QAV 742 — Flame Trees

QAV 742 Club

[00:00:00] TK: Mr. Bond, I’m not gonna hurt you, I’m going to kill you!

[00:00:13] CR: This is Tony doing his best Elon Musk as Bond vil­lain imper­son­ation. Wel­come to QAV 7 742,

[00:00:21] TK: That’s it. Musk is the new Goldfin­ger.

[00:00:24] CR: Yes.

[00:00:26] TK: Yeah.

[00:00:27] CR: I like gol­l­l­l­lld.

[00:00:31] TK: Wel­come to Ams­ter­dam,

[00:00:32] TK: Mr. Bond.

[00:00:35] CR: and I think we’ve talked about this before, but you know that if the Bond pro­duc­ers, the Broc­col­i’s, approached Musk and said, we want you to be the Bond vil­lain in the next Bond film, you know, he would do it. Yeah. Yeah.

[00:00:50] TK: dol­lars.

[00:00:51] CR: Tony’s doing visu­al jokes on a pod­cast here. How’s your week been, TK?

[00:00:59] TK: Good? Yep. Um, yeah, it’s been, yeah, been real­ly good. Had a cou­ple of hors­es run on the week­end, did­n’t do so well, but that’s okay. Uh, just try­ing to catch up on things because I’ve been away so often late­ly, so it’s been rea­son­ably qui­et.

[00:01:15] CR: With your sec­ond wife.

[00:01:17] TK: With my sec­ond wife, yes. How was your week? Now, I was read­ing in the Fin Review on the front page today that, uh, uh, what’s her name?

[00:01:25] TK: Sal­ly McManus has two black belts. One of them is in Kung Fu.

[00:01:30] CR: Who’s Sal­ly McManus?

[00:01:32] TK: ahead of the ACTU.

[00:01:35] CR: Oh,

[00:01:36] TK: There was an arti­cle about how, um, well, yeah, there was an arti­cle about how she had to beef up secu­ri­ty because of the CFMEU, um, bikey gang infil­tra­tion. Alleged­ly. Yeah. So I thought, wow, she’s got two black belts.

[00:01:54] CR: Yeah, well, she’s ahead of

[00:01:55] TK: is there a black belt, is there a black belt arbi­trage? Like if you get one in Kung Fu, do you then go and talk to the Taek­won­do peo­ple and get an in on your sec­ond?

[00:02:04] CR: I’ve already got one, just, you know, give me anoth­er one. That’s a, it’s a thing. There’s lots of peo­ple in our Kung Fu school that have got black belts and oth­er, you know, Taek­won­do or BJJ or some­thing like that. So, uh,

[00:02:19] TK: Hang on. You’re going to have to explain that

[00:02:21] TK: one.

[00:02:22] CR: Brazil­ian Jiu Jit­su. Lots of, lots of tack­ling. Uh,

[00:02:27] CR: grap­pling and tack­ling stuff and BJJ. Yeah. Um, let’s not, let’s not take the easy jokes. Um, yeah, it’s a lot of peo­ple get a black belt in one dis­ci­pline and then they want to go do anoth­er one and anoth­er one and add to their skillset. Cause they’re all

[00:02:42] CR: slight­ly dif­fer­ent, but, um, I think I’ll stick to this one for the time being. So our grad­ing is this Fri­day, our

[00:02:50] TK: hmm. Ah, good

[00:02:51] CR: brown belt grad­ing.

[00:02:52] CR: I’m get­ting my

[00:02:53] CR: back put back. Bye. Hit put back in again tomor­row. I got it back in last Wednes­day. I got to get it put back in tomor­row. Hope­ful­ly, just hop­ing I don’t, uh, injure myself. I did some­thing on Sat­ur­day. I was train­ing with one of the black belts on Sat­ur­day. We, one of the things I have to do in my grad­ing is a, what we call a bear hug defense.

[00:03:12] CR: So some­body comes up from behind you, grabs you around, you know, The arms, pins your arms in, pulls you real­ly hard and you’ve got to get out. And we’ve got a cou­ple of tech­niques for get­ting out. And there’s this black belt there. No, he’s not a black belt, he’s a brown belt, but he’s been there for like 10 years and he’s this short guy, built like a wom­bat, what we call wom­bat strength, you know, so he’s just all mus­cle.

[00:03:35] CR: And he grabbed me so hard that I think he bruised my, the lit­tle bone, the xiphoid. That’s just where your solar plexus is at the bot­tom of your ribcage. It’s bruised and it real­ly hurt over the week­end. I was like, Oh my God, I’m just get­ting over my, uh, back issue. And now I’ve got a bruised solar plexus.

[00:03:58] CR: So any­who, try­ing to take it easy

[00:04:01] TK: know, I’m learn­ing lots here about how to get away from some­one who grabs me from behind, and what a Zip­fi­an is. That’s very edu­ca­tion­al.

[00:04:10] CR: Yeah. Well, come along to Kung Fu and I’ll show you some stuff one of these days.

[00:04:14] TK: Well, I get all my moves from 80s action movies. If some­one grabs you from behind, you lean for­ward and then run up back­wards

[00:04:20] TK: against the wall and try and break out of it that way. Yeah.

[00:04:24] CR: Yeah. As long as there’s a wall in front of you, you’re

[00:04:26] CR: good.

[00:04:26] TK: Yeah.

[00:04:26] CR: If there’s no wall in front of you, you’re stuffed.

[00:04:30] TK: If you’re in an open field, yeah, right.

[00:04:32] CR: Yeah. Um, well it’s, uh, Mark, it’s been tick­ing along. What did you say last week? Bor­ing­ly hap­py,

[00:04:40] TK: Bor­ing­ly hap­py, yeah.

[00:04:42] CR: of last week’s title. It’s been more of

[00:04:43] TK: I like that

[00:04:44] CR: week. Um, I was going to talk to you about Pep­per Mon­ey Lim­it­ed, cause it was at the top of our buy list this week, and I’d nev­er real­ly heard of them before.

[00:04:54] CR: And I was look­ing at them last night and the Prop­Caf was like 0. 5. They’re a non bank lender. And then I saw in your notes, you’re going to do them as a pulled pork any­way.

[00:05:01] TK: Yeah.

[00:05:02] CR: you’re going to do a PP on PPM.

[00:05:05] CR: It’s the PPPP. P. M. today.

[00:05:09] TK: Cor­rect. Pri­or plan­ning pre­vents piss poor

[00:05:13] TK: per­for­mance. Used to be the say­ing.

[00:05:15] TK: Oh,

[00:05:19] CR: that they’re doing a share buy­back and then I was look­ing at the oth­er stocks in the top of the buy list. Boom Logis­tics doing a share buy­back, Per­en­ti doing a share buy­back. Lots of share buy­backs going on. Uh, and I know we’ve, we’ve talked about share buy­backs a bit, whether or not it’s a sign of, um, val­ue or that it’s a good stock.

[00:05:42] CR: Uh, remind me what you would derive from the fact that a lot of the com­pa­nies at the top of our buy list are in the process of doing share buy­backs.

[00:05:54] TK: I think I derive a lot. I’m seri­ous­ly think­ing about putting it into the check­list. Again, you’re read­ing my mind because I was going to talk about it today on the on the show on the what’s what works on Wall Street sec­tion. Uh, but I decid­ed to break it up to do div­i­dends this week and buy­backs next week.

[00:06:12] TK: But in a nut­shell, uh, O’Shaugh­nessy thinks buy­backs are good. And if you buy shares that are doing buy­backs, you out­per­form the mar­ket. So, um, I’ll cov­er it on next week’s show. And then I think once I can work out how to rate it, how to put it in the check­list and how to gath­er the

[00:06:30] TK: data, I’ll try and put it in the check­list, I think.

 Um, alright, well, the oth­er one that I saw, uh, men­tioned this morn­ing I was look­ing up was Eme­co,

[00:06:42] TK: Mm hmm.

[00:06:43] CR: uh, I think you did a Pulled Pork on back in, like, May. That was the blog post that broke the web­site this morn­ing was the one where you did the pulled pork, Eme­co. Um, I

[00:06:54] TK: Is that, was that because it was so pop­u­lar it brought

[00:06:57] TK: down the web­site?

[00:06:58] CR: yeah, that was it.

[00:06:59] TK: Yeah. Okay.

[00:07:00] CR: I looked, I was going back to look at the tran­script to see if you’d men­tioned this and I don’t think you did. By the way, it’s, uh, how’s it done since May? Ter­ri­ble. It, uh, it was trad­ing at, uh, 40, 43 cents in May, and then it went down to 14 cents.

[00:07:23] TK: Wow.

[00:07:23] CR: Sep­tem­ber, it’s back up to 17. Oh no, hold on, that’s Euro­pean Met­al Hold­ings, my bad.

[00:07:29] CR: What’s the share code for Ami­co? It’s not EMH appar­ent­ly.

[00:07:32] TK: I think it’s EHL,

[00:07:33] TK: isn’t it?

[00:07:33] CR: Oh, okay. Maybe I should look at the right. There you go. Oh, it’s done. Right. Oh, the oppo­site of pulled pork curse. Mid­dle of May, it was 77 cents. It dropped down to 70. Then it went up to 83, came back to 73. It’s now trad­ing about 80. So it’s done a lit­tle bit.

[00:07:52] CR: Done okay. But, um,

[00:07:53] TK: Okay. That’s great. Since May.

[00:07:56] CR: 77 to 80. It’s not that

[00:07:58] TK: Okay.

[00:07:59] CR: Good. But, um, I noticed a sto­ry in Yahoo Finance this morn­ing that pri­vate equi­ty firms own 39 per­cent and indi­vid­ual investors hold only 30%. This arti­cle, which is, you know, sim­ply Wall Street, so they’re try­ing to sell a

[00:08:18] CR: research report, but they say every investor in Ami­co Hold­ings should be aware of the most pow­er­ful share­hold­er groups. The group hold­ing the most num­ber of shares in the com­pa­ny, around 39 per­cent to be pre­cise, is pri­vate equi­ty firms. In oth­er words, the group stands to gain the most or lose the most from their invest­ment into the com­pa­ny.

[00:08:34] CR: Mean­while, indi­vid­ual investors make up 30 per­cent of the com­pa­ny’s share­hold­ers. They talk about insti­tu­tion­al investors and blah, blah, blah. We’ve talked a bit in the past about, um, you know, uh, index funds hav­ing to own, you Top 200 and that kind of stuff. And I was won­der­ing, like, when you see a sit­u­a­tion like this, pri­vate equi­ty firms are own­ing near­ly 40 per­cent of a stock like this.

[00:08:58] CR: I’m not, is it a, is it a good thing or a bad thing or a neu­tral thing in your view?

[00:09:03] TK: I think it’s a neu­tral thing. It’s just anoth­er big share­hold­er, as far as I can tell. It would­n’t sur­prise me if they launch some kind of cor­po­rate action. You know, they’ve got a large share­hold­ing, and I guess when the time’s right, they might launch a takeover, which is hap­pen­ing with one of the oth­er com­pa­nies we’re going to talk about, GTN.

[00:09:24] TK: Um I guess the only, the only direct issue for me is it affects ADT because there’s less of the float trad­ed because the cor­ner­stone share­hold­er isn’t going to take much out of it. Um, but no, it does­n’t, it’s not some­thing I fac­tor

[00:09:38] TK: into the check­list at all.

[00:09:41] CR: Right. And pri­vate equi­ty firms would tend to just buy and hold and try and build it. They would­n’t be trad­ing their equi­ty on the pub­lic mar­ket usu­al­ly,

[00:09:51] TK: Well, they might, but it’s a big, that’s a big chunk to trade. So they’ll face the prob­lem of, you know, swamp­ing the mar­ket and drop­ping it. I’ll have to sell the dis­count if they try and trade it all at

[00:10:00] TK: once. Because the ADT is so

[00:10:02] TK: small.

[00:10:03] CR: Right. But it’s, it’s sim­i­lar to Berk­shire Hath­away own­ing a big chunk of a com­pa­ny. Right. And they, they do trade stuff from time to time, but they have to be

[00:10:12] CR: care­ful about how they do that, I guess.

[00:10:14] TK: Yeah, but Berk­shire Hath­away, I mean, if you look at what Berk­shire Hath­away does when it trades, it’s usu­al­ly in very big com­pa­nies like Apple or Air­lines or Bank of Amer­i­ca or some­thing like that. So I dare say, I’ve nev­er heard War­ren talk about it, but I dare say he’s well aware of mar­ket depth when he’s doing his trades.

[00:10:31] CR: of course. Yeah. I’m just look­ing at the ADT. So 243, 000 is the ADT for EHL. So it’s tiny.

[00:10:39] TK: Yeah, uh, so what’s, what’s like­ly? I mean, who knows, but it could just be that the pri­vate equi­ty thought it was a good invest­ment. But to take a big share­hold­ing like that is, um, could be a pre­cur­sor to a takeover, could be a pre­cur­sor to an amal­ga­ma­tion if they’ve got stakes in sim­i­lar com­pa­nies, um, even world­wide.

[00:11:00] TK: Uh, it’s, it’s hard to say.

[00:11:02] CR: Right.

[00:11:04] TK: Looks like, and it’s called, the com­pa­ny’s called Black Dia­mond, so I don’t know much about them. They’re an over­seas, um, com­pa­ny. The US based pri­vate

[00:11:12] TK: equi­ty com­pa­ny.

[00:11:13] CR: that a KISS song? Black Dia­mond! Pret­ty sure. I’m

[00:11:19] TK: Okay.

[00:11:20] CR: look­ing it up now. Yeah. Yeah, Black Dia­mond, KISS song, uh,

[00:11:25] TK: maybe kiss on a bit of Ami­co.

[00:11:28] TK: Maybe they’re into their earth mov­ing.

