QAV 731 — Getting High with VIT

QAV 731 Club

[00:00:00] Cameron: All right.

[00:00:09] Cameron: Wel­come to QAV.

[00:00:10] Tony: I was try­ing to,

[00:00:11] Cameron: right,

[00:00:12] Tony: sor­ry.

[00:00:13] Cameron: when you’re done.

[00:00:14] Tony: I’ll just keep talk­ing over

[00:00:15] Tony: you.

[00:00:17] Tony: Say some­thing.

[00:00:18] Cameron: And wel­come to Q, uh, wel­come to QAV episode 731, 20, no 30th of July, uh, 2024. How are you TK?

[00:00:29] Tony: Good, thank you. Sor­ry for talk­ing over you then.

[00:00:31] Cameron: That’s okay. You’re obvi­ous­ly get­ting ready to prac­tice for your debate against Kamala Har­ris, get­ting your, uh, talk­ing over the top of a strat­e­gy

[00:00:39] Cameron: ready.

[00:00:41] Tony: Oh, I don’t think I’d debate her. I’m look­ing

[00:00:43] Tony: for­ward to a debate between her and Trump.

[00:00:46] Cameron: Yeah, well, that’ll be his strat­e­gy.

[00:00:47] Cameron: Just inter­rupt­ing and talk­ing over the top of her all the time. Well. Um, uh, FND, Tony, one of our favourite stocks down 19%. Uh, yes­ter­day, any­one I looked at it, um, now the CEO, uh, who reached out to us after you did a pulled pork on it and said he want­ed to come on, still has­n’t come on, um, and maybe this is why.

[00:01:13] Cameron: My gosh.

[00:01:14] Tony: I

[00:01:16] Cameron: Uh, dear me, it was, uh, trad­ing at 4. 80 on the 15th of July. Dropped down to 3. 40 yes­ter­day, back up to 3. 70 today. I could­n’t see any­thing in the news when I looked. Apart from, mys­te­ri­ous­ly, some­thing did go out. Some­thing was in the Stock Doc­tor announce­ments, uh, on the 26th of July, say­ing FY25 earn­ings guid­ance and mar­ket update invi­ta­tion.

[00:01:48] Cameron: But the share price has been falling since, uh, the mid­dle of the month when they announced their upcom­ing Annu­al Gen­er­al Meet­ing. I’m won­der­ing if, uh, some­body’s leaked some­thing, uh, or some­body knows some­thing is com­ing out for the share price to drop that much. What does it smell

[00:02:03] Cameron: like to you?

[00:02:05] Tony: Yeah, I don’t know. It could be. It’s, um, it’s con­fes­sion sea­son, so they should be con­fess­ing to some­thing like that, but, yeah, I’m not sure. I did some research. I looked at some, um, at their fig­ures, looked at their most recent pre­sen­ta­tions, and it was all pret­ty good, uh, and in line with what the mar­ket expect­ed.

[00:02:24] Tony: All I could see was on the day that it dropped 10%, There was a notice say­ing that some­one called Jack Yetiv, Y E T I V, had tak­en a stake greater than 5%. And I don’t know if that’s coin­ci­dence or rel­a­tive or what, but that was the only news com­ing out that day and, you know, bad tim­ing, Mr. Yetiv, if your stock­’s gone down 10 per­cent after you’ve just bought 5%.

[00:02:51] Tony: More than 5 per­cent of it. Um, and I won­dered, I mean, I’m draw­ing some long bows here. I don’t know this per­son. Uh, looks like they work for a com­pa­ny called Seek­ing Alpha. They have tak­en stakes in oth­er, even though they’re US based, they have tak­en stakes in oth­er ASX com­pa­nies. Um, I’m won­der­ing if it’s, Yeah, I real­ly, I’m spec­u­lat­ing here whether he’s an activist investor or build­ing a stake for a takeover or what, uh, but, um, that’s all I could see that, um, that was per­ti­nent around the time of the decline.

[00:03:26] Tony: Um, it could also, you know, be viewed by the mar­ket as chal­leng­ing the founders’ stakes because I think Uh, they have, even though they have, uh, direc­tors have hold­ings in the com­pa­ny, I think there’s three of them who have com­bined about nine per­cent. So per­haps, uh, the mar­ket is lik­ing that the founders could, could be chal­lenged by a new share­hold­er.

[00:03:48] Tony: This is all spec­u­la­tion on my part, I don’t know if it’s the case and don’t know this per­son, but it’s the only thing I could see that hap­pened on the day that this shares went

[00:03:57] Tony: down. Yeah. Yeah.

[00:03:58] Cameron: uh, Seek­ing Alpha is like a Stock Doc­tor type of a tool. It’s like a stock analy­sis tool. So, uh, I’m just look­ing at his bio. Jack Yetev, Seek­ing Alpha Ana­lyst since 2008, Val­ue, Growth at a Rea­son­able Price, Div­i­dend Invest­ing. After col­lege, Jack obtained MD and PhD degrees from Ohio State, then prac­ticed emer­gency med­i­cine for about 20 years, from which he retired in 2003, then he obtained a law degree in the late 90s, uh, inter­est­ed in alter­na­tive ener­gy, no for­mal finan­cial train­ing, but has been a stock investor for more than three decades, and has made all the mis­takes that can be made, some of them more than once.

[00:04:37] Cameron: I like that. Good on you, Jack. Um, so he’s tak­en a sig­nif­i­cant stake, has he, in, uh,

[00:04:45] Cameron: Fin­di.

[00:04:46] Tony: Mmm. Sub­stan­tial share­hold­er notice on that day. Could be coin­ci­dence, um, but it could also have sparked the sell off. I’m not sure. And hap­py to talk to him and find out too. I’m not, um, not, I’m look­ing around for a rea­son why the stock was sold off. I’m not

[00:05:03] Tony: say­ing that he was the rea­son.

[00:05:06] Cameron: the notice says he became a sub­stan­tial share­hold­er on the 26th of July. It, look­ing at the chart, it start­ed falling a bit before that. It sort of peaked on the 15th of July and start­ed drop­ping. Uh, after that I think it was down to like 3. 80 by the 26th of July, down from 4. 80, sort of dropped 20 25 per­cent before he bought in.

[00:05:36] Cameron: So,

[00:05:36] Cameron: um, I don’t, yeah.

[00:05:38] Tony: May not be him. It was cer­tain­ly down 10 per­cent on the day he

[00:05:41] Tony: bought in, or the day the announce­ment

[00:05:43] Tony: hit.

[00:05:44] Cameron: Oh, yeah. Okay. So look­ing at the lit­tle table in there, he start­ed buy­ing 15th of Feb­ru­ary. He’s been acquir­ing shares since Feb­ru­ary.

[00:05:56] Cameron: He’s been

[00:05:57] Tony: yeah, it’s a fair­ly it’s a, yeah, it’s a fair­ly small ADT stock, so I can’t imag­ine he bought 5 per­cent on one day.

[00:06:03] Cameron: Yeah, right. So he, uh, yeah. Oh, wow. So he start­ed buy­ing, uh, 13th of Feb­ru­ary at 1. 70 and, uh, con­tin­ued buy­ing all the way up to the peak and then back down to 3. 70. So inter­est­ing. All right. Well, uh, that’s, yeah, so we don’t know, but that’s a big, that’s a big dip. I hold it in, uh, I think one of the light port­fo­lios and it’s still above water, uh, has­n’t breached any of the, uh, sell­ing, uh, trig­gers, but still a big shock.

[00:06:41] Cameron: It went up and then it went back down, went up very quick­ly and then came down just as quick­ly. So

[00:06:47] Cameron: that’s always dis­ap­point­ing.

[00:06:48] Tony: Well, we’ve seen it before though, noth­ing great, no tree grows to the sky. Some­one’s tak­en some prof­its, I would prob­a­bly guess. Some­one thought this has been a good run, up from a dol­lar in Jan­u­ary or what­ev­er it was, to four bucks, I’m going to take some mon­ey off the table.

[00:07:02] Cameron: I was hik­ing, uh, with my mum and Chris­sy and Fox on, uh, Sat­ur­day after­noon up at Mount Coot tha. There’s some pret­ty big trees. They’re grow­ing all the way to the sky.

[00:07:15] Cameron: As far as I can see. Alright, maybe they, they’re not get­ting small­er.

[00:07:21] Tony: Well, they will even­tu­al­ly fall down.

[00:07:23] Cameron: Okay. Try­ing to push the anal­o­gy too far. Um, tell me about Karoon

[00:07:30] Cameron: Tony.

[00:07:32] Tony: Yeah, so we spoke about Karoon a cou­ple of times, um, it was on the buy list, I think I might still be on the buy list, but any­way, um, And it’s look­ing at its chart, it’s not quite a buy yet, it was a buy in the past, I think I did a pulled pork on it. Um, but, and we also talked about them ear­li­er in the year because an activist investor took a stake in Karoon and was upset that they kept acquir­ing new oil and gas fields in the US where most of their busi­ness is.

[00:08:05] Tony: Um, and. Whether it’s because of that activist investor or the board just thought it was a good idea, that they’ve just announced a div­i­dend and or a share buy­back worth between 20 and 40 per­cent of prof­it going for­ward. So the activist investor decid­ed that Uh, share­hold­ers weren’t being looked after enough and that man­age­ment incen­tives were tied to too much to growth and it was easy for man­age­ment to meet the hur­dles by going out and buy­ing using the, you know, the com­pa­ny’s resources to expand the, the oil fields that they have, which is not a, not an invalid rule.

[00:08:42] Tony: Strat­e­gy for this kind of com­pa­ny. But any­way, they decid­ed to, um, to start giv­ing mon­ey back to share­hold­ers at about 30 per­cent of their prof­it going for­ward. If they pay back as a div­i­dend, it’s going to be about 5 per­cent accord­ing to some cal­cu­la­tions I saw, which is not bad. And if they decide to con­duct a buy­back instead of mak­ing a div­i­dend pay­ment, the board has said that they con­sid­er the share price does not reflect the true val­ue in the in the com­pa­ny.

[00:09:14] Tony: So there’s a lit­tle bit going on there. I was kind of, my inter­est got piqued because Mac­quar­ie Group, their analy­sis of the com­pa­ny sug­gests that it’s worth 2. 50 and Stock Doc­tor have a con­sen­sus val­ue of the com­pa­ny at 2. 37, even though it’s trad­ing at 1. 85. So sub­stan­tial dis­counts to what the ana­lysts are think­ing.

[00:09:39] Tony: So not quite a buy yet, but one to watch for when it turns.

[00:09:45] Cameron: Hmm, unfor­tu­nate­ly, um, I don’t hold Karun. Looks like I let it go back in April’s the last time I had to get rid of it. Rule one sell.

[00:09:58] Cameron: Do you hold any Karun?

[00:09:59] Tony: I don’t,

[00:10:00] Tony: no, I’m not spruik­ing my own

[00:10:02] Tony: cheese.

[00:10:03] Cameron: Hmm. Um, well, not spruik­ing, it’d just be nice to get that div­i­dend, would­n’t it? If it came in, if it comes in.

[00:10:11] Tony: Yeah,

[00:10:11] Cameron: list this week.

[00:10:13] Tony: okay, it has been though.

[00:10:15] Cameron: Yeah, I’m just gonna see when the last time it was on the buy list. His­tor­i­cal buy list. Oh, well, yeah, last week it was. There you go.

[00:10:30] Tony: Big dif­fer­ence.

[00:10:32] Cameron: Yeah,

[00:10:33] Cameron: it was

[00:10:33] Cameron: last week, not this week.

[00:10:35] Cameron: Uh, alrighty, um, what else have you got in the hop­per

[00:10:39] Cameron: for today, Tony?

[00:10:40] Tony: Yeah, in my hop­per, num­ber two cab off the rank is today’s quote from O’Shaugh­nessy, the What Works on Wall Street book. I’m going to keep trot­ting these out because I’m still read­ing through it and like every time I turn the page it’s like, yeah, that’s exact­ly right. And he says it so much bet­ter than I can, so I’m just going to quote.

[00:10:59] Tony: So this week, this week’s quote is, uh, he’s refer­ring to David Faust, who wrote in his rev­o­lu­tion­ary book, The Lim­its of Sci­en­tif­ic Rea­son­ing, and quotes, Human judg­ment is far more lim­it­ed than we think. We have sur­pris­ing­ly restrict­ed capac­i­ty to man­age or inter­pret com­plex infor­ma­tion. Study­ing a wide range of pro­fes­sion­als, from med­ical doc­tors mak­ing diag­noses, to experts mak­ing pre­dic­tions of job suc­cess in aca­d­e­m­ic or mil­i­tary train­ing, fast found that the human judges were con­sis­tent­ly out­per­formed by sim­ple actu­ar­i­al mod­els.

[00:11:35] Tony: Like tra­di­tion­al mon­ey man­agers, most pro­fes­sion­als can­not beat the pas­sive imple­men­ta­tion of time test­ed for­mu­las. So I thought that was a good quote, um, so I guess it fol­lows on from last week about stay­ing the course and look­ing at a sys­tem that’s worked in the long term, which, uh, no, yes, I guess it’s a spoil­er alert, but no sur­pris­es that Ashan­ti sees val­ue on best­ing as being the sys­tem that’s worked in the long term or worked the best in the long term.

[00:12:08] Tony: Um, but the point he’s mak­ing here is. It’s prob­a­bly an answer to the ques­tion you asked me a lit­tle while ago, is why do 70 per­cent of fund man­agers under­per­form the mar­ket? And O’Shaugh­nessy’s, if I’m para­phras­ing here, but O’Shaugh­nessy’s answer is that they, uh, they either get spooked by a quar­ter of under­per­for­mance and see some of the out­flows leav­ing their fund.

[00:12:30] Tony: And so they change strat­e­gy or they, uh, they decide to use gut feel. and devi­ate from the strat­e­gy. They don’t apply it slav­ish­ly because they just can’t stand to see peri­ods of

[00:12:41] Tony: under­per­for­mance.

[00:12:42] Cameron: They can’t

[00:12:43] Cameron: or their

[00:12:45] Tony: Well, they’re investors. Yeah,

[00:12:47] Cameron: investors can’t.

