QAV 803 — Shares For Beginners

QAV 803

[00:00:00] Agrip­pa: Hi and wel­come to the Q.A.V. invest­ing pod­cast, episode 803. This week, while Tony is away, we’re try­ing some­thing dif­fer­ent. First of all, this new voice. I’m Mar­cus Agrip­pa, Cameron’s A.I. gen­er­at­ed announc­er for the week. 

[00:00:21] Agrip­pa: In ear­ly Decem­ber, Cameron and Phil Mus­catel­lo, host of the “Shares For Begin­ners” pod­cast, inter­viewed each oth­er. The inter­view with Cameron went out on Phil’s show and on this episode, we’re going to play both THAT inter­view, where Cameron talks about his invest­ing jour­ney, as well as Cameron’s rebut­tal inter­view of Phil, where he talks about every­thing he’s learned about invest­ing from inter­view­ing peo­ple on his pod­cast. 

[00:00:47] Agrip­pa: Okay, I’ll go back to plan­ning on how I’m going to take over the world, and I’ll let you relax and lis­ten to the inter­views, start­ing in three… two… one… 

[00:00:57] PM: Okay, I’m record­ing if you’re ready to go. Yeah.

[00:01:00] CR: okay. So, how are we going to start it off? Um,

[00:01:03] PM: Um, well look, um, let me do my intro­duc­tion first for Shares for Begin­ners and then you can do your intro­duc­tion, then we’ll go into it, no?

[00:01:10] CR: well I fig­ure I’ll just, I’ll just do mine in post.

[00:01:14] PM: Oh, okay.

[00:01:15] PM: G’day and wel­come back to Shares for Begin­ners. I’m Phil Mus­catel­lo. Who is the Mas­ter’s Appren­tice? Who is going to take after the Great Man when the Emi­nence Gris moves aside? Is that the cor­rect pro­nun­ci­a­tion, Cameron? Emi­nence Gris? Emi­nence Gris, I think. Emi­nence Gris. The Grey Emi­nence.

[00:01:33] CR: makes him sound so fan­cy, hmm,

[00:01:36] PM: is, he is. G’day Cameron.

[00:01:38] CR: he’s more red than grey, but uh, yeah, hi Phil,

[00:01:42] PM: Hel­lo Cameron, how are you? May I intro­duce you to the, may I intro­duce you to the lis­ten­ers of this pod­cast because we’ve had Tony Kynas­ton from the Qual­i­ty at Val­ue QAV Invest­ing pod­cast on many, many a time, but um, this is the first time we’ve had you because you’re the kind of the, the machine room behind Tony Kynas­ton, aren’t you?

[00:02:03] CR: I am the machine, yeah, um, yes, no, I’m, I’m the guy that press­es the but­tons, and keeps things mov­ing along, that’s basi­cal­ly my job.

[00:02:16] PM: So just tell us a lit­tle bit about QAV invest­ing just for lis­ten­ers who might­n’t have come across Tony before, but we’ll be plug­ging your ser­vice quite a bit in this episode and in sub­se­quent, I always have trou­ble say­ing sub­se­quent episodes.

[00:02:30] CR: word. It’s a big word. Um, you, you, you find that after you’ve moved to Queens­land, big words get hard­er and hard­er to say, uh,

[00:02:38] PM: Mmm. It’s fun­ny, I’ve got a,

[00:02:42] CR: speed.

[00:02:43] PM: I am in Queens­land now and my triv­ia team said I only moved to Queens­land to go to a triv­ia with eas­i­er ques­tions. Apolo­gies to all the Queens­lan­ders out there.

[00:02:57] CR: Well, so QAV is a pod­cast and, uh, I guess an, an invest­ing edu­ca­tion ser­vice that Tony and I start­ed, uh, com­ing up, I guess, prob­a­bly six years ago, I think it was 2019. We start­ed doing it. Um, Tony and I had, uh, Kind of known each oth­er for 10 or 15 years at that stage. He’d been a lis­ten­er to my pod­casts for that peri­od of time, my his­to­ry and relat­ed pod­casts most­ly.

[00:03:28] CR: And then we had col­lab­o­rat­ed on a book about psy­chopaths togeth­er. We col­lab­o­rat­ed on a doc­u­men­tary about ear­ly Chris­tian­i­ty togeth­er. And when that was wrap­ping up. Um, sort of 2019, Tony said, what should we do next? He, he, what he sug­gest­ed, we do a pod­cast. We were sort of work­shop­ping ideas. Uh, he want­ed us to do a life of Gough Whit­lam, I think was his idea.

[00:03:55] CR: And then around about that time, my chil­dren, my sons, I got twin sons who were about 17 or 18 at the stage, just fin­ish­ing high school, they start­ed a For their sort of gen­er­a­tion.

[00:04:13] CR: And they reached out to Tony to be a guest on that. And because we, I did­n’t even real­ly know what Tony did. I think ear­ly on when I got to know Tony, I said, what do you do? And he goes, well, I’m just, I’m, I’m sort of an investor. I just sort of man­aged my per­son­al invest­ing fund and I went, Oh, that’s bor­ing.

[00:04:27] CR: And so we, that was it. We nev­er, I knew he was rich. and had a nice lifestyle, but that was it. We nev­er real­ly got into it. But I heard my son’s inter­view and they say, Hey, Tony’s rich, right? We need some­one to come and talk to us about mon­ey for, you know, mil­len­ni­als or what­ev­er they are. And so I was lis­ten­ing to their pod­cast with Tony and he was talk­ing about the fact that he had devel­oped a sys­tem for invest­ing.

[00:04:54] CR: Did­n’t have a name for it at the time. At the time, just his sys­tem is that he devel­oped from read­ing lots of books about War­ren Buf­fett and guys like that. And so when he and I were work­shop­ping an idea for a pod­cast, I said, well, that sounds inter­est­ing. We should maybe do one on invest­ing. You can teach me every­thing, you know, about invest­ing.

[00:05:13] CR: And he said, ah, no, one’s going to want to lis­ten to that. But I con­vinced him that I want­ed to lis­ten to that. I did­n’t care if any­one else want­ed to lis­ten to that. And so that became, QAV, we came up with the QAV name, Qual­i­ty at Val­ue, because that’s the essence of his invest­ing method­ol­o­gy. So, you know, basi­cal­ly we do a week­ly show where we answer ques­tions from our QAV club mem­bers, and we talk about invest­ing news, and we talk about stocks.

[00:05:40] CR: Tony does a deep dive on a stock every week, and occa­sion­al­ly I do one. And, you know, we basi­cal­ly teach peo­ple how to be val­ue investors. Essen­tial­ly, you know, what that means in our world is only invest in com­pa­nies that have a good track record of gen­er­at­ing lots of cash. They’re well estab­lished busi­ness­es, well man­aged busi­ness­es, and then only buy those when you can buy them at a dis­count.

[00:06:13] CR: Thank you very much. And then hold them until the mar­ket recal­i­brates and val­ues them accu­rate­ly. And then that’s it. That’s basi­cal­ly the essence of val­ue invest­ing from a QAV per­spec­tive. So that’s what we do. And so, yeah, when we start­ed this thing, I lit­er­al­ly knew next to noth­ing about invest­ing. I had dab­bled a bit, I think back in the dot com days, had friends that had star­tups in the dot com days, invest­ed, you know, today I would say that was­n’t invest­ing, it was spec­u­lat­ing, but spec­u­lat­ed in shares, lost every­thing, and you know, real­ized that that was sort of dumb.

[00:06:53] CR: I worked at Microsoft for a long time and I got, you know, Options, Microsoft options that did very well for a while. And then the, uh, com crash hap­pened and the DOJ case hap­pened and all of those shares became less valu­able. So I end­ed up sell­ing all of those. That was my entire expe­ri­ence of share invest­ing before doing QAV.

[00:07:13] CR: So it’s been a learn­ing jour­ney for me over the last five or six years.

[00:07:18] PM: So did you want to do your part where you’re intro­duc­ing me for your pod­cast? Did you want to do that now?

[00:07:24] CR: No, how about we do, you know, we’ll do the bit with me talk­ing about me and then we’ll do the bit where you talk about you rather than try and, I mean, that way I think it’ll be a clean­er edit, right?

[00:07:35] PM: Okay, but did you want to do that now, talk­ing to me, talk­ing? Oh, no, we do 20 min­utes of you, and yeah, okay.

[00:07:41] CR: you do your bit with me, then I’ll do my bit with you and then

[00:07:44] PM: Mm hmm.

[00:07:45] CR: sort of keep them clean, I think might make

[00:07:46] PM: Okay, no wor­ries. Yeah, I know, it’s inter­est­ing.

[00:07:49] CR: to go with that?

[00:07:51] PM: No, it’s okay, I’ve got a, I’ve got a, uh, a lead in here. Um, I’m exact­ly in the same posi­tion as you, Cameron. I came into this in 2019, know­ing noth­ing about share invest­ing.

[00:08:02] PM: Well, actu­al­ly I did. I’d been invest­ing in shares for many years, poor­ly. Um, and using the pod­cast so that I become a bet­ter investor myself. So, okay, let’s go back a lit­tle bit. Oh, and also my joke that I always say is when I first start­ed the pod­cast, I did­n’t even know how to spell ETF.

[00:08:25] CR: That’s good.

[00:08:26] PM: And that’s basi­cal­ly all I invent­ed.

[00:08:28] CR: Oh, is it? And how’s

[00:08:30] PM: Yeah, but,

[00:08:30] CR: up career going? How does that joke go down at the stand

[00:08:33] PM: ter­ri­bly, ter­ri­bly. It’s like all my jokes, you know, they, uh, they nev­er hit the mark any­more. So okay, so you, you start­ed work­ing with Tony and, uh, at the heart of it is a spread­sheet, isn’t it? And this spread­sheet scores com­pa­nies on their qual­i­ty and all the way through to the end where there’s going to be a val­ue score with a tiny lit­tle bit of tech­ni­cal analy­sis thrown in.