[00:11:29] CR: it’s Gene Sim­mons Invest­ment Com­pa­ny. 1974 on the album KISS, which if I’m not mis­tak­en was their first album. The debut stu­dio album, Black Dia­mond. Yes, love a bit. Do you like Kiss, Tony?

[00:11:45] TK: I did when I was like about 13 or 14. Yeah. And I actu­al­ly heard a real­ly good pod­cast about them too. You’ve remind­ed me of, um, there’s a Cana­di­an pod­cast called Under the Influ­ence, which I’d rec­om­mend to any mar­keters out there. Very, very good. And he cov­ered Kiss is a Case Sto­ry about how they, um, almost went, went about their career in a cor­po­rate way.

[00:12:08] TK: So they made their, made their, uh, Or they start in the, in the rock and roll indus­try by going and play­ing dif­fer­ent col­leges and just kept going back to them around the US and, you know, would do any­thing for the peo­ple who came out to them, play at foot­ball match­es, all that kind of thing, until it just got a big­ger and big­ger audi­ence based on

[00:12:26] TK: loy­al­ty.

[00:12:27] TK: Yeah. Yeah. Oh,

[00:12:28] CR: I think that’s the way they all did it. I mean, it’s the way Van Halen did it back, like Back­yard, Van Halen got start­ed doing back­yard par­ties in Pasade­na. Like just, you know, drunk­en par­ties, and I’ve heard like record­ings of them play­ing high school dances and venues like that, you know, in the ear­ly days.

[00:12:46] CR: I think that was the way that you did it back in the day. Back in the sev­en­ties. Um, I, the thing that I’ve always admired about Kiss is just the brand­ing. I mean, the logo and the make­up, like, you know, you think you see, um, a lit­tle Char­lie Chap­lin mous­tache, you know, it’s Char­lie Chap­lin or Hitler. You see the bicorn hat, you know, it’s Napoleon.

[00:13:12] CR: You see a fat dude with a cig­ar out­line and it’s either Churchill or, um, uh, who is the, the. The Direc­tor in the 60s, Rear Win­dow, Hitch­cock, Hitch­cock. Like these peo­ple with real­ly defin­i­tive things, but you see, you know, just an out­line of Gene Sim­mons or Paul Stan­ley’s. Make­up, and you know who it is. It’s like, or Alice Coop­er’s the same, or Bowie’s Light­ning Bolt, that kind of stuff.

[00:13:40] CR: Like just bril­liant brand­ing that they had from the get go. I think Ace Frehley came up with the KISS logo orig­i­nal­ly, and then Paul Stan­ley, um, sort of tight­ened it up. I think they were both like graph­ic design­ers or some­thing in their spare time. Yeah. Right.

[00:13:57] TK: an inter­view with Gene Sim­mons who said that he had this real­ly wild meet­ing with the bank. He got dressed up in a suit and took his brief­case into a bank to ask for mon­ey so they can invest in KISS with the make­up and the light show and the pyrotech­nics. And he had to show them the pho­to­graph, pic­tures of them in make­up and every­thing.

[00:14:13] TK: So that was a real­ly, it was a

[00:14:14] TK: real­ly wild meet­ing.

[00:14:18] CR: Any­who, pri­vate equi­ty firms back to that. Black Dia­mond. We don’t know who Black Dia­mond are.

[00:14:23] TK: No, and nor do I

[00:14:25] TK: care, real­ly, to be hon­est.

[00:14:27] CR: You don’t care. Okay.

[00:14:28] TK: No.

[00:14:29] CR: US dum­my port­fo­lio update. Tony, uh, last week it was up 66%. It’s, uh, today it’s up 79%.

[00:14:40] TK: Uh, what are we doing talk­ing here? We should just go and put our hous­es into the U. S. dum­my port­fo­lio stocks.

[00:14:45] CR: It’s like, you know, I’d like to say that, uh, I’m a genius, but,

[00:14:51] TK: huh. Oh, look, you can say it.

[00:14:54] CR: using your sys­tem, but it,

[00:14:56] CR: uh, like the mar­ket over there is just, yeah. It’s insan­i­ty right now. I mean, this is against the S& P, which is up 35%, so we’re doing bet­ter than dou­ble the S& P in the US. But even that, up 35 per­cent the S& P in a year, I mean, that’s

[00:15:15] TK: I know, it’s incred­i­ble.

[00:15:17] CR: his­tor­i­cal­ly crazy, right?

[00:15:19] CR: I

[00:15:19] CR: mean, I’m sure it has done that dur­ing dif­fer­ent boom peri­ods in the past, maybe in the dot com boom and places like that, but still, the S& P up 35 per­cent since Sep­tem­ber last year. It’s a bit over a year now we’ve been run­ning it, just a lit­tle over a year, but that’s crazy. Any­way, there you go. Geoff, uh, con­tact­ed me last week, um, we were talk­ing a week or so ago about VUK,

[00:15:42] TK: Mm hmm.

[00:15:43] CR: well and tru­ly vucked now, and that, uh, if you missed the, what­ev­er it is, a takeover, you might be in sticky waters.

[00:15:54] CR: Jeff called me, he did miss it, he owned it, and had­n’t been pay­ing atten­tion. And called me up and said, uh, you know, what do you think I should do? And I said, dis­claimer, don’t take any finan­cial advice from me, but you just call NABTRADE and ask them, they’re his bro­ker, ask him what the sit­u­a­tion is. He emailed me and said he did do that and they said the funds will be returned to him tomor­row.

[00:16:19] CR: So.

[00:16:20] TK: Oh, good.

[00:16:21] CR: Yeah, hap­py, hap­py end­ing there for Jeff

[00:16:23] CR: being stuck in VUK. So just want­ed to men­tion that. Thank you to Jeff for report­ing back and any­one else if you have found your­self hold­ing VUK, reach out to your bro­ker or com­put­er share and hope­ful­ly it’ll get sort­ed out.

[00:16:40] TK: Yeah, because it was, it was under takeover for a long time, trad­ed like about one cent below the takeover price for most of this year, and final­ly got delist­ed last week. So, um, you should have real­ly sold out. And put the mon­ey some­where else ear­li­er on, but good on Jeff for get­ting his mon­ey

[00:16:55] TK: out quick­ly once de list­ed.

[00:16:57] CR: Yeah, I got a quote from Lefevre’s, uh, Rem­i­nis­cences of a Stock Bro­ker, uh, this is towards the end of the book, I thought it was a good one. The pub­lic always wants to be told. That is what makes tip giv­ing and tip tak­ing uni­ver­sal prac­tices. It is prop­er.

[00:17:30] CR: Today’s earn­ings do not jus­ti­fy bro­kers in advis­ing their cus­tomers to buy stocks unless there is some assur­ance that six or nine months from today, the busi­ness out­look will war­rant the belief that the same rate of earn­ings will be main­tained. If, on look­ing that far ahead, you can see rea­son­ably clear­ly the con­di­tions are devel­op­ing which will change the present actu­al pow­er, the argu­ment about stocks being cheap today will dis­ap­pear.

[00:17:56] CR: The trad­er must look far ahead. But the bro­ker is con­cerned with get­ting com­mis­sions now. Hence the inescapable fal­la­cy of the aver­age mar­ket let­ter. Bro­kers make their liv­ing out of com­mis­sions from the pub­lic, yet they will try to induce the pub­lic through their mar­ket let­ters or by word of mouth to buy the same stocks in which they have received sell­ing orders from insid­ers or manip­u­la­tors.

[00:18:23] TK: Oh, that’s very cyn­i­cal.

[00:18:25] CR: Isn’t it?

[00:18:26] TK: Yeah.

[00:18:28] CR: Yeah, do you think much has changed in a hun­dred years, Tony?

[00:18:31] TK: Uh, I think it’s a bit more reg­u­lat­ed these days, but there are prob­a­bly ways around it. For sure. You just have to look at bro­ker rec­om­men­da­tions, right? There’s some­thing like about 80 per­cent of bro­ker rec­om­men­da­tions are buy, buy or hold, and a very small num­ber are sell, because like, the bro­ker wants fur­ther work from the com­pa­ny, so why would he say, or she say,

[00:18:50] TK: sell the stock?

[00:18:51] TK: Mm. Mm hmm.

[00:18:53] CR: but I, and I think the key point though, I took away from this is just that reminder that bro­kers are in the busi­ness of get­ting you to trade. That’s how they make mon­ey at the end of the day is

[00:19:07] TK: Mm hmm.

[00:19:08] CR: trade. And so you got to

[00:19:11] CR: keep that in mind if you’re talk­ing to bro­kers and I guess, you know, peo­ple that put out newslet­ters, us aside, uh,

[00:19:22] TK: Because we’re gen­tle­men.

[00:19:27] CR: Well, we’re always telling peo­ple to do your own research and, you know, work it out for your­self. We’re teach­ing a sys­tem. We’re not telling you what to buy or what to sell.

[00:19:36] TK: we make noth­ing out of trades. Maybe

[00:19:38] TK: we should.

[00:19:41] CR: try­ing to teach peo­ple how to think about invest­ing, not telling them what to buy or to sell. Any­way, I think it nev­er hurts to remind our­selves that the, most of the finan­cial ser­vices indus­try is a con. It’s. Peo­ple on all sides who make mon­ey out of con­vinc­ing peo­ple to do things, uh, buy, sell, or read the news­pa­per, watch the TV show, cause they’re mak­ing mon­ey off of adver­tis­ing, or you know, sub­scrip­tions, or some­thing like that.

[00:20:19] CR: It’s a, it’s, it’s the old say­ing, if, if you don’t know, if you don’t know what prod­uct you’re being sold, then you’re the prod­uct, some­thing like that.

[00:20:32] TK: Yeah. That’s right. And, um, or sim­i­lar to the Buf­fett say­ing, if you’re play­ing pok­er and you’re sit­ting at the table and don’t know who the pat­sy is, you’re the pat­sy.

[00:20:40] CR: You’re the fan­cy. Yeah,

[00:20:44] TK: Yeah.

[00:20:45] CR: but I think it’s

[00:20:45] TK: Or, and the oth­er, and the oth­er Buf­fett say­ing, if you nev­er ask the bar­ber for a hair­cut, it’s like, if you, if you sud­den­ly inher­it a mil­lion dol­lars, don’t ring up your stock­bro­ker and

[00:20:55] TK: say, what should I do with it?

[00:20:59] CR: So you should­n’t ask your hair­dress­er for a hair­cut, real­ly?

[00:21:02] TK: if you

[00:21:03] TK: know, you should­n’t ask your bar­ber if you need a hair­cut.

[00:21:05] CR: Oh, if you need a hair­cut, yes. Right. Yeah. The answer’s always gonna be yes. My bar­ber does­n’t like me very much right now because I, I only see him like once a year. You used to see him every six weeks and now I was like once a year and he is like, you just looks at me, says I can make you look bet­ter, mate.

[00:21:26] CR: Yeah. He said If a guy, Richie, film my hair­dress­er, he goes, there’s shit messy and there’s good, messy Yeah. Your hair looks shit messy, so I’m gonna make it look good messy. It can still look messy, but we’ll make it look good messy. Just come back and see me, I’ll keep it look­ing good messy, yeah? Hey, Gov­er­nor. Alright, that’s all my notes. What do you got?

[00:21:46] TK: I’ve got a pulled pork to do and I’ve got a What Works on Wall Street

[00:21:52] TK: quote to go through as well. So which would you

[00:21:55] CR: AIT Oh, AITK. You lis­ten to

[00:21:58] TK: Yeah, so I’ll lis­ten to the show.

[00:22:02] CR: I was won­der­ing if you’d pick that up.

[00:22:04] TK: Now I know how Scar­lett Johans­son feels,

[00:22:07] CR: Yeah. Oh, you do, you?

[00:22:10] TK: yeah.

[00:22:11] CR: I thought you meant you’d

[00:22:12] CR: felt up Scar­lett Johans­son. Um, yeah, I’ve gotcha. I thought you’d be hap­py about that. Yeah. We don’t even know if this is real­ly you on the show now. It could just be an AI ver­sion of you.

[00:22:26] TK: Yeah, so let’s swap the roles. You can use AI to do all the pull books and quotes and answer

[00:22:32] TK: ques­tions and I’ll just come on and if there’s an edit­ing

[00:22:35] TK: mis­take and I need to go in and dub, yeah, I’ll just do

[00:22:38] TK: the over­dubs.

[00:22:39] CR: the fun­ny thing was when I, when I was, so for peo­ple who did­n’t pick it up in last week’s show, um, I think we were talk­ing about, um, I can’t remem­ber what it was. Oh, some­body who was dead. You said some­one was dead.

[00:22:51] TK: Yeah, so you were doing a Yoda imper­son­ation and I said I thought

[00:22:54] TK: Frank Oz was dead. It’s the oth­er guy who’s dead, Jim Hen­son.

[00:22:58] CR: Jim Hen­son. Right. So I looked up

[00:22:59] CR: Frank Oz, noticed he was­n’t dead. And I thought I could get my micro­phone out and I did­n’t want to scare peo­ple. Cause you know, I’m sure every­one cares about Frank Oz’s well­be­ing. And then I real­ized with my edit­ing tool, I can actu­al­ly put an AI voice in there. So I tried to put my voice in there, but it did your voice by mis­take.

[00:23:19] AITK: oh yeah.. sure it was a mis­take… wel­come to the matrix…

[00:23:22] CR: And I thought, well, that’s even bet­ter. I’ll just use Tony’s voice. I did­n’t even know it could do your voice. Um, I did­n’t know I’d done the, I must’ve done the train­ing cause you have to do the train­ing thing. I must’ve done the train­ing thing with you at some point. Or it just says no, cause I did it with Ray a long time ago, but, um, there’s like a script that you have to read and then it, um, right.

[00:23:47] TK: done that.

