ward in Stock­o­pe­dia, maybe.

[00:40:59] Tony: Uh, or, or if it’s a leas­ing com­pa­ny, we, we give it a pass on the Zed score. Uh, I had a look at this man­u­al­ly. This is the low­est PE in three years. So we can score it for that. The PE is only 7. 3 times. I was­n’t see­ing a fore­cast earn­ings per share for this. And when I sort of delved into Stock­o­pe­dia, I saw some­thing inter­est­ing.

[00:41:22] Tony: So they have a, Um, a low bro­ker cov­er­age, uh, fil­ter, and, um, if some­thing has low bro­ker cov­er­age they give it, they look for, uh, for, uh, cov­er­age, um, of less than two bro­kers and they give it a score for that, so that’s some­thing worth look­ing at for us, but, um, they have a num­ber of, uh, uh, like screens that they call it, which is I guess, um, pre­built fil­ters for stock­o­pe­dia data.

[00:41:51] Tony: One of which is called Neglect­ed Firms Screen. So I was sort of scrolling through all the dif­fer­ent screens that they have built in. And this was from a book called Quan­ti­ta­tive Engi­neer­ing, Quan­ti­ta­tive Equi­ty Port­fo­lio Man­age­ment by two peo­ple called Lud­wig Cin­cori­ni and Dae­won Kim. And I ordered the book to have a look at it, but it looks like They go into this area that I’ve been sort of think­ing about in our own check­list, which is, you know, what kind of advan­tage do we have in buy­ing a com­pa­ny that we like, but has­n’t been cov­ered by the, the bro­ker­age com­mu­ni­ty yet.

[00:42:29] Tony: And these two gen­tle­men who wrote the book seem to think that there is a big, um, ben­e­fit. So I’m going to await their book and have a look at it. Um, but that might be some­thing we can, uh, sort of for­mu­la, for­mu­la, for­mu­la­rize and put into our check­list as well. Stock­o­pe­dia have it as a fil­ter.

[00:42:46] Cameron: So you’re sug­gest­ing that could be like an extra point that a com­pa­ny gets if it does­n’t have bro­ker­age cov­er­age But we’ve dis­cov­ered that there’s some under­ly­ing val­ue.

[00:42:55] Cameron: Hmm. Hey, that’s inter­est­ing.

[00:42:57] Tony: Yeah, so I had done some research on our check­list, uh, where we don’t have an earn­ings per share fore­cast, which is basi­cal­ly a, um, a mark­er that there’s not enough. I think Stock Doc­tor need three bro­kers before they put an earn­ings per share fore­cast in their down­loads from mem­o­ry.

[00:43:15] Tony: Um, and that’s, I did do some research on that. Was­n’t look­ing like it made a big dif­fer­ence to per­for­mance, but, um, I want to read this book that these guys, um, have. Pub­lished around neglect­ed com­pa­nies and just see what they say about it. That might be some­thing worth putting into our check­list. Any­way, that was an inter­est­ing aside.

[00:43:36] Tony: Um, get­ting back to the check­list, uh, could­n’t give it a growth over PE score because we don’t have an earn­ings per share fore­cast. Um, it’s, uh, it’s had a great, uh, run up in, um, the bread lat­er. Uh, but it was­n’t a recent buy, crossed its buy line quite a while ago. So I could­n’t score it for that. Uh. All in all, I kind of did this man­u­al­ly, I got 8 for qual­i­ty score, and the QAV score, I used yours at 0.

[00:44:03] Tony: 41, which makes it pret­ty high up, but I think, you know, that Prop­Caf, that score will prob­a­bly change as we play around with the down­load and the check­list. going for­ward. Yeah, but inter­est­ing one. I real­ly liked it. It’s one of the rea­sons why I think peo­ple might want to have a look at some U. S. stocks when they can get into com­pa­nies like this that are unique and inno­v­a­tive that we just don’t see in Aus­tralia on the ASX.

[00:44:29] Cameron: But even though this one does­n’t have a Z score, it’s got a qual­i­ty score of 65. So, um, you know, we’re not fil­ter­ing those out at this stage, right? We’re just going to give it a zero for finan­cial health rat­ing. Yeah, I

[00:44:44] Tony: think so. Yeah. Yeah, we’ll have to, we’ll have to tri­al that. Yeah, exact­ly. We’ll have to work out what to do.

[00:44:51] Cameron: Hmm, there you go. Inter­est­ing. I don’t know how you, like, how do you hot swap a jet engine? Yeah,

[00:45:00] Tony: it would, would­n’t it?

[00:45:02] Cameron: I imag­ine it’s like an F1 thing where like, you pull your jet up and 20 guys come out and they’re like, engine comes out, engine goes in, boom, it’s off.

[00:45:13] Tony: And if it works that quick­ly, I’d have, I’d hate to be a pas­sen­ger, like sit­ting there look­ing at the guys, right, we’re free to take off,

[00:45:23] Cameron: no, no thanks.

[00:45:25] Cameron: Yeah. Ter­ri­fy­ing.

[00:45:27] Tony: Yeah.

[00:45:29] Cameron: Well, thanks for that, Tony. Um, I got a cou­ple of, um, uh, sur­vey results in from our Aus­tralian QAV club mem­bers, uh, in the last week. Uh, one from Tom. Hey, he puts a bit of a caveat on it. He says, uh, I use a num­ber of dif­fer­ent entry meth­ods aside from QAV. Not exact­ly sure what that means.

