QAV 801 — CY24 Portfolio Analysis

QAV 801

[00:00:00] CR: Give me a 1, 2, 3.

[00:00:03] TK: 1, 2, 3. The

[00:00:05] CR: 2025.

[00:00:07] TK: year of

[00:00:08] CR: year it all hap­pens. Well, yeah.

[00:00:12] TK: not the year of Trudeau.

[00:00:13] CR: New Year. Hap­py New Year,

[00:00:15] TK: New

[00:00:15] CR: TK.

[00:00:15] TK: Yeah, you too.

[00:00:16] CR: Yeah, Trudeau’s out. Not Gary Trudeau. He will be draw­ing car­toons for­ev­er, but, uh, his cousin. I don’t know. They must be relat­ed some, some­where along the line. Justin Trudeau. Uh, how was your, how was your Christ­mas and New Year, Tony?

[00:00:34] TK: Good. Busy though, up and down between Syd­ney and Mel­bourne and Cape Schanck, but good. And the move. So we’re, we’re mov­ing down to Cape Schanck for the next 12 months, at least.

[00:00:47] CR: And you are there now?

[00:00:48] TK: I am there now, you can’t tell?

[00:00:51] CR: Yeah, well, the lis­ten­ers can’t tell, I

[00:00:53] TK: Lis­ten­ers can’t tell. Yeah. Okay.

[00:00:55] CR: I can see the wind through the

[00:00:56] TK: was going to say, it’s very windy.

[00:00:59] CR: well, it could be windy in Syd­ney, but there’s no, usu­al­ly not bush­es out the front of your win­dow when you’re in the Sky Palace.

[00:01:04] TK: No, that’s right.

[00:01:08] CR: Hmm, so you’re gonna miss, uh, the Sky Palace, do you think?

[00:01:12] TK: Oh, you know what? I don’t think I will. Jen­ny will.

[00:01:17] CR: Hmm.

[00:01:17] TK: Yeah, I mean, I love it down at Cape Schanck, but she’s not the golfer, so there’s a

[00:01:21] CR: No. Well, maybe this is her oppor­tu­ni­ty to start.

[00:01:29] TK: No, not with her back and hips. No, no.

[00:01:32] CR: No, no. Get her an exoskele­ton.

[00:01:36] TK: Oh, that’s a good idea.

[00:01:38] CR: cool exoskele­tons com­ing out now. Get her one of those.

[00:01:42] TK: Oh, that’d be great. Yeah.

[00:01:43] CR: Yeah. So what else? What did you do for New Year’s Eve? Where were you New Year’s Eve?

[00:01:48] TK: Yeah. Back at the Sky Palace, last fire­works for a while. So that was a, had a good func­tion. I only had a small group of friends around, but it was nice. And, uh, watch the fire­works. It was a great night. And then

[00:02:01] CR: That’s good.

[00:02:01] TK: had New Year’s Day off and then start­ed the pack the day after that. It was just being, oh, go, go, go.

[00:02:10] TK: I did like, I did at least 10, 000 steps every day with­out leav­ing the apart­ment. Just on the run.

[00:02:18] CR: hmm. Mm hmm. Did you Marie Kon­do your­self in the process?

[00:02:24] TK: I don’t know what that means.

[00:02:30] CR: Marie Kon­do, she’s this big woman, she’s been very pop­u­lar for some years now. She’s the one about min­i­mal­ism, only keep the things that bring you joy. Any­thing that does­n’t bring you joy, you get rid of it. You say, does this bring me joy? No, get rid of it.

[00:02:45] TK: Uh, that’s not the, that’s not the rule I’d be in a, yeah, exact­ly, it’s not,

[00:02:50] CR: this, you don’t bring me joy.

[00:02:52] CR: You’re gone.

[00:02:53] TK: I don’t know, you bring me joy, you make me laugh. Um, uh, Jen­ny might be apply­ing that, but she keeps get­ting big­ger and big­ger and more,

[00:03:02] CR: More stuff. More stuff brings me joy.

[00:03:05] TK: Oh, we were, I know she won’t lis­ten to this, so I can tell you the sto­ry. So, like, we, we’ve spent three good goes at declut­ter­ing. And she’s still got, I’m going to say, 20 wardrobes of clothes.

[00:03:23] TK: And I’m like, so I keep drop­ping into the con­ver­sa­tion, Oh, look, if I haven’t worn it for a year, I throw it out.

[00:03:29] CR: Uh

[00:03:29] TK: She’s like, she’s like, Oh yeah, I haven’t worn this stuff for 20 years, but I’m keep­ing it. So that does­n’t bring me joy. If, if I was to throw out things that did­n’t, she’d have a lot less clothes.

[00:03:46] CR: Big Jen­ny’s wardrobe you’d be

[00:03:47] TK: M Books, Emma, her, I mean she wrote that book, The Gift of Gen­eros­i­ty, it’s the gift of back pain as far as I’m con­cerned, I have moved 30 box­es of books in about 3 dif­fer­ent places now and I am over it.

[00:04:02] CR: Uh, I, um, I find it hard to get rid of books, not my own books. I do find it hard to get rid of them too, but um, just to move them. But yeah, like some, I got rid of hun­dreds and hun­dreds and hun­dreds of books years ago, but I still have a cou­ple of hun­dred, maybe a hun­dred, that I know like, you know, old edi­tions that I’m not going to be able to find dig­i­tal ver­sions of or oth­er ver­sions.

[00:04:25] CR: Chris­sy’s like, you’re nev­er going to read them again. I go, well, you know, the minute I throw it out is when I’ll go, Oh, what was that book? Well, the minute I get rid of it will be the minute I’ll need to look some­thing up in it. But any­way. So! Mm hmm.

[00:04:39] TK: I’ve got, I’ve got two piles of books. I’ve got the books I’m keep­ing at the moment are the ones which are trea­sured by me. So you can see Behind me in a book­case there is things like Kurt Von­negut’s and um, old sci fi and stuff. Ah, but also, you know, books like, um, Chaos by Glick.

[00:04:59] CR: hmm.

[00:04:59] TK: yep, so good. Books that I would like to be able to just at hand say to some­one, Hey, if you haven’t read this, read this.

[00:05:06] CR: Right.

[00:05:07] TK: Or, and I’ve got a,

[00:05:08] CR: Epi­dem­ic. 50 copies of that.

[00:05:10] TK: yeah, it’s at home. Not 50. Got a

[00:05:14] CR: home!

[00:05:14] TK: half a dozen. Um, and then, uh, books I haven’t read yet, which is a big pile as well.

[00:05:20] CR: Right.

[00:05:21] TK: Every year I say, my new year’s res­o­lu­tion is, look, don’t buy anoth­er book until you fin­ish the ones you haven’t read yet. And then some­thing I’ll get released and I go, oh, I’ve got to get that.

[00:05:32] CR: Mm. Mm. You haven’t moved to dig­i­tal books yet? E books? iPad books?

[00:05:37] TK: I did that for a long time and I did­n’t like it. And Alex and I were talk­ing about that recent­ly. You don’t get the cov­er art, you don’t get the, You know, I just, I find they all blur into each oth­er if I’m not sort of star­ing at a pic­ture of the author or some­thing on the front cov­er and asso­ci­at­ing that with it.

[00:05:55] TK: Yeah.

[00:05:56] CR: Right.

[00:05:57] TK: It’s like read­ing one con­tin­u­ous mag­a­zine arti­cle.

[00:06:01] CR: Excuse me a sec­ond, a lit­tle boy has just walked in. What’s up? He’s hid­ing from mum­my for a while. Um.

[00:06:28] TK: do that at some stage or anoth­er, don’t we? That was the oth­er thing, like, talk about hid­ing from peo­ple. It’s prob­a­bly a good thing Gin­ny and I aren’t in the same state at the moment. I’m very grate­ful that she stayed behind for a cou­ple of days. She’s got a hair­cut this after­noon, which is why she was stay­ing behind.

[00:06:49] TK: Um, and I had to leave with the Pack­ers when they fin­ished because I had to dri­ve every­thing down to Cape Shea. Um,

[00:06:56] CR: Car­rie?

[00:06:57] TK: sor­ry, no, not Ker­ry, no. Grace. Grace Broth­ers. Yeah.

[00:07:02] CR: Hmm. Oh, Grace Pack­er.

[00:07:04] TK: so I’m get­ting phone calls. I’m dri­ving down yes­ter­day from Wag­ga. I’m get­ting phone calls. Uh, how do we change the code on the safe? And I’m like, I don’t know.

[00:07:14] TK: You’re there. Google it. How do I do that? Just open up Google, get the make and mod­el of the safe, and say, how do I check? It’s like, and then like two hours lat­er, I get a call back. I’m doing a vic­to­ry lap. I changed the code on the safe. Okay, good. We’ll go to the front door now and get the alarm code changed.

[00:07:37] TK: So the ten­ants don’t use their alarm code. And that, like, that took all day. And I did it. I got to Cape Schanck, got out of the car, sat down, got Google out, rang a bat, Face­Timed me, show me the key­pad, here’s how you do it. Try that. Done in five min­utes.

[00:07:56] CR: I was, I was, I was with my mum for the last two weeks in Bund­aberg and she was quite proud of her­self because she’s got a friend who’s like 87, whose hus­band passed away recent­ly and now this woman calls my mum 15 times a day to ask her stuff like that. Mum says to her, just Google it. And I was like, I can remem­ber teach­ing my mum that 20 years ago.

[00:08:17] CR: Now my mum’s teach­ing peo­ple. Yeah. But,

[00:08:20] TK: just don’t expect

[00:08:22] CR: of us that are,

[00:08:23] TK: does­n’t do that these days.

[00:08:25] CR: well, I don’t do that because I’m part of the Cognoscente, Tony, and as Steve and I were talk­ing about on Futur­is­tic, uh, a cou­ple of weeks ago, the Cognoscente don’t Google it any­more, we Chat­G­PT it. Appar­ent­ly, Google traf­fic is Um, from hard­core users has dropped like 90 per­cent in the last six months because peo­ple are just using Chat­G­PT now to look up stuff.

[00:08:51] CR: They’re not, because now it has search built into it. They’re not using Google any­more. So

[00:08:55] TK: Well, I get, um, when­ev­er I use Google now, I get their AI sum­ma­rizes the results for me. So that’s pret­ty good.

[00:09:02] CR: Yeah.

[00:09:03] TK: isn’t that as good as Chat­G­PT?

[00:09:06] CR: I haven’t test­ed it. Prob­a­bly. Chat­G­PT is a lit­tle bit bet­ter, I think, but prob­a­bly good enough. Yeah. All right. Let’s get into invest­ing. Tony, see­ing as we’re on a tight time win­dow today. Yeah.

[00:09:18] TK: Yeah. Okay.

[00:09:23] CR: Well, that’s what we’re here for. Um, yes, well, so, uh, cal­en­dar year 2024 has been and gone. Um, and, uh, look, it was bizarre. So I had a cou­ple of emails from peo­ple telling me that, um, They did­n’t have a great year, um, I had a look at my num­bers of all the port­fo­lios that I look after, and it was a real mish­mash, as you’ve prob­a­bly seen, because I post­ed it up on the Face­book page, but out of the six port­fo­lios that I man­aged, the returns were every­where from neg­a­tive 1.

[00:10:02] CR: 7 per­cent for the cal­en­dar year, Up to 20. 61 per­cent and every­thing in between. There were two with neg­a­tive one, two around about 10 or 11, 12 per­cent and two up around 20 per­cent fol­low­ing the exact same sys­tem, all fair­ly well estab­lished. My super port­fo­lio is prob­a­bly the newest out of them. I think it’s only been run­ning for a cou­ple of years, but, um, yeah,

[00:10:27] CR: all fair­ly well estab­lished, and yet, uh, the results all over the place. So, uh, they,

[00:10:35] TK: sounds like

[00:10:36] CR: try­ing to fig­ure that out. It would sound like chance if I knew it was­n’t. Um, and when I looked at the, when I, when I did some, like, analy­sis, high lev­el analy­sis of them. I saw the thing that popped out at me was the port­fo­lios that did real­ly well, that had like a 20 per­cent return. By the way, the STW, I think, was like 11 per­cent for the, for the cal­en­dar year. Um, the ones that did up around 20 per­cent tend­ed, the only thing they real­ly had in com­mon, port­fo­lio sizes were sim­i­lar. One’s got 13, one’s got 16 at the moment. Um, one had. More losers than win­ners. One had more win­ners than losers. But the thing that they both had in com­mon was at least two or three stocks that per­formed 70 to a hun­dred per­cent in the year where the ones that did­n’t per­form as well, either had.

[00:11:36] CR: Only one stock that did sort of north of 70% or did­n’t have any that got above 50%. Now, there were like the ones that did neg­a­tive 1%, had some good returns, uh, 52%, 43%, 36% for some stocks. Like, I’m not sneez­ing at a 40 50 per­cent year, uh, return on a, on a stock, but they did­n’t have enough big win­ners to com­pen­sate for the losers that they had, and in both of those cas­es, the ones that did neg­a­tive 1 per­cent had more losers than more win­ners.

[00:12:12] CR: So, and I, uh, so my con­clu­sion was just that, you know, it’s, uh, It is a bit of a luck of the draw thing in terms of the stocks. In any giv­en year, the port­fo­lios that out­per­form, sig­nif­i­cant­ly out­per­form, just hap­pen to have enough stocks that real­ly do well in that year. I mean, we’re always buy­ing stocks that meet our cri­te­ria to the best of our abil­i­ty.

[00:12:37] CR: There are good com­pa­nies that we can get them at a dis­count and then we hold them as long as we can, but they’re not all gonna kick off at the same time, is my con­clu­sion. What, uh, what’s your con­clu­sion from all of that and how did your port­fo­lios do for the cal­en­dar year?

[00:12:55] TK: so my con­clu­sion from what you’ve just said was that the only thing I can draw on is that they did all start at dif­fer­ent times. So that, that could be a thing. Um, we’ve seen

[00:13:07] CR: a cal­en­dar year, you know, day, Jan 1 per­for­mance, how would that, how would that play into it? They were all well estab­lished before Jan 1, 2024.

[00:13:17] TK: Uh, the only way I could see it play­ing into it is if you, you know, bought some stocks Um, two years ago and then, you know, they had a dif­fer­ent pro­file when they came in to start 2024, like they were already close to their highs or they were already, you know, close to their lows or what­ev­er, um, when they, when they start­ed the year.

[00:13:37] TK: That’s all I can think of. But, um, what I noticed about most of the port­fo­lios is you have, in those ones you just out­lined, you had more losers than win­ners, I think, in the major­i­ty of cas­es.

[00:13:48] CR: Yeah.