[00:23:48] CR: well, I don’t know how it end­ed up. Know­ing how to sim­u­late your voice, but it just did. So I thought that, I thought it was pret­ty good. Like it

[00:23:55] TK: It was

[00:23:56] CR: it was a lit­tle bit off, but it was pret­ty good.

[00:23:58] AITK: Watch it, puny human.

[00:24:00] AITK: I think I’m pret­ty close to the real thing… even bet­ter in some ways…

[00:24:04] TK: Yeah.

[00:24:05] CR: So how about that? Yeah, now wait till I get it to call up your bank and get them to trans­fer all of your funds into my bank account.

[00:24:13] TK: won­der how the banks will han­dle that.

[00:24:15] TK: If you ring up and say, uh, I nev­er

[00:24:17] TK: called you. Because

[00:24:20] CR: the ABC actu­al­ly this morn­ing, um, which I’m also going to talk about on the bull­shit fil­ter, about the fact that there is no leg­is­la­tion in Aus­tralia that for­bids false polit­i­cal adver­tis­ing, uh, false adver­tis­ing in pol­i­tics. Um,

[00:24:41] TK: that would just be the end of adver­tis­ing

[00:24:43] TK: in pol­i­tics.

[00:24:45] CR: out­side of South Aus­tralia, appar­ent­ly South Aus­trali­a’s had it for a long time, um, you can’t lie, in a polit­i­cal ad in South Aus­tralia, but fed­er­al­ly and in all the oth­er states, it’s carte blanche.

[00:24:57] CR: You can do what­ev­er you want. There’s no law against it. And sev­er­al gov­ern­ments have tried to bring it in, um, fed­er­al­ly, but it’s always been shot down. And the AEC wants to have it, but does­n’t want to run it. They want anoth­er body to be set up to actu­al­ly be the judi­cia­ry on it. But they’re talk­ing about What’s going to hap­pen when all of a sud­den we’re pro­duc­ing AI ads?

[00:25:24] CR: And there’s one guy who’s been doing this a

[00:25:26] TK: prob­a­bly already hap­pen­ing.

[00:25:27] CR: to prove the point. Yeah, you, he built a thing where he had Albo and, uh, Pota­to Head, um, talk­ing about some pol­i­cy issue and just had it all AI gen­er­at­ed and say­ing, you know. We’re, we’re enter­ing a world where there’s just going to be this absolute swamp of fake videos of politi­cians say­ing things that they’ve nev­er said, being pro­duced by oppo­si­tion par­ties and there’s no law stop­ping it in this coun­try.

[00:26:00] CR: We don’t have any leg­is­la­tion in place to say you can’t do that. So

[00:26:04] TK: Yeah. And we have a dis­tri­b­u­tion net­work which does­n’t care what

[00:26:07] TK: it pub­lish­es or is held to account for what

[00:26:09] TK: it pub­lish­es. So, yeah, it’s the wild west.

[00:26:13] CR: well, who are you talk­ing about, Mur­doch or Twit­ter? Face­book. All of the above. Yeah.

[00:26:18] TK: All of

[00:26:18] TK: the above, yeah.

[00:26:19] CR: Yeah. Yeah. So any­who, yes, AITK. That

[00:26:24] TK: Well, I’m gonna, I’m gonna, uh, yeah, I’m gonna use it as my out from now one, so when Pip­pa Mon­ey

[00:26:32] TK: goes down in

[00:26:33] TK: share price after I do this analy­sis of it, I’ll just blame AI and say it was­n’t me. I was­n’t

[00:26:38] TK: here.

[00:26:39] CR: Yeah. No. Prove, prove, prove, prove it was­n’t AI. Yeah.

[00:26:43] TK: Yeah. I just think it’s the first step of you doing a show with­out me and, uh, branch­ing off, so.

[00:26:50] CR: I’m absolute­ly, You know,

[00:26:51] CR: pre­pared for that. You

[00:26:53] TK: yeah, so I’ve got my AI to rec­og­nize your

[00:26:56] TK: voice and I’ll go off on my

[00:26:58] TK: own to the

[00:27:00] CR: you want to do a show. I thought you’ve been.

[00:27:04] CR: You’ve been, you know, just wait­ing for me to be able to replace you with AI so you can just go and play golf all day, right?

[00:27:11] TK: Yeah, unfor­tu­nate­ly AI’s got to get a lot smarter.

[00:27:15] CR: Give it six months.

[00:27:17] TK: I thought you’re gonna, I thought the title for last week’s show was going to be Mansplain­ing to AI rather than Hap­pi­ly

[00:27:23] TK: Bor­ing.

[00:27:26] CR: All right, well, I’ll keep that one up by sleeve.

[00:27:29] TK: any­way,

[00:27:29] CR: first? Wow’s or PPM?

[00:27:32] TK: PPM. Alright, so Pep­per Mon­ey. Pep­per. Full book on Pep­per Mon­ey. So it’s come on the buy list as a recent addi­tion. Entered as num­ber one with a bul­let, as they say. If any­one does­n’t know who Pep­per Mon­ey is, it’s a non bank lender. And they ask on their web­site, do you won­der exact­ly what a non bank lender is?

[00:27:59] TK: Put sim­ply, we’re a finance provider that isn’t a bank.

[00:28:03] TK: This means that since

[00:28:04] TK: we aren’t, sor­ry.

[00:28:06] CR: Or the mob? Isn’t that just the mob? Non bank lender? Okay, sor­ry. I’ve watched too much Sopra­nos. Keep going. Pod­cast­ers.

[00:28:16] TK: aren’t a deposit tak­ing insti­tu­tion, our loans aren’t fund­ed by cus­tomer deposits. Instead, our loans are fund­ed through debt cap­i­tal mar­kets, mar­ket­places for mon­ey invest­ed in lend­ing. Now, that’s a good sum­ma­ry, I thought, of what they do. Banks do this as well, but they also use deposits to back their mort­gages.

[00:28:36] TK: You know, these, this com­pa­ny, uh, does what’s called secu­ri­ti­za­tion, so they will take a whole bun­dle of mort­gages, put them togeth­er, go out and sell a bond, back to back with that. And then, um, make a mar­gin on the dif­fer­ence. And there’s plen­ty of investors, like you spoke about before, the PE com­pa­nies, uh, around the world who like to buy these kinds of bonds and, um, invest in them.

[00:29:00] TK: Um, they gen­er­al­ly pay a lit­tle bit bet­ter than oth­er cor­po­rate bonds. Um, these loans are gen­er­al­ly retailed to cus­tomers, uh, at a lit­tle bit high­er rate, uh, than, um, you can get from a main­stream bank. And the mar­ket for these mort­gages is often, uh, peo­ple who can’t get a mort­gage some­where else. Um, so they don’t hold a steady job, or they’re in a small busi­ness, or, uh, what­ev­er.

[00:29:26] TK: Yeah, pod­cast­ers, well they haven’t been in the job long enough to have a cred­it his­to­ry or what­ev­er. So yeah, um, His­to­ry of Pep­per began life in 2000. So it’s been around for near­ly 25 years. Some of the mile­stones, they bought GE Cap­i­tals, home lend­ing busi­ness in Aus­tralia and New Zealand in 2011, GE Cap­i­tals now called Lat­i­tude Finance in Aus­tralia.

[00:29:49] TK: Uh, 2012, they acquired an auto loan book for 150 mil­lion and they now offer auto loans. 2014, they launched an equip­ment and asset finance busi­ness. 2016, launched a per­son­al loan prod­uct. 2018, com­menced com­mer­cial real estate lend­ing. 2019 entered the New Zealand mort­gage mar­ket, and in 2021 they IPO’d on the ASX.

[00:30:13] TK: In 2023 they launched an SMSF mort­gage prod­uct. So basi­cal­ly they’ve been expand­ing by doing what the major banks do. Per­son­al loans, car loans, equip­ment financ­ing, etc. So it’s pret­ty much now a bank, but it does­n’t take deposits. And there’s some ben­e­fits to that too, because they’re not at a, uh, what’s called an ADI, Autho­rized Deposit Tak­ing, or ADT.

[00:30:39] TK: ADI, Autho­rized Deposit Tak­ing Insti­tu­tion. And so there’s dif­fer­ent reg­u­la­tions about them. So, uh, it gives them a slight advan­tage. Uh, 2024 results, um, for the half. It was a lit­tle bit dif­fi­cult to go through their results because, um, there’s a lot of, uh, pro for­mas in there. Um, a lot of nor­mal­ized. Prof­it type things, and I guess the rea­son for that is tim­ing issues on when these bonds are issued com­pared to when the mort­gages are writ­ten, so there’s a bit of smooth­ing I guess they do on there, but the prof­it was up 13 per­cent on the PCP, and they call that prof­it pre revi­sion.

[00:31:21] TK: How­ev­er, the MPAT was down 4 per­cent on PCP. So I’m going to look at the MPAT, which is the statu­to­ry num­ber. Uh, total, uh, assets under man­age­ment is now 19. 3 bil­lion, and that was up 2 per­cent on PCP. So they’ve got, they’ve got a fair­ly large, uh, lend­ing base out there. Total net inter­est mar­gin, which is their mar­gin between, um, Bor­row­ing and lend­ing is 1.

[00:31:47] TK: 92 per­cent and that’s up 11 basis points. So that’s good. Um, one thing that caught my eye was loan loss­es as a per­cent­age of lend­ing rose from 0. 28 per­cent to 0. 45%. So that’s small, but it’s some­thing to watch because it’s increas­ing. So that’s, uh, when we spoke about that, we, we’ve cov­ered this kind of sec­tor a lit­tle bit in the last month or so.

[00:32:08] TK: We had Judo

[00:32:09] CR: JDO. Yeah,

[00:32:12] TK: um, I think there’s been anoth­er one too, it escapes me, but, um, it’s obvi­ous­ly, uh, com­ing of age, I guess it’s get­ting onto our buy list, um, it’s a sec­tor that’s, uh, becom­ing attrac­tive, uh, but one of the things I do watch with banks is their pro­vi­sion­ing for bad and doubt­ful debts, and that is going up for this com­pa­ny, how­ev­er, total expens­es were down 2%, Um, on the pri­or peri­od, uh, Inter­im Ful­ly Franked Div­i­dend is 5 cents, which was up 1.

[00:32:38] TK: 5 cents per share, so that’s good too. So, kind of, um, across the board, not a bad result, not a great result, but, but not bad. Uh, I do, did note that Stock Doc­tor is fore­cast­ing earn­ings per share to drop this half again, so, um, It’s, it’s, it’s, it’s a grow­ing com­pa­ny, but the prof­it seems to be falling a lit­tle bit, so some­thing to watch.

[00:33:04] TK: Um, but dur­ing the year, they com­plet­ed the acqui­si­tion of a com­pa­ny called Strat­ton Finance, which they had already owned a large tranche of. Um, but it meant that they had cap­i­tal. Uh, freed up after they bought the rest of that, and they’re now under­tak­ing a share buy­back, as you said before. So they’re buy­ing back a large chunk, approx­i­mate­ly 10% of their shares on mar­ket this year.

[00:33:25] TK: So that’s, that’s quite a, uh, exten­sive, um, buy­back. The QAV num­bers, um, share price used in the analy­sis is a dol­lar 41, and that’s 10% below con­sen­sus tar­get, but it’s greater than IV one of. 1. 20 and intrin­sic val­ue 2 of it’s less than intrin­sic val­ue 93. So it’s, it’s kind of in the val­ue range. Uh, inter­est­ing­ly enough, both Stock Doc­tor and Stock­o­pe­dia can’t rate the finan­cial health and trend for this kind of com­pa­ny.

[00:33:55] TK: And we’ve seen that before with, with, with these kinds of, uh, non bank lenders, uh, because they have dif­fer­ent, um, dif­fer­ent finances to indus­tri­al com­pa­nies. But I did note that Stock­o­pe­dia Does have a, an F score of 6 out of 9, uh, for its health trends, so that’s pret­ty good. So, the, um, Piotrows­ki score was good for this com­pa­ny.

[00:34:18] TK: ADT is approx­i­mate­ly 300, 000, so it’s, uh, a rea­son­able size. Uh, PE is 6 times, which is the high­est in the last 3 years, so we give it a neg­a­tive 1 on the check­list for that. Yield is 7. 1 per­cent which is strong and scores for us being above the aver­age mort­gage rate. And, uh, some­thing I also like about this kind of com­pa­ny is the yield is also greater than the PE ratio.

[00:34:42] TK: So it scores for that. That’s a, um, long, long been used by myself as a good, um, short­cut indi­ca­tor of val­ue. But the big, big indi­ca­tor of val­ue is the Prop­Caf, which is only 0. 5 times, so you’re, it’s, you’re pay­ing six months cash flow per share for this com­pa­ny, which seems to be amaz­ing. Um, how­ev­er, I did note the oper­at­ing cash flow for this com­pa­ny is, is dif­fer­ent to what we’d nor­mal­ly, nor­mal­ly pay.

[00:35:11] TK: look at prop­er­ty and cash flow. And I think it’s being boost­ed at the moment by the tim­ing between issu­ing the bonds, um, to raise mon­ey and then loan­ing it out. So there’s, there’s, there’s always some­thing in the cash flow state­ment called, um, what’s it called? Sale of, sale of assets, I think it is. Um, I’ll get the term in a minute.

[00:35:31] TK: Uh, but, um, I think it’s a tim­ing issue. So the last cou­ple of halves have had strong Prop­Caf. Um, Pri­or years haven’t, uh, I sus­pect if this is a tim­ing issue that Prop­Caf may go down in the future. It does have a sort of reg­u­lar Prop­Caf, which is the mar­gin between the bonds and the, and the mort­gages. Um, uh, and that’s kind of smoothed over time, but there is a bit of a reg­u­lar­i­ty in the cash­flow.