[00:12:51] Cameron: Yeah. I

[00:12:54] Tony: And it’s an inter­est­ing sort of con­cept because, um, what they’re espous­ing is you have a sys­tem and you apply it dili­gent­ly, which is exact­ly what a quant trad­er or an AI imple­men­ta­tion of a fund man­ag­er would do. Um, but it, it does­n’t stop peo­ple from leav­ing the fund dur­ing peri­ods of under­per­for­mance.

[00:13:14] Tony: Um, and then fur­ther on in the book, O’Shaugh­nessy points out that peo­ple tend to leave at exact­ly the wrong time. You know, they leave in 2009 at the end of the GFC and then 2010 is the best peri­od for val­ue invest­ing in the last

[00:13:29] Tony: 15 20 years, so

[00:13:32] Cameron: so they should be locked in when they sign up. You say, lis­ten, if you, if you’re join­ing our fund, you got to leave your mon­ey in there for 20

[00:13:39] Cameron: years. You can’t pull it out.

[00:13:41] Tony: Which is exact­ly what Buf­fett did in his orig­i­nal part­ner­ship. Um, peo­ple should go back and read that. It’s about 19, it’s about as old as me, it’s about 63, I think, when he put his, um, orig­i­nal part­ner­ship togeth­er and he set out some rules, and one of them was, your mon­ey’s in for 10 years, um, you can’t take it out.

[00:13:59] Tony: So, uh, he knew that peo­ple were going to lose, lose their nerve at some stage. He could­n’t always out­per­form the index over that peri­od, so he locked them up.

[00:14:09] Tony: For their own good,

[00:14:09] Cameron: Q, that’s what we should do with QAV

[00:14:11] Cameron: mem­ber­ships.

[00:14:13] Tony: offer a 10 year mem­ber­ship.

[00:14:16] Cameron: Yeah. You just can’t get out. You’ve got a, we’ll call it the Hotel Cal­i­for­nia mem­ber­ship. Um, no, but seri­ous­ly, like, uh, you know, we’ve seen it. Peo­ple come in and they’re all excit­ed and they’re going to do it. And then they get a cou­ple of years into it and things go south for a year or two. And they’re like, Oh, I can’t han­dle it any­more.

[00:14:40] Cameron: We, maybe we need to cre­ate lock ins to, for their own ben­e­fit. To stop them from, uh, you know, wig­ging out when times are tough, going, no,

[00:14:50] Tony: Yeah.

[00:14:51] Cameron: no, it’s, uh, there’s, it’s like, it’s like a, a poi­son pill option, a poi­son pill. You can’t get out, you know,

[00:14:59] Cameron: once you’re in, you’re locked in.

[00:15:01] Tony: Yeah. Well, we, we charge a very high

[00:15:04] Tony: exit fee.

[00:15:06] Cameron: Yeah. Yeah. Yeah.

[00:15:08] Tony: It’s hard for you to repro­gram the mem­ber­ship sys­tem to, uh, let peo­ple leave. So you have to pass on that charge.

[00:15:15] Cameron: Sor­ry. Yeah. You’re stuck in. It’s like Chi­na. I’ve been, um. Unsub­scrib­ing from all my stream­ing ser­vices, uh, over the last week. And, uh, it’s not easy to unsub­scribe from some stream­ing ser­vices. I don’t know if you’ve noticed that or things like Ama­zon Prime, you know, they’re like, Oh, sor­ry, you can’t unsub­scribe from the app.

[00:15:38] Cameron: You have to go here and then you have to dig through mil­lions of options. And then you’ve got click on an email that they’ll send you. Then you’ve got to speak to some­body and See a jus­tice of the peace and go to

[00:15:52] Cameron: con­fes­sion.

[00:15:54] Tony: called Jeff Bezos.

[00:15:56] Cameron: yeah,

[00:15:57] Tony: Apol­o­gize.

[00:15:58] Tony: yeah.

[00:15:59] Cameron: Yeah, they make it real­ly, real­ly dif­fi­cult to get out. Um, all right, what else

[00:16:05] Cameron: you got?

[00:16:06] Tony: I pulled pork.

[00:16:09] Tony: I have a pulled pork on,

[00:16:10] Cameron: week,

[00:16:11] Cameron: Tony?

[00:16:12] Tony: uh, VI Health Lim­it­ed. VIT is the A SX code. It’s um. It’s a small spec­u­la­tive stock, so bear that in mind when you’re lis­ten­ing to this. Com­pa­ny’s cur­rent­ly a buy, but it is close to its sell price. And its share price has been on a wild ride. It’s down 90 per­cent since Octo­ber 2022, when it was at its highs.

[00:16:37] Tony: It’s cur­rent­ly trad­ing at 0. 09 a share, but it has ticked up in the last few weeks and it’s back on our buy list. Three areas of oper­a­tion for this com­pa­ny. Essen­tial­ly it’s a, it’s a sup­pli­er of cannabis to both indi­vid­u­als via a pre­scrip­tion type plat­form, but also to dis­trib­u­tors like phar­ma­cies. So it has three areas of oper­a­tion.

[00:17:03] Tony: Uh, Can­view, which is the plat­form I just spoke about. It’s for pre­scribers of cannabis prod­ucts, cus­tomers and phar­ma­cies to order cannabis prod­ucts online. Cor­texa, which is the dis­tri­b­u­tion cen­ters and net­work for sup­ply of cannabis and psy­che­del­ic prod­ucts to phar­ma­cies. And a com­pa­ny they acquired a lit­tle while ago called Doc­tors on Demand, which allows you to Con­tact the doc­tor via tele­health and they have some­thing like 150, 000 patients using that ser­vice. Uh, I’m kind of indebt­ed to an arti­cle by Tim Borham on the com­pa­ny from March 15 this year, uh, for a bit of insight into the com­pa­ny and he wrote that arti­cle on Stock­head. Um, and here it goes. Futu­ra was for­mer­ly known as Kro­nos Aus­tralia. Kro­nos Aus­tralia was a 50 50 joint ven­ture between Cana­di­an.

[00:17:58] Tony: Med­ical cannabis giant Kro­nos Group, and a pri­vate equi­ty fund owned by an Aus­tralian doc­tor called Rod­ney Cox. And liv­ing in, just as an aside, liv­ing in Toron­to, when I did, when cannabis was being dereg­u­lat­ed, uh, the cannabis stocks went on a wild ride. They were, they were like dot com stocks. They were going through the roof.

[00:18:20] Tony: Um, and peo­ple were telling me I should invest in them, and they were putting all their mon­ey into them, and of course, as I left Cana­da, they were all worth a bet. 0. 10 in the dol­lar from what they had been at their highs. Uh, and, and I ran these kinds of sto­ries about, oh, we need to get, it’s all green­fields.

[00:18:38] Tony: We need to get the first mar­ket move. We have to open the stores before any­body else does, uh, and get our, get our patch of turf defined. And then of course the gov­ern­ment decid­ed it was going to sell cannabis through its own. Retail Net­work of Stores, in the same way it sells liquor in Cana­da, or at least in Ontario, very archa­ic way of doing it, but that’s how they do it, and all those retail stores had to be shut down and write offs tak­en by those cannabis com­pa­nies, and of course it was also, um, With so much com­pe­ti­tion in the mar­ket, the mar­gins in cannabis were erod­ed quite quick­ly as well, so what looked like a real­ly good busi­ness idea at the start turned out not to be at the end.

[00:19:21] Tony: Any­way, so Kro­nos, the his­to­ry of this com­pa­ny was, uh, was a com­pa­ny in Cana­da that, uh, part­nered with the Aus­tralian, um, uh, Investor guy by the name or doc­tor by the name of Rod­ney Cox. He was CEO of the com­pa­ny for six years, but resigned, uh, ear­li­er this year and fin­ished up at the end of June. Uh, he is rea­son­ably well known and, and cer­tain­ly well respect­ed.

[00:19:44] Tony: He was Vic­to­ri­a’s Aus­tralian of the year in 2005, attend­ing to injured bomb­ing vic­tims in Bali and at Bagh­dad’s you UN head­quar­ters. Uh, and he also held roles at Lin Fox and Boston Con­sult­ing Group.

[00:19:59] Cameron: Did he just give them weed? So he just went over there and he’s just like, lis­ten, smoke up, you know, you’ll just feel

[00:20:05] Cameron: bet­ter.

[00:20:07] Tony: Yeah, pos­si­bly not.

[00:20:09] Cameron: Okay.

[00:20:11] Tony: Any­way, Kro­nos list­ed on the ASX in late 2019 with a mar­ket cap of 20 mil­lion at 0. 50 a share. They had orig­i­nal­ly planned to build a cannabis man­u­fac­tur­ing facil­i­ty, but in 2021 they decid­ed to merge with CDA Health. which was found­ed by anoth­er doc­tor, Dr. Janssen, and CDA stands for Cannabis Doc­tors Aus­tralia.

[00:20:36] Tony: And they, they oper­at­ed under a full tele­health mod­el nation­al­ly, and that seemed more attrac­tive to, uh, to Kro­nos. Um, at the time, the IP agree­ment with Kro­nos in Cana­da was ter­mi­nat­ed by mutu­al agree­ment, and in Feb­ru­ary 2023, the com­pa­ny became Vitu­ra Health. Uh, the lit­tle, uh, bit on the Aus­tralian med­i­c­i­nal mar­i­jua­na indus­try, um, a cou­ple of years ago in 2022, which were the lat­est stats that, uh, this arti­cle saw, uh, it grossed about 244 mil­lion in sales, uh, and that was up 41 per­cent from the first half of the year to the sec­ond, so fast grow­ing.

[00:21:15] Tony: 80 per­cent of pre­scrip­tions were for chron­ic pain. or as an alter­na­tive to opi­oids. And Dr. Cox says the typ­i­cal patient is a female in her 50s who has nev­er touched cannabis before. Uh, mov­ing on, the com­pa­ny expand­ed into the tele­health field, hav­ing acquired the pri­vate Doc­tors on Demand plat­form last Octo­ber.

[00:21:37] Tony: Doc­tors on Demand facil­i­tates around 300, 000 con­sul­ta­tions a year and was found­ed by a cou­ple of Mount Isa fam­i­lies. Phar­ma­cist, um, as a way of, uh, improv­ing access to health and region­al areas. And that was back in 2015 that they found­ed that, uh, Dr. Cox reck­ons that 50 to 70 per­cent of gen­er­al prac­ti­tion­er vis­its could be sat­is­fied by tele­health, um, notably being repeat pre­scrip­tion, uh, type, uh, uh, uh, inter­ac­tions with a health pro­fes­sion­al.

[00:22:08] Tony: Um, as anoth­er aside, uh, Vitu­ra paid 25 mil­lion for, for, for, uh, Doc­tors on Demand, while West­farm­ers shelled out 135 mil­lion for one of their rivals called Instant Scripps. So, um, I think I saw some­where that Vitu­ra paid one times rev­enue and West­farm­ers paid three times rev­enue. So the, uh, the bore that Vitu­ra was, uh, was quite can­ny with that invest­ment, it looks like.

[00:22:33] Tony: How­ev­er, uh, after ini­tial suc­cess in finan­cial year 23, Ven­tu­ra record­ed a sharp near­ly 60 per­cent prof­it decline in the first, uh, in the half year to Decem­ber 2023, and prof­it was down to 3. 1 mil­lion. This was attrib­uted to indus­try wide decline in the aver­age CBD sell­ing price, gross mar­gin pres­sures and costs relat­ed to the doc­tor’s on demand pur­chase.

[00:22:57] Tony: How­ev­er, there was some good news with the. Uh, sec­ond half results in 2023, uh, with the com­pa­ny mov­ing a record num­ber of 498, 000 units, with the pre­scrib­ing doc­tor base increas­ing from 423 to over 1, 400, and dis­pens­ing chemists on the plat­form grow­ing from 530 to 4, 244. Addi­tion­al­ly, the com­pa­ny has called out that they hope to take advan­tage of the recent­ly announced fed­er­al gov­ern­men­t’s crack­down on import­ed nico­tine vapes to thwart their ram­pant abuse of these devices among young peo­ple, and now requir­ing that nico­tine vapes are sold by pre­scrip­tion. On top of the decline in rev­enue, and per­haps because of it, uh, there has been board reduc­tion dur­ing the last 12 months. Dr. Janssen, the, the per­son from the, the, um, uh, orig­i­nal merg­er with CDA and one of his col­leagues, Mr. Tan­ner, were direc­tors post CDA pur­chase. Uh, and in fact, Mr. Tan­ner chaired the com­pa­ny, but stepped down in April 22, and Dr.

[00:24:01] Tony: Jansen quit in Sep­tem­ber of 2022. The Jansen camp, uh, have con­cerns, um, with the cur­rent board, uh, in terms of how much they’ve issued the new shares, and the terms of per­for­mance based shares issued to Dr. Cox and Mr. Headley. As well as their remu­ner­a­tion. The board hot­ly defend­ed the par­tic­u­lar arrange­ments, but the com­pa­ny did receive its first REM strike at the last AGM, large­ly on the, the, uh, votes of Mr.

[00:24:31] Tony: or Dr. Jan­sons and Mr. Tan­ner. Um, and as stat­ed before, Mr. Cox even­tu­al­ly resigned in, uh, end­ing 30th of June, 2024, and it cur­rent­ly does­n’t have a full, uh, does­n’t have a per­ma­nent, uh, CEO, the CEO is, uh, an inter­im one and is, uh, is, uh, uh, the job is being per­formed by the CFO. So there’s a lot going on at the top of this com­pa­ny, um, and, uh, I guess not sur­pris­ing giv­en the share price tank­ing as much as it has, but, uh, cer­tain­ly some­thing to watch.

[00:25:05] Tony: The QAV num­bers, the share price is 9 cents, which is only 13% of the con­sen­sus share price, which is still at 70 cents, which is, um, not far off the all time high. Uh, VIT trades at its IV one price, but way less than IV two, which is 29 cents. So that means it’s a stock that trades below. Half of its IV2 price, so it gets an extra point for that.