[00:45:53] Cameron: And sec­ond­ly, my use of the 3PTL, which is awe­some, is incon­sis­tent. As it’s used along­side the Stock Doc­tor 30 TSR. Ah, right. Yep. Chart­ing 30. And he says, uh, despite all of those caveats, his returns on Share­Site for the finan­cial year were, um, in his SMSF, 17. 07%. With div­i­dends 3. 86, I’m not sure if that’s on top of the 17 or includ­ing in the 17.

[00:46:23] Cameron: I’m going to sug­gest it’s includ­ed in the 17. Trust 19. 79 per­cent with divs 4. 37. He says, I’m look­ing to adopt more QAV rec­om­men­da­tions on the buy list and would be hap­py to con­tribute to a What­sApp group. Or email you when I buy, as dis­cussed on this week’s episode. Um, recent­ly I bought PRN from the buy list and sold IGL after it breached the 3 point trend line.

[00:46:47] Cameron: The bas­tard of a stock has gone up almost 10 per­cent after I sold it. Yeah, you nev­er check, Tom. Nev­er. Nev­er, nev­er, nev­er go back. Don’t go on to Face­book and

[00:46:58] Tony: see what your ex girl­friend’s up to. Just don’t look back. That’s right. Yeah. Yeah. Don’t

[00:47:01] Cameron: look back. Uh, but thank you for shar­ing that. Uh, Mark said, I’ve start­ed to exper­i­ment with my port­fo­lio and piv­ot­ing towards resource slash ener­gy stocks.

[00:47:14] Cameron: Um, and look­ing to NAMM slash Stock­o­pe­dia for more breadth in resource slash ener­gy com­pa­nies, NAM.

[00:47:21] Tony: North Amer­i­ca.

[00:47:23] Cameron: Oh, yeah, right, okay. I sus­pect a full resource stock port­fo­lio will be volatile, prone to peri­ods of no trades, Josephine slash sell, and like­ly to need two year, Month­ly 3PTL to be effec­tive, I’ll see.

[00:47:38] Cameron: Uh, Mark is, uh, a geol­o­gist, I think, from mem­o­ry. So he’s deep in the whole resource indus­try. So prob­a­bly knows a lot about resources mar­ket that us aver­age pun­ters don’t know. He said he got about a 4 per­cent return for the finan­cial year. So sort of down at our lev­els, not up with Tom’s lev­els, but, uh, con­grat­u­la­tions to every­body for stay­ing in the game.

[00:48:04] Cameron: Cause that’s what it is. Got to be in it to win it, good years, bad years, good times, bad times, some­thing, some­thing, some­thing.

[00:48:14] Tony: Well, speak­ing of per­for­mance and cut­ting off your singing, I have from time to time talked about my mus­ings on the show, and one of them I’ve been work­ing with is, I think I talked about it once before, it was, it was build­ing a port­fo­lio based on the, the Used to be called the BRW Rich List, I think it’s now the AFR Rich List.

[00:48:37] Tony: Um, and I was kind of went back and had a look at it at the end of finan­cial year and I had set one up. So basi­cal­ly I went through the Rich List, which came out about 12 months ago. And then they just updat­ed it recent­ly in the last month or so. And pulled togeth­er all the stocks that were list­ed on the ASX that Rich­Lis­ters had a hold­ing in.

[00:48:58] Tony: There’s about, I think there’s def­i­nite­ly 200 peo­ple on the Rich­List, but of course, a lot of it’s pri­vate wealth and a lot of it’s like prop­er­ty devel­op­ers and farm­ers. And so you don’t get, um, you don’t get a, uh, a com­plete one to one, uh, com­par­i­son. And then I, I stack ranked the list of ASX stocks by their ADT.

[00:49:17] Tony: So stocks like Fortes­cue, Mead­ows Group. Close to the top. Um, and then I put togeth­er a port­fo­lio. Orig­i­nal­ly, I put it togeth­er based on the top stocks by ADT, which were, uh, if I get the num­ber now, say top 10 stocks were 75 per­cent of the Um, ADT val­ue of the list any­way. Uh, and I just left it there and that, that kind of out­per­formed the mar­ket by one or 2 per­cent since I put that togeth­er, which was back in the start of Octo­ber, but then I start­ed play­ing around with it and, uh, pulled togeth­er a list using our nor­mal buy and sell cri­te­ria.

[00:49:55] Tony: So, um, this was a regres­sion test. It was­n’t done, um, going for­ward. It was done going back and review­ing. Uh, but any­way. You know, so I did­n’t put a stock into the port­fo­lio until it, um, was­n’t a com­mod­i­ty sale, and it was­n’t a Josephine, but it was a buy on the Bre­da lat­er. Uh, and there’s only a cou­ple of stocks which had com­modi­ties any­way.

[00:50:17] Tony: Fortes­cue Met­als Group was one, obvi­ous­ly. Min­er­al Resources was anoth­er one. Uh, you know, because Gina Rein­hart’s, uh, Com­pa­ny isn’t list­ed. It’s, it’s held pri­vate­ly. So we can’t buy into that. Um, but the rest of them weren’t, weren’t com­mod­i­ty stocks. So I could look at their Bre­vil­lea­tus, um, scores and score them.

[00:50:36] Tony: Any­way, in doing that, and I, I kept, um, I did an even 15 stock port­fo­lio, um, based on what I had to spend. And, uh, that did real­ly well. It was like a 17%. per­for­mance since Octo­ber, which was not quite dou­ble mar­ket, but close to it. So I’m going to just fid­dle around with that going for­ward and see­ing if that can lead some­where.