[00:35:58] TK: So this, this could go away from the buy list next half, but for the moment, they’re, they’ve got a bit of cash to throw at the busi­ness. Um, com­pa­ny, uh, what else have I got? Um, equi­ty per share is 1. 95, so we are also buy­ing this com­pa­ny at less than book val­ue. So that’s anoth­er com­pelling val­ue screen for me, um, regard­less of what’s hap­pen­ing with Prop­Caf, it is, we are buy­ing it for less than book.

[00:36:26] TK: Stock­o­pe­dia give it a rank­ing of 91. which is rea­son­ably high up on their score, with a 98 rank­ing for val­ue. So they see this being a val­ue share as well. I did men­tion before, earn­ings per share is fore­cast to decline by 15%, so it gets a minus one on the PEG ratio for us because it’s going down. Um, does­n’t, the com­pa­ny does­n’t have an own­er founder.

[00:36:49] TK: It did up until the start of this year. The, uh, the chair, He was one of the founders, a chap by the name of Michael Col­hane, and it appears as if he’s retired for health rea­sons. So he found­ed Pep­per, act­ed as the CEO, and then took it to the ASX boards and became the chair. He stepped down ear­li­er this year.

[00:37:14] TK: It’s a good time for me to men­tion a bit like the com­pa­ny we spoke about before, Ami­co, Pep­per has an unusu­al own­er­ship struc­ture and 60 per­cent of it is owned by a com­pa­ny called the Pep­per Hold­co ANZ. It was just called Hold­co for short. I know Cole Hayne was also involved on the board of that com­pa­ny and it’s unclear if he stepped down from the Hold­co board, um, but I’ve scored it, uh, A zero for own­ing a founder, because even if he’s on the board of Hold­co, he’s not direct­ly involved day to day.

[00:37:47] TK: Hold­co is inter­est­ing. It appears to be a joint ven­ture between the founder and KKR and some oth­er investors. Um, um, And when I tried to dig down as to what it was, what was going on here, it looks like, uh, when they list­ed on the ASX, they had to do some kind of restruc­tur­ing of the com­pa­ny. I’m not sure why, either for tax rea­sons, because the, the ulti­mate own­er of the com­pa­ny of the share­hold­ing in the com­pa­ny is based in, uh, the Jer­sey islands.

[00:38:17] TK: Um, but it could also be that they had to do some­thing about some of the over­seas branch­es of Pep­per, um, some­thing to do with the rules on the ASX, which some­times occurs, um, the, the. Annu­al report says that the ulti­mate par­ent enti­ty of Pep­per Mon­ey Lim­it­ed is Pep­per Glob­al Top­Co Lim­it­ed, or Top­Co for short, an enti­ty incor­po­rat­ed in Jer­sey.

[00:38:39] TK: Top­Co owns 100 per­cent of the shares in Pep­per Glob­al Mid­Co, which in turn owns 100 per­cent of the shares in Pep­per Group ANZ Hold­Co. Hold­Co owns 60. 55 per­cent of the shares of Pep­per Mon­ey Lim­it­ed and its con­trolled enti­ties. I did a bit more googling and came up with some­thing that said, After com­plet­ing a cor­po­rate restruc­ture to demerge the Aus­tralian, New Zealand and Mani­la oper­a­tions from the rest of Pep­per Glob­al Group, Pep­per Mon­ey con­vert­ed to a pub­lic 1, 000 com­pa­ny and list­ed on the ASX on the 21st of May, uh, 25th of May 2021.

[00:39:13] TK: Pep­per Group, ANZ, Hol­co, Part of Pep­per Glob­al Group retained 60. 6 per­cent of the share cap­i­tal of Pep­per Mon­ey. So, not sure what to make of that. Again, it’s a, it’s a large, uh, cor­ner­stone hold­ing. Um, obvi­ous­ly put togeth­er by the founder. So, uh. May lead to noth­ing and it may be for tax rea­sons or it may be for list­ing rea­sons when it list­ed.

[00:39:39] TK: But I could­n’t find much else about that. KKR are involved, so they may want to do some­thing with that hold­ing com­pa­ny. But again, the only, the only, um, The only impact I can see on my think­ing about this par­tic­u­lar hold­ing is it low­ers the ADT because there’s less, you know, 60 per­cent of the stock is tied up with one com­pa­ny.

[00:40:02] TK: So it’s more liq­uid than it should be. But we take ADT into account, so it’s not going to both­er us too much. What else can I say? There’s a, it’s a new three point upturn, scores for that. It does­n’t have con­sis­tent­ly increas­ing equi­ty, so I can’t score it for that. Uh, all in all, qual­i­ty’s not great. It’s 9 out of 17, or 53%, um, pos­si­bly marked down because of the fact it’s a finan­cial and we can’t get, um, scores for finan­cial health or trend.

[00:40:33] TK: Um, but by the by, the QAV score is 1. 05, which is dra­mat­i­cal­ly high, which is dri­ven by the Prop­Caf. So, what are the risks? Um, Prop­Caf is dri­ven by the net inter­est. Oh, here we go. The term in the oper­at­ing cash flow state­ment is pro­ceeds from sale of loan port­fo­lios. And that’s the line item which has ramped up recent­ly, so it could reverse or go down in the future.

[00:40:59] TK: So, um, if you just relied on the under­ly­ing inter­est cash flow, that would reduce the Prop­Caf quite a lot. Um, but it’s a PE of 6, so it’s still not going to be, um, hor­ri­ble if that sort of one off, um, Cash injec­tion goes away. Um, there’s all the sort of nor­mal lend­ing risks asso­ci­at­ed with this kind of com­pa­ny.

[00:41:18] TK: Inter­est rate moves will affect it, as will any down­turns in the economies, which might lead to slow­er repay­ments or delin­quen­cies. And the oth­er one I called out, they’re in the asset finance busi­ness and there has been a cou­ple of cas­es of fraud in that indus­try in the last 12 months that I know of.

[00:41:38] TK: So, I’m assum­ing they’ve got the right checks and bal­ances, but it’s a poten­tial risk as well. Oppor­tu­ni­ties though, is that this lend­ing mar­ket is a grow­ing mar­ket. As the banks are more reg­u­lat­ed, the major banks are more reg­u­lat­ed, they can lend less to less peo­ple. And so the non con­form­ing mar­ket is a grow­ing mar­ket.

[00:42:00] TK: And Pep­per has plen­ty of head­room to grow share. It’s only got a small part of that mar­ket at the moment. So plen­ty of upside, plen­ty of cash flow, uh, I think it’s, you know, jus­ti­fi­able to look at it, um, at this stage, bear­ing in mind that the Prop­Caf might, might not be the best thing to base it on, but cer­tain­ly you’re buy­ing it for less than book, and a PE of 6, it’s

[00:42:23] TK: still, you know, quite cheap any­way.

[00:42:25] CR: Hmm. Yeah, that, the Prop­Caf sit­u­a­tion sort of spooked me when I looked at it last night because it does­n’t seem, I mean, I’m sure, we know that Prop­Caf plays a big chunk of our scor­ing and it’s kind of hard to assess with these sort of non bank lend­ing play­ers with the way the mon­ey works.

[00:42:48] TK: yeah, there’s a few sort of indus­tries where Prop­Caf gets dis­tort­ed. This one, um, I think we had anoth­er one on the buy list. I think it was called, uh, was it Data Advan­tage? The Bris­bane com­pa­ny that resold com­put­ing. So it’s Prop­Caf had a tim­ing issue about when it Bought from whole­salers and sold to retail­ers, that kind of thing.

[00:43:07] TK: So yeah,

[00:43:08] CR: Mm. Mm.

[00:43:09] TK: can get skewed from time to time.

[00:43:12] CR: But the oth­er fun­da­men­tals you, think are pret­ty good.

[00:43:14] TK: Yeah. Yeah, I do. Hmm.

[00:43:17] CR: Tony. Pep­per Pig. Pep­per Pig’s Bank. Okay. WWOWS.

[00:43:27] TK: Well, wow.

[00:43:28] CR: us?

[00:43:29] TK: What works on Wall Street. So I was going to do a com­par­i­son between O’Shaugh­nessy’s Research into div­i­dends and buy­backs, but it became quite lengthy, so I’m just going to break it up. So, I’ll cov­er div­i­dends this week and then I’ll cov­er buy­backs next week. Uh, so this is Chap­ter 11 from what works on Wall Street.

[00:43:49] TK: Uh, and he talks, the intro­duc­to­ry, I love his intro­duc­to­ry quotes, he’s found some great quotes. This one goes, Octo­ber. This is one of the pecu­liar­ly dan­ger­ous months to spec­u­late in stocks. The oth­ers are July, Jan­u­ary, Sep­tem­ber, April, Novem­ber, May, March, June, Decem­ber, August, and Feb­ru­ary. Which is a quote from Mark Twain. then O’Shaugh­nessy goes on to say, Investors who find all months pecu­liar­ly dan­ger­ous often seek redemp­tion in stocks with high div­i­dend yields. Since div­i­dends have his­tor­i­cal­ly account­ed for more than half a stock­’s total return, investors think it wise to con­cen­trate on stocks pay­ing high div­i­dends.

[00:44:31] TK: What’s more, it’s impos­si­ble to mon­key with a div­i­dend yield since the com­pa­ny must pay, defer, or can­cel it. So his research shows that A 10, 000 invest­ment in the decile of the high­est yield­ing stocks on Decem­ber 31, 1926 was worth 102 mil­lion at the end of 2009, an aver­age com­pound return of 11. 77%. And that’s more than invest­ing in the all stocks uni­verse, so the index, where the aver­age com­pound return was 10.

[00:45:05] TK: 46%. So, not much extra alpha over the index, um, what is it, uh, 1%, basi­cal­ly, and O’Shaugh­nessy agrees. He says, high div­i­dend yields alone do not pro­vide a con­stant panacea for invest­ments in broad­er index­es or a more spe­cif­ic strat­e­gy that includes oth­er fac­tors. In oth­er words, you’re not going to rely just on div­i­dend yield to make your invest­ment choice. O’Shaugh­nessy then goes on to look at stocks that cut their div­i­dends and found that bet­ter returns were found in com­pa­nies that were in the mid­dle of the pack for pay­out ratios, but this was­n’t an over­ly com­pelling out­per­for­mance of the index either. Uh, so I prob­a­bly put two things togeth­er there. He, he looked at com­pa­nies, uh, first of all, that had high pay­out ratios and those that had low pay­out ratios, and he found that the best returns came from those in the mid­dle, and then he looked, he did some research on stocks that cut their div­i­dends.

[00:46:04] TK: His research found that cut­ting a div­i­dend had a detri­men­tal effect. Uh, not much if the div­i­dend cut was less than 50%, but, to quote, In the 801 instances when a com­pa­ny cut the div­i­dend 50 to 100%, the stocks lost to their bench­marks by an aver­age of 3. 6 per­cent in the fol­low­ing year. The worst returns came from com­pa­nies that sus­pend­ed their div­i­dends alto­geth­er.

[00:46:27] TK: There were 3, 329 instances when this occurred and the stocks lost an aver­age 5. 1 per­cent to their bench­mark. On the oth­er hand, stocks that increased their div­i­dends, over the course of our study, there were 46, 000 instances where this occurred. Those stocks beat their bench­mark by an aver­age 4. 5 per­cent in the fol­low­ing year.

[00:46:49] TK: The biggest win­ners were stocks that had paid no div­i­dend but then start­ed to pay one. In the 6, 000 obser­va­tions in which a firm ini­ti­at­ed a div­i­dend, the stocks on aver­age went on to beat their bench­marks by 9. 2 per­cent in the fol­low­ing year. These data sug­gest that div­i­dend investors should sell any of their hold­ings where the div­i­dend is cut by more than 50%, and or if it is sus­pend­ed, and replace the stock with anoth­er high div­i­dend yield com­pa­ny.

[00:47:17] TK: So,

[00:47:18] CR: So,

[00:47:19] TK: inter­est­ing research. That’s led me to think that we, I might tweak the, the buy list to rather than, uh, Um, or as well as look at stocks that yield more than the mort­gage rate to also, uh, look at stocks which cut their div­i­dends or restart their div­i­dends or start their div­i­dends. And, um, cer­tain­ly that sec­ond one seems to be, uh, a high scor­ing

[00:47:40] TK: against the index, um, type invest­ment.

[00:47:43] TK: Uh, so again, I’ll have to work out a way of try­ing to

[00:47:46] TK: auto­mate that some­how, but, um, I’ll have a look at it.

[00:47:49] CR: so penal­ize them if they cut their div­i­dend and reward them if they restart a div­i­dend.

[00:47:55] TK: cor­rect. Yeah,

[00:47:57] CR: Good stuff.

[00:48:01] CR: Uh, well, should I move on? I’ve got a cou­ple of ques­tions. I’ve got a late ques­tion. Ques­tion for you too. So the first one came from Jor­dan.

[00:48:12] CR: He said, I did a down­load today and noticed GTN is cur­rent­ly under a takeover offer.

[00:48:17] CR: How­ev­er, the board has rec­om­mend­ed the offer be reject­ed by share­hold­ers as it does­n’t rep­re­sent val­ue for share­hold­ers. In cas­es like this where a stock is on the buy list, but under a takeover offer, would Tony just move on or would he look to try and use the takeover sit­u­a­tion to make short term

[00:48:38] TK: Noth­ing wrong with short term prof­it. That’s, that’s a good term. Uh, well, it’s regard­less of whether it’s short term or long term, it’s a case by case sit­u­a­tion, I think. So again, in what’s, what’s, what works on Wall Street, O’Shaugh­nessy said that, uh, he researched and found that, um, if a share price was Greater than or equal to 95 per­cent of the bid, it was time to move it on.