[00:25:31] Tony: ADT for this stock is only 26, 000, so it’s not going to suit a lot of investors, um, but it’s, um, it’s, I guess it’s there for small, uh, cap or micro­cap investors. Yield is 10%. Um, which gets the one on our check­list and the yield is also greater than the P. E. ratio, so it gets an extra point on our check­list for that.

[00:25:53] Tony: Stock Doc­tor Finan­cial Health is strong, and the trend is steady, so it scores for that. P. E. is only 5. 6, which is the low­est in the three years, again scor­ing for that. Price to oper­at­ing cash flow is 4. 8 times, which is good. Debt equi­ty per share is 7 cents. Book plus 30 is 0. 09, so that’s around the share price.

[00:26:14] Tony: How­ev­er, I note the NTA is only 0. 01, most like­ly because of the good­will booked in acqui­si­tions. So we’ve seen that before when com­pa­nies merge and take over oth­er com­pa­nies, the equi­ty can be high­er than the NTA. Fore­cast earn­ings for share growth is a whop­ping 81%, which means that growth over P. E. is 14 times.

[00:26:35] Tony: When we’re look­ing for com­pa­nies that score bet­ter than 1. 5 times, so we give it a score of 2 points on the check­list. Direc­tors hold more than 10%. Uh, even though, uh, uh, the CEO resigned, the, there’s still Guy Headley, one of the founders, uh, of the com­pa­ny. He is on the board still, and he holds still 17.5% of the shares.

[00:26:58] Tony: Uh, share price has ticked up recent­ly, so we score it, uh, as being a recent buy for that, pos­si­bly fol­low­ing a pre­sen­ta­tion by the board on their strate­gies to improve the finan­cial per­for­mance. Equi­ty is con­sis­tent­ly increas­ing over the last six halves, so it scores for that. So, the score, com­pa­ny scores very well from a qual­i­ty point of view, in fact, from a QAV point Point of view.

[00:27:19] Tony: It scores 19 points out of 17 items because it gets two points for some. We’re giv­ing it a qual­i­ty score of 112 per­cent and a QAV score of 0. 23. So it’s rea­son­ably high on our buy list.

[00:27:34] Cameron: Ha Ha

[00:27:35] Tony: pos­i­tives and neg­a­tives. Ha

[00:27:37] Cameron: Is that a, weed joke?

[00:27:38] Cameron: It’s, it’s rel­a­tive­ly

[00:27:39] Tony: ha ha, No,

[00:27:41] Cameron: that where you’re going with that? Oh, come on, Tony! Come

[00:27:44] Cameron: on!

[00:27:44] Tony: no,

[00:27:45] Cameron: that’s what, that’s gonna be the episode, the name of this episode is rea­son­ably high. Get­ting rea­son­ably high with VIT.

[00:27:52] Cameron: I

[00:28:17] Tony: psy­chi­a­trist pre­scrip­tion of psy­che­delics as a, as a par­tic­u­lar growth for them as well. So plen­ty of growth oppor­tu­ni­ties for the com­pa­ny. On the risk side, they need to sort out their board ruc­tions. And I guess they come to terms with the fact that, uh, because there is.

[00:28:36] Tony: Growth oppor­tu­ni­ty and the inter­est in the indus­try, the com­pe­ti­tion is trad­ing away the mar­gins in the cannabis side of things and so they need to trim their costs and reflect that in their strate­gies going for­ward. So that’s it, the IT, have a look.

[00:28:53] Cameron: think the risks also include, have to include, like, decrim­i­nal­iza­tion. I think the I mean, we don’t seem to be close to that here, I know that the Greens and a cou­ple of dif­fer­ent politi­cians are talk­ing about it, they’re try­ing to push it through, but I mean, it just amazes me how far behind the US we are with those sorts of things.

[00:29:16] Cameron: Like the US has decrim­i­nal­ized and or legal­ized weed in, I don’t know, how many states? I think half of the states over there, um, over the last cou­ple of years. Canada’s obvi­ous­ly

[00:29:27] Cameron: done it. A lot of coun­tries have done it.

[00:29:29] Tony: Mm hmm.

[00:29:30] Cameron: you know, we’ve been over, oh, a cou­ple of

[00:29:31] Cameron: years ago, the last time I was in Ari­zona.

[00:29:35] Cameron: Like the, the weed stores in Ari­zona are like Apple stores, uh, don’t know if you’ve ever gone into

[00:29:41] Cameron: one of them over there, but,

[00:29:43] Tony: And Apple Store?

[00:29:44] Cameron: no, a weed store, it’s like, they’re like, uh, high end, bou­tique y fash­ion estab­lish­ments, you get greet­ed, at the front and every­one’s wait­ing on your hand and fist and you know, they’re friend­ly, hip, young peo­ple, staff who can answer all your ques­tions and make rec­om­men­da­tions and walk you through dosage.

[00:30:06] Cameron: You say, lis­ten, I’m from Aus­tralia where it’s not legal. We don’t know what we’re doing. They’re like, Hey, no prob­lem. Let me, let me talk you through, like, start with this gum­my, take half a gum­my. Well, you know, and work your way up, give it a cou­ple of hours, see how you feel. And, you know, it’s just very, it’s an amaz­ing expe­ri­ence, um, in terms of Cus­tomer expe­ri­ence.

[00:30:25] Cameron: Also trip­py the first time you go in, if you come from a place like this, and it’s like, hel­lo! Imag­ine like what it was going to

[00:30:32] Cameron: Ams­ter­dam 30 years ago, but

[00:30:34] Tony: I was just going to

[00:30:34] Tony: say that. Yeah, 30 years

[00:30:36] Cameron: it’s, it’s very, very civ­i­lized. And so any­way, my point is that

[00:30:42] Cameron: even­tu­al­ly, Even­tu­al­ly, like we did with gay mar­riage and not so well with the voice, but even­tu­al­ly, you know, at some point in the next cou­ple of years, some politi­cians got to grow a pair and go, you know what, let’s just, I mean, I don’t know who’s hold­ing it back.

[00:31:02] Cameron: Chris­sy and I talk about this all the time. Like she’s been, she got a med­ical license, I think dur­ing

[00:31:08] Cameron: COVID a few years ago. She

[00:31:10] Tony: a med­ical license.

[00:31:11] Tony: She’s,

[00:31:12] Cameron: Yeah, no,

[00:31:13] Tony: a prac­tic­ing doc­tor,

[00:31:14] Tony: is

[00:31:14] Cameron: she’s She’s, she’s, she’s, a prac­tic­ing doc­tor, Yeah, yeah.

[00:31:19] Cameron: What’s, I was going to say a gynae­col­o­gist.

[00:31:21] Tony: Dr. Dun­away. stat!

[00:31:24] Tony: Come to ER.

[00:31:24] Cameron: not a gynae­col­o­gist, I’m not a gynae­col­o­gist, but I’ll take

[00:31:26] Cameron: a look any­way. I don’t know what the female ver­sion of that is. I’m not a proc­tol­o­gist maybe, but I’ll take a look any­way. Um, but like, she takes oils to deal with her anx­i­ety and her ADHD and, you know, PMDD and all the oth­er D’s. That she suf­fers from and has suf­fered from her whole life. It’s been mirac­u­lous for, and her back, like, you know, I don’t know if you remem­ber this, but like years ago, Chris­sy could bare­ly walk.

[00:31:57] Cameron: Half of the month. She, she’s got a cou­ple of bust­ed low­er discs from when she was in her 20s and she picked up a pho­to­copi­er bad­ly and crushed her discs and as she got old­er, she’s 40 some­thing now, um, 40 some­thing, 40 some­thing, what did I do? Six, six, six, sev­en, five, 45. Yeah.

[00:32:23] Cameron: And, um, you know, about 10 years.

[00:32:29] Tony: for­got­ten the age of your wife.

[00:32:31] Cameron: It’s not my word. Um,

[00:32:33] Cameron: She, uh, like her back was just a mess. She could bare­ly walk. I’d have to mas­sage her for an hour every morn­ing for her to stand up straight. She was just like bent over like an old woman. Um, she could­n’t lift any­thing. She could­n’t, you know, use a broom. She could­n’t bend over to pick any­thing up.

[00:32:51] Cameron: It was real­ly bad. This is when she was in her mid thir­ties, right? It was start­ing to get real­ly bad. And then some­one a few years ago, I think dur­ing COVID, some­one said to her, you should try weed. I had the same thing, you know, tried weed, fixed it. We were skep­ti­cal, but she’d been to see all the doc­tors and, you know, they basi­cal­ly said, look, it’s surgery, right?

[00:33:11] Cameron: She’d been on opi­oids and they messed her up. So she got off of those and they were like, yeah, we’re going to have to go in and oper­ate. That’s real­ly the only thing. And then she, uh, start­ed, uh, using weed and it just dis­ap­peared. Like lit­er­al­ly. Overnight, all of the ten­sion in her low­er back evap­o­rat­ed.

[00:33:29] Cameron: She has­n’t had a back prob­lem since, and now she’s doing Kung Fu. Like, we always talk about this. The idea, five years ago, that she would be able to do Kung Fu five times a week with her back the way it was, would have been ridicu­lous.

[00:33:42] Tony: wow,

[00:33:43] Cameron: But now, and then, because she’s been doing that, it’s also strength­ened, I think, her core and her low­er back mus­cles and all of that kind of stuff, which helps com­pen­sate as well.

[00:33:53] Cameron: But that was why she got into orig­i­nal­ly that and her anx­i­ety and all that kind of stuff. But any­way, my point is that even­tu­al­ly some­body’s got to just legal­ize it. We’ve got to decrim­i­nal­ize it and legal­ize it here. And then what hap­pens to all of these busi­ness­es that have built their busi­ness around the pre­scrip­tion mod­el when all of a sud­den, It’s legal and you can grow a cou­ple of plants in your veg­gie patch or you can just buy it from retail­ers.

[00:34:18] Cameron: I guess

[00:34:19] Cameron: maybe they’ll try and get into the retail side

[00:34:21] Tony: yeah, well they’re sup­ply­ing chemists now, so they’re set up, they’re

[00:34:23] Tony: set up for deliv­ery to retail, would be my guess, but they’ve also got that tele­health arm, which is just straight doc­tors online, so I could fall back on that, but I agree with you, I actu­al­ly, I just don’t want to split hairs, but I think Mar­i­jua­na is decrim­i­nal­ized in most states.

[00:34:41] Tony: In oth­er words, you won’t go to jail if you’re picked up for smok­ing, at least below a cer­tain amount. Um, it’s, it’s legal­ized in Col­orado, et cetera, in the US. Um, I think it won’t be the Greens who suc­cess­ful­ly do it. It’s going to be like a state like Vic­to­ria. They were going to say, you know what, we’re almost bank­rupt and, uh, this is a great source of rev­enue. Because that’s, that’s the com­pelling argu­ment to politi­cians is the fact that they can tax

[00:35:07] Tony: it.

[00:35:08] Cameron: Yeah. Yeah. Well, you know, fair enough too.

[00:35:13] Tony: Oh.

[00:35:14] Cameron: Why should crim­i­nal orga­ni­za­tions be mak­ing all of the mon­ey out of it? Why should­n’t the gov­ern­ment be get­ting mon­ey and using some of that to deal with peo­ple that have, you know, don’t han­dle it well or have, uh, addic­tive, addic­tion

[00:35:29] Cameron: prob­lems? Um, yeah, I’m just

[00:35:32] Cameron: look­ing up the,

[00:35:34] Tony: Well, it sounds, it sounds like Chris­sy,

[00:35:36] Tony: sounds like Chris­sy exact­ly fits the pro­file that the

[00:35:40] Tony: ex CEO was talk­ing about.

[00:35:42] Cameron: Yeah. Um, There you go. Under Queens­land Cannabis Laws out­lined in the Drugs Mis­use Act 1986, the pos­ses­sion of few­er than 500 grams of cannabis is equat­ed to a max­i­mum penal­ty of 15 years impris­on­ment sen­tence. For the pos­ses­sion of more than 500 grams, the max­i­mum prison penal­ty is 20 years.

[00:36:04] Tony: Wow. I’m pret­ty sure that’s dif­fer­ent to New South Wales and Vic­to­ria. But who’s Queens­land?

[00:36:13] Cameron: Any­way, thank you for that, VIT. Did you say what their

[00:36:18] Cameron: aver­age dai­ly trade is?

[00:36:19] Tony: Yeah, it’s down like it’s 27, 000. I think it’s pret­ty low. 26, 000. Yeah,

[00:36:26] Cameron: 27, 000.

[00:36:26] Cameron: Yeah. Well, I have a pulled pork to

[00:36:29] Cameron: do, Tony.

[00:36:31] Tony: go for it.

[00:36:32] Cameron: Why should you have all the fun? I

[00:36:33] Cameron: thought to myself. Um, just hop­ing we did­n’t pick the same com­pa­ny to do and we did­n’t, but mine’s also a small com­pa­ny, but it’s an inter­est­ing one. Sim­i­lar in some ways, because it’s a soft­ware plat­form. This is CXZ Con­nex­ion.

[00:36:48] Cameron: I don’t think we’ve ever done CXZ

[00:36:51] Cameron: before. Have we

[00:36:53] Tony: No, I haven’t heard of it before.

[00:36:54] Cameron: I don’t think so. Right. They’re right down the bot­tom of our buy list this week. Got a 1 score. Con­nex­ion, I say it like that because it’s got an X. Con­nex­ion. Mobil­i­ty. For­mer­ly Con­nex­ion Telem­at­ics, CXZ. Their soft­ware is a ser­vice solu­tion for the glob­al auto­mo­tive indus­try.

[00:37:17] Cameron: And, uh, not know­ing any­thing about cars, I found this inter­est­ing. They start­ed a long time ago sell­ing inter­net radio stream­ing prod­ucts called miROAMER. To car man­u­fac­tur­ers, inter­net radio. When you were going to be lis­ten­ing to inter­net radio in your car, instead of just your phone. Maybe peo­ple still do lis­ten to inter­net radio.

[00:37:45] Cameron: I mean, all radio is inter­net

[00:37:47] Cameron: radio today, I think.

[00:37:48] Tony: Yeah, pret­ty much.