[00:50:59] Tony: I’ll kind of do it more live than what I did just then and see if that has some legs, but I thought that was inter­est­ing. So it’s basi­cal­ly, I guess, riff­ing on the idea of the own­er founder. Because these, most of these com­pa­nies have an own­er founder in them. Some of them are just pas­sive invest­ments. Um, they tend to be on the small­est side of the ADT list.

[00:51:19] Tony: But, um, you know, your Fortes­cue Met­als still have own­er founders and then the Min­er­al Resources still have own­er founders. Wash­ing­ton, Sol Pats is up there, it still has an own­er founder as a, as a chair. So, yeah, they, it, um, they seem to be doing well. If you, if you adopt the nor­mal QAV buys and sells for it.

[00:51:41] Cameron: And you would be dis­count­ing our stand­ing con­cerns about Fortes­cue to add them to the list?

[00:51:50] Tony: Well, I added them to the, I did, but, um, they were out of the port­fo­lio, I think in Jan­u­ary because the iron ore price was a com­mod­i­ty sell. Right. And I think it’s been there for the rest of the year, so it did­n’t make much dif­fer­ence.

[00:52:03] Tony: Yeah.

[00:52:03] Cameron: Right. Hmm. Inter­est­ing.

[00:52:07] Tony: Hmm. Any­way, some­thing I played around with. Well, I might men­tion it.

[00:52:13] Cameron: Keep us in the loop on that. Well, speak­ing of Aus­tralian news, a cou­ple of arti­cles I saw I want­ed to touch on. Why coal stocks are see­ing an epic ral­ly. Accord­ing to the Finan­cial Review, White­haven Coal and Yank Coal surged 17.

[00:52:31] Cameron: 3 per­cent and 10. 7 per­cent respec­tive­ly this week, with both stocks hit­ting fresh 52 week highs on Fri­day. Mean­while, Coro­n­a­do Glob­al Resources jumped 13. 5 per­cent and Stan­more Resources climbed 12. 2%. This is Alex Gluyas in the Finan­cial Review and he was say­ing that, um, there were dis­rup­tions at two major coal oper­a­tions over the past week which have height­ened con­cerns about insuf­fi­cient sup­ply at a time for grow­ing demand for the com­mod­i­ty, spark­ing a ral­ly in ASX list­ed min­ing stocks.

[00:53:05] Cameron: Under­ground fires at Anglo Amer­i­can’s Grosvenor mine in Queens­land and Alleghe­ny Met­al­lur­gi­cal’s Longview mine in West Vir­ginia. have inter­rupt­ed pro­duc­tion at both mines, which togeth­er account for about two and a half per­cent of the hard cok­ing coal export mar­ket. Um, I don’t know if you have any com­ments on that, but, uh, you know, coal stocks have been pret­ty pop­u­lar on our buy list.

[00:53:32] Tony: They’re a clas­sic con­trar­i­an buy, aren’t they? They’re throw­ing off lots of cash and, um, com­pa­nies, uh, that, uh, try­ing to, uh, do the right thing by ESG con­cerns haven’t been buy­ing it. So it’s, um, It’s been a hap­py hunt­ing ground for us if you ignore the ESG con­cerns.

[00:53:50] Cameron: Well, accord­ing to Glen­more’s port­fo­lio man­ag­er, Robert Gre­go­ry, he says coal stocks have been over­looked by investors due to the daz­zling per­for­mance of tech­nol­o­gy com­pa­nies.

[00:54:00] Tony: I doubt it. I don’t think they’re doing either or.

[00:54:04] Cameron: Right, yeah, yeah, yeah.

[00:54:06] Tony: Yeah, I think it’s more that, um, You know, peo­ple, a lot of fund man­agers don’t want to or can’t buy them under their man­dates for ESG con­cerns. Which means the share price is always rea­son­ably val­ued because you don’t have a whole heap of peo­ple com­pet­ing to buy.

[00:54:21] Cameron: And,

[00:54:22] Tony: and no, we’ve talked about this a lot, um, You know, I think coal’s going to be around for a lot longer than peo­ple think because, uh, it’s base­load pow­er, which is impor­tant, um, and we haven’t got that sort­ed out yet, even though bat­tery tech­nol­o­gy is improv­ing, it still, you know, has­n’t been deployed at lev­els required to, to phase out coal pow­er, at least in Aus­tralia, and I sus­pect it’s the same around the world.

[00:54:48] Tony: And even if Aus­tralia adopts nuclear pow­er, they were talk­ing about it tak­ing 10 or 15 years to build the first one, so, I don’t know. The coal plants are prob­a­bly going to keep going for a lot longer than peo­ple think.

[00:54:59] Cameron: Speak­ing of which, have you heard about, um, the Natri­um, uh, plant that’s get­ting built in Wyoming?

[00:55:08] Tony: Is that Bill Gates one?

[00:55:09] Cameron: Mmm.

[00:55:10] Tony: Yeah. I don’t know much about it, but I have heard of it. Looks inter­est­ing.

[00:55:17] Cameron: Yeah, this is where they’re tak­ing, you know, it’s the thing he’s been work­ing on for, gee, 25 years, I think I’ve been fol­low­ing this, where they’re tak­ing sort of, waste prod­ucts from nuclear plants, deplet­ed ura­ni­um, and, uh, extract­ing the resid­ual ener­gy out of it, I think, with this new tech­nol­o­gy for dif­fer­ent kinds of, um, sodi­um.