[00:49:04] TK: So that, uh, you know, is a pret­ty good rule of thumb. I think I had to look at GTN. It’s actu­al­ly. trad­ing above the bid price. So it’s kind of already blast­ed through that 95 per­cent rule. And that would indi­cate to me that the mar­ket expects the bid to be lift­ed. And a lit­tle bit of research would also, I think, back that up.

[00:49:27] TK: So this is a case where there was a cor­ner­stone, uh, I think it’s a pri­vate equi­ty firm, but cer­tain­ly Cor­ner­stone Com­pa­ny has an invest­ment already in GTN, so a com­pa­ny called Vibur­num, and they own 35. 6 per­cent of the shares in this com­pa­ny, and there are rules around, uh, share own­er­ship and large share own­er­ship, and so the, the rules is Gen­er­al­ly known as the CREEP pro­vi­sion, means that they can’t buy any more shares on mar­ket oth­er than 3 per­cent every 6 months.

[00:50:02] TK: So, it’ll take them a long time to take over the com­pa­ny buy­ing on mar­ket. Um, and they’ve launched a, so they’ve launched a takeover bid. So they’ve amassed the cor­ner­stone share­hold­ing, they want to buy the com­pa­ny, they then have to make what’s called an off mar­ket takeover offer, so they’re not buy­ing shares on mar­ket, they’re pre­vent­ed from buy­ing more than 3 per­cent every six months, so they’ve launched the bid and it goes direct­ly to the shares, share­hold­ers, who can then sell to buy Burn­ham.

[00:50:29] TK: The issue with this takeover offer is it’s only 0. 2 per­cent above the weight­ed aver­age price that, um, The stock was at before the takeover, so bug­ger all pre­mi­um for tak­ing over the com­pa­ny. The rule of thumb in takeovers is you need to pay at least 20 per­cent pre­mi­um to the stock price because you’re, um, you know, you won’t need to com­pen­sate the share­hold­ers who are sell­ing for future upside in the stock, um, and for the loss of con­trol of busi­ness.

[00:50:59] TK: So, um, I sus­pect this is the start of a bid­ding war, um, I don’t know, who knows if any­body else will emerge to com­pete for this com­pa­ny, and per­haps that’s why Vibur­num launched the takeover offer at about the share price pre­vail­ing. Because they’re want­i­ng to flush some­body out. But, um, uh, yeah, I, I, the board have come out and said that they reject the takeover offer.

[00:51:26] TK: I think by Burn­ham to get any accep­tances at the cur­rent price would be, um, wish­ful think­ing. So they’ll prob­a­bly have to increase by 10 or 20 per­cent at least their offer. So, um, and the share mar­ket thinks that because the price is trad­ing above the bid price. So, Jor­dan, um, not finan­cial advice, but what I would do is sit and wait.

[00:51:47] TK: Uh, I sus­pect there’ll be anoth­er, um, bid. Vibur­num pull out in their, in their takeover offer that if they decide to pull the offer, the share price will go down. And whilst I think that’s true, um, it’s only going to drop back to the price before the offer, which was a cou­ple of cents. So, I think your down­side risk is min­i­mal.

[00:52:08] TK: Um, the only, um, The big­ger down­side risk is if I, if I burn them, take their bet­ting ball and go home and sell their 35 per­cent stake on the open mar­ket, which would crash the share price. But, um, why would they want to hurt them­selves? By doing that, so, uh, yeah, I think it’s, it’s a wait­ing game, just to wait for a high­er bid, wait for the board to accept it, and then wait for the share price to trade with­in 5 per­cent of that bid,

[00:52:32] TK: and then sell.

[00:52:33] CR: So when you, when you say wait, like if you don’t own it, I’m just look­ing at the buy list, it’s got a QAV score of 0. 29, but the aver­age dai­ly trade’s only 21, 000. So it’s pret­ty small as it is. It’s prob­a­bly not going to suit most investors. Um, but when you say sit and wait, you, you, you, uh, would­n’t con­sid­er buy­ing it, assum­ing that you were buy­ing a small

[00:53:00] TK: Oh, no, no, um, I think it’s, it’s worth, if you want­ed to buy it, you can con­sid­er buy­ing it, but know­ing that it’s not going to be a long term hold, I, I think, you know, I think the way this will, who knows how it’ll play out, but the way I think it would nor­mal­ly play out is by Burn­ham have, have lobbed a bid at the share, cur­rent share price.

[00:53:17] TK: Uh, the board have reject­ed it. The share price is trad­ing a bit high­er than the bid was lobbed at. Uh, which would prob­a­bly cause Vibur­num to come in and offer some more. So, you know, you could make a short term gain. Um, Vibur­num’s going to have to offer 10 or 20 per­cent to be real­is­tic in attract­ing peo­ple to sell to them.

[00:53:38] TK: So, um, yeah, you could make 20 per­cent in a cou­ple of weeks or a cou­ple of months, which is attrac­tive, but there’s no guar­an­tee.

[00:53:46] CR: Okay. Thank you for that. Hope that helps, Jor­dan. Trent sent me an email with two ques­tions. He said we can hold on to three ques­tions. He said, you know, you can hold on to them, not urgent. One of them’s rel­a­tive­ly, the first one’s pret­ty straight­for­ward. I thought I’d, uh, throw it at you. Um, he said it’s, it’s been a while since we’ve had a good old fash­ioned three point trend­line chat.

[00:54:11] CR: And he thought it was time that we did that. There was some­body else, a new lis­ten­er from Den­mark emailed me this morn­ing, new sub­scriber from Den­mark, and he was ask­ing me ques­tions about three point trend­lines. And, um, he was look­ing at a blog post where I was explain­ing how to draw one from like April, 2020.

[00:54:30] CR: I said, it’s fun­ny, you know, we used to get ques­tions about them all the time until the Bread O Lat­er came out. Now we nev­er get ques­tions about 3PTLs any­more because no one has to draw them.

[00:54:40] TK: Yeah.

[00:54:40] CR: Oh, by the way, some­body asked on the show a week or two ago, if there was any update on the Excel ver­sion of the Bret­ta­la­tor, which Gary had been work­ing on, Gary has sent me an updat­ed ver­sion of it, and I did some Cross test­ing between it and the Google ver­sion last night and they were most­ly all the same.

[00:55:04] CR: There was one I think it was GRR that was a lit­tle bit dif­fer­ent but the rest seemed to be okay. I asked Gary if he was hap­py for me to share it more broad­ly and so peo­ple can do their own test­ing. He said he is so I’m going to throw a link to that up on the Face­book group today and peo­ple can down­load it and have a play with it and do some com­par­isons between it and the Google ver­sion and see if we can fig­ure out.

[00:55:25] CR: Uh, where it may dif­fer from it, because we’re look­ing, because it’s using stock his­to­ry pric­ing, which we know has gaps in it, um, from time to time, but so does Google Finance. And then I’ve got the Yahoo ver­sion as well that, uh, Matt built for me, which is pret­ty good as well. So we’ve got a cou­ple of dif­fer­ent ver­sions of the bread lat­er now.

[00:55:46] CR: Any­way, here’s, uh, Tren­t’s ques­tion. Macmil­lan Shake­speare, this one has been on the buy list for a while but it’s cur­rent­ly down 25 per­cent since it’s high ear­li­er this year. Prob­a­bly because you did a poor pork on it at some point, I think. Uh, he says, A,

[00:56:04] TK: And I own the share, so I’ll just

[00:56:06] CR: Oh, there you go.

[00:56:07] TK: Yeah.

[00:56:08] CR: It says you men­tioned you were a cur­rent hold­er.

[00:56:10] CR: So any reflec­tions on how this one has played out? Any of the alter­ations to the rules that have been dis­cussed over the year have trig­gered ear­li­er? I think at one point there was dis­cus­sion on using doji can­dles. Doji can­dles?

[00:56:26] TK: Haha.

[00:56:26] CR: a sell sig­nal, would this have helped?

[00:56:30] TK: Ooh, that’s a good ques­tion. No, it was­n’t, was­n’t Doji Can­dles, it was, uh, what was it now, the red and blue lines in, let me look it up, uh, Stock Doc­tor, um,

[00:56:41] TK: No, let me, I’m sor­ry, I’m hav­ing a men­tal block.

[00:56:47] CR: you still own it. It’s

[00:56:49] TK: I do own it, yeah. So it has­n’t made any of my sell sig­nals, even though it is down. Um, it went ex div­i­dend.

[00:56:55] TK: In the last lit­tle while, so, um, take that into account as well. It’s recov­er­ing since then. Uh, what was it called? Um,

[00:57:04] TK: oh

[00:57:06] CR: still a fair ways above its three point sell price too. It’s cur­rent­ly trad­ing at 16. 36 and the sell price is 12. 98. So,

[00:57:15] TK: yeah,

[00:57:15] CR: drop by anoth­er like 30%.

[00:57:18] TK: was a Renko chart I was look­ing at and, um, had been doing a port­fo­lio, which was like a dum­my port­fo­lio trade on Renko and it did­n’t real­ly add, uh, much to the, um, To the process side, I, um, yeah, did­n’t, did­n’t change the rules to add it.

[00:57:39] CR: That’s what I always think of Renko. It’s like, yes, mas­ter.

[00:57:42] TK: Oh, Ren­fro? What’s, no, what’s his name? Um,

[00:57:45] TK: yeah,

[00:57:47] CR: Who­ev­er.

[00:57:48] TK: yeah.

[00:57:48] CR: And that leads, that leads me to think of Mar­ty Feld­man in

[00:57:51] CR: Young Franken­stein, where he says, walk this way. And I just dis­cov­ered yes­ter­day that his line, walk this way from that film is where the Aero­smith.

[00:58:04] TK: Oh, real­ly?

[00:58:05] CR: title came from.

[00:58:06] CR: The band was in the stu­dio

[00:58:08] CR: record­ing that album. They went to see the film and they all thought that line was hilar­i­ous. And so Steven Tyler wrote a song called Walk This Way, which as we know, if you’ve ever lis­tened to the lyrics, has noth­ing to do with young Franken­stein and has more to do with hav­ing sex with young girls in the play­ground, but, uh, polit­i­cal­ly very incor­rect.

[00:58:29] CR: But 1974, you could sing songs about that kind of stuff and get away with it.

[00:58:35] TK: no, the past is a

[00:58:35] TK: dif­fer­ent coun­try, isn’t it?

[00:58:39] CR: Par­tic­u­lar­ly when you’re Steven Tyler. Any­who, um, yes. Back to MMS.

[00:58:44] TK: Yeah, so I just looked it up on Stock Doc­tor. It is a sell on using a Renko graph, but it’s way above the sell line, uh, with our three point trend line. Uh, it was still above my buy, price, so there’s no stop loss involved there. Um, and I’m, I’m a hap­py hold­er of the com­pa­ny. Uh, but the big drop hap­pened.

[00:59:03] TK: Um, if I recall, it lost the, lost the big chunk of busi­ness. It had the SA gov­ern­ment fleet busi­ness. If this is a fleet leas­ing com­pa­ny, it lost it to one of its com­peti­tors. And it’s sort of slow­ly been recov­er­ing from that, um, since then. And that’s what hap­pens with these com­pa­nies. There’s three or four major play­ers in this indus­try.

[00:59:24] TK: And, uh, You know, they’re always bid­ding for dif­fer­ent, uh, ten­der­ing for dif­fer­ent con­tracts, and they, they seem to revolve around between the three.

[00:59:32] CR: think you were talk­ing about own­ing all three.

[00:59:34] CR: of them at some point and just let­ting them arbi­trage.

[00:59:37] TK: Yeah, I did some analy­sis on that, and, um, I, I did­n’t do analy­sis on arbi­trage, I just said buy all three, and it, uh, it did okay, but it was­n’t, um,

[00:59:46] TK: was­n’t index bid­ding enough to say it was a good strat­e­gy.

[00:59:50] CR: Well, the share prices dropped from, looks like, I don’t know, 20, 22 rough­ly down to 16, uh, since late Feb­ru­ary. But, uh, Trent goes on to say, I note that MMS is still on the buy list, so not sell­ing may be a gift to allow the stock to con­tin­ue its longer term trend. If you are cur­rent­ly look­ing at buy­ing the stock, How would you draw your 3PTL that the Bret­ta­la­tor is cur­rent­ly using L1 back from June, 2020.

[01:00:23] CR: Uh, I actu­al­ly think it’s April, 2020 by the looks of it. I’ve got the Bret­ta­la­tor open in front of me, but close enough, which in six months will fall off cre­at­ing an even flat line. So it’s, it’s gonna be six months, even though it’s April, 2020. Uh, would you look at run­ning a tighter three PTL fudge fac­tor to 50%?

[01:00:47] CR: Sounds like some­thing Cap­tain Kirk would say. Mr. Scott! Budge fac­tor to 50%! Oh, he’s not the one with the Scot­tish accent. That’s Mr. Scott, Fudge Fac­tor 2, 50%. Aye, Cap’n! I’m not a magi­cian, Cap’n! I’m a fake Scot­tish engi­neer!

[01:01:09] CR: Uh,

[01:01:10] TK: love how, did­n’t he receive an hon­orary doc­tor­ate from MIT or some­thing

[01:01:15] TK: for boost­ing enrol­ment in engi­neer­ing

[01:01:18] TK: stud­ies? I

[01:01:19] CR: No, real­ly?

[01:01:20] TK: like that.

[01:01:20] CR: Not just for hav­ing a fake Scot­tish accent? He should have got

[01:01:23] TK: Well, maybe it was from Glas­gow Uni­ver­si­ty.

[01:01:26] CR: Scot­tish tourism board or some­thing. Which would then use June 2022 as an L1 point. I don’t know. Uh, Yeah, prob­a­bly would be. So June, 2022 will prob­a­bly, uh, no. So what’ll hap­pen when April falls off? Can we do, can we do for­ward dates?

[01:01:54] CR: In, uh, the bread lat­er,

[01:01:56] TK: I don’t think so. You can try it.