[00:37:50] Cameron: I don’t know. I mean, I don’t

[00:37:51] Cameron: lis­ten to radio. I haven’t lis­tened to radio for 20 years, so I don’t know what’s going

[00:37:54] Cameron: on in the radio world. But,

[00:37:56] Tony: I real­ly miss Sir­ius Radio from

[00:37:58] Tony: North Amer­i­ca.

[00:37:59] Cameron: yeah.

[00:38:00] Tony: real­ly good. yeah.

[00:38:01] Cameron: Hmm. Yeah, when I go over there and I’ve got a rental, I put it on. You know, that’s the only time I ever lis­ten to radio in a car when I’m in the US.

[00:38:10] Cameron: But then they got into the telem­at­ics space, uh, and they are big into pro­vid­ing a soft­ware solu­tion around telem­at­ics. Most­ly to man­age fleets and trucks, uh, and some rentals and that kind of stuff. And in the US most­ly is where they’re oper­at­ing. For peo­ple like me who don’t know what telem­at­ics is, it’s a tech­nol­o­gy that’s used to man­age all the infor­ma­tion about a vehi­cle.

[00:38:37] Cameron: Obvi­ous­ly our cars are very much com­put­er­ized these days, so there’s a lot of infor­ma­tion about how the engine’s run­ning and how dif­fer­ent pieces of the car are run­ning, it’s all dig­i­tal and dig­i­tal­ly avail­able. But also they can plug, they can stick a lit­tle box on your car, which will tell them where it is and how far it’s dri­ven and all those sorts of things, and they can track and mon­i­tor all of that kind of stuff.

[00:39:04] Cameron: It’s part of what they call the Inter­net of Things That Move. I’d heard of IOT, you know, we used to talk about that 20 years ago back in my Microsoft days, but this is IOTTM, the Inter­net of Things That Move, track­ing things that move and being able to pro­vide vis­i­bil­i­ty of them. I know that’s kind of big in the min­ing and now in farm­ing.

[00:39:28] Cameron: In fact, on Futur­is­tic com­ing up, Steve and I are going to have a guest on, Mar­tin Mur­ray, who’s a lis­ten­er of ours, and he’s a farmer. I think in New South Wales and he’s been doing a lot of test­ing of Chat­G­PT on his farm, using it for dif­fer­ent stuff. He’s going to come and talk about how he uses tech­nol­o­gy on his farm, which be inter­est­ing because again, like cars, I know noth­ing real­ly about how farms work.

[00:39:53] Cameron: So that I’m look­ing for­ward to hear­ing more about that. But the ben­e­fits of telem­at­ics appar­ent­ly is that you can reduce fuel costs by using telem­at­ics to come up with bet­ter route plan­ning, route, route. I’m nev­er sure how you say that. How do you say R O U T E?

[00:40:09] Cameron: Root? Route? Is

[00:40:11] Tony: I say RAT.

[00:40:12] Cameron: Route?

[00:40:15] Cameron: Um, they can also do things like cut engine idling. They can detect unau­tho­rized use of a vehi­cle, all that kind of stuff. I guess they can shut it down too. I think they do that with insur­ance com­pa­nies. They’re able to shut your car down if they think it’s stolen. Like Apple can turn your phone off, they can turn your car off.

[00:40:36] Cameron: Um, Look­ing at all the mechan­i­cal issues, obvi­ous­ly, of the car, bet­ter com­mu­ni­ca­tion with dri­vers and oper­a­tors out in the field, enhanced safe­ty, you know, they can look at the, um, mon­i­tor the oper­at­ing side of the equip­ment and fig­ure out if it needs to be ser­viced and what’s going wrong with it so there are less acci­dents, um, also, Being used increas­ing­ly in major cities to deal with intro­duc­ing things like smart cities.

[00:41:09] Cameron: Who was it? My mum was telling me, my mum was in Chi­na, I don’t know, ear­li­er this year, late last year, can’t remem­ber, ear­li­er this year, she was in Chi­na, I think. And, um, she was telling me that in, I think it was in Bei­jing, you’re only allowed to dri­ve your car. every oth­er day or some­thing like that. You have allo­cat­ed days that you can dri­ve your car.

[00:41:33] Cameron: And I was like, why don’t we do that here? That seems like a bril­liant idea. I said, what do you do? How do you get to work in the oth­er days? And she did­n’t know, but I fig­ure you just car­pool on the oth­er days. If you have to go some­where, you car­pool with a neigh­bour or we should, we should have apps that just orga­nize car­pool, just cut down on the amount of cars on the road.

[00:41:50] Cameron: I think that was a great idea. Any­way. They can use telem­at­ics for all this kind of stuff, and what this com­pa­ny, Con­nex­ion, do is sort of pro­vide solu­tions for that. I think they pro­vide the hard­ware. Hon­est­ly, their web­site’s not great. I tried to go through their web­site to fig­ure out exact­ly what parts of the solu­tion, because they’re called Soft­ware as a Ser­vice.

[00:42:12] Cameron: But then I was try­ing to fig­ure out, do they actu­al­ly sup­ply the box­es as well? And I could­n’t fig­ure that out on their web­site or read­ing their annu­al report. I asked Chat­G­PT and it said, yeah, they do, but it could just be mak­ing that up. I don’t think, I don’t know how it knows. I asked for a source and it did­n’t real­ly give me any­thing that was, uh, too con­vinc­ing.

[00:42:32] Cameron: Um, so they’ve got a cou­ple of dif­fer­ent prod­ucts. They’ve got, their main thing is called OnTrack, which stands for on time, reli­able, accu­rate, cour­te­ous. Which is also my nick­name. Uh, con­fus­ing­ly, there are two oth­er busi­ness­es in the U. S. that have the same name, OnTrack, O N T R A C. There’s a big deliv­ery ser­vice com­pa­ny, like a FedEx y kind of thing that’s called OnTrack.

[00:43:01] Cameron: And there’s one, there’s anoth­er com­pa­ny called OnTrack Telem­at­ics Corp., which is a sep­a­rate busi­ness to Con­nex­ion that has an OnTrack Telem­at­ics prod­uct, sep­a­rate busi­ness­es. So from a brand­ing per­spec­tive, it’s a bit of a mess. But Gen­er­al Motors uses their on track to man­age the largest cour­tesy trans­porta­tion pro­gram in the us A CTP baby.

[00:43:26] Cameron: You know me, I thought ct. I thought cour­tesy trans­porta­tion would be like if you’re a shit­faced drunk in the mid­dle of the night, you know, you jump on that bus that takes you home. Uh, the drunk bus?

[00:43:38] Tony: The Knight Rid­er.

[00:43:39] Cameron: Uh, yeah, yeah, yeah. The night

[00:43:41] Cameron: Rid­er.

[00:43:42] Cameron: But no, it’s um. If you drop your car off at a car deal­er­ship to get ser­viced and you need a car to, they loan

[00:43:49] Tony: Yeah, right, right.

[00:43:51] Cameron: the day that they sort of man­age that.

[00:43:52] Cameron: So if you steal the car, they know where you are.

[00:43:56] Tony: yeah, they track every­thing.

[00:43:58] Cameron: Yeah. Yeah, Um, they also have a, uh, OEM agnos­tic ver­sion of that called CXZ track that Gen­er­al Motors and clients like that can white label if they want to put their own brand­ing on them. So they say that, um, they’ve got, um, They man­age the fleets of more than 4, 000 deal­er­ships, I think most­ly in the US.

[00:44:21] Cameron: Their soft­ware is already used by over 20 per­cent of all fran­chise deal­er­ships in the US. They say they’ve got 12, 000 plus active users, 720, 000 vehi­cles con­tract­ed, and 7 mil­lion cus­tomers con­tract­ed. I don’t know how you have 7 mil­lion cus­tomers with just 720, 000 vehi­cles. I don’t know who those cus­tomers are that don’t have Vehi­cles, maybe they’re peo­ple rent­ing cars.

[00:44:48] Cameron: So maybe those cars get used mul­ti­ple times and they’re clas­si­fied as a cus­tomer. Not exact­ly sure. Any­way, I like this. Their over­ar­ch­ing strat­e­gy accord­ing to the annu­al report is come for the tool, stay for the net­work. And I thought we could steal that for QAV, right? Come for the buy list, stay for the ban­ter on Face­book.

[00:45:13] Cameron: It’s most­ly stay for the buy list, I think, for most peo­ple. Um, and the way that they pitch it, and this is the sto­ry. that this is how they’re pitch­ing the sto­ry in their annu­al report is the tool is kind it’s it’s it gets back to drug deal­ers um the the the tool is real­ly what peo­ple buy but then once they have the net­work that’s where the real mon­ey is reminds me of what I’ve heard Elon say about Tes­la peo­ple think they’re sell­ing cars but what they’re doing is real­ly build­ing a net­work of basi­cal­ly four um robots and cam­eras that are That have all of this infor­ma­tion about what’s hap­pen­ing on the roads, on the streets, because they’ve got, you know, 360 degrees cam­eras that are video­ing every­thing, and that’s all get­ting cap­tured and going into their sys­tems, and they can do a whole bunch of intel­li­gent stuff even­tu­al­ly on that.

[00:46:09] Cameron: It’s also going to feed their AI, I’m sure. You know, Tes­la slash Grok AI, what­ev­er he’s call­ing it these days. So that’s the sto­ry. They say they have, they have a vis­i­bil­i­ty of a lot of fleets and that’s where the long term val­ue is. Now I could­n’t find Founders, which is inter­est­ing. I sus­pect it sort of got sold off and acquired.

[00:46:30] Cameron: But one of the inter­est­ing things is all of the, all of the guys on the board all seem to be investors. They’re all ven­ture cap­i­tal­ists, or they come out of invest­ing firms that have, they’ve all seen an oppor­tu­ni­ty in this and jumped on board. In fact, the CEO is a guy called Aaryn Nania. Dou­ble A R Y N.

[00:46:51] Cameron: Aaryn. Aaryn Nania. He looks like he’s about 23, uh, in these pho­tos on the web­site. Uh, I don’t know how old he is, but pri­or to Con­nec­tion, he’s been, he’s been a direc­tor of the com­pa­ny since 2018. Pri­or to that, he co-found­ed Lucerne Invest­ment Part­ners, an active long term investor in both list­ed and unlist­ed com­pa­nies glob­al­ly.

[00:47:14] Cameron: Pri­or to that, he was a port­fo­lio man­ag­er at Cana­di­an invest­ment bank, Canac­cord Genu­ity.

[00:47:21] Cameron: You know them? Are you

[00:47:22] Tony: Oh, I’ve heard of

[00:47:22] Tony: them. Yeah.

[00:47:25] Cameron: Where he estab­lished and suc­cess­ful­ly man­aged the Absolute Return Port­fo­lio. Um, he holds about 6. 33 per­cent of the stock. Anoth­er guy, Nicholas Kef­fler, holds 8. 2, 8. 62 per­cent of the stock.

[00:47:41] Cameron: He’s described as a full time cap­i­tal allo­ca­tor and the exec­u­tive direc­tor of Gra­ham New­man Pty Ltd, a pri­vate invest­ment com­pa­ny based in Mel­bourne. You ever heard of them? You know

[00:47:54] Cameron: who Gra­ham New­man is?

[00:47:56] Tony: No, nev­er heard of them. Except on Sein­feld.

[00:48:01] Tony: You man!

[00:48:02] Cameron: That New­man, uh, um, there you go. I, I don’t know, um, who they are, but they’re, yeah, some sort of an invest­ment com­pa­ny. He appar­ent­ly owned and oper­at­ed a fam­i­ly busi­ness before sell­ing it to an ASX 100 com­pa­ny in 2019. Has been a long term investor in Con­nex­ion. So. Yeah, a com­pa­ny that’s, you know, run by a bunch of, uh, pro­fes­sion­al investors, basi­cal­ly.

[00:48:30] Cameron: Now, I’m won­der­ing, is that a good thing for us as investors if the com­pa­ny’s run by oth­er investors? Are they going to be look­ing after the share­hold­ers as their major share­hold­ers? We, you know, we like own­er founders or CEOs that have skin in the game. These guys have quite a

[00:48:44] Cameron: lot.

[00:48:46] Tony: Yeah, no, I think it’s a good thing.

[00:48:48] Cameron: their June quar­ter report, uh, Q4 rev­enue was 2.

[00:48:54] Cameron: 6 mil­lion. So they’re not huge, but I say that was up 4 per­cent over the pre­vi­ous quar­ter, gross prof­it up 1. Uh, gross prof­it of 1. 92 mil­lion, which was up 1 per­cent over the pri­or quar­ter. Uh, net prof­it before tax, 800, 000 up 6%, oper­at­ing cash flow of 550, 000 up 6 per­cent for the quar­ter. But from a QAV per­spec­tive, price to oper­at­ing cash flow is 7.

[00:49:21] Cameron: 54. So it’s get­ting up there, just below our cut­off. Uh, finan­cial health is strong, accord­ing to Stock Doc­tor. Health trend is steady, con­sis­tent finan­cial health all along the way. They’re, they get a score for record low PE. Their direc­tors hold about 16 per­cent all up. Those two guys I men­tioned before, I’ve got about 15 between them.

[00:49:44] Cameron: And then the rest of the board have about a per­cent. So quite a big, uh, hold­ing in the com­pa­ny by the direc­tors. Uh, so they score 8 out of 11, qual­i­ty score of 73 per­cent and a QAV score of 0. 1, so down the bot­tom. And their aver­age dai­ly trade is again small, I think it’s about 17, 000. So not real­ly going to be suit­able for any­body but small investors, but an inter­est­ing busi­ness based out of Mel­bourne.

[00:50:13] Cameron: But most­ly oper­at­ing in the US, that’s where they’ve got all the fleet stuff hap­pen­ing, so. And the sort of num­bers they men­tioned before, like all of those, what is it, mil­lion, 7 mil­lion cus­tomers, 720, 000 vehi­cles. But rel­a­tive­ly small rev­enues, 10 mil­lion in rev­enues, judged by the quar­ter­ly num­bers, which I was sur­prised by, so.