[00:55:41] Cameron: Natri­um is appar­ent­ly what sodi­um is called in Ger­many. And, um, it’s, yeah, sodi­um. Makes sense, NA. Yeah, NA, exact­ly. And they, uh, melt the sodi­um appar­ent­ly. Um, the sodi­um, some sort of sodi­um water, but also they melt sodi­um and it has some­thing to do with the heat dis­per­sion process. Any­way, yeah, that’s all I know about it.

[00:56:09] Cameron: I watched a bit of a video about it, but yeah, they’re build­ing it now. It’s going to be ready by 2030. They think which will be inter­est­ing.

[00:56:18] Tony: Yeah, but I guess get­ting back to coal, even if it is ready by 2030, that’s one tri­al reac­tor.

[00:56:24] Cameron: Yeah.

[00:56:25] Tony: You’re still going to have to have base­line pow­er pro­vid­ed by coal for a lot longer than peo­ple think is my opin­ion.

[00:56:30] Cameron: Yeah. Inter­est­ing­ly, um, I just had a look at my, uh, port­fo­lio. Track­er. I’ve only, I’m only hold­ing one coal stock in one port­fo­lio. That’s the light pos­si­ble port­fo­lio, which isn’t real­ly part of our tech­ni­cal hold­ings. It’s Yang Coal. Had it since the 31st of May and it’s up 15%, but, um, obvi­ous­ly had to dump all of our coal stocks at some point due to a com­mod­i­ty sell, I’m guess­ing, and have them brought back in.

[00:57:03] Tony: Yeah, right. Um, and that’s the oth­er thing too, is that the com­mod­i­ty price for coal, even though it’s going up. A lit­tle bit recent­ly may not still, I don’t know what, we’re at six at the moment, may not be a bar. In terms of a five year month­ly graph?

[00:57:18] Cameron: Um, well, uh, it just became a buy. Coal Ther­mal just became a buy for us this week actu­al­ly.

[00:57:26] Cameron: Right. Met­al­lur­gi­cal has been a sell or a Josephine going back to Feb­ru­ary. And, uh, Ther­mal’s been up and down, but yeah, up until recent­ly it was a Josephine, was a buy briefly a week here, a cou­ple of weeks in April and ear­ly May. But yeah, it’s, uh, and it was, you know, going back to being a sell Jan­u­ary. So it’s been up and down a lit­tle bit more volatile than Met­al­lur­gi­cal, but Nei­ther of them have been buys for long enough to actu­al­ly make it into our port­fo­lios, well, my port­fo­lios any­way, I don’t know about yours.

[00:58:03] Tony: Yeah, so, I mean, that’s, I haven’t had a cold stock for a while, I did have them a year or two ago. Um, but yeah, I think that’s been the issue for us is that, uh, even though you get arti­cles like this say­ing the cold stock, cold prices spiked, it’s not, um, it’s not becom­ing a buy on our port­fo­lios. Yeah,

[00:58:24] Cameron: it’s not a buy long enough.

[00:58:26] Cameron: The spike’s not long enough for it to actu­al­ly become a buy for us.

[00:58:29] Tony: Yeah.

[00:58:31] Cameron: There was anoth­er inter­est­ing arti­cle by Joshua Peach in the Finan­cial Review. The next glob­al invest­ing mega­trend, war stocks. Which I read and I thought was inter­est­ing, but um, par­tic­u­lar­ly this bit, they’re talk­ing about the stub­born stub­born­ly, high iron ore price sup­port­ing the val­u­a­tions of BHP and Fortes­cue, and say­ing it may be con­nect­ed to mil­i­tary spend­ing across Asia.

[00:58:56] Cameron: It’s hard to rec­on­cile while the price remains, why the price remains high, and why Chi­na is stock­pil­ing it. There is a the­o­ry that a lot of it is going into defence spend­ing. Aus­trali­a’s largest export has defied ana­lysts pre­dic­tions in the last 18 months, push­ing as high as 140 US per tonne ear­li­er this year, despite many fore­cast­ing Chi­na’s ail­ing prop­er­ty sec­tor to trig­ger a bear mar­ket in the steel mak­ing com­mod­i­ty.

[00:59:21] Cameron: Last trad­ed at US$ 113. 95 a tonne. Of course, In anoth­er AFR arti­cle on the same day, it says ASX to sit out glob­al ral­ly amid iron ore woes. A slump in iron ore prices is set to drag the Aus­tralian share mar­ket fur­ther behind its glob­al peers. Um, but I thought that was inter­est­ing, just the analy­sis about it maybe being some sort of war stock­pil­ing.

[00:59:49] Cameron: Uh, well, maybe. Not much.

[00:59:52] Tony: It just sounds like noise Again, if you look at the five year graph, I think iron ore isn’t a Buy for us, it’s been a sell, it’s been drop­ping. Um, I think it’s like, even this arti­cle says it’s high was 140 and now it’s about 113 a ton. So, um, it’s not nec­es­sar­i­ly a buy for us. So, whether, you know, if there was­n’t mil­i­tary stock­pil­ing going on, it should be 80 a ton.

[01:00:17] Tony: I’m not sure, but it’s not a buy. I don’t focus on it.

