QAV 748 — The Trump Slump

QAV 748

[00:00:00] TK: one, two, three. 

[00:00:08] CR: Wel­come back to

[00:00:08] CR: QAVTK episode sev­en, four, eight,

[00:00:13] CR: time­stamp. 26th of Novem­ber, 2024, offi­cial­ly 20 years today, the very first episode of G’day World came out. I record­ed it a day or two ear­li­er, but by the time we edit­ed it and got it out, it was this day, 20 years ago.

[00:00:35] CR: I did my first. The first Aus­tralian pod­cast, as I keep bang­ing on about, no one cares. Well, actu­al­ly it’s not true. The Nation­al Film and Sound Archive cares because they put the show in the Nation­al Film and Sound Archives. So a thou­sand years from now, when peo­ple are won­der­ing, I won­der who the first Aus­tralian pod­cast­er was?

[00:00:58] TK: So you’re up there with Mr Squig­gle and Count­down. Yeah. Okay, cool. And of course you’re

[00:01:05] TK: now record­ing in your plush sol­id gold record­ing stu­dio in the cas­tle.

[00:01:11] CR: Yeah, um, Joe Rogan’s next door. We’ve got a, we’ve got

[00:01:14] CR: a, we’ve got adjoin­ing man­sions. Hmm.

[00:01:19] TK: hexag­o­nal man­sions in the desert. 

[00:01:21] CR: Hmm.

[00:01:22] CR: Trump will be around lat­er. We’re gonna shoot the shit.

[00:01:25] TK: Yeah.

[00:01:26] CR: Um, how’s your 

[00:01:28] TK: I met a trumper last week. I met a trumper.

[00:01:30] CR: Did you?

[00:01:31] TK: Yeah. Yeah, just every­thing you would imag­ine a trumper would be. Loud, brash, 

[00:01:36] CR: Log­i­cal, 

[00:01:36] TK: opin­ion­at­ed. Yeah, no, no, no. Well, you know, made up for that with vol­ume. 

[00:01:45] CR: Yeah. 

[00:01:48] TK: No, an Amer­i­can cit­i­zen work­ing in Aus­tralia. 

[00:01:50] CR: right. 

[00:01:53] TK: of those peo­ple, I was in a, in a meet­ing room, who just kind of walks in shoul­ders first, you know, rolling their shoul­ders, get out of my way, get out of my way, I’m impor­tant, I’m loud,

[00:02:02] TK: I’m here, let’s do it.

[00:02:04] TK: And every­one’s just look­ing at her going, who the fuck are you?

[00:02:08] CR: A her. You’re in a meet­ing room. 

[00:02:11] TK: Yeah, 

[00:02:11] CR: What?

[00:02:14] TK: I’ll tell you off air. 

[00:02:15] CR: yeah.

[00:02:16] CR: okay. Well, um, been an inter­est­ing

[00:02:20] CR: week in the mar­kets, Tony. Mar­kets down today and from what I read in the ABC or some­thing it was because of Trump’s tar­iffs. Says he’s, day one he’s gonna put a 25 per­cent tar­iff on every­thing com­ing in from Cana­da, Mex­i­co and Chi­na. 25 per­cent tax on the Amer­i­can peo­ple.

[00:02:37] CR: Boom, day one. Boom.

[00:02:41] TK: And you think the mar­ket believed him?

[00:02:45] TK: That’d be crazy if the mar­ket’s react­ing to what

[00:02:48] TK: Trump says. I can’t 

[00:02:50] CR: bump when he got elect­ed, so why can’t 

[00:02:52] TK: Well, that’s dif­fer­ent. Because again, there’s the, Trump’s got a busi­ness vibe, does­n’t have a busi­ness plan or a busi­ness agen­da.

[00:03:01] CR: The Trump 

[00:03:02] TK: Every­one knows he will help him­self, which means he’ll help the busi­ness.

[00:03:06] TK: But I mean, first of all, there’s Just on that issue, there’s, there’s the NAFTA agree­ment, North Amer­i­can Free Trade Agree­ment. 

[00:03:14] CR: does­n’t care about agree­ments. 

[00:03:17] TK: Yeah, so any­way, I’d be sur­prised if Cana­da and Mex­i­co, um, have a tar­iff put on them, giv­en the NAFTA agree­ment, and I’d be sur­prised if Trump’s read the NAFTA agree­ment, or knows about the NAFTA agree­ment, or cares, but, uh, some­one will. He’ll be, here’s a pic­ture book,

[00:03:35] TK: Mr. Pres­i­dent, as to why you can’t tear up the NAFTA agree­ment. 

[00:03:41] CR: All writ­ten in three, three let­ter words. Uh, well you see he’s going to put

[00:03:53] CR: sanc­tions on Aus­tralia too, well actu­al­ly it’s the Biden admin­is­tra­tion that are going to sanc­tion Aus­tralia. 

[00:03:58] TK: because of the changes to social media com­pa­nies. 

[00:04:02] CR: any coun­try that, uh,

[00:04:05] CR: goes along with the ICC’s rul­ing to arrest Netanyahu. We’ll have sanc­tions placed on them by the Unit­ed States, and we’ve said that we’ll abide by the ICC, so Aus­tralia will get sanc­tioned. If Netanyahu comes on his annu­al vis­it to Aus­tralia and we have to arrest him, um, then we’re done for.

[00:04:22] CR: Any­way, enough pol­i­tics, 

[00:04:24] TK: that would be a c that would be a cer­e­mo­ni­al arrest, would­n’t it? With um, like a gold, A gold sym­bol­ic gold called, placed on his 

[00:04:31] CR: red car­pet. 

[00:04:33] TK: Yeah, Rig Car­pet

[00:04:33] TK: Arrest. Yeah, uh, it is enough about pol­i­tics because it’s all get­ting very sil­ly isn’t it, real­ly.

[00:04:39] CR: it is, we have only begun. 

[00:04:43] TK: I heard, I heard today, here’s a fun fact, uh, Joe, Joe Biden is I think a year younger than David Atten­bor­ough. And when I think of David Atten­bor­ough, who I think is now 90 at least, I think of a very, very, uh, sto­ried and leg­end of the, of the broad­cast­ing and

[00:05:03] TK: ecol­o­gy scene, but a very, very, very old man.

[00:05:09] CR: And a very old man was he. 

[00:05:11] TK: and then that time­stamps Biden and I think, Oh, okay, but there’s any­thing wrong with about being old. I mean,

[00:05:20] TK: War­ren’s going strong at what­ev­er he is, 94, run­ning Berk­shire Hath­away.

[00:05:24] CR: Well, I’m going to talk about some of Berk­shire’s new buys lat­er 

[00:05:28] TK: you, did you learn my seg­way

[00:05:30] TK: then? I

[00:05:31] CR: I did. Oh, so 

[00:05:32] TK: actu­al­ly read the agen­da.

[00:05:36] CR: Well, look at you doing segues and 

[00:05:38] TK: I know.

[00:05:40] TK: You’ve been

[00:05:41] TK: doing pod­casts for 20 years. That comes as sec­ond nature for you, but I’m just learn­ing, learn­ing the ropes. Yeah. 

[00:05:47] CR: lis­ten, um, I was going to do port­fo­lio updates, but it sort of leads me to a,

[00:05:51] CR: um, a ques­tion and a top­ic. I don’t know what’s going on with Boom Logis­tics, but, um, I was look­ing at my spread­sheet, uh, just about an hour ago, uh, where I track all the port­fo­lios and I saw the Boom Logis­tics was up 900 per­cent since I bought it.

[00:06:09] CR: And I thought, that’s all right. And then I went and tried to fig­ure out why it was up 900%. And I saw that stock his­to­ry, the Microsoft. Stock­i­ty thing, was trans­lat­ing the BOL share code as BOLDA. And instead of the share price being 14 cents, which is what it should have been, um, it was 1. 40. And I tried to fix it in the spread­sheet and it would­n’t take.

[00:06:34] CR: So I post­ed a thing on Face­book and I was gonna just warn peo­ple, keep, because it’s on the buy list as well still, I was gonna say be care­ful of that. I just went into Navexa to do a, uh, Uh, Dum­my Port­fo­lio Update, and it’s show­ing BOL down 90%. It’s show­ing its, uh, share price as 0. 14, but show­ing that it’s, you know, some­thing’s hap­pened and it’s col­lapsed.

[00:07:04] CR: Um, so I don’t know what’s going on with BOL. I’m look­ing at the Announce­ments in Stock Doc­tor. There was some con­sol­i­da­tion. Oh, it was a split. Oh, look at that. Boom Logis­tics did a split. This did­n’t come up in my news alerts this morn­ing. Dis­ap­point­ing. Um, okay. Boom. Logis­tics has done a split. It is, uh, let me see, record date, noth­ing.

[00:07:40] CR: Noth­ing. Come on. 10 10 for one.

[00:07:45] TK: But I’m just look­ing at that too, and I’m doing it in Stock Doc­tor, and it’s prob­a­bly not Stock Doc­tor’s fault, but the con­sol­i­da­tion and split of boom logis­tics isn’t list­ed as a price sen­si­tive announce­ment.

[00:08:00] TK: Like it’s only changed the price by 10 times.

[00:08:05] CR: Yeah.

[00:08:06] TK: But it’s not con­sid­ered a price sen­si­tive announce­ment.

[00:08:10] CR: So if any­one is hold­ing Boom or

[00:08:13] CR: look­ing at boom in the buy list, uh, pay atten­tion to that. So 

[00:08:17] TK: Yeah, and the DA, so DA nor­mal­ly is some kind of deferred share place­ment. So, even­tu­al­ly it’ll start, the DA will go away and it’ll start trad­ing back under BOL, but they use it if there’s a, like a merg­er or a split or some­thing like that, which does­n’t hap­pen straight

[00:08:33] TK: away. It kind of phas­es in the

[00:08:36] TK: change and gives peo­ple notice of what’s hap­pen­ing.

[00:08:38] TK: Yeah.

[00:08:40] CR: Okay. Well that explains that. Um, and it’s gonna make it hard for me to. Talked to what the dum­my port­fo­lio is doing, but when I looked at it yes­ter­day, it was doing what it always does. Yeah, rough­ly dou­ble mar­ket. Um, the, the one I did want to talk about though was the U. S.

[00:09:02] CR: Port­fo­lio. Let me see.

[00:09:03] CR: Where is, um, where is the Stock­o­pe­dia? The U. S. Port­fo­lio dipped a bit, you know, we had the Trump bump. And then it dipped a bit and now it’s back up again. So it’s, all time it’s up 95 per­cent since about Sep­tem­ber last year. For the last 12 months, it’s also up 95 per­cent ver­sus the S& P 500 up about 30%.

[00:09:27] CR: It’s inter­est­ing, I’m on a val­ue invest­ing sub­red­dit and, uh, which is most­ly U. S. Uh, folks. And some­body asked the ques­tion, how are you doing this year? What are your results? How is every, any­one, is any­one beat­ing the S& P 500? And a few peo­ple were going, Oh, bare­ly, but I’m in, and then they’re in all these mag sev­en stocks.

[00:09:49] CR: And I went, I jumped in. I was like, uh, yeah, we’re up about 95 per­cent this year. And they said, tell us what your win­ning stocks were, your best stocks were, and I’m going, well, Willis Lease Finance Com­pa­ny up 345%, Land’s End up 134 per­cent in this, in this year, ENVA up 78%, OPHC up 47%, ESEA up 45%, BLX up 38%, and then there’s a bunch around the 25 30 per­cent mark and a hand­ful low­er than that.

[00:10:24] CR: And no one, no one replied. No one, no one said Bull­shit. I expect­ed a bunch of peo­ple to call it bull­shit. No one did. No one said, hey, con­grat­u­la­tions, what are you doing? Just, a few peo­ple were like, in com­ments before me were say­ing, oh, I’ve gone to EFTs because I can’t out­per­form the S& P and blah, blah, blah, blah, blah.

[00:10:44] CR: Post­ed mine, just crick­ets. So, there you go, there you go. 

[00:10:51] TK: did you put a link to the QAV pod­cast

[00:10:53] TK: site as well?

[00:10:54] CR: Uh, No,

[00:10:55] TK: I can come and check us

[00:10:56] CR: No, no, you can’t do self pro­mo­tion and stuff like that. Unless some­body asks, you know, you got­ta be care­ful. Peo­ple, they don’t like, you

[00:11:01] CR: know, pro­mot­ing 

[00:11:03] TK: Yep. Fair enough. All 

[00:11:05] CR: Um, have to get oth­er peo­ple to do that for you.

[00:11:08] CR: So any­way, I can’t do any oth­er, um, port­fo­lio updates because the BOL thing is going to, because we own it in a few port­fo­lios, it’s going to mess every­thing up.

[00:11:17] CR: But they’re all doing basi­cal­ly the usu­al. Do have an update from Jor­dan on accru­als though. Anoth­er accru­als update, and thank you to Jor­dan for, uh, Stay­ing on this, he said, Just let­ting you know, I have spo­ken with Stock Doc­tor. They con­firmed they use the Sloan Ratio to cal­cu­late the accru­al per­cent­age met­ric, and this is then used to deter­mine the earn­ings qual­i­ty met­ric.

[00:11:43] CR: As a check, I looked at a pre­vi­ous regres­sion test I had done to see if the earn­ings qual­i­ty might have saved me from pur­chas­ing los­ing com­pa­nies. The test was buy­ing the high­est qual­i­ty. Qual­i­ty scored stocks on a nor­mal QAV buy list break­down as fol­lows. Stocks with strong earn­ings qual­i­ty, total 77, prof­itable 28, loss 49, 36.

[00:12:07] CR: 3 per­cent chance of a prof­itable stock. Stocks with neu­tral earn­ings qual­i­ty, total num­ber with 28, Prof­itable 11, lost 17, 39 per­cent chance of a prof­itable stock. Stocks with weak earn­ings qual­i­ty, total 16, prof­itable 6, lost 10, 37. 5 per­cent chance of a prof­itable stock. Stocks with­out earn­ings qual­i­ty, this seem to be finan­cial stocks, total 33.

[00:12:35] CR: Prof­itable 7, loss 26, 21. 1 per­cent chance of a prof­itable stock. Over­all regres­sion test, total 155, prof­itable 52, loss 103, 33. 5 per­cent chance of a prof­itable stock. He goes on to say, I can’t real­ly see any cor­re­la­tion between the dif­fer­ent earn­ings qual­i­ty results and like­li­hood of a stock being prof­itable, but the data set isn’t huge.

[00:12:59] CR: I’m won­der­ing if QAV’s oth­er check­list items have already removed stocks in which man­age­ment Fudg­ing the num­bers and the remain­ing stocks have a gen­uine rea­son for accru­als. Look­ing at the 16 com­pa­nies which had weak earn­ings, I had 13 min­ers and 2 steel man­u­fac­tur­ers. I can see gen­uine rea­sons for these com­pa­nies hav­ing accru­als if a cus­tomer does­n’t pay until they receive the goods.

[00:13:22] CR: This could be a sig­nif­i­cant peri­od of time from when you’ve actu­al­ly per­formed the work and incurred the cost of min­ing. The final com­pa­ny was LAU. Any­way, it would be good to do some fur­ther test­ing giv­en my lim­it­ed data so it can be deter­mined how to incor­po­rate it, thanks Jor­dan. Good stuff Jor­dan.

[00:13:41] TK: Yeah, thanks, Jor­dan. That’s, um, very detailed work. I mean, I’ve got a lot of ques­tions from, uh, about it as well. Not the least of which is the Sloan Ratio. Is that like, uh, yup­pies from Lon­don in Range Rovers play­ing polo? Isn’t that the Sloan Rangers? Is that like the Sloan Ratio?

[00:13:58] CR: I have no idea what you’re talk­ing about. 

[00:14:01] TK: real­ly? You nev­er heard of a Sloan Ranger?

[00:14:02] TK: Okay.

[00:14:03] CR: Okay.

[00:14:04] TK: Yeah. 

[00:14:05] TK: Sloan

[00:14:05] TK: I think Sloan Square is a 

[00:14:06] CR: income minus cash flow from oper­a­tions and cash flow from invest­ing divid­ed by total

[00:14:10] CR: assets, Tony. Every­one

[00:14:11] CR: knows that. Based on an arti­cle by Richard Sloan.

[00:14:16] TK: Right, from Sloane Square in Lon­don.

[00:14:21] TK: Look up Sloane Ranger, you’ll have a laugh. Um, So a cou­ple, a whole heap of ques­tions here. Thanks very much, Jor­dan. It’s great analy­sis. I’m kind of like, to me, that’s, that the work he’s done there is not real­ly show­ing us that earn­ings qual­i­ty helps at all. That’s my first take from it. Um, and his, his point is, is well made that it could be that we’re dou­bling up on the qual­i­ty work we do with the oth­er check­list items.

[00:14:47] TK: So that’s a pos­si­bil­i­ty, but I’m, I’m start­ing with his over­all regres­sion test­ing. I have 155 stocks on the buy list and he’s say­ing that one third basi­cal­ly were prof­itable and two thirds were loss­es. So I’m not sure whether he’s pick­ing stocks that are on the buy list but aren’t a buy from the Bret­ta­la­tor point of view, from a 3 point trend line point of view, or from a com­modi­ties point of view.

[00:15:13] TK: Um, You know, because that sounds

[00:15:15] TK: like the loss ratio is a bit too high any­way for what

[00:15:19] TK: we’d nor­mal­ly expect from the buy list.

[00:15:22] CR: Well, one of the ques­tions I had was what else he was doing in the regres­sion test­ing, like, are you just buy­ing them and hold­ing them or are you buy­ing them and then fol­low­ing the nor­mal sell rules? You, you know, sell­ing them on a rule one or a three point trend line or a com­mod­i­ty sale and how much detail goes into the regres­sion test­ing process there.

[00:15:43] CR: Um, I’m sus­pect­ing because he has­n’t said oth­er­wise that it’s buy and hold, but, um, 

[00:15:49] TK: For how long? 