[00:13:49] TK: I think, uh, your super had more win­ners than losers, uh, and one of the Light, the Light port­fo­lio that did 20.

[00:13:57] TK: 6 per­cent return had 17 win­ners and 10 losers. So I’m, you know, I’d have to go through and analyse the trans­ac­tions, but I’m won­der­ing whether chang­ing from a 10 per­cent rule one to a 20 per­cent rule one. might help. I don’t know whether they were rule ones that were caus­ing the trades or not. Because in my own port­fo­lio, I only had four trades for the year, uh,

[00:14:24] CR: Wow.

[00:14:25] TK: which was, but I’ve got a con­cen­trat­ed port­fo­lio, so there’s only six stocks in my port­fo­lio, but, um, it’s still, it’s still a rea­son­ably light 20 per­cent rule one, so I’m won­der­ing whether.

[00:14:40] TK: That’s helped. I’ve had more win­ners than losers as well. I’m just look­ing up my num­bers now. So, for my port­fo­lio, I had 16. 3 per­cent total return for the cal­en­dar year. Yep. Um, and, but that was rough­ly 50 50 div­i­dends and cap­i­tal gains. And,

[00:14:58] CR: Right.

[00:14:59] TK: if I could char­ac­ter­ize my port­fo­lio, it’s, it’s large cap, high div­i­dend pay­ing stocks, because I’m sort of posi­tion­ing it for retire­ment, um, and liv­ing off the div­i­dends, but, but yeah, rough­ly 8, well, the num­bers were 8.

[00:15:11] TK: 3 per­cent cap­i­tal gain and 8 per­cent div­i­dends, um, that would include frank­ing cred­its for the, for the year, so grossed up div­i­dends. Um, I com­pared that, so I’m using Share­Site for my report­ing, so again, that’s, the cap gains are prob­a­bly going to be time weight­ed rather than straight CAGR, so that’s One thing to be aware of, but I am com­par­ing it to what Share site is say­ing.

[00:15:36] TK: S‑T-D-S-T‑W did, which was 15.7% for the year. So slight­ly out­per­formed, STW, and I know you just said 11% and, uh, I get 11.2% for the A SX 200 or, um, accu­mu­la­tion index. Is S‑T-W-A-S‑X 200 or is it total share

[00:15:57] CR: Yeah. No, it’s total return, STW total return.

[00:16:01] TK: I can’t, I can’t explain that because I’ve got 11. 2 when I googled it and Share­Site is say­ing it’s 15.

[00:16:07] TK: 7. So, yeah, I can’t explain what’s going on there. Um, Share­Site say­ing 10. 5 per­cent cap gain and 5. 1 per­cent div­i­dends for STW.

[00:16:25] CR: If I look at the, um, if I look at the dum­my port­fo­lio, it had about a 6. 3 per­cent cap­i­tal gain and a 5. 56 per­cent income return, so also rough­ly about a 50 50 split for the year.

[00:16:39] TK: Yep. So that’s inter­est­ing.

[00:16:41] CR: Um, so yeah, I haven’t done an analy­sis on how many of the cells were Rule 1 ver­sus, uh, any­thing else. Thanks. But I would guess there was prob­a­bly the major­i­ty of Rule 1s,

[00:16:56] TK: Yeah. Yeah. So is it worth­while just tak­ing two of those port­fo­lios and maybe mak­ing them 20 per­cent and see if that in the next 12 months makes a dif­fer­ence to the returns at all?

[00:17:08] CR: Yeah, sure. Can do that. Um, okay, but out­side of Rule 1, you know, why would it be that, um, you know, these port­fo­lios Uh, fol­low­ing the same sys­tems but have such diver­gent returns, do you think? And, and, and, sim­i­lar, some feed­back, I haven’t had much feed­back from the mem­bers, I did do a Face­book page, but I know a cou­ple of peo­ple had, you know, sort of slight­ly neg­a­tive, slight­ly pos­i­tive years, um, and some­body emailed me say­ing that, or on the Face­book said that he had a, near­ly an 18 per­cent return for the year, so mem­bers also get­ting diver­gent results.

[00:17:51] CR: Thank you very much. Which isn’t new, we’ve seen that before, we’ve seen that in the past. Um, yeah, some peo­ple do real­ly well, some peo­ple do aver­age, some peo­ple do bad years. Um,

[00:18:02] TK: Do you have past per­for­mance for each buy port­fo­lio? So you can say if it went up the most this year, it was actu­al­ly under­per­formed last year, in which case I would think it’s going to be just the start­ing state, that the port­fo­lio held stocks that were at their highs when it start­ed the year and it so has­n’t per­formed as well.

[00:18:19] TK: But in the pri­or year, to get to the highs, it out­per­formed.

[00:18:24] CR: um, you mean for the port­fo­lios I man­age?

[00:18:27] TK: Yeah, for the ones you just read out, the white

[00:18:30] CR: I have, I, I haven’t done that, but I know they all had a port­fo­lio. Pret­ty bad year. Like the pre­vi­ous year was a shock­er. Um, so, um, well, I know like the 221, the first light port­fo­lio, which I start­ed in Feb­ru­ary 22, just before the inter­est rate ris­es kicked in, before the Ukraine war kicked in, um, it’s all time per­for­mance since then is the same as its last cal­en­dar year per­for­mance.

[00:18:59] CR: It’s about neg­a­tive 1. 6%. It’s nev­er been able to get its way. Wind in its sails. Um, so I know it did­n’t have a good year the pre­vi­ous year. Um, where­as I know the 2. 2. 2 port­fo­lio was doing real­ly well for a while there. It was doing dou­ble mar­ket. Last year, um, had a cou­ple of big win­ners and it had a bad year this year.

[00:19:26] CR: So it might be that case. By the way, my super port­fo­lio, which it was, did it come in at about 10 per­cent as of late Octo­ber, it was up 22%. And then it had, um, who are the guys that, um, got kid­napped in Africa?

[00:19:43] TK: West African Resources.

[00:19:45] CR: Res­olute? No, Res­olute Min­ing. I think it was. Yeah, had them, which went down by 50 per­cent and a few oth­ers.

[00:19:53] CR: Um, and it is a lit­tle bit more con­sol­i­dat­ed. So, uh, that hurt. Had a cou­ple of, I think, FPR and FND and a few of those. Ah, FND is one of those. Any­way, um, it dropped a lot just in the last six weeks. It was look­ing real­ly good up until the end of Octo­ber and then the last two months, it real­ly took a beat­ing.

[00:20:16] CR: Any­way, um, I just keep think­ing, well, it’s a long term strat­e­gy and it all should bal­ance out in the end. Each of those port­fo­lios should get a good cou­ple of stocks that’ll pull it up and have a good cou­ple of years. But, um, yeah,

[00:20:29] TK: Shoot. I don’t have the data, so shoot me the details if you can. Do you have the trans­ac­tion since you set up the port­fo­lios?

[00:20:37] CR: yeah, I’ve got all of the trades. I can shoot you in a spread­sheet. I was plan­ning on doing some analy­sis on that at some point, just haven’t had a chance.

[00:20:45] TK: Espe­cial­ly the one, maybe just send through two twos at 221, the one that’s still under­per­form­ing since it was set up. Yeah.

[00:20:51] CR: yeah,

[00:20:52] TK: Let me have

[00:20:52] CR: I’d love to get your thoughts on it.

[00:20:53] TK: Yeah. Um, so I had four trades dur­ing the year, um, in a six stock port­fo­lio. So that’s, you know, not, not, that’s pret­ty usu­al, I think, longer term.

[00:21:06] CR: Yeah.

[00:21:07] TK: Yeah. I try, I mean, I lost when inter­est rates start­ed ris­ing, I had a cou­ple of hor­ri­ble years where I kept trad­ing because of rur­al ones often­times.

[00:21:16] TK: Um, but the, but like the, of the four stocks I trad­ed, there’s. There were some fun­ny things going on. One was ABA, Auswide Bank, which we had that day where it dropped a lot and went down below its peak. It’s um, sell one and then bounce back up again the next day. So I can’t real­ly explain that one. Um,

[00:21:34] CR: And you see, did you see my text over the hol­i­days when I went to vis­it their head­quar­ters, just to have a word with them? They hap­pened to be closed because it was New Year’s Day, but um,

[00:21:43] TK: Are you going to ask them what hap­pened?

[00:21:45] CR: Yeah. I was going to be like, Hey, what’s going on? Um, it’s hap­pened twice. It hap­pened twice over the Christ­mas, New Year peri­od.

[00:21:52] CR: Again, if you look at their, if you look at their chart, I think it’s hap­pened four times in the last month. The last one was­n’t as bad, but the one before that was quite bad. They’ve had like this Peri­od of just like, end of the day, mas­sive drops, and then it recov­ers the next day. Oh, there’s anoth­er one!

[00:22:12] CR: Anoth­er one hap­pened, uh, yes­ter­day. Where it was, it opened the day at sort of 4. 88 and then it dropped down to 4. 67 at the end of the day and then recov­ered this morn­ing. So five times since, uh, the 9th of Decem­ber, 10th of Decem­ber. It’s had sud­den end of day drops, quite dra­mat­ic end of day drops, and then recov­ered the next day.

[00:22:41] CR: Uh, rinse and

[00:22:42] TK: Grand, isn’t it? And the ADTs, it’s, well, it’s not that large. It’s 170 odd thou­sand, but it’s, so it could be moved around by a rel­a­tive­ly small trade, I guess, but it’s hap­pen­ing at the end of the day and it’s five or 6 per­cent that’s being sold off. Or it’s forc­ing the price down five or six per­cent. Yeah, I can’t work out who’s doing that and how they’re gain­ing from it real­ly.

[00:23:07] CR: yeah. And why, you know, no one’s raised a query with the

[00:23:12] TK: Yeah, yeah,

[00:23:13] CR: It’s very bizarre.

[00:23:16] TK: yeah, okay.

[00:23:17] CR: So any­way, so you had, uh, four sells out of six stocks

[00:23:22] TK: Yeah, so the ABA was the fun­ny one and that was­n’t real­ly a QA, even though it was on the buy list. I bought it before it was on the buy list because it was a, um, there was a cap­i­tal rais­ing that my stock­bro­ker got me into. So I did­n’t actu­al­ly own much of it because of the ADTs. Small. Um, so put that aside, it’s, it’s three QAV trades, uh, GN, Grain­Corp, which was a com­mod­i­ty sell, uh, and that, that actu­al­ly worked out well, because I made a, a small prof­it on Grain­Corp, I think I made like 5 per­cent on my hold­ing, uh, it was picked up by one of our lis­ten­ers, thanks to Gary, that I was hold­ing it, even though that Grain had become a com­mod­i­ty sell and it worked out well because I bought, um, into, uh, Per­en­ti, which is up, that’s been my best per­form­ing stock and that’s up, uh, how much is that up? Oh, 30 or 40 per­cent since I bought it. 38. 44 per­cent since I bought it. That’s only since August, since late August. So that’s been a tear­away suc­cess for me. Um, I guess, I guess I had to fudge, fudge the ADT on that one. Like in all port­fo­lios, grow­ing corp was­n’t my biggest hold­ing, so I only had a, um, I tend to find over time I get full hold­ings and half hold­ings because, you know, if you sell a los­er and you sell a los­er and you sell a los­er and you keep just rein­vest­ing that por­tion, it gets, you know, if you don’t get some­thing that grows, that it sort of lags behind the rest of the port­fo­lio.

[00:24:48] TK: So I was able to buy Par­en­ti with just a bit of a fudge on the ADT, um, but it was good because it’s, it’s grown. It’s been my best per­former, but I have. Um, had some oth­er good ones, so ANZ’s up 21%, QBE’s up 27. 5 per­cent for me, so that’s good. The rest are sort of up less than that, but doing okay. Uh, the ones I regret I sold PRU, which is, um, the gold min­er, Perseus, and I sold Ramelius, RMS, and I can’t recall whether they were real.

[00:25:25] TK: I don’t think they were real ones. They might have been, but I think they are more prob­a­bly com­mod­i­ty sales from gold.

[00:25:30] CR: Gold.

[00:25:31] TK: Yeah. So, and like, as soon as I sold them, they turned around and, uh, I, I, I lost on the trades. I think I lost about 15 per­cent on Ramelius, and now it’s up way above what I sold it for. So that worked against me.

[00:25:45] TK: Mm

[00:25:46] CR: I don’t know. It’s, it’s, I’ve got that on my list of things to talk about today because it’s been a bizarre one in the last cou­ple of months as well. It was up 20th of Octo­ber is up like 2. 47. Then it dropped to 1. 95 by the mid­dle of Novem­ber, shot back up to 2. 40 by the 11th of Decem­ber, dropped back down to 2.

[00:26:07] CR: 00 by the end of Decem­ber, um, and is up a lit­tle bit today. And it’s been, again, it’s one of these things where there’s no real rea­son I can see for it being as chop­py as it is. I know they’re under­go­ing, um, par­tic­i­pa­tion in, I think, anoth­er busi­ness cap­i­tal rais­ing at the moment. But, uh, yeah, all over the place, chop­pi­ness, which, um, I have, I, it’s actu­al­ly keeps slid­ing in and out of a rule one cell for me with one of the light port­fo­lios.

[00:26:42] TK: Okay.

[00:26:44] CR: They put out a press release yes­ter­day morn­ing, which was fun­ny. It was like Decem­ber 2024 quar­ter update record under­ly­ing free cash flow of 174. 5 mil­lion. And then, that’s pret­ty much all it said, and under­neath that it said, Com­ments relat­ed to FY25 guid­ance and fur­ther details will be avail­able in the full Decem­ber 2024 quar­ter­ly report lat­er this month.

[00:27:10] CR: Like, well Why did you put this report out? Just to say that you’re mak­ing cash? Like, real­ly? Is that it? That’s the only good news thing you have? So you just put this out to try and stem the share price? The share When the Well, when the When this thing went out, the quar­ter­ly update Par­tial quar­ter­ly update went out yes­ter­day.

[00:27:29] CR: The shares shot up 5 per­cent from 2. 11 to 2. 22 and then fell back down today to 2. 12. So it was like, uh, I don’t know, I was read­ing it going, well, let’s, what’s the point of this? Like, it, it did­n’t real­ly, you know, If you’re going to go to the trou­ble of putting that out, is it because they have to report any­thing that they come across?

[00:27:51] CR: Oh look, we, we made mon­ey, we bet­ter tell the mar­ket? Or is it just, uh,

[00:27:55] TK: Well, they, they do. They do. But to work out, to work out free cash flow and whether it was record free, cash flow, they’ve got­ta do all the oth­er cal­cu­la­tions as well, which means they know what the rev­enue is up. Yeah. , they know exact­ly what every oth­er num­ber is. So they, if I was a reg­u­la­tor, I’d be say­ing, well, you’ve got­ta release a lot.