[00:50:35] Cameron: Any­way, that

[00:50:36] Tony: How does it,

[00:50:37] Cameron: XZ.

[00:50:39] Tony: thank you Cam, how does that com­pare to E Road, anoth­er com­pa­ny that we’ve, I’ve done a Pulled Pork on, it’s on our buy list, doing essen­tial­ly the same thing.

[00:50:48] Tony: Putting black box­es in trucks and then allow­ing fleet man­agers to opti­mize their fleet.

[00:50:54] Cameron: Yeah, good ques­tion. Let me see, where did you talk about E

[00:50:58] Cameron: Road last?

[00:51:00] Tony: Jan­u­ary, I think it was, or Decem­ber. It

[00:51:03] Tony: was a ques­tion from one of our lis­ten­ers, I think, to do a Pulled Pork on E Road.

[00:51:07] Cameron: yeah, episode 651 was when we got asked the ques­tion, but you did­n’t do it then, so it must have been prob­a­bly 652. Let’s see, yes, E Road. I don’t know, I’ll have to go through and have a look at

[00:51:25] Cameron: your notes,

[00:51:26] Tony: Yeah, it sounds very sim­i­lar.

[00:51:29] Cameron: yeah, right,

[00:51:31] Cameron: look­ing at what, E Roads, uh, cash­flow is like, uh,

[00:51:39] Tony: I think I made the point,

[00:51:42] Cameron: 48 and a half mil­lion. So yeah, they’re, you know, quite a bit big­ger.

[00:51:49] Tony: still a small com­pa­ny, and I made the point that, um,

[00:51:53] Tony: I could­n’t, I could see com­peti­tors. eas­i­ly get­ting into the mar­ket because those vehi­cle black box­es are out there. Um, a lot of cars when I was in Cana­da and North Amer­i­ca have them because their insur­ers will offer a cheap­er rate if you dri­ve with the black box that cap­tures your dri­ving sta­tis­tics.

[00:52:13] Tony: You know, how, how often you pump the brakes, how fast you, you know, how often you go over the speed lim­it, that kind of thing, um, or not. So you get a bet­ter insur­ance rate. Uh, so the tech­nolo­gies. Wide­spread, it’s out there, and it then comes down to the fleet man­age­ment soft­ware, which I can’t imag­ine is that dif­fi­cult to build.

[00:52:34] Tony: So, low bar­ri­ers to entry, which is, I guess, why we’re see­ing two of these com­pa­nies, um, on

[00:52:40] Tony: the buy list in the same year.

[00:52:42] Cameron: And I think, um, as AI pro­gress­es, I expect to see more and more AI built into cars and maybe these Com­pa­nies are going to be well placed to do that if, if the, um, auto­mo­bile man­u­fac­tur­ers aren’t build­ing it in them­selves, but I ful­ly expect in the next In a decade, cars will increas­ing­ly have AI built into the core of the brain of the car that’ll be mon­i­tor­ing all of its mechan­ics and its per­for­mance and it’s, you know, how it’s being used and who’s using it.

[00:53:23] Cameron: And we’ll be able to pro­vide a lot of infor­ma­tion back to who­ev­er owns the car about what’s going on or it’s or the mechan­ic and that kind of stuff who mon­i­tors the car. So I don’t know if that’s an oppor­tu­ni­ty for busi­ness­es like E Road or Con­nex­ion or if it’ll just be some­thing that will be done at a auto­mo­bile man­u­fac­tur­er lev­el and may negate the need for these busi­ness­es in some way.

[00:53:51] Cameron: Maybe the AI will just come over

[00:53:52] Cameron: the top of it.

[00:53:54] Tony: Yeah, cer­tain­ly cars, if they don’t go dri­ver­less, they’re going to go very close to dri­ver­less, which is prob­a­bly where I think they’ll fin­ish up. You know, when I’m cruis­ing on the high­way in my car, it pret­ty much dri­ves itself.

[00:54:06] Cameron: Yeah.

[00:54:07] Tony: Radar con­trol, cruise con­trol and brakes quick­er than I can, gives me a warn­ing if I’m drift­ing out of the lane, all that kind of

[00:54:15] Tony: stuff.

[00:54:15] Tony: So that’ll just improve.

[00:54:18] Cameron: I don’t think we’ll own

[00:54:19] Cameron: cars. I always tell Fox, I don’t think you’ll ever need to get a dri­ver’s license. I don’t think you’ll ever need to own a car. I can’t imag­ine, you know, he’s 10. I can’t imag­ine by the time he’s 20, we won’t have just fleets of self-dri­ving cars. It’ll be Uber or Tes­la.

[00:54:36] Cameron: I mean that’s, you know, both of those com­pa­nies stat­ed visions for the future is you just see you need to go some­where, you pull up your app and a dri­ver­less car turns up two min­utes lat­er and takes you wher­ev­er you need to go and you don’t have to wor­ry about petrol or main­te­nance or the The cap­i­tal cost of buy­ing a car or any of that kind of stuff.

[00:54:57] Cameron: I think own­ing a car in the future will be sort of a lux­u­ry for machine heads. And, you know, be like own­ing a Harley David­son today. Like you don’t real­ly need one. You’re just doing it cause you’re, you know, going through a midlife

[00:55:11] Cameron: cri­sis or some­thing, but, uh,

[00:55:13] Tony: Thank you for spend­ing the week­end. Yeah, look, I hope so. I’m not sure. I’m not sure I’m that bull­ish on it as you are, but, uh, uh, yeah, I’m not sure. I mean, the human ele­ment of giv­ing over trust for your fam­i­ly while the car dri­ves for

[00:55:27] Tony: you has got to be over­come.

[00:55:30] Cameron: Oh yeah,

[00:55:32] Tony: And, you know, the tech­nol­o­gy’s

[00:55:34] Cameron: that will

[00:55:34] Tony: go through a step change to do that

[00:55:37] Cameron: I think that will hap­pen real­ly quick­ly. I mean there’s already plen­ty of stud­ies that I’ve seen that say that even with some of the issues that they’ve had with the self dri­ving car. func­tion­al­i­ty in like Tes­la and some of the oth­er places in the US. Uh, it’s still way safer than humans dri­ving a car.

[00:55:58] Cameron: I don’t think that’s a huge leap for peo­ple to make. I mean, hav­ing a com­put­er dri­ving the car that’s talk­ing to all of the oth­er cars on the road is going to be a safer propo­si­tion. I mean, there’s going to be a peri­od of tran­si­tion where you’ll be obvi­ous­ly have a com­bi­na­tion of. Humans and com­put­ers on the road, but com­put­ers should be able to, they should have bet­ter reflex­es in deal­ing with emer­gency sit­u­a­tions than humans will.

[00:56:25] Cameron: Pret­ty quick­ly, I imag­ine. I think, I don’t think that’ll be a big hur­dle for most peo­ple to

[00:56:28] Cameron: get over.

[00:56:30] Tony: Yeah, we’ll see. Um, you know, there are still lim­i­ta­tions. I mean, the Crowd­Strike prob­lem last Fri­day, when­ev­er it was, or the Fri­day before, when every­thing got shut down. Um, there’s got to, I think there’ll be a big tran­si­tion peri­od which allows for human over­ride, which, um, in the con­trols, which means that there’ll be a longer peri­od before it’s ful­ly

[00:56:50] Tony: self dri­ving.

[00:56:53] Cameron: Imag­ine that if you had a Crowd­Strike thing with all of the cars in the

[00:56:57] Cameron: world just all of a sud­den

[00:56:58] Tony: I am imag­in­ing

[00:56:59] Cameron: screen of death. Ha

[00:57:01] Tony: of the, it’s one of the hur­dles that dri­ver­less cars has to over­come.

[00:57:05] Cameron: That was insane.

[00:57:08] Cameron: I mean, we’ve both got an IT back­ground. I mean, for that to hap­pen is just unfath­omable to me that some­thing like that could hap­pen and was­n’t even a ter­ror­ist attack

[00:57:21] Cameron: was just stu­pid­i­ty.

[00:57:23] Tony: to me, I mean, look at, look at the, uh, Boe­ing, what was it, Boe­ing 737 SD Max falling from the sky. It’s just a, you know, when cap­i­tal­is­m’s put under pres­sure, cut cor­ners get cut, so, it’s, it’s. Been around for as long as, or longer than I have, and it will con­tin­ue to be around, so it’s going to be an issue, I think, when we start to rely a lot more on tech­nol­o­gy that we could get spin­ning piz­za wheels and blue screens more than we’d like.

[00:57:52] Tony: I remem­ber one of the jobs I had at, uh, Coles Myer was busi­ness man­ag­er for a roll­out of NT point of sale devices, which was the first one in Aus­tralia, built on the NT Win­dows plat­form, and one of the things we had to be aware

[00:58:08] Tony: of was that it could crash,

[00:58:11] Cameron: Did any­one tell you that NT stood for not today

[00:58:15] Cameron: or next time? Win­dows

[00:58:17] Tony: Next time? Yeah.

[00:58:19] Tony: Yeah, Win­dows next time.

[00:58:21] Tony: Yeah, so, yeah, it was a live issue for us back then.

[00:58:26] Tony: And it will con­tin­ue to be, unfor­tu­nate­ly.

[00:58:29] Cameron: Well, that’s the les­son is don’t build stuff on Win­dows.

[00:58:31] Cameron: I mean, that’s the

[00:58:33] Tony: It is, yeah.

[00:58:34] Cameron: Pay­ing take­away from all of this.

[00:58:36] Cameron: We’ve got some ques­tions. Uh, Paul asks, if Tony had to sell a stock to raise some mon­ey for life expens­es, which of the fol­low­ing two QAV stocks would he sell? Fleet Part­ner. This stock was pur­chased two years ago and is appre­ci­at­ed by 60 per­cent in terms of a cap­i­tal gain.

[00:58:53] Cameron: The stock is still show­ing healthy eco­nom­ic results, has sig­nif­i­cant­ly reduced its share count by share buy­back, and is expect­ed to start a div­i­dend with­in the next 24 months. The share price keeps climb­ing slow­ly upwards. Or Clearview Wealth. This stock was pur­chased two years ago and the share price has stayed flat but pays a gross yield of 10%.

[00:59:14] Cameron: Man­age­ment have stat­ed they intend to increase the div­i­dend in the finan­cial year to come. The busi­ness has just gone through a trans­for­ma­tion, is tak­ing mar­ket share, is prof­itable and is show­ing improv­ing eco­nom­ics in the busi­ness. Com­men­ta­tors are pop­ping up say­ing it is due for a re rate. But they’ve been say­ing that for two years.

[00:59:31] Cameron: I guess the ques­tion is, would Tony sell the win­ner, Fleet Part­ner, and take a prof­it and hold on to Clearview and hope for the re rate or the oth­er way around? And then Paul said that just after we record­ed last week. And then he sent me a fol­low up say­ing, I think Tony’s answer might be, you should have sold FPR because it dropped 5 per­cent after you post­ed the ques­tion.

[00:59:54] Tony: Uh, no, Paul, I would sell Clearview, and I’m not that famil­iar with Clearview, I think I did a Paul talk a cou­ple of years ago on it, and the basic, my basic log­ic is that to sell fleet part­ners incurs cap­i­tal gains tax in the sce­nario you’ve out­lined, where­as sell­ing Clearview does­n’t, and so that’s why I would pick Clearview.

[01:00:17] Tony: Um, if you force them to make. a sale of one or the oth­er, and I would always pull the weed and sell the one that incurs less CGT.

[01:00:24] Cameron: That

[01:00:25] Cameron: makes sense, because

[01:00:27] Tony: think Fleet Part­ner is prob­a­bly one of the most suc­cess­ful stocks on our buy list. It’s, it’s been grind­ing ever upwards. I think, A, because it’s a good com­pa­ny, but B, it’s also under­tak­ing a share buy­back.

[01:00:38] Tony: Pro­gram which has sup­port­ed the price and I’m dis­ap­point­ed to hear that they’re expect­ed to start pay­ing a div­i­dend because I could, I can’t ques­tion why they would do that. I guess they have frank­ing cred­its on their bal­ance sheet they need to get rid of but um, but the buy­back pro­grams uh, has been work­ing for them so well I’m not sure if it’s a good thing that they start pay­ing a div­i­dend.

[01:00:57] Tony: But no, def­i­nite­ly avoid the CGT or pay as lit­tle as you can because it eats into prof­it and um, sell clear view. Not giv­ing per­son­al finan­cial advice but. If that was the, that’s the way, the rule I always apply when this kind of sit­u­a­tion occurs, and it has occurred for me many times, sell the stock with the low­est CGT.

[01:01:19] Cameron: you keep your cap­i­tal

[01:01:20] Cameron: invest­ed that way, right?

[01:01:21] Tony: Well, yeah, you do. You’re pulling your weed rather than lop­ping off your, um, your flower,

[01:01:26] Tony: yeah.

[01:01:29] Cameron: Don’t chop off your flour, Paul. Rule num­ber one. Nev­er chop your flour. Uh, oth­er ques­tion is from Rob. Would be great if you guys can talk us through what it was like to trade the QAV method through the COVID dip. How did the sys­tem behave? Did it lim­it loss­es? How did you man­age three PTL cells? Still wait to see what hap­pens the next day?

[01:01:53] Cameron: Ques­tion mark. Thanks, Rob. So Rob obvi­ous­ly was­n’t around dur­ing COVID. Well, not around with QAV dur­ing COVID. Um, I mean, I can tell you from my expe­ri­ence, it was, uh, shock­ing. ini­tial­ly, because, you know, our port­fo­lio had been run­ning for six months, four months or some­thing. And we start­ed to get hit ear­ly because we had com­pa­nies that were exposed to Chi­na.

[01:02:20] Cameron: And when it hit Chi­na in sort of Jan­u­ary, 2020, some of our stocks start­ed to take a hit. And then of course, by the time it hit the world in March, April and every­thing shut down, every­thing fell off the cliff. And I can remem­ber, and yeah, so, um, you know, to, if you don’t mind me, uh, butting in, you know, from my per­spec­tive to answer Rob’s ques­tion, yeah, we just fol­lowed the rules.

