QAV AU 829 — Chat QAV

 

AU 829 Club Audio

[00:00:00]

Cameron: Wel­come back to QAV Aus­tralia. Tony, record high on the all odds. Tony, even though it’s come off a bit, I think it’s still a record high. Uh, where are we today? This is, what day is it? Tues­day, the 22nd of July, 2025. All odds is 8,932 at the moment was up over 9,000, uh, on the 18th of July because you know, the, the world’s going great.

Every­thing’s going great in the world. There’s no issues. Uh, no rea­son not to be com­plete­ly opti­mistic about the state of affairs, Tony.

Tony Kynas­ton: Well, not just that, I mean there’s, there is a bit of a dis­con­nect now in what we’re [00:01:00] pay­ing for shares and how much they’re earn­ing. And what they’re earn­ing is growth are. So, it’ll be an inter­est­ing report­ing sea­son com­ing up in August. We see some num­bers. I mean, the pro­jec­tions are that they’re not gonna be shoot the lights out across the board. So, uh, there’ll be patch­es of it, I guess. But, um, yeah, there’s cer­tain­ly some high val­u­a­tions, um, espe­cial­ly in like Com­mon­wealth Bank, but been raked over a lot in the finan­cial press. Lot of pas­sive invest­ing going on with that. But, uh, you know, that can, that can hold up for a long time.

Cameron: I was think­ing about some­thing in the car today I want­ed to ask you about, we’ve prob­a­bly talked about this before, but I don’t recall. In your expe­ri­ence over your many decades, does QAV have its home run year, typ­i­cal­ly after a crash?

Tony Kynas­ton: Uh, let me, I’m just try­ing to think back to some of the home runs years. Oh, a qual­i­fied, yes. Um, like it won’t be. What I found [00:02:00] after the GFC, just using that as an exam­ple, was it did­n’t hap­pen 2009 or 2010 from mem­o­ry, it was more like 2013. From mem­o­ry I had a home run year and that was against the back­drop of a lot of peo­ple steer­ing clear of equi­ties because of the GFC.

They were burnt, they weren’t com­ing back into the mar­ket. Um, so there was that. But yeah, I cer­tain­ly did well at the end of the GFC, I think it was the March report­ing sea­son in oh nine when every­thing was report­ing rel­a­tive­ly good num­bers and they were trad­ing on very low mul­ti­ples. So that was a good to buy. So yeah, poten­tial­ly.

Cameron: I was think­ing about what you told me about the post GFC and what I saw hap­pen post COVID

Tony Kynas­ton: Hmm.

Cameron: think­ing about the fact that when peo­ple are scared off, ’cause the mar­ket’s just gone through a big crash because they don’t have a sys­tem, they don’t have rules that are telling them what to buy and when to buy in, which we do.

Then I was won­der­ing, should we just like sit out the [00:03:00] mar­ket for four years and then every time there’s a crash that’s when we, when there’s blood on the streets, we just buy in then, then your mon­ey’s not doing any­thing for the inter­ven­ing four years, I guess, right?

Tony Kynas­ton: And you can still have good years in those four years too. Yeah.

Cameron: Um, but yeah, it just, it just. Struck me that, I mean, that’s why we would prob­a­bly out­per­form in those post crash years because we try to stay ful­ly invest­ed and we have rules that tell us what to do in that sce­nario, where­as the vast major­i­ty of investors don’t, uh, and they’re scared off. So, you know, they’re, they’re stay­ing out­ta the mar­ket.

Tony Kynas­ton: Yeah. I mean, there’s cer­tain­ly a con­trar­i­an ele­ment to stay­ing in the mar­ket when every­one’s leav­ing, for sure.

Cameron: Well. Yeah, but from our per­spec­tive, it’s not real­ly con­trar­i­an. We’re just fol­low­ing the sys­tem that says, you know, buy this, it’s [00:04:00] gen­er­at­ing cash and it’s cheap, you know, but from the out­side per­spec­tive, from the out­side, it looks con­trar­i­an, I guess. Yeah.

Tony Kynas­ton: Hmm.

Cameron: So that’s, you know, when, when peo­ple are peo­ple out there who are new to QAV or have been doing it for a few years and have had, you know, we, we had a cou­ple of aver­age or tough or bad years, 22, 23 last year or two.

Haven’t been too bad. Um, not shoot the lights out, but, okay. But what we’re real­ly look­ing for, what we’re wait­ing for is that cycli­cal wipe out, but in, in a way, we kin­da wipe the wipe out. We don’t for soci­ety, but for us, the post wipe out is the, um, big mon­ey, big mon­ey year.