[00:15:50] CR: Yeah, too, yeah. 

[00:15:51] TK: yeah. 

[00:15:52] CR: So any­way, um, if you could give us some more detail, Jor­dan, and we should get you on. Maybe you can come on and talk us through it if you want to.

[00:16:00] TK: So that’s great for fol­low­ing it up, Jor­dan. Thanks. The oth­er ques­tion I had was, is there a dif­fer­ence between accru­als in the US where, um, what works on Wall Street, did their research? The account­ing stan­dards, I think, will be the same around the world, but some­times. There are dif­fer­ent inter­pre­ta­tions or dif­fer­ent pro­ce­dures 

[00:16:19] TK: in dif­fer­ent coun­tries.

[00:16:20] TK: So there could be a dif­fer­ent, um, a whole dif­fer­ent mean­ing for the, for the way the

[00:16:25] TK: accru­als are tak­en up in the US. I’m just not sure.

[00:16:27] CR: Mm hmm. Any­way, um, good stuff and more work to be done. Thank you, Jor­dan. Uh, some news. RSG. Uh, Res­olute Min­ing. Uh, since our last show, it was announced that the key per­son­nel, the CEO and the oth­er cou­ple of guys have been released from deten­tion. In Mali, the mon­ey in the brown paper bags made it to the right address and they’ve been released.

[00:17:01] CR: So con­grat­u­la­tions to them and their fam­i­lies and the com­pa­ny. Share price, I broke my own rule, I had to go see what had hap­pened to the share 

[00:17:11] TK: Haha. 

[00:17:12] CR: Um, and, uh, noth­ing much. It has­n’t mas­sive­ly recov­ered

[00:17:18] CR: from where it was after the big drop, it’s still up a lit­tle bit from where I sold it, I think I sold it around 38, it’s about 39.

[00:17:26] CR: 7 at the moment, so it’s up a lit­tle bit, it jumped up high to 43 and then it came back down, um, even after that announce­ment, so. It says, I like the West Aus­tralian, it says Res­olute’s CEO on way home after 13 days of Mar­ley hell. I mean, the last I heard they were being well looked after and it was fair­ly cushy, so, don’t know what the hell was, but maybe even cushy, I don’t know what Mar­ley’s like, maybe even cushy in Mar­ley is hell for CEO from Lon­don, I don’t know.

[00:17:57] TK: Well, it’s the, it’s a basic rule of, Um.

[00:17:59] TK: Aus­tralian jour­nal­ism. If some­one’s in an over­seas jail, it’s hell. hell.

[00:18:04] CR: Yeah. Um. 

[00:18:06] TK: opposed to the news­room at the West­ern Aus­tralian News. 

[00:18:10] CR: Yeah. So, uh, if 

[00:18:12] TK: well, I just want to point out too, I, I, you, you were mak­ing a joke about brown paper

[00:18:17] TK: bags chang­ing hands. In fact, the com­pa­ny has agreed to pay 160 mil­lion US to the Mali

[00:18:23] TK: gov­ern­ment 

[00:18:24] CR: in brown paper bags, non marked 

[00:18:26] TK: No, well, we don’t know that. That’s actu­al­ly ille­gal. So I’m not going to allege that or even 

[00:18:30] TK: sug­gest 

[00:18:30] CR: it ille­gal in Mali?

[00:18:32] TK: It’s ille­gal in Aus­tralia

[00:18:33] TK: to be an Aus­tralian com­pa­ny and bribe an over­seas gov­ern­ment.

[00:18:36] CR: Well, they’re not brib­ing. They’re just demand­ing to be paid. Is that brib­ing? Is what they did brib­ing?

[00:18:42] TK: Well yeah, if you, nor­mal­ly if you say mon­ey’s being deliv­ered in a brown paper bag,

[00:18:46] TK: it’s a bribe.

[00:18:48] CR: I No, I That’s your words, not mine. I just said it was deliv­ered in brown paper bags. That could have been the Mali gov­ern­men­t’s pre­ferred way of receiv­ing the funds. You’re read­ing too much into it.

[00:18:58] TK: I am. Um, I need to, I need to pro­tect my assets. 

[00:19:02] CR: it, is it a bribe? Is it a bribe? If a, if a for­eign gov­ern­ment says you need to

[00:19:06] CR: sud­den­ly pay us, uh, $250 mil­lion in extra 

[00:19:10] TK: it’s not a bribe, it’s not a bribe at all. If you pay it in brown paper bags, it’s a, it’s

[00:19:15] TK: prob­a­bly a 

[00:19:16] CR: it

[00:19:16] CR: not a bribe? Uh, we’re hold­ing your CEO unless you pay us 250 mil­lion dol­lars, it’s 

[00:19:22] TK: No, that’s not a 

[00:19:22] TK: bribe. 

[00:19:24] CR: sit­u­a­tion. It’s extor­tion, 

[00:19:27] TK: by the gov­ern­ment.

[00:19:28] CR: brib­ing?

[00:19:29] CR: Well, 

[00:19:29] TK: No, 

[00:19:30] CR: what’s it, what’s, where’s the line between extor­tion and brib­ing?

[00:19:34] TK: Well, extor­tion is done by the per­son hold­ing the cap­tive and brib­ing is done by the per­son try­ing to get them out.

[00:19:42] TK: Here’s, here’s some mon­ey to make the prob­lem go away. 

[00:19:45] CR: yeah, alright, I think it’s prob­a­bly seman­tics. 

[00:19:49] TK: Here’s, here’s a bit less, but it’s in cash.

[00:19:52] TK: Any­way, I’m not alleg­ing any­thing has unto­ward gone on, and I think the gov­ern­ment would argue that they had been levy­ing too lit­tle, um, for the extrac­tion of resources by for­eign com­pa­nies, so, uh, yeah, I’ll leave it at that. And the WA News is in its own kind 

[00:20:13] TK: of hell. And if you read, yeah, if you read the WA News, you’re in your own kind of hell as well.

[00:20:19] CR: Min­ing? Tax­ing min­ing? How dare you sir?

[00:20:24] TK: That’s a hot but­ton issue in WA. Yeah, 

[00:20:28] CR: secede from Aus­tralia before they allow their min­ing to

[00:20:30] CR: be fur­ther taxed. 

[00:20:32] TK: yeah. What did Steven Mayne say about Perth recent­ly? He said it’s run by the, is

[00:20:37] TK: it the Perth ebri­ties, some­thing like that, mean­ing Perth celebri­ties, Perth per­son­al­i­ties. 

[00:20:43] CR: Perth 

[00:20:43] TK: But, uh, yeah,

[00:20:46] TK: busi­ness in Perth is run by the

[00:20:47] TK: Perthonal­i­ties or WA is run by the Perthonal­i­ties. I thought that was a good line.

[00:20:51] CR: So back to, back to RSG, you know, with all of this hav­ing hap­pened, um, I’m not sure if it’s on the buy list, but if it was on the buy list, prob­a­bly not. It’s a Josephine if any­thing, but if it was on the buy list and it came up and it was with­in your baili­wick, would these recent events cause you to sort of see it as a red flag?

[00:21:14] CR: I mean, on one hand, I think, alright, well, they’ve already paid their whack, so they’re prob­a­bly going to be alright now for a while, well, they’ve agreed to pay the rest of it, um, but there’s no guar­an­tee they won’t get paid. Pulled aside six months from now and said, pay us anoth­er 100 mil. Um, 

[00:21:33] TK: pay ran­soms, because they don’t stop. 

[00:21:35] CR: that’s why I always tell Fox when­ev­er he tries to, you know,

[00:21:39] CR: demand 

[00:21:40] TK: don’t nego­ti­ate with ter­ror­ists, yeah. 

[00:21:41] CR: with ter­ror­ists.

[00:21:42] CR: Yeah. Give in to him once and then it’ll be some­thing else five min­utes lat­er.

[00:21:46] TK: Yeah. Uh, no, if I owned the

[00:21:49] TK: stock and it was on the buy list, first

[00:21:51] TK: thing I’d be check­ing it whether it was a three point sell, which I think

[00:21:54] CR: No, I mean, if you, if you did­n’t own it and it was on the buy list and the, and it was big enough for you to buy, would an event like this, If it met every oth­er met­ric, but this had just hap­pened, would you be like, um,

[00:22:10] TK: Well, if it meets every oth­er met­ric, that means the share price is going up. So peo­ple have fac­tored the 160 mil US hit to the prof­it into the cal­cu­la­tion and they’re still hap­py to buy it. Um, which means that the sell off was over­done. So yeah, I’ll be buy­ing it.

[00:22:24] CR: you would­n’t, you would­n’t be wor­ried that they might just get bent over the table again in six months and ask for more mon­ey?

[00:22:31] TK: We know that there’s a sov­er­eign risk in Africa. We know that the stocks there trade cheap­ly and that’s why they’re on our val­ue list. And so I, I, how could I? protest and say I’m shocked that this is going on when I,

[00:22:44] TK: fac­tored it into the price I’m pay­ing for the stock. 

[00:22:46] CR: But there’s a dif­fer­ence between sov­er­eign risk and sov­er­eign exe­cu­tion. I mean, this isn’t sov­er­eign. It’s, it’s not a risk that the Mali, the, the Malian gov­ern­men­t’s going to extort mon­ey. It’s actu­al­ly hap­pened, so,

[00:23:00] TK: Yeah, but you’re say­ing can I, can I spec­u­late that it’ll hap­pen again? Well, I think I’d say the chance of that’s

[00:23:08] TK: fac­tored into the stock price by peo­ple who know the sit­u­a­tion bet­ter than me. In oth­er words, all the insid­ers. 

[00:23:15] CR: The insid­ers did­n’t sell it before the CEO got arrest­ed the first time. I mean, the price

[00:23:19] CR: was boom­ing. It was up like 30%. 

[00:23:22] TK: cor­rect. 

[00:23:23] CR: So I dun­no that the insid­ers had any inside knowl­edge before it hap­pened the first time. How do they, no, it won’t hap­pen anoth­er time.

[00:23:29] TK: Yeah, you’re true. If they knew that was going to hap­pen, they would­n’t have stayed in

[00:23:34] TK: Mar­ley. But that’s my point. You’re spec­u­lat­ing. If you want to buy and sell stocks

[00:23:38] TK: on spec­u­la­tion, go for it.

[00:23:41] CR: But the crazy thing is

[00:23:42] CR: we, we now know that it had hap­pened to oth­er com­pa­nies like Bar­rick and a cou­ple of oth­ers that you men­tioned, these Cana­di­an com­pa­nies, before it hap­pened to Res­olute. If I’d known that before,

[00:23:57] CR: you know, it hap­pened in Res­olute, I don’t know, I might have gone, 

[00:24:02] TK: would have thought, again, you would have thought, why was the stock price going up

[00:24:05] TK: if it’s hap­pen­ing to their com­peti­tors in the same place? Yeah.

[00:24:08] CR: know, it’s only a mat­ter of time, you would think. I don’t even know why the CEO was in the

[00:24:12] CR: coun­try, I would­n’t know. 

[00:24:14] TK: Again, they must have thought that they had a deal done or that they

[00:24:17] TK: were, you know, a bet­ter cor­po­rate cit­i­zen than the Cana­di­an gold min­ers, for exam­ple. I don’t 

[00:24:24] CR: the insid­ers must have thought so as well or they would have dumped it. 

[00:24:27] TK: Yeah. So it’s a sur­prise. You’re right. And it could be future shocks. Um, yeah. Things often repeat and come in threes.

[00:24:36] TK: So yeah, there could be. But to me, it’s going to be reflect­ed, chances of that will be reflect­ed in the share price. And at the moment, the share

[00:24:44] TK: price, I think, is going down. So you’re prob­a­bly right. And

[00:24:48] CR: hmmm, uh, well the only oth­er spot of news

[00:24:53] CR: that I’ve got is, um, from one of my US port­fo­lio com­pa­nies, ESEA Euroseas, I think we may have talked about that recent­ly, they just released their third quar­ter earn­ings. Uh, the earn­ings beat by 36 cents, rev­enue topped esti­mates, uh, but the share price uh, bumped up a lit­tle bit, it’s, it’s, it had been going down for a while, the share price, it sort of peaked at Octo­ber 3rd, 50 bucks, down to 40 now, so it’s down quite a bit.

[00:25:27] CR: But uh, there you go. So I 

[00:25:30] TK: that’s in the US port­fo­lio, yeah? 

[00:25:32] CR: Yeah, 

[00:25:33] TK: Okay. 

[00:25:33] CR: ESEA. It’s still up 78 per­cent for

[00:25:36] CR: US so I’m not com­plain­ing that it’s gone down a lit­tle bit, but there you go. They beat, they beat their esti­mates, and, uh, share price has­n’t real­ly bounced, so I guess it was fac­tored in. Uh, mov­ing right along, back to lithi­um, Jamie. is, uh, deter­mined to, um, pull us into line.

[00:25:59] CR: I don’t know, it’s like we’ve insult­ed his moth­er or his wife. I don’t know what his rela­tion­ship is with lithi­um, but uh, Hehe­he­he­he­he

[00:26:08] CR: Jamy

[00:26:10] TK: for the

[00:26:10] TK: Malian gov­ern­ment.

[00:26:14] CR: said, uh, I feel like you should know if you have mis­con­strued some­thing by mis­take. He said, our dis­cus­sion about lithi­um last week was pret­ty much com­e­dy gold. Well, that’s, 

[00:26:30] TK: he wants us to keep going, obvi­ous­ly, by writ­ing in and, yeah,

[00:26:34] TK: com­ment­ing. 

[00:26:34] CR: clear­ly demon­strat­ed how lit­tle you know and,

[00:26:36] CR: under­stand about min­ing. Now lis­ten, 

[00:26:38] TK: Uh huh. 

[00:26:39] CR: if I only talked about, if I only talked on pod­casts about things that I know about 

[00:26:45] TK: Well, I would­n’t go for two hours like ours does nor­mal­ly

[00:26:48] TK: for a start.

[00:26:49] CR: My 20

[00:26:49] CR: year career in pod­cast­ing would have been about five min­utes long because I don’t know any­thing about any­thing. Um, at least I did­n’t when I

[00:26:56] CR: start­ed. Um, so I, I appre­ci­ate your feed­back. Um, but, uh, I’m, I’m,

[00:27:03] TK: I think it’s great. I’d like to learn more about it because, but, you know, in fair­ness to us, we have said we, our invest­ment approach is to use the num­bers, not to know any­thing deep, deeply intrin­sic about the indus­try we’re buy­ing into. We can’t pos­si­bly know enough about every indus­try on the stock mar­ket to do a deep dive and come up with our val­u­a­tions.

[00:27:26] TK: We use the num­bers. So I hap­pi­ly admit I know, what I know about min­ing

[00:27:30] TK: is as much as I know about air­lines or banks or yeah,

[00:27:35] CR: and I don’t know what

[00:27:36] CR: and I

[00:27:36] CR: don’t know what you said to upset him last week, and I’m pret­ty sure it was you because I don’t think I said much, maybe I did, but my only, my only point with the lithi­um sto­ry, or the Lion Town sto­ry, he says there’s 

[00:27:49] TK: Not Lion­stown, not Lion­stown. 

[00:27:52] CR: it’s inter­est­ing, even before I got his email, when I was doing the

[00:27:57] CR: The tran­script from last week’s show, I saw that there was an S in it, in the tran­script, and I thought, Oh, that’s not right, and I took it out.

[00:28:04] CR: I’m not sure if you said it or I said it, but 

[00:28:07] TK: must have been me. 

[00:28:08] CR: picked it up as 

[00:28:08] TK: I’m, I’m throw­ing myself under the bus. I’m hap­py to admit my fail­ings. 

[00:28:12] CR: could have said that too, I don’t know, but,

[00:28:13] CR: um, you did, you did write

[00:28:15] CR: it in your notes again today, so I did sus­pect it was you

[00:28:18] CR: when I saw that. 

[00:28:20] TK: I’m going to call it Lion­stown from now on,

[00:28:22] TK: just, just because Jamie made a big deal of it.

[00:28:24] CR: My only point with this whole sto­ry is not that lithi­um’s not a great met­al. I’m sure it’s a very love­ly met­al. I’m sure it’s very love­ly and it does won­der­ful things for bat­ter­ies. 

[00:28:34] TK: It’s a won­der­ful medal. It’s, peo­ple say it’s the best medal. 

[00:28:38] CR: It’s just that when it was get­ting pumped up a cou­ple of years ago, and all these share prices were going through the roof, well, you know, lithi­um min­ing shares were going through the roof, the start up lithi­um min­ers, that then it’s come back off that.

[00:28:51] CR: So not to buy things just because they’re get­ting hyped up in the mar­ket­place to, you know, and again, if you want to buy it and hold it for 40 years, cause you’re 10 years or five years, what­ev­er, cause you think it’s going to be great, then great. And he points out PLS was on our buy list. And I think I did buy PLS 

[00:29:08] TK: Yeah, I own PLS, which is Pil­bara Min­er­als. Yep. We both owned it at one stage or anoth­er. 

[00:29:13] CR: Owned it. We don’t own it now. We sold it when lithi­um became 

[00:29:17] TK: I def­i­nite­ly sold mine, I’m not sure about yours. But the dif­fer­ence between Pil­bara and Lion­stown

[00:29:22] TK: is that Pil­bara had pos­i­tive oper­at­ing cash flow, I think still does, and Lion­stown is, uh,

[00:29:31] CR: Oh. 

[00:29:32] TK: any­thing yet. I could be wrong.

[00:29:34] CR: I did sell, it looks like I sold all of the PLS, um, I did­n’t record the date, but yeah, it was a while ago. It was a com­mod­i­ty sell, and I sold it, yeah.

[00:29:43] TK: I love the feed­back, Jamie. Um, 

[00:29:46] CR: I love it when 

[00:29:47] CR: peo­ple 

[00:29:48] TK: do want to con­tin­ue the dis­cus­sion though, 

[00:29:50] CR: Of 

[00:29:50] TK: did do some num­ber crunch­ing. 