[01:00:22] Cameron: Has­n’t been a buy for us since the mid­dle of Jan­u­ary. So most of this year, we have not been able to buy iron ore stocks. Not that we would have bought FMG any­way, because, uh, I don’t think there’s any­one left. It’s like last per­son that FMG turned out the lights kind of sit­u­a­tion, at least in the senior man­age­ment, right?

[01:00:42] Tony: I noticed when I was going through the BA, uh, not the BAW, the AFR rich list, Quig­gy’s wife, who he’s now divorced from, actu­al­ly owns more stock in FMG than he does. So, uh, it must be an inter­est­ing con­ver­sa­tion when the AGM rolls around.

[01:01:00] Cameron: Yeah. Awk­ward. All right. Well, that’s all I’ve got for today. Tony, how about you?

[01:01:07] Tony: Yeah, that’s, that’s all I had. Uh, I’m sor­ry. I did park a com­ment I want­ed to make when I talked about the bil­lion­aire’s port­fo­lio. One of the rea­sons for rais­ing it or the Rich List port­fo­lio, one of the rea­sons for rais­ing it dur­ing our US show was because if any­one’s inter­est­ed in the US, they of course have the Forbes 400 list.

[01:01:25] Tony: They could. Do the sim­i­lar sort of, um, tri­al or analy­sis as I’ve been doing, um, which might be inter­est­ing for them. But that was all. Yeah. And I just had, um, after hours after that.

[01:01:39] Cameron: After hours, where we talk about stuff that isn’t invest­ing relat­ed for new lis­ten­ers. We’ve talked about your hors­es. What else have you got?

[01:01:48] Tony: I came across it and I’m still read­ing the, the, uh, Peter Biskin book on the gold­en use of TV, which is bril­liant. Inter­est­ing, and I’d rec­om­mend it. Um, but I came across an arti­cle in the Fin Review on the week­end. And, uh, they have a col­umn called The Buzz, which is about shows, films, books, and things. Not nec­es­sar­i­ly, um, about invest­ing as well.

[01:02:10] Tony: I just, we’ll read out, um, a lit­tle bit of it quick­ly. So this is about, uh, the Muse­um of Old and New Art, MONA, in Tas­ma­nia. And, uh, inter­est­ing­ly enough, they’ve moved part of their col­lec­tion, includ­ing sev­er­al Picas­sos, into the wom­an’s toi­lets, after a court ruled that dis­play­ing them in its female only ladies lounge was dis­crim­i­na­to­ry to men.

[01:02:35] Tony: The U. S. artist behind the lounge, I’m going to strug­gle to pro­nounce her name, Keisha, Kichele, um, and I feel, I feel your, uh, pain there, Kiesha, if I’ve mis­pro­nounced it, because I have a mis­pro­nounce­able sur­name begin­ning with K as well, so, um, yeah, sym­pa­thies there. Any­way, Kiesha Kichele is appeal­ing a court deci­sion hand­ed down in April after a man com­plained about being refused entry to the Mona exhib­it because of his gen­der.

[01:03:03] Tony: In the mean­time, Mrs. Kicel­li, who was mar­ried to the muse­um’s own­er, David Walsh, says she did a lit­tle redec­o­rat­ing. I thought of a few, I thought a few of the bath­rooms in the muse­um could do with an update. Some cubism in the cubi­cles, so I’ve relo­cat­ed the Picas­sos, she said in an email to the AFR. The lounge was a con­cep­tu­al art­work that allowed only one man inside, the but­ler, who served women fan­cy high teas.

[01:03:29] Tony: It has been closed since the state of Tas­ma­ni­a’s civ­il and admin­is­tra­tive tri­bunal gave the muse­um 28 days to stop refus­ing entry based on gen­der. Uh, Mr. Cicel­li is con­sid­er­ing oth­er pos­si­ble workarounds to the court rul­ing. The law states that there are cer­tain grounds for deny­ing access based on gen­der, such as in a reli­gious insti­tu­tion where reli­gious doc­trines were brought.

[01:03:52] Tony: So the, Brigham Tri­bunal in Tas­ma­nia lets made up reli­gious doc­trines allow sex­ism, but not an art gallery. Any­way, in the case of sin­gle gen­der schools and in the same types of shared accom­mo­da­tion, and some types of shared accom­mo­da­tion, Ms. Cac­cel­li says we’ll get the lounge open again as a church slash school slash bou­tique glamp­ing accom­mo­da­tion.

[01:04:18] Tony: She said in a social media post, she has also pro­posed open­ing to men on Sun­days for the quote, per­son­al enrich­ment med­i­ta­tion in the form of iron­ing and fold­ing laun­dry. That real­ly tick­led my fan­cy. I love it when, uh, some­one is, is much smarter than the admin­is­tra­tor of the Tri­bunal of Tas­ma­nia and came out vox­ing.

[01:04:41] Tony: Great. Well done. Props to them.

[01:04:44] Cameron: I read that arti­cle, uh, when it came out a week or two ago and I was read­ing it out to Chris­sy cause I knew she’d enjoy it. And, um, I liked the fact that dur­ing the tri­bunal hear­ing, there was a bunch of women who turned up to the tri­bunal with the, Co-own­er of the gallery dressed all the same and all read­ing, uh, a book.

[01:05:05] Cameron: Um, dur­ing it, they turned it into like a, an, uh, a, a per­for­mance the­ater piece. Um, the whole thing. They just turned the whole thing into a, a bit of a show and, yeah.

[01:05:18] Tony: Fan­tas­tic. That’s great.