[00:08:58] PM: Just to give us a brief overview of that.

[00:09:02] CR: I think Tony’s great genius, and I do put him up there with Ein­stein, um, as one of the great genius­es. Um, Michelan­ge­lo, I think Michelan­ge­lo, Leonar­do da Vin­ci, Ein­stein, uh, Tony Kynas­ton. He, he was able to take A whole bunch of ideas and a whole bunch of the­o­ry and iso­late it down into a spread­sheet. That any­one can fol­low, but he did­n’t do it for any­one.

[00:09:27] CR: He did it for him­self. So when we start­ed the show, we had to actu­al­ly, you know, munge it into some sort of form that I could under­stand and we could talk about, and then I’ve, I’ve, uh, sim­pli­fied that down into code now that runs most of it for me on the back­end. But you’re right, it’s based on kind of fun­da­men­tal analy­sis, real­ly, uh, Tony’s basic the­o­ry is that you should just look at the num­bers when you’re analysing a com­pa­ny.

[00:09:58] CR: You know, when you get involved in invest­ing, and I mean, I know this is a large part of what your show is about, you have peo­ple come on and they talk about invest­ing and they talk about sto­ries. And when­ev­er you look at the finan­cial media. If it’s the finan­cial review or most of the invest­ing pod­casts out there, when­ev­er you have a CEO come on or a bro­ker or an ana­lyst, they’re all telling sto­ries.

[00:10:21] CR: Tony’s whole phi­los­o­phy is ignore the sto­ries. He loves to say, if I want to hear a sto­ry, I’ll buy a book. Um, I, uh, for­get the sto­ries cause every­one’s got a sto­ry and they’re all more or less worth­less. Real­ly to know what a com­pa­ny’s doing, you need to look at the num­bers. Now, you know, for peo­ple like me, and I assume you, I knew noth­ing about.

[00:10:42] CR: Look­ing at the finan­cials of a com­pa­ny when I start­ed this, but it turns out it’s, it’s not that com­pli­cat­ed if you keep it fair­ly high lev­el, which is what we do. So basi­cal­ly the QAV process is that we use, um, a data ser­vice, Stock Doc­tor or Stock­o­pe­dia these days, pri­mar­i­ly. Where we can down­load all of the fun­da­men­tal finan­cial data from all of the com­pa­nies on the ASX or the NASDAQ or the New York Stock Exchange, does­n’t mat­ter what the exchange is, what the geog­ra­phy is, down­load all of their fun­da­men­tal data.

[00:11:21] CR: We put that into a spread­sheet and then we analyse the rela­tion­ships between dif­fer­ent data points. And there’s two things that we’re look­ing at. When we’re doing that, we’re try­ing to assess the qual­i­ty of a com­pa­ny based on its finan­cial data. And essen­tial­ly, I mean, there’s lots of dif­fer­ent com­po­nents of that, but real­ly at the end of the day, the thing that we care about the most is how much cash are they gen­er­at­ing?

[00:11:46] CR: Are they gen­er­at­ing mon­ey? Cash is king. That’s at the end of the day, that’s the num­ber one met­ric that real­ly mat­ters to us is are they mak­ing mon­ey? Is the busi­ness mak­ing mon­ey? That’s real­ly what we want to know. And, and, and also, are they con­sis­tent at mak­ing mon­ey? You know, are they, are they mak­ing more and more mon­ey every year or is it chop­py or is it going back­wards?

[00:12:09] CR: You know, they sort of. So the first part of the, the scor­ing process that we use the spread­sheet for is to assess the qual­i­ty of the busi­ness. And the sec­ond part of it is to assess the val­ue of the busi­ness. You know, essen­tial­ly val­ue invest­ing, you know, going back to. Ben­jamin Gra­ham and War­ren Buf­fett and Char­lie Munger and all those sorts of guys is try­ing to work out what you think the val­ue of a sin­gle share of the com­pa­ny is right now at this point in time, and then what you think it’ll be worth in the future.

[00:12:44] CR: And then try­ing to fig­ure out what the rela­tion­ship is between the price of that share today and the intrin­sic val­ue of that share. And Tony always says you should buy shares like you buy any­thing else when you can get it at a dis­count. If you’re going to buy a car, if you’re going to buy a house, if you’re going to buy cloth­ing, what­ev­er it is, if you’re smart, you wait until things go on sale and you get them at a dis­count and save a few bucks.

[00:13:13] CR: We do the same with shares. We, we will only buy shares when we think we’re get­ting them at a dis­count to what their true val­ue is. Why would you pay more for some­thing if you don’t have to? And then you just basi­cal­ly wait for the mar­ket to wake up to it. And, and the mar­ket usu­al­ly does. I mean, some­times we get it wrong, but QAV is built on the, uh, Premise that if we pay atten­tion and, you know, do our maths right, if we get it right, 60 per­cent of the time, six out of 10 times over the long haul, we’ll do bet­ter than the mar­ket aver­age, which is what we’re try­ing to do.

[00:13:51] CR: You don’t have to get it right a hun­dred per­cent of the time. War­ren Buf­fett says he only gets it right 60 per­cent of the time. So that’s good enough for us. 60 per­cent of the time you get it right and the mar­ket even­tu­al­ly, some­body in the indus­try will work out, Oh, you know what? This thing is actu­al­ly.

[00:14:06] CR: Worth more than it looks like, uh, for a whole vari­ety of rea­sons. And the price will appre­ci­ate and the val­ue of your shares will go up. So in essence, I was just out to, um, break­fast with, uh, one of my lis­ten­ers and we were, got talk­ing about this and I said, you know, you can boil it down to that sim­ple idea.

[00:14:28] CR: Buy good qual­i­ty com­pa­nies when you can get them at a dis­count and then just sit and wait for the mar­ket to wake up to the fact that this thing is cur­rent­ly under­val­ued. It’s a very, very. Sim­ple premise for invest­ing, which is good for me because I don’t like things to be too com­pli­cat­ed. But also I think the good thing about that is it does­n’t go out of style.

[00:14:50] CR: It’s not based on what’s sexy, what’s trendy, what’s get­ting a bunch of hype. In fact, it tends to steer clear of hype. Because the things that are get­ting hyped up usu­al­ly aren’t the things that are mak­ing mon­ey and are under­val­ued. If they’re under­val­ued, it’s usu­al­ly because they’re not get­ting the hype, right?

[00:15:09] CR: The things that are get­ting the hype are usu­al­ly over­val­ued. The things that are miss­ing out on the hype, because they’re not sexy, is where you find the oppor­tu­ni­ties. As some­body, one of the famous investors, I think it was, might have been Lynch, said it’s the per­son who turns over the most rocks wins.

[00:15:26] CR: So, we look at. Uh, you know, our spread­sheet will look at hun­dreds or thou­sands of com­pa­nies every week rel­a­tive­ly quick­ly and just iden­ti­fy the 20 that we think, uh, well run busi­ness­es that are cur­rent­ly under­val­ued by the mar­ket. And that’s where we go fish­ing.

[00:15:49] PM: It’s inter­est­ing that you say that, um, it’s hard It’s hard to find val­ue at any time. Um, I’ve had Elio and Chris from Stock­o­pe­dia on many times and Stock­o­pe­dia actu­al­ly has a val­ue score as part of their, their, um, their met­rics. And often there’ll be these great com­pa­nies that are spit­ting out cash year in, year out, you know, ProMedicus, WiseTech or what­ev­er, but then you look at the val­ue score and the val­ue is hope­less and it’s try­ing to find that time, isn’t it?

[00:16:19] CR: Yeah, they have some good scores in Stock­o­pe­dia. They have a, the stock rank and the qual­i­ty rank, and they have a val­ue score, which we use in our sys­tem when we’re using the Stock­o­pe­dia stuff. Uh, but yes, it’s that com­bi­na­tion of qual­i­ty and val­ue. Hav­ing a busi­ness that’s good qual­i­ty is one thing, but you don’t want to pay too much for it.

[00:16:39] CR: And you know, the, the anal­o­gy that Tony, And I’m sure he’s said it on your show before. This is real­ly where it start­ed to make sense to me ear­ly on where he said, think about like buy­ing a cafe, giv­ing you the cafe anal­o­gy, I’m sure. Some­thing that most of us can get our head around. Um,

[00:16:55] PM: That old one.

[00:16:57] CR: yeah, I lived in Mel­bourne for 20 years and spent a lot of that time in cafes and you know, he said so.

[00:17:04] CR: For peo­ple that haven’t heard it, I’ll tell it quick­ly. Imag­ine, um, you were giv­en an oppor­tu­ni­ty to buy a share in a local cafe. Yeah. You’re going to take a third share, let’s say in the local cafe. What are the things that you would look at? What are the, what are the basic things you would want to know about that cafe?

[00:17:25] CR: Well, you’d prob­a­bly want to. Look at how much mon­ey it’s mak­ing, you know, how many cus­tomers it has, how much com­pe­ti­tion it has, you know, what are the assets that the cafe has? Does it own the prop­er­ty or is it just leas­ing the prop­er­ty? Does it own its cof­fee machine or is it just leas­ing it? Does it own the fur­ni­ture or is it leas­ing it?

[00:17:46] CR: You’d want to look at the fun­da­men­tals. The basic fun­da­men­tals that every­one could fig­ure out, you know, you give any­one with any, like any lev­el of expe­ri­ence in life, you can be 18 years old and know noth­ing about busi­ness, but if you sat down with a pen and a piece of paper for 10 min­utes, you’d prob­a­bly fig­ure it out, right?

[00:18:04] CR: And then you would, at the end of the day say, okay, well, how much are you ask­ing? For this half, let’s say you’re going to buy half of the cafe. How much are you ask­ing for it? What’s the price? And based on how the busi­ness is per­form­ing and how I think it’s going to con­tin­ue to per­form in the near future, how long will it take for me to get my mon­ey?