Tony Kynas­ton: Poten­tial­ly I, I’m, yeah, look, I, you’re prob­a­bly right. I’d have to go back and look at the years and ana­lyze them. But the, as you said, the mar­kets set are high and we out­per­form the mar­ket, so we still get good returns in good years for the mar­ket as Well,

Cameron: Yeah, well, [00:05:00] speak­ing of which,

Tony Kynas­ton: sor­ry, just be, just one more thing to say on that too, is. The QAV num­bers that I’ve used before on the pod­cast would be great­ly enhanced if I had have start­ed in the depths of A GFC. So it’s start­ing points real­ly mat­ter for long term cap­i­tal tag­ger results. I only

Cameron: yeah.

Tony Kynas­ton: um, if you look at some­one’s returns over a long time peri­od, pay atten­tion to when they start­ed invest­ing.

Cameron: Yeah.

Tony Kynas­ton: they start­ed in the sort of run of the mill year, then their returns are, um, are prob­a­bly a lot more indica­tive than if they start­ed you know, post Co or in the mid­dle of COVID or in the mid­dle of the GFC or some­thing like that, where com­ing out of it you get a, a big tail­wind from the mar­ket. Rerat­ing upwards.

Cameron: Well, speak­ing of port­fo­lios, just my port­fo­lio report for the week, our dum­my port­fo­lio. If I look at it from our ful­ly invest­ed date, 2nd of [00:06:00] Sep­tem­ber, 2019 to today, it’s up 15.11% per annum. Yeah, almost a even split between cap­i­tal gain and income return. About 8% for cap­i­tal gain and 8.7% for income return, which is inter­est­ing.

And that’s ver­sus the bench­mark, the SPDR 200, which is 8.47% per annum over that peri­od. So we’re doing not quite dou­ble, but a lit­tle bit less. So, I don’t know, nine 90% bet­ter. Some­thing like that.

Tony Kynas­ton: Just, on that cam. So half the

Cameron: Hmm.

Tony Kynas­ton: gain is through div­i­dends, but we don’t real­ly cap­ture the frank­ing cred­its in our analy­sis, do we? I don’t think, I don’t think Navexa gives us a, gives us a ben­e­fit for that from mem­o­ry. I could be wrong.

Cameron: The frank­ing cred­its. Hmm. [00:07:00] Yeah, I don’t know. I dun­no how they track that.

Tony Kynas­ton: Hmm.

Cameron: So if if they’re not, then our per­for­mance would look bet­ter than what it already looks, which is almost dou­ble. Yeah. Oh, sor­ry. Speak­ing, speak­ing of Navexa, we did have the CEO of Navexa Navar on a few weeks ago and he teased that they were com­ing out with their NAVEXA ai.

It is out, has been out for a week or two. Um, I’ve had a lit­tle bit of a play with it. Um, I haven’t found any­thing super spe­cial to do with it. If I open up the lit­tle win­dow, it says, what can you do? I can help you ana­lyze your port­fo­lio in var­i­ous ways. How is my port­fo­lio per­form­ing this year? Well, I can just look at the graph and see that, I dun­no why I need ai, what’s my port­fo­lio per­for­mance since incep­tion?

Again, I could just do that. I might be able to ask it. [00:08:00] What’s my port­fo­lio per­for­mance since 2 9 20 19?

Do, do, do, do? Um, well now it’s giv­ing me a dif­fer­ent result to what the graph gives me. Um, it says 14.34% ver­sus 15.11%. But I am, I did fin­ish my chart as yes­ter­day and it’s fin­ish­ing it today, so I don’t know if that makes any dif­fer­ence. Maybe it’s down a bit today, but it’s pret­ty close. Alright. So you can type in, uh, those sorts of things rather than play with the cal­en­dar, but apart from that, like it’s not real­ly, I haven’t found any­thing yet.

That’s, uh. Eas­i­er to do with their AI ser­vice than it is just to do it the old fash­ioned way. But

Tony Kynas­ton: Ask it what it thinks

Cameron: maybe I’m miss­ing real­ly. [00:09:00] Okay.

Tony Kynas­ton: Prob­a­bly say

Cameron: do you think

Tony Kynas­ton: invest­ment return for N users.

Cameron: you’re an idiot, I guess. Sor­ry, I can’t help with that. This request is not sup­port­ed. Yeah, it does­n’t wan­na give you any, any opin­ions.