[00:29:52] CR: Uh huh. 

[00:29:53] TK: Yeah. Yeah, online, Lion­stown, LTR. So, um, I just, it was bug­ging me that, uh, there was a com­pa­ny out there which was sup­pos­ed­ly a hun­dred bag­ger. And, um, I want­ed to drill into the num­bers and just see, uh, not how true that was, but just see what the num­bers

[00:30:16] TK: were.

[00:30:17] TK: Um, and I think Jamie might find this inter­est­ing,

[00:30:19] TK: and I’m sure he’ll debate it, and I’m hap­py to be

[00:30:21] TK: schooled if my num­bers are wrong. 

[00:30:23] CR: come on.

[00:30:23] CR: the show and do it, Jamie, 

[00:30:24] TK: yeah, come on the show. That’s right. Come on next week, because I’m going to be on hol­i­days 

[00:30:28] CR: Yeah, not next week, When Tony gets back, come on I’m not 

[00:30:32] TK: can defend me next week. 

[00:30:33] CR: to take the heat for you, no way. I’ll just throw you under the bus. Yeah, he did say that. Oh what an idiot. 

[00:30:40] TK: see what a pro pod­cast­er you are. Uh, okay. So, um, lion Town, uh, iPod, uh, at a price of 20 cents. At the time of IPO, they had 143 mil­lion shares, and that was back in Decem­ber, 2016. So they already had shares. As an unlist­ed com­pa­ny and they raised 93 mil­lion in new shares. Since then, the shares have risen from 143 mil­lion in 2016 to cur­rent­ly 2.

[00:31:17] TK: 425 bil­lion. So that’s near­ly a 17 times dilu­tion. 16. 96 times dilu­tion. So, If you want­ed to main­tain your equiv­a­lent own­er­ship in the com­pa­ny from when it IPO’d to now and assum­ing you bought shares in the IPO, you would be, you would be, you would have paid the equiv­a­lent of 3. 39 today for your shares to have the same own­er­ship per­cent­age of the com­pa­ny as it was at the float.

[00:31:48] TK: Share price today is 0. 81. So you’ve been heav­i­ly dilut­ed and you’ve paid for the So yeah, some­body who did buy a 0. 20 share and IPO has been dilut­ed but if they held on to that share it’s now worth 81 cents so in near­ly 20 years you’ve had a four bag­ger so that’s great and it’s bet­ter than the STW I looked up the STW and because uh the float was in GFC hap­pened in between STWs only up about 50 per­cent in that time peri­od because of the GFC main­ly so you have done a lot bet­ter than the STW so hats off but the rea­son for the Um, pok­ing the, pok­ing the bear, pok­ing the Jamie bear, um, is, is because I’ve seen this.

[00:32:37] TK: Many, many times with many, many min­ers and many, many growth com­pa­nies. We all know Fortes­cue Met­als is a tear­away suc­cess. It’s not the only iron ore com­pa­ny that’s ever been, or the only mine that’s ever been. And Twig­gy For­est had com­pa­nies before Fortes­cue that raised cap­i­tal and went broke. And there’s a real risk if you buy shares in an IPO in a spec­u­la­tive min­ing com­pa­ny.

[00:33:03] TK: And back in 2016, or 2016, what­ev­er it was, 2006. 2016. Um, I don’t know what the pro­file of lithi­um was back then, whether, I guess Tes­la would have been around then, so per­haps there was a known mar­ket for it. Um, but you’re buy­ing a pret­ty spec­u­la­tive share, and you’re hop­ing that it can con­tin­ue to raise mon­ey, and that you won’t be over­ly dilut­ed, so that when you come to sell your shares, you’re sell­ing at a prof­it.

[00:33:35] TK: But there are plen­ty. Plen­ty of instances where that hope turns to shit and, um, the growth can still occur. Um, you know, it’s, it’s, I think col­lo­qui­al­ly it’s the, called the val­ue of sins from when a com­pa­ny goes and rais­es cap­i­tal and con­tin­ues to raise cap­i­tal, but does­n’t get to oper­at­ing cash flow.

[00:33:54] TK: That gap between rais­ing cap­i­tal and stand­ing on its own two feet is often too hard to, to cross. Um, you see it a lot with tech com­pa­nies, with bio­s­tock tech com­pa­nies and with min­ing com­pa­nies. Um, And if Lion­town goes on to be a, you know, a, a, a MOTSA, um, I’m going to call it out as almost being as much luck as it is good man­age­ment because there’s plen­ty of oth­er ones who don’t get there.

[00:34:20] TK: And that’s the rea­son it’s because they dilute heav­i­ly because they’re liv­ing off the cash flow they raise until they can ship the lithi­um. So Jamie, come on the show. Let’s, let’s talk about it. Hap­py to know more about min­ing. It’s an inter­est­ing area. I agree with you. Lithi­um is a com­mod­i­ty and it goes up and down like gold stocks.

[00:34:38] TK: And I agree with Cam that The point we were mak­ing about com­par­ing it to tulips in the 17th cen­tu­ry was that, um, a cou­ple of years ago, all of our ques­tions were on, should I buy lithi­um stocks? Um, cause it was being tipped heav­i­ly. Um, it’s more the fact that it’s an, that indus­tries come and go, like Bit­coin comes and go, like, like After­pay.

[00:34:59] TK: Buy Now Pay Lat­er comes and goes. I know 000, so we’re, you know, peo­ple out there are say­ing you’ll, there’ll be oth­er ver­sions of Jamie out there going you’re look­ing like fools, 000 and all I’ll say to them is what’s your sell price? When do you get out?

[00:35:14] CR: do you know who Peter Dia­man­dis is? Um,

[00:35:18] TK: Ooh, I’ve heard the name.

[00:35:20] CR: prob­a­bly might’ve read one of his books. He’s been sort of a futur­ist guy for years, but he, and he had like a

[00:35:25] CR: cou­ple of X prizes kind of thing for space. And they’d like some bil­lion­aire investor guy who cre­at­ed a bunch of like.

[00:35:33] CR: Incen­tives for peo­ple to do inno­v­a­tive things. I was watch­ing, he does like a YouTube pod­casty show now where he inter­views peo­ple, I was watch­ing one the oth­er day where he had Scara­muc­ci on and, uh, you know, the Mooch, the Mooch,

[00:35:46] TK: I do know them, Mooch, 

[00:35:48] CR: and it was actu­al­ly real­ly good. The first half of it, the 

[00:35:51] TK: worked for eight days in the Trump, uh, 

[00:35:54] CR: 11 days.

[00:35:54] CR: And he, and he calls it, he calls 

[00:35:56] TK: And he’s par­layed that into a speak­ing career. 

[00:35:59] CR: Yeah, well he’s a Wall Street guy, you know, dude, but he calls the amount of time that you sur­vive work­ing for Trump as one Scara­muc­ci, 11 days is one Scara­muc­ci. They were ask­ing him how long they think Elon, he thinks Elon’s gonna last, and he says about 30 Scara­muc­ci’s, which is about a year, rough­ly.

[00:36:21] CR: Um, but he said, 

[00:36:22] TK: Mm 

[00:36:23] CR: it was real­ly good, he was like, like, he goes, you don’t need to buy a box of cere­al, because I have the Trump Dako­ta ring. I’ve got it. I paid my time. I’ve got the Trump Dako­ta ring. He said there’s like 40 peo­ple that were part of his first admin­is­tra­tion and senior lev­el posi­tions who, who had a falling out with him and hate his guts and you know, uh, would not sup­port him this time around.

[00:36:45] CR: He said, do you think the new admin­is­tra­tion are going to have a dif­fer­ent expe­ri­ence to the first bunch of peo­ple? He said, I’ve got the Trump Dako­ta ring. I can tell you what’s going to hap­pen, how it’s going to work, how it plays out. And he was say­ing the first sign that Trump’s ready. Um, sidelin­ing Elon is that the Doge respon­si­bil­i­ty was split between Elon and Vivek.

[00:37:07] CR: He said like, Elon does­n’t have sole pow­er, he’s split it with anoth­er guy. Now my, I’m not sure that’s nec­es­sar­i­ly the only inter­pre­ta­tion of that. I fig­ured Elon would just come in once a month and go, Let’s fire all these peo­ple and then Vivek would actu­al­ly get it done, cause Elon’s got a real job. Um,

[00:37:24] TK: And there’s also the­o­ries which say that Vivek will get approved by the Sen­ate and can actu­al­ly, because there’s a, even though it’s being called the Depart­ment of Gov­ern­ment Effi­cien­cy, it can’t be a depart­ment unless Elon

[00:37:34] TK: divests him­self of all his

[00:37:36] TK: assets into a blind trust.

[00:37:38] CR: Yeah, yeah. He’s just going to be some sort of a con­sul­tant, I think, or an advi­sor to him.

[00:37:42] TK: cor­rect. 

[00:37:43] CR: But so the first half of it was real­ly inter­est­ing, and he was talk­ing about Trump, and I enjoyed it. Then they got onto Bit­coin,

[00:37:49] CR: and there was anoth­er guy, anoth­er guy, so the three of them were pump­ing the shit out of Bit­coin.

[00:37:54] CR: How it’s the great­est invest­ment of all time. Mooch was say­ing how he was a suck­er. Skep­tic for many years and now he’s on board. 55 per­cent of his invest­ment port­fo­lio is in Bit­coin. Dia­man­dis has got about the same. And Mooch has come out with a book, The Lit­tle Book of Bit­coin, which I actu­al­ly down­loaded and I’m plan­ning to read so I can, you know, see what his bril­liant analy­sis is that Char­lie Munger and War­ren

[00:38:22] CR: Buf­fett haven’t fig­ured out. 

[00:38:25] TK: Well, I reck­on we should come on the show, can’t we? 

[00:38:28] CR: Oh, I’d love to get the Mooch on. The Mooch is an enter­tain­ing guy.

[00:38:32] TK: yeah, come and debate Bit­coin with

[00:38:33] CR: Yeah, any­way, so I’m going to read that book and um, we can chat about it

[00:38:38] CR: at some point when you get back from hol­i­days. But uh, you know, they were going on and on and on about how it’s the great­est invest­ment of all time and I was wait­ing for them to explain why.

[00:38:47] CR: Nah, there was no, there was no why, there was no analy­sis, just that if you don’t get it, You need to read his book because it’s the great­est invest­ment of all time. And it’s going to go to a mil­lion dol­lars and all this kind of stuff. So, 

[00:39:02] TK: So that’s the pump part

[00:39:03] TK: of the equa­tion. I’m guess­ing they don’t put their trades on their web­site so we can check when they 

[00:39:09] CR: uh, Yeah.

[00:39:11] CR: we own lots of Bit­coin and you should too. 

[00:39:14] TK: Yeah, exact­ly. Yeah. Hey, a lit­tle while ago, I did a segue,

[00:39:22] TK: it’s tak­ing us a long time to get back to it, but do you have a sto­ry on War­ren Buf­fett?

[00:39:27] CR: Yeah, but I’m doing that at the end because, um, I’m going to do a pulled

[00:39:30] CR: pork and, you know, um, Andy Cody does­n’t want to hear me talk about Amer­i­can stocks in the mid­dle of the show. So I’m going to do it at the end of the show. Hi Andy. Oh, hey, lis­ten, uh, while I think of it, Tony’s away next week and we’ll prob­a­bly take some time off over the hol­i­days. Um, he’s got a lot going on and I’m think­ing about, 

[00:39:53] TK: prob­a­bly, 

[00:39:54] CR: Prob­a­bly, yeah. Um, I, I’m think­ing about, um, strate­gies for what to do, and I was think­ing about hav­ing some long term mem­bers come on, and we haven’t had, like, mem­ber guests for quite a while, and so Some of our long term mem­bers have been around with us for 3, 4, 5 years, been very suc­cess­ful, report­ed real­ly good results at the end of the last finan­cial year.

[00:40:19] CR: Um, if you, if you’re open to it, come on, it does­n’t have to be an hour chat. We can chat for 15 min­utes or what­ev­er, but, um, I’d love to do a shout out to long term mem­bers, even new term mem­bers, if you want to come on and ask ques­tions or what­ev­er. But, um, If any­one lis­ten­ing to this is a mem­ber would love to come on and shoot the shit while Tony’s away, you only get to talk to me, but, you know, 

[00:40:42] TK: yeah, it’s a shame I won’t be there because I’d like to talk to them too, but I under­stand what you’re try­ing to do. Um, so we had the lis­ten­er, and I apol­o­gize, I’ve for­got­ten his name, who was

[00:40:53] TK: on the, um, has a QAV port­fo­lio on one of the

[00:40:56] TK: plat­forms that tracks his per­for­mance. Gary, there you 

[00:41:00] CR: Yeah. Gary, 

[00:41:01] TK: Gary might want to come on and talk about it.

[00:41:03] CR: Gary’s a must. I’m not tak­ing a no from Gary. Gary’s got to come on

[00:41:06] TK: there you go. Okay, 

[00:41:08] CR: All right. And I thought 

[00:41:09] CR: Andy was anoth­er 

[00:41:09] TK: great idea. 

[00:41:10] TK: Andy, yep, get Andy on, 

[00:41:12] CR: come on. And, and we can talk about QAV. Um, yeah. So I’ll talk about War­ren

[00:41:16] CR: Buf­fett lat­er at the end. 

[00:41:18] TK: Oh, okay. So I failed as a Seg­way, with a Seg­way

[00:41:23] CR: You just, you just, you know, you just

[00:41:24] TK: Failed with lithi­um, failed with min­ing, failed with Bit­coin, failed with a Seg­way. I’ll take it next week off, Cam.

[00:41:31] CR: Think about your Seg­way strat­e­gy.

[00:41:34] TK: I’ll improve my

[00:41:35] CR: Go buy a Seg­way. Ride around Syd­ney on a Seg­way. When you come back.

[00:41:39] TK: Oh, man. I’m already a dork with­out doing some­thing stu­pid like that. 

[00:41:45] CR: You’re the per­fect, you’re the tar­get demo. You know, get a lit­tle

[00:41:48] CR: hel­met. Some safe­ty glass­es,

[00:41:51] CR: put elbow pads on, like skater safe­ty 

[00:41:55] TK: Uh huh. Yeah. Uh huh.

[00:41:57] CR: pro­tec­tor. Uhh­h­h­hh. 

[00:42:06] TK: It’s a pic­ture. Alright, where are we up to? I’ve segued off 

[00:42:11] TK: the agen­da. Nick Scali. 

[00:42:13] TK: thank you. So stocks in the news from my point of view. Nick Scali Fur­ni­ture left strand­ed was the arti­cle in the AFR. I think it was on the week­end from mem­o­ry. Fur­ni­ture retail­er Nick Scali says its prof­its could be low­er than esti­mat­ed just a month ago.

[00:42:31] TK: After one of its logis­tics part­ners col­lapsed, leav­ing hun­dreds of con­tain­ers full of sofas and din­ing sets strand­ed. Any­way, it’s a fail­ure of one of their ship­ping com­pa­nies, Lion Glob­al For­ward­ing. Um, and, uh, Nick Scali has been on the buy list, I think ear­li­er in the year. We talked about it because it expand­ed into the UK and There was a, we put a pin into whether that was a good thing or not, because, um, I said at the time, if any­one can do it, they can, but, uh, they’re strug­gling at the moment with sup­ply chains, and I guess that’s the risk with drop ship­ping, so, Nick Scali does a won­der­ful job, uh, from a com­pa­ny point of view, keep­ing its costs down by hav­ing stores which take orders and then The order’s ful­filled in the fac­to­ry and shipped lat­er, some­times up to two or three months lat­er, which is a, you know, a very tight way to man­age your inven­to­ry and keep your costs down.

[00:43:28] TK: But there is a risk, and when the sup­ply chains fall over like it has at the moment, they’re hurt­ing. It seems to be a tem­po­rary thing, but the man­age­ment of Nick Scali are say­ing they’re find­ing oth­er com­pa­nies to do their freight for­ward­ing and they’ll

[00:43:42] TK: get their, uh, sofas off the dock, but a bit

[00:43:45] TK: of a hic­cup for them at the moment.

[00:43:47] CR: It’s inter­est­ing, I remem­ber talk­ing to Chair­man Mabb about Nick Scali last time he and I had lunch. Which was, I don’t know, 6 or 8 months ago or some­thing. He was very bull­ish on Nick Scali. And, um, you know, just look­ing at their chart and like, I’m not so bull­ish. Over five years, uh, well over four years, let’s say, over five years, share price five years ago was 6.

[00:44:18] CR: 69. That’s like late 2019. It’s now 13. 60. So it’s, you know, kind of dou­bled. In five years, which again, I mean, it’s not ter­ri­ble, but it’s not great. It’s high. It’s sort of peak was Novem­ber, 2021. It’s 16 bucks. So it’s, if you bought it, then you’re in the red. It’s been down since then. It’s been down. I was sev­en bucks in June, 2022, but, um, a cou­ple of months ago, well, Sep­tem­ber, it was up at 1650 again.

[00:44:52] CR: Now it’s back to 13. It’s been fair­ly rocky. It’s not like it’s a. You know, con­sis­tent­ly going from bot­tom left to upwards right, you know. 

[00:45:03] TK: Well, what is camp? It’s not doing too bad. It is in

[00:45:07] TK: the trend, it’s going from bot­tom left to top right.

[00:45:11] TK: If you draw a trend line through it, it’s sort of like, 

[00:45:13] CR: you go back 10 years, it’s done very well. It’s gone from

[00:45:15] CR: 2. 50 to wher­ev­er it, is, over 10 years. But last 5 years, it has­n’t done that. It’s gone up a lit­tle bit, as I said. It’s dou­bled in 5 years. 

[00:45:27] TK: that’s good. 

[00:45:28] CR: Is it? 5 years? Real­ly?