[00:28:13] TK: You can’t just release the good one. So,

[00:28:15] CR: we don’t have time. Don’t have time. Don’t have time to write all those oth­er num­bers in the press release, got­ta get it out! I only have time to write down one num­ber.

[00:28:23] TK: Yeah.

[00:28:24] CR: Yeah. Any­way, that’s RMS, it’s, it’s a, it’s a weird one.

[00:28:28] TK: Yeah, okay, look, I haven’t got the RMS num­bers in front of me, but, uh, for Perseus, uh, I bought it at 1. 85 in August 23, sold it for 1. 70 in Feb­ru­ary 24, so that was a loss, and it’s now up at 2. 58 today, so, uh, it’s pret­ty good. It’s bounced around a lot too and forced me to sell. But any­way, look, you don’t look at the ones you’ve sold, but um, uh, and I did buy oth­er things which have done well, so I’m not too wor­ried about it. But yeah, so for me, a kind of more nor­mal year than the past cou­ple. Um, not, not dou­ble mar­ket, but, you know, 16 per­cent is a good return and, uh, you know, giv­en that I’m sort of con­cen­trat­ing on large caps with good div­i­dend pay­ers, so it’s only a sub­set of the mar­ket, um, that’s, that was pret­ty good. So, um, yeah, not a bad result for me this year.

[00:29:26] CR: to any­one that had a bad year, um, I did see a thing on a val­ue invest­ing sub­red­dit, which I liked is a quote from Peter Lynch. Every­one is a long term investor until the mar­ket goes down. I’ve actu­al­ly got a clip. I’ll see if this will work. I got it. I watched this. It’s a talk he gave in 1994. There are some real­ly good clips.

[00:29:51] CR: Um, I’ll just play that one, even though it’s quite short.

[00:29:55] Peter Lynch: Because I’ve had audi­ences like this, large audi­ences. And I’ll say, how many peo­ple in the room are short term investors? I’ve nev­er had any­body ever raise their hand. I mean, every­body in the world is a long term investor. Until the mar­ket goes down, and like in 90 I remem­ber 1990, 1990 was so much scari­er than 87.

[00:30:12] Peter Lynch: 87, the mar­ket just fell down. And you call up com­pa­nies and say, our busi­ness is ter­rif­ic. We’re about to announce a stock buy­back. We’re already buy­ing back our stock. Busi­ness is great, and we can’t fig­ure this out. But in 1990, you had Kuwait invad­ed. You had, uh, the bank­ing sys­tem real­ly on the ropes.

[00:30:29] CR: Any­way, then he goes on about the Iraq war, but that was just that quote. I like that. Every­one’s term investor until the mar­ket goes down. And you know, I, I feel like every­one’s a long term investor until they have a bad year and then they’re like, Oh shit, you know, I’m not doing that any­more. But like, I don’t want to be face­tious about it, but you know, it’s a long term strat­e­gy.

[00:30:53] CR: You’re going to have good years. You’re going to have bad years, right?

[00:30:56] TK: Yeah. So I was a long term investor before the GFC. Like I was the clas­sic Buf­fett 10, 10 rides on your bus pass and click one off every time you buy some­thing, even though he’s bought and sold hun­dreds, if not thou­sands of busi­ness­es and shares over the years. But, um, but yeah, that’s the clas­sic val­ue investor is the buy and hold, which I was.

[00:31:17] TK: And then it just, every­thing went down in the GFC. Every asset class went down. Um, so there was no hid­ing and so I decid­ed I need­ed to sharp­en up the way I sold things and that’s when the three point trend line process came out, uh, or came about and I added it to my invest­ment process. But yeah, it’s a real­ly good quote, makes sense.

[00:31:37] TK: And, and as to your oth­er point about peo­ple hav­ing a bad year and then, you know, throw­ing in the tow­el Chang­ing style. Capit­u­lat­ing. Um, I was lis­ten­ing on the way down dur­ing whilst dri­ving between Syd­ney and Cape Shank, uh, to the Joe Walk­er pod­cast, which is the ex Jol­ly Swag­man pod­cast. And he was inter­view­ing Eugene Fama.

[00:31:58] TK: So have you heard of Eugene Fama? Yep.

[00:32:01] CR: Yeah, we’ve talked about him on the

[00:32:02] TK: guru. Yeah. Uh, and it was actu­al­ly a real­ly good lis­ten, um, even though I don’t always agree with Fama, but, um, he made a lot of sense in the pod­cast. But one thing he said was, Uh, if a fund man­ag­er says, you know, I’ve out­per­formed the mar­ket for the last five years or three years or what­ev­er, don’t judge them on that.

[00:32:18] TK: You have to see what they do going for­ward. Judge peo­ple going for­ward, because that, you know, his, his the­o­ry, if the effi­cient mar­ket is right, peo­ple can out­per­form for short peri­ods, but not for long peri­ods. Um, and that kind of res­onat­ed with me, but it also kind of said that there’s going to be peri­ods of under and over per­for­mance.

[00:32:38] TK: Um, you know, I think the, I think the, the basic hypoth­e­sis of what I do is still sound that, uh, if you take a mar­ket and take out the bad stocks and take out the stocks which are riski­er, like the high, high PE stocks, you’ve got to be left with stocks which out­per­form over time. They won’t out­per­form every year, but they will out­per­form over time.

[00:32:57] TK: So, you know, I think that still holds. It’s held for me for 25 years. Um, but it has­n’t held every year in 25 years. So I think that’s impor­tant to put in per­spec­tive. Oh,

[00:33:10] CR: when Lynch talks about long term investors, I don’t think that nec­es­sar­i­ly means that you don’t have stop loss­es in place, but it means that when you sell some­thing, you are rein­vest­ing regard­less of where the mar­ket is at. You’re try­ing to remain ful­ly invest­ed as long as your sys­tem will allow you to remain ful­ly invest­ed.

[00:33:30] CR: There’s one oth­er ques­tion. Uh, I want to play, it’s from ear­li­er in this talk from 94, but, um, it’s just good stuff. I mean, it’s 30, is that 30 years ago? 29, 30 years? Yeah. Um, and, but it just speaks to today. Let me play this clip for a few min­utes.

[00:33:51] Peter Lynch: I frankly think it’s a tragedy in Amer­i­ca that the small investor, has been con­vinced by the media, the print media, the radio, the tele­vi­sion media, that they don’t have a chance, that they don’t, the big insti­tu­tions with all their com­put­ers and all their degrees and all their mon­ey, have all the edges, and it just isn’t true at all.

[00:34:13] Peter Lynch: And when they’re con­vinced, when this hap­pens, when this occurs, peo­ple act accord­ing­ly. When they believe it, they buy stocks for a week, and they buy options, and they buy the Chile fund this week, and next week it’s the Argenti­na fund, and, and they get results pro­por­tioned to that kind of invest­ing. And that’s very both­er­some.

[00:34:30] Peter Lynch: I think the pub­lic can do extreme­ly well in the stock mar­ket on their own. I think the fact that insti­tu­tions dom­i­nate the mar­ket today is a pos­i­tive for small investors. These insti­tu­tions push stocks on unusu­al lows. They push them on unusu­al highs. For some­one that can sit back and have their own opin­ion and know some­thing about the indus­try, this is a pos­i­tive.

[00:34:48] Peter Lynch: It’s not a neg­a­tive. So that’s what I want to talk about. And the sin­gle, sin­gle most impor­tant thing to me and the stock mar­ket for any­one is to know what you own. I’m amazed how many peo­ple own stocks. They would not be able to tell you why they own it. They could­n’t say, in a minute or less, why they own it.

[00:35:07] Peter Lynch: Actu­al­ly, if you real­ly pressed them down, they’d say, The rea­son I own this is the suck­er’s going up. And that’s the only rea­son, that’s the only rea­son they own it. And if you can’t explain, I’m seri­ous, you can’t explain to a 10 year old, in two min­utes or less, why you own a stock, you should­n’t own it.

[00:35:21] Peter Lynch: And that’s true, I think, of about 80 per­cent of peo­ple that own stocks. This is the kind of stock peo­ple like to own. This is the kind of com­pa­ny peo­ple adore own­ing. This is a rel­a­tive­ly sim­ple com­pa­ny. They make a, a very, uh, nar­row, easy to under­stand prod­uct. They make a one megabit SRAM CMOs bipo­lar risk float­ing point data io io array proces­sor, sir, with an opti­miz­ing com­pil­er, a 16 dual port mem­o­ry, a dou­ble dif­fused met­al oxide, semi­con­duc­tor mono­lith­ic log­ic chip.

[00:35:50] Peter Lynch: With a Plas­ma Matrix Vac­u­um Flu­o­res­cent Dis­play. It has a 16 bit dual mem­o­ry. It has a Unix oper­at­ing sys­tem. Four Whet­stone MegaFLOP Poly Sil­i­con Emit­ter. A high band­width, that’s very impor­tant. 6 GHz. Dou­ble Met­al­iza­tion Com­mu­ni­ca­tion Pro­to­col. Asyn­chro­nous Back­ward Com­pat­i­bil­i­ty. Periph­er­al Bus Archi­tec­ture.

[00:36:10] Peter Lynch: Four Wave Inter­leave Mem­o­ry. A Token Ring Inter­change Back­plane. And it does it in 15 nanosec­onds of capa­bil­i­ty. if you own a piece of crap like that, you will nev­er make mon­ey. Nev­er. Some­body will come along with more whet­stones, or less whet­stones, or a big omega flop, or a small omega flop. You won’t have the fog­gi­est idea what’s hap­pened.

[00:36:31] Peter Lynch: And peo­ple buy this junk all the time. I made mon­ey in Dunkin Donuts. I can under­stand it. I, uh, when there was reces­sions, I did­n’t have to wor­ry about what was hap­pen­ing. I could go there and peo­ple were still there. I did­n’t have to wor­ry about low priced Kore­an imports. I mean, I just did­n’t have, you know, I can under­stand it.

[00:36:50] Peter Lynch: And you laugh. I made 10 or 15 times my mon­ey in Dunkin Donuts. Those are the kind of stocks I can under­stand. If you don’t under­stand it, it does­n’t work. This is the sin­gle biggest prin­ci­ple. And it both­ers me that peo­ple are very care­ful with their mon­ey. The pub­lic, when they buy a refrig­er­a­tor, they get to con­sume reports, they buy a microwave oven, they do that. They ask peo­ple what’s the best kind of radar range, or what kind of car to buy. They do research on apart­ments. When they go on a trip to Wyoming, they get the Mobile Trav­el Guide, or Cal­i­for­nia. When they go to Europe, they get the Miche­lin Trav­el Guide. Peo­ple will hear a tip on a bus, on some stock, And they’ll put half their life sav­ings in it before sun­set and they won­der why they lose mon­ey in the stock mar­ket and when they lose mon­ey they blame it on the insti­tu­tions and pro­gram train­ing.

[00:37:38] Peter Lynch: That is garbage. They did­n’t do any research, they bought a piece of junk, they did­n’t look at the bal­ance sheet, and that’s what you get for it. And that’s what we’re being dri­ven to and it’s self ful­fill­ing. The pub­lic does ter­ri­ble invest­ing and they say they don’t have a chance. It’s because that’s the way they’re act­ing.

[00:37:54] Peter Lynch: I’m try­ing to con­vince peo­ple there is a method. There are rea­sons for stocks to go up. There Uh, Coca Cola. This is very mag­ic. It’s a very mag­ic num­ber. Easy to remem­ber. Coca Cola is earn­ing 30 times per share what they did 32 years ago. The stock has gone up 30 fold. Beth­le­hem Steel is earn­ing less than they did 30 years ago.

[00:38:15] Peter Lynch: The stock is half its price of 30 years ago. Stocks are not lot­tery tick­ets. There’s a com­pa­ny behind every stock. The com­pa­ny does well, the stock does well. It’s not that com­pli­cat­ed. Peo­ple get too car­ried away. And first of all, they try and pre­dict the stock mar­ket. That is a total waste of time. No one can pre­dict the stock mar­ket. They try to pre­dict inter­est rates. I mean, this is a If any­one could pre­dict the inter­est rates right three times in a row, they’d be a bil­lion­aire. It’s true, there’s not that many bil­lion­aires on the plan­et. very, you know, I took, I had log­ics, and, uh, stud­ied these when I was at Boston Col­lege. There can’t be that many peo­ple who can pre­dict inter­est rates because there’d be lots of bil­lion­aires.

[00:38:56] Peter Lynch: And no one can pre­dict the econ­o­my. I had a lot of peo­ple in this room around in 1981 and 82, when we had a 20 per­cent prime rate, With dou­ble dig­it infla­tion, dou­ble dig­it unem­ploy­ment. I don’t remem­ber any­body telling me in 1981 about it. I did­n’t read, I stud­ied all this stuff. I don’t remem­ber any­body telling me we’re gonna have the worst reces­sion since the Depres­sion. what I’m try­ing to tell you, it’d be very use­ful to know what the stock mar­ket’s gonna do. It’d be ter­rif­ic to know that the Dow Jones aver­age a year from now would be X, that we’re gonna have a full scale reces­sion, our inter­est rate’s gonna be 12%. That’s use­ful stuff. You nev­er know it, though. You just don’t get to learn it.

[00:39:31] Peter Lynch: So, I’ve always said, if you spend 14 min­utes a year on eco­nom­ics, you’ve wast­ed 12 min­utes. And I, I, I real­ly believe.

[00:39:42] TK: that’s good.

[00:39:43] CR: You had a lot of good lines.

[00:39:44] TK: He did so much good stuff on that. I was lis­ten­ing to him describe the com­put­er and I was think­ing, wow, that was back in the 80s, was­n’t

[00:39:52] CR: yeah. And, um, you know, obvi­ous­ly, uh, a lot of peo­ple made a lot of mon­ey out of tech com­pa­nies, but I think the point is you don’t know which one until after the event is going to be suc­cess­ful. Um, I, I thought that was inter­est­ing because I, It was on one of the val­ue invest­ing sub­red­dits over the last few days and I saw some­body mak­ing the argu­ment that val­ue invest­ing does­n’t work any­more in the US because there’s too much data and every­one knows every­thing about every stock so the oppor­tu­ni­ties to get stuff at a dis­count, aren’t there, isn’t there any­more.

[00:40:29] CR: Um, it’s all priced in, you know, and you were talk­ing about Fama and the effi­cient mar­ket the­o­ry, like we don’t real­ly believe that, right? Because peo­ple are greedy. Peo­ple, you know, uh, don’t, uh, take the long term view and have a fun­da­men­tal the­sis that’s, uh, stocks in good com­pa­nies when you can get them at a dis­count and then just hold them as long as you can.

[00:40:56] CR: Till your rules tell you to sell them. It’s bor­ing.