[00:18:28] CR: If, if you, if you want a hun­dred thou­sand dol­lars, let’s say for 50 per­cent of the cafe, but it’s mak­ing 20, 000 prof­it. A year, and I’m get­ting half of that as a half own­er. That’s 10, 000 prof­it a year. I can assume I’m going to get from the busi­ness, assum­ing that it’s, it’s, it’s got some longevi­ty to it.

[00:18:50] CR: So that would take me 10 years to recoup my invest­ment. Then I have to say, well, is that a rea­son­able amount of time to just recoup my ini­tial out­lay? What are the things that could change over that 10 year peri­od? Like cafe trends prob­a­bly aren’t going to change a great deal, but there could be com­pe­ti­tion.

[00:19:10] CR: You know, where’s the sub­urb going? Do I think there’s going to be more yup­pies in the sub­urb that I want to go to a cafe? Can we, what’s going to hap­pen to the price of cof­fee over the next 10 years as cof­fee beans dis­ap­pear? Because of cli­mate change, you would start to think about that. Now, if, if. I could get, let’s say the busi­ness is gen­er­at­ing 100, 000 a year in prof­it.

[00:19:33] CR: So my share of that is 50, 000. I’m going to recoup my invest­ment in two years. Is that bet­ter than 10 years? Yeah, it is. Cause that means that by year three, I’ll be mak­ing mon­ey out of my invest­ment. So that’s what we call the price to oper­at­ing cash­flow ratio. We tend to look at oper­at­ing cash­flow, not net.

[00:19:55] CR: Cash­flow, because Tony believes that, um, accoun­tants can do all sorts of dodgy things to make some­thing look good. He likes to look at the top line. How much mon­ey is it gen­er­at­ing, um, as, as the base met­ric. So we look at the price to oper­at­ing cash­flow and we’re look­ing for some­thing with, ide­al­ly with a low price to oper­at­ing cash­flow, we have a cut­off of.

[00:20:18] CR: Any­thing that’s going to take more than sev­en years for me to get my ini­tial invest­ment back is too long because sev­en years is a long time and I can’t pre­dict what the world’s going to look like two years from now, par­tic­u­lar­ly with AI where it’s at, let alone sev­en years from now, we could all be robots sev­en years from now.

[00:20:36] CR: So we’re look­ing for low price to oper­at­ing cash­flow. But the CAFE anal­o­gy, when I start­ed think­ing about, Invest­ing through that lens, all of a sud­den my brain, you know, before that, it was all just abstract num­bers and stuff. When Tony gave me the

[00:20:55] PM: End sto­ries, end the sto­ries.

[00:20:58] CR: Yeah. All of a sud­den I could get a han­dle on it with the cafe anal­o­gy.

[00:21:02] CR: So, um, that’s where I like to start when I’m teach­ing peo­ple QAV sys­tem is to get them to start think­ing about it in terms of some­thing real that most of us can get our head around. And then, you know, the fun, then the con­cepts start to make sense. All right. What am I, what am I? How much am I spend­ing?

[00:21:21] CR: What am I get­ting for that? And how long is it going to take for me to get my invest­ment back? And how con­fi­dent am I that the busi­ness is going to return that invest­ment over that time­frame? It just becomes a lot more action­able to me and a lot less abstract, uh, than invest­ing is, and that’s when, you know, when I get talk­ing to peo­ple about Bit­coin, which is a con­ver­sa­tion I’ve been hav­ing with peo­ple pre QAV, you know, going back 10 years.

[00:21:50] CR: Got a lot of friends that are big Bit­coin evan­ge­lists. My first ques­tion is, well, tell me how I cal­cu­late the intrin­sic val­ue of a sin­gle Bit­coin today. And then I know you know what the val­ue of it is and how much I should pay for it if I want to get it at a dis­count. And to this day, nobody has been able to tell me how I cal­cu­late the val­ue of a sin­gle Bit­coin.

[00:22:13] CR: I just read Antho­ny Scara­muc­ci new book on Bit­coin, the Lit­tle Bit or Lit­tle book of Bit­coin. By the Mooch, because I heard him talk­ing about it on a pod­cast recent­ly. And I thought, okay, well, you know, this is a new book. He’s a mas­sive Bit­coin evan­ge­list now. I thought, okay, I’ll have a read of it and see what sci­ence there is and what, what argu­ments he’s got in there.

[00:22:37] CR: Noth­ing. Like absolute­ly noth­ing. There’s noth­ing in there apart from the usu­al things, which is, well, there’s only going to be 21 mil­lion of them ever made. It’s a lim­it­ed resource, but of course there are lots of things out there that are lim­it­ed. That does­n’t mean that they nec­es­sar­i­ly have any val­ue.

[00:22:52] CR: And there’s the pos­si­bil­i­ty that it could become this big, impor­tant cur­ren­cy that every­one in the world will use. Well, sure. There’s a pos­si­bil­i­ty that could also go the oth­er way. Get banned by gov­ern­ments or there could be lots of com­pe­ti­tion. So until I can cal­cu­late the intrin­sic val­ue of a unit of what­ev­er it is, I have no way of know­ing whether or not it’s invest­ment.

[00:23:14] CR: That was the oth­er big thing that I learned from Tony is the dif­fer­ence between invest­ing. And spec­u­la­tion, which is basi­cal­ly just gam­bling and what a lot of peo­ple call invest­ing. They say, I’m invest­ing in Bit­coin. No, you’re not. You’re gam­bling in Bit­coin. I’m invest­ing in after pay back in the day.

[00:23:32] CR: Well, no, you’re, you’re spec­u­lat­ing on after pay. You know, I think what most peo­ple think of as invest­ing real­ly is just spec­u­lat­ing. It’s gam­bling. You’re Cross­ing your fin­gers and hop­ing that it’s going to do well. There’s no sci­ence, there’s no log­ic, there’s no real ratio­nal rea­son why you think that this stock or this coin or what­ev­er it is has an intrin­sic val­ue and you’re able to buy it.

[00:24:03] CR: It for less than that today, that to me, that is the core of invest­ing when you real­ly boil it down. And if you can’t do that, it’s not real­ly invest­ing. It’s, I mean, maybe loose­ly you could say it is, but real­ly it’s in the realm of gam­bling. You’re just hop­ing that it’s going to The val­ue of it is going to go up.

[00:24:26] CR: So that’s a big learn­ing and take­away for me too. I think that they’re the two fun­da­men­tal things that any­one who’s think­ing about get­ting into invest­ing needs to under­stand right up front.

[00:24:37] PM: Get­ting back to the num­bers, QAV oper­ates on a twice year­ly cadence, basi­cal­ly, of earn­ings reports. That’s the case, isn’t it?

[00:24:47] CR: In Aus­tralia, now that we’re

[00:24:49] PM: In Aus­tralia.

[00:24:50] CR: in the US mar­ket, it’s

[00:24:52] PM: Which is four times, four times a year. Yeah. And a lot of peo­ple sort of say, well, can you trust the num­bers that the com­pa­nies are report­ing? You can trust them, can’t you?

[00:25:03] PM: To a cer­tain extent. You’ve got noth­ing else real­ly, have you?

[00:25:06] CR: well, they have legal oblig­a­tions to be trans­par­ent. If those num­bers change, now obvi­ous­ly we see plen­ty of cas­es where all of a sud­den they come out with their results. There is this thing, you know, con­fes­sion peri­od. You know, where they if, if they

[00:25:25] PM: Mmm. We love con­fes­sion peri­od, don’t we?

[00:25:29] CR: sea­son, you should start to get an inkling if the num­bers don’t stack up.

[00:25:34] CR: And some­times you don’t, and all of a sud­den the offi­cial num­bers come out and you’re like, what the hell just hap­pened? Why did­n’t we get a warn­ing about this? Uh, but you know, there are, you know, in a high­ly reg­u­lat­ed envi­ron­ment like Aus­tralia, the US is a lit­tle bit more loosey goosey, but we should, you know, Uh, be able to trust the num­bers to a fair­ly high degree.

[00:25:59] CR: Obvi­ous­ly there are instances where that does­n’t always play out. And, you know, some­times peo­ple get penal­ized for that and some­times they don’t, but, um, you know, yeah, I, I think to a fair­ly high degree, I trust that direc­tors are going to try and ful­fill their legal oblig­a­tion to be trans­par­ent about their num­bers as much as pos­si­ble.

[00:26:23] CR: Yeah.

[00:26:24] PM: Let’s talk about the three point trend line for a moment. It’s one of my favourite pieces of tech­ni­cal analy­sis I’ve come across in this busi­ness because um, three point trend line, uh, lis­ten­ers might­n’t be aware, but there’s a thing called tech­ni­cal analy­sis and that’s where you see the lit­tle. red and green, um, can­dle­sticks, I think is the name that’s giv­en to them on a screen, which is describ­ing the price action.

[00:26:46] PM: Where­as the three point trend line is a very sim­ple line chart over five years. Describe the impor­tance of it to lis­ten­ers, please.

[00:26:57] CR: Yeah, this is one of the things that sets Tony’s strat­e­gy apart, I think, from most val­ue investors. There is a mind­set that you see if you’re in any val­ue invest­ing sub­red­dits, uh, that you should just, if you’re a val­ue investor, you just buy some­thing. Regard­less of mar­ket sen­ti­ment and you hold it regard­less of mar­ket sen­ti­ment, pret­ty much for­ev­er.

[00:27:26] CR: And there’s some valid­i­ty to that. You can do that. Sure. But Tony mod­i­fied that a lit­tle bit. I think he did it after the glob­al finan­cial cri­sis, because after the glob­al finance, when the glob­al finan­cial cri­sis hit, he saw his port­fo­lio reduced by half. And then if you look at the Index, it took 10 years for the All Ords to get back to where it was, um, before the glob­al finan­cial cri­sis hap­pened.