[00:45:30] TK: Yeah, we’re look­ing to, I mean, we’re look­ing to dou­ble in 4, but dou­bling in 5 is not bad.

[00:45:35] TK: Rule of 72, 

[00:45:37] TK: so 

[00:45:37] CR: a half. Yeah.

[00:45:39] CR: it’s about three and a half. Yeah. Okay. It’s not too 

[00:45:42] CR: bad. 

[00:45:43] TK: That’s 15, 15 per­cent or so a year in growth, but it is going up and down. And it’s hurt by these kinds of issues at the moment, so it’ll, it’ll recov­er. But it does have, it’s work cut out for it UK. Hope that works out for them as well, 

[00:45:58] CR: So when this 

[00:45:59] TK: I read it out, read out the arti­cle in case peo­ple are won­der­ing

[00:46:02] TK: why the share price has come off recent­ly.

[00:46:04] CR: well, the share price sort of dipped this morn­ing. It was open at about 13. 60 today, and then it dropped down to 13. 26. I issued when this announce­ment came out and it’s bounced back. So it’s back to where it was. 13. 60. 

[00:46:19] TK: think this announce­ment

[00:46:20] TK: came out on the week­end or last week.

[00:46:21] CR: Oh, okay. 

[00:46:23] TK: Yeah, so there’s some­thing else dri­ving the share price today.

[00:46:26] CR: Well, it’s down a bit since then. It’s down over the last week. 

[00:46:30] TK: prob­a­bly the peo­ple who are mon­i­tor­ing our email com­mu­ni­ca­tions

[00:46:33] TK: and saw we were going to

[00:46:34] TK: talk about it.

[00:46:35] CR: It’s the AI pay­ing 

[00:46:37] TK: Yeah, tried to front run it. Speak­ing of, I 

[00:46:39] CR: Any more on Nick Scali or do you want to move on to 

[00:46:45] TK: Yeah, because, you know, EVs are the future and lithi­um is going to pow­er the 

[00:46:50] CR: the Jamie Bear. 

[00:46:51] TK: ha Sor­ry, Jamie. Um, so we, you report­ed on the ASG expe­di­tion last week, you know, your, um, The­o­ry that it goes down a lot when it pays a div­i­dend and then bounces back, except it did­n’t bounce back so much this time.

[00:47:11] TK: Um, I think I know why. So arti­cle in this morn­ing’s Fin Review, car deal­ers are being forced to sell lux­u­ry elec­tric vehi­cles for a loss. To shift stock as demand at the top end of the EV mar­ket suc­cumbs to shift­ing con­sumer tastes and com­pe­ti­tion from cheap­er Chi­nese car mak­ers. ASX list­ed Autosports Group, which owns about 40 show­rooms and deal­er­ships in NSW, Vic­to­ria and Queens­land, is among the com­pa­nies under pres­sure as the high end elec­tric vehi­cle mar­ket slows in Aus­tralia.

[00:47:43] TK: So, um, yeah. Peo­ple aren’t, they’re falling out of love with their elec­tric vehi­cles, and they’re hav­ing to be sold at a loss to Clio. So that’s prob­a­bly what’s been affect­ing the ASG

[00:47:53] TK: share price recent­ly.

[00:47:56] CR: Well,

[00:47:56] TK: we know.

[00:47:57] CR: mean, I, I could­n’t real­ly,

[00:48:01] CR: um, take away from this arti­cle whether or not peo­ple were falling out of love with their elec­tric vehi­cles, or it’s more about increased com­pe­ti­tion from more afford­able Chi­nese brands, um, and cost of liv­ing pres­sures and all of that kind of stuff, and, and sort of an over­sup­ply of.

[00:48:23] TK: It’s hell! It’s hell out there in

[00:48:26] TK: ASG land. Deal­er land.

[00:48:29] CR: So, yeah, I mean, I don’t think peo­ple are falling out of love. Oh, by the way, speak­ing of leas­ing com­pa­nies, um, I did see in my news alerts that I ran this morn­ing, I was going to men­tion a bit, they haven’t been on our buy list for some time. SG Fleet, SGF is being acquired. Um, they haven’t been on our buy 

[00:48:51] TK: an offer any­way. 

[00:48:52] CR: Right. They haven’t been on our buy list though for, for a year or so. So, um,

[00:48:57] TK: Yeah, and that was the sec­ond half of the arti­cle is that, um, and I sus­pect it does­n’t sort of it talks about one plus one, but does­n’t actu­al­ly draw the con­clu­sion of two, but it talks about com­pa­nies like Fleet Part­ners who lease EVs doing well, so it’s pos­si­ble that peo­ple aren’t buy­ing them, they’re leas­ing them as well, and there are some gov­ern­ment incen­tives to, incen­tives to sup­port that.

[00:49:19] TK: So you’re right, but ASG from mem­o­ry deals in the high end brands. You are the Euro­pean brands like Mer­cedes Benz and Jaguar and BMW. And I think that’s the point of the arti­cle is that those high end brands are at least in terms of sell­ing those cars that are fac­ing com­pe­ti­tion from leas­ing and from cheap­er

[00:49:40] TK: Chi­nese cars.

[00:49:42] CR: who was a big pro­mot­er of BYD?

[00:49:46] TK: R. I. P. 

[00:49:47] CR: Yeah, Char­lie. Char­lie loved BYD. He was buy­ing big in

[00:49:52] CR: BYD before he passed away and, um, this is why. They’re, uh, gob­bling 

[00:50:01] TK: lunch with Chair­man Mabb a cou­ple of weeks ago when our horse ran, which is called Dou­ble Mar­ket. But, um, we tried to reg­is­ter Char­lie 99 as the name and they would­n’t allow it for some rea­son. So we did, we did vow again to try some­time in the

[00:50:15] TK: future to reg­is­ter a Char­lie 99 in mem­o­ry.

[00:50:18] CR: it’s a sex posi­tion. They did­n’t want to allow that. You nev­er done a Char­lie 99. Oh,

[00:50:24] CR: you haven’t lived

[00:50:29] CR: Uh, yes. Chi­na gob­bling up the EV mar­ket. Super Tax Tony?

[00:50:35] TK: Yes. So we did talk about this. I’m going back like a year at least, I think, uh, where the fed­er­al gov­ern­ment was going to bring in a super­an­nu­a­tion tax on bal­ances over a cer­tain amount. I think it was 3 mil­lion from mem­o­ry. Uh, but they were going to charge tax on unre­al­ized gains. And despite every­body say­ing, hang on, you can’t, you super­an­nu­a­tion funds on hous­es or farms or busi­ness­es, and they can’t just sell a por­tion of those things to.

[00:51:07] TK: to pay their tax bill. This is an unwork­able piece of leg­is­la­tion and they pushed on and they would­n’t back down. They would­n’t con­cede that one point which prob­a­bly would have got­ten through the leg­is­la­tion and they’re dying in a ditch over it but per­haps it’s a trade for some­thing else that they want to get through but it looks like now that super tax won’t be Brought into law at least before the elec­tion by the cur­rent gov­ern­ment and will go to the elec­tion as an elec­tion issue.

[00:51:34] TK: But as any­one who has mon­ey in a super fund or is involved in finance will tell you, you can’t tax unre­al­ized gains. It’s unwork­able. Peo­ple won’t either be able to pay the tax or they’ll have to sell all of their assets to pay a small tax bill. It’s just stu­pid. So,

[00:51:53] TK: um, maybe that’s the way the gov­ern­men­t’s back­ing out of

[00:51:55] TK: it.

[00:51:56] TK: I’ll defer it, but that’s the, that’s a good out­come. I think

[00:51:58] CR: mm. Alright, that brings us to, I think you are Paul Pork for the week.

[00:52:06] TK: it is. Yes. That’s an Aus­tralian com­pa­ny, Wood­side Petro­le­um. Well, it’s actu­al­ly Wood­side Ener­gy now. Um, so I just, I did this, uh, yes­ter­day and it was back on the buy list but I think it’s actu­al­ly fall­en slight­ly like a cent below its buy price today so it’s retreat­ed it had just poked above its buy price on the bread lat­er yes­ter­day um so bear that in mind and watch it if you decide to do fur­ther research on this com­pa­ny um check its share price and check the bread lay­er and see if it’s back above its uh its buy line uh but I’ll push on it’s inter­est­ing com­pa­ny Uh, I think I did do a Pulled Pork on it many years ago, I could­n’t find it in the notes from the past, but um, I cer­tain­ly haven’t done it for a while.

[00:52:54] TK: Uh, I think most peo­ple would know that, um, it’s a, it’s a nat­ur­al gas or LNG com­pa­ny. It does, uh, has about 30 per­cent of its rev­enues from oil, but most­ly it’s from, uh, nat­ur­al gas. Uh, nat­ur­al gas is an inter­est­ing com­mod­i­ty at the moment, it’s also Back being a buy. Oil is still a Josephine, which affects 30 per­cent of the rev­enue of this com­pa­ny, but nat­ur­al gas is a buy.

[00:53:23] TK: And there has been a bit of mar­ket com­men­tary at the moment that the price of nat­ur­al gas is expect­ed to rise, um, next year. And I’ll read from, uh, the, um, I’ll read from an arti­cle which quotes Gold­man Sachs. This is from our friend James Gluyas in the AFR from the 18th of Novem­ber. Gold­man Sachs has flagged the grow­ing risks fac­ing the gas mar­kets as a cold­er than aver­age start to the Euro­pean win­ter coin­cides with delays to sev­er­al upcom­ing LNG projects across the Amer­i­c­as.

[00:53:55] TK: An expect­ed tight­en­ing in the phys­i­cal mar­ket led Gold­man to raise its 2025 fore­cast for Euro­pean nat­ur­al gas prices to 40. A megawatt hour from 34 euros pre­vi­ous­ly. So goal, I guess what they’re call­ing out there is, is there’s a lot going on in the, in the mar­ket. There is more refin­ing com­ing online.

[00:54:17] TK: Um. But, uh, nat­ur­al gas prices do tend to rise in the north­ern hemi­sphere win­ters, and they’ve raised their prices accord­ing­ly. And we’re see­ing that in our own check­ing of the com­mod­i­ty prices as well. Wood­side released mixed results for its half, and the num­bers I’m going to read out com­pare to the first half of 2023.

[00:54:40] TK: Uh, rev­enue is down 19%. Net prof­it after tax is up 11%. How­ev­er, some of that was due to non cash items. The under­ly­ing impact was down 14%. Um, so for exam­ple, there were less write downs this half. Oper­at­ing cash is down 19%, but the div­i­dends up 14%. So, a lot of mov­ing parts with this com­pa­ny. Um, It’s, it’s a big, com­plex, glob­al com­pa­ny, uh, it’s, it’s has to be well man­aged, I think at the moment it is, because they’re decid­ing whether to put cap­i­tal into, uh, a gas field in Sene­gal, or one in North­west Shelf in the T or one in the Tim­or Sea, um, or one in the US.

[00:55:32] TK: And com­par­ing all of that ver­sus what they do with cap­i­tal from a pay­ing down debt per­spec­tive or buy­back per­spec­tive or increas­ing div­i­dends per­spec­tive. So, a lot of mov­ing parts. Uh, to run through what the com­pa­ny does, um, they have, uh, gas and oil fields in, uh, WA, so the North­west Shelf. Project, which is a big, um, LNG project in WA.

[00:56:00] TK: Uh, they have the Plu­to project up there as well. Um, greater Anfield and Vin­cent Fields in Aus­tralia. They have the shale oil and gas field in or off the coast of Louisiana and the Gulf of Mex­i­co. A cou­ple hun­dred Ks off the coast and they have the greater Anu­ra field locat­ed 38 Ks north­east of Trinidad.

[00:56:22] TK: So. Lots going on. Um, they’re the pro­duc­tion fields. They have lots under devel­op­ment. They have the Tri­on or Tri­on field, which is a green­field oil and gas oppor­tu­ni­ty in the Gulf of Mex­i­co, west of Mex­i­co. They have the Calyp­so fields again in Trinidad and Toba­go or near. Uh, or 220 kilo­me­tres off the coast of Trinidad to be, um, pre­cise.

[00:56:47] TK: They have the Greater Sun­rise Fields, um, 450 Ks north­west of Dar­win and 150 Ks south of Tim­or Leste. And that’s been rea­son­ably con­tentious polit­i­cal­ly, um, because there’s been, uh, a treaty nego­ti­at­ed between Aus­tralia and Tim­or Leste over who owns the rights to those, um, to the gas They’ve recent­ly acquired a com­pa­ny called Tel­luri­an, uh, with its Drift­wood LNG devel­op­ment in Louisiana, and also a clean ammo­nia project, uh, in Louisiana.

[00:57:23] TK: Uh, they have the San­go­mar Field in Sene­gal, which has begun pro­duc­tion this year, with three ship­ments deliv­ered so far. Um, inter­est­ing sort of strat­e­gy at the moment, and I guess trend, Wood­side haven’t come out and con­firm this, but, uh, One ana­lyst has com­ment­ed, and I quote, Wood­side Ener­gy’s 30 bil­lion of invest­ment com­mit­ments in North Amer­i­ca in the past 15 months has cement­ed a view in the mar­ket that the coun­try’s biggest oil and gas pro­duc­er is turn­ing its back on Aus­trali­a’s hos­tile busi­ness envi­ron­ment and will increas­ing­ly focus on the Unit­ed States.

[00:58:00] TK: With Wood­side’s invest­ments in the Drift­wood LNG export Project in Louisiana, uh, and the Low Emis­sions Ammo­nia Project in Texas, and the 10. 7 bil­lion Tri­on oil project in Mex­i­co. Most of Wood­side’s val­ue will lie in North Amer­i­ca by 2030, said MST Markey Ener­gy Ana­lyst Saul Kavon­ic. And that was report­ed by Angela McDon­ald Smith and the AFR in Sep­tem­ber.

[00:58:29] TK: And the head­line was, Is Wood­side Going Amer­i­can? Prob­a­bly a good idea, investors say. So Wood­side has an Amer­i­can CEO. Uh, lady called Meg O’Neill, and she’s acute­ly aware of the dif­fer­ent busi­ness envi­ron­ments and the dif­fer­ent, uh, envi­ron­ments when it comes to cli­mate change activism in Aus­tralia com­pared to the U.

[00:58:50] TK: S. And I have made a note fur­ther on when I come to risk some pos­i­tives about this com­pa­ny is that of course the change of admin­is­tra­tion in the U. S. will prob­a­bly favour, um, more drilling. in these oil fields or fields and gas fields and you know we all know about the drill baby drill com­ment Don­ald Trump has made.

[00:59:10] TK: That could also be a risk because if there’s a lot more sup­ply for more activ­i­ty in the U. S. that could depress both oil and nat­ur­al gas prices. But if, if Wood­side are already estab­lished in that mar­ket then it may well help them. Uh, Wood­side has a sto­ried his­to­ry. Goes back to 1954, so 2024 marks 70 years of oper­a­tion for Wood­side.

[00:59:34] TK: Wood­side was incor­po­rat­ed as a com­pa­ny called the Wood­side Brack­ets Lakes Entrance Oil Com­pa­ny, named after the Vic­to­ri­an town of Wood­side. Uh, they secured their first per­mit to, uh, explore for Oil in 1956. Uh, uh, they acquired their first WA explo­ration per­mit in 1963. In 1968, they found oil at the Le Lada Field in the North­west Shelf in 1971, they dis­cov­ered major gas and con­den­sate fields at Scott Reef.

[01:00:10] TK: North Rankin and Angel Fields in West­ern Aus­tralia. These com­pa­nies, these dis­cov­er­ies con­tin­ue through the ear­ly 70s with the addi­tion of Sun­rise and Trou­ba­dour Fields to that list. In 1977, Wood­side signed an agree­ment for the North­west Shelf devel­op­ment with the West­ern Aus­tralian Gov­ern­ment. It was Aus­trali­a’s largest resources project at that time.

[01:00:33] TK: Wood­side oper­at­ed the joint ven­ture that began export­ing Aus­trali­a’s first LNG car­go in 1989. And I spoke last time about, when I was talk­ing about Wood­side, about the mas­sive devel­op­ment in what’s called the LNG train. So the, the, um, the, um, Prepar­ing LNG for ship­ment. I think they freeze it from mem­o­ry, and it goes into huge can­is­ters on big tankers, which gets shipped into Asia to their cus­tomers.

[01:01:01] TK: Mas­sive invest­ments in infra­struc­ture to do that. Wood­side dis­cov­ered the Lam­i­nar­ia oil field in the Tim­or Sea in 1994. In 2009, Wood­side began pro­duc­tion at the Plu­to LNG project. In 2020, they devel­oped, uh, In 2020, they start­ed devel­op­ment of the San­go­mar field in Sene­gal, and in May 2022, Wood­side Petro­le­um changed its name to Wood­side Ener­gy Group after a merg­er with the oil and gas assets of BHP.

[01:01:34] TK: Um, in the BHP Petro­le­um spin­off. So big­ger and big­ger over time from hum­ble begin­nings and uh, one of the giant play­ers in the world at the moment. The QAV num­bers, I’m doing the analy­sis at 25. 36, which is just above the buy price as of yes­ter­day, uh, and is 93 per­cent of con­sen­sus tar­get, but above IV1 of 13.

[01:02:01] TK: 20 and slight­ly above IV2 of 24. 71. ADT for this com­pa­ny is huge, 115 mil­lion on aver­age trad­ed per day and a 48 bil­lion mar­ket cap. So it’s, um, it’s a very liq­uid stock. Div­i­dend yield is high and obvi­ous­ly Wood­side have cho­sen to empha­size that at the moment, um, per­haps because their results, their prof­it results weren’t as high as they’d hoped and they’re try­ing to attract peo­ple to the stock for oth­er rea­sons, but the yield is 7.

[01:02:32] TK: 64%, which is high and scores on our check­list. And also Gives it the moniker of a star income stock in Stock Doc­tor, so we give it half a point on our check­list if a stock is ranked as a star income stock in Stock Doc­tor. Stock Doc­tor finan­cial health is strong and the trend is recov­er­ing, which we like to see and we give it an extra point for that as well.