[00:41:00] TK: Sub­red­dit you men­tioned Willis Leas­ing and told him

[00:41:04] CR: No, I did­n’t. I did­n’t weigh in. I had, there had been a cou­ple of threads over the last cou­ple of weeks say­ing, how was your year? And I report­ed our US results and nobody said any­thing. So I’ve giv­en up com­ment­ing on it. It’s not worth the effort it takes, but yeah.

[00:41:22] TK: The inter­view with Fama was inter­est­ing because Joe Walk­er had done his research and he put a few ques­tions like that to him. And, I mean, Fama’s been field­ing ques­tions like that for a long time. Sub­ti­tling And you know, I can’t remem­ber the exact quotes he used, but it’s along the lines of the mar­ket over­all is effi­cient.

[00:41:39] TK: Um, not every stock every day is effi­cient. And I think what Joe Walk­er asked him was, how do you explain Renais­sance Cap­i­tal, that orig­i­nal sort of quant fund that made 40 per­cent per annum, what­ev­er it was. And, uh, he said, well, that can hap­pen. That’s when you go into this whole talk about there will be peo­ple out there who can out­per­form the mar­ket.

[00:42:00] TK: You’ve got to judge them going for­ward rather than judge them going back.

[00:42:03] CR: Right.

[00:42:04] TK: Yeah, so, and he’s, he was ful­ly okay with that. And then Walk­er chal­lenged him and said, well, where does behav­iour­al eco­nom­ics fit into this? And he basi­cal­ly poo pooed behav­iour­al eco­nom­ics and said it was just a, it was just a part of volatil­i­ty in the mar­ket.

[00:42:19] TK: And that the mar­ket would always, you know, work, you know, would work that out. It may not work it out tomor­row, but it will work it out even­tu­al­ly. And, and then what­ev­er irra­tional­i­ty was going on would cor­rect itself. So, um, you know, and, and to be, to be fair to Fama, he, as he points out, you know, the large chunk, I think he said almost 50%, but I think that’s, you know, Erro­neous, but I can’t quote the exact num­ber.

[00:42:43] TK: Any­way, he said that, you know, index funds and index ETFs are now so pre­dom­i­nant in the mar­ket, it proves that the effi­cient mar­ket, you know, mar­ket hypoth­e­sis. I don’t think that’s the case, but. Um, he’s, he’s cer­tain­ly vin­di­cat­ed, an index fund is, fund invest­ing is cer­tain­ly vin­di­cat­ed if you, if you’re not pre­pared to put the work in your­self, then you may as well be buy­ing the mar­ket.

[00:43:07] TK: Um, but yeah, it’s an inter­est­ing dis­cus­sion. What Peter Lynch is talk­ing about is very inter­est­ing. I, I tried. to do the one up on Wall Street trade. So, you know, if I bought, I remem­ber buy­ing some fur­ni­ture from Tem­ple and Web­ster and, you know, look­ing at that. I bought some Scotch from Lark and looked at that.

[00:43:25] TK: Um, you know, Apple iPods, when they first come out, I looked at Apple and I could­n’t, even though I liked all those things, I could­n’t con­vince myself that the under­ly­ing busi­ness was good to invest in and nev­er did. And even though those shares went up, they had peri­ods when they retraced. The Rise. And, uh, I could­n’t get my head around the frame­work I need­ed to invest in those com­pa­nies.

[00:43:50] TK: But even though I had a good expe­ri­ence with them, were they going to last for­ev­er? Well, Apple prob­a­bly has con­tin­ued to go up, but Lark is a bombed out stock now, um, for exam­ple.

[00:44:00] CR: And Apple, Apple could have gone lots of dif­fer­ent ways. I mean, there was no guar­an­tee 20 years ago, or even 13 years ago when Steve died, that Apple would con­tin­ue to go from strength to strength. I mean, you know, lots of things could have hap­pened. As it turned out, they’ve done pret­ty well. Tim Cook was a good cus­to­di­an, but it could have gone either way, real­ly.

[00:44:23] TK: But what I do find use­ful, to go back to Peter Lynch, is that And I’ve always restrict­ed myself to invest­ing in Aus­tralian com­pa­nies because, um, I don’t know if the news just gets through quick­er, but if, like, the Lark CEO gets videoed smok­ing crack, it’s out there on the front page of the AFR pret­ty quick­ly.

[00:44:41] TK: Um, You know, and you hear about it soon­er and, or like­wise, if you’re in, shop­ping in Myer and you see dis­count rack after dis­count rack, you get a sense that some­thing’s wrong at Myer. So, um, I think there is some ben­e­fit in invest­ing in, you know, what you know and what’s local and what’s close to you.

[00:44:59] TK: We’ll, we’ll find out when we, you know, go deep­er into the U. S. And as you’ve found out, the U. S. port­fo­lio has done real­ly well with­out need­ing to know, um, in detail or fol­low in detail what’s going on with those com­pa­nies.

[00:45:13] CR: Well, that was going to be my oth­er point out of the Lynch bit. Well, two points I was going to have when he says, if you can’t explain to a 10 year old why you’re buy­ing it, um, usu­al­ly it’s just cause the suck­ers going up. To me, that’s Bit­coin investors. I, I, I have a sus­pi­cion that 99. 9 per­cent of peo­ple that think they’re invest­ing in Bit­coin would­n’t be able to explain to a 10 year old why.

[00:45:34] CR: and how Bit­coin, how Bit­coin actu­al­ly works as a tech­nol­o­gy, but, um, I also thought, well, I would­n’t be able to explain to you the intri­ca­cies of most of the busi­ness­es that I invest in, but I have a rough idea about how they make mon­ey, what kind of busi­ness they’re in, very high lev­el, 10 year old why I invest­ed in any one of the com­pa­nies is because we looked at the num­bers.

[00:46:02] CR: They’re a fair­ly well run busi­ness and we think we can buy them at a dis­count to their intrin­sic val­u­a­tion. That’s, that’s the, that’s the the­sis, right?

[00:46:12] TK: Cor­rect. I mean, I was going to make that same point. I mean, he, you know, Peter Lynch talks about Coke and he talks about, was it Beth­le­hem Steel or US Steel or what­ev­er it was. Yeah. Um, and he’s right. But could he explain, he can’t explain the for­mu­la for Coke because it’s locked up in a safe some­where.

[00:46:29] TK: It’s only known by two peo­ple on the plan­et. So, um, he does­n’t real­ly under­stand. What’s going on at Coke? What he under­stands is what we do, that the num­bers are real­ly good. And so I think you’re right. That’s how I explain QAV. If some­one said to me, why did I buy A and Z? And that hap­pens to me all the time.

[00:46:47] TK: Oh, what are you doing buy­ing one of the big four banks for? They’re not going any­where. Well, it’s up. 25 per­cent this year, which is good enough for me. And I bought it because it was throw­ing off lots of cash and I could buy it cheap­ly and that’s a sol­id com­pa­ny. Um, what else do you want in an invest­ment?

[00:47:01] TK: Oh, I want Bit­coin. I want, well, you can have a moon shot, but you know, it’s going to, it’s going to land at some point, you know, when you’re going to get off. And most peo­ple don’t.

[00:47:13] CR: he talks a lot about that in that, uh, talk as well. I mean, how do you know? If you don’t know why you bought it in the first place, how do you know when to get out? It’s one of the ques­tions that he has. Um, any­way, enough of that. Um, I’ve got a few oth­er things, but what have you got to talk about before we get into, uh,

[00:47:33] TK: I had a cou­ple of quotes, um, most of them I think from the Wall Street Jour­nal I’ve been read­ing over the break, um, and one of them is about Bit­coin. I’ll go to that one first, I guess. Uh, it’s the head­line is a loom­ing threat to Bit­coin, the risk of a quan­tum hack. Um, and, uh, It’s actu­al­ly some­thing, every time I read an arti­cle about quan­tum com­put­ing, I think about this, so, I’ll read the arti­cle.

[00:48:00] TK: Bit­coin’s ral­ly faces a risk that isn’t on the radar of most cryp­to investors. Quan­tum com­put­ing, the nascent tech­nol­o­gy which drew atten­tion this month after Google claimed a break­through with its new Wil­low quan­tum com­put­ing chip could one day enable hack­ers to break the encryp­tion that keeps Bit­coin secure.

[00:48:19] TK: Such a hack would, could tor­pe­do Bit­coin’s price by allow­ing thieves to swipe coins out of sup­pos­ed­ly secure dig­i­tal wal­lets. And it goes on to say that, um, the author thinks that’s a real­i­ty with­in 10 years, based on quan­tum com­put­ing trends. That’s some­thing I’ve always thought of because I remem­ber when I start­ed read­ing about quan­tum com­put­ing, the, the appli­ca­tion that kept get­ting cit­ed was break­ing 32 bit secu­ri­ty codes.

[00:48:44] TK: All the encryp­tion that goes on, um, in, in spy­ware and then even in bank­ing and things like that relies on 32 bit codes. And, you know, the, I kept read­ing arti­cles about how they were being cracked faster and faster by quan­tum com­put­ers. So I think Bit­coin stays a num­bered, you know, Based on that, they may well come up with, they may well come up with an enhanced code or a quan­tum com­put­ing ver­sion of Bit­coin, so I could be wrong, but I think that that arti­cle is pret­ty sound.

[00:49:14] CR: I think the secu­ri­ty that’s in sup­pos­ed­ly inher­ent in cryp­tocur­ren­cies is more to do with the way the blockchain decen­tral­iza­tion works, you know, you, um, you’re, you’re Coins are pro­tect­ed by its posi­tion in the blockchain, which has been dis­trib­uted to all of the com­put­ers that are track­ing it around the world.

[00:49:39] CR: In order to hack that, you would some­how need to be able to change that entry in the blockchain per­fect­ly with all of the dis­trib­uted copies of it. I don’t know how you would do that, but

[00:49:56] TK: But how does a dig­i­tal wal­let work and a coin based work and exchange based work then? They’d have to work off reg­u­lar encryp­tion, 32 bit encryp­tion.

[00:50:06] CR: Um, yes, but my under­stand­ing is that it’s also pro­tect, well, even if you get into the wal­let, it’s pro­tect­ed by the posi­tion of your pur­chase in the blockchain. Um, you might be able to feign that you are the own­er of that coin in the blockchain some­how. But yeah, it’s, uh, it’s beyond my, uh, very shal­low under­stand­ing of blockchain.

[00:50:33] CR: I did spend quite a bit of time over the hol­i­days actu­al­ly, um, Research­ing blockchain stuff, um, for anoth­er project that I, anoth­er idea that I had. But, uh, yeah, I’m, I’m cer­tain­ly no expert. Hmm.

[00:50:48] TK: because they tried to replace the chess sys­tem of track­ing who owns what in the share mar­ket with a blockchain sys­tem, which they had to scrap. Um, yeah. But look, I guess the point was made specif­i­cal­ly about Bit­coin, but it’s got to be a loom­ing threat for every­thing, real­ly.

[00:51:04] TK: Because, uh, if they can hack into Bit­coin using quan­tum com­put­ers, they can hack into ANZ Bank and,

[00:51:12] CR: Yeah.

[00:51:12] TK: you know, get access to my wal­let. My bank­ing or what­ev­er bank it is and what­not. So yeah, it’s got, it’s going to be an inter­est­ing sort of 10 years as that plays out, I think.

[00:51:22] CR: Yeah. I

[00:51:23] TK: Uh, next item was, uh, uh, an item that I came across.

[00:51:28] TK: Con­fi­dence among US con­sumers dropped unex­pect­ed­ly this month, uh, and expec­ta­tions are grow­ing bleak­er for the new year. The Con­fer­ence Board­’s Index of Sen­ti­ment dropped 8. 1 points to 104. 7, defy­ing hopes for an increase, while its Expec­ta­tions Index, mea­sur­ing con­sumers near term con­fi­dence in income, busi­ness and the jobs mar­ket, fell 12.

[00:51:50] TK: 6 points to 81. 1, tak­ing it close to the lev­el that often sig­nals a reces­sion. This is from Wall Street Jour­nal from, uh, Decem­ber, end of Decem­ber, but it’s report­ing on Novem­ber’s fig­ures. So it’s, there is, I don’t, that’s your US data, but there is a high cor­re­la­tion I’ve seen before between the West­pac Con­sumer Sen­ti­ment Index and the share mar­ket.

[00:52:15] TK: So, um, if con­sumer sen­ti­men­t’s turn­ing down, it’ll be pret­ty hard for the share mar­ket to stay up, I would think.

[00:52:25] CR: won­der how Trump’s spin­ning that. It’s sup­posed to be a new day in Amer­i­ca

[00:52:29] TK: That was Biden.

[00:52:30] CR: Andreessen called it. But it’s a, it’s a, it’s a fore­cast thing. Peo­ple’s fore­cast­ed expec­ta­tions when Trump takes office in

[00:52:38] TK: Yeah. Right. Yeah.

[00:52:39] CR: Isn’t it going to be a new, new morn­ing in Amer­i­ca?

[00:52:42] TK: Have you seen? I’m sur­prised I haven’t seen the meme post­ed by David Markham yet, but have you seen the meme? I think it’s called the Left Coast Meme. It’s a, it’s a map of Cana­da with all of the, uh, The states on the west­ern bor­der of the U. S. join­ing up into Cana­da. So Cal­i­for­nia and, uh, Ore­gon,

[00:53:04] CR: Well, now that Justin Trudeau’s out, they might end up with a ultra right wing gov­ern­ment in Cana­da too.

[00:53:10] TK: cor­rect. Any­way,

[00:53:12] CR: Rob Ford. Rob Ford will be run­ning it.

[00:53:15] TK: or Doug.

[00:53:16] CR: he’s still around.

[00:53:17] TK: No, Rob died. Doug’s, his broth­er’s still

[00:53:19] CR: Oh, it’s Doug who’s around.

[00:53:21] TK: Yeah, yeah, remem­ber Rob died of a spe­cial type of can­cer that attacked the fat cells,

[00:53:28] CR: No, real­ly?

[00:53:29] TK: kar­ma, if you ever saw a pho­to of Rob Ford. Any­way, yeah, now this is again a bit like the Peter Lynch quite, so the last, um, I think it’s the last item I sort of focused on.

[00:53:42] TK: I thought it was real­ly good. Decem­ber 22 in the Wall Street Jour­nal, sea­soned investors have a chuck­le when the invest­ing mass­es pay 2 for a dol­lar in the mar­ket. And some­times they even hop onto the crazy train briefly them­selves if they think it can tem­porar­i­ly go to 3. But pric­ing anom­alies can be a sign of froth for the broad­er mar­ket.