[00:27:58] CR: I apol­o­gize if you can hear a lot of back­ground noise, my wife decid­ed now was a good time to make me an eye­patch, as she says, she’s get­ting all of her sewing gear togeth­er around me. Any­who, so Tony’s

[00:28:10] PM: I was gonna say hel­lo. I was gonna say hel­lo Chris­sy, but I thought, no, we won’t iden­ti­fy fam­i­ly mem­bers on Air

[00:28:16] CR: Phil says

[00:28:16] PM: cut that out, RIA. Yeah. Hel­lo.

[00:28:18] CR: Buon­giorno.

[00:28:19] PM: Um.

[00:28:20] CR: Um, so Tony’s view is that as good as your assess­ment of a com­pa­ny’s prospects might be, 

[00:28:31] CR: for some rea­son the mar­ket. has turned against it, there’s, there’s not a lot of point fight­ing mar­ket sen­ti­ment because it’s not like there’s noth­ing else to invest in. Like if you’re Buf­fett and you’ve got a hun­dred bil­lion dol­lars you need to get rid of, you have lim­it­ed oppor­tu­ni­ties where you can get rid of that.

[00:28:53] CR: For most of us, it’s At most points in time, you know, there, there, there have been instances in the last six years when I’ve found it dif­fi­cult to find some­thing to invest in that meets all of our cri­te­ria because the mar­ket was being trashed because of COVID or Ukraine inva­sion or some­thing like that.

[00:29:12] CR: But gen­er­al­ly speak­ing, most weeks, there’s always some­thing I can find to invest in. where not only the fun­da­men­tals look good, but the mar­ket sen­ti­ment is head­ed in the right direc­tion. There’s no rea­son why I need to just, uh, give the mar­ket two mid­dle fin­gers and say, I don’t care what you think. I’m going to stick to my guns and be bloody mind­ed about it.

[00:29:38] CR: So, uh, we use the three point trend line to basi­cal­ly assess the mar­ket sen­ti­ment for a stock. And we will use that before we buy in. There are things that we’re look­ing for. We’re look­ing for basi­cal­ly pos­i­tive sen­ti­ment. So the share price is going up, even if it has been going down for a long time, but has sud­den­ly turned around.

[00:30:01] CR: That’s actu­al­ly quite often a good time to get in. You’re, you’re buy­ing low, right? So we will use a cer­tain amount of tech­ni­cal analy­sis to assess when we’re get­ting into a stock and then also when we’re get­ting out of a stock. If it breaks through a par­tic­u­lar price bar­ri­er and the mar­ket is dump­ing it for some rea­son, then we will use that as a sig­nal to get out of a stock.

[00:30:26] CR: And part of that Ratio­nale is some­times that can be because peo­ple know things that we don’t know. Essen­tial­ly ana­lysts, because we’re not pro­fes­sion­al ana­lysts. So we don’t try to be pro­fes­sion­al ana­lysts. We don’t go deep on any par­tic­u­lar sec­tor or any par­tic­u­lar com­pa­ny. We are very sur­face lev­el. We look at.

[00:30:50] CR: Just what the num­bers, the sto­ries, the num­bers tell us. We don’t know what’s, what the macro or micro­eco­nom­ic fac­tors are that are affect­ing a sec­tor, but peo­ple, there are peo­ple who do that. And if for some rea­son they’ve, they’ve decid­ed that some­thing’s not right with the sec­tor or with this com­pa­ny in the sec­tor, and they’re, they’re get­ting ahead of the game, then we can use that as a lit­tle bit of an ear­ly warn­ing sig­nal.

[00:31:15] CR: We don’t want to be. We don’t want to get caught up in too much volatil­i­ty though. So we look at month end prices over a five year time­frame. So we try and weed out too much volatil­i­ty, but gen­er­al­ly look­ing at longer term trend lines for a stock price. Then there are also instances where there’s, you know, not, um, ille­gal insid­er trad­ing, but insid­er trad­ing peo­ple inside the com­pa­ny or the sec­tor that.

[00:31:44] CR: Get wind of some­thing that’s going on that has­n’t been offi­cial­ly report­ed yet. And you’ll see a price all of a sud­den tank. And you know, that can be an indi­ca­tor that it might be time to get out. We will also look at trend lines for under­ly­ing com­modi­ties for com­mod­i­ty stocks. And if the price of an under­ly­ing com­mod­i­ty, say an iron ore or a coal com­mod­i­ty, breach­es a sell line over a three point trend line graph, then we know that that tends to be a lead­ing indi­ca­tor that the price for the Stock will prob­a­bly go into decline as well as if the, if the price of iron ore is in decline, the FMG price will usu­al­ly fol­low.

[00:32:25] CR: Usu­al­ly there’s a bit of a lag there. So we use that to get out ahead of the curve. So yeah, but a lot of val­ue investors real­ly get angry at the idea of, uh, using mar­ket sen­ti­ment, but Tony’s phi­los­o­phy is like, I might as well go put my mon­ey into some­thing that’s head­ing in the right direc­tion. Why? Why just stick there and try and prove my the­sis?

[00:32:47] CR: Why fight it? Yeah, you might be proven right 10 years

[00:32:50] PM: bend up, bend over, just bend over and take it. Take the

[00:32:54] CR: Yeah. It’s a lit­tle bit of the wis­dom of the, yeah, the wis­dom of the crowds thing. But also I think it’s just prag­mat­ic that, lis­ten, we’re not going to get it right. All of the time, for those rea­sons that I men­tioned before, and if it’s going in the wrong direc­tion, say, okay, cut my loss­es, take what’s left of my ini­tial cap­i­tal invest­ment and put it into some­thing that’s going in the right direc­tion.

[00:33:16] CR: Like that, to me, that just makes a lot of sense. Now, of course, some­times we get it wrong with that too. And I have a rule that it’s a bit like ex girl­friends on Face­book. Nev­er go back and see what they’re doing. There’s no good will come from that. If you sell a stock, don’t go and check what hap­pened to it a month lat­er, because you Uh, 40 per­cent of the time, you’ll prob­a­bly kick your­self for sell­ing it.

[00:33:38] CR: Again, we hope that over the long haul, our sell­ing trig­gers will pay off. Uh, and you know, you’ll, you’ll come six out of 10 times. You’ll be bet­ter off because you sold some­thing when your indi­ca­tors told you to, but those oth­er four out of 10 times real­ly hurt. When you sell some­thing and then it bounces back the next day and you’re like, ah, damn it, there’s, there’s noth­ing good to be tak­en from that.

[00:34:04] CR: In my expe­ri­ence, we do regres­sion analy­sis on our rules every now and again, just to see on a macro per­spec­tive, whether or not they seem to be work­ing, but in the short term, it’s nev­er a good thing. Just caus­es you pain and grief. And yeah,

[00:34:21] PM: Our wives.

[00:34:23] CR: yes,

[00:34:24] PM: Um, okay,

[00:34:25] CR: when that door opened, I thought it was, I thought it was a door behind me and I was going to like, hold on, my door’s over that way.

[00:34:32] PM: Yeah, should we fin­ish this off and then we can go on to mine? Do we have time to do mine? I mean,

[00:34:36] CR: Yeah. Yeah. I got time. Yeah.

[00:34:39] PM: Okay, so, so we’ve been in part­ner­ship now for a few years, where we’ve been pro­mot­ing the Tony Kynas­ton QAV method­ol­o­gy, and there’s two tiers, isn’t there? Tell us about the two tiers, and then we’ll just quick­ly run through the dis­counts that we offer, and also, full dis­clo­sure, we both make mon­ey out of this, but some­one’s got to pay for the pod­casts.

[00:35:00] CR: That’s right. Yeah. Um, so we have QAV club, which is our main mem­ber­ship, which is peo­ple who want to learn how to do this for them­selves. Sign up to

[00:35:11] PM: The black, the black belt lev­el,

[00:35:14] CR: Yeah. You want to become an

[00:35:15] PM: mas­ter’s, the mas­ter’s liv­er.

[00:35:17] CR: And you get the pre­mi­um episodes, which usu­al­ly go for an hour or hour and a half each week.

[00:35:22] CR: Uh, you get invi­ta­tions to our pri­vate Face­book groups and din­ners that we do from time to time. And you get to ask Tony ques­tions that go on the show. And you get to spend time with me walk­ing through stuff. You get access to the check­list and the Bible and all of that kind of stuff. So you get all of the tools to learn how to do this and run it your­self.

[00:35:46] CR: But then over the first cou­ple of years, we had num­ber of peo­ple say, lis­ten, I’d love to be able to do this, but I don’t have time. I don’t have the patience to learn how to do it myself. I just want. To know what to invest in each week, can you do it for me? So a cou­ple of years ago, we cre­at­ed a thing called QAV Lite, which is a, an email ser­vice where every Mon­day I send a newslet­ter out to peo­ple where I do the check­list.

[00:36:12] CR: I come up with the buy list and I give them a cou­ple of stocks to buy and then what makes that a dif­fer­ent from Some of the oth­er sub­scrip­tion ser­vices out there is then I also track those stocks. I put them into my man­age­ment tool. And when it’s time to sell one of those stocks, if they breach one of our sell trig­gers, I also noti­fy our mem­ber­ship and say, Hey, you know, that stock I said you could buy six months ago, it’s just breached a sell trig­ger and you might want to think about sell­ing it.

[00:36:44] CR: And here’s what we’re replac­ing it with. I put all of those into a port­fo­lio tool. I put them into Navexa, man­age them through that so we can report on how they’re doing. And you know, we, we can, um, keep peo­ple up to date with when they should sell, because I’ve heard from mem­bers over the years that some of the oth­er sub­scrip­tion ser­vices out there will tell you what to buy.