[01:01:59] CR: uh, so I’ll say the

[01:02:02] CR: 1 0 5 20 25. Yeah. I just broke the bread lat­er and

[01:02:09] TK: Yeah,

[01:02:09] TK: well done.

[01:02:11] TK: Broke Google.

[01:02:12] CR: Yeah,

[01:02:14] TK: But

[01:02:14] CR: I think, I think what I’ll,

[01:02:16] TK: Amer­i­can gov­ern­ment does­n’t have to run an antitrust case now. You’ve just bro­ken Google.

[01:02:20] CR: I was actu­al­ly using the Yahoo finance ver­sion. But

[01:02:23] TK: All right. Okay.

[01:02:24] CR: No, but when, when we get past April,

[01:02:26] CR: uh, Trent, the, the low point, the, the first L one will be actu­al­ly Sep­tem­ber, 2020, had a close of $8 21. The L two will be the same L two it is now, which is June, 2022 at $9 73. So it will make it a slight­ly low­er sell point.

[01:02:49] CR: Again, I think doing an imag­i­nary ruler, you’re going to end up with a sell price that’s down sort of at 10 or 11 ver­sus 13 where it is now. So, you know, the sell price is going to drop in six months. Um, And you know, that gives it more head­room to recov­er, I

[01:03:09] TK: Yeah, I agree.

[01:03:12] CR: I think

[01:03:12] TK: if you look at the,

[01:03:13] CR: safe.

[01:03:14] TK: if you look at the five year sort of chart, it’s real­ly going from bot­tom left to top right. Admit­ted­ly, it’s very squig­gly and volatile, but it is, I mean, I like a stock like this where you’ve got some room before the sell line, so you can ride out

[01:03:29] TK: the volatil­i­ty for long term gain.

[01:03:32] CR: And as Trent point­ed out, it is still on the buy list, a qual­i­ty score of 82 per­cent and a QAV score of 0. 19, 3 mil­lion aver­age dai­ly trades. That’s a large cap stock. That’s a pret­ty good qual­i­ty score, 82%. So accord­ing to our buy list, it’s pret­ty well run. It’s got good man­age­ment met­rics, um, and you know, my, my view with com­pa­nies like this is just stay out of the way and let the, let the man­age­ment do what they do, which is run the busi­ness and gen­er­ate cash.

[01:04:09] CR: I don’t know what the Prop­Caf is on this one, but you

[01:04:13] TK: and I think it’s also yield­ing pret­ty high too, from mem­o­ry. Yeah. The cur­rent yield is, well, Stock Doc­tor is say­ing 9. 7%, so that’s a huge yield. This is a, I think it’s an inter­est­ing indus­try because you’ve got fleet part­ners that does­n’t pay a div­i­dend and it’s, it’s doing share buy­backs. And that’s been, I think, a strong per­former for the dum­my port­fo­lio.

[01:04:34] TK: And you’ve got Macmil­lan, which is now yield­ing near­ly, what is it, 9 per­cent and not doing a buy­back. So it’s a bit of a race to see who’s the bet­ter

[01:04:42] TK: strat­e­gy, isn’t it, in the same

[01:04:43] CR: The prop, the prop caf on this is 4. 35. It’s a four year pay­back. It’s got one and a half points for star stock, prices less than con­sen­sus IV, new three point uptrend, record low PEs, growth over PE is greater. Oh no, it’s not greater than 1. 5. It does­n’t score for that. Yield is greater than bank debt, good health rat­ing, um, gets an own­er founder score too.

[01:05:12] CR: You know, that does­n’t come much bet­ter than this. Large cap stock. with an 82 per­cent rat­ing like that’s that’s that’s that’s mon­ey that’s Vince Vaughn would say that’s mon­ey baby that’s mon­ey your mon­ey baby your mon­ey

[01:05:29] TK: But do your own research. I own it, so I’m not going to pump it. Um, it’s, it’s, as point­ed out, it is down this year. But, uh, I think it’s a long term, it’s a good long

[01:05:38] TK: term invest­ment. Do

[01:05:42] CR: but good ques­tion Trent thank you I’m gonna save your oth­er ques­tions for uh Next week, cause I tend not to have any ques­tions these days. So ques­tions are mon­ey. They’re mon­ey, Trent, mon­ey.

[01:05:56] TK: you think, uh, Chat­G­PT is

[01:05:58] TK: putting us out of busi­ness? Peo­ple are ask­ing AI.

[01:06:02] CR: No, I think our like 500

[01:06:04] CR: episodes where we’ve answered every ques­tion ever is just meant that. You know, and the Bible and the course that I’ve done and the videos, you know, I think peo­ple have had all the ques­tions answered. I don’t know. All right. Well, uh, that’s, that’s it today. Tony just got into After Hours and I’ve got some cork­ers for you this week.

[01:06:29] TK: Derek, we’ll go ahead.

[01:06:31] CR: Night Tide. Have you ever seen a 1961 film called Night Tide?

[01:06:38] TK: I have not.

[01:06:40] CR: Anoth­er Plex dis­cov­ery for me this week. Um, it’s Den­nis Hop­per’s first star­ring role in a fea­ture film, first lead role, 86 per­cent on Rot­ten Toma­toes, direct, direct­ed by a guy called Cur­tis Har­ring­ton, who I’m not famil­iar with, but, um, this is a strange, strange film.

[01:07:09] CR: I think, um, uh, Robert, what’s his face, who we’ve been talk­ing about late­ly, um, B movie direc­tor.

[01:07:20] TK: Roger Cor­man.

[01:07:22] CR: Sor­ry, Roger Cor­man. He was involved, I think, at some lev­el. He might have pro­duced it or some­thing, but I think he bought the rights to it at some point. I haven’t real­ly been able to piece it togeth­er. But it’s basi­cal­ly about, uh, a very young Den­nis Hop­per, like 25 when he made this, uh, black and white film.

[01:07:41] CR: He’s, uh, Navy guys on shore leave, I think it’s sup­posed to be Venice Beach, where I know Den­nis Hop­per lived late in life. I remem­ber walk­ing down Venice Beach look­ing for his house before he passed away

[01:07:52] TK: was meant

[01:07:52] TK: to be like a fortress to house his mod­ern art col­lec­tion, was­n’t it?

[01:07:56] CR: Yeah. Yeah. Yeah. Um, and, uh,

[01:08:02] TK: Although, sor­ry to inter­rupt, but you did get to see inside that dur­ing the episode in Entourage, where, uh,

[01:08:07] TK: he bets on foot­ball with, with Vin­cent.

[01:08:10] CR: with Vin­ny. Oh, right. Um, I told you about the sto­ry where I, I saw him in a restau­rant in Syd­ney once. Have I told you

[01:08:17] TK: No, real­ly?

[01:08:19] CR: My Microsoft days, I’m sit­ting in this lit­tle restau­rant, like a lit­tle hole in the wall restau­rant in Syd­ney with a cou­ple of guys from Microsoft. And it’s like 10, 10, 15 tables in this place.

[01:08:29] CR: It’s quite small. It’s like 11 o’clock at night. We’re out. And I’m fac­ing the door and I see Den­nis Hop­per walk in with a cou­ple of guys. He was shoot­ing the Sina­tra film,

[01:08:40] TK: Oh, yeah. Yep. Yep.

[01:08:44] CR: No one in the fuck­ing restau­rant pays any atten­tion. I’m eye to eye with Frank from Blue Vel­vet and he sees me look at him and we lock eyes and I’m wait­ing for him to go, and so I look away and I say to the guys I’m sit­ting with.

[01:09:04] CR: Den­nis Hop­per just walked in and they’re like, who? And I’m like, Den­nis Hop­per. And they’re like, who? I’m like, Oh, for­get it. No, no, no, no. I thought he

[01:09:17] CR: would, thought he would stab me. He had that look in his, any­way, it was great. There’s exact­ly, that’s the, that’s the only inter­ac­tion I need with Den­nis Hop­per is to be ter­ri­fied.

[01:09:26] CR: Just look­ing at him,

[01:09:27] TK: Yeah,

[01:09:28] CR: Any­way.

[01:09:29] CR: And the, but the, the great, so he goes, he’s on shore leave, he meets this girl at a jazz club, and then there’s some­thing real­ly weird about her and some old woman is stalk­ing her. And it turns out she may or may not be a mer­maid. And peo­ple start warn­ing him that all the oth­er men that she’s dat­ed have drowned under mys­te­ri­ous cir­cum­stances, but he’s infat­u­at­ed with her.

[01:09:51] CR: But it’s real­ly weird. Um, quite well done, beau­ti­ful­ly shot. It’s been restored recent­ly. Um, beau­ti­ful black and white, but the great thing about it is just see­ing Hop­per at that age and he’s play­ing it straight. Like he’s, he’s a nor­mal guy, but he’s total­ly Den­nis Hop­per. Like he’s, like, I know I’ve seen him in, you know, the, the, Who was, um, kid died in his Porsche movies.

[01:10:23] TK: Yeah, yeah, so Giant was the You got before

[01:10:26] TK: Giant and after Giant with Den­nis Hoff­man. Yeah

[01:10:29] CR: Yeah. So, you know, I’ve seen him in oth­er stuff when he’s young, but he’s always had small roles in this. This is, he’s, he’s, he’s the lead, but like he’s total­ly hop­per. He’s got that look about him that, you know, you’re not quite, he’s got the frown and you’re not quite sure what’s going on. It’s beau­ti­ful.

[01:10:45] CR: Any­way, I loved it. And it’s trip­py film, but I loved it just to see a young, Has­n’t. become the car­i­ca­ture of evil men­ace that Den­nis Hop­per became in Water­world and, you know, Speed and things like that lat­er on in life.

[01:11:03] CR: Yo Al, he’s just crazy. But then I was read­ing up on him and like read­ing up on his career.

[01:11:08] CR: So after this film, he did­n’t work again for six or sev­en years. And we’ve read Peter Biskin, and by the way, I’m read­ing Peter Biskin’s TV book at the moment, so I want­ed to talk to you about that. I just read the chap­ter on Dead­wood, and um, David Milch, and all that kind of stuff.

[01:11:27] CR: But like, Hop­per had this rep­u­ta­tion already at this age for being dif­fi­cult to work with, because he was real­ly A bit like Val Kilmer got, uh, uh, in his hey­day too.

[01:11:42] CR: He was just all about the work and demand­ing 80 takes on stuff because he could get it bet­ter and all this kind of stuff and no one would work with him, which is of course why he had to go and make Easy Rid­er and, but then I read this, he, he says that he, he, he took respon­si­bil­i­ty for the cocaine prob­lem in Amer­i­ca, uh, because, uh, you know, he sort of glo­ri­fied the use of cocaine in Easy Rid­er and some of his films after that.

[01:12:09] CR: But any­way, this is just, yeah, check it out. It’s, it’s fan­tas­tic for a whole bunch of rea­sons.

[01:12:15] TK: will. have. you seen Mad Dog Mor­gan, the

[01:12:19] CR: I have. I

[01:12:20] TK: star­ring Den­nis Hop­per? And that would have been in the 70s, I think. But very, very sim­i­lar thing.

[01:12:26] TK: He’s a straight actor. He’s not, not out of con­trol. And,

[01:12:29] CR: He was out of con­trol on that. What are you talk­ing about? He was Mad Dog. That’s why they called him Mad Dog. He was Mad Dog Mor­gan, shot in Aus­tralia. He had to go to Aus­tralia to get jobs, you know, even at that point in his career, ear­ly 70s, B, C lev­el Aus­tralian films, yeah.

[01:12:47] TK: But, but his lev­el of act­ing in that was just such a lev­el above. All the Aus­tralian actors who are in it. Because you know, Jack Thomp­son, who I admire, has that plum­my British voice, which I can nev­er work

[01:13:00] TK: out if he’s act­ing or whether that’s his actu­al voice.

[01:13:03] CR: And well, these days, he does the South­ern Amer­i­can thing in all the Hol­ly­wood films. Um, what was the,

[01:13:11] CR: um, what was the great Aus­tralian Awake in Fright? Um, you’ve seen Wake and Fright, I’m sure.

[01:13:18] TK: Mm

[01:13:20] CR: Yeah, I mean, he was in that, um, that was a great per­for­mance by Jack Thomp­son, I thought. Um, Don­ald Pleasence, uh, as the scary, um, I saw Don­ald Pleasence in some­thing recent­ly, too, on Plex.

[01:13:36] CR: A very ear­ly Don­ald Pleas­ance film, um, that was, oh yeah, it was 1984. It was the 1954 ver­sion of 1984. I think I men­tioned that to you. Did I men­tion that to you? I was telling the boys. I did. Yeah. He was one of the leads in that. Um, I think it was, no, he was­n’t play­ing Win­ston. He was play­ing some­body else.

[01:14:00] CR: Any­way. Um, been read­ing Peter Biskin’s book, which is great. Um, although. Big mis­take to read it when I go to bed at mid­night because then I’m lying in bed at 2am and I can’t sleep because it’s too good.

[01:14:13] TK: Mm.

[01:14:14] CR: But I’ve been read­ing Rick Rubin’s book on cre­ativ­i­ty and watch­ing a long inter­view with him on Rick Beato’s YouTube chan­nel.

[01:14:23] CR: Dude, Rick Rubin is my new hero. Rick Rubin is so the man right now. Have ever seen an inter­view with Rick Rubin?

[01:14:33] TK: oh, he pops up a lot on my feeds. Def­i­nite­ly.

[01:14:35] CR: Yeah, dude,

[01:14:37] TK: talk­ing about the Bea­t­les and how they

[01:14:38] TK: record­ed and oth­er things. Yeah.