[00:54:03] TK: In the lat­est high pro­file exam­ple, MicroS­trat­e­gy’s 7. 81 per­cent increase share price implies a val­ue for its main asset, a huge stash of bit­coins that is more than dou­ble the price of bit­coin on the open mar­ket. Even more extreme, a closed end invest­ment fund called the Des­tiny Tech 100 recent­ly was trad­ing for 11 times as much as the fund’s net asset val­ue and down from as high as 21 times ear­li­er this year.

[00:54:36] TK: Investors have been clam­our­ing to buy shares of the fund, best known for its tick­er sym­bol DXYZ, or Z as they say over there, because it owns shares of Elon Musk’s SpaceX. and oth­er close­ly held tech com­pa­nies. Indi­vid­u­als have few oth­er ways to gain expo­sure to them. Is this a new phe­nom­e­non? Not at all.

[00:54:55] TK: There are no new sto­ries, only new investors, as the say­ing goes.

[00:55:00] CR: I love that line.

[00:55:01] TK: Nonethe­less, sit­u­a­tions such as these are strange and wor­thy of a good gawk­ing. Anoth­er good line, They vio­late the prin­ci­ple known as the law of one price, which holds that iden­ti­cal goods should have iden­ti­cal prices. Weird things can hap­pen with­out bub­bles, but bub­bles can’t hap­pen with­out weird things.

[00:55:19] TK: Great line, Owen. That was a quote from Owen Lam­ont, Port­fo­lio Man­ag­er at Akka­di­an Asset Man­age­ment, who has stud­ied such anom­alies for decades, dat­ing back to his days as a Yale finance pro­fes­sor. When there are opti­mistic retail investors, they will over­pay in crazy ways, and you can’t always tell that they’re over­pay­ing, but you can tell when there’s a sub­sti­tute that they’re ignor­ing.

[00:55:44] TK: Ben Gra­ham, who taught War­ren Buf­fett how to analyse secu­ri­ties, In his mem­oirs, he told the sto­ry of an invest­ment firm he start­ed in 1923 and its first trade bought DuPont and short­ed Gen­er­al Motors, in which DuPont owned a large stake. says, the first thing I did was to buy some shares of DuPont and to sell sev­en times as many shares of GM, short against it.

[00:56:11] TK: At that time, DuPont Com­mon was sell­ing for no more than the val­ue of its hold­ings of GM. So that the mar­ket was real­ly plac­ing no val­ue on its whole chem­i­cal busi­ness and assets. So DuPont was great­ly under­val­ued by com­par­i­son with the mar­ket price of GM. The pairs trade worked and he made a prof­it. So I thought that was a real­ly inter­est­ing series of quotes, but also inter­est­ing fact about the mar­ket that there are two.

[00:56:38] TK: Two ver­sions of the same item sell­ing for vast­ly dif­fer­ent prices. And it made me think of the pay, the, the, um, after pay Fren­zy. Um, and, and yeah, peo­ple made lots of mon­ey out of After­pay, but if you still stood back and looked at it, it was basi­cal­ly a cred­it provider. And I, I, I did go and have a look at how Square or Block as it’s called on the ASX now has per­formed in the last, I think it was 12 months com­pared to Visa in the US and Block went back­wards and Visa’s up 33%.

[00:57:12] TK: And they’re both Cred­it Providers. So, I find that, um, that hap­pens all the time. It’s very inter­est­ing in the mar­ket.

[00:57:20] CR: Mm. Very good.

[00:57:22] TK: So, that’s all I had.

[00:57:24] CR: I got a cou­ple more notes. Um, it was Scott on our Face­book page who said that he was up 17. 7 per­cent for cal­en­dar year 2024. He said the best per­former by far was FND, Fin­di, at close to 300%. I asked him when he bought in and he said it was Jan­u­ary when it was trad­ing like crazy. 97 cents I think.

[00:57:45] CR: Then it went up to like sev­en bucks. It’s down to I think 450 now. It’s come down a lot in the last uh month or so but still it’s not bad if you’re get­ting it under a buck. Um, oth­er decent per­form­ers.

[00:58:00] TK: and we’re still find­ing gross stocks on our val­ue buy list as well, which is inter­est­ing, isn’t it? Yeah.

[00:58:06] CR: yeah. Oth­er decent per­form­ers were SXC at 97%, SGLLV at 69%, and JYC at 56%. So, um, he said he had a lot less stop loss sales in 2024 and went for long peri­ods with no trad­ing. So! Yeah, you know, the, the sys­tem works, won’t work exact­ly the same for every­body every year, but long term, again, that’s what I always keep com­ing back to, your fun­da­men­tal premise you said before, you know, fil­ter out the bad com­pa­nies, just by com­pa­nies that seem to be per­form­ing well, when you can get them at a dis­count to what we think the intrin­sic val­u­a­tion is, and on aver­age, they won’t always do well, but on aver­age, they should do well.

[00:58:52] TK: And, you know, from time to time, I’ve done my, a lot of work on try­ing to find a method­ol­o­gy for buy­ing gross stocks. And, uh, every time I look at it and think I’ve got it nut­ted, some­thing hap­pens in the mar­ket and they crash. And that’s, you know, That’s, I have to keep, I guess, beat­ing myself over the head with the analy­sis, but that’s what hap­pens.

[00:59:12] TK: They can go for two or three years and shoot the lights out, and then they trade at a triple dig­it P. E., and the mar­ket has a stum­ble, but they fall off a cliff. I, you know, I prove that self to my, I prove that to myself again. In the last cou­ple of months. I went back and looked at, um, the anti QAV stock port­fo­lio I set up as a tri­al, um, a few years ago and did it, did exact­ly that.

[00:59:37] TK: Did well for a year or so, and then it’s, it like some of the stocks are worth 20% what they were back when they were, you know, start­ed up. And the, the dif­fi­cult thing with stocks that do that is that their three point trend sell line is so low. You know, because they’ve gone up asymp­tot­i­cal­ly that you nev­er get a chance to sell them at a prof­it.

[00:59:57] TK: They just, they just crash right back down to, you know, the sell line, which is, which is way, way low­er than what they’re trad­ing at before they crashed.

[01:00:07] CR: And if you have some oth­er kind of high­er, more hug­ging stop loss, you know, you need to fig­ure out, well, noth­ing’s going in a straight line, so they’re always going to go up, come down, go up, come down. Where do you set that?

[01:00:21] TK: I tried that. I tried, you know, graph­ing a trend line. on it. So, you know, buy when it’s below the trend line, sell when it’s above. Um, same sort of prob­lem. Like if they, if they crash through and they go and they drop below the trend line, they can, they can lose 80%. Um, and there’s no point in buy­ing them then because they aren’t com­ing back.

[01:00:42] CR: Mm.

[01:00:43] TK: Yeah.

[01:00:45] CR: Uh, well, a cou­ple of oth­er news items. Uh, ERD, E Road. I saw, I went to have a look at them as a buy yes­ter­day, noticed that their chief finan­cial offi­cer resigned. in late Novem­ber. Not sure if we’ve talked about that before,

[01:00:59] TK: we haven’t.

[01:01:01] CR: but, um, it seems fair­ly straight­for­ward. Says that the Chief Finan­cial Offi­cer, Mar­garet War­ring­ton, has resigned effec­tive 21st of Feb­ru­ary, 2025.

[01:01:12] CR: So there’s a 90 day

[01:01:14] CR: peri­od they’re going to start inter­view­ing, look­ing for a replace­ment. Um, seemed fair­ly kosher to me. What do you think?

[01:01:23] TK: I think it, I think it is kosher. Sor­ry, I’m just try­ing to get my notes on

[01:01:26] TK: ERO. Um, nor­mal­ly if a CFO resigns and they haven’t

[01:01:30] TK: got some­one lined up to replace them, it’s a bit of a red flag, um, but I thought it was kosher as well. A cou­ple of rea­sons why I thought that was the case, Mar­garet War­ring­ton used to work at the com­pa­ny she’s going to, she’s going back to Som­er­set Group.

[01:01:45] TK: Anoth­er QAV stock, QAV stock by the way, New Zealand Retire­ment Home Investor and Man­ag­er. Um, so she had worked for them and then got her chance to be a CFO of a list­ed com­pa­ny by going across to E Road and now she’s gone back to be CFO of QAV. Uh, Som­er­set. I think the rea­son is the mar­ket cap of E Road is 180 mil­lion and the mar­ket cap of Som­er­set is 2.

[01:02:09] TK: 8 bil­lion. So it’s a, it’s a career pro­gres­sion for her. I imag­ine, in that sort of cir­cum­stance, she had to keep it pret­ty qui­et so she could­n’t Tipoff, E Road, that she was, you know, in talks with Som­er­set to go back there. Uh, yeah, so, I think it’s, it’ll look pret­ty kosher to me. Often talk, the red flag is often that they’re resign­ing, you don’t know what’s going on, they don’t tell you where they’re going, or, and there’s like, there’s a rea­son giv­en, like, I’m doing it for fam­i­ly rea­sons,

[01:02:40] TK: or, uh, you know, spend more time with my kids.

[01:02:43] TK: It’s like, yeah, it would, which oth­er ambi­tious exec­u­tive ever quit to spend more time with their fam­i­ly? Except for per­haps me. Haha. Alright.

[01:02:54] CR: Yeah.

[01:02:54] CR: that’s right, you. Um, I also not­ed that Mid­way, MWY,

[01:03:02] CR: is in a scheme imple­men­ta­tion deed with Riv­er Cap­i­tal. Don’t know if we’ve talked about that

[01:03:11] CR: in the past, but it was­n’t in

[01:03:13] TK: Yeah, I think we men­tioned that when the bid was lobbed, because I think the shares jumped like 60 per­cent in a day or some­thing from

[01:03:18] TK: mem­o­ry,

[01:03:18] CR: Right. Okay. Well

[01:03:21] TK: but it’s worth ris­ing, worth rais­ing again, because I think mid­way might still be on the buy list and you don’t want to buy it because it’s not, the upside is going to be lim­it­ed, could even poten­tial­ly go down because when I had a look at it, when you raised it in the notes today, the bid price in the scheme is 1.

[01:03:37] TK: 19, but the shares are trad­ing at 1. 25.

[01:03:41] TK: The only expla­na­tion I could give for that, well there’s only two options I can think of. One is that part of the pay­ment, um, in the bid is that they’re going to issue a, I think it’s a 38 cent spe­cial div­i­dend. And so I’m won­der­ing whether the dif­fer­ence between the cur­rent share price and the bid price are the frank­ing cred­its, the lit­tle val­ue of the frank­ing cred­its, in some peo­ple’s hands.

[01:04:03] TK: So they’re pre­pared to pay a lit­tle bit more than the bid price to get a hold of the frank­ing cred­its. Um, or the oth­er option is that the mar­ket thinks anoth­er bid’s com­ing. Um, I, I don’t sub­scribe to that, and, you know, I did a bit of read­ing on it today. Um, the, the board­’s, you know, rec­om­mend­ing the bid, but the thing which tipped me over into think­ing it was full and final was that, um, Uh, the River­co con­trols a lot of the com­pa­ny already.

[01:04:31] TK: I think, um, they them­selves held a 11 per­cent share from mem­o­ry. Uh, the biggest share­hold­ers accept­ed, um, and they held 28 per­cent, I think. And then there was a bit of detec­tive work going on to say that affil­i­ates of River­co also had big hold­ings in the com­pa­ny.

[01:04:51] CR: Right,

[01:04:51] TK: know, it sounds like it’s all done and dust­ed, um, but I can’t explain why it’s trad­ing above the bid price by six cents, oth­er than it’s, um, the frank­ing cred­it val­ue for the spe­cial div­i­dend that’s being used to help pay for all this.

[01:05:06] TK: Um, but I, I, I keep com­ing back now to O’Shaugh­nessy’s rule, which is if the shares are trad­ing at more than 90 per­cent of the val­ue of the bid, sell, move on.

[01:05:15] CR: right.

[01:05:16] TK: You know, the upside’s so lim­it­ed, why would you, why would you hold on?

[01:05:19] CR: Yeah. Well, it is on the buy list, and I just want­ed to leave that note for peo­ple in case they don’t have it in their notes. I did­n’t have it in mine. I, before I bought it, I went and just checked their recent news and saw it was on there. I see that We did talk about

[01:05:34] CR: it a while ago when it

[01:05:36] CR: jumped, as you said. But you know, I have the mem­o­ry of a gold­fish, so if it’s not in my notes, uh, my buy list notes then. Can go

[01:05:44] CR: unnot­ed. The only oth­er

[01:05:46] TK: Gold­fish mem­o­ry is a good thing to have,

[01:05:47] TK: espe­cial­ly on The golf

[01:05:48] TK: course.

[01:05:49] CR: is it, yeah, it’s good in life, good in life. Like, uh, you know, I don’t remem­ber any­thing that hap­pened five min­utes ago. So it’s clean slate. I actu­al­ly read a sto­ry

[01:05:58] CR: just yes­ter­day about

[01:06:00] TK: And you remem­ber it.

[01:06:03] CR: year old girl

[01:06:05] CR: in the US who was at a FFA con­ven­tion.

[01:06:09] CR: I had to ask Chris­sy what that was. Future Farm­ers of Amer­i­ca

[01:06:12] CR: con­ven­tion.

[01:06:13] TK: Oh,

[01:06:14] CR: Arlene.

[01:06:15] TK: Farm­ers. They’re farm­ing the future in Amer­i­ca, are.

[01:06:17] CR: they?

[01:06:17] CR: are. Yeah, it’s very Peter Eli­ade. I only know them because Lou Reed­man has a song called Future Farm­ers of Amer­i­ca from his 1986 album, or 1989

[01:06:29] CR: album, New York.

[01:06:31] TK: Well, if it was like, hang on, if it was, if there real­ly was a

[01:06:33] TK: Future Farm­ers of Amer­i­ca, it’d be his 2030 album, would­n’t it?

[01:06:39] TK: 2030 album released in 1998. 50,

[01:06:45] CR: if he was still alive to release new albums, we could talk to him about that. Any­way, this girl was at this con­ven­tion and there was a guy crowd surf­ing at some point and she got kicked in the head, had a con­cus­sion, Um, And then, for the next four months, she, her mem­o­ry reset every two hours to the day of the con­ven­tion.

[01:07:11] CR: She still thought it was the day of the con­ven­tion. Her mem­o­ry just, every two hours, bang, it would reset. And then she end­ed

[01:07:17] TK: first dates.

[01:07:18] CR: yeah! Then she end­ed up, uh, there was this, there was some, she, her sto­ry went viral and then, um,

[01:07:24] CR: Uh, a cog­ni­tive research out­fit in Salt Lake City, uh, con­tact­ed the fam­i­ly and they did work with her and man­aged to get her back to nor­mal.