Tony Kynas­ton: oh yeah, right. Finan­cial advice, of course.

Cameron: If I look at the last, let’s say 30 days, how have we done? We’re up up 5.63% in the last 30 days ver­sus the bench­mark up, 2.24%. Um, if I look at this cal­en­dar year. Can I do that cur­rent cal­en­dar year?

Yeah. This cal­en­dar year we’re up 9.8 ver­sus the bench­mark up. 8.38. So what are we in July six, near­ly sev­en months into the year. So not, not killing it for the cal­en­dar year to date. Any­way, that is the dum­my. If I look at the light [00:10:00] port­fo­lios as a group year to date, they’re actu­al­ly doing bet­ter than the dum­my port­fo­lios.

The light port­fo­lios are up 10.35. Year to date, last 30 days as a group, they’re up 4% ver­sus 2.2. Uh, so yeah, they’re doing okay. Every­thing’s, every­thing’s track­ing along well because the mar­ket is just sort of. Boom­ing at the moment for rea­sons that are not clear. The opti­mism is high. Even the Reserve Bank hold­ing their rates last week, when­ev­er it was week or two, week or two ago, did noth­ing mar­ket kick up for a sec­ond and then went, nah, it’s all good.

Record high.

Tony Kynas­ton: Well, they kicked up when the lat­est infla­tion data came out cou­ple of, towards the end of last week. I think from mem­o­ry, that’s one of the rea­sons why they reached an all time high. ’cause it, the mar­ket’s pric­ing in a almost [00:11:00] cer­tain­ty of an inter­est rate cut when the RBA meets next month. So,

Cameron: You know why I think the mar­ket’s up is because Trump’s not gonna release the Epstein files and all of the, uh, pow­er play­ers, uh, who ruined Epstein’s files are like super hap­py now that, uh,

Tony Kynas­ton: and know what they’re

Cameron: that.

Tony Kynas­ton: more stock.

Cameron: Yeah, yeah, yeah. They’re dou­bling down. Yeah. Yeah. It’s all good.

Tony Kynas­ton: Uh

Cameron: I’m gonna talk about in after hours, I’m read­ing a biog­ra­phy on Robert Maxwell

Tony Kynas­ton: mm-hmm.

Cameron: at the moment, so I’m gonna talk a lit­tle bit about that in after hours.

It’s fas­ci­nat­ing.

Tony Kynas­ton: Yeah. I mean, only know what was in the papers fell off a yacht. Um, father of

Cameron: miss Gah-laine.

Tony Kynas­ton: Gah-laine, is that how you pro­nounce it?

Cameron: Gah-laine. Yeah. Gah-laine. I learned.

Tony Kynas­ton: I’ve ever heard any­one say I’ve only heard it.

Cameron: No, me know. I used to pro­nounce it. Glan. Yeah, it’s Gilan. Um, [00:12:00] Chat­G­PT. Tony, I know. You’re, you, you love your AI. Um, does­n’t, nev­er heard you say a bad thing about your ai. It’s always, always lov­ing. It loves his ai. This man.

Tony Kynas­ton: I use

Cameron: Um.

Tony Kynas­ton: would­n’t say I

Cameron: Yeah, I know.

Tony Kynas­ton: I

Cameron: Then you com­plain about it con­stant­ly.

Tony Kynas­ton: when I try to

Cameron: They just launched, uh, yes­ter­day or day before they launched their first agent

Tony Kynas­ton: Mm-hmm.

Cameron: I, I don’t have it yet. You got­ta have a, they rolled it out to their top tier accounts first, the pro accounts, which is a cou­ple of hun­dred bucks a month. Tay­lor signed up for the pro account just so he could get his hands on it.

It’s being rolled out to plus users, which I am the $20 a month account it was sup­posed to be today, but they’ve had some tech­ni­cal issues. They said it’ll be tomor­row now, this is where you can tell it to do stuff like, and it’ll just go away and do it. It can log into web­sites, down­load stuff, build spread­sheets, et cetera, et cetera.

Tay­lor and Hunter were using it yes­ter­day to do a bunch of com­pli­cat­ed things and they were [00:13:00] blown away by it. They said it took a, it took a lit­tle while to like pro­gram it to do what you want­ed it to do, which is. Typ­i­cal with these things, and I’ve learned that from using it to write code too, is like, you think you know what you want and you tell it and then you real­ize, oh, I have to tell it actu­al­ly do it this way or do it that way.