[01:02:54] TK: Uh, Stock­o­pe­dia, um, give Wood­side an 86 rank­ing for qual­i­ty, with a 6 out of 9 F score, and they give it an over­all rank of 92, which is rea­son­ably high on the Stock­o­pe­dia list. The P is 9. 8 for the QAV. Com­pa­ny and that’s the cur­rent PE which is not the high­est or the low­est in the last six halves so we can’t score it for being a val­ue buy on that basis.

[01:03:23] TK: Prop­Caf though is only 5. 89 times so it’s throw­ing off lots of cash and we can buy it cheap­ly on that met­ric. Debt equi­ty per share is 28. 49 which is above the cur­rent price of 25. 36 so we are buy­ing it for less than. Net equi­ty or book val­ue, and cer­tain­ly for less than book val­ue plus 30. So we score it for both of those things.

[01:03:46] TK: Um, inter­est­ing­ly enough, Stock Doc­tor says fore­cast earn­ings per share growth is flat at minus 1%, so we give it a neg­a­tive 1 for not grow­ing its earn­ings per share, um, at least in the cur­rent fore­cast. No own­er found us, so we can’t score it for that, or at least no own­er found us still on the, um, It’s a new 3 point upturn, so it gets a score for that, although it will lose it if it’s gone below its buy price, so watch that when you’re doing your own research.

[01:04:14] TK: And the com­pa­ny does­n’t have con­sis­tent­ly increas­ing equi­ty, and I guess that makes a bit of sense after its merg­er with a very large com­pa­ny in BHP Petro­le­um. So all in all, we have a total of 11. 5 out of 17. Or 68 per­cent for qual­i­ty and it just sneaks on the buy list at a QAV score of 0. 11. So it’s at the bot­tom.

[01:04:36] TK: Um, it’s fall­en off again with the drop in the share price slight­ly today. It’ll prob­a­bly rise again and come back on. Uh, There’s prob­a­bly plen­ty of time for peo­ple to do their research on this. It’ll take a long time for the share price to accu­mu­late to take it off the buy list, and it’ll prob­a­bly climb high­er on the buy list if it keeps hav­ing the suc­cess it’s hav­ing at the moment.

[01:04:58] TK: On the risks and pos­i­tives, uh, pos­i­tives first, inter­est­ing­ly I picked up in their half results a quote Uh, which says that coal remains a sig­nif­i­cant por­tion of the ener­gy mix world­wide, account­ing for 25 per­cent of glob­al pri­ma­ry ener­gy con­sump­tion in 2023. Uh, how­ev­er, coal to gas is switch­ing, coal to gas switch­ing was the largest dri­ver of ener­gy relat­ed emis­sions reduc­tions in the U.

[01:05:23] TK: S. pow­er sec­tor in 2023, and Chi­na’s nat­ur­al gas use is expect­ed to grow to 605 BCM. Um, I for­get what that is. That’s the unit British cubic meters, I think it is. In 2040, up from 390 BCM today, as part of Chi­na’s decar­bon­i­sa­tion efforts. So, a lot of coun­tries are replac­ing coal in their pow­er pro­duc­tion with nat­ur­al gas, and Wood­side are say­ing that, um, that could poten­tial­ly dou­ble the amount of nat­ur­al gas.

[01:05:57] TK: Demand in the world. And that’s just one part of the ener­gy mix. There are oth­er uses for nat­ur­al gas as well. Uh, as I said before, the change to Trump will prob­a­bly make it eas­i­er to drill in the U. S., which will help the com­pa­ny. Uh, risk on the risk side, it’s a com­mod­i­ty. Nat­ur­al gas and it will go up and down and so it will become buys and sells and Josephines for us.

[01:06:20] TK: We saw lots of move­ments around the start of the Ukraine war, the start of the Mid­dle East issues, changes when Trump came in and threat­ened tar­iffs, etc, etc. So both nat­ur­al gas and oil will be bounce around on the com­mod­i­ty chart. So, um, I see a com­pa­ny like Wood­side as being a trad­ing stock. We might hold it for six months, 12 months.

[01:06:44] TK: We won’t hold it for­ev­er. I don’t think the com­modi­ties will con­tin­ue to go up. They’ll trade around. Um, and I think the oth­er point I want­ed to raise, which I prob­a­bly have already talked about, was there is always a risk of mis­man­age­ment of invest­ments and acqui­si­tions with such a large com­pa­ny deal­ing in the explo­ration space.

[01:07:03] TK: Um, they’re dab­bling in some clean ener­gy ini­tia­tives, ini­tia­tives like an ammo­nia plant, that may work out for them, may not, they’re not putting the farm on it, but there is obvi­ous­ly a trend to do more of that, that may stop under Trump, but cur­rent­ly they’re, they, com­pa­nies like Wood­side do like to sort of bur­nish Good com­pa­ny cre­den­tials by say­ing, look at what we’re doing to help cli­mate change.

[01:07:27] TK: So that’s going to be an issue. But I’ve seen it before in big resource com­pa­nies and BHP, I think had this hap­pen to them over the years, is that, um, the pres­sure that grows always there, which means the pres­sure to explore and expand and take risks is always there. And that’s fine if you’re a start­up, it’s actu­al­ly the same risk across the whole min­ing and resources sec­tor.

[01:07:49] TK: But when you’re play­ing with it, This is a 50 bil­lion mar­ket cap com­pa­ny. One wrong step can be a mate­r­i­al dent in the future cash flow of the com­pa­ny, so I’m just high­light­ing that as a risk. Cur­rent man­age­ment is doing a good job, I think. There’s no rea­son to sug­gest they’ll make a mis­step, but there’s always the chance that, um, Pres­sure comes from out­side, pres­sure for growth comes from investors, um, or from activist investors to do X, Y, and Z in the green space, and any of those things could be a poten­tial mis­step for the com­pa­ny.

[01:08:25] TK: So that’s Wood­side, suc­cess sto­ry from Aus­tralia, play­ing on the glob­al stage, and

[01:08:30] TK: take a look.

[01:08:32] CR: WDS. Is that the code? I think.

[01:08:35] TK: It is, yes. 

[01:08:37] CR: Thank you, Tony. Speak­ing of com­modi­ties, um, when I did the check­list on the week­end, I not­ed that gold had become a buy, um, and I just checked again and it’s back to being a Josephine. It fell, the ship, the price for gold fell sub­stan­tial­ly last night for some rea­son. Prob­a­bly Trump, I don’t know, gold, Trump, some­thing, um.

[01:09:06] TK: There’s gonna be a lot of

[01:09:07] TK: these read­ing of the tea leaves move­ments and com­modi­ties

[01:09:10] TK: for the next six months, prob­a­bly the next four and a half

[01:09:12] TK: years, I would think,

[01:09:14] CR: So if you’re

[01:09:14] TK: there was the first time around.

[01:09:16] CR: I was going to men­tion it because a num­ber of stocks on the buy list this week are gold

[01:09:21] CR: min­ers, and I was going to say, hey, it’s a buy, and they’re now buys for us, but, uh, not so much today. Um, alright, well, let me move on to your segue. Do you want to do it again? Speak­ing of 

[01:09:38] TK: Speak­ing of War­ren Buf­fett,

[01:09:41] TK: do you have some news on

[01:09:42] TK: Berk­shire Hath­away?

[01:09:43] CR: Yeah, so there’s this arti­cle I read, uh, recent­ly said Berk­shire ini­ti­at­ed new posi­tions in only two stocks in the last quar­ter. Its biggest addi­tion was Domi­no’s Piz­za, uh, and then they’ve also added to their hold­ings of Sir­ius XM and Heico, not to be con­fused with Geico, there’s Heico, Aero­space and Elec­tron­ics Com­pa­ny.

[01:10:14] CR: And then the fourth is, it says, the con­glom­er­ate dipped its toes in the water, clever, clever bit of writ­ing there, with swim­ming pool sup­plies dis­trib­u­tor Pool Cor­po­ra­tion. Berk­shire bought over 404, 000 shares of pool sup­plies. Pool val­ued at near­ly 152. 3 mil­lion at the end of Q3. And I thought it would be inter­est­ing to take one of these com­pa­nies that Berk­shire’s invest­ing in and do a Pulled Pork on it to see how they stack up against our met­rics.

[01:10:46] CR: And because Pool was a new one, the oth­ers they were top­ping up a lit­tle bit dif­fer­ent. Um, Pool is a new invest­ment for them, so I did a Pulled Pork on Pool. And that’s way too much allit­er­a­tion for one sen­tence, but, uh, let’s go with it. Um, so inter­est­ing com­pa­ny, uh, so peo­ple not inter­est­ed in U. S., you can, you can turn it off now and then.

[01:11:11] CR: You’ll miss out on after hours, but that’s on you. Um, or just skip ahead five min­utes, I guess, because this won’t take long. Um, the world’s lead­ing dis­trib­u­tor of swim­ming pool sup­plies, equip­ment, and relat­ed out­door prod­ucts. They claim on their web­site that Pool, P O O L is the share code. They’re on the NASDAQ.

[01:11:32] CR: They also dis­trib­ute irri­ga­tion and land­scape prod­ucts in the Unit­ed States. Com­pa­ny was incor­po­rat­ed in Delaware in 1993, so they’ve been around quite a while, changed its name in 95, the, and then sort of became. The Pool Cor­po­ra­tion in 2006. Head­quar­ters are based in the New Orleans sub­urb of Cov­ing­ton, Louisiana.

[01:12:00] CR: You ever been to New Orleans, Tony?

[01:12:03] TK: I have camp. Last

[01:12:05] TK: year.

[01:12:06] CR: Not with me 

[01:12:06] TK: We spoke about it. No, not with you. Well, I went with Rod­dy.

[01:12:09] CR: You went?

[01:12:10] TK: Yeah.

[01:12:11] CR: You did­n’t like it though, Right. Did you like it? 

[01:12:13] TK: No, I did­n’t. No. We were there dur­ing spring break. So the place was full of, uh,

[01:12:18] TK: schoolies.

[01:12:19] CR: I’d for­got­ten about that. Yeah. I love New Orleans, but it’s been a while since I’ve been there. Prob­a­bly 20 years since I’ve been there. Um, it was found­ed by a guy called, some of the names in this sto­ry are great. The founder was a guy called Frank St. Romain, I guess. Yeah.

[01:12:35] TK: a real Louisiana name, isn’t it? The French 

[01:12:38] CR: So Romain. 

[01:12:40] TK: the Arca­di­ans?

[01:12:41] TK: who, French who came down, they were boot­ed out of Cana­da 

[01:12:46] CR: Arca­di­ans. Why were they Arca­di­ans? 

[01:12:49] TK: I can’t remem­ber now. They were, they were a sep­a­rate, uh, sort of, yeah, it’s a good ques­tion. They were sep­a­rate, uh, to the main­stream French who occu­pied Cana­da, and I can’t recall why, but that’s, they brought all of the, um, Uh, French lit­er­a­ture, French speak­ing, and French cui­sine, and, um, some of the, uh, how can I say this, the black mag­ic cul­ture to New Orleans.

[01:13:18] TK: They, they were boot­ed out of Cana­da, out of

[01:13:20] TK: Que­bec, and they went south. into the U. S. and it was Louisiana who allowed them to set­tle. 

[01:13:27] CR: When was that? Do you have a rough time frame? 

[01:13:30] TK: Uh, well, Cana­da would have been set­tled by the French in the late 1600s, ear­ly 1700s, so I’m going to say

[01:13:37] TK: 1700s or 1800s, prob­a­bly 18, yeah.

[01:13:41] CR: Right. Well. I know, and you prob­a­bly know, because you lis­ten to the Napoleon show, that Louisiana was owned by the French, obvi­ous­ly, and Napoleon famous­ly sold it to the Amer­i­cans for one dol­lar. Yeah, because he, because he did­n’t like swamp­land. Yeah, Napoleon decid­ed, yeah, lis­ten, we’re, we’re not going to real­ly have, have time or oppor­tu­ni­ty to real­ly do much there.

[01:14:12] CR: So he, uh, it was a, I think it was like, it dou­bled. The land mass of the Unit­ed States when Napoleon sold it to them in the ear­ly 19th cen­tu­ry. So it was very French before that. And there’s some Napoleon­ic stuff there. And then, of course, when Napoleon was, uh, hav­ing to be sent into exile, one of the plans was for him to go to Louisiana and retire to Louisiana.

[01:14:40] CR: There was a, it did­n’t, did­n’t hap­pen. He put his faith in the British. They were like, yeah, yeah, sure, get on a boat, we’ll take you to Eng­land, you’ll get a cot­tage, it’ll be fab­u­lous, and then they took him to St. Hele­na instead. But I think one of his broth­ers end­ed up, from mem­o­ry, in Louisiana, and there was this whole Napoleon­ic thing, for years, where they were build­ing, like a refuge for Napoleon in Louisiana, because they were plan­ning on get­ting him out of St.

[01:15:09] CR: Hele­na and putting him in Louisiana, and then, you know, in my fan­ta­sy world, he actu­al­ly did that and took over the Unit­ed States and it’s all French now, 10th 

[01:15:22] TK: I’m using, 

[01:15:23] CR: Bona­parte on the throne.

[01:15:26] TK: so just to clar­i­fy, the Arca­di­ans from Wikipedia, eth­nic group descend­ed from the French who set­tled in the New France colony of Arca­dia dur­ing the 17th and 18th cen­tu­ry. Today most descen­dants of the Arca­di­ans live either in the North Amer­i­can region of Arca­dia where descen­dants of Arca­di­ans who escaped the expul­sion of the Arca­di­ans set­tled or in Louisiana.

[01:15:49] TK: with thou­sands of Aca­di­ans moved in the late 1700s. Descen­dants of the Louisiana Aca­di­ans are most com­mon­ly known as Cajuns, the angli­cized term of Aca­di­an. But most Aca­di­ans in Cana­da con­tin­ue to live in major­i­ty French speak­ing com­mu­ni­ties, notably those in New Brunswick, where the Aca­di­ans

[01:16:07] TK: and Fran­coph­o­nes are grant­ed auton­o­my in areas such as edu­ca­tion and health.

[01:16:12] TK: There we go. No,

[01:16:13] CR: I nev­er knew the Cajuns came from So the Cajuns are Cana­di­an Indi­ans. Is that where

[01:16:19] TK: no. Well, they’re French. They’re orig­i­nal­ly French set­tlers. 

[01:16:22] CR: Yeah, but they came down from Cana­da. I guess it was­n’t real­ly Cana­da

[01:16:25] CR: then down there, 

[01:16:26] TK: Well, Cana­di­an Indi­ans are some­thing dif­fer­ent.

[01:16:28] TK: They’re 

[01:16:29] CR: but I’m there where I’m won­der­ing 

[01:16:30] TK: you’re jok­ing. 

[01:16:31] CR: yes, I was jok­ing. 

[01:16:32] TK: Okay.

[01:16:33] CR: So Le Cadil­lac, 

[01:16:35] CR: you know, do

[01:16:36] CR: you remem­ber the sig­nal, Gary?

[01:16:39] CR: Do you know

[01:16:43] CR: that? 

[01:16:45] TK: No. I look fun­ny. 

[01:16:47] CR: The South, uh, the, the film, uh, Team Amer­i­ca, uh, the, the South Park

[01:16:53] CR: guys made, you know, the mar­i­onettes. Yeah. Team Amer­i­ca, World Police. The, the guy that they send into like. to the ter­ror­ist com­pound is Gary and that’s, you know, and if he’s in trou­ble he has to send the sig­nal. Do you remem­ber the sig­nal, Gary?

[01:17:07] CR: That’s the sig­nal for peo­ple who aren’t watch­ing. He’s wav­ing his hands and silent­ly scream­ing. That’s the sig­nal that he’s in trou­ble. Um, any­way. Back to Frank Saint Romain. Began his career in pool dis­tri­b­u­tion as a ware­house man­ag­er in 1981. He and his part­ner, Richard Smith, went out on their own, based in New Orleans.

[01:17:30] CR: They set up a com­pa­ny called South Cen­tral Pool Sup­ply. Then, they were joined by indus­try vet­er­an, Wil­son B. Rusty Sex­ton. Which I swear to God it sounds like a name out of a Will Fer­rell film like Tal­lade­ga Nights. It’d be Rusty Sex­ton. It’s a great name, uh, or it’d be a name that Matt Berry would come up with in, uh, What We Do In The Shad­ows, like his, when he’s try­ing to pass him, he’s a vam­pire, but try­ing to pass him­self off as a human, he’d come up with a name like Rusty Sex­ton.

[01:18:02] CR: Um, Uh, I, and I was goo I went through old news­pa­pers. com arti­cles on Frank’s Saint Romain to try and find his back­sto­ry. And I saw that he was at a wed­ding of a Sex­ton 20 years before he start­ed the com­pa­ny. So, I think the Saint Romains and the Sex­tons, uh, go back a ways in New Orleans. 

[01:18:23] TK: Yeah. Okay. 

[01:18:24] CR: Any­who, um, so they, then the com­pa­ny got tak­en over by a pri­vate equi­ty firm in 1993, Code Hen­nessy and Sim­mons.

[01:18:32] CR: Changed it’s name to SCP Pool Cor­po­ra­tion, and, uh, they had a, Sex­ton became the Chief Exec­u­tive Offi­cer, Frank became the day to day oper­a­tions guy. Any­way, then they got, they float­ed in, uh, 1995. They have, uh, 439 sales cen­ters in Aus­tralia, Bel­gium, Cana­da, Croa­t­ia, France, Ger­many, Italy, Mex­i­co, Por­tu­gal, Puer­to Rico, uh, AKA, um, garbage, 

[01:19:03] TK: float­ing pile of garbage, 

[01:19:04] CR: pile of garbage, Spain, Unit­ed King­dom of the Unit­ed States.