[01:07:35] CR: Wow, isn’t that fas­ci­nat­ing? Like, and it had some­thing to do with, uh, the part of her brain that got dam­aged when she got kicked, could­n’t move. Process oxy­gen and short term mem­o­ries are reliant on the oxy­gen path­ways. And they had to, she had to relearn how to remem­ber, basi­cal­ly. It was a lot, a lot of phys­i­cal ther­a­py by the sounds of it. Had to rebuild part of her brain that could learn how to, uh, remem­ber things. Uh, new

[01:08:01] CR: path­ways need­ed to be built, painstak­ing process, but I’m always fas­ci­nat­ed by how, how flim­sy our brains are and our hold on

[01:08:11] CR: real­i­ty, you know. Did you

[01:08:13] TK: real­ly? I was always

[01:08:15] TK: amazed

[01:08:16] TK: at how com­plex they

[01:08:17] TK: are.

[01:08:18] CR: Well, com­plex, but a lit­tle thing goes wrong, and there was anoth­er sto­ry I read a cou­ple of weeks ago, um, about the lat­est find­ings in Alzheimer’s research. You know, for a long time now, they’ve thought that Alzheimer’s was caused by a buildup of plaque on the neu­rons that involve this

[01:08:36] CR: par­tic­u­lar, um, dis­ease.

[01:08:39] CR: ele­ment, which I can’t remem­ber the name of the chem­i­cal that makes up the plaque. The lat­est research says that it’s not the buildup that’s the prob­lem. It’s a lack of that chem­i­cal in the body that’s a prob­lem. And what they think is hap­pen­ing is the brain rec­og­nizes there’s a lack of that chem­i­cal.

[01:09:00] CR: And so it starts to store it up. as plaque in the

[01:09:05] CR: brain. And so they’ve been, all of the, the, like the exper­i­men­tal research in the last 10, 20 years has been to try and remove that plaque and it

[01:09:14] CR: has­n’t worked because it turns

[01:09:17] CR: out, yeah, always invert.

[01:09:19] CR: That’s right. Need Char­lie there. Um, They’ve been doing it with, I don’t think they’ve done human phase tri­als yet, but they were doing it with like, ani­mal, mouse, you know, phase tri­als, and dis­cov­ered that by giv­ing the body more of that chem­i­cal, it actu­al­ly fix­es the prob­lem.

[01:09:34] CR: So, it’s fas­ci­nat­ing, right? You know.

[01:09:36] TK: yeah, it is,

[01:09:37] TK: isn’t it,

[01:09:38] CR: Any­way, one last sto­ry. Uh, this is from Trent, who shared this on Face­book. He said, I heard Jeff Wil­son on anoth­er pod­cast talk­ing about the check­list approach he uses across the LICs he over­sees. Uh, Jeff Wil­son, um, from Wil­son Asset Man­age­ment. For peo­ple that are new lis­ten­ers and haven’t heard you, um, glaze him over the last five or six years, that’s what the kids call it today, glaze, Tony, that’s the new thing, glaz­ing.

[01:10:06] CR: Um, blow­ing smoke up some­one’s ass or talk­ing like, it, it, I, I won’t tell you exact­ly what the anal­o­gy, where

[01:10:12] CR: it. comes from, but if you let your imag­i­na­tion

[01:10:16] CR: go wild, you might be able to, uh, Think about where, you know, glaz­ing some­one.

[01:10:23] CR: Let me do that. Let me, let me mime

[01:10:24] TK: I’ll google it. Ah, okay, well don’t put that on YouTube.

[01:10:32] CR: Any­way, um, his check­list is three items. Rate man­age­ment out of 10 and then mul­ti­ply by 2. Aver­age EPS over next two years divid­ed by PE mul­ti­plied by 10. Indus­try and posi­tion with­in indus­try out of 10. If score is over 50, it’s a poten­tial buy. But would then only buy if they saw a cat­a­lyst for share price to move high­er.

[01:11:02] CR: Quote, try­ing to find under­val­ued growth com­pa­nies and buy them when we see a cat­a­lyst for change in val­u­a­tion. Trent says, inter­est­ing to see anoth­er ver­sion of a check­list, though inter­est­ing that PE is real­ly the only sol­id data point. Every­thing else, EPS, view on man­age­ment, view on cat­a­lyst, view on indus­try requires an opin­ion or fore­cast.

[01:11:24] CR: Since I’ve start­ed fol­low­ing QAV, I’ve real­ly enjoyed hear­ing the

[01:11:27] CR: peo­ple Process­es or check­lists that oth­er investors fol­low so thought you might find it inter­est­ing. Uh, what do you think about Jef­frey Wil­son? Did you know that? I mean, I know you’ve been

[01:11:36] CR: fol­low­ing

[01:11:37] CR: Wil­son for a long, long time. Yeah,

[01:11:39] TK: I actu­al­ly, he used to put it as a

[01:11:40] TK: dia­gram in the old annu­al reports, and I went back and had a look at it, and it’s pret­ty much as, as described by

[01:11:45] TK: Trent way back in 2001. I think the annu­al report had the same sort of ver­biage in it. Um, well the cat­a­lyst side of things always inter­est­ed me.

[01:11:55] TK: Uh, um, and as, as Brent says, it’s, there’s a lot of sub­jec­tiv­i­ty, but you can, you can put some sci­ence around the sub­jec­tiv­i­ty, like if you have a sys­tem to rate man­age­ment. I don’t know, Geof­f’s nev­er told us how he does it, but I remem­ber Roger Mont­gomery say­ing he rat­ed man­age­ment by going back, Over five years of man­age­ment reports and check to see if they did what they said they were going to do.

[01:12:22] TK: So, you know, that’s a rea­son­ably sci­en­tif­ic way of doing it. Oth­er peo­ple I know have used met­rics like return on assets, so man­age­ment run­ning the com­pa­ny to get returns from what they’re invest­ing in. And they have, you know, check­lists with rat­ings on what the cut­off is for good man­age­ment, ROA, etc. You can tell, you can cer­tain­ly tell the posi­tion in the indus­try, um, sci­en­tif­i­cal­ly.

[01:12:48] TK: It’s, you know, there’s data out there which says it’s your num­ber one or two play­er or what­ev­er in the

[01:12:53] TK: indus­try.

[01:12:54] CR: Sor­ry, before you move on to that, I was just going to say that, isn’t that what our con­sis­tent­ly increas­ing

[01:13:00] CR: equi­ty met­ric I’ve always thought of as a man­age­ment qual­i­ty met­ric.

[01:13:04] CR: It’s sim­i­lar as the return on assets, right? Are they, are they build­ing the busi­ness? Are they build­ing the equi­ty of the busi­ness

[01:13:09] CR: on a con­sis­tent basis?

[01:13:10] CR: We score them for that. Yeah,

[01:13:13] TK: I like that one because, um, you know,

[01:13:17] TK: if you look at ROI, the eas­i­est way to

[01:13:20] TK: improve ROI is to go and bor­row a truck­load of mon­ey and throw it at the assets and, you know, um, you’ll get a good return, um, so your ROI is good, but, um, your bal­ance sheet’s gone as quick­ly as you can. dete­ri­o­rat­ed. So, but increas­ing equi­ty takes into account what you’re bor­row­ing and how you’re invest­ing it and how you’re man­ag­ing it.

[01:13:39] TK: So that’s pret­ty good. And you cou­ple that with, with, um, good oper­at­ing cash­flow. That’s a real­ly good, I mean, you, if you had to define a good busi­ness, it’s, it’s, you know, the equi­ty is going up, so your bor­row­ings are under con­trol and you’re throw­ing off lots of cash. And you know, the two ways to rate man­age­ment real­ly aren’t they?

[01:13:57] TK: And we also throw in founder, own­er, founder into that as well, because there’s enough research to show that. If you treat the com­pa­ny like it’s your own, you’ll be post con­scious and you’ll be invest­ing for the long term, not the short term, all those kinds of things. So I kind of think our man­age­ment rat­ing’s wrapped up in the qual­i­ty check­lists that we have, or parts of it any­way.

[01:14:16] TK: So, I don’t have any prob­lems with what Jeff does, and every­one’s got their own ver­sion of what Jeff does. How they do this. What I like is that he has a process. My expe­ri­ence in being a share­hold­er of WAM over the years is the process isn’t always fol­lowed. And Jeff is quite open in say­ing that his check­list is only part of how they invest in WAM.

[01:14:39] TK: He also has what he calls a mar­ket dri­ven process. So he is hap­py to invest in IPOs or hap­py to take shares of cap­i­tal rais­ings, etc. Or if there’s a takeover, he might arbi­trage it, that kind of thing. So part of the per­for­mance is that, part of it is the check­list. But if I look at the check­list side of thing and leave it there, And I solve for Tren­t’s prob­lem, um, you know, is it sub­jec­tive?

[01:15:04] TK: Well, I think Jeff would have some guide­lines at least. Uh, and, and part of the rea­son I think that is because Jeff does­n’t do it by him­self now. He’s got a whole team of peo­ple work­ing for him and then he must have taught them how to do it. So there’s got­ta be some rules around, around how to do this some­where.

[01:15:21] TK: But the one I’ve always focused on and found dif­fi­cult to repli­cate is the cat­a­lyst for invest­ment. And I, you know, they do talk about that if you go along to a wham. Investor Day, they’ll talk about the cat­a­lyst for some, in some cas­es, but not always in oth­ers. And the cat­a­lyst can be a change in CEO, or it can be a change in strat­e­gy, or it can be a change in inter­est rates or what­ev­er.

[01:15:43] TK: Um, but I’ve always strug­gled to, to find the cat­a­lyst for invest­ment. As a, as a the­sis for why I’m invest­ing in some­thing. I think we touch on it a bit in com­mod­i­ty pric­ing. So if the gold price goes down, that’s a cat­a­lyst. We expect the gold stock price for the min­ers to fol­low it. So there is a cat­a­lyst there.

[01:16:04] TK: Um, but you know, know­ing enough about an indus­try to say, Oh, okay. I can see the, you know, that this change in what they’re doing is a cat­a­lyst for invest, invest­ing is, I think. You know, way beyond my knowl­edge of all the indus­tries that are out there in Aus­tralia. Um, so I’ve always strug­gled to try and imple­ment the Cat­a­lyst part of Jef­f’s check­list myself.

[01:16:28] TK: Does­n’t mean he can’t, does­n’t mean it does­n’t work, but that’s the

[01:16:30] TK: one I’ve strug­gled with.

[01:16:32] CR: It’s kind of fore­cast­ing, isn’t it? You’re say­ing, okay, well, the busi­ness is doing X dif­fer­ent­ly and there­fore we think it’s going to do well. There are so many vari­ables wrapped up in whether or not a busi­ness

[01:16:45] CR: does well. Um, par­tic­u­lar­ly if they’re chang­ing some­thing up that, um, you know, your odds of get­ting that right more than 50 per­cent of the time sure­ly got

[01:16:54] CR: to be slim.

[01:16:56] TK: the oth­er thing which has always per­plexed me a bit too with the process is, I mean, first of all, he’s fore­cast­ing by say­ing he’s look­ing at two years of what he thinks the earn­ings per share is going to be. But if you think about it log­i­cal­ly, if the com­pa­ny is going to have two sol­id years of increas­ing earn­ings per share, And you think the man­age­men­t’s good, and you think the indus­try’s good, do you need a cat­a­lyst?

[01:17:19] TK: I mean, why would­n’t you invest in, if you can, if you, you know, have achieved a sense of con­vic­tion around those things, do you need a cat­a­lyst?

[01:17:27] CR: Hmm.

[01:17:29] TK: That is a cat­a­lyst, right? Earn­ings per share is going up strong­ly for the next two years. Sure­ly as soon as that’s known, that’s a cat­a­lyst.

[01:17:37] CR: Yeah, Good stuff. Well, thanks for shar­ing that any­way, Trent. Good, uh,

[01:17:43] CR: good to think through oth­er peo­ple’s

[01:17:46] TK: Yeah, I agree.

[01:17:48] CR: Well, that gets us into after hours, I think,

[01:17:51] CR: Tony.

[01:17:53] TK: Good.

[01:17:53] CR: at the beach for the last two weeks. I have done very lit­tle after hours­ing. My mum has a TV that’s about four inch­es square and, um, does­n’t have, you know, the inter­net con­nect­ed to it, because if she’s going to watch any­thing, she does it in bed on her lap­top.

[01:18:10] CR: So, you

[01:18:11] TK: Oh,

[01:18:11] TK: okay.

[01:18:12] CR: she does have a DVD play­er, but no one, no one wants to watch a TV that small, um, from 1992 or some­thing. So, uh, and I don’t know if you know what it’s like, I’m sure every­one does. You go to the beach, In the mid­dle of sum­mer in Queens­land, you get home, you wash the sand off, and you’re just knack­ered.

[01:18:33] CR: Like, just the stand­ing in the waves, the heat, the whole thing. I want­ed to just roll up and go to sleep every night, so, uh,

[01:18:41] CR: yeah, did a lot more sleep­ing than watch­ing stuff. But I

[01:18:43] TK: Well, that’s good.

[01:18:44] CR: things. I’ve been watch­ing Alien 3 since I got back, um, just because I could­n’t real­ly remem­ber it. Um, turns out, I did­n’t miss

[01:18:55] CR: much.

[01:18:55] CR: Nah, it’s, like it’s a David Finch­er film, and you know, Fincher’s very sol­id, he’s done a lot of sol­id stuff. But it’s, it was like the same com­plaint I had with the last one, that I see he’s just hit Net­flix now too, or Dis­ney or some­thing. Um, the Romu­lus one, like,

[01:19:14] CR: It’s just the same for­mu­la. I know what’s hap­pen­ing from the, from the open­ing of the film.

[01:19:19] CR: Apart from the fact that she’s got one inside of her in Alien 3 and I think that’s what they were count­ing on as the

[01:19:24] CR: shock fac­tor, um, and that she’s got a head shaved, um, I used that to try and con­vince Chris­sy

[01:19:33] CR: to shave her

[01:19:34] CR: head. I’m like, yeah, it’s hot. You should shave your head

[01:19:36] TK: Oh, real­ly?

[01:19:38] CR: Yeah. I said, I’ll do it if you do it. We’ll both just shave our heads.

[01:19:43] CR: Um, go all, um,

[01:19:45] TK: You’d fit into Bund­aberg if you shaved your head though,

[01:19:47] TK: would­n’t you?

[01:19:49] CR: Oh, as long as I got lots of neck tats, Tony.

[01:19:52] CR: Lots of neck tats. Got­ta get the neck tats, uh, cov­ered in tats. Um, and obese. Gross­ly obese and lots of neck tats. Then I’d fit right in. Um. Where was I? Yeah, not very good.