[01:14:42] CR: you got­ta watch the inter­view with him on Rick Beato, I know Rick­’s got his own pod­cast on YouTube too now, which I haven’t checked out, but I’m read­ing his book on cre­ativ­i­ty. And he’s a, he’s a, like he’s a full enlight­ened guru, man, like the open­ing of the book says The uni­verse is an illu­sion. There is no free will.

[01:15:00] CR: We’re just the uni­verse expand­ing and unfold­ing. And he’s been med­i­tat­ing he’s been doing med­i­ta­tion, I saw him, uh, uh, being inter­viewed by, um, uh, one of the well­ness guys that Chris is in, I can’t remem­ber his name, but he talks about his, his rou­tine is he gets up, he med­i­tates every morn­ing for an hour, and then he does stretch­ing and he goes for a long walk.

[01:15:21] CR: All of the inter­views I’ve seen with him, he’s wear­ing bare feet. He’s got the cra­zi­est hair and beard known to man. You know, he’s a total sort of, he’s nev­er drunk, nev­er, nev­er touched booze, nev­er done drugs. Um, and he’s, some­body asked him about that

[01:15:39] TK: Which you’d have to, you’d have to ques­tion that giv­en the way

[01:15:42] TK: it presents.

[01:15:43] CR: Yeah. Like you, he total­ly looks like he’s a, you know, a hip­pie and he’s like, yeah, no,

[01:15:49] TK: all the gui­tarists from ZZ Top.

[01:15:51] CR: Yeah. He goes, I’ve nev­er been inter­est­ed in it. It’s nev­er real­ly been my thing. Um, but he’s been like in a tran­scen­den­tal med­i­ta­tion since he was like 14. And, but any­way, just lis­ten­ing to him talk about.

[01:16:03] CR: The ear­ly days of hip hop and, you know, um, dis­cov­er­ing LL Cool J when he was 16 and the Beast­ies and Run DMC and, um, you know, get­ting Aero­smith in to do, con­vinc­ing Run DMC to do Walk This Way. They did­n’t want to do it. He said they were using the track. They’d been using the track. He said every­one used the track in the under­ground hip hop scene, but they would just do the

[01:16:31] TK: Yeah, right.

[01:16:32] CR: They just do the drum beat and maybe the begin­ning of the riff, but they’d cut out every­thing else and he want­ed them to do a cov­er and they did­n’t wan­na do a cov­er.

[01:16:41] CR: They just want­ed to do their own rap­ping. And he was No, no, no, no, no, no. And then he got Aero­smith in, and Aero­smith obvi­ous­ly, they, they, they were all in rehab. Their career was over in 1980. 586, when­ev­er it was. And he got the, you know, con­vinced Steven Tyler and, and, um, Joe Per­ry to come in and do it. And, you know, just like I was say­ing to Chris­sy, cause you know, she was­n’t around.

[01:17:01] CR: She’s born in 79. Like my friends and I, I was 15 in 85, right. And we were all into Van Halen and Black Sab­bath and, you know, Def Lep­pard and Alice Coop­er. We were met­al guys, Aussie, heavy met­al guys. And then like, it was Walk This Way, real­ly, that got us into hip hop. I mean, when that came out, we were like, holy shit, what is this?

[01:17:28] CR: That and the Beast­ie Boys opened up hip hop for my gen­er­a­tion

[01:17:34] TK: Oh, Grand­mas­ter

[01:17:35] TK: Flash and the Furi­ous Five, I thought was the, my

[01:17:38] CR: Well, yeah, I mean, that’s true. I love the mes­sage before that. I was into the mes­sage and Blondie doing. Rap­ture.

[01:17:47] CR: I nev­er, no, I was­n’t real­ly across the class. What did they do? What was, I

[01:17:51] TK: Mag­nif­i­cent Sev­en, which was their sort of long play­ing,

[01:17:55] TK: Crossover to hip hop.

[01:17:57] CR: don’t know, pre­dict­ing the bub­ble of 2024, NASDAQ bub­ble?

[01:18:04] TK: No.

[01:18:04] CR: And as Ruben points out, like Steven Tyler was rap­ping on the orig­i­nal Walk This Way. Back­stroke lover always hopped beneath the cov­ers when I talked to my dad­dy, he say, Said you ain’t seen noth­ing till you’re down on the muf­fin and your shoul­der, but you change your ways.

[01:18:17] CR: Like it was basi­cal­ly just scat sort of deliv­ery, you know, any­way. Ter­rif­ic, just like, just can­not get enough of watch­ing, uh, Rick Rubin right now, it’s such a

[01:18:28] TK: Right. Okay.

[01:18:29] CR: Such a cool dude and so influ­en­tial in, I guess, the music that I’ve lis­tened to. And then, yeah, I haven’t even heard about the John­ny Cash albums

[01:18:36] TK: Mm-Hmm.

[01:18:37] CR: and all the oth­er stuff that he’s pro­duced.

[01:18:39] CR: Like just the guy who’s got a, and he said the rea­son he got into doing the hip hop stuff in the ear­ly days was he was going to the clubs as a uni stu­dent and then lis­ten­ing to the music that was com­ing out on records and he said it was, it was­n’t the same. The, like, because it was music pro­duc­ers. Who were try­ing to apply what they nor­mal­ly did and they were stuff­ing it up.

[01:19:07] CR: And he was like, I, he just want­ed, he had no ambi­tion oth­er than he just want­ed it to sound right. He goes, well, uh, like, uh, let me help you get this on record, cause I want to hear it on record, sound the way it sounds in the clubs. That was his only ambi­tion. Like he had no, Oh, I’m going to make this, I’m going to make you famous, or we’re going to be, you know, we’re going to make a lot of mon­ey.

[01:19:30] CR: He just want­ed to hear the music on the record, the way it sound­ed in the club. It was like a gen­uine sort of, you know, Artis­tic. He did­n’t care about, he just want­ed to make the music sound good. You know? So any­way, it’s ter­rif­ic stuff.

[01:19:45] TK: I look into it. I’ve cer­tain­ly seen quite a few inter­views with him. Um, and there was, I think there was a series on the A, B, C. where they had Paul McCart­ney and him going through some of the Bea­t­les tracks and the pro­duc­tions behind

[01:19:58] TK: that,

[01:19:59] CR: Right.

[01:19:59] TK: was good. Yeah.

[01:20:02] CR: Any­who, that’s my rant­i­ng for the day.

[01:20:05] TK: Oh, it was a good rant. Well done.

[01:20:10] TK: So I’ve been, have you

[01:20:11] TK: watched Slow Hors­es? The BBC show?

[01:20:14] CR: the Gary Old­man one. No, look, it’s one of those things I hear great things about and I keep mean­ing to get into it and haven’t yet.

[01:20:22] TK: Yeah. I’ve been watch­ing it all week halfway through

[01:20:24] TK: the.

[01:20:24] TK: sec­ond sea­son. I think they’ve just dropped the third. Um, I don’t know if you’ll like it. I love it. I love it. But it’s like a Len Dighton book. on, you know, on the screen. So it’s got that sort of, uh, it’s, it’s British secret ser­vice, but it’s, you know, com­plete­ly dys­func­tion­al.

[01:20:42] TK: Old­man has a great part in it where he just basi­cal­ly burps and farts his way through, um, putting every­one off, but, you know, he’s, he’s seri­ous­ly the mas­ter­mind. Behind the scene, um, yeah, so it’s, it’s, I’m real­ly enjoy­ing it. Yeah, and it’s, the title remind­ed me of the hors­es

[01:21:01] TK: that ran on the week­end that I owned, so.

[01:21:05] CR: I’ve been a fan of Gary Old­man since Guilden­stern and Rosen­crantz are dead in the ear­ly eight­ies. You ever see that, him and Tim Roth?

[01:21:13] TK: I did, yeah.

[01:21:15] CR: Like, I’ve, he’s been one of those

[01:21:16] CR: guys whose career

[01:21:20] TK: first script.

[01:21:21] CR: yeah, right. And,

[01:21:24] CR: and he’s one of those guys who I loved in the eight­ies and the nineties. And then, You know, his career with his alco­holism and his rela­tion­ship dis­as­ters has seemed to have gone up and down.

[01:21:36] CR: He’s done some ter­ri­ble stuff, but he’s also done like some of the great­est

[01:21:42] TK: Mmm,

[01:21:43] CR: The Fifth Ele­ment and, um, Leon, The Pro­fes­sion­al, where he’s doing that whole turn,

[01:21:51] CR: like,

[01:21:52] TK: Yeah.

[01:21:53] CR: they’re both, um, who­ev­er that French. Sid and Nan­cy, yeah, which, I mean, I have issues with that because of the depic­tion of Sid and the stuff that, you know, it’s obvi­ous­ly not very, uh, his­tor­i­cal telling of Sid, but his per­for­mance is great.

[01:22:09] CR: Like, he’s just, he’s been one of those guys who’s had an amaz­ing career, um, And I, I, I’m look­ing for­ward to see­ing this just to see

[01:22:19] TK: Oh yeah, he’s great

[01:22:20] CR: good form, you know?

[01:22:21] TK: yeah, he’s fan­tas­tic in it. And Kris­ten Scott Thomas is in it too, who’s real­ly good.

[01:22:25] CR: Oh, I haven’t seen her for years.

[01:22:27] TK: yeah. I bumped into her. You, you saw, um, what’s his, Den­nis Hop­per. I saw Kris­ten Scott Thomas. Oh, is it Heathrow Air­port? Like around mid­night one night. Came in on a flight from some­where in Europe.

[01:22:41] TK: I was work­ing for Shell and we were the last two peo­ple wait­ing for our bags and you know you don’t sort of notice who’s stand­ing wait­ing for bags and I looked over and it was Kris­ten Scott Thomas and we locked eyes, big broad smile, she was

[01:22:53] TK: real­ly hap­py and I was like, oh yeah, hi,

[01:22:56] CR: you?

[01:22:56] TK: no, I don’t know, no, the lug­gage final­ly turned up I think

[01:23:01] CR: Oh, right.

[01:23:02] TK: and I remem­ber her lug­gage was bright red like and I thought, oh that’s how you do it, you, you know, you don’t want to lose your lug­gage, just buy a bright colour, it won’t get mixed up.

[01:23:11] TK: Yeah,

[01:23:12] CR: Good think­ing.

[01:23:14] TK: yeah. No, I stared at my feet. I was­n’t going to

[01:23:16] TK: engage with Chris­t­ian.

[01:23:20] CR: She scared you like Den­nis Hof­fa scared me.

[01:23:24] TK: I had this prob­lem with intrud­ing on celebri­ties. There’s a few that walk around our area. I bump into Lau­ra Tin­gle in the super­mar­ket every now and then. You just got­ta let them go on their own.

[01:23:35] CR: a celebri­ty.

[01:23:36] TK: think so. I’m a big fan. And, uh, what’s his name? Don Walk­er, the key­board play­er from Cold Chis­el. He lives near­by.

[01:23:45] TK: I’ve seen him around.

[01:23:47] CR: Right.

[01:23:48] TK: And he’s real­ly cool with it. Like, he sees, he sees if some­one’s clocked

[01:23:50] TK: him, he just looks the oth­er way, you know, keeps on walk­ing.

[01:23:54] CR: Did he write Flame Trees?

[01:23:56] TK: prob­a­bly.

[01:23:57] CR: I think he

[01:23:58] CR: did. Yeah. Uh, Steve Prest­wich and Don Walk­er. Yeah. I mean, a drum­mer can’t write a song, so it had to be Don Walk­er. I think Flame Trees is one of the great­est songs

[01:24:10] TK: It is, I agree.

[01:24:11] CR: Like I, I’ve,

[01:24:14] CR: I’ve sung it a lot. I used to do it. I used to play it a lot. And, and, um, I can’t even sing it in the car with­out get­ting a lit­tle bit choked up

[01:24:23] TK: Yeah.

[01:24:24] CR: every time I sing it.

[01:24:25] CR: Like, it’s just,

[01:24:28] TK: It real­ly evokes, evokes a sit­u­a­tion, does­n’t it?

[01:24:32] CR: It does. Yeah.

[01:24:34] TK: Hang­ing out with your

[01:24:35] TK: friends, going over old friends.

[01:24:39] CR: But also, just the, like, the lyrics and the, and the, the sto­ry that it’s

[01:24:44] CR: telling. Can’t stop that long for­got­ten feel­ing of her and, uh, and then the key change, won­der­ing if he’ll go or if he’ll stay. Do you remem­ber? Noth­ing stopped us in the field in our day. Like it’s, it’s, uh, no, it’s, it’s, it, it gives me, gives me goose­bumps every time I sing it, it’s mas­ter­ful.

[01:25:05] CR: Well,

[01:25:06] TK: I agree.

[01:25:07] CR: bril­liant song. Any­who.

[01:25:08] TK: Yeah. And the struc­ture of a tune, num­ber one is to find some friends to say you’re doing well.

[01:25:14] CR: Yeah. Clev­er­ly writ­ten.

[01:25:17] TK: It is.

[01:25:17] TK: Yeah.

[01:25:18] CR: Yeah. Yeah. Yeah.

[01:25:21] TK: Yeah. So I’m,

[01:25:22] CR: of, Chris­sy rolls her eyes every time it comes on.

[01:25:24] CR: Cause it’s one of

[01:25:25] TK: oh, real­ly?

[01:25:26] CR: well, A, she’s not an Aussie, so it

[01:25:28] CR: does­n’t have that sort of

[01:25:30] TK: Yeah.

[01:25:32] CR: cul­tur­al con­nec­tion. It’s like, you know, like a Spring­steen song for a lot of Amer­i­cans. It’s that, that sort of cul­tur­al thing.