[01:19:08] CR: About 6, 000

[01:19:09] CR: employ­ees. The com­pa­ny receives over half of its rev­enue from Cal­i­for­nia, Texas, Flori­da, and Ari­zona. What do all of 

[01:19:19] TK: So what’s the, what’s the, Ha ha ha ha, Drill baby drill. What’s the, um, drill for pools. What’s the, um, brand

[01:19:29] TK: in Aus­tralia?

[01:19:30] CR: Don’t know. No, I don’t know. Did­n’t go that deep. But, um, inter­est­ing­ly in 2023, 62 per­cent of their rev­enue came from main­te­nance and minor repair prod­ucts. 24 per­cent of its rev­enue from prod­ucts used in pool ren­o­va­tions, and only 14 per­cent of its rev­enue from prod­ucts used in pool con­struc­tion. So it’s 

[01:19:55] TK: not sur­prised. 

[01:19:56] CR: basi­cal­ly the um, razor blade indus­try.

[01:20:00] CR: You get a pool.

[01:20:02] CR: But then you spend the rest of your life pay­ing for main­te­nance. That’s where the mon­ey is in the pool

[01:20:07] TK: And parts.

[01:20:09] TK: Yeah, I can attest to that. We had a pool when I was liv­ing in, um, Mel­bourne and Mel­bourne. And 

[01:20:15] TK: Swim 

[01:20:15] CR: saw that pool. I went to that house. I remem­ber. yeah. 

[01:20:19] TK: Um, and Swim Art was the local sup­pli­er. He would

[01:20:21] TK: turn up every week and skim the leaves off for me and check the pH lev­el and et cetera, et cetera, put chem­i­cals

[01:20:27] TK: in. 

[01:20:27] CR: day in a Mel­bourne year when you got to use the pool, it looked

[01:20:31] CR: fab­u­lous.

[01:20:32] TK: ha, ha,

[01:20:33] CR: The hell do you need a pool in Mel­bourne for? Was It heat­ed? 

[01:20:36] TK: gets hot in sum­mer. It was heat­ed. Yeah, it was love­ly. 

[01:20:39] CR: Oh, okay. If it’s heat­ed, that’s 

[01:20:40] TK: It was heat­ed and it was, I mean, it was main­ly for Alex and her school

[01:20:44] TK: friends. She had lots of pool par­ties.

[01:20:49] CR: Oh, sure she did. She’s such a social but­ter­fly. Um, where are they at the moment? They’re in New Zealand, aren’t 

[01:20:57] TK: New Zealand, yeah, they’re in Welling­ton 

[01:20:59] CR: love­ly. 

[01:21:01] TK: Of course.

[01:21:01] TK: Where Alex spent, well we all spent a fair bit of time there, but she

[01:21:05] TK: spent some of her for­ma­tive years

[01:21:07] CR: Five years you were in New Zealand?

[01:21:09] TK: No, three. 

[01:21:12] CR: So any­who, um, that was inter­est­ing to me. Um, in 2011 they were accused by the Fed­er­al Trade Com­mis­sion of antitrust prac­tices by pres­sur­ing sup­pli­ers not to con­duct busi­ness with its com­peti­tors. And in Jan­u­ary 2012, they set­tled with a con­sent order, which pro­hib­it­ed the com­pa­ny from con­tin­u­ing the prac­tice.

[01:21:34] CR: I think antitrust. I do not think Pool Sup­plies 

[01:21:39] TK: Yeah, well 

[01:21:42] CR: to show you, though.

[01:21:44] TK: will take care of all that.

[01:21:46] CR: Oh, Willy,

[01:21:47] TK: Yeah, dis­band the antitrust. yeah, 

[01:21:50] CR: yeah. yeah. Google, I’m sure Google will be hap­py about that, because they’re 

[01:21:53] TK: Oh, yeah.

[01:21:54] CR: get them­selves in,

[01:21:55] CR: a bit of hot water. They won’t be hap­py when he, uh,

[01:21:59] CR: Shuts down their

[01:22:00] CR: AI busi­ness by get­ting reg­u­la­tors to look into their, um, AI busi­ness, which I did a show with Steve Sam­marti­no a week or so ago, talk­ing about Elon as the AI czar and how I think he’s going to be going for, par­tic­u­lar­ly open AI, but, um, prob­a­bly Google as well, see­ing as he start­ed open AI to stop Google from own­ing AI.

[01:22:21] TK: Well, Elon’s like Trump. He’s in pol­i­tics for him­self. 

[01:22:25] CR: Of course, of course he is. And sav­ing the human

[01:22:28] CR: race, but you know, the two things are con­nect­ed. 

[01:22:32] TK: Yeah.

[01:22:33] TK: Well, it’d be inter­est­ing to see what hap­pens. I mean, you said he might

[01:22:36] TK: last, what was it, 30 Scaramoochies. It might be that Trump, Trump might last 30 Elons.

[01:22:42] CR: Well, you know, I talked about that with Steve. Part of me thinks that Elon and Trump prob­a­bly won’t last until the inau­gu­ra­tion, um, but who comes out on top is the real sto­ry there. Like, but Elon can’t be pres­i­dent. I mean, apart from the fact that he’s not elect­ed, he’s not elec­table, but, um, he’s like, dude, I can find 50 guys.

[01:23:07] CR: I can make pres­i­dent like . But JD Vance is, uh, a Peter Thiel Elon guy. So the part of the Pay­Pal Pay­Pal’s 

[01:23:16] CR: Amer­i­ca. You know, the Pay­Pal White House, that’s what I’m call­ing it now. Any­who, back to, uh, back to POOL. Uh, their rev­enue for 2024 is esti­mat­ed to come in around 5. 3 bil­lion. 

[01:23:31] TK: Wow. Just from, just from putting salt water in the pools 

[01:23:35] TK: and chem­i­cals 

[01:23:36] CR: the world’s largest pool sup­plies com­pa­ny, that’s actu­al­ly not as much

[01:23:39] CR: as I thought it would be.

[01:23:40] CR: I thought it would be a lot more than that. I mean, it seems measly, but okay. Slight­ly less than their 2023 rev­enue of 5. 3 bil­lion. 5. 5 and 2022 of 6. 8. But it sounds like for some rea­son, 2022 was like a, a bumper year for pools, uh, in the U S I think it might’ve been a COVID thing. Peo­ple were like, Hey, we’ve been trapped inside.

[01:24:03] CR: Let’s buy a pool, uh, or main­tain our pool. I don’t know. They did­n’t 

[01:24:07] TK: Well, they ordered, maybe they built their pool

[01:24:09] TK: dur­ing COVID when they were locked down at home and then they’re get­ting it ser­viced from 2022 onwards. 

[01:24:16] CR: Um, oper­at­ing cash­flow is also drop­ping. Um,

[01:24:19] CR: Oh, I don’t know. Um, go through the num­bers and then I’ll talk about what they’re say­ing about the num­bers. Um, so I ran this today, um, so aver­age dai­ly trade is 124. 5 mil­lion dol­lars. Last finan­cials came out at the end of Sep­tem­ber, they’re the finan­cials that I’m using.

[01:24:41] CR: Um, here’s, so, uh, again, I’m doing this to sort of think about, it’s a Buf­fett stock or Berk­shire stock and run­ning it through our sys­tem. The pri the price to oper­at­ing cash flow is 22. 25.

[01:24:55] TK: real­ly? 

[01:24:55] CR: Yeah. 

[01:24:57] TK: Why is

[01:24:57] TK: Buf­fett buy­ing this stock?

[01:24:59] CR: Well,

[01:25:00] TK: he, does he want a cheap pool Yeah, 

[01:25:04] CR: main­te­nance. He’s prob­a­bly already got the pool,

[01:25:06] CR: he’s try­ing to do a deal on the main­te­nance. 

[01:25:09] TK: well, it’s the kind of busi­ness mod­el that would appeal to

[01:25:11] TK: him, like, you know, like you say, it’s the Gillette, it’s the razor blade

[01:25:15] CR: yeah, yeah, yeah.

[01:25:17] TK: Recur­ring cash flow. 

[01:25:18] CR: Very expen­sive, um, from our

[01:25:21] CR: per­spec­tive, but, you know, we know that Berk­shire strug­gle to buy stuff, too, that’s big enough, and so maybe they’re will­ing to pay over, you know, that, maybe 22 sounds rea­son­able to them, but it would get knocked out of con­tention for us on that basis.

[01:25:39] CR: And Stock­o­pe­dia, it’s got a qual­i­ty rank of 67, which, you know, Isn’t up the top end, but it’s okay, 

[01:25:45] TK: pret­ty low. 

[01:25:46] CR: yeah, it’s not high. Um,

[01:25:50] CR: The price is well above our intrin­sic val­ues. It’s also above book and, um, book plus 30. It does have a new point, a new three point upturn though. Um, when I looked at it, uh, in the bread lat­er, it’s just gone above its buy line.

[01:26:10] CR: So it gets a point for that. It’s just turn­ing around now. Um, I don’t know if that’s because Buf­fett bought 154 

[01:26:18] TK: Yeah. 

[01:26:19] CR: of it or not. 

[01:26:20] TK: And just, and just declared. Yeah. 

[01:26:21] CR: Yeah. It does­n’t score for growth over P. E. greater than 1. 5. Um, book val­ue growth is pos­i­tive. P. E. is less than the yield, so it’s rel­a­tive­ly low from a P. E. per­spec­tive. Um, does­n’t, 

[01:26:41] TK: That’s huge. So what’s it yield­ing?

[01:26:43] CR: the yield is, um, 1.

[01:26:49] CR: 5. 0. 25, 

[01:26:53] TK: Per­cent. 

[01:26:54] CR: yeah, Yield, 

[01:26:56] TK: the, what’s, and what’s the PE? 

[01:26:58] CR: well, the Yield minus PE here it says it’s 94.

[01:27:03] CR: Let me go, I have to go back to, um, my Stock Doc­tor data to see what the PE is. 

[01:27:09] TK: Stock­o­pe­dia. You won’t get that. You won’t get 

[01:27:11] TK: pool and stock 

[01:27:12] CR: Stock­o­pe­dia I’m talk­ing about, 

[01:27:14] TK: yeah. So 

[01:27:16] CR: PE is, hold on, PETTM is 31.

[01:27:20] CR: 4. and the yield 

[01:27:24] TK: the yield. Yeah, there’s a glitch in the matrix there some­where.

[01:27:28] CR: hold on, well, hold on, how do I score this then? No, I’m divid­ing the yield by a hun­dred, because the yield is a per­cent­age.

[01:27:44] TK: It’s just sim­ply the yield minus the PE. Num­ber minus num­ber. So the yield is 1. 2 minus the PE of 21 is

[01:27:53] TK: a neg­a­tive num­ber. So it does­n’t score. 

[01:27:57] CR: Uh no okay. Why 

[01:28:03] TK: Any­way, take it offline and have a look. 

[01:28:05] CR: Why have I added a per­cent­age to that then? Uh, Defab­ri­ca­tor.

[01:28:12] TK: We’re not going to buy the stock any­way, so it does­n’t mat­ter. And of course, it may not have been, it may not, it may not be 

[01:28:16] TK: Buf­fett. 

[01:28:17] CR: lists. 

[01:28:18] TK: I’m try­ing to, I’m try­ing to tap

[01:28:19] TK: dance here so you can move on. Um, Buf­fett may not have bought the stock too, it could be some­one else in 

[01:28:26] CR: Oh, one of the, I’m guess­ing, I’m assum­ing it was one of the oth­er guys. Yeah. 

[01:28:29] TK: Yeah. 

[01:28:31] CR: I’m going to make a note for myself to look into this. 

[01:28:34] TK: Okay. 

[01:28:35] CR: Um, 

[01:28:36] TK: Okay, so we’re not buy­ing it, but Buf­fett has. Can’t work out why, unless he likes the busi­ness

[01:28:42] TK: mod­el. And Buf­fett may not have bought it, Todd or Ted may have. Um,

[01:28:49] CR: it gets a score. Alt­man’s Z score gets a score. The actu­al Z score is about 11. 5. The S score is about five. But when I read their most recent annu­al report, which is, you know, from 2023. They say, Look­ing ahead, we believe it is help­ful to reflect and focus on the inher­ent strengths of our indus­try. Over the course of the last five decades, our indus­try has expe­ri­enced con­sis­tent expan­sion as the installed base of swim­ming pools has grown year after year.

[01:29:19] CR: Each of the approx­i­mate­ly 5. 4 mil­lion in ground pools, along with mil­lions of above ground pools and hot tubs all require ongo­ing reg­u­lar main­te­nance and occa­sion­al ren­o­va­tion and upgrad­ing over time. I’m assum­ing they’re talk­ing about a small area. I mean, you’d have 5. 4 mil­lion in ground pools in Bris­bane.

[01:29:42] TK: Ha ha, I know you would­n’t. 

[01:29:44] CR: Seems like it.

[01:29:46] TK: Maybe in Aus­tralia. 

[01:29:47] CR: Even my ex

[01:29:48] CR: wife has got an in ground pool, the house that I bought and then gave to her. I

[01:29:54] TK: such a gen­er­ous guy. 

[01:29:55] CR: am a great guy. I’m a great ex hus­band. All my ex wives say that. Um, as con­sumers adjust. To recent, recent infla­tion effects and bor­row­ing rates are expect­ed to decline. We expect to see out­door liv­ing con­struc­tion activ­i­ties recov­er.

[01:30:09] CR: And as we’ve seen in the past, grow­ers, home­own­ers invest in enhanced out­door liv­ing spaces. As this antic­i­pat­ed resur­gence occurs, we are well posi­tioned to serve the needs of this grow­ing mar­ket with a broad prod­uct offer­ing, our pow­er­ful sales sys­tem. Indus­try lead­ing cus­tomer ser­vice tools and the most tal­ent­ed work­force in the indus­try.

[01:30:29] CR: That’s one thing that’s impor­tant when it comes down to pool main­te­nance. Pool boys, tal­ent­ed pool 

[01:30:33] TK: Yeah. the mous­tache.

[01:30:35] CR: Yeah. sub­stan­tial cap­i­tal strength cou­pled with our long his­to­ry of

[01:30:40] CR: oper­at­ing effi­cien­cy and unri­valled exe­cu­tion gives us great con­fi­dence. Blah, blah, blah, blah, blah. Any­way, so, Um, they, they’re pla you know, it, it, it, they’re, they’ve got sort of a pret­ty big oper­a­tion dom­i­nant in their space.

[01:30:55] CR: They think that there’s gonna be a lot of pool main­te­nance in the future, and obvi­ous­ly Berk­shire has tak­en a punt on it. But, uh, yeah, from a pure num­bers per­spec­tive, run through QAV. Does not look, 

[01:31:09] TK: does­n’t make sense 

[01:31:10] CR: Does­n’t make sense. to us. Yeah, 

[01:31:12] TK: And I think in your notes you said they bought 150 mil­lion worth, so it’s not going to make a

[01:31:17] TK: big dif­fer­ence to Berk­shire Hath­away either, unless they’re plan­ning to buy more.

[01:31:22] CR: no. Rel­a­tive­ly small. But, uh, all of the, um.

[01:31:26] CR: All of the invest­ments that we, that were list­ed in this arti­cle were rel­a­tive­ly small, like their, their stake in Domi­no’s is 550 mil­lion, their stake in Sir­ius, uh, it does­n’t say here, just said it increased, their stake in Heico is worth rough­ly 214 mil­lion. So they’re all rel­a­tive­ly small stakes from a Berk­shire per­spec­tive, but 

[01:31:54] TK: Yeah, it’s strange, isn’t it? Unless they’re like, I know that they’ve got a home divi­sion now, the real estate divi­sion and home prop­er­ty man­age­ment. So per­haps they’re going to try and push that into pools into that. I don’t know. Or maybe they see the ben­e­fits because they’re always pay­ing the pool guy to come and fix up the pool.

[01:32:14] TK: I don’t know. But I think that’s the big­ger point is that Berk­shire Hath­away is sit­ting on well over 100 bil­lion in cash or cash equiv­a­lents at the moment. Um, Which is usu­al­ly a sign that War­ren thinks the US mar­ket’s over­val­ued.

[01:32:28] TK: He’s wait­ing to deploy cash when it comes off

[01:32:31] TK: again.

[01:32:34] CR: So, you know, I don’t know if he likes Poole, why not buy the whole thing?

[01:32:39] TK: Cor­rect. Yeah. 

[01:32:42] CR: Any­way, 

[01:32:44] TK: Very strange. Well, thanks for that. 

[01:32:45] CR: the pool

[01:32:45] CR: busi­ness. 

[01:32:47] TK: Yeah.

[01:32:47] TK: I did­n’t know about the pool busi­ness. 

[01:32:48] CR: Gets it to, I won­der, I won­der if they’ve got a

[01:32:51] CR: side busi­ness for hand­some

[01:32:53] CR: pool boys ren­der­ing ser­vices to ladies,

[01:32:58] TK: won­der how many pool boys will be deport­ed when Trump winds up, rams up the ille­gal immi­grants. 

[01:33:03] CR: what’s that impact going to be on their busi­ness? I

[01:33:09] TK: be able to swim at Mar a Lago. 

[01:33:12] CR: won­der how many of their pools are man­u­fac­tured in Mex­i­co. Yeah,

[01:33:15] CR: 25%. import tax­es on their tar­iffs on their pools and all their pool boys are shipped back to Mex­i­co or wher­ev­er. All right, after hours, Tony, do you want to kick it off?

[01:33:29] TK: yeah, sure. So, um, I had the great

[01:33:31] TK: plea­sure of going to see Rock­wiz live

[01:33:33] CR: Oh, wow!

[01:33:34] TK: The­atre on Sun­day night, which was just fan­tas­tic. 

[01:33:38] CR: film’s at the ESPY in Mel­bourne or some­thing.

[01:33:41] TK: It does, but it tours around Aus­tralia. 