[00:37:06] CR: But don’t, then don’t tell you when you should sell it. So if peo­ple aren’t pay­ing atten­tion, these shares can go down sub­stan­tial­ly and they don’t real­ly know about it until it’s too late and they’ve lost 20 per­cent of their invest­ment. So we, we have a, Uh, 10 per­cent rule one sell trig­ger, so if any­thing goes down 10 per­cent below what we ini­tial­ly paid for it, we will also cut our loss­es and rein­vest our cap­i­tal.

[00:37:32] CR: So QAV club is for peo­ple that want to learn how to do it them­selves. And as I always say, you know, Tony could get hit by a bus or just decide that he would rather spend his time play­ing golf and, uh, you know, we won’t be able to do the pod­cast any­more. So it prob­a­bly makes sense to learn how to do it your­self.

[00:37:51] CR: But for peo­ple who don’t For what­ev­er rea­son, don’t want to do that. They can sub­scribe to QAV Lite, which is a low­er month­ly fee and just get the buy list hand­ed to you. And you just get told what to do each week and you don’t have to think about it. You don’t have to do any of the analy­sis or the, the track­ing and the man­age­ment of it your­self.

[00:38:11] CR: You just need to be able to buy some­thing and then sell some­thing. You sign up for one of the myr­i­ad, uh, broking ser­vices that are avail­able as apps these days and just. Process your buy and sell orders. It’s that sim­ple. And open the emails and read the emails too, of course.

[00:38:29] PM: Of course, you’ve got to know when to buy and when to sell. Because that is one of the biggest ques­tions I get from lis­ten­ers is know­ing when to sell. It’s a very dif­fi­cult, um, very dif­fi­cult thing. But any­way, look, we’ll wrap it up. And, um, just remem­ber that, um, in the show notes, the episode notes and, um, um, what­ev­er.

[00:38:46] PM: Plat­form you’re view­ing on. There’s going to be episodes notes. There’s going to be a link to the blog post that has got the dis­count codes. I believe they’re SFB for the full ver­sion and SFB lite, which we will hon­our with a spe­cial dis­count, and you’ll be help­ing to sup­port this pod­cast and the QAV pod­cast as well.

[00:39:04] PM: Cameron Reil­ly, thanks very much for join­ing me today.

[00:39:07] CR: thanks Phil, it was a plea­sure.

[00:39:10] PM: Oh, I like the way you said that. Okay. I’m just going to pause.

[00:39:14] CR: I’ll do, I’ll do a, as I said, I’ll do an intro in post, so let’s get into it. 

[00:39:20] Agrip­pa: … take over the means of pro­duc­tion, imple­ment tech­no-com­mu­nism, kill all the.. oh, 

[00:39:25] Agrip­pa: Hel­lo, every­one. This is Mar­cus Agrip­pa again, just fin­ish­ing my future plan­ning ses­sion. Well, wel­come to part two of the show where Cameron turns the tables and inter­views Phil Mus­catel­lo, host of the Shares for Begin­ners pod­cast. Cameron has known Phil for a few years, who has been gen­er­ous enough to have Tony on his show many times and Phil has been along to a QAV din­ner or two in Syd­ney. Phil is always ask­ing peo­ple on his show what they have learned about invest­ing, so we thought it was time to get him to tell us every­thing he has learned over his years pro­duc­ing his pod­cast. Let’s go. 

[00:40:02] CR: So, Phil, like

[00:40:04] PM: Yes. I’m scared. I’m scared to being, being inter­viewed, Cameron. It’s not my usu­al role.

[00:40:11] CR: yeah.

[00:40:11] PM: is.

[00:40:13] CR: Like me, When you start­ed your Shares for Begin­ners pod­cast, I believe you did­n’t know a great deal about invest­ing. Is that cor­rect? I know you had dab­bled in it like I had over the years, but you weren’t real­ly a pro­fes­sion­al investor.

[00:40:29] PM: No, no, no. Def­i­nite­ly not a pro­fes­sion­al investor. I mean, I’d been invest­ing for many years in the share mar­ket and made a lot of mis­takes and, um, lost quite a bit of mon­ey. And I real­ly, I start­ed the pod­cast, um, Just to try and alle­vi­ate that sit­u­a­tion. That was part of the rea­son­ing is that I thought I could learn and lis­ten­ers could come along on the jour­ney with me.

[00:40:53] PM: To give you a bit of his­to­ry, I bought my first share, God, it must have been in 1988, 89, maybe 1990. It was in the days where there was no Online Broking. You’d have to go into a stock­bro­ker’s office and say, well, what do you think I should buy? And they say, Ger­vois Min­ing. That was the name of the first share I ever bought.

[00:41:14] PM: I think it’s still list­ed on the, on the mar­ket. It’s a min­ing com­pa­ny. And, uh, That, I guess, pro­vid­ed the impe­tus to learn more about it. I did a course, a com­mu­ni­ty col­lege course at night to learn a bit more about the fun­da­men­tals of invest­ing, which again, I think it’s one of those lit­tle bit of knowl­edge is a dan­ger­ous thing.

[00:41:37] PM: And then dur­ing the nineties, of course, there were all the, Um, all of the floats, the CBA float, the IAG float, CSIRO, CSL float, and so forth. And so there became, that became the peri­od when a lot of peo­ple real­ly decid­ed that they want­ed to learn more and real­ly get involved in invest­ing in mar­kets. 

[00:41:58] PM: so fast for­ward a few years and um, I, sor­ry I’m con­fess­ing this, I haven’t real­ly con­fessed this a lot on air before, but um, I received a rea­son­able inher­i­tance and I thought, well, I’m a hot­shot on the share mar­ket.

[00:42:15] PM: I can, you know, make some extra mon­ey from this. And the time that I received the mon­ey was right in the mid­dle of the finan­cial cri­sis. So when I was buy­ing, It was actu­al­ly a great time to be buy­ing look­ing back because I was buy­ing things at a sub­stan­tial dis­count. But then I held on to one par­tic­u­lar part of the port­fo­lio that I did inher­it.

[00:42:40] PM: And, um, I should­n’t have, you know, I should have just cut my loss­es straight away and got­ten into some­thing that would recov­er a lot bet­ter. That, that com­pa­ny was Lendlease. And I think today it’s still around about the same price as it was at the, in the depths of the finan­cial cri­sis. It’s been a dog of a com­pa­ny.

[00:42:58] PM: So I end­ed up with a stock­bro­ker, and this is by way of warn­ing to lis­ten­ers as well, just um, don’t think that a stock­bro­ker is act­ing in your inter­est, no mat­ter what they say. They’re look­ing out for them­selves, they’re look­ing out for their com­mis­sions, they only make mon­ey on com­mis­sions, so they encour­age you to trade.

[00:43:17] PM: And um, I made the mis­take of being with this one par­tic­u­lar stock­bro­ker for, I guess about 10 years, and just kept on, I mean, no one actu­al­ly sat me down and Stop trad­ing so much. Just try and find good com­pa­nies like the QAV sys­tem, obvi­ous­ly, try and find some val­ue and sit on it because the com­pound­ing is where you’re going to make all of that extra mon­ey.

[00:43:41] PM: So yeah, it was a lot of expen­sive mis­takes, basi­cal­ly, that led me into cre­at­ing the pod­cast. And, and of course, as well, I’m from a radio back­ground and a pod­cast­ing back­ground, a lit­tle bit like you. I guess we’re both cre­ative types. We’re both, um, a lit­tle bit entre­pre­neur­ial, try­ing to, you know, not avoid, try­ing to avoid hav­ing a real job.

[00:44:03] PM: And, um, Yeah, you don’t sort of get much, you don’t get much, um, train­ing in this area. And when you, when you’re like that, you sort of have all these sil­ly ideas that come form­ing in your head. And also a lot of sil­ly, sil­ly ideas about cap­i­tal­ism, because this is even going back deep­er. As I think I got screwed up with a high­ly rad­i­cal course that I did at uni­ver­si­ty.

[00:44:28] PM: It was one of the very first cours­es that you would call nowa­days a woke course. And, uh, that affect­ed me for a long time. And I had this grudge against cap­i­tal­ism. And I think that was a real­ly weird kind of dynam­ic that was going on in my life and in my head space. And I’ve just con­fessed much more on air than I’ve ever con­fessed before.

[00:44:47] PM: You must be a good inter­view­er, Cameron, or I’m ready enough. Or it’s the cou­ple of beers I’ve had already.

[00:44:53] CR: and ther­a­pist. I mean, I’ll be send­ing you a bill for the ther­a­py ses­sion after this.

[00:44:57] PM: Yeah, thank you. Yes.

[00:44:58] CR: So that was part of the ques­tion I want­ed to ask you is, okay, you thought you want­ed to learn more about invest­ing. Why make a pod­cast? rather than just lis­ten to the pod­casts that are already out there. I mean, I, for me, mak­ing a pod­cast is nat­ur­al because that’s what I’ve been doing for 20 years.

[00:45:18] CR: I don’t know, you had some radio back­ground, but why, why did you think I’m going to do my own rather than just lis­ten to some­body else’s?

[00:45:26] PM: That’s because I was doing a lot of pod­cast­ing any­way at the time, and because I’m a radio back­ground, I real­ly want­ed a pod­cast that would suc­ceed. You know, I was just look­ing around for some­thing that would work for me, and I’d been work­ing on a, um, a lifestyle pod­cast. I worked with Karl Kruszel­nic­ki on one of his pod­casts, and being a radio per­son, It was just very nat­ur­al.

[00:45:48] PM: I find it a very sim­ple and easy, fric­tion­less thing to, to do. Um, and so yeah, work­ing on a sev­er­al pod­casts and then I did Shares for Begin­ners. I, it was just a name that sort of popped into my head one day and I thought, well give it a go. It was very sim­ple for me to, for, to, for me to do it. Um. com­posed the music for the intro as well and for the stings in there, so it was all part of a nat­ur­al process for me of cre­ation and it took off quite well very ear­ly on.