[01:02:44] Cameron: And, you know, I remem­ber we were talk­ing to you about it at the time, you were like, yep, we fol­low the rules. And lis­ten­ers at the time were ask­ing ques­tions about, should we make excep­tions? Because this is a, an extreme sit­u­a­tion. And you were like, nah, yeah, we just fol­low the rules. So we sold off, 40, 50 per­cent of the port­fo­lio in that first cou­ple of months.

[01:03:06] Tony: At least.

[01:03:07] Cameron: And,

[01:03:10] Tony: case, I’d sold all but one of my stocks.

[01:03:13] Cameron: right. And, uh, you know, you said we’re just going to wait it out. We’re just going to wait it out and the sys­tem will tell us when to buy back in. We’ll just apply the nor­mal rules. And I thought it could be a year of just sit­ting on our hands. We used to talk about beta

[01:03:31] Cameron: funds, just sit on

[01:03:33] Tony: Yeah.

[01:03:34] Cameron: Uh, And then, all of the, uh, mech­a­nisms were put into place by gov­ern­ments to boost the econ­o­my and every­thing roared back into life way soon­er than I expect­ed. And, I remem­ber being scep­ti­cal when the mar­ket start­ed pick­ing back up and I was like, oof. This seems crazy because, you know, we still, like, this is a year before we had a vac­cine.

[01:04:09] Cameron: You know, Mel­bourne was shut down for a year as, uh, peo­ple down there will obvi­ous­ly prob­a­bly remem­ber. Um, and, uh, you know, the U S was, you know, com­plete­ly screwed and peo­ple were, they were like shov­el­ing bod­ies into holes in New York city. And it was like a

[01:04:28] Cameron: com­plete, Clus­ter,

[01:04:31] Tony: Trump was tak­ing Clorox injec­tions. Chloro­quine. Yeah.

[01:04:37] Cameron: Um, but the sys­tem said to buy back in and, and so we did and we had an absolute boomer year.

[01:04:45] Cameron: We were up 40 per­cent I think by the mid­dle or the end of that year or ear­ly 2021, mid 2021. 2020, mid 2020 to mid 2021 was absolute­ly bonkers. We were doing four times The per­for­mance of the bench­mark at one point. And I remem­ber you say­ing, don’t get used to it. This isn’t going to last and be think­ing, ah, he’s just being hum­ble.

[01:05:11] Cameron: What does he, he’s just being hum­ble. This is, this is the great­est thing ever. And, uh, sur­pris­ing­ly it did­n’t last and, uh, in the mar­ket. crashed in 22 with, uh, you know, Ukraine and trade wars and, uh, sup­ply chain issues and inter­est rates going back up and all of that kind of stuff. And our port­fo­lio came back down to doing dou­ble mar­ket.

[01:05:40] Cameron: So, you know, from four times mar­ket to dou­ble

[01:05:43] Cameron: mar­ket is where we set­tled in,

[01:05:45] Tony: Yeah. But the, but that’s what the sys­tem was designed to do. That’s what it’s done in the past for me. It’s exact­ly what it’s meant to do. On the box says what it does or does what it says. Um, but, you know, putting some con­text around all this Cam, um, we had no idea what was going on. I remem­ber, I think you and I, you were in Syd­ney.

[01:06:04] Tony: There’s some meet­ings and we drove around Syd­ney and we’re going, how many, how many peo­ple is this going to kill? And some peo­ple were point­ing back to the Span­ish flu out­break after World War One

[01:06:16] Tony: say­ing, yeah, this could kill mil­lions in Aus­tralia.

[01:06:20] Cameron: I was actu­al­ly in

[01:06:20] Cameron: Syd­ney for the pre­miere of our film, Mar­ket­ing the Mes­si­ah. I did, I did a pre­miere in Mel­bourne, which was sold out. About four days lat­er, we had the pre­miere in Syd­ney and only half the peo­ple who bought tick­ets turned up. And I had a pre­miere sched­uled for Bris­bane. Two days lat­er and all of the cin­e­mas were shut down by then.

[01:06:43] Cameron: So in a week we, and then I had pre­mieres booked out in the US. I was sup­posed to be going to Austin and places like that to screen the film. And of course, every­thing got shut down that week. So I was in Syd­ney and you and I were doing some meet­ings and we were there for the pre­miere of the film and we were dri­ving around going, wow, like what’s going to hap­pen?

[01:07:02] Cameron: Yeah, it’s, this is,

[01:07:03] Tony: So was it,

[01:07:04] Tony: it was an act of God to shut down the mar­ket­ing, the

[01:07:07] Cameron: I’ve always tak­en respon­si­bil­i­ty for that. Yeah, It was

[01:07:11] Cameron: It was pay­back. It was

[01:07:12] Tony: was­n’t

[01:07:13] Tony: Wuhan. Was­n’t Wuhan.

[01:07:14] Tony: It’s act of God. Yeah,

[01:07:21] Cameron: I got to get that on a t shirt. I made COVID. Yeah, it’s my fault.

[01:07:26] Cameron: Any­way, please con­tin­ue.

[01:07:27] Tony: Yeah, but I mean, that was the, that was the whole con­text of what was going on. No one knew what was going to hap­pen. The mar­ket was sell­ing off quick­ly. We start­ed, it did­n’t take us long, maybe a month to liq­ui­date most of the port­fo­lio, at least half. And it did­n’t take much longer than a month for us to start buy­ing back in.

[01:07:45] Tony: And in between, we were get­ting ques­tions from lis­ten­ers going, you know, how long did the GFC last and how long were you out of the mar­ket for on the GFC and is this going to be the same? Turns out, it last­ed for about a month before we start­ed buy­ing back in. And it was a great time to buy back in. So yeah, so I think to me that was the mak­ing of QAV that proved the sys­tem worked because it was under duress, it was extreme, no one knew what was going on, human emo­tion was run­ning high, it was fraud, um, there were all sorts of debates about whether print­ing mon­ey was a good thing or a bad thing and whether this was the begin­ning of MMT for life and all this kind of stuff and uh yeah so you know no one knew what was going on eco­nom­i­cal­ly either as well as Epi­dem­i­cal­ly.

[01:08:36] Tony: And, uh, but we just kept apply­ing the sys­tem

[01:08:40] Tony: and it worked out real­ly well for

[01:08:41] Tony: us.

[01:08:42] Cameron: I’ve got the, our trans­ac­tion his­to­ry, um, up on my screen. So I can tell you that we bought some­thing on the 26th of Novem­ber, 2019. And then we did­n’t sell any­thing until the 10th of Feb­ru­ary. It was Hori­zon Oil and, but we replaced it with MFD. Then a week lat­er, we sold BPT and bought AQG. A cou­ple of days lat­er, we sold UNV and bought SFC.

[01:09:13] Cameron: And then it just start­ed. Um, we got a cou­ple of buys in. We, there’s anoth­er sell on the 24th, on the 25th, on the 28th, three, four on the 28th. Four sells. Bought a cou­ple of things on the 3rd of March, FMG and IFN. And then it was just ear­ly March, 12th of March, we sold CCP, SMR, BFG, R& D, MML, IFN. I feel like I’m just doing the alpha­bet now.

[01:09:41] Cameron: Um, two parcels of IFN, CUE, KSL. Then, so that was the 18th of March. So, between the like 12th of March and the 18th of March, We sold 1, 2, 3, 4, 5, 6, 7, 8, 9

[01:09:57] Cameron: stocks.

[01:09:58] Tony: In a 15 stock port­fo­lio from mem­o­ry too.

[01:10:02] Cameron: 15 to 20, I don’t know how many it was, but yeah, some­thing like that. So half, give or take. Then, so that’s the 18th of March was the last sale, which was KSL. Then it stopped, and then on the 3rd of April, we bought STO. On the 15th of April, we bought BFG, CRN, NHC, and KOV, 17th of April RRL, 21st of April VIM, 21st of April AGD, 23rd of April HAW, 5th of May EWC, and yeah, so between the begin­ning of April and the, uh, begin­ning of May, we bought 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 stocks.

[01:10:46] Cameron: Please sub­scribe. And then we had a few more sells actu­al­ly that day and it sort of, you know, it was kind of chop­py a bit there.

[01:10:53] Tony: Yeah.

[01:10:53] Cameron: from May, 28th of May, we did­n’t sell any­thing until Sep­tem­ber because it was going absolute­ly bonkers in that peri­od. And then it went back to the usu­al sell a cou­ple, buy a cou­ple kind of thing every week or cou­ple of weeks and that kind of thing.

[01:11:12] Cameron: Yeah, so I was, like in that one month peri­od between March and April, it went from holy shit we’re prob­a­bly going to be in cash for a year or five years, to we could­n’t spend mon­ey quick­ly enough.

[01:11:26] Tony: Yeah. I know. I mean, that’s like every sort of down­turn in the mar­ket. Um, it’s the only time when this time it’s dif­fer­ent applies, they usu­al­ly are all dif­fer­ent. Um, it’s dif­fer­ent to the GFC, peo­ple were going back to the GFC as their tem­plate for what to do dur­ing COVID, but it was all over in a month.

[01:11:44] Tony: From an invest­ing

[01:11:45] Tony: point of view,

[01:11:46] Cameron: And you know, and this is where I guess I learned this les­son in real terms. You always say stay ful­ly invest­ed if the sys­tem will let you. And it was gloomy, obvi­ous­ly, in April 2020, it was still gloomy out there, the, every­thing was shut down, um, and, you know, we did­n’t know how long we were going to be shut down for, you know, in Queens­land it was a cou­ple of months, I think the same in Syd­ney, Mel­bourne it was a year, more or less, but, um, We did­n’t know, I mean, we had no idea how long the world was going to be shut down for, but the sys­tem was telling us to buy stocks.

[01:12:24] Cameron: And I was like, real­ly? Okay. You know, if that’s what it tells us to do. And as I said, you know, we end­ed up doing like four times the bench­mark over the next year. So you had to be in it to win it. Emo­tion­al­ly, most peo­ple would­n’t have been buy­ing stocks at that time because it was, it was sort of chaos and doom and gloom out

[01:12:45] Cameron: there.

[01:12:47] Tony: and that’s the, that’s the, that’s the impor­tant point. It was, the sys­tem took the emo­tions out of it. Um, and we, and we did­n’t know if it was a dead cat bounce, whether it was, the mar­ket was full of gov­ern­ment sup­port and there­fore crash again and all that kind of thing. But we just said, we don’t care, we just,

[01:13:04] Tony: we like the num­bers and we’re going to start buy­ing again.

[01:13:07] Cameron: Well, don’t ques­tion the sys­tem, you know, was my ratio­nale. It was like, okay, sys­tem tells us to do it, do it, don’t try and be smarter than the sys­tem.

[01:13:15] Tony: Yep. Which is

[01:13:18] Cameron: Rob, that was the sto­ry. Yeah,

[01:13:21] Cameron: the sys­tem got us out and got us back in and did what it’s sup­posed to do, you

[01:13:30] Cameron: know.

[01:13:32] Tony: And you could argue that we’re only out for a month, why did­n’t we just hold on and ride it through? But if you look at the, look at the graph of the All Ords, um, dur­ing that peri­od, it did­n’t have that sort of 40 per­cent rebound. That we did from hav­ing cash to deploy at the right

[01:13:48] Tony: time.

[01:13:49] Cameron: Yeah, which is why we did four times the bench­mark, the SDW, right? Yeah.

[01:13:55] Cameron: All right. Thanks, Rob. That’s the ques­tions for this week. After hours, Tony, what do

[01:14:01] Cameron: you got?

[01:14:02] Tony: Yeah. Just, uh, find­ing my, here it is, find­ing my list. A lit­tle, uh, lit­tle arbi­trage sto­ry, um, in the US elec­tion. So after the, after the Joe Biden speech deba­cle, I looked at the mar­kets and Kamala Har­ris was 8 to be the next US pres­i­dent. So I put a very small amount of mon­ey on her, which I thought was a rea­son­able bet, giv­en I did­n’t think Biden was going to last as the can­di­date, or there was a chance he would­n’t last, uh, and now she’s been, uh, now she’s been, uh, or being nom­i­nat­ed.

[01:14:38] Tony: Her odds are into 2. 30 from eight bucks and Don­ald Trump has drift­ed out to 1. 70. So yes­ter­day I put some mon­ey on Don­ald Trump and I can’t lose now from an arbi­trage per­spec­tive. It does­n’t mat­ter who wins. I, uh, I bank a prof­it. So I thought that was, um, inter­est­ing, inter­est­ing and illus­tra­tive of how you can often use.

[01:14:58] Tony: Um, sit­u­a­tions that are com­ing to a head when some­thing drifts to, to back it and then

[01:15:04] Tony: back the oth­er side when it gets clos­er.

[01:15:06] Cameron: Of course, she does­n’t have the nom­i­na­tion yet for the Democ­rats. She has to go through the con­ven­tion, so she may not get it, but I don’t think she’s got any seri­ous

[01:15:15] Cameron: com­pe­ti­tion right now, right?

[01:15:17] Tony: No, you’re right. It’s my risk in the strat­e­gy is that she does­n’t get a nom­i­na­tion at the con­ven­tion and some­one else does. And then my bets on Har­ris, and then I’m rely­ing on Trump to win to, to wash my face on the bets and make some mon­ey. But, um. I might be able to arbi­trage that

[01:15:32] Tony: if he does­n’t get the, the nom­i­na­tion.

[01:15:35] Cameron: You’d be hop­ing Trump

[01:15:36] Cameron: wins. That’s an emo­tion­al­ly dicey

[01:15:38] Cameron: sit­u­a­tion to be in, isn’t it?

[01:15:39] Tony: Yeah. I had to, had to hold my nose when I took that oth­er side of the deal, but, uh,

[01:15:46] Tony: Yeah.

[01:15:46] Cameron: hop­ing Kar­ma does­n’t catch up with you on that. Um, so you,

[01:15:51] Tony: Mm-Hmm.

[01:15:51] Cameron: you backed it at eight, you backed Kamala at 8 and now it’s down to 2. 30. if it stays there and she wins, how

[01:16:01] Cameron: does that work? I still don’t under­stand

[01:16:02] Tony: I get paid out $8 times my ini­tial bet.