[01:05:19] Cameron: The, uh, the guy here in the tri­bunal, I don’t think he’s a judge or what­ev­er you call some­body who, um, admin­is­trates a tri­bunal, was not impr he did­n’t see it, but, uh, he was­n’t impressed when he heard about it lat­er, said they were mak­ing a mock­ery of the whole thing, and I think that was Oh, and he’s not?

[01:05:37] Cameron: Real­ly? I think that I think that was I think that was their com­plete inten­tion was to make a

[01:05:43] Tony: copy of it. I hope the guy who took them to the tri­bunal has been banned for life. It’s just, oh dear.

[01:05:51] Cameron: That would prob­a­bly be anoth­er dis­crim­i­na­tion case.

[01:05:55] Tony: And they can go along with Bris­tol the same and read from the same book again.

[01:05:59] Cameron: Yeah.

[01:06:00] Tony: Yeah.

[01:06:01] Cameron: Um, I real­ly want to get down to Mona, still haven’t been

[01:06:04] Tony: there.

[01:06:05] Cameron: I’ll be down there play­ing golf

[01:06:07] Tony: in Jan­u­ary and I’m think­ing about tack­ing on Mona at the end of that.

[01:06:11] Cameron: That’d be fan­tas­tic. Uh, we watched the Gene Wilder doc­u­men­tary this week on Net­flix. What did you think?

[01:06:19] Tony: Good. Yeah, I was always been a fan of Wilder.

[01:06:22] Tony: Yeah,

[01:06:23] Cameron: me too. It was sad, like, uh, both los­ing Gil­da Rad­ner and then he found hap­pi­ness and then his Alzheimer’s. But I thought it, it was a real­ly ter­rif­ic, it was great to see Mel Brooks, uh, telling sto­ries. I mean, Mel’s got­ta be, what is he, a hun­dred Mel? Yeah.

[01:06:38] Tony: two, 2000 year old man or what­ev­er it was. Yeah.

[01:06:42] Tony: He real­ly is, isn’t he now? Yeah. Yeah.

[01:06:44] Cameron: Um. And still, you know, artic­u­late and fun­ny and all of those sorts of things. Let’s see. How old is he? Born in 1926. So June 28th. So just turned 98. Wow. Yeah, still going strong. Good for him. He

[01:07:04] Tony: could give Joe Biden some lessons.

[01:07:09] Cameron: Oh, let’s not get sucked into that rab­bit hole. Um, what else? Uh, Watched, um, a cou­ple of good inter­views get­ting back to our futur­is­tic stuff, um, I sent you, I think, the link to the Bill Gates one. Don’t know if you had a chance to look at that, but I found that real­ly inter­est­ing.

[01:07:30] Tony: Oh, I did­n’t.

[01:07:32] Cameron: No? Well, I got

[01:07:34] Tony: noth­ing new out of it.

[01:07:35] Tony: Um, I mean, Bill thinks AI will dri­ve pro­duc­tiv­i­ty, which makes all the sense. That’s about it. That’s what I took out of it any­way.

[01:07:43] Cameron: Right. Uh, yeah, well, he’s very bull­ish about where AI is going. going in the next few years too. He’s anoth­er guy who real­ly thinks it’s going to have a huge explo­sion. And then I’m near­ly fin­ished watch­ing a recent inter­view that Elon did at the Khan Lions, um, uh, event.

[01:08:02] Cameron: The like adver­tis­ing indus­try. Adver­tis­ing. Yeah. Yeah. Yeah. They had him along and the guy is the CEO. Mark Reed is the CEO of WPP, uh, did the inter­view. And his first ques­tion was about six months ago, you told us we could all go fuck our­selves. So, uh, what was that all about? How’s that going? Yeah. Yeah, what did you mean by that?

[01:08:22] Cameron: Which I thought was a good way to open the inter­view. Um, yeah, but also just Elon talk­ing about his fore­cast for AI. Um, Mark Reid said, we’ve got a whole the­atre here full of peo­ple that are in the cre­ative indus­tries and is AI ever going to be, you know, gen­uine­ly cre­ative? And Elon’s like, yeah. And he goes, are we going to, are we going to look at writ­ing and paint­ing and video that AI does that’s orig­i­nal and say, this is real­ly amaz­ing?

[01:08:50] Cameron: He goes, yeah. He goes, so what you’re basi­cal­ly telling us is we’re all going to be out of work. And he’s like,

[01:08:55] Tony: yeah,

[01:08:56] Cameron: yeah. I mean, but he’s fore­cast, he says there’s a 10, 10, 20 per­cent chance that every­thing’s going to be a dis­as­ter. But he said, but that’s 80 per­cent cup full. So, Kapa­ful, he said, you know, he thinks it’s going to be a world of abun­dance.

[01:09:14] Cameron: He said it’s not going to be a uni­ver­sal basic income. It’s going to be a uni­ver­sal high income. Every, he said, it’s going to be a, um, a big cri­sis of mean­ing. Every­one’s going to have to fig­ure out how they get mean­ing from life when they don’t have Well, he said when an AI

[01:09:31] Tony: Why do peo­ple want mean­ing?

[01:09:32] Tony: Like, does a grasshop­per have mean­ing, but it’s got life? Does a cow have mean­ing? Does a blade of grass have mean­ing? They don’t. Why

[01:09:40] Cameron: do

[01:09:40] Tony: we keep try­ing to put mean­ing on life? It has no mean­ing.

[01:09:45] Cameron: Well, you have to have a rea­son­ing.