[01:33:43] TK: They do a live show. Yeah. Well, they may have filmed it. I’m not sure, but, um, fan­tas­tic. It was so good. Yeah. And they’ve been doing it for 20 years.

[01:33:52] TK: So it’s a well oiled machine and you know, the band’s super tight. Comp airs are bril­liant. Um, The high­light for me was the end when they do their finale and the guest musos were Sarah Blas­co and Mia Dyson

[01:34:09] TK: who per­formed Price of Love by Bri­an Fer­ry was just rocked and pumped and then Tim Fried­man, the lead singer from the Whit­lam’s was the third guest and he came out and joined them and they did Elvis Costel­lo at the end, What’s So Fun­ny

[01:34:24] TK: About Peace, Love and Under­stand­ing, which was just pumped.

[01:34:27] TK: It was so good. Real­ly good. Yeah. Great night. 

[01:34:31] CR: Speak­ing of you going to things, I don’t think you told me about

[01:34:34] CR: Steven Fry on our last

[01:34:35] CR: show. 

[01:34:37] TK: No, I did­n’t. That was fan­tas­tic too. 

[01:34:39] CR: Yeah, what, 

[01:34:40] TK: was real­ly 

[01:34:41] CR: was he talk­ing 

[01:34:42] CR: about? 

[01:34:44] TK: Well, he, um, I’ve got to gath­er my thoughts now, that was a cou­ple of weeks ago. Uh, what was he talk­ing about? It’s a good ques­tion, Cam, and half the show was on

[01:34:56] TK: ques­tions. Um, he did a read­ing from his lat­est book about Greek mythol­o­gy, so there was a bit of talk about that.

[01:35:04] CR: have got that.

[01:35:04] CR: I’ve been mean­ing to read it, I bought it a while back. 

[01:35:07] TK: I think it’s like the fourth or fifth in the series, 

[01:35:09] CR: Oh, okay, right. 

[01:35:11] TK: He’s been doing it for a while, um, but he just came out and spoke for about an hour and a half and then took a break and he asked peo­ple the right ques­tions, he had a QR code to scan, and, um, I scanned the QR code

[01:35:25] TK: and I said, um, Are you over your jeal­ousy with Hugh Lau­rie yet?

[01:35:29] TK: But he did­n’t answer that ques­tion.

[01:35:31] CR: He’s jeal­ous of you, Lau­rie. 

[01:35:33] TK: He was­n’t when Hugh Lau­rie was mak­ing lots of mon­ey and when he was play­ing house. Yeah,

[01:35:39] TK: yeah. But I got the feel­ing that, um, I don’t even know if he saw the ques­tions. He kind of had pre­pared spiels, which I also heard him talk about when he was doing press­es. for the for the road but always great to lis­ten to spoke a lot about his upbring­ing um going to oxford how he got into oxford as a mature age stu­dent how he was off the rails 

[01:36:00] CR: Hmm. Mm 

[01:36:00] TK: how he and he would often stop and riff about terms like that you know he wants to be off the rails why is off the rails being bad who wants to be on the rails who wants to be in

[01:36:10] TK: a rut he loves being off the rails so there’s a lot of you know just

[01:36:16] TK: Just, you know, nice explo­ration of the lan­guage as well and Racon tour­ing.

[01:36:22] CR: Yeah. 

[01:36:23] TK: Told, told sto­ries about, uh, his first vis­it to Perth when, um, Hugh, Lau­rie and Hugh came over as part of the Cam­bridge Foot­lights and, uh, had, had a lot of jokes at the expense of Aus­tralians. Um, yeah, what he was, I for­get now what he was talk­ing about, but he, yeah, I can’t remem­ber now. He was mak­ing fun of our accent.

[01:36:42] TK: Um, but he made fun of the British accent too, so that was fine. Yeah, no, it was real­ly good. Just, just a, just a chat, real­ly,

[01:36:52] TK: real­ly enjoyed it. And so did Alex. Alex and I went, which was great. 

[01:36:56] CR: Hmm. 

[01:36:57] TK: Yeah. Yeah. Uh, I went on a golf comp at our golf course on the week­end. So I was chuffed about that. Yeah. 

[01:37:07] TK: Golf, my golf game’s get­ting bet­ter.

[01:37:09] TK: At 61? Nah, I’m over the hill. Nah, but get­ting bet­ter. So that was good fun. Uh, and POIFECT, our horse runs on Sat­ur­day at Flem­ing­ton. So I’ll be head­ing off tomor­row

[01:37:21] TK: to go down and watch it.

[01:37:23] CR: Wow. Good luck.

[01:37:24] TK: Yeah. Yeah, thanks. So that’s me. 

[01:37:27] CR: Uh, well, I lost anoth­er cen­time­tre off my waist this week. That’s my big news. I’ve stopped los­ing way, but I’m los­ing waste. 

[01:37:37] TK: Okay. 

[01:37:38] CR: lost weight in about six or sev­en weeks since I start­ed tak­ing pro­tein pow­der, I

[01:37:43] CR: think, but I’m los­ing a cen­time­tre a week or there­abouts off my waist still, which

[01:37:51] TK: do you take pro­tein pow­der and not eat pro­tein? 

[01:37:55] CR: I can’t eat enough pro­tein, um, to meet my pro­tein require­ments. I tried that with the, with the calo­rie restric­tion that I’m doing. So I’m eat­ing like, 1900 calo­ries a day, basi­cal­ly, give or take. Some­times 17, some­times 2100, but yeah, rough­ly 19 on aver­age. Um, it’s, it’s near­ly, I’m sup­posed to be eat­ing 150 grams of pro­tein a day based on my lev­el of exer­cise and height and weight and that kind of stuff.

[01:38:22] CR: And I was bare­ly get­ting 40 or 50 when I was doing it through diet. So the pro­tein pow­der bumps it up. You know, I get a lot of pro­tein. It’s just con­densed. You get 26 grams of pro­tein for 30 grams of pro­tein pow­der. So a cou­ple of pro­tein drinks a day, and it bumps me up by 50, 60 grams of pro­tein with­out a caloric bump.

[01:38:44] CR: Cause it’s just most­ly water and pro­tein pow­der, right? Um, 

[01:38:48] TK: And who told you to do this? Oh, 

[01:38:52] CR: it was GPT, I think, ini­tial­ly. I was like,

[01:38:55] CR: how do

[01:38:55] CR: I get more pro­tein, uh, per gram, 

[01:38:58] TK: GPT did­n’t say you’re not get­ting enough pro­tein. 

[01:39:01] CR: Well, it did. I was, I was talk­ing to it about my, um,

[01:39:05] CR: you know, all of my nutri­tion­al lev­els and mak­ing sure, because one of the prob­lems with calo­rie restric­tion is mak­ing sure you’re get­ting enough nutri­tion, right?

[01:39:14] CR: And I was los­ing weight and I assumed that some of that weight I was los­ing was pro­tein, mass. as well as, um, fat, par­tic­u­lar­ly if you’re doing a lot of exer­cise and, you know, you’re burn­ing a lot of calo­ries and the pro­tein is burn­ing as well as fat. So I need to top up the pro­tein to make sure that my body is, um, adding pro­tein from, you know, stress­ing my mus­cles and that kind of stuff.

[01:39:41] CR: So it said you need to eat more pro­tein. I could­n’t fig­ure out how to do it pure­ly on diet, so it sug­gest­ed sup­ple­ments. And I spoke to it, there’s a guy at my, I got to go Kung Fu with, who’s a body­builder slash used to own a gym, and I spoke to him about it, and he rec­om­mend­ed the pro­tein pow­der that he takes, and so I got that one, because it’s a clean pow­der, it does­n’t have a lot of, you know, addi­tives and sug­ars and all that kind of stuff in it.

[01:40:06] CR: Any­who, so yes, not los­ing weight, but los­ing waste. So I, 

[01:40:10] TK: Well done. 

[01:40:11] CR: I’m not sure how that works, but I think it’s a good thing.

[01:40:14] TK: I’ll tell you, as a segue, I’ll tell you my Chat­G­PT sto­ry today. 

[01:40:19] CR: No, 

[01:40:21] TK: As I was prepar­ing for the show, I, uh, you know, if I type some­thing into Google now, it gives me their AI ver­sion of the, of the result. So I typed in, uh, why are LNG prices going up? And, um, got back three rea­sons. Yeah, Ukraine, war, com­mod­i­ty, this or that, um, sup­ply, sup­ply chain, this or that.

[01:40:44] TK: Oh, okay. But I thought, hang on.

[01:40:46] TK: And I typed in why is LNG prices going down? And I got the same three answers

[01:40:52] TK: from the AI. 

[01:40:53] CR: that was in GPT or Google.

[01:40:55] TK: Google.

[01:40:56] CR: Right.

[01:40:57] TK: Yeah. Well, 

[01:40:59] CR: I’m 

[01:41:00] TK: if you’re los­ing weight, then your advice is bet­ter than my advice on LNG 

[01:41:04] CR: not los­ing weight. I’m los­ing waste. 

[01:41:06] TK: Sor­ry, los­ing waste. W A I

[01:41:08] TK: S T.

[01:41:10] TK: Yeah. 

[01:41:12] CR: and I’ve watched a few things this week. Um, but the main thing is I fin­ished, uh, Black Sab­bath. Did I talk to you about the Black Sab­bath film I was watch­ing a cou­ple of weeks ago?

[01:41:22] TK: Oh, it’s a film. I thought you were going to talk

[01:41:23] TK: about the record or the band.

[01:41:26] CR: It’s the film that the

[01:41:28] CR: band got its name from. Uh, 1963 Ital­ian. Anthol­o­gy hor­ror film by Mario Bava. It’s three short films, um, togeth­er. And, uh, Mario Bava, don’t know if you’ve ever heard of him, prob­a­bly most famous for Her­cules, the 1958 Her­cules film with Steve Reeves. Um, I think that was the film that inspired Arnold Schwarzeneg­ger. To become a body­builder. So that was direct­ed by, um, no, 

[01:42:01] TK: Who inspired Your Son

[01:42:03] CR: Yes.

[01:42:04] TK: an influ­encer.

[01:42:05] TK: So there’s a Direct

[01:42:06] TK: line from Black Sab­bath. Yeah. All the way through. 

[01:42:10] CR: That actu­al­ly, it was

[01:42:12] CR: Mario Bava did­n’t direct that. He was the cin­e­matog­ra­ph­er for that, but he also became a direc­tor and was pret­ty much known for, uh, Hor­ror films, he did a, it’s prob­a­bly the most famous one, it’s called Black Sun­day that was released in 1960, which I haven’t seen yet, Kill Baby Kill, Bar­ren Blood, Lisa and the Dev­il, Rabid Dogs, but any­way, this one, Black Sab­bath, it’s Intro­duced by Boris Karloff, and he is one of the actors in the sec­ond of the three films.

[01:42:43] CR: But it was fab­u­lous, I real­ly enjoyed it, like super low bud­get, and appar­ent­ly the way it came about is, um, The, there was a bunch of Amer­i­can Pro­duc­tion com­pa­nies that, that, when I think Her­cules was a suc­cess in 58, a bunch of Amer­i­can com­pa­nies want­ed to make, uh, low bud­get Ital­ian films.

[01:43:03] TK: Son of Her­cules. 

[01:43:04] CR: all that kind of stuff.

[01:43:05] CR: And it’s 

[01:43:05] TK: Well, Schwarzeneg­ger’s first movie was

[01:43:08] TK: Her­cules in New York.

[01:43:09] CR: Yeah, that’s right. Yeah. And, uh, so they went over and they made all these films and this was one of the films that was sort of, I think, part­ly fund­ed by Amer­i­can mon­ey. Um, and it’s, and it’s fab­u­lous. Like it’s got a real­ly good, uh, rat­ing on Rot­ten Toma­toes too. I think it’s like a 90 per­cent rat­ing or some­thing like that.

[01:43:31] CR: Um, beau­ti­ful­ly, um, filmed, uh, beau­ti­ful sets, a lit­tle bit cheesy. Like it looks like a C grade pro­duc­tion in many ways, but the sto­ries are great. The act­ings over the top are great. Um, I real­ly enjoyed it. Just a real­ly, real­ly fun series of. 

[01:43:53] TK: Right. 

[01:43:54] CR: You know, orig­i­nal sort of hor­ror sto­ries. Any­way, appar­ent­ly the sto­ry is Black Sab­bath, the band, were look­ing for a name and they saw that was being screened some­where and they just saw the name and thought, that’s what a great name, Black Sab­bath, and that’s where they got the name from.

[01:44:13] TK: good. And what sort of style of hor­ror? Like, uh, Exor­cist? Uh,

[01:44:19] TK: Drac­u­la? Sort of cliche Boris Karloff? Or what kind?

[01:44:24] CR: So there’s three, as I said, there’s three sto­ries in it. The first sto­ry is called The Tele­phone. It’s about a, Uh, a French call girl, who returns to her apart­ment late at night, gets a series of strange phone calls, and the caller even­tu­al­ly iden­ti­fies him­self as Frank, her for­mer pimp, who’s recent­ly escaped from prison, and he says he’s gonna come and kill her.

[01:44:54] CR: And then she phones her friend and for­mer les­bian lover, Mary, for solace, and Mary’s like, Oh, I thought you did­n’t want to ever talk to me again. Okay, I’ll come over and help you. I’ll be there in 15 min­utes. But then it turns out it’s Mary mak­ing the phone calls, dis­guis­ing 

[01:45:12] TK: Ah ha 

[01:45:13] CR: that she’s Frank.

[01:45:13] CR: She goes over, she’s try­ing to ter­rorise her. 

[01:45:17] TK: Right. 

[01:45:18] CR: then she goes

[01:45:18] CR: over to help her and then gives her a sleep­ing drug and knocks her out and then is writ­ing a con­fes­sion let­ter. I’m so sor­ry, I just want­ed, I want­ed to get revenge. You broke my heart. And while she’s writ­ing the apol­o­gy let­ter, Frank comes into the room, Frank comes in and kills her.

[01:45:38] TK: Right. 

[01:45:38] CR: Mary walks up and stabs him. No, no, no. The call girl wakes up and stabs him to death. And any­way, she does­n’t say, you know, and then she reads the, it’s like orig­i­nal sto­ries.

[01:45:48] TK: Tales of the Unex­pect­ed type 

[01:45:50] CR: Yeah, the sec­ond one that Boris Karloff did is called the Wur­du­lak. 19th cen­tu­ry Ser­bia, this young noble­man finds a behead­ed corpse and then he stum­bles across this house and they’re like, Oh, and they tell him that their father left five days ago.

[01:46:07] CR: And if he does­n’t return by mid­night, they have to kill him because he’s the Wur­du­lak, which is like, you get infect­ed. You get bit­ten on the neck by anoth­er Wur­du­lak, and then you need to kill the peo­ple you love the most. And he returns, and they’re not sure if he’s a Wur­du­lak or not. And the last sto­ry’s about a woman, a nurse, who gets a phone call and she needs to attend to this house, and there’s this old rich woman who’s died, and her, her maid calls the nurse to come and do some­thing with the body and pre­pare it for the funer­al.

[01:46:42] CR: And the, the, the nurse steals a ring off the corpse and then goes home and then the corpse appears to her and ter­ror­izes her and it’s just like that kind of 60s, you know, sort of, but they’re orig­i­nal sto­ries and they’re just, just real­ly kind of real­ly well done, like very, very low bud­get, but the per­for­mances are great.

[01:47:05] CR: Lots of scream­ing, lots of hor­ror, and it’s all in Ital­ian, which I love too. So, you know, got to. 

[01:47:11] TK: Okay. 

[01:47:11] CR: prac­tice my Ital­ian and the whole thing. Any­way, that’s sort of the high­light of my week. I’m watch­ing that. Yeah,

[01:47:18] TK: Nice. 

[01:47:19] CR: that’s it for me. T. I watched a lot of David Bowie, live Bowies, a lot of live Bowie stuff on YouTube that I’ve nev­er seen before.

[01:47:26] CR: You, you men­tioned Stephen Fry hav­ing pre writ­ten ques­tions that he was answer­ing. I saw a Bowie show where he was doing like live, uh, radio. Peo­ple were call­ing in and then doing live requests and then he’d do the song, but it was kind of obvi­ous that the live requests were all screened. Like the band knew the songs like, 

[01:47:50] TK: Yeah. 

[01:47:50] CR: Oh, can you do, uh, blue jeans?

[01:47:53] CR: Sure. We can do

[01:47:54] CR: blue jeans. You know, it’s not like, 

[01:47:57] TK: well, one of 

[01:47:57] CR: We haven’t played that one before out of my cat­a­logue of, you know, 200 songs, you know, that

[01:48:04] TK: that they played at Rock Quiz by the, the band played there was, um, all the Young dudes, which was great. 

[01:48:10] CR: he wrote for Mott the Hoople 

[01:48:12] TK: Yes, that’s right. That was the sec­tion of the, of the Rock quiz was they were

[01:48:16] TK: talk­ing about cov­ers and Yeah. So that was one of the ques­tions. And then they played the song, 

[01:48:22] CR: Name the oth­er song that he wrote for anoth­er artist and then record­ed

[01:48:26] CR: him­self.

[01:48:28] TK: uh, Chi­na Girl. 

[01:48:30] CR: Very good, 

[01:48:31] TK: yeah, 

[01:48:33] CR: yeah,

[01:48:34] TK: For, um, Iggy, 

[01:48:35] CR: for Iggy, 

[01:48:36] TK: his Mate. yeah,

[01:48:38] CR: Yeah.