[01:20:04] TK: I must admit, my favourite, I mean, apart from the orig­i­nal Alien, which blew me away, my

[01:20:08] TK: favor­it­ed was Alien the first Alien vs. Preda­tor. Have you seen

[01:20:11] TK: that?

[01:20:12] CR: oh, I think I may have.

[01:20:16] TK: I just found

[01:20:16] TK: that it knows what it is. You know, we’re just about these two fran­chis­es being thrown togeth­er and we’re going to try and max­i­mize

[01:20:24] TK: it. No plot line, I

[01:20:26] TK: think from mem­o­ry it was set in Antarc­ti­ca or some­thing or in the bot­tom of an old pyra­mid or some­thing like that. And it was just great.

[01:20:33] CR: It’s like Cyber­men ver­sus Daleks.

[01:20:35] TK: Yeah, exact­ly. Yeah.

[01:20:39] CR: You are supe­ri­or to the Daleks in only one way. What is that way? In dying! Um, but the thing I’ve been going real­ly deep, I think we, last time we talked I men­tioned I was on a clas­si­cal music, uh, binge again. Um, I went real­ly deep in the last cou­ple of weeks while I was away on Shostakovich. Watched a cou­ple of Shostakovich doc­u­men­taries on YouTube and been lis­ten­ing to a lot of his stuff, um, but par­tic­u­lar­ly his fifth sym­pho­ny.

[01:21:15] CR: Lis­tened to a lot of dif­fer­ent

[01:21:16] CR: vari­a­tions on it, doc­u­men­taries on it, I’ve been read­ing about it, just, just try­ing to unpick his fifth sym­pho­ny. Do you know much

[01:21:26] CR: about Shostakovich at all?

[01:21:28] TK: No, my mem­o­ry is say­ing that, uh, it’s, it’s very mod­ern, very ran­dom

[01:21:34] TK: sort of music from

[01:21:35] TK: mem­o­ry.

[01:21:37] TK: Clas­si­cal. No! Okay.

[01:21:40] CR: mod­ern yes, but not ran­dom. Like, he did do some of that stuff, but, um, so the, the quick ver­sion of his sto­ry is, um, grew up in the ear­ly 20th cen­tu­ry in Rus­sia, St. Peters­burg, or Leningrad, what­ev­er it was called at the time, um, was a prodi­gy as a child. Um, in their twen­ties, uh, he became very well known for writ­ing film scores and par­tic­u­lar­ly post rev­o­lu­tion­ary films.

[01:22:10] CR: Um, wrote a lot of pop­u­lar songs and pop­u­lar

[01:22:12] CR: scores for, you know, films that were glo­ri­fy­ing the rev­o­lu­tion, but it became famous like 21, I think he wrote his first sym­pho­ny, instant­ly famous.

[01:22:22] CR: Um, very, very pop­u­lar,

[01:22:24] CR: but then he start­ed to get into more mod­ern,

[01:22:28] CR: uh, com­po­si­tion and, uh, the use of dis­so­nance and things like that.

[01:22:34] CR: And it was doing very, very well. And he was, he was the. gold­en child of Sovi­et clas­si­cal music. Until about 34, he had this, um, opera, Lady Mac­beth, that, um, was, had been a hit for like two years, and then Stal­in went to see it. And Stal­in did­n’t like it. He said it start­ed and left halfway through and then wrote a vicious arti­cle about it that went out in Prav­da a cou­ple of days lat­er.

[01:23:02] CR: And Shostakovich, like his career was basi­cal­ly over every­one thought. He was so sure he was going to get arrest­ed and sent, this is like when the purges was hap­pen­ing, he was going to get arrest­ed and go to the Gulag that he packed his suit­case and slept on his front doorstep. Because when they came to get him

[01:23:21] CR: in the mid­dle of the night, he did­n’t want his fam­i­ly to be dis­turbed.

[01:23:25] CR: That’s how con­vinced he was that he was gone, that he was going to go to the Gulag.

[01:23:30] TK: wait a minute. so,

[01:23:31] TK: his fam­i­ly would­n’t be dis­turbed by watch­ing him pack a suit­case and sleep on the front doors?

[01:23:35] CR: I don’t think they knew he was

[01:23:36] CR: doing it. He would just get up in the mid­dle of

[01:23:38] CR: the night and go

[01:23:39] CR: and sleep out there. So, and prob­a­bly left a note on the

[01:23:43] CR: din­ing room table. Um, any­way, but it did­n’t hap­pen because

[01:23:48] CR: Stal­in was a huge fan of his ear­li­er work and gave an order that Shostakovich did­n’t know about, but gave an order he’s not to be touched.

[01:23:59] CR: But he just screwed with him at the same time to get him to fall into line and crit­i­cized him for for­mal­ism. Yeah. The big crit­i­cism, you know, the Sovi­ets at this time under Stal­in want­ed all of the arts to be sup­port­ing the rev­o­lu­tion and build­ing the rev­o­lu­tion and any­thing that was con­sid­ered to be.

[01:24:18] CR: too dif­fi­cult to under­stand, that was too elit­ist, was frowned upon. He want­ed stuff that the peas­ants, mean­ing him, could enjoy, um, that was sing along, catchy lit­tle tunes, you know, rem­i­nis­cent of, uh, you know, the, the tunes that they would sing when they were

[01:24:36] TK: Work­ing.

[01:24:37] CR: in the fields and all that kind of stuff.

[01:24:38] TK: So, so, So

[01:24:39] CR: any­way,

[01:24:42] TK: I’ve nev­er under­stood the log­ic of diss­ing the peas­ants when you want the peas­ants to con­trol every­thing. It’s like he’s say­ing that the peas­ant isn’t capa­ble of under­stand­ing com­plex clas­si­cal music. Ah, right.

[01:24:54] CR: yeah, well, they were illit­er­ate and they weren’t edu­cat­ed and he’s like, oh, that’s too fan­cy pants. Fan­cy schman­cy for the peo­ple. Of which he was one, uh, you know, he was not a high­ly edu­cat­ed guy, did some time at sem­i­nary, but left. Read a lot, but was­n’t very high­ly edu­cat­ed. Any­way, so Shostakovich had this, uh, fourth sym­pho­ny ready to go and scrapped it because he was con­cerned that it would go, it would be the death knell of him if he put it out.

[01:25:23] CR: So he wrote his fifth sym­pho­ny in about three months and it was in a tra­di­tion­al sym­phon­ic form, more akin to Tchaikovsky or some­thing like that, Beethoven, but it sup­pos­ed­ly had a lot of hid­den mes­sages in it and the great, um, con­tro­ver­sy I guess ever since, it was huge­ly suc­cess­ful at the time, both the peo­ple that were pro the par­ty loved it, It was like Tol­stoy said, it was a return to form and it was ter­rif­ic and all this kind of stuff.

[01:26:00] CR: But a lot of oth­er peo­ple secret­ly said, Ooh, nobody’s actu­al­ly crit­i­ciz­ing the Stal­in regime in it. And it, and the fas­ci­nat­ing thing is you can lis­ten to 10 dif­fer­ent record­ings of it and it comes across, par­tic­u­lar­ly the last move­ment, the

[01:26:17] CR: fourth move­ment, either comes across as high­ly crit­i­cal or high­ly ebul­lient and tri­umphal.

[01:26:26] CR: It depends on

[01:26:27] CR: how it’s per­formed, what the inter­pre­ta­tion of

[01:26:29] CR: the con­duc­tor is, how it comes across. Any­way, it’s

[01:26:33] CR: a, it’s a fan­tas­tic,

[01:26:34] CR: if you haven’t heard it, like I high­ly rec­om­mend even just the first move­ment. It’s like just amaz­ing dis­cor­dant chords. And he also wrote his own ini­tials into his. Motif in it, DSCH it’s called.

[01:26:47] CR: Any­way, went deep, deep, deep into Shostakovich and a lot of his oth­er stuff is cham­ber music in his string quar­tets. They are very dis­so­nant, very jar­ring, very Because he’s try­ing to talk about the, what it’s like to live. Um, when all your friends are dis­ap­pear­ing and get­ting killed or sent to gulags and you think you’re going to be arrest­ed any minute of the day and but we’re sup­posed to be glo­ri­fy­ing the rev­o­lu­tion and what a won­der­ful thing it is but at the same time we’re all ter­ri­fied we can’t speak the truth so he was try­ing to basi­cal­ly con­vey the mes­sage.

[01:27:18] CR: All of that in his music from that point on. And, um, yeah, it’s, it’s a, as a Cold War nerd, uh, on top of that and a clas­si­cal music buff, like it’s just all of that mixed in, it sucked me right in.

[01:27:35] TK: good. I’ll check

[01:27:36] CR: was my, that was most of my last cou­ple of

[01:27:38] TK: Oh, real­ly? Okay. For me, um, I was going to talk

[01:27:41] TK: about this. We skipped the show before New Year’s.

[01:27:45] TK: But have you seen the floor of

[01:27:46] TK: the

[01:27:46] TK: project?

[01:27:48] CR: I think I’ve heard of

[01:27:49] TK: Yeah, I’m not

[01:27:50] TK: sure what stream­er it’s

[01:27:52] TK: on, it’s one of them. Uh, it’s prob­a­bly the most

[01:27:56] TK: inter­est­ing film

[01:27:57] TK: I’ve seen all year. It’s like watch­ing a car crash, but it’s so

[01:28:02] TK: mes­mer­iz­ing and mem­o­rable.

[01:28:03] TK: I’m

[01:28:03] TK: still think­ing

[01:28:04] TK: about it every

[01:28:05] TK: day. it’s stars, Willem

[01:28:07] TK: Dafoe, and then the rest of the

[01:28:09] TK: cast are

[01:28:10] TK: basi­cal­ly unknowns, includ­ing the

[01:28:11] TK: kids

[01:28:12] TK: who, um, form most of the cen­tral char­ac­ters, but it’s about these kids

[01:28:17] TK: grow­ing up in a

[01:28:17] TK: motel

[01:28:18] TK: in

[01:28:18] TK: Flori­da, um, at real­ly

[01:28:21] TK: sub­sis­tence lev­el, but they’re hav­ing a hap­py,

[01:28:23] TK: like these six year olds are hav­ing a hap­py and joy­ous

[01:28:25] TK: child­hood play­ing with each oth­er and

[01:28:28] TK: run­ning right through the motel

[01:28:29] TK: and mak­ing fun of the guests

[01:28:30] TK: and all that kind of

[01:28:31] TK: stuff. While the

[01:28:32] TK: par­ents, like, have all kinds of

[01:28:34] TK: prob­lems, includ­ing one of the, like, the sort of

[01:28:36] TK: lead

[01:28:36] TK: char­ac­ter whose moth­er is, um, sort of descends into being a pros­ti­tute and then gets thrown out of the

[01:28:42] TK: hotel with­out giv­ing too much away. So it’s, it’s a kind of, on the one hand, it’s these kids who are very joy­ous

[01:28:48] TK: and on the oth­er hand, it’s a car crash. Which kind of is, I guess, an alle­go­ry for

[01:28:53] TK: Amer­i­ca.

[01:28:55] TK: Um, and Defoe’s in the mid­dle try­ing to play this blue

[01:28:57] TK: col­lar, uh, man­ag­er of the hotel, kind of handy­man man­ag­er of the hotel, try­ing to sort things out, um, in a very work­man­like

[01:29:06] TK: way. And you watch it and like, I just could­n’t take my eyes off it. It’s just so mes­mer­iz­ing.

[01:29:13] TK: You know, it’s not great. It’s real­ly cheap in its pro­duc­tion val­ues, but it’s, it’s, it’s just, Such a fas­ci­nat­ing idea and the exe­cu­tion is so good. Um, real­ly good.

[01:29:28] CR: wow. Got a, uh, 96 per­cent rat­ing on Rot­ten Toma­toes and it’s on Stan.

[01:29:35] TK: Ah, Stan, okay.

[01:29:36] CR: I’m going to, uh, going to check that out. Thanks. I love Willem Dafoe.

[01:29:41] TK: told me about it. So, uh, she was spot on with it. Yeah. Yeah. No, I love Willem Dafoe as well. It popped up in my Face­book feed, I think, a review of Live and Die in LA, which I think was his first, or the first time I saw him any­way, his first film. Still one of the, one of the best.

[01:29:59] TK: You recall that one?

[01:30:01] CR: I’m just try­ing to remem­ber. Again, that sounds famil­iar.

[01:30:04] TK: the 80s or 90s. I think it’s a Fried­kin movie, the guy who made the Chi­na, um, the French Con­nec­tion, sor­ry.

[01:30:11] CR: No, French Con­nec­tion. And, uh, a lot of oth­er things like, Um,

[01:30:16] TK: Um,

[01:30:16] CR: Omen, I think was freak­ing.

[01:30:18] TK: yeah. So that’s a great film. And, um, Well, I watched it, I thought it was a good film, and then I watched it again about 10 years lat­er and went, Holy cow, he has cast every actor 10 years before they’re famous in this movie.

[01:30:32] CR: Yeah, right. Yeah,

[01:30:33] CR: that’s some­body who knows tal­ent, right?

[01:30:36] TK: exact­ly. So it stars the guy who was orig­i­nal­ly the CSI inves­ti­ga­tor, is it William Peter­son, I think,

[01:30:44] TK: is his name? Um, John Pankow, who was in Mad About You’s

[01:30:48] TK: in it, is one of the oth­er leads, and Willem Dafoe is the bad guy. Plays a coun­ter­feit­er in it. Great film.

[01:30:56] CR: Wow. I don’t think I’ve ever seen

[01:30:57] TK: Oh, high­ly rec­om­mend it. Yeah.

[01:31:01] CR: I was talk­ing to Hunter the oth­er day about Willem Dafoe. I can’t remem­ber. how it came up, some­thing he’d seen him in, but it’s just like, he’s one of those guys, man. Like he’s always great And, he’s done every­thing from, you know, Wes Ander­son come­dies through to David Lynch through to, uh,

[01:31:19] CR: Every­thing, like he’s played pret­ty much every, super­hero movies, like the first Spi­der Man movie is the Green Gob­lin, Over The Top.

[01:31:27] CR: He does every, he’s done every pos­si­ble role out there, and he’s always great. He’s like, Nico­las Cage, he always gives 110%.

[01:31:37] TK: Yeah, I mean, he’s even been in that. Did you ever see that movie? I think it’s called The Hunter, where he plays

[01:31:41] TK: a, uh, a hunter in Tas­ma­nia.

[01:31:46] CR: No,

[01:31:46] TK: mem­o­ry, I can’t remem­ber the con­ceit of the sto­ry, but

[01:31:50] TK: I think some­one’s paid him like a mil­lion bucks to go and

[01:31:54] TK: catch a Tas­man­ian tiger, which are extinct, and kill it and bring it back.