[01:16:07] Cameron: Right.

[01:16:08] Tony: Yeah. Um, and, uh, so, and I also have a bet on Trump. So if he wins, I get, uh, I basi­cal­ly make a 25% prof­it either way, regard­less of who wins. I get $80 on a small bet for Har­ris, and I get a dol­lar 70 on a larg­er bet

[01:16:24] Tony: for Trump.

[01:16:26] Cameron: So you get paid at 8. It means if you, like if you bought, if you, if you bet 10, you get

[01:16:38] Cameron: 80.

[01:16:39] Tony: cor­rect. Prof­it of 70. And then if I 35 odd dol­lars on Trump. Um, I’ve spent 45 and I get 80 less than 45 if Har­ris wins and I get, um, what­ev­er 35 times 1. 7 is,

[01:16:59] Tony: it’s about a 25 prof­it either way, if Trump wins.

[01:17:02] Cameron: a What did you put, like,

[01:17:03] Cameron: 10 mil down on it?

[01:17:05] Tony: Nah. 10 bucks

[01:17:10] Cameron: Well, if you’re so

[01:17:11] Tony: I was just play­ing around. I know

[01:17:13] Cameron: 10 mil on it?

[01:17:14] Tony: I should’ve. Well, the mar­ket would­n’t, mar­ket would­n’t sup­port that. But yeah,

[01:17:18] Cameron: No? Oh, okay.

[01:17:20] Cameron: And how are your hors­es doing this week?

[01:17:22] Tony: well, Quel­lo Dora­to, which is be pati­na’s. Half broth­er ran third for his first start last Fri­day, and it was a good run. So I’m look­ing for­ward to him going onwards and upwards after

[01:17:37] Tony: that.

[01:17:38] Cameron: my Ital­ian tells me that Quel­lo means that, but what’s Dora­to in

[01:17:43] Cameron: Ital­ian?

[01:17:45] Tony: Gold­en one. The Gold­en one.

[01:17:48] Cameron: The gold­en one.

[01:17:49] Cameron: Dora­to, real­ly?

[01:17:51] Tony: Hmm.

[01:17:53] Cameron: How do you get

[01:17:54] Cameron: the gold­en one out of that?

[01:17:57] Tony: I think is that gold. The Aura,

[01:18:02] Cameron: D’oro. Yeah, D’Oro. Yeah. Okay. Dora­to.

[01:18:13] Cameron: Hmm. Okay. Good.

[01:18:14] Tony: yep, and then Cast­er’s back in get­ting close for a run. She ran well in the tri­al last week on Fri­day as well, and will prob­a­bly run in two weeks time, two or three any­way, in Mel­bourne. So look­ing for­ward to her com­ing back. So yeah, get­ting excit­ing for the Spring Car­ni­val, which is com­ing up.

[01:18:34] Cameron: Oh, that’s right. That’s com­ing up. Yeah. And you did­n’t like the Min­istry of Ungentle­man­ly War­fare.

[01:18:42] Tony: No, I mean, you should watch it for a laugh, but, um, it, and it’s great cast, but, uh, prob­a­bly the clos­est thing it remind­ed me of was The Kings­man. So that sort of slash­er, slash­er for laughs type approach to the movie. So, um, yeah. Yeah, did­n’t real­ly appeal to me that much. And I thought it was actu­al­ly real­ly jar­ring at the end when they show you, I mean, it’s based on true life, true sto­ry of the prog­en­i­tors of the SAS and com­man­dos going in to do things that the British gov­ern­ment can’t allow.

[01:19:18] Tony: itself to be seen doing, like going into neu­tral ter­ri­to­ries for raids. And then that tells you the sto­ry of the four or five leads in it, and I’m think­ing, oh, if I was in the fam­i­ly of that per­son, I would not want to be por­trayed as this, you know, killing, killing Nazis for laughs char­ac­ter.

[01:19:37] Cameron: Yeah.

[01:19:38] Tony: yeah, that jarred for

[01:19:41] Cameron: I mean, in our Cold War show, Ray and I talked about Churchill’s orga­ni­za­tion that did this, and I think Ian Flem­ing is sup­pos­ed­ly part of it, and

[01:19:52] Cameron: yeah,

[01:19:53] Tony: and he’s a key char­ac­ter in the movie.

[01:19:55] Cameron: Oh right,

[01:19:56] Cameron: but you know, anoth­er Guy Ritchie kind of fail­ure, just not, does­n’t have the thing he used

[01:20:02] Cameron: to have. I’m not a

[01:20:04] Tony: Miss­ing a note. Yeah. Miss­ing a note. But yes, I mean, stel­lar cast. Carville’s in it. And, um, his name? Rich­son.

[01:20:14] Tony: Okay.

[01:20:15] Cameron: Richard­son?

[01:20:16] Tony: Rich­son. Yep.

[01:20:17] Cameron: yeah,

[01:20:18] Cameron: that guy from, um, that thing. Yeah, the Reach­er thing. I’m

[01:20:22] Cameron: not a big fan of that either. I watched a cou­ple of episodes. I thought it was good. My boys liked it. I thought it was

[01:20:27] Cameron: kind of just,

[01:20:27] Tony: I liked it.

[01:20:28] Cameron: pre­dictable.

[01:20:28] Tony: The first series in par­tic­u­lar, sec­ond series, was again a bit sort of blood­thirsty. Um, but he’s kind of, he’s kind of a new Schwarzeneg­ger in act­ing, or he

[01:20:38] Tony: will be.

[01:20:38] Cameron: Yeah, right. Cav­il­l’s one of those guys who’s very good look­ing, but, uh, I just, he’s nev­er impressed me as real­ly that inter­est­ing an actor. He’s just good look­ing. That’s all he does. He’s good look­ing, you know. I mean, I haven’t seen The Witch­er or any­thing like that, but what­ev­er I’ve seen in films, like, Super­man, it’s just bor­ing.

[01:20:57] Cameron: I mean, mate, it’s not his fault. It’s just, the Super­man movies real­ly sucked, but, uh, yeah.

[01:21:03] Tony: it was good in The Man From U. N. C. L. E. I think that’s prob­a­bly the best of all

[01:21:06] Tony: his movies, in my opin­ion. Um,

[01:21:09] Cameron: Is that anoth­er Guy Ritchie

[01:21:10] Cameron: one?

[01:21:11] Tony: oh, could have been.

[01:21:12] Cameron: off sider?

[01:21:14] Tony: That was Armie

[01:21:15] Tony: Ham­mer, I think, was in it too.

[01:21:17] Cameron: Oh yeah, it was direct­ed by Guy

[01:21:18] Cameron: Ritchie.

[01:21:19] Tony: Yeah, right. Yeah, I quite

[01:21:21] Cameron: He’s guy Ritchie’s new, uh,

[01:21:24] Cameron: what­ev­er the guy was. Who’s the

[01:21:26] Tony: Vin Jones.

[01:21:27] Tony: Oh,

[01:21:29] Cameron: the oth­er one. The main one from Lock, Stock and Two Smok­ing Bar­rels. He became a big star after that. The pro­fes­sion­al Olympic div­er.

[01:21:37] Tony: Jason

[01:21:38] Cameron: Yeah, Statham.

[01:21:40] Cameron: He’s his new

[01:21:40] Cameron: Statham. Hmm.

[01:21:42] Tony: Yeah, quite pos­si­bly. Um, any­way, and I’ve read anoth­er Len Dighton book called The Bil­lion Dol­lar Brain, which I’ve loved the Len Dighton books. It’s about the third I’ve read now in the Ipcris File series. Um, high­ly rec­om­mend them. They’re real­ly well writ­ten, real­ly well writ­ten.

[01:22:00] Tony: Um, just tense, terse prose. Uh, the lead char­ac­ter is a spy. Bye. Um, but fair­ly cyn­i­cal, um, and, you know, half the time he’s mak­ing sure he’s not cut off at the knees by the, his own gov­ern­ment and his own bureau­cra­cy, um, whilst hav­ing a lot of expe­ri­ence in, in, um, in spy craft. It’s actu­al­ly a real­ly good breed.

[01:22:28] Cameron: I don’t think I’ve ever read a Len Day­ton. Hmm. book you know I’ve seen it I’ve seen like

[01:22:33] Cameron: the Ipcris file and

[01:22:35] Tony: The movies are noth­ing like the books. They were real­ly bad adap­ta­tions in my opin­ion, even though I’m a fan of Michael Caine. Um, yeah

[01:22:44] Tony: but the books are great.

[01:22:45] Cameron: which Michael Caine are you a fan of? Are you a fan of the younger Michael Caine? You’re only sup­posed to blow the bloody doors off! Or the old­er Michael Caine. I say, you know, you’re only sup­posed to talk like this.

[01:23:00] Tony: Oh, I’m a fan of all of Michael Caine through­out his life. The Bruce

[01:23:05] Cameron: So we’re

[01:23:06] Tony: Alfred the But­ler Michael Caine, and uh,

[01:23:08] Cameron: Oh yeah,

[01:23:09] Tony: Ital­ian Job Michael Caine.

[01:23:11] Cameron: just want to see the

[01:23:11] Cameron: world burn. Where do you, uh, where do you rec­om­mend I should start

[01:23:16] Cameron: with Len Day­ton books?

[01:23:18] Tony: The Ipris File.

[01:23:20] Cameron: Oh,

[01:23:20] Cameron: okay.

[01:23:21] Tony: Yeah, so these are all series. I for­get now who the main char­ac­ter is. It does­n’t, you know, he gets named very often, but these are all part of a series. Bil­lion dol­lar brains is like the third or fourth book. Yeah,

[01:23:32] Cameron: right. Good. I’ll check those out. I’ve got a bunch of books I’m queued up to read. An Aus­tralian author, McGarn, Andrew McGarn.

[01:23:41] Cameron: You ever heard of him?

[01:23:43] Tony: I have. And I used to work with his cousin, I think.

[01:23:47] Cameron: Wow.

[01:23:48] Tony: I went to uni­ver­si­ty with his sis­ter.

[01:23:51] Cameron: Wow.

[01:23:52] Tony: love Andrew McGahn. Um, uh, what’s the one that he’s first one in, um, set in Bris­bane? Um,

[01:23:59] Tony: oh, I can’t think of it now.

[01:24:02] Tony: It’s a great,

[01:24:03] Cameron: with a,

[01:24:04] Tony: book. Great movie too.

[01:24:07] Tony: Um,

[01:24:09] Tony: I’ll just

[01:24:09] Tony: look it up.

[01:24:12] Cameron: so, um, friend of mine, uh, who’s a jour­nal­ist slash author, Praise, is that the one you think of?

[01:24:20] Tony: Yeah. Praise. Great book. Great, great movie too.

[01:24:25] Cameron: He was rec­om­mend­ing, uh, McGan­n’s stuff to me recent­ly. So I got, I got Last Drinks. Uh, I could­n’t get, I could­n’t find an ebook copy of Praise that eas­i­ly, but I, Last Drinks. And his last one, I think, um, The White Earth,

[01:24:40] Tony: Hmm.

[01:24:41] Cameron: awards for, but yeah. So they’re queued up, but I’ve been read­ing, uh, well, Rad­i­cal Abun­dance.

[01:24:51] Cameron: I’ve been read­ing, uh, still read­ing, uh, The Sin­gu­lar­i­ty is Near­er by Kurzweil, sort of on and off. Um, yeah. And, and then he men­tioned K. Eric Drexler’s most recent book, Rad­i­cal Abun­dance, which I had­n’t. Heard of, I read Drexler’s orig­i­nal book, uh, Engines of Cre­ation, that he wrote in the late 80s. I read it in the 90s.

[01:25:17] Cameron: It’s the orig­i­nal book on nan­otech­nol­o­gy. He’s sort of the father of nan­otech­nol­o­gy. And about 10 years ago, 2013, he came out with a book called Rad­i­cal Abun­dance, where he was sort of updat­ing where nan­otech­nol­o­gy is and where it was going to be and what it was going to do. Kurzweil was quot­ing that in his book.

[01:25:39] Cameron: And, um, You know, it’s, it’s a real­ly max­i­mal­ist view of where tech, nan­otech is going to take us still in the next cou­ple of decades in terms of not only, uh, um, man­u­fac­tur­ing, but med­ical tech­nol­o­gy. And, you know, in the futur­is­tic, I keep a track of, um, nan­otech news. It’s some­thing that I’m always keep­ing an eye on.

[01:26:01] Cameron: And we did a sto­ry a week or two ago about some, small robots that have been put into mice that kill can­cer in mice, nan­otech, you know, robots that can find the can­cer­ous cells and kill them and that sort of thing. So progress is being made, but there’s this great exam­ple that he used in the book about how, uh, the idea of how a car will be made in the future.

[01:26:28] Cameron: He was talk­ing about, uh, uh, think about a build­ing the size of a garage, nor­mal house garage. In the mid­dle of it, you’ve got sort of robots, robot arms that you would expect to see in a nor­mal auto­mo­bile fac­to­ry today for tak­ing rel­a­tive­ly large bits and pieces. pieces of things and assem­bling them. Yeah.

[01:26:48] Cameron: He said, but the back wall behind that is just floor to ceil­ing of box­es, the size of sort of microwaves, some big­ger ones on the bot­tom and then small­er ones on the top. And inside of those box­es are small­er ver­sions of those robot arms that are assem­bling the com­po­nents that go togeth­er to make up the thing.

[01:27:10] Cameron: But inside those box­es, there are small­er box­es with small­er robot arms. And it’s like a Matryosh­ka doll, inside all the box­es there are small, right down to the small­est box, which is basi­cal­ly just doing atom­ic or mol­e­c­u­lar lev­el manip­u­la­tion, spit­ting out tiny com­po­nents, elec­tron­ics most­ly, chips and that kind of stuff, which then get fed to the next box, where they get some oth­er things done, and that gets fed to the next box, and he said the whole car gets man­u­fac­tured in min­utes, from begin­ning to end, Because it’s so quick to Any­ways, talk­ing about the world where, um, food and, and mate­r­i­al goods and cloth­ing are all man­u­fac­tured local­ly from raw ele­ments using nan­otech­nol­o­gy and robots to assem­ble them.