[01:09:46] Tony: We explod­ed from a big bang and every­thing’s been pre­or­dained since then. If you look for mean­ing, I mean, my take on on the mean­ing of life is we’re just part of a mes­sage sys­tem, right?

[01:09:57] Tony: Some­one, some­one much far advanced than us said I have to send a mes­sage to some­body else in a dif­fer­ent space time, so I start a Big Bang, I encode it in the DNA, it all plays out accord­ing to how I pro­grammed it. And at the end of the uni­verse, the oth­er per­son gets the mes­sage. But because every­thing hap­pens at the same time, it’s instan­ta­neous com­mu­ni­ca­tions.

[01:10:17] Tony: This is what we expe­ri­ence at tak­ing a long time. Some­where in our DNA is a mes­sage say­ing, Do you want to go out for beer on Fri­day night at nine o’clock? That’s the mean­ing of life. There’s no mean­ing.

[01:10:30] Cameron: I’m not sure it’s in the DNA, I think it’s in the under­ly­ing, uh, code of the uni­verse, the laws of physics, you know.

[01:10:38] Cameron: My old mate Den­nis Bas­tas, who’s now one of Aus­trali­a’s bil­lion­aires, uh, he and I used to talk about this dur­ing long boozy lunch­es, uh, 25 years ago. We, we, we were, we used to say, when we final­ly decode the under­ly­ing algo­rithm, the uni­fied field the­o­ry of the uni­verse, it’ll be a mes­sage say­ing, Wel­come.

[01:10:59] Cameron: Wel­come haha bb. Yeah, wel­come. You know, you’ve now joined the club of advanced intel­li­gences, uh, go to these Space­time coor­di­nates in a dif­fer­ent uni­verse and Oh, maybe. I think it’s going to be much more triv­ial than that. Maybe it’s your badge.

[01:11:17] Tony: You’re being human cen­tric. It’s like, no one’s going to wel­come us.

[01:11:22] Tony: We’re just serv­ing, we’re serv­ing some far greater intel­li­gence who wants to send a mes­sage across space­time.

[01:11:28] Cameron: Well, I think what he means by mean­ing is just a rea­son to get up in the morn­ing and what you’re going to do with your life, day to day. Grasshop­pers and cows just exist to pass on their genome.

[01:11:38] Cameron: That’s all they think about is eat, bang. Well, yes. I mean, for me, that’s def­i­nite­ly true, but that’s, I don’t know about many oth­er peo­ple. Any­way, good, good, inter­est­ing chat from, Elon, like, it’s the thing with Elon, like, he has these two dif­fer­ent per­son­al­i­ties, he has his bois­ter­ous shit stir­rer mar­ket­ing per­son­al­i­ty, but when you get him and he’s being seri­ous, like he was at this thing, thought­ful, seri­ous, tak­ing his time, think­ing about his answers, try­ing to do a good job, uh, he’s very intel­li­gent, very insight­ful, and I find him, you know, very dif­fer­ent to his, sort of, Sort of autis­tic, dick­ish, uh, tech pro per­son­al­i­ty, you know?

[01:12:23] Cameron: Yeah.

[01:12:23] Tony: So if he, if he thinks that PDoom’s less than, would you say 20%? 10 to 20%, which he said is

[01:12:29] Cameron: Geof­frey Hin­ton’s num­bers too. Okay.

[01:12:32] Tony: Okay. So has he changed his view about hav­ing to have Mars as a back­up to, you know, Earth?

[01:12:38] Cameron: No, no, they asked him about, you know, his, why he’s doing SpaceX and he said it’s so humans become a mul­ti plan­e­tary species and as quick­ly as pos­si­ble so we remove the, you know, what he calls the, um, uh, okay, men­tal blank, um, who was the physi­cist in the for­ties who, um, said if aliens exist why aren’t they here?

[01:13:08] Cameron: Where are they? Oh, that

[01:13:09] Tony: was, that’s um, Cig­a­r­ne isn’t it? No, uh, Fer­mi. Fer­mi Par­al­lax.

[01:13:12] Cameron: Fer­mi. Yeah. Thanks. He called it the, the Fer­mi prob­lem. You know, the answer to the Fer­mi prob­lem is you don’t have a sin­gle point of fail­ure, right? So you have to get intel­li­gence. He does­n’t talk about as humans nec­es­sar­i­ly, he talks about as intel­li­gence.

[01:13:27] Cameron: To spread intel­li­gent con­scious­ness to oth­er plan­e­tary sys­tems so we don’t have a sin­gle point of fail­ure. That’s his, that’s his over­rid­ing sort of vision for SpaceX.

[01:13:42] Tony: Well, I think the aliens are already here, you know that, don’t you?

[01:13:45] Cameron: You call it the AI, the aliens.

[01:13:48] Tony: No, well, any alien, I think any, any alien that’s advanced enough to trav­el inter­stel­lar dis­tances has to do it as a, as a being pro­ject­ed at the speed of light, which they can then, you know, be inject­ed into mat­ter here, my, my desk, my key­board, um, and then, you know, live out their uploaded life using the, using the quan­tum com­put­ers that they’ve, you know, formed stored as part of the mat­ter.