[01:48:38] CR: so I’ve been watch­ing just a lot, like when I’m clean­ing up after din­ner or cook­ing din­ner or what­ev­er, what­ev­er, I’ve just got lots of live Bowie, I’m record­ing some Bowie con­certs in the back­ground over the years and, yeah. Yeah, it’s inter­est­ing just to see all the dif­fer­ent ways that he did live shows and some of them are heav­ier and some of them are jazz­i­er and funki­er in the Thin White Juke peri­od

[01:49:01] CR: and

[01:49:02] TK: Yep. All 

[01:49:03] CR: with James Brown’s band dur­ing the Sta­tion to Sta­tion and the Gold­en Years peri­ods and just so many dif­fer­ent phas­es and yeah,

[01:49:15] TK: yeah, he’s like a bit like Madon­na, isn’t he? He just keeps rein­vent­ing him­self or rein­vent­ed him­self

[01:49:19] TK: Oh,

[01:49:22] CR: up look­ing like, uh, What­ev­er Madon­na looks like today.

[01:49:26] CR: Talk about hor­ror movies. Oh my god, she looks like a hor­ror. Ter­ri­ble plas­tic surgery. I tell you who I reck­on has the same plas­tic sur­geon as her is um, uh, Strict­ly Ball­room direc­tor, Baz Luhrmann. Oh, oh my god, I for­got to men­tion this, I watched the great­est doc­u­men­tary on Net­flix this week too, Elvis 68 Come­back Spe­cial Doc­u­men­tary.

[01:49:53] TK: Oh yeah.

[01:49:53] CR: Oh

[01:49:54] TK: I think I’ve seen that. 

[01:49:55] CR: doc­u­men­tary? 

[01:49:57] TK: Yeah. 

[01:49:57] CR: just came out on 

[01:49:58] TK: The singer, the singer spe­cial. Oh, I’ve seen doc­u­men­taries on that.

[01:50:01] TK: before. 

[01:50:02] CR: Oh, well, this is, I mean, I don’t know what one you’ve seen before, but this, like, I’ve loved the 68 spe­cial since I saw it first as a teenag­er. It’s always been one of, like, my go tos. I’ll pull that out every 

[01:50:13] TK: hmm. Mm 

[01:50:14] CR: I watch it, it’s fan­tas­tic.

[01:50:16] TK: hmm. Mm

[01:50:16] TK: hmm. 

[01:50:16] CR: But the doc­u­men­tary, it’s just been made, um, made me love it even more.

[01:50:22] CR: Like, it puts the whole thing into per­spec­tive, in a per­spec­tive that I did­n’t ful­ly appre­ci­ate. And so Baz Luhrmann is one of the main voic­es on it, and he looks like Madon­na. like shock and plas­tic surgery, talks a lot on it, Jay, not Jay Leonard, Conan O’Brien, for some rea­son it’s weird, but also, um, Rob­bie Robert­son’s on it, um, uh, the guy from Smash­ing Pump­kins, um, what­ev­er 

[01:50:47] TK: Bil­ly Cor­gan. 

[01:50:48] CR: Cor­gan, yeah, wear­ing a fab­u­lous, like, bla, uh, sort of blaz­er, no, not a

[01:50:54] CR: blaz­er, a pullover, a cardi­gan, fab­u­lous knit­ted cardi­gan, um, and the basic sto­ry, you may, you may know all this, but They talk about how, you know, when Elvis went to, was draft­ed, 

[01:51:08] TK: Mm 

[01:51:09] CR: I’ve always believed was a set­up to get him out of the coun­try for three years, he comes back, he does one con­cert when he comes back, and then that’s it.

[01:51:18] CR: Does­n’t do anoth­er con­cert for sev­en years. Colonel Tom has him doing shit­ty movies, and they just get worse and worse and worse and worse. The first cou­ple make a shit ton of mon­ey, both the records and the films, and then they just get worse and worse. Mean­while, as they tell the, the Bea­t­les come out, the Stones come out, the Doors, He was the, before he went to West Ger­many, he was the bad boy of rock and roll.

[01:51:44] CR: Now he’s like this lame, like they, Colonel put him on TV with Sina­tra when he got back. And I think it’s, I don’t know if it’s Baz or I think it’s Spring­steen say­ing, this was them going, you know, Elvis is now fam­i­ly friend­ly. Like he’s on, TV with Sina­tra the croon­er like he’s gone from 

[01:52:04] TK: Yeah, right. 

[01:52:05] CR: dan­ger­ous to now san­i­tized for the pub­lic and all and his films gets more and more like kid cre­ole he’s king cre­ole he’s sort of singing trou­ble and he’s a lit­tle bit sort of dan­ger­ous and then it just gets stu­pid to the end well they’ve got Priscil­la in it as well more bad plas­tic surgery um Talk­ing about how mis­er­able he was.

[01:52:28] CR: Any­way, then, the idea, Colonel says he needs to do TV, the, the, his last film’s a huge flop. They’ve got him singing Old Mac­Don­ald Had a Farm in his last film. Priscil­la’s watch­ing it going, oh my god, like it’s so 

[01:52:42] TK: hmm. Mm hmm. Mm hmm. 

[01:52:44] CR: Um, he was, as a lot of peo­ple say, he was, because he nev­er wrote his own songs, and that was the oth­er thing that I had­n’t real­ly ful­ly, you know, appre­ci­at­ed too.

[01:52:51] CR: Now you’ve got every­one writ­ing their own songs and Elvis and they’re singing about con­tem­po­rary issues and polit­i­cal issues and Dylan’s doing all of his stuff and talk­ing about the sto­ry of the hur­ri­cane and they’re talk­ing about the civ­il rights move­ment and Elvis and Elvis is get­ting the shit­ty songs that no one else wants like the songs that he’s get­ting are the songs that no one else will touch um

[01:53:17] TK: also because Tom Park­er would only take a song from some­one if they signed over 

[01:53:22] CR: gave the rights which is

[01:53:23] CR: why Dol­ly would­n’t sign over any of her songs. And all that sto­ry, yeah, which they don’t touch on,

[01:53:28] CR: but that’s obvi­ous­ly part of the sto­ry. So, the 68th spe­cial was orig­i­nal­ly just a bunch of shit­ty, pre pro­duced Sketch­es. 

[01:53:39] TK: It’s in the movie. the Baz Luhrmann It’s in The Baz Luhrmann. 

[01:53:41] CR: Oh, real­ly? They cov­er this in the Baz Luhrmann movie. 

[01:53:43] TK: Yeah, Yeah, yeah, how Elvis spat it and took it over and changed the wardrobe and changed the song and every­thing, yeah,

[01:53:49] TK: The song list? 

[01:53:50] CR: Well, the, the way they tell it in this

[01:53:52] CR: is in between rehearsals, he would be in the dress­ing room just jam­ming with the guys and some­body had a tape recorder going and they were like, and then you hear Elvis say, you know, uh, we should do some­thing like this in the show. Agreed with him and went to Colonel Tom and Colonel said over my dead body and then they final­ly talked, right.

[01:54:14] CR: So they final­ly talked him into it and Elvis was real­ly ner­vous because he had­n’t per­formed live in sev­en years

[01:54:19] CR: and then obvi­ous­ly it’s just the great­est, one of the great­est things ever put on film.

[01:54:26] TK: So many years ago, uh, me and a mate Bill went and saw Elvis’s back­ing band. This is at the Rod Laver Are­na. Per­form with that con­cept pro­ject­ed on the screen behind them, so big pro­jec­tion of Elvis and then the band stand­ing in front of their posi­tions on stage. And like so, you know, at one stage the trum­pet play­er would come out and do a lit­tle dance

[01:54:54] TK: and twirl their trum­pet on the screen, but also in real life they’d come out and do that on the stage 

[01:55:01] CR: which band 

[01:55:01] TK: played live.

[01:55:03] CR: Not the 68s. 

[01:55:04] TK: The back­ing band from the 68 spe­cial, they played live

[01:55:08] CR: right,

[01:55:08] TK: to the video of Elvis per­form­ing.

[01:55:12] CR: okay,

[01:55:13] TK: an amaz­ing con­cert. 

[01:55:15] CR: right, be, so you’re talk­ing about the big band there, not um, Scot­ty Moore and DJ Fontana 

[01:55:21] CR: and those guys. 

[01:55:23] TK: the big back­ing 

[01:55:24] CR: Oh yeah, right, okay, oh that would still be huge.

[01:55:27] TK: It was.

[01:55:28] CR: Yeah, right. And then, and there’s one point 

[01:55:32] TK: And like, I’ve got to say, some of those guys, Scot­ty Moore and all those guys, some of them could have been there, I can’t remem­ber.

[01:55:37] CR: He died in 2016, I think, Scot­ty Moore.

[01:55:39] TK: Yeah, this would have

[01:55:40] TK: been before that. Ha 

[01:55:42] CR: Priscil­la in this doc­u­men­tary, talk­ing about the fact that she moved into

[01:55:46] CR: Grace­land when she was like 17. They got mar­ried when she was 21, which was 67, 68. She got preg­nant on their wed­ding night with Lisa Marie. And then the 68 spe­cial, they were new­ly mar­ried. And she said that was the first time she’d ever seen him per­form live.

[01:56:08] CR: And she’s like Oh my god, that’s, this is what it’s all about. She’d only seen him on, like, in shit­ty movies, uh, you know, that kind of stuff. She’d nev­er seen him live. She saw him live and was like, oh, holy shit.

[01:56:23] CR: What they

[01:56:23] CR: don’t tell in this, but of course, every­one who knows the sto­ry knows, they got divorced like three years lat­er.

[01:56:32] CR: They were only mar­ried for like four years. And, um, so, and she’s still trad­ing on the Pres­ley name, like,

[01:56:43] CR: 50 odd years lat­er, she’s still trad­ing on the fact that she was mar­ried to him for four years, 

[01:56:51] TK: She’s the mooch. the mooch of, uh, rock and roll. 

[01:56:54] CR: It’s a Priscil­la. How long you stayed with Elvis is one

[01:56:57] CR: Priscil­la. Like the thing that you nev­er hear

[01:57:01] CR: talked about is the per­son who found him dead on the toi­let was his fiancée who had moved into Grace­land, um, but whose name nobody knows because Priscil­la was writ­ten around the his­to­ry. You know, the replace­ments.

[01:57:17] CR: Priscil­la had an affair with her karate instruc­tor. He intro­duced her to a karate instruc­tor, but he was too far to go to train. They were liv­ing in Cal­i­for­nia, I think. And she went and trained with, um, Chuck Nor­ris for a while, and then this guy said, I’ll come to your house. And train with you. And then they end­ed up hav­ing an affair.

[01:57:37] CR: Elvis was hav­ing affairs as well. And any­way, so she left Elvis for her karate instruc­tor. And, uh, then, and then, you know, with­in a few years, you see him in sev­en, there’s still the 70, 71 con­certs. He still looks like a mil­lion bucks in his orig­i­nal white jump­suit doing the karate stuff on stage. And with­in five years, six years, he’s, uh,

[01:58:01] TK: Yeah. Well, the res­i­den­cy 

[01:58:02] CR: whale and 

[01:58:03] TK: in Las Vegas

[01:58:03] TK: killed him. Yeah.

[01:58:04] CR: Yeah. Any­way,

[01:58:07] TK: Both men­tal­ly and phys­i­cal­ly.

[01:58:09] CR: and all the drugs, and yeah, you read the sto­ries, I was read­ing it up on the week­end, all the sto­ries like he

[01:58:13] CR: just could bare­ly walk, um, he was slur­ring his words, he was just a, you know, 

[01:58:21] TK: Which is, well, accord­ing to the, um, Lern­er movie, that’s how Tom want­ed him, Colonel Tom, want­ed him, 

[01:58:28] CR: right, 

[01:58:29] TK: want­ed him to per­form what­ev­er the num­ber of shows were a day, day and evening, 

[01:58:35] CR: cause he’s bring­ing in the 

[01:58:36] TK: six or sev­en days a week to make the mon­ey, yeah, because, um, that’s what hap­pened, and accord­ing, this is accord­ing to the Baz Lern­er movie, Tom Park­er gets into gam­bling debts at the casi­no and pays it off by get­ting Elvis to do the

[01:58:48] TK: res­i­den­cy, um, and then

[01:58:50] TK: keeps inject­ing Elvis with The uppers to keep him per­form­ing and down­ers to get him down again.

[01:58:56] TK: Yeah,

[01:58:57] CR: And then the colonel lives, uh, 20 years and keeps con­trol­ling the Pres­ley

[01:59:00] CR: estate for anoth­er 20 years. Would have made a for­tune off of that. One of the things I think it’s Bil­ly Cor­gan says in the doc­u­men­tary is, he said, When you see the 68 spe­cial, you have to real­ize this was­n’t just Elvis on a good night.

[01:59:14] CR: This was Elvis Pres­ley every fuck­ing day. And we could have seen this. Like, we could have hun­dreds and hun­dreds of hours of this Elvis. Um, this is what it could have been through the 60s. We could have had all of this Elvis, but the Colonel stopped us from get­ting Elvis. Like, it’s just a great tragedy of Elvis that we have so lit­tle

[01:59:43] CR: footage.

[01:59:45] CR: And record­ings of Peak Elvis doing his shit. Like, he’s so ani­mal. He’s so rock and roll in that thing. It’s insane­ly good. And Chris­sy had­n’t seen any of that before. I was watch­ing it. She was upstairs doing what­ev­er she does at night. I was down­stairs Doing my stretch­ing rou­tine after Kung Fu, watch­ing this, and she came down, just as the, they were start­ing to play the footage of the 68 spe­cial, and she was like, holy shit, she’s only ever seen like Elvis movies.

[02:00:15] CR: She has no, like, you know, shit­ty Elvis films, Blue Hawaii and stuff, which is actu­al­ly one of the good ones. A bit of Viva Las Vegas, bits I’ve shown her over the years, and she was like flab­ber­gast­ed. She’d nev­er seen This before, like, I’m like, Oh my God, you’ve nev­er seen Peak Elvis.

[02:00:33] TK: yeah,

[02:00:34] CR: She grew up as a Mor­mon.

[02:00:35] CR: She knows very lit­tle about Amer­i­can cul­ture. I know way more Amer­i­can cul­ture. Okay.

[02:00:39] TK: Well, the oth­er con­spir­a­cy the­o­ry is, uh, Colonel Tom was an ille­gal immi­grant and Elvis nev­er toured

[02:00:47] TK: out­side the U. S. because Tom would­n’t let him go with­out Tom and Tom could­n’t get back in if he left, did­n’t have a pass­port. 

[02:00:53] CR: Yeah, Right. He’s Czech or some­thing, was­n’t he? I think he’s Czecho­slo­va­kia or 

[02:00:57] TK: can’t remem­ber. Yeah, but we, but no one got to

[02:01:00] TK: see Elvis, not just the Amer­i­cans, but no one

[02:01:02] TK: world­wide got to see Elvis in con­cert.

[02:01:04] CR: Yeah, wow. But just think­ing about, like, from his per­spec­tive, going away in 58, going to West Ger­many, com­ing back, not being able to per­form live, and then watch­ing around you the Bea­t­les and the Stones and the Doors and Vel­vet Under­ground and this whole explo­sion of rock and roll, and you’re just watch­ing it go by, you’re not part of it, must have been incred­i­bly frus­trat­ing.

[02:01:32] CR: for 

[02:01:33] TK: Yeah. And then there, and then I’m not going to call it a lame attempt, but it was a

[02:01:37] TK: very con­ven­tion­al attempt to

[02:01:38] TK: try and, you know, put their foot in the door, was the, in the ghet­to, 

[02:01:43] CR: I love that, song. I’ve 

[02:01:45] TK: Yeah, it’s a great, great song, but it’s like, it’s like the lamest attempt to try and have social rel­e­vance in the rock and roll world.

[02:01:52] TK: It’s a

[02:01:52] TK: good song, but it’s a croon. It’s, it’s a, you know, it’s a Sina­tra style song.

[02:01:59] CR: It brings a tear to my eye. I steal that song. 

[02:02:01] TK: Sure. But, but it’s not, it’s not, um, you

[02:02:04] TK: know, it’s not, uh, For­tu­nate Son, or it’s

[02:02:08] TK: not, um, The Hur­ri­cane, as you

[02:02:10] CR: They stum­ble from my bed, thun­der crash­ing in my head, pil­lows still wet from last night’s tea. Oh, that’s, that’s Don’t Cry Dad­dy. That’s not in the ghet­to. I love Don’t Cry Dad­dy. That always brings tears to my eyes too. In the ghet­to. No, it’s good. Well, Rob­bie Robert­son on this thing says when the 68 spe­cial was, was, was going away, he, he and the band were with Bob and he’s like, Bob and I were like, let’s just watch it to see if the old man still got it.

[02:02:36] CR: You know, let’s tune in. And he said, they were both like, holy shit. Yeah. And Priscil­la was, Priscil­la was telling the sto­ry of when the Bea­t­les went

[02:02:46] CR: to their house to meet Elvis. And she said, John and Paul just sat there the whole night and did­n’t speak. They were just like a Just look­ing at him. They just could­n’t talk.

[02:02:58] CR: And he was like, well, if you’re not going to say any­thing, I’m going to turn on the TV. She said they were just, they were just starstruck. They could­n’t even, you know, have a con­ver­sa­tion with 

[02:03:07] TK: Well, and John and Paul say it was Elvis who intro­duced him to

[02:03:10] TK: dope. 

[02:03:11] CR: No, Bob, Bob

[02:03:13] TK: Oh, Bob was. I thought it was Elvis. Okay. Well, maybe Elvis intro­duced him to some­thing else 

[02:03:17] CR: Yeah. No, I know 

[02:03:18] CR: that 

[02:03:18] TK: that one wrong? 

[02:03:19] CR: Yeah. it was 

[02:03:19] TK: No, no. I thought it was 

[02:03:20] CR: intro­duced him to weed. All right. Well, that’s enough jib­ber jab­ber.

[02:03:26] TK: Okay. Yep. 

[02:03:28] CR: uh, enjoy your break next week, um, open invi­ta­tion for guests, get in

[02:03:33] CR: touch, um, oth­er­wise, um, I’ll just, uh, talk about Elvis next week, some­how. 

[02:03:43] TK: Yeah. Have a good week. Have a good two weeks. I’ll talk to you in a fort­night. Okay. 

[02:03:48] CR: Ciao.