[01:25:38] CR: And B, she just heard me sing it. At the top of my voice like a mil­lion times. And she’s like, that old bat out of hell comes on. She’s like, ah,

[01:25:49] TK: ha ha, ha ha,

[01:25:50] CR: pull the, car over and let me out. And I, I know what’s about to hap­pen to my ear balls and I don’t want to, I don’t want to be part of it

[01:25:59] TK: I can’t remem­ber who sung it, but I had one of the first Triple J Unearthed CDs, and the female singer cov­ered it. It was such a great cov­er. I used to play it a lot. Yeah, I was Sarah Blasko or some­one like that, but it was real­ly It added an extra dimen­sion being sung well by a female, I thought.

[01:26:17] CR: Right. All right. What else you got for me?

[01:26:23] TK: Uh, noth­ing much. I’m head­ing off to Vic­to­ria in the next few days. Um

[01:26:27] TK: Got a friend’s birth­day par­ty Sat­ur­day. Yeah, Poi­fect will run it. Yeah, I should. Poi­fect will run on Caulfield Cup Day, which is Sat­ur­day, so I’ll prob­a­bly go along and see her run. Um, yeah, I’ll prob­a­bly, I might stay down there for a while.

[01:26:45] TK: I’ll see, unless some­thing drags me back to Syd­ney.

[01:26:48] TK: I’ve got a few things over the next three

[01:26:49] TK: weeks.

[01:26:51] CR: Which was the name of the episode of the pod­cast where we talked about Ami­co Hold­ings, it was the Poi­fect episode.

[01:26:57] TK: Poi­fect.

[01:26:58] CR: Yeah,

[01:26:59] TK: Got­ta say it right. Poi­fect.

[01:27:01] CR: Poi­fect! Uh, alright, well, that’s the show for this week. Wish me luck on Fri­day night.

[01:27:11] TK: yeah.

[01:27:12] CR: I think the boys are going to come along and watch and make fun of me, no doubt, uh, as I get pum­melled.

[01:27:19] TK: a bear hold.

[01:27:21] TK: Know where the sore rib is.

[01:27:23] CR: I’m going to have to do prob­a­bly half an hour of spar­ring, black belts in a line com­ing at me, one at a time, minute at a time. One comes on, I do them for a minute, then they go off and anoth­er one comes on, then they go off and anoth­er one comes on, and half an hour of just fend­ing off black belts try­ing to knock me out.

[01:27:47] TK: And the last two are Tay­lor and Hunter. I get the

[01:27:50] TK: last shot.

[01:27:52] CR: Oh, yeah. Uh, no, it’d

[01:27:54] TK: Well, good luck.

[01:27:56] CR: Thank

[01:27:56] TK: luck.

[01:27:58] CR: Yeah.

[01:27:59] TK: And hap­py belat­ed birth­day.

[01:28:00] TK: I’m sor­ry I did­n’t call you on the day. I missed it.

[01:28:03] CR: It’s quite okay. But you know, I did a lit­tle Face­book post and it’s a thing. It’s a new thing for me. You know, I’ve tried to for­get and ignore my birth­days for years, but this year was dif­fer­ent because I kind of feel like I turned 54, but I’m at peak con­di­tion, which is a weird thing for me, you know, like feel­ing I’m at the low­est weight I’ve been at for 20 odd years.

[01:28:33] CR: My fit­ness is Prob­a­bly bet­ter than it’s ever been since maybe my ear­ly 20s because of Kung Fu. I mean, like a year or so ago, I could­n’t do a sin­gle sit up. Now I can do sit ups and push ups all night long. Like, you know, I’ll do two or three hours of Kung Fu in a What are you laugh­ing at?

[01:28:54] TK: That’s not what the night’s for, Cam. Sit up some push ups.

[01:28:59] TK: But go ahead.

[01:29:01] CR: Now, like my Sifu always says, because he’s 58 and he’s an absolute machine and, but he’s been doing Kung Fu for 35 years, you know, but when­ev­er I used to turn up and he’d say, how are you doing? And I’m feel­ing old, he would always say, age is a mind­set, you know. And I’m start­ing to come to that con­clu­sion, is right.

[01:29:19] CR: Like I’m. Feel­ing fit­ter and stronger and more sort of, um, I don’t know, under con­trol in con­trol of my health than, um, I, I felt for, for decades. And it’s kind of good, so now I was sit­ting there telling the boys, like, now my goal is by each birth­day to Step it up a notch. So to be fit­ter and stronger by the time I hit 55, and I’ll have to be, if I’m going for a black belt before I’m 60, I have to get fit­ter and hard­er every year in order to get to that lev­el.

[01:30:00] CR: So it’s a, it’s a com­plete­ly dif­fer­ent way to approach get­ting old­er, you know, it’s to not go qui­et­ly into the night, but to go, no, no, I’m get­ting hard­er and stronger and. Faster, like the 6 mil­lion man. We can make him bet­ter,

[01:30:20] TK: I’d rather have the six mil­lion dol­lars. What’s that book you wrote, The Three Illu­sions? This might be the fourth one.

[01:30:26] TK: You wait until you’re 60, pal.

[01:30:29] CR: Hey, by the time I turn 60, which is six years from now, I’ll have a robot body that Elon will have built for me and a Neu­ralink chip in my head.

[01:30:39] TK: Yeah. And I’ll have Ozem­pic. What’s it called? Ozem­pic? Aussie? Ozem­pic, yeah. And I’ll go, Oh, I’m the light­est I’ve been in

[01:30:48] TK: 30 years as well.

[01:30:50] CR: Yeah. You were telling me that’s a big thing in Syd­ney. You haven’t, you

[01:30:53] TK: Oh, shit, yeah.

[01:30:54] CR: you haven’t giv­en it a crack yet.

[01:30:56] TK: No, no. I’ll wait till all the side effects go. I don’t know if I want it, real­ly. It’s like, it’s a cheat.

[01:31:04] CR: Yeah,

[01:31:04] TK: also, too, some of the peo­ple who are tak­ing it, I’m sure lots of peo­ple don’t tell you they’re tak­ing it, but they’re hav­ing issues, they’re hav­ing side

[01:31:12] TK: effects from it,

[01:31:13] CR: I’ve heard that there’s not good for your liv­er or your kid­neys or

[01:31:16] CR: some­thing

[01:31:16] TK: mmm, some­thing,

[01:31:17] TK: yeah, yeah, but it’s inter­est­ing to, yeah, well, that’s the tra­di­tion­al way, isn’t it? Count your calo­ries and do a bit of

[01:31:27] TK: exer­cise.

[01:31:29] CR: I was read­ing Nor­man Swan’s most recent book the oth­er day, and he was say­ing, like, the only sci­en­tif­i­cal­ly proven, it was his book on longevi­ty, and he was say­ing

[01:31:37] TK: Oh, I’ve read that one

[01:31:38] TK: too. Yeah.

[01:31:41] CR: Have to restrict it more than I’m restrict­ing it, though. Like, I, most days I’m down like 14, 1500 and, or low­er, 13.

[01:31:50] CR: It’ll

[01:31:51] TK: That is so low.

[01:31:53] CR: It’ll get to 10 o’clock at night and I’ll

[01:31:55] CR: be like 1300 for the day. And I’ll like, I prob­a­bly should eat some­thing because this is prob­a­bly, I’m not get­ting the nutri­tion that I need with the amount of work that I do. Just got some pro­tein pow­der today. So I’m start­ing to take pro­tein pow­der in my smooth­ies and frappes too.

[01:32:11] CR: But, um, I have to force myself to eat cause I’m just. Not hun­gry, you know, I’ve, it’s, I’ve got into that spot now where, I’ve always seen Chris­sy be for, like Chris­sy will for­get to eat for the entire day and I’ll have to remind her, have you eat­en? She’s like, no, I had­n’t thought about it. And I’m like, you real­ly should eat some­thing before we go to train­ing.

[01:32:32] CR: Um, it’s crazy for me because, you know, I’ve gone from prob­a­bly 3000 calo­ries a day down to half that and don’t even notice it, you know, so,

[01:32:43] TK: That is amaz­ing. And it’s pret­ty low too. I mean, that was the num­ber you’re sup­posed to get to for longevi­ty, but it was always,

[01:32:51] TK: you know, a bridge too far for me to get down that low.

[01:32:54] CR: I think he was say­ing like 800 to 1200. Um, but I don’t know if that’s every day or if that’s, um, like once a week or like if that’s on a fast­ing day or some­thing like, uh,

[01:33:09] TK: 200 once a week. Oh, you mean do, do that one day a week, get down to 800. I think he was say­ing that actu­al­ly from mem­o­ry, yeah,

[01:33:18] CR: I have to keep

[01:33:19] TK: yeah, he was say­ing do a fast­ing day because he was, from mem­o­ry he was look­ing at, I think it was the Greeks, maybe the Ital­ians, and how they had a reli­gious, you know. thing about um, hav­ing one day a week where they did­n’t eat any meat

[01:33:34] CR: Yeah.

[01:33:36] TK: result­ed in them hav­ing an 800 calo­rie day which was con­tribut­ing to their longevi­ty.

[01:33:40] CR: Hmm.

[01:33:41] TK: you know, who knows, I mean there was also that Har­vard study which talked about the only fac­tor which was they could find that led to longevi­ty was a cir­cle of friends you kept up with. Hav­ing a strong cir­cle

[01:33:54] TK: of friends, kind of like, you know, keep­ing each oth­er alive.

[01:33:57] CR: Yeah. The Blue Zones stud­ies and that sort of stuff. Mediter­ranean diet, dai­ly light. Exer­cise, like walk­ing, like you do a lot of walk­ing up and down hills, friends, hav­ing a pur­pose, some­thing that you look for­ward to every day, you know, tend­ing your gar­den or what­ev­er it is.

[01:34:18] TK: yeah,

[01:34:19] CR: And, uh, I can’t remem­ber what the fifth one is.

[01:34:22] CR: There’s a fifth one. Five things, I think.

[01:34:28] TK: yeah, but like I also won­der, you also won­der, I mean, research is a won­der­ful thing, but you know, is there some­thing else that’s going on there as well, genet­i­cal­ly or what­ev­er? There’s got to be, they’re always like, you know, if you put peo­ple on a bell curve, there’s always got to be an out­lier. Is that just genet­i­cal­ly the case? Or the Do These Things Con­tribute. Because was­n’t there, um, was it Jared Dia­mond who also cov­ered this and he found that the, one of the groups that lived longest were a tribe in Papua New Guinea, I think it was, or the Ama­zon, where they just ate, uh, sweet pota­to. The whole diet was yams. And it’s like, yeah, you can live longer.

[01:35:12] TK: It’s like, it’s like a dev­il’s trade, you know, you can live

[01:35:15] TK: longer, but all you can do is eat yams.

[01:35:18] CR: You don’t actu­al­ly live longer.

[01:35:19] CR: It just feels like you are. Um, the blue zone fac­tors are diet,

[01:35:24] CR: phys­i­cal activ­i­ty, social con­nec­tions, stress man­age­ment, and opti­mism.

[01:35:30] TK: Which is, what was her name, Eliz­a­beth, um, Black­burn was the same thing she attrib­uted to telom­eres, if you want­ed to, like there’s sci­en­tif­ic evi­dence to say if you live in a stress­ful envi­ron­ment, your telom­eres short­en, which is an indi­ca­tor for a short­er life, and all those things were too. Yeah.

[01:35:50] CR: I don’t believe in stress. I don’t,

[01:35:53] TK: But does it believe in you? I’ll talk to you on Fri­day. I’ll talk to you on Fri­day. You’re stress­ing now about your brown belt grad­ing.

[01:36:03] TK: Uh.

[01:36:05] CR: Some­body, peo­ple keep ask­ing me, you know, are you excit­ed about it? And I’m like, I’m not, I’m not, I’m just not think­ing about it. Just stay chill, go into it. I’m gonna. I’m going to do what I do. It’s going to go how it goes. Going to take it a minute at a time. You know, if it does­n’t work, it does­n’t work.

[01:36:25] CR: If I fail it, then I fail it and I’ll do it again six months lat­er, you know.

[01:36:30] TK: that’s very much how I approach things too, but I find that like I’ll be approach­ing some­thing like that, but then my sub­con­scious will take over in my sleep and I’ll start dream­ing about it or dream­ing about going wrong or what­ev­er. Have all those nor­mal dreams of fail­ing the exam or turn­ing up the wrong day, all

[01:36:46] TK: that kind of stuff.

[01:36:47] TK: Yeah.

[01:36:47] CR: turn­ing up to the grad­ing with­out any pants on. Um, I, yeah, some­times, yeah, some­times I’ll have the four, 4am, you know, night­mares where

[01:36:57] TK: Mm hmm.

[01:36:58] CR: brain will go, and I’ll be like, just shut up. You know, part

[01:37:00] TK: Yeah.

[01:37:01] CR: will be going stu­pid and the oth­er part of my brain will be going, will you just shut

[01:37:04] CR: up?

[01:37:04] CR: Like,

[01:37:05] TK: Yeah.

[01:37:05] CR: I’m not lis­ten­ing. I’m not, I don’t care what you say. I’m not lis­ten­ing. I’m

[01:37:08] CR: not pay­ing any atten­tion to your mon­key chat­ter. But, uh, yeah, if I had free will, I would stop that from hap­pen­ing, but

[01:37:16] TK: Yeah, but I’m the same, but like think­ing of awake for hours telling your sub­con­scious to fuck off.

[01:37:25] TK: So it wins any­way. It does­n’t mat­ter. It wins, right? Because it keeps

[01:37:28] TK: you awake.

[01:37:29] CR: Chem­istry wins at the end.

[01:37:31] TK: Yeah.

[01:37:32] CR: All right. Well, lis­ten, it’s 30 degrees in my office and I’m sweat­ing. So, uh, I’m going to go. Thank you, Tony. I’ll talk to you from Vic­to­ria next week. Have a good week, every­one.

[01:37:41] TK: you too. Hap­py ASX.

[01:37:43] AITK: And good­bye from AI TK, too.