[01:28:00] Cameron: They’re not going to get built in Chi­na and put on a ship and deliv­ered. They’ll just be built local­ly. local­ly by these machines. And of course, these machines will build copies of them­selves as well, so they can pro­lif­er­ate. But it’s one of the things, like Kurzweil, when he was men­tion­ing this, the point he was mak­ing was, he was talk­ing about like the com­put­ers that we had in the 40s.

[01:28:23] Cameron: The amount of MIPS that they could do and what they cost to build. And then, you know, the sort of com­put­ers that we have as in an iPhone today, and the MIPS that they do actu­al­ly, he was also com­par­ing it to, you know, one of the super com­put­ers at Google that they have and the MIPS that it can do. And just talk­ing about that pro­gres­sion of, of Moore’s law over the last 90 years.

[01:28:48] Cameron: But he was say­ing that, you know, we haven’t seen that same sort of expo­nen­tial. Uh, cost reduc­tion in oth­er avenues, like the cost of food and cloth­ing and what­ev­er has decreased dra­mat­i­cal­ly in the last cen­tu­ry for a whole bunch of rea­sons, but not to the same lev­el that

[01:29:10] Cameron: com­pu­ta­tion has. It’s like a 200 bil­lion fold price reduc­tion in MIPS in, in com­pu­ta­tion.

[01:29:18] Cameron: And he says the rea­son is, is that infor­ma­tion tech­nol­o­gy builds on itself. It’s, uh, um, you know, the, the, the next gen­er­a­tion of infor­ma­tion tech­nol­o­gy gets built by this gen­er­a­tion of infor­ma­tion tech­nol­o­gy and so on and so forth. So today’s chips help design and build the next chips, which help design and build the next chips, and it builds on top of itself that has­n’t been applied, you know, uni­form­ly across, uh, oth­er prod­ucts or ser­vices.

[01:29:49] Cameron: But he says, but they will be. As we start to have AI and nan­otech that enable us to apply those sorts of infor­ma­tion tech­nol­o­gy solu­tions to man­u­fac­tur­ing food, man­u­fac­tur­ing white goods, man­u­fac­tur­ing elec­tron­ics, man­u­fac­tur­ing cloth­ing, etc., that we will soon see that same sort of insane reduc­tion in the price.

[01:30:19] Cameron: that you devel­op these things for. So any­way, a very max­i­mal­ist view, but I’m also read­ing, as the coun­ter­point to that, Václav Schmil’s How the World Real­ly Works. I think we’ve talked about Václav Schmil before, Bill Gates’s favorite author. I read one of his books on ener­gy in the last cou­ple of years.

[01:30:40] Cameron: Um, he’s from, uh, he’s Czech Cana­di­an, Dis­tin­guished Pro­fes­sor Emer­i­tus in the Fac­ul­ty of Envi­ron­ment at the Uni­ver­si­ty of Man­i­to­ba. He’s into dis­ci­pli­nary research inter­ests in Com­pass Ener­gy, Envi­ron­men­tal, Food, Pop­u­la­tion, Eco­nom­ic, His­tor­i­cal, and Pub­lic Pol­i­cy Stud­ies. He’s writ­ten like, I don’t know, 40 books or some­thing like that.

[01:31:07] Cameron: But yeah, this is, I think, his most recent one. It came out in 2022. I saw an inter­view with Gates recent­ly and some­body asked him, if there’s one book every­one should read, what is it? He said, you need to read this one, How the World Real­ly Works. And basi­cal­ly, it’s kind of depress­ing. He’s talk­ing about fos­sil

[01:31:22] Cameron: fuels, um, for most of the book.

[01:31:25] Cameron: And he’s say­ing, yeah, there’s no way we’re get­ting rid of fos­sil fuels. And he said, like, peo­ple, he said, I hear all of this, you know, stuff about, we’re going to get net zero by 2050. He’s like, there’s no chance we’re going to even come close to that in 2050. And he’s talk­ing about the role of fos­sil fuels in elec­tric­i­ty, but it’s like, that’s just a small part.

[01:31:45] Cameron: One of the things that he points out, I’m just read­ing this chap­ter last night, was on ammo­nia.

[01:31:50] Tony: Mm hmm.

[01:31:51] Cameron: he was talk­ing about the amount of food that the world pro­duced in, after World War II and the amount of food the world pro­duces today. And the pop­u­la­tion is, what, tre­bled

[01:32:02] Tony: Mm hmm.

[01:32:03] Cameron: peri­od of time, but we’re pro­duc­ing like, I don’t remem­ber what the num­bers are, but it’s like eight­fold, ten­fold the amount of food that we were able to pro­duce back then.

[01:32:11] Cameron: And it’s large­ly due to ammo­nia, which is a byprod­uct of

[01:32:16] Cameron: fos­sil fuels. It’s like, so if we take away

[01:32:19] Tony: Twig­gy was try­ing to bring in green hydro­gen to, uh,

[01:32:23] Tony: make nitrates from.

[01:32:26] Cameron: Yeah, he

[01:32:26] Cameron: does talk about that, um, how there’s some ear­ly work being done on that, but it’s a long

[01:32:31] Cameron: way away from, you know,

[01:32:32] Tony: Yeah.

[01:32:32] Tony: or Twig­gy shut it down. Yeah.

[01:32:35] Cameron: Yeah.

[01:32:35] Cameron: Right. But, you know, the flip side to that, and he’s also sort of, uh, I haven’t got up to this chap­ter yet, but in his ear­ly chap­ter, he says he’s, he’s, uh, not, uh, He’s not a big believ­er that AI is gonna rev­o­lu­tion­ize every­thing the way that the Max­i­mal­ist think it will either.

[01:32:54] Cameron: I think he’s prob­a­bly the coun­ter­point to Kurtzweil on that. Um, so I’m look­ing for­ward to get­ting into that chap­ter and see­ing what his argu­ments are. But, but of course, you know, one of the coun­ter­points too, get­ting rid of fos­sil fuels is, you know, once we start throw­ing super intel­li­gent ais at it on mass, hope­ful­ly we’ll be able to make a lot more progress.

[01:33:14] Cameron: Now, Kurts, while makes the point that most sci­en­tif­ic. Advance­ments we’ve ever had are usu­al­ly the result of acci­dents. Oh, what’s this mold grow­ing on this piece of bread? Oh, peni­cillin. Yeah, it saves the lives of what­ev­er, 200 mil­lion peo­ple a year or some­thing. Um, but you know, once we can have AIs doing bil­lions or tril­lions of vir­tu­al­ized exper­i­ments, uh, to come up with the short list of things to actu­al­ly tri­al in a lab­o­ra­to­ry, we should be able to make a lot more rapid progress in a lot of things.

[01:33:50] Cameron: But any­way, so there are two, it’s two or three real­ly inter­est­ing books, two that are super pos­i­tive about how dif­fer­ent the world’s going to be 10 years from now, and Vaclav Schmel going, no,

[01:34:02] Cameron: it’s

[01:34:02] Tony: Hmm.

[01:34:03] Cameron: going to look good.

[01:34:03] Tony: I think I’ll read the Buck, Love,

[01:34:04] Tony: Schmill.

[01:34:05] Cameron: Yeah, I thought it’d be,

[01:34:07] Tony: me. Yeah.

[01:34:08] Cameron: I thought that’s more, uh, well you like Kurzweil though, right?

[01:34:10] Tony: I do love Kurzweil. Yeah, look, it’s kind of, it’s going to be a meld of both, prob­a­bly. I don’t, I don’t for a minute think that, um, I can’t see a world with­out fos­sil fuels, um, by 2050. I mean, unless, I could be wrong. AI might come up with some rad­i­cal new way of mak­ing plas­tic, for exam­ple,

[01:34:31] Tony: which comes out of the fos­sil fuel indus­try, um, and is so

[01:34:34] Cameron: oth­er things he

[01:34:35] Cameron: talks about is plas­tics. Yeah,

[01:34:37] Cameron: it’s one of his, one of his big things about fos­sil fuels is, you know, the role of plas­tics. Yeah,

[01:34:44] Tony: Yeah.

[01:34:45] Cameron: a quote here that I can steal, um, from Vaclav Schmil’s

[01:34:51] Tony: Yeah. And notwith­stand­ing, ura­ni­um might be the solu­tion, but it’s got to be a provider of base­load elec­tric­i­ty. Um, even if we go to full, um, bat­tery stor­age, it’s got to be a back­up to that. Comes back to my argu­ment again about Cloud­Strike, right? You can’t put your whole net­work, um, with­out a back­up. You can’t, you can’t bet the net­work on, on bat­ter­ies.

[01:35:17] Tony: It’s got to have a back­up some­where, which will be fos­sil

[01:35:20] Cameron: the real, We are a fos­sil fueled

[01:35:22] Cameron: civ­i­liza­tion whose tech­ni­cal and sci­en­tif­ic advances, qual­i­ty of life, and pros­per­i­ty rest on the com­bus­tion of huge quan­ti­ties of fos­sil car­bon, and we can­not sim­ply walk away from this crit­i­cal deter­mi­nant of our for­tunes in a few decades, nev­er mind years. He talks about the four pil­lars of mod­ern civ­i­liza­tion are ammo­nia, steel, con­crete, and plas­tics.

[01:35:47] Tony: Yeah, and there’s cer­tain­ly been some work done in try­ing to, um, take fos­sil fuels out of all of those. I’m not famil­iar with plas­tics, but cer­tain­ly con­crete and, um, steel and, and fos­sil fuels. So, I mean, I, I think there’ll be less fos­sil fuels by 2050, but

[01:36:02] Tony: they won’t be elim­i­nat­ed.

[01:36:04] Cameron: Yeah. And he, well, he’s say­ing there will be less, but he’s talk­ing like it’s going to go from 80 per­cent down to 70 per­cent or some­thing like that will be gen­er­at­ed by fos­sil

[01:36:14] Cameron: fuels.

[01:36:16] Tony: I would­n’t be

[01:36:16] Cameron: nations, the com­plete reliance

[01:36:19] Cameron: on these renew­ables would require what we are still miss­ing, either mass scale, long term, days to weeks elec­tric­i­ty stor­age that would back up inter­mit­tent elec­tric­i­ty gen­er­a­tion, or exten­sive grids of high volt­age lines to trans­mit elec­tric­i­ty across time zones and from sun­ny and windy regions to major urban and indus­tri­al regions.

[01:36:39] Cameron: con­cen­tra­tions. Could these new renew­ables pro­duce enough elec­tric­i­ty to replace not only today’s gen­er­a­tion fuelled by coal and nat­ur­al gas, but also all the ener­gy now sup­plied by liq­uid fuels to vehi­cles, ships and planes by way of a com­plete elec­tri­fi­ca­tion of trans­port? And could they real­ly do so as some plans now promise in a mat­ter of just two or three decades?

[01:37:01] Cameron: He’s talk­ing about planes. This is a big one

[01:37:02] Tony: Yeah.

[01:37:03] Cameron: And ships, you know, you run­ning those off elec­tric­i­ty, you know, how imprac­ti­cal that

[01:37:09] Cameron: seems to

[01:37:09] Tony: well, yeah. If you’re going to have a plane that flies from Perth to Lon­don, the bat­tery’s going to weigh it down for a start, so

[01:37:17] Tony: it’s, yeah. Yeah. Okay.

[01:37:20] Cameron: but you use wind pow­er

[01:37:21] Cameron: because it’s up in the sky. There’s a lot of

[01:37:22] Tony: Uh huh, he could, yeah,

[01:37:24] Cameron: fans.

[01:37:25] Tony: it a

[01:37:26] Tony: diri­gi­ble,

[01:37:29] Cameron: there you go. Uh, any­way, uh, yeah, so a cou­ple of real­ly great books. Um, one is quite cyn­i­cal, uh,

[01:37:38] Cameron: and then

[01:37:39] Tony: I don’t think it’s cyn­i­cal, Cam, I think it’s a

[01:37:41] Tony: real­is­tic analy­sis.

[01:37:43] Cameron: it’s what all cyn­ics say,

[01:37:45] Cameron: Tony.

[01:37:46] Tony: I don’t want to be so cyn­i­cal.

[01:37:48] Tony: Well,

[01:37:52] Cameron: Um, on the oth­er side of things. When Con­rad Zeus built the first work­ing pro­gram­ma­ble com­put­er, the Z2 in 1939, it could per­form around 0. 0000065 com­pu­ta­tions per sec­ond per 2023 dol­lar. In 1965, the PDP 8 man­aged around 1. 8 com­pu­ta­tions per sec­ond per dol­lar. When my book, The Age of Intel­li­gent Machines, was pub­lished in 1990, the MT486DX could achieve about 1700.

[01:38:24] Cameron: When The Age of Spir­i­tu­al Machines appeared nine years lat­er, Pen­tium III CPUs were up to 800, 000. Loved my Pen­tium 3. And when the Sin­gu­lar­i­ty is near debuted in 2005, some Pen­tium 4s were at 12 mil­lion. As this book goes to print in ear­ly 2024, Google Cloud TPU v5e chips are like­ly around 130 bil­lion oper­a­tions per sec­ond per dol­lar.

[01:38:53] Cameron: It’s

[01:38:53] Cameron: not bad.

[01:38:54] Tony: my lit­tle snap­shot on that was when I went to uni­ver­si­ty, back in the 80s, and peo­ple would use the anal­o­gy of walk­ing around with a Texas Instru­ments cal­cu­la­tor, which had more pro­cess­ing pow­er than the com­put­ers that sent man to the moon in the

[01:39:12] Cameron: Yeah,

[01:39:13] Tony: And you can put them in your pock­et. Oh,

[01:39:15] Cameron: Let alone an iPhone 15 Pro. Any­way, there you go. That’s all I got.

[01:39:22] Cameron: Noth­ing else.

[01:39:24] Tony: inter­est­ing. That’s good All right.

[01:39:28] Cameron: TK.

[01:39:29] Tony: Thank you, Cam.

[01:39:30] Cameron: Have a good week.

[01:39:31] Tony: Have a good week. Hap­py ASX.