[01:14:17] Tony: in space. I mean, that’s, to me, that’s the solu­tion. That’s the only solu­tion. Because like we have this 1950s view of space trav­el, right? That some­one’s going to crack the speed of light trav­el and we’re going to be frozen for a mil­lion years while we find anoth­er plan­et. Don’t need to do that. Once we’re uploaded, you can just send out beams in a 360 degree rota­tion every­where until it strikes mat­ter and have some code in that, which just injects you into the aster­oid or the earth or what­ev­er, um, and you live your life as a, in a quan­tum com­put­er, which is gen­er­at­ed in that mat­ter.

[01:14:54] Cameron: What would be the point? If you live, just liv­ing in a vir­tu­al envi­ron­ment in your desk, what’s the point of trav­el­ing? Oh, okay. So

[01:15:02] Tony: one of Kurzweil’s books, he said that there was, spook­i­ly enough, there was­n’t, there’s enough mat­ter in the uni­verse to upload every­one’s brain into a quan­tum com­put­er using that mat­ter as the stor­age.

[01:15:15] Tony: Right, because the brain is so big and

[01:15:19] Cameron: Right, so you have to reach out into the uni­verse to find mat­ter to turn into com­pu tro­n­i­um.

[01:15:26] Tony: Yeah, so I’m guess­ing some­one else has already done that, giv­en that there’s tril­lions and tril­lions and tril­lions and tril­lions of plan­ets out there, um, and it solves the Fer­mi Para­dox as well.

[01:15:36] Tony: So what hap­pens when

[01:15:37] Cameron: we’re min­ing the earth, we’re dig­ging up their com­pu tro­n­i­um, we’re dig­ging up their Yeah. Yeah. When BHP has a mine that dig in, they’re dig­ging aliens out of the ground and dis­rupt­ing their quan­tum com­put­ers. If you knock

[01:15:51] Tony: over your chair or you throw your chair on the fire. Yeah, def­i­nite­ly.

[01:15:56] Tony: But there’s still plen­ty of oth­er mat­ter in the uni­verse. I’m sure they’re, I’m sure they’re diver­si­fied, to use a finan­cial term.

[01:16:04] Cameron: They have redun­dan­cy back­ups. Yeah. Yeah. Yeah. Uh, I’ve been, I’ve, I’ve been watch­ing a lot of Bon­sai YouTubes too, get­ting into Bon­sai thing. I’ve been want­i­ng to do my whole life, so I’ve got some focus.

[01:16:19] Tony: You mean bon­sai, not lit­tle plants, trim­ming lit­tle plants, not, not as in Kamikaze’s yelling

[01:16:26] Cameron: bon­sai. Not bon­sai, bon­sai, not bon­sai, yes, yes, tiny plants in a pot.

[01:16:35] Tony: Okay. I love how you bring mean­ing to your life in lots of dif­fer­ent ways. Bon­sai, bak­ing bread, roast­ing beans. Yeah, it’s great. No, it’s real­ly good.

[01:16:49] Cameron: All right. Well, if you’re going to laugh at all my hob­bies.

[01:16:52] Tony: I’m not. I love it. It’s so inter­est­ing.

[01:16:55] Cameron: See,

[01:16:57] Tony: this is what hap­pens when you don’t fol­low sport.

[01:17:02] Cameron: Ah, yeah. How’s your golf game going?

[01:17:07] Tony: Ah, okay, it’s been very wet here, so last week we went into an indoor sim­u­la­tor to play, rather than go out into the course, we could­n’t go out into the course, too wet.

[01:17:17] Cameron: So you just hit a ball at a screen, that kind of thing?

[01:17:19] Tony: Yeah, and then the AI tells us how good we are. Yeah? No, indoor sim­u­la­tors, no, they mea­sure the spin on the ball, you can hit it into a screen. So we played the old course at St Andrews, which I played in real life and now played on the sim­u­la­tor as well.

[01:17:35] Tony: Which is bet­ter? In real life, for sure, because the sim­u­la­tor tech­nol­o­gy just isn’t quite there yet. So if you’re going to, you know, the gorse bush on the sim­u­la­tor, no penal­ty. You’re going to place the old course at St Andrews and go into plen­ty of gorse bush­es, you’re stuffed, you have to reload.

[01:17:56] Cameron: I’ve got an appoint­ment at the Apple Store at Cherm­side on Sat­ur­day after­noon to test the Apple Vision Pro, which arrive in Aus­tralia this week, final­ly.

[01:18:08] Tony: They

[01:18:10] Cameron: arrive on Fri­day, so Tay­lor and Hunter and I have got a booked, Tay­lor’s already played with one in LA last year, but Hunter and I have booked it. Booked a demo, or Tay­lor and Hunter and I have booked a demo when I go to pick up my lap­top, which is get­ting fixed. Um, yeah, so that’ll be fun. So maybe a few years from now, you’ll be able to wear an Apple Vision Pro in your liv­ing room and play San Andrews and Yeah, not for sure.

[01:18:35] Tony: Absolute­ly. Still won’t be quite the same as going out there in the wind and the rain and the Scot­tish air and hav­ing a beer after­wards.

[01:18:45] Cameron: Just have a fan and a mis­ter going in your, uh, in your sports room.

[01:18:51] Tony: I could do it that way. Yeah, it’s gonna be a long time, I think, before you replace the real thing.

[01:18:55] Tony: That’s my hum­ble opin­ion. Yes.

[01:18:57] Cameron: Yeah, I think so too. Alright, thank you tk. Thanks every­body. Have a good week.

[01:19:03] Tony: Yeah. Hap­py ASX and hap­py NYSE and hap­py Nas­daq now with the lis­ten­ers.

[01:19:08] Cameron: Yeah, all of those. Yeah.