[01:31:59] TK: And so the whole movie is just him camp­ing out in The Tas­man­ian Wilder­ness, and try­ing to track this thing which does­n’t

[01:32:05] TK: exist, but it’s

[01:32:06] TK: just such a great

[01:32:07] TK: per­for­mance,

[01:32:09] CR: 2011.

[01:32:10] TK: right?

[01:32:12] CR: Did you see, um, was it the Alba­tross?

[01:32:15] TK: No.

[01:32:17] CR: No, not the Alba­tross.

[01:32:19] TK: the Light­house?

[01:32:20] CR: one where he is the light­house? Yeah. it had an alba­tross in, it. The light­house. Yeah. Hunter put me onto that one when it came out. He goes, oh man. you got­ta see this. and it took me a while to, see it. And Yeah. I saw it. I loved it.

[01:32:33] CR: It was dark. The dark­est films I’ve seen recent­ly.

[01:32:38] TK: And he likes, he kind of, I remem­ber there was

[01:32:40] TK: a, I can’t remem­ber what it was called, but Dafoe

[01:32:42] TK: and Cage were in a movie

[01:32:43] TK: togeth­er, and it was, um, was, it, no, it was­n’t Cage, it was, yes, it was Cage? Yeah.

[01:32:50] TK: Dafoe and Cage were in a movie. Real­ly low bud­get movie about a group of thieves who fin­ish up killing each oth­er and

[01:32:58] CR: Dog Eat Dog?

[01:32:59] TK: have been, and I remem­ber they said this is the kind of movie we like.

[01:33:04] TK: That’s why they made it. Yeah.

[01:33:06] CR: um, I seem to recall that it?

[01:33:11] CR: was Paul Schrad­er. Yeah, Paul Schrad­er.

[01:33:13] CR: direct­ed it.

[01:33:14] CR: Yeah, I watched it

[01:33:16] CR: because, I mean, I love all those guys and I love Paul Schrad­er and I watched it and I loved it. It was just low bud­get, grit­ty,

[01:33:23] CR: vio­lent, um

[01:33:25] CR: So what else?

[01:33:26] CR: Doc­tor Who Christ­mas

[01:33:27] CR: spe­cial.

[01:33:28] TK: Doc­tor Who Christ­mas spe­cial.

[01:33:29] TK: have you seen it?

[01:33:30] CR: Yes. From the grit­ty to the

[01:33:32] CR: ridicu­lous.

[01:33:33] TK: ha ha ha. ha. I thought the end­ing was ter­ri­ble, but oth­er­wise it was real­ly good fun, fast paced. Doc­tor Who, clas­sic Doc­tor Who. I loved it.

[01:33:42] CR: I don’t know about clas­sic Doc­tor Who, but, uh, cause this new Doc­tor Who is like just bonkers, um, over the top,

[01:33:50] CR: but,

[01:33:52] CR: he’s,

[01:33:52] TK: Well, ha

[01:33:52] TK: ha.

[01:33:53] CR: it’s, it’s not Tom

[01:33:54] CR: Bak­er, man.

[01:33:56] TK: He was bonkers and over the top. Put it in con­text. When he came out, he was, yeah, rev­o­lu­tion­ary.

[01:34:01] CR: he was, but you know, they took. Six episodes to tell a sto­ry. It was like slow mov­ing, not bang, bang, bang, off you go. But yeah, no, I think, um, Ncu­ti Gat­wa’s Doc­tor

[01:34:13] CR: is, um, still fight­ing itself.

[01:34:16] CR: But, uh, man, like he’s got, I

[01:34:18] CR: still say this, he’s got too much charis­ma.

[01:34:21] CR: Like, the guy is just insane­ly charis­mat­ic.

[01:34:26] CR: It’s, uh, awe­some. I like my doc­tor to be dark, a lit­tle bit angry, a lit­tle bit sort of psy­cho­path­ic, a lit­tle bit sort of, you know, I’ll torch this plan­et if you mess with me again kind of thing.

[01:34:41] CR: Um, I’m being nice to you because I choose to be, not because I have to

[01:34:46] CR: be. I’ve I’ve burned entire civ­i­liza­tions before and I’ll do it again if

[01:34:51] CR: you get on my wrong side kin­da thing.

[01:34:53] CR: This guy’s just like the dis­co doc­tor. He’s Like, every­day’s a par­ty.

[01:35:00] CR: And I know that they tried to

[01:35:03] CR: explain that from the get go but he’s dealt with all of his shit.

[01:35:08] TK: Right.

[01:35:08] CR: Dur­ing the

[01:35:09] CR: last regen­er­a­tion or between it, yeah, he’s sort of, he’s done his ther­a­py, he’s over the

[01:35:14] CR: dark side of it, now

[01:35:15] CR: he’s just hav­ing, he’s here for a good time.

[01:35:18] CR: Um, which, okay, fine,

[01:35:21] CR: but

[01:35:22] TK: The

[01:35:22] CR: my doc­tor to be a lit­tle, I want Willem

[01:35:23] CR: Dafoe

[01:35:25] TK: Oh, right.

[01:35:26] TK: Okay. Yeah. Yeah. Fair enough. Any­way, I enjoyed it. And

[01:35:30] CR: I

[01:35:30] CR: enjoyed it

[01:35:31] CR: too,

[01:35:31] CR: though.

[01:35:32] TK: this, the SCORE pod­cast. Have you come across that one?

[01:35:35] CR: No, what’s

[01:35:36] CR: that?

[01:35:36] TK: Just start lis­ten­ing to it. It’s a pod­cast where the pod­cast­er inter­views a bank rob­ber who tells their sto­ry,

[01:35:44] CR: Oh,

[01:35:45] TK: Cal­i­for­nia bank rob­ber.

[01:35:47] CR: fan­tas­tic,

[01:35:48] TK: Yeah, and it’s it’s real­ly, real­ly engross­ing, real­ly well done. Um, just all the details in it, you

[01:35:56] CR: yeah.

[01:35:57] TK: you know, unless you actu­al­ly were talk­ing to a bank rob­ber, you would­n’t think about that, you know, like a num­ber of times he would go into the

[01:36:04] TK: bank And then get a bad

[01:36:05] TK: feel­ing, you know, before his first rob­bery would walk out

[01:36:09] TK: again. go and have KFC or some­thing and then

[01:36:13] TK: come back and feel bad about it. And on the way out he

[01:36:15] TK: real­ized there were

[01:36:16] TK: cam­eras on him that he did­n’t see the first time

[01:36:19] TK: in. You know, then when he final­ly gets up the gump­tion, he’s in there and it all feels good and he’s got the note and he slides it across, the teller does­n’t

[01:36:27] TK: react. He just keeps star­ing at the

[01:36:29] TK: note. he’s got the kind of, he’s get­ting real­ly

[01:36:32] TK: ner­vous. he’s got to try and han­dle the sit­u­a­tion and force her not

[01:36:36] TK: to say

[01:36:36] TK: any­thing, but to hand over the mon­ey.

[01:36:39] TK: Yeah, it’s just all these lit­tle details and they’re real­ly, real­ly good. His time in prison and how he han­dled

[01:36:44] TK: that.

[01:36:45] TK: You would­n’t know that lev­el of detail unless you’d been through it.

[01:36:48] TK: It’s, um, great. Yeah.

[01:36:51] CR: Or like Chop­per Read, you went to prison and just stole every­one else’s sto­ries and said that they were your

[01:36:56] CR: sto­ries.

[01:36:58] TK: Pos­si­bly there’s a bit of that with this guy too. You would­n’t know.

[01:37:01] CR: I love, I love the fact that Chop­per did that. It’s just, uh, such a, such a

[01:37:06] CR: Chop­per thing to

[01:37:07] CR: do.

[01:37:08] TK: yeah.

[01:37:08] TK: Wrote

[01:37:09] TK: book after book.

[01:37:10] CR: cool crim­i­nal sto­ries and say, ah, I did that. What to do about it? You’re serv­ing 25 to life, I’m just going to steal your sto­ries.

[01:37:20] TK: Well, there’s anoth­er pod­cast I’ve been lis­ten­ing to. Um, I for­get now what it’s called. By, uh, Mankiewicz. I think it’s the son of The man who wrote Cit­i­zen Kane,

[01:37:32] TK: yeah,

[01:37:34] TK: uh, he’s doing a series at the moment on John Ford,

[01:37:38] TK: the

[01:37:38] CR: Ooh.

[01:37:39] TK: and I’ve just heard the first one of those

[01:37:42] TK: and all the clips they play of John Ford, they’ll play a clip and then they’ll go, did­n’t

[01:37:47] TK: real­ly hap­pen.

[01:37:49] TK: John

[01:37:49] CR: Ha ha ha ha ha

[01:37:50] TK: just, embell­ish­es the sto­ry about, you know, the kind of ordeals they went through to make this pic­ture.

[01:37:56] TK: Did­n’t real­ly hap­pen.

[01:37:58] CR: Wow. Hey, speak­ing of which, have we talked about Baby­lon?

[01:38:03] TK: No, I think you men­tioned you’d seen it. It was good. So I haven’t

[01:38:06] TK: got­ten around to see­ing it

[01:38:07] TK: though, but you.

[01:38:07] TK: haven’t told me

[01:38:08] TK: why.

[01:38:09] CR: then it might have been when Jeff was on the show. Yeah,

[01:38:12] CR: uh, it’s, it’s about,

[01:38:15] CR: you know, the sort of ear­ly,

[01:38:16] CR: um, the tran­si­tion years in Hol­ly­wood from

[01:38:18] CR: silent movies to talkies,

[01:38:22] CR: and, um, It’s over the top. Um, the guy who wrote and direct­ed it is

[01:38:28] CR: the guy who did La La Land and, um, what­ev­er the drum­mer one

[01:38:32] CR: was,

[01:38:33] CR: um.

[01:38:33] TK: Oh yeah. Yep. Anoth­er one you

[01:38:35] CR: Whiplash.

[01:38:36] TK: Whiplash.

[01:38:37] TK: Yes. Thank

[01:38:37] CR: Yeah, uh, good direc­tor. But this, this got trashed

[01:38:40] CR: when it came out. Crit­ics hat­ed it. Flopped at the box office. Oh, it hit Net­flix and I’m like,

[01:38:46] CR: well, I like the guy, so I’ll check

[01:38:48] CR: it out. Brad Pitt and Mar­got Rob­bie, so some­thing to look at if noth­ing

[01:38:52] CR: else. And, um, yeah, no, I loved it. But, um, a lot of just the crazi­ness of, you know, sort of peak, um, debauched Hol­ly­wood in the late twen­ties.

[01:39:06] CR: Um,

[01:39:07] CR: hmm.

[01:39:08] TK: It’s like, what was that book I read when I was a kid? Hol­ly­wood Baby­lon. All those sto­ries and that.

[01:39:13] CR: it might have been based on that.

[01:39:14] TK: Could have been

[01:39:15] TK: Yeah.

[01:39:18] TK: yeah,

[01:39:19] TK: Well, that’s me. I think,

[01:39:21] CR: yeah, we’re not going to talk about AI and Hans Moravec,

[01:39:23] CR: Moravec’s

[01:39:24] CR: para­dox.

[01:39:25] TK: I think, I think we will, if we, if we start that, we’ll be here for a lot longer and I

[01:39:30] CR: Yes, you got stuff to,

[01:39:30] CR: you got­ta go

[01:39:31] CR: buy food for your house. Thank you TK, um,

[01:39:35] CR: well let’s see what 2025 brings. I think it’s going to be a crazy year

[01:39:39] CR: with the Trump White House and uh, AI and, you know, And God knows what else is com­ing this year, Elon.

[01:39:48] CR: How long Elon and

[01:39:49] CR: Trump sur­vive before they kill each

[01:39:50] CR: oth­er.

[01:39:51] CR: We did­n’t even talk about Adri­an Dittman. Have you

[01:39:53] CR: heard

[01:39:53] CR: about Adri­an

[01:39:54] CR: Dittman?

[01:39:55] TK: I have not, no.

[01:39:57] CR: For the last year or so,

[01:39:58] CR: there’s been this the­o­ry that there was a char­ac­ter on Twit­ter that was glaz­ing Elon all the time. His name was Adri­an Dittman. And there was a the­o­ry that it was real­ly just Elon with a fake Twit­ter account.

[01:40:10] CR: pre­tend­ing that he was this guy. Elon

[01:40:12] CR: con­fessed to

[01:40:13] CR: it a cou­ple of days ago that he is Adri­an Dittman. Um, he’s been writ­ing quotes about what a

[01:40:18] CR: great father Elon is, what a

[01:40:20] CR: great busi­ness­man he is, you know, how smart he

[01:40:23] CR: is. Like, what? Who does that? The rich­est man in the world run­ning a fake Twit­ter account talk­ing about what a great guy he is.

[01:40:33] CR: What? Like, uh,

[01:40:36] CR: any­way,

[01:40:37] TK: That’s almost psy­cho­path­ic though, isn’t it? Try­ing to, boost his pro­file on Twit­ter.

[01:40:42] CR: need to boost his pro­file! He’s got more fol­low­ers than any­one! How, with all the busi­ness­es that he’s run­ning and tak­ing over the world’s gov­ern­ments and, how does he have time to do that? I, I, I don’t have time to scratch

[01:40:58] CR: myself. I don’t

[01:40:58] CR: know how

[01:40:59] TK: Yeah. And why does­n’t he just get his assis­tan­t’s assis­tant to do it? Hey, set up a fake pro­file and praise me all the time, will you?

[01:41:06] CR: Maybe he did, I don’t know.

[01:41:08] CR: I think it’s just more fun. It’s like Trump tweet­ing about how great he is. He just took it one step fur­ther.

[01:41:15] CR: Any­who, until next time, Thank you. TK. Bye!

[01:41:18] TK: Thank you. Yep, so I’m back next week for a show, but the week after I’m away. Just give you a heads up on that. So

[01:41:24] TK: if you need a, you’re going to, I think, play your inter­view with Phil! Mus­catel­lo or vice ver­sa.

[01:41:30] TK: Yeah.

[01:41:31] CR: Well, I record­ed a cou­ple of Three Illu­sions pod­casts yes­ter­day with Chat­G­PT as my co host. So, um, I’m, I’m test­ing out Chat­G­PT as just a full time co host. So maybe I’ll

[01:41:40] CR: do that.

[01:41:41] TK: all right.

[01:41:43] CR: We’ll see. Yeah, it’s to replace Ray,

[01:41:46] CR: basi­cal­ly.

[01:41:47] TK: All right. Okay.

[01:41:52] CR: stuff that I don’t have a co host for. But any­way. All right. Talk to you next week. Bye.

[01:41:56] TK: Thanks. Bye.