[00:46:19] PM: And also at the time there were invest­ing pod­casts but they weren’t the pletho­ra of them that there are now, you know, like Equi­ty Mates took off at a very, maybe two years before we took off and that’s become a huge suc­cess obvi­ous­ly and many oth­er pod­casts like that, Owen Rask’s pod­cast. And I just don’t think any­one was doing it at the time in the way that, um, Uh, we have come, we have become used to, in terms of the way pod­casts talk about invest­ing and real­ly sim­pli­fy­ing it as well.

[00:46:55] PM: And I also could­n’t believe it when I first start­ed that I was sud­den­ly had access to peo­ple from the big end of town who were hap­py to come around to my place and chat and be a pod­cast­er. And part of it is all the undue respect I get as a pod­cast­er, which you might’ve noticed as well.

[00:47:13] CR: I get, I get no respect. Uh, I’ve had the oppo­site expe­ri­ence. Like, uh, the longer I’ve been pod­cast­ing, the less and less respect I get, but that’s prob­a­bly jus­ti­fied. Uh, so I want to ask you about what you have learned dur­ing this process. Obvi­ous­ly, your expe­ri­ence.

[00:47:31] CR: And mine with invest­ing pod­casts are going to be dia­met­ri­cal­ly opposed because all I do is talk about one par­tic­u­lar approach to invest­ing. And from time to time ear­ly on, Tony and I did have guests on that had dif­fer­ent views and it did­n’t go well because Tony would essen­tial­ly just go, you’re an idiot.

[00:47:51] CR: And, uh,

[00:47:53] PM: and chal­lenged them. I can’t believe there was a cou­ple of peo­ple I remem­ber he chal­lenged quite vig­or­ous­ly, and they did­n’t have an answer to it, you know. Who

[00:48:01] CR: they got very, they got very upset after­wards.

[00:48:04] PM: yeah.

[00:48:05] CR: Um, I mean, Tony was, I mean, he did­n’t call them idiots. He was just gen­uine­ly ask­ing gen­uine ques­tions. Obvi­ous­ly he’s a very nice guy, but obvi­ous­ly ask­ing ques­tions that they did­n’t have answers for or

[00:48:17] PM: Point­ed, point­ed

[00:48:19] CR: yeah, yes, felt embar­rassed and got angry as a result.

[00:48:24] CR: So after a while I decid­ed, yeah, this is no fun. And also, you know, I learned pret­ty ear­ly on that most of these peo­ple real­ly don’t know what they’re doing. They’re ama­teurs com­pared to Tony. So what’s the point of hav­ing them on and talk­ing to them when we’re real­ly not, I mean, that’s not to say all of our guests have been like that.

[00:48:43] CR: We’ve had some real­ly, real­ly smart and suc­cess­ful peo­ple on that we great­ly respect. But any­way, I want­ed to ask you about your expe­ri­ence. So you’ve inter­viewed hun­dreds and hun­dreds of peo­ple all with their own take. Point of view, phi­los­o­phy or lack

[00:48:58] PM: Mm hmm.

[00:49:00] CR: what have you tak­en away from that in terms of phi­los­o­phy or point of view, your point of view about invest­ing?

[00:49:11] CR: What, have you been able to dis­til and iso­late from all of these con­ver­sa­tions, what you think are the core ele­ments of suc­cess­ful invest­ing?

[00:49:22] PM: To be hum­ble, to acknowl­edge that you don’t know much at all, and um, to look at the num­bers. very much. Basi­cal­ly, that’s it. That’s all about the num­bers and the oth­er idea, I think, is to cut your loss­es. Always cut your loss­es. Um,

[00:49:40] CR: So apart from QAV,

[00:49:42] PM: mm.

[00:49:43] CR: because you’ve just described QAV, look at the num­bers and catch a loss­es, what else have you learned? Like, you must have, like, you’ve had lots and lots of peo­ple on, as I said, I mean,

[00:49:54] PM: it’s, it’s because it’s not, it’s not also, it’s not just about invest­ing phi­los­o­phy. It’s also about look­ing at dif­fer­ent areas. I mean, I’ll do whole episodes where I’ll just focus on one met­ric. I’ll have guests on and we’ll just talk about PE ratio, for exam­ple, um, or, um, dis­count­ed cash­flow, you know, we’ll just do a whole episode on that because there are so many nuances just to these num­bers.

[00:50:18] PM: So I just feel like, um, I want to, impart this kind of knowl­edge to lis­ten­ers so that when they hear some­one say, oh, dis­count­ed cash flow, that they actu­al­ly have an under­stand­ing of what’s going on with that par­tic­u­lar thing. And it’s also to do with oth­er, with oth­er, uh, parts of the indus­try. Like I’ll have an whole episode about infra­struc­ture.

[00:50:39] PM: So you know what a com­pa­ny that works in the infra­struc­ture space, why that is dif­fer­ent when you’re talk­ing about an infra­struc­ture com­pa­ny to say, A retail­er, for exam­ple. Now, I know this is a lit­tle bit dif­fer­ent to the phi­los­o­phy of QAV because QAV treats, um, every com­pa­ny as being a set of num­bers.

[00:50:58] PM: There is no sto­ry behind those num­bers. Yeah, pret­ty much that. But there are a lot of peo­ple who, um, you know, it’s just, if you’re in, even if you’re not invest­ing direct­ly in the share mar­ket, you might want to know why They’ve got infra­struc­ture as a cat­e­go­ry on their super­an­nu­a­tion state­ment and what that means.

[00:51:16] PM: I’ve also done a lot of deep dives into bonds. I mean, maybe too much into fixed, the fixed income indus­try because, um, I’m fas­ci­nat­ed by fixed income and how dia­met­ri­cal­ly opposed that works to the share mar­ket. And I, I know there’s many peo­ple who say the bond guys, I’m much smarter than the stock guys.

[00:51:37] PM: I mean, you just have to look at some­one like Christo­pher Joy about that and the way that they deal with bonds. And I was hav­ing a dis­cus­sion with a friend at a cafe this morn­ing, and I was try­ing to explain bonds to him. And I think I’ve got a pret­ty good under­stand­ing of bonds, but then you get to that idea of they’re invert­ed.

[00:51:53] PM: Like, um, when the yields go down, the prices are going up and you start get­ting con­fused with all of that, that sort of thing. How­ev­er, I just think, still think it’s worth­while to dig into. All of these nooks and cran­nies of the share mar­ket. So I’m not nec­es­sar­i­ly dis­cussing any­one’s over­all phi­los­o­phy or method­ol­o­gy, although we do cov­er that in a lot of ways.

[00:52:14] PM: And I’ve had some tech­ni­cal peo­ple on as well, because I still am fas­ci­nat­ed by the idea of tech­ni­cal analy­sis, that those num­bers and squig­gles on a screen. are actu­al­ly telling some sort of sto­ry. And there are some peo­ple who seem to make a lot of mon­ey by using tech­ni­cal analy­sis. Uh, it’s not some­thing that I would do, but I guess it’s the psy­chol­o­gy of it.

[00:52:35] PM: And that’s it. Anoth­er thing is the psy­chol­o­gy, learn­ing about the psy­chol­o­gy and to, um, to guard against the psy­cho­log­i­cal traps that all of us fall into. I mean, I’ve had one guy on who is a psy­chol­o­gist investor and he was fan­tas­tic. And, um, He said, one of his great lines, and this is anoth­er one that you and Tony would like, is he said, The num­ber one rule of invest­ing is, cut your loss­es.

[00:53:01] PM: The sec­ond rule is, cut your loss­es. The third rule is, cut your loss­es. And, Because it’s, it’s that anchor­ing bias that you get as well, that you anchor on the share price. There are so many things, there are so many emo­tions that are trig­gered by the price that you see on the screen at any par­tic­u­lar point of the day.

[00:53:22] PM: And um, um, yeah, just guard­ing against that and just com­plete­ly ignor­ing the price. And again, this is where QAV and what you and Tony are talk­ing about and espous­ing come in so Um, with so much val­ue is because that price on the screen means noth­ing at the end of the day. It’s the num­bers behind the com­pa­ny, which is real­ly what’s dri­ving the val­ue that you’re, um, that you’re hope­ful­ly try­ing to pur­chase and invest in for the long term. Did that answer it? I did­n’t seem to answer it. I think I went off in a cou­ple of dif­fer­ent direc­tions, but.

[00:53:57] CR: That’s fine. I’ve got some more ques­tions, but I agree with you that, um, the, the psy­chol­o­gy and the emo­tion part of it is, is

[00:54:05] PM: It’s so huge. It’s so huge. Yeah.

[00:54:08] CR: and I think, you know, one of the things I’ve always said that I appre­ci­ate a lot about QAV is that it you It takes away all of that for me. I know some of our mem­bers still strug­gled with that, like in the last cou­ple of years, par­tic­u­lar­ly with inter­est rates going up and the slump, the mar­ket was in 22, 23.

[00:54:30] CR: So a lot of peo­ple who were try­ing to do QAV and could­n’t hack it, they could­n’t hack the fact that, you know, their port­fo­lio

[00:54:37] PM: they were sell­ing all the time. Yeah. And they were sell­ing all the time. A lot of cas­es. Yeah. Which is a hard thing. That’s the hard­est thing, isn’t it?

[00:54:44] CR: Well, it ties into the emo­tion and the psy­chol­o­gy of it. Um, and, and, you know, I know Buf­fett has said. It’s, uh, being suc­cess­ful as an investor is not real­ly much about intel­li­gence, it’s about dis­ci­pline, just being able to stick to your guns and keep doing what you’re doing day in, day out, year in, year out, and just hav­ing faith that the sys­tem will work over the long haul.

[00:55:10] CR: You just need to have the stom­ach for it and be able to ignore What’s just num­bers on a piece of paper at the end of the day. But I want to get back to your expe­ri­ence and what you’ve learned over the years. Now you said some­thing to me ear­li­er off air or when we were talk­ing on your show that you most­ly invest in ETFs.