Or you have to log in here or what­ev­er. But, um, they had it com­pil­ing lead lists for their busi­ness­es. So basi­cal­ly going out to a, a web­site that has, you know, kind of a LinkedIn sort of thing that has peo­ple with cer­tain job titles in cer­tain regions and cer­tain com­pa­nies and say­ing, can poll me a list of peo­ple that are the CMOs at com­pa­nies that look like this, that are inter­est­ed in adver­tis­ing on Tik­Tok and gimme their phone num­ber and their email address and their title and blah, blah blah.

And throw that into a spread­sheet for me. And it just did it. It was just pulling it down. Not a hun­dred per­cent accu­rate­ly Hunter said. [00:14:00] But any­way, my point is when I get access to it, um, I’m gonna try to use it for qual­i­fied audits, be my. Lat­est attempt to use AI to be able to do an update. I did send Tay­lor my, he said, look, if, if you give some­thing you wan­na do with it, send it to me.

’cause you got plen­ty of cred­its. I did send him like a prompt for that yes­ter­day, but I don’t think he’s had a crack at it yet. But, so some­time this week I’ll have a crack at that and I’ll be able to report back next week. That would be one of the last, um, hur­dles in automat­ing QAV for me, par­tic­u­lar­ly if I can get it to just do it.

Um, you know, every after every report­ing sea­son, just do an overnight run, gimme the audit sta­tus, throw them into a spread­sheet and that’s that.

Tony Kynas­ton: So that’s um, that’s good tim­ing ’cause we’re gonna get annu­al reports. Fair­ly soon.

Cameron: Yeah.

Tony Kynas­ton: Is that, I mean, that’s, maybe we could, uh, well, maybe you could, if it works, mon­e­tize it and sell it [00:15:00] to peo­ple as a prod­uct offer­ing. Here are all the qual­i­fied audits on the ASX because tried to get the ASX to keep a list for us.

’cause I think it’s vital­ly impor­tant to know if the com­pa­ny you’re think­ing about invest­ing in has, you know, had a red flag its going con­cern raised by the audi­tors, but, but, uh, it’s very hard to find as, as you found out.

Cameron: Yeah, I’m not sure that any­one out­side of US cares that much about it. If they did, it might be avail­able as a data­base out there. I remem­ber when we had, um, Tim Lin­coln on, he did­n’t even know what a qual­i­fied audit was and he runs Stock Doc­tor.

Tony Kynas­ton: Well I think, to be fair, he did­n’t know what our ter­mi­nol­o­gy was, but Yeah. Yeah. he

Cameron: That’s our ter­mi­nol­o­gy.

Tony Kynas­ton: look­ing at it

Cameron: No, but I mean, that’s my point. Like he runs Stock Doc­tor and. W thought a qual­i­fied, when we said a qual­i­fied audit, then it meant an audit. Just they had an audit that had been signed by [00:16:00] some­body who’s qual­i­fied. Um, and like an audi­tor, um, uh, Steven Mabb, chair­man Mabb, uh, sent us, uh, a link or point­ed out that there was this sto­ry in the finan­cial review today.

Where did that go? I had that. Oh, there it is. Uh, com­pa­nies with robust cash flow tend to be win­ners here are nine. Despite pan­demic’s wars and bear mar­kets, some com­pa­nies just keep gen­er­at­ing cash by Todd Hoare

whore head of Pub­lic Mar­kets at LGT Crest­stone. He says, uh, it’s the mantra every busi­ness own­er lives by and one that every investor should note. Cash is king. Unlike earn­ings, which can be adjust­ed with account­ing tac­tics, cash flow, par­tic­u­lar­ly free cash flow, reveals what a busi­ness actu­al­ly gen­er­ates and retains after it pays its tax­es.

Inter­est at cap­i­tal invest­ments in any oth­er oblig­a­tions. [00:17:00] It’s the true cash avail­able to rein­vest, acquire, or return to share­hold­ers via div­i­dends and buy­backs. That’s why strong, con­sis­tent, free cash flow is a hall­mark of high qual­i­ty com­pa­nies. Earn­ings can lie. Cash flow does­n’t. This dis­tinc­tion mat­ters.

Investors learned it the hard way with Enron, which report­ed 13% earn­ings growth annu­al­ly from 1996 to 2000, but post­ed neg­a­tive free cash flow every year dur­ing that peri­od, burn­ing through over $5 bil­lion before col­laps­ing under the weight of too much debt and two fab­ri­cat­ed accounts. So, um, that sounds, uh, famil­iar.