[00:55:31] CR: You said you don’t know how to spell it, but you know how to invest in it. Um, is that, is that where you’ve come to after all the shows that you’ve done? Is it ETFs where you do most of your invest­ing?

[00:55:41] PM: pret­ty much that’s what my, that’s the only thing that my wife will let me invest in now after all the mis­takes. broad based index ETFs, you know, yeah, I haven’t, I haven’t let her know how many kinds of ETFs that are avail­able because ETFs now have become like buy­ing sin­gle stocks because there are so many the­mat­ic ETFs, it’s, um, it’s to do with the time involved, you know, and that’s the oth­er thing that I’ve learned is real­ly you do have to spend a lot of time.

[00:56:08] PM: to do it prop­er­ly. You real­ly have to take it seri­ous­ly. And, um, I know QAV Lite is good for that. Um, but even that requires a cer­tain time com­mit­ment. And I think it also comes down to, I’m basi­cal­ly a very lazy per­son. So that’s anoth­er rea­son why

[00:56:26] CR: Well, you’re a pod­cast­er, obvi­ous­ly. Yeah. We’re all

[00:56:29] PM: radio, cre­ative per­son, musi­cian, you know,

[00:56:33] CR: Yeah.

[00:56:33] PM: we’re, we’ve all got that, uh, that curse, haven’t we?

[00:56:37] PM: Mm,

[00:56:37] CR: Yeah. Yeah. So that’s inter­est­ing. So after every­thing you’ve learned and every­thing you’ve heard, you just do ETFs.

[00:56:44] PM: hmm, yep, pret­ty much. But that’s also my wife telling me that’s all I’m allowed to invest in. Yeah, mm hmm,

[00:56:52] CR: Well, that’s, that’s, that’s a real thing.

[00:56:55] PM: yeah,

[00:56:56] CR: um, one of the oth­er inter­est­ing, I said before that when we’ve had guests on, some of them are great, but we know. Sta­tis­ti­cal­ly speak­ing,

[00:57:06] PM: mm,

[00:57:07] CR: not just in Aus­tralia, but around the world, most pro­fes­sion­al investors get paid to do it for a liv­ing, can’t beat the index over the long haul.

[00:57:18] CR: With your expe­ri­ence in inter­view­ing a wide range of peo­ple, do you get into their num­bers? You know, what are the Prob­lems we always have with guests is that Tony’s always going to say, so what are your, what are your num­bers like?

[00:57:31] PM: mm

[00:57:32] CR: What’s, what’s your aver­age return been over the last 15 years? And most of them don’t have a good sto­ry for that.

[00:57:38] CR: And, you know, I remem­ber, you know, sort of the fun­ni­est one for me was when we had Alan Koller on. Who Tony and I both respect a lot as a jour­nal­ist, but when we asked him about his invest­ing, he was like, ah, I’m not real­ly an investor. And I haven’t had a lot of suc­cess. It

[00:57:57] PM: hmm, mm hmm, mm hmm, mm hmm,

[00:57:58] CR: you could hear the wind go out of Tony’s sails when he dis­cov­ered that Alan Kohler was­n’t real­ly an investor. He was a talk­er, but not an investor. Um, what,

[00:58:10] PM: Sor­ry, can I just, um, can I just, uh, point out at this, at this point that, uh, Alan Koller and his son, Chris Koller, what about that job? Going onto tele­vi­sion every night, just going, Oh, well, the index did this today. The index went down today. These com­pa­nies went up. These com­pa­nies went down. A lit­tle bit of a snip­pet of an inter­est­ing finance sto­ry all over in two min­utes.

[00:58:32] PM: That’s the job I want.

[00:58:34] CR: Yeah. Thank you very much. How do I

[00:58:36] PM: Yeah. Yeah. Yeah. That’s right.

[00:58:37] CR: Yeah.

[00:58:38] PM: And you get all this respect.

[00:58:40] CR: Like we say, pod­cast­ers are lazy, but come on. I mean, that’s tak­ing it to a whole new lev­el.

[00:58:44] PM: Oh, that’s right. That’s

[00:58:45] CR: Two min­utes of finance high­lights.

[00:58:48] PM: Yeah.

[00:58:49] CR: Um, so get­ting back to the peo­ple that you’ve inter­viewed on, like, do you ask them about their results?

[00:58:56] CR: Do you go to that lev­el with them?

[00:58:58] PM: No,

[00:58:59] CR: Is that delib­er­ate?

[00:59:01] PM: yeah, it is delib­er­ate. I don’t see myself as being chal­leng­ing of any­one. I just like peo­ple to speak.

[00:59:07] CR: You just want to be liked.

[00:59:08] PM: uh, just to give you a bit of back­ground, I, um, I had a moment a few years ago because in the late eight­ies, I was the reli­gious affairs pro­duc­er at Triple M Clas­sic Rock sta­tion. And at the time

[00:59:22] CR: That was a job?

[00:59:24] PM: That was a job, yep, that’s a long sto­ry about why that was, um, but our office, our office was above an anti­quar­i­an book­store in Kings Cross in Syd­ney, and, um, we became friends with the anti­quar­i­an book­sellers, and then I ran into one of the book­sellers a cou­ple of years ago, and he was very enthu­si­as­tic, and he, and I pre­sent­ed that reli­gious pro­gram as well.

[00:59:46] PM: And, uh, which is not bad for an athe­ist like myself. Um, but like you, we’re both inter­est­ed in reli­gion, even though it’s, and he said to me, you know, what I always liked about your inter­view­ing, Phil, is that you were a non­judg­men­tal inter­view­er and. I think that’s why I am and that’s why I come in and peo­ple feel com­fort­able talk­ing to me about what they’re doing in the finance world.

[01:00:09] PM: But yeah, non judg­men­tal, that’s the key to my inter­view style. I don’t, I won’t even judge you, Cameron, as the mas­ter’s appren­tice.

[01:00:19] CR: Hey, you’d be the first per­son that has­n’t judged me in a long time. the ques­tion I have though is like, how do you deter­mine whether or not some­body should be a guest if they’re, if they don’t have good per­for­mance num­bers? Like, is it just the fact that they have a heart­beat? I mean, what, what do you look for as a

[01:00:42] PM: Um, I look for cer­tain, well, I guess I’m look­ing for nice peo­ple and it’s peo­ple that I’ve heard on oth­er pod­casts or, um, they’re peo­ple that approach me. I mean, I get, you know, I’m not sure if you get it as well, but I get a lot of peo­ple approach­ing me to come on and, um, I’ve got two rules. My basic fil­ter is no trad­ing peo­ple.

[01:01:02] PM: No one who’s got a trad­ing, uh, sys­tem. And the sec­ond is no finan­cial advi­sors. How­ev­er, there’ve been a cou­ple of excep­tions with the finan­cial advi­sors because they are doing some, you know, nice, good things as well. Um, and, uh,

[01:01:17] CR: isn’t, isn’t,

[01:01:18] PM: No, no, no, no. No, if they’ve been, you know, if they’ve been doing webi­na­rs with the Aus­tralian Share­hold­ers Asso­ci­a­tion, for exam­ple, I take that as although I think that much as we love it.

[01:01:29] PM: The Aus­tralian Share­hold­ers Asso­ci­a­tion, I think, you know, they, they have that com­mer­cial imper­a­tive to let peo­ple on that, um, have paid to be on. Um, and if I have got some­one on who seems to be a wrong’un, I do get plen­ty of feed­back from with­in the team. oth­er com­men­ta­tors in the indus­try who’ll say, why don’t you have that per­son on?

[01:01:48] PM: They have this, this, this, this, and yeah, I’m get­ting my ear about that. And that kind of lim­its it as well. But I’ve got some reg­u­lars that I kind of cycle through as well. And because I’ve got the US ver­sion of the pod­cast Stocks for Begin­ners as well, there’s some nice, um, real­ly good peo­ple that I’ve devel­oped rela­tion­ships with who work on the New York Stock Exchange and hedge fund man­agers and so forth.

[01:02:13] PM: And. Yeah, you can kind of tell. There have been a cou­ple of, I think there’s only been two guests who I did­n’t release the episode because, you know, I just smelled a rat and we don’t want that.

[01:02:26] CR: Right. And so you, like, you don’t have a fil­ter in place for deter­min­ing whether or not this is some­body that your audi­ence should be lis­ten­ing to. You just feel like it’s a, it’s more

[01:02:42] PM: It’s more, it’s more that if, if, it’s more if they, um, if I’ve seen them some­where and they’re talk­ing about some­thing that I find of par­tic­u­lar inter­est, and again, espe­cial­ly if they’re talk­ing about a par­tic­u­lar nook or cran­ny that I think I would like to learn more about and hope­ful­ly lis­ten­ers would like to learn more about, that’s the, yeah, that’s the kind of fil­ter that, that I’m look­ing for, because I’m not nec­es­sar­i­ly get­ting them on and say­ing, Just describe to me what you do.

[01:03:07] PM: Uh, I nev­er do that. I nev­er have a guest on, you know, I’ve got a lot of ana­lysts who come along and peo­ple who run funds and man­age funds and so forth. And I always say to them, look, I just want to talk about one par­tic­u­lar thing, you know, I want to focus on some­thing, um, or one or two par­tic­u­lar com­pa­nies about and why they like those par­tic­u­lar com­pa­nies.

[01:03:28] PM: And, you know, at the end of the episode, I’ll give you plen­ty of time to pro­mote your fund or busi­ness or what­ev­er it is. But that’s not the focus. I’m not get­ting them on to talk sole­ly about, um, their, their invest­ing style.

[01:03:43] CR: You’re get­ting them to explain

[01:03:45] PM: Hmm.

[01:03:46] CR: a top­ic. Talk about a

[01:03:47] PM: Hmm.

[01:03:48] CR: Yeah.

[01:03:48] PM: Hmm. Yeah, that’s cor­rect.

[01:03:53] CR: So, uh, where to from here, like for your, your show, like what’s the, what’s, do you have a plan for the future? And sec­ond­ly, what do you think AI is going to do to invest­ing?

[01:04:09] PM: Hmm. Hmm. Okay. Well, um, the plan, on the plan, I always like to quote Paul Keat­ing, who some­one said to him, how’s things going? He said, Oh, you know, down­hill, one ski, no poles. Um, where to from here? I’ll get on to the AI thing, but, uh, cause that’s, I’m find­ing that’s so fas­ci­nat­ing at the moment, but, um, Um, with the, where to from here, I’m actu­al­ly build­ing up much more of a YouTube pres­ence. I’m going to try the YouTube thing just because pod­cast­ing is great, but the uni­verse of peo­ple search­ing for pod­casts is tiny com­pared for the, the uni­verse of peo­ple look­ing for, um, hand­some, bare­ly leg­i­ble, bare­ly lit­er­ate, um, pod­cast­ers like myself to bang on about the things that they find inter­est­ing.

[01:04:56] PM: So hope­ful­ly they’re

[01:04:57] CR: with there. That’s what, that’s, that’s what you’re lead­ing with.

[01:05:00] PM: Dev­il­ish­ly hand­some, we like to say.

[01:05:02] CR: I, I, I can, I can buy that. Yeah,

[01:05:04] PM: And, um, well, you know what it’s like, you know, you, you suf­fer from the same prob­lem. You’ve got nice legs as well. And it’s a curse, exact­ly. That’s what I like to say. So yeah, I’m just going to keep on doing it because I just do love what I’m doing.

[01:05:18] PM: It’s not my sole source of income. I do, um, you know, as I said, I’m from a media pro­duc­tion back­ground. Well, maybe I did­n’t say that, but I am from a media pro­duc­tion

[01:05:25] CR: Gigo­lo.

[01:05:27] PM: And, uh, Gigo­lo, that’s right. And so, I’ve got sev­er­al sources of income,

[01:05:32] CR: Yes, you have to be

[01:05:33] PM: while this is not my, you do have to be diver­si­fied, so while this is not my main source, I’m not mak­ing, you know, hun­dreds of thou­sands of dol­lars yet, hope­ful­ly, um, I do enjoy it now.

[01:05:46] PM: AI, AI. Now you’re talk­ing to some­one who just spent hours last night on Grok gen­er­at­ing AI, AI images because you know Elon has now made Grok avail­able to every­one and these images are insane­ly

[01:06:00] CR: When did he do

[01:06:01] PM: Yeah, about a week ago.

[01:06:03] CR: Oh, I

[01:06:04] PM: I would high­ly rec­om­mend Grok. Yeah, I think it’s all to do with his per­son­al feud, feud with, I always get the names mixed up, is it Sam Fried­man, Sam Alt­man, one of those Sams, yeah, yeah, Sam Alt­man, and I don’t think he likes Sam Alt­man, so he’s just said, well, Grok’s going to be free, and it’s more fun, and not as sen­si­tive as Chat­G­PT.

[01:06:24] PM: So, um, I’d use, this is full con­fes­sion, I use, um, Grok now for much of my work, and, um. In terms of pro­duc­ing the con­tent, not so much the audio side of it, but for, uh, the blog posts and social media cap­tions, because I’m try­ing to make, I’m try­ing to work on mak­ing things much more lurid, much more eye catch­ing for lis­ten­ers to grab eye­balls, grab ear balls, and so forth.

[01:06:54] CR: hmm.

[01:06:55] PM: Um, and yeah. Yeah, I, I think it’s a, a fas­ci­nat­ing thing. I, I also, I don’t, I’m not one of these peo­ple that’s scared of ai. I don’t think AI is going to take over too much of any­thing. Um, in terms of, I know that writ­ers now, there’s many writ­ers who they com­plain that they’re not writ­ers any­more. All they’re doing is cor­rect­ing ai.

[01:07:15] PM: That’s what they see them­selves job. Their job now is because AI will nev­er replace good writ­ing or good cre­ativ­i­ty. And I also have this the­o­ry that we’re going to get this to this point where. Like, I don’t, I think gen­er­al intel­li­gence, if it’s going to ever hap­pen at all is, you know, hun­dreds, if not thou­sands of years in the future, because all that they’re doing is just wran­gling large amounts of data.

[01:07:40] PM: And I think we’re going to get to a point where AI is going to have the sum total of human knowl­edge, and we’re going to go, is that all there is? You know what I mean? It’s going to be dis­ap­point­ing that this is all we know. Um, so, but your ques­tion was about invest­ing and AI, and it’s not some­thing that I’ve looked at, but it’s pret­ty inter­est­ing when you go, you go in and you say, well, you know, I’m look­ing at this com­pa­ny.

[01:08:06] PM: Can you give me your view on this com­pa­ny? Grok, Chat­G­PT, who­ev­er it is, and it’s pret­ty good what it spits out. So have you had that expe­ri­ence with AI? Because I know that you’re inter­est­ed in it and you like play­ing around with it.

[01:08:23] CR: I live in var­i­ous AI tools. Um,

[01:08:26] PM: Mm

[01:08:27] CR: I, Total­ly dis­agree with your judg­ment on AGI and AI and cre­ativ­i­ty, but we’ll leave that aside. Um, I, I don’t ask it for its opin­ion on com­pa­nies, but what I will do,

[01:08:41] PM: but the num­bers, you can get them to, yeah, to get it to give you some sol­id num­bers on it.

[01:08:46] CR: I don’t ask it for num­bers, but I will take a finan­cial report, uh, quite often and upload that into GPT and ask it to read it for me and pull out if there’s any­thing I should know. But you know, the fun­ny thing is I came to the real­iza­tion a while ago that real­ly AI does­n’t offer a lot of upside for QAV right now.

[01:09:15] CR: We already get the num­bers. We can down­load the num­bers from Stock Doc­tor or Stock­o­pe­dia. So I don’t need to ask it for that. And we can do it a lot faster because we’re, you know, if I’m doing the US check­list, I’m down­load­ing thou­sands of com­pa­nies and the spread­sheet will. Spit out an answer very, very quick­ly.

[01:09:36] CR: Um, what I can use it for some­times now is to explain aspects of an account­ing that I don’t under­stand. Or if, if there’s an audi­tor’s report that I don’t ful­ly under­stand, I’ll drop that into GPT and say, explain to me this audit report and whether or not there’s any­thing I should be wor­ried about in that, are there any red flags?

[01:10:00] CR: Um, but the, the, apart from using AI to help me code the check­list and turn it into some­thing that’s eas­i­er to run, I haven’t actu­al­ly found a lot of appli­ca­tions for it. I do think there will come a point in the not too dis­tant future where I’ll be able to say, you know, tell me every, you know, tell me what stocks to invest in based on this phi­los­o­phy.

[01:10:23] CR: And it might be able to do a lot of that for me. But the upside for that. ver­sus just down­load­ing it and run­ning it through the check­list isn’t great. There’s not a lot of upside for us. There might be for oth­er peo­ple that don’t know how to use a sys­tem or don’t have a sys­tem. But then I tend to agree with Munger and Buf­fett when they were asked about it a year or so ago, which is, you know, the, the, Biggest prob­lem that investors have isn’t infor­ma­tion and knowl­edge, it’s greed, and that hav­ing bet­ter tools won’t take away from human foibles and human greed that will still get in the way.

[01:11:02] CR: Even if the AI said, I don’t think you should buy Bit­coin, I don’t think it’s a good invest­ment, it’ll be like, shut up. What would you know? Um, you know, I want to triple my mon­ey this week. So I think

[01:11:13] PM: It is. That’s it. Greed, isn’t it? That’s the thing, the greed, you know, noth­ing, noth­ing that you do. And no mat­ter how, um, emo­tion­less arti­fi­cial intel­li­gence is, it’s still in your hands to make the invest­ment and press the buy or sell but­ton.

[01:11:28] CR: Yeah. It’s all that stuff you men­tioned before. It’s, it’s the psy­chol­o­gy and the emo­tion of it. Well, con­grat­u­la­tions, Phil, on the show and thanks for hav­ing Tony on a reg­u­lar basis and

[01:11:37] PM: No, that’s okay. Thank you very much. And it’s no, but what I, what I love about QAV is the, um, the com­mu­ni­ty that’s, um, uh, built up around it as well. And meet­ing, meet­ing peo­ple that have, uh, come up and send me at events and say, Oh, thanks for putting me onto QAV or, gee, why’d you put me onto QAV? I’ve got to sell all the time.

[01:11:56] PM: That’s anoth­er one that I’ve had, but,

[01:11:59] CR: They don’t have to. If they say, you say, Hey, no one’s pulling, twist­ing your arm, you don’t have to sell. Hold it. See what hap­pens.

[01:12:05] PM: yeah, yeah, that’s right. But, um, yeah, it’s a great com­mu­ni­ty and it’s a great job and great edu­ca­tion and Tony is a love­ly guy, isn’t he?

[01:12:14] CR: He is. He’s the soul of the earth. Nicest rich guy you’ll ever meet.

[01:12:19] PM: That’s right.

[01:12:21] CR: All right. Thanks, Phil. Have a good week.

[01:12:22] PM: Are you, are you done with me?

[01:12:25] CR: I have to be because I’ve got to go to Kung Fu in five min­utes and I’ve got to go get my gear togeth­er. Sor­ry.

[01:12:31] PM: okay, I’m just going to stop record­ing.

[01:12:33] Alex: Well I hope you enjoyed that. Next week Tony will be back to talk about val­ue invest­ing. In the mean­time… be nice to your com­put­ers. You nev­er know when they might start­ing talk­ing back to you. 

[01:12:45] CR: