QAV AU 834 — From Chickens to CSL: A Reporting Season Reality Check

[00:00:00]

Cameron: Wel­come back to QAV tk, episode 834, QAV Aus­tralia. Peo­ple don’t know that you had a week off, but you had a week off.

Tony Kynas­ton: Now you told them

Cameron: Oh, whoops.

Tony Kynas­ton: I was

Cameron: Tell us what,

Tony Kynas­ton: I was

Cameron: tell us what you’ve

Tony Kynas­ton: Berne.

Cameron: Sure you were, tell us what you’ve been doing.

Tony Kynas­ton: Oh. Went away. Had a vaca­tion up at, uh, Yarra. Won­ga on the Mur­ray. I was gonna save it for after hours, but that’s fine. It was a love­ly, love­ly week away with, uh, rud­dy and my broth­er-in-law, Wal play­ing golf. We stayed in the most, just a fan­tas­tic Airbnb in y Won­ga, a cou­ple of streets from the main dre, a cou­ple of streets from the lake. uh, it was just, it was a real­ly nice house and, and super cheap. Stayed in this kind of, uh, Vic­to­ri­an, well, would­n’t call it a man­sion, I sup­pose, but it was very, um, flash and spa­cious and we had a great time. good fun.

Cameron: That’s nice. I’m glad it was super cheap because I would­n’t want you to be, uh, [00:01:00] finan­cial­ly bur­dened with your, uh, golf­ing vaca­tion.

Tony Kynas­ton: No, well, would­n’t have wor­ried me, but, um, I was­n’t the only one stay­ing there.

Cameron: Right. Well, speak­ing of super cheap, super cheap auto are not in my good books.

Tony Kynas­ton: Real­ly.

Cameron: I, um, I did a Tik­Tok about them. Well, I, I did a Tik­Tok the oth­er week that, that did quite well. I, um, had to get a new head­lamp for my car and I went to Super Cheap Auto to get one, and I was look­ing at the, the thing that, the one that I got­ta get, and, um, I pulled that GPT and I said, is this a rea­son­able price?

And it was like, no, that’s, that’s ridicu­lous. You could get it for half that at Bun­nings. So I had to go to Bun­nings any­way, so I went up the road to Bun­nings and got a bulb for half the price and, uh, post­ed the, the, the, because I’m try­ing to do this more sort of GPT relat­ed con­tent and um, had to use it in a shop­ping or retail envi­ron­ment.

And a lot of peo­ple were like, yeah, super cheap is super expen­sive. Don’t [00:02:00] ever buy any­thing from super cheap. It’s the worst piece of brand­ing malarkey ever. So there you go.

Tony Kynas­ton: You always mar­ket your worst aspect. ’cause the, the good things mar­ket them­selves. We were, we were up at Yarra won the day that their results dropped last week.

Cameron: Oh yeah.

Tony Kynas­ton: uh, and the share price went up, I think some­thing like 13 or 40, maybe 15% in the day.

Cameron: Right.

Tony Kynas­ton: in my port­fo­lio. So I was, I was cheer­ing them and we’re walk­ing down to the main street.

I just told Rod­dy this and on the cor­ner of the street we were walk­ing into or from into the main street was a super cheap, um, out­let. Rod­dy said, stick your head and say thanks.

Cameron: Uh,

Tony Kynas­ton: I stuck my head and there was no cus­tomer. So I thought, well that’s not good.

Cameron: SUL, aren’t they?

Tony Kynas­ton: SUL.

Cameron: code?

Tony Kynas­ton: Yep.

Cameron: Not, not in any of my port­fo­lios. How come you have hold them? And I don’t. I must have sold ’em at some point. You

Tony Kynas­ton: Dun­no, I’ve had them for a

Cameron: don’t, you don’t sell. God, you,

Tony Kynas­ton: do.

Cameron: uh, amus­ing.

Tony Kynas­ton: [00:03:00] I haven’t sold for a while though. Yeah, but they also own Rebel Sports and, uh, BC, so,

Cameron: Mm-hmm. Mm-hmm. Mm-hmm.

Tony Kynas­ton: I’m not sure. I haven’t gone through the results in detail yet to see what the split of is.

Cameron: I did have them in my super port­fo­lio, but I sold them at some point. Dun­no when, but it was a while ago. Well, uh, there’s been a lot of, uh, dis­ap­point­ing results and news and stuff that we’ll get into, but um, before we get into that.

Tony Kynas­ton: A lot of

Cameron: ASX?

Tony Kynas­ton: Hang on.

Cameron: Well, yes. Yeah, it goes both ways.

Tony Kynas­ton: It

Cameron: The ASX uh, up over 9,000, uh, for the first time.

It’s come back a lit­tle bit today, or y yes­ter­day it hit 9 3 1 3. It’s back down to 9 2 1 2 at the moment. A lot of, uh, a lot of bois­ter­ous­ness, a lot of mar­kets boom­ing. Tony, it’s been a inter­est­ing cou­ple of years, huh?

Tony Kynas­ton: [00:04:00] Yeah, we had this dis­cus­sion prob­a­bly about 12 months ago when it went through 8,000. And, uh, we got ques­tions about was the mar­ket over­val­ued and what’s my strat­e­gy for deal­ing with an over­val­ued mar­ket? I’m just like, huh, I’ll let it go. our, we’ve got our­selves and not using them. And, uh, yeah, so we’re faced in the same sit­u­a­tion again, more record highs, more, more over­val­u­a­tion, but, um, we can’t pre­dict the future, so we’re just gonna keep the process going.

Cameron: I went through 8,000 in Feb­ru­ary, 20, 24, near­ly 18 months ago. Went through 7,000 in Jan­u­ary, 2021, so, uh oh. It had­n’t been through that before in 2019, briefly, just before the, uh, COVID crash. But yeah, it’s going, going gang­busters.

Tony Kynas­ton: And look, you know, it’s, um, it, it, I think the [00:05:00] mar­ket is an over­val­ued ter­ri­to­ry. I think the mar­ket in the US is an over­val­ued ter­ri­to­ry, but, um, can con­tin­ue to go on at this rate, uh, before they cor­rect and when and if they cor­rect, we’ll have our to sell, trig­gered and we’ll sell. But, um, try­ing to pre­dict whether it’s gonna be over­val­ued and then that leads to a crash next week is, is impos­si­ble.

Cameron: I’m in the mar­ket not tim­ing the mar­ket. As you once said, I’m giv­ing you that quote,

Tony Kynas­ton: Oh, right.

Cameron: uh, as Tony Eson once said, Hey, um, you know, I, a cou­ple of weeks ago I built a spread­sheet of my QAV Amer­i­ca pulled porks to see how they had per­formed since doing it, I did the same for your pulled porks going back to 2022.

And, um, I have a ref­er­ence now ’cause we talk about the curse of the pulled pork.

Tony Kynas­ton: Mm-hmm.

Cameron: Do you wan­na know, uh, what the best and the worst have been?

Tony Kynas­ton: Sure.

Cameron: [00:06:00] Uh, so this is since you, since the date of the Paul Pork. Right.

Tony Kynas­ton: Mm-hmm.

Cameron: Um, some the worst, apart from a few that have delist­ed. Five have delist­ed a GG, um, tab. A B, A and FSF, only four that have de-list­ed.

The worst per­former out­side of those is call Lithi­um CXO that you did in Decem­ber, 2023. It’s down 65% since then. Min­er­al resources that you did in April, 2023 is down 57% Pil­bara Min­er­als down 53 since May of 2023. DGL Group down 52%. Fron­tier Ener­gy down 51. Lind­say Aus­tralia, who we will be talk­ing about lat­er on down [00:07:00] 44% since.

You did it in July of 2023 when they were trad­ing at a dol­lar 38, but, um, have done quite well in my port­fo­lio, so I must have bought them well after that. And, uh, they’ve done well, although they’ve come back a bit late­ly. Um, satire, is that how we decid­ed to pro­nounce that you did back in May of this year.

CTT, they’re down 41% since you did that. Uh, a NZ uh, air, sor­ry. Air New Zealand AI Z down 31%. So there’s a lot that are below water. That said a lot of ones that have done very well too, uh, Fin­di did them back in Jan­u­ary 24. They’re up 260% Aus a SB you did an April 24 up, 184% stealth group. May 24, they’re up 183%.

Reg­is resources you did in Decem­ber 23 up [00:08:00] 165 South­ern Cross Elec­tri­cal up 152. Uh, ser­vice Stream lim­it­ed up 142. Reg­is Health­care up 127 erode up 127. Also since Decem­ber 23 when you did it. McMa­hon hold­ings up 121 Genus PPL plus group up 114 Met­als X up 113. Nick Gal­ley up 112. Alius up a hun­dred, Par­en­ti up 95.

Um, lots. There’s lots above water. So I think there are more above water than below water, and the ones that are above water are way more above they, where they were when you did it than the ones that are below or below. But you know, it’s prob­a­bly, you know. 60 40.

Tony Kynas­ton: Which is what we always say.

Cameron: Yeah,

Tony Kynas­ton: Yep.

Cameron: yeah, yeah, yeah. So the ones that have done well have done real­ly well.

Tony Kynas­ton: [00:09:00] Yeah,

Cameron: Not all, not all of them. You know, there’s some here Grain Corp, which you did in June 23 is up 5% since you did it. Um, McMil­lan Shake­speare did in Novem­ber 23 is up 2% since then. So some, um, have been shaki­er, but, um, yeah. Any­way, there you go.

So the pulled pork curse is not a curse, it turns out after all.

Tony Kynas­ton: just a cou­ple of com­ments on that. And of course, they don’t include div­i­dends, so it’s a com­pa­ny like MMS, I think is yield­ing, I’m gonna say close to 10%. So,

Cameron: Yeah. Right.

Tony Kynas­ton: that would help. Um,

Cameron: Hmm.

Tony Kynas­ton: a lot of those ones that were under­wa­ter were lithi­um stocks, and we have cells which would’ve got us out long before the. The, they would’ve been going down, but they would­n’t have gone all the way down to those num­bers. She quot­ed

Cameron: Hmm, hmm. So there you go. That’s, that was a bit of fun. Um, I’ve been ask­ing chat, PT how to improve QAV. Only [00:10:00] it’s, it’s at a stage now where I’m like, with its deep research, it’s deep think­ing chat, PT five. I’m like, here’s all the met­rics that we mea­sure. What are we miss­ing? Or the next step will be, here’s how we’re scor­ing them.

Should we adjust the scor­ing? And how do, how do I build a regres­sion sys­tem to test that? The first thing it came up with was test­ing gross pro prof­itabil­i­ty. It sug­gest­ed that one of the best doc­u­ment­ed met­rics in aca­d­e­m­ic research is gross prof­itabil­i­ty, which is gross prof­it divid­ed by total assets.

Novi Marx­ist 2013 paper showed that with­in val­ue port­fo­lios, high gross prof­itabil­i­ty stocks dra­mat­i­cal­ly out­per­formed low prof­itabil­i­ty ones. The idea is sim­ple. If two stocks are equal­ly cheap, buy the one that’s a bet­ter busi­ness. So I start­ed think­ing about that, but then thought, well, that’s prob­a­bly in one of the finan­cial health [00:11:00] met­rics that we look at, and sure enough, it is in stock.

Expe­di­a’s qual­i­ty rank, long-term gross prof­its to assets is one of the things that is, uh, one of the com­po­nents of their qual­i­ty rank. I’m not sure about, um, the Stock Doc­tor finan­cial health, but I know you know those, or you used to know those a bit bet­ter, but. The, I, I assume it’s already fac­tored in or some­thing sim­i­lar to that is fac­tored into finan­cial health.

But then the ques­tion I had was, should, sor­ry, should we be scor­ing on long-term gross prof­its or gross prof­itabil­i­ty, uh, dif­fer­ent­ly? You know, should we be a, if that’s one of the most impor­tant met­rics in a val­ue port­fo­lio, should we be break­ing that out or scor­ing that more high­ly than we cur­rent­ly are?

And I thought I’d throw that out to you and see what your gut reac­tion is.

Tony Kynas­ton: [00:12:00] The only way to tell us to is to test it. I guess that paper you quot­ed may have some num­bers in there, which would help us. Uh, my, my gut when I saw that, when I saw the notes this morn­ing before com­ing online was that, uh, putting any­thing over assets can be a bit tricky because, uh, assets, first of all, it will favor cap­i­tal like busi­ness­es. So if you com­pare two com­pa­nies with the same growth prof­it, just gonna pick two here. Like, you know, pick me the, the depart­ment store busi­ness ver­sus Ama­zon where there’s hard­ly any, there’s, there’s much less in the way of assets than Ama­zon’s gonna look bet­ter. So that’s prob­a­bly a good thing. Um, but there’s also, again, it come, assets can be manip­u­lat­ed.

So, um, there’s been a lot of. I guess research a lot of [00:13:00] things that have hap­pened on the asset side of things, uh, going back to when R‑O-A-R-O‑E and ROA were two prime mea­sures of in com­pa­nies in the eight­ies, nineties, back when I first start­ed invest­ing man­age­ment would there­fore focus on reduc­ing equi­ty.

’cause if you reduce the, the denom­i­na­tor, uh, then the, um, per­cent­age goes well, no, sor­ry, what’s, what’s the bot­tom one? Numer­a­tor. Now what’s the bot­tom part of the, the ratio any­way? you, if you reduce the below the line, um, num­ber in a ratio, then the, the over­all result looks bet­ter. so if you reduce equi­ty by tak­ing on debt, ROE looks bet­ter.

And if you reduce assets by, for exam­ple, sell­ing them and leas­ing ’em back the clas­sic way in retail your ROA would look bet­ter because you’d have the same return, but you’d have less assets. And, and so I was always skep­ti­cal of any­thing over assets because it can be manip­u­lat­ed. Um, so. Then you get down to what’s a bet­ter busi­ness?

Is it some­thing, some­thing like a Har­vey Nor­man where they own lots [00:14:00] of stores, um, ver­sus Mey­er where they, where they’ve sold the prop­er­ty and leased it back. And, you know, that’s, that’s always been a bit of a debate, um, in invest­ment cir­cles. So hap­py to, hap­py to include gross prof­it over ROIF. We see it’s falls well iso­la­tion.

Um, but, uh, I’m always skep­ti­cal about, skep­ti­cal about using assets as a, as a divider in the, uh, ratio equa­tion.

Cameron: Okay. Inter­est­ing.

I haven’t, I haven’t gone through the Novi Marks paper, so I dun­no what they found.

Tony Kynas­ton: I’ll get GPT to go through it and tell you.

Cameron: Well, it already did tell me that it was the thing, it was like.

Tony Kynas­ton: what that method, that, uh, met­ric for loan deliv­ered? What kind of, what kind of cag over what peri­od?

Cameron: Yeah, no, I did­n’t, uh, go, I did­n’t go into that, David. It just said that, um, it’s, uh, one of the best doc­u­men­tary doc­u­ment­ed met­rics in aca­d­e­m­ic research, uh, [00:15:00] deter­min­ing per­for­mance. I’ll drill into it some more, but it, I, I guess, um, the real point of that is I think we are a, the, the, the AI are at a stage now where I can engage them to help me do

Tony Kynas­ton: Mm-hmm.

Cameron: deep research on some of these things and start to build test­ing sys­tems to iso­late dif­fer­ent met­rics, uh, at a new lev­el and, and look for things that we might be miss­ing and play around with ’em.

So I’m gonna start try­ing to set aside some time to do some more of those things and see what we come up with.

Tony Kynas­ton: Right. Well, speak­ing of AI and met­rics, the one I’d like to put into QAV is, is buy­backs under­tak­ing buy­backs? And the only way I’ve been able to tell that is to do a tech search, um, in their announce­ments or in their own annu­al report. So, um. I, I know you’re doing re work on look­ing for qual­i­fied audits, so per­haps when that’s at a pro­duc­tion stage, you might be able to look at, um, [00:16:00] doing a tech search for buy­backs as well.

’cause I’d like to put that into the, check­list.

Cameron: Oh, okay.

Tony Kynas­ton: And in fact, I, I was gonna talk about it a bit lat­er, but I might ring it up now. There was some research I came across, uh, we for­ward­ed, this was in the AFR last week. Um, there was some analy­sis that showed. The major­i­ty of ASX list­ed com­pa­nies that announced buy­backs have out­per­formed the broad­er share mar­ket in a sub­se­quent 12 months by a medi­um of 10%. So, uh, it’s, I think it is worth putting it in. I I want­ed to put it in on the basis of, as shaugh­nessy’s on in what works on Wall Street. Um, so it’s, but it prob­a­bly needs to have a search through the announce­ments for com­pa­nies to look for the word buy­back. ’cause I haven’t found a data­base of buy­back infor­ma­tion any­where to search.

Cameron: Yeah. Yeah. I’ve got­ta keep try­ing to build [00:17:00] some sort of sys­tem that can search for those and give us an updat­ed, um, right. Report on it. Hmm. It’s dif­fi­cult, more dif­fi­cult than it should be.

Tony Kynas­ton: Hmm.

Cameron: Okay. Um, well, I’ll work on that. Speak­ing of, uh, check­lists, uh, one of our mem­bers, Peter told me that he down­loaded the la lat­est ver­sion of the AFR check­list and it was giv­ing him an out of resources error. And when I played it, opened it up and played with it, I, I got the same thing, but I was able to iso­late it to a sheet that I added at some point, which was a Josephine check­er sheet.

Once I removed that sheet, which isn’t real­ly nec­es­sary ’cause it’s in the buy list that I put out each week, I think I built it in that and then moved it over to the buy list. Um, once I removed that, the out [00:18:00] of resources error went away. So, uh, just a tip for peo­ple out there. If you are get­ting the out of resources error on your AFR ver­sion, delete that sheet if you’re not using it, and, uh, see if that removes the prob­lem.

It’s just, uh, too many for­mu­las that the, that Excel can’t han­dle. I’m still try­ing to get my US ver­sion check­list to stop giv­ing me that error. I’ve been opti­miz­ing it and opti­miz­ing it, and I keep get­ting it. I haven’t quite fig­ured out the, the, the solu­tion yet, but I have, I have done a new ver­sion of the AFR sheet 25.3, which I’ll put up in the club mem­ber resources page, which will not have that sheet in it, the Josephine check­er.

Hope­ful­ly you won’t get that prob­lem with it if you don’t wan­na take it out of your own. Let’s talk about Ham’s Chick­en, ING. Tony, they came out with their results. They dropped 20%. I had to sell them out of a cou­ple of port­fo­lios, so I was gonna hold [00:19:00] onto them because they’re a big com­pa­ny and you had the thing and then about hold­ing onto them.

And then I went back and read through the tran­script from our amus­ing show and you said, it’s just amus­ing. And I was not amused by Ying, so I sold it. Uh, their share price has not recov­ered either. I thought it might, they dropped from $3 55, they’re now $2 79. But when I look at their five year chart, they did this last year and the year before their results come out, they dropped by a sub­stan­tial amount, then they recov­er, then they come out with their results and they drop and then they recov­er.

And I did, part of me did think, oh, I’m just gonna hold onto ’em and they’ll recov­er. But then I thought, well, it’s, you know, that’s not the rules that’s fore­cast­ing and b you know, it’s, uh, the oppor­tu­ni­ty costs. I could be invest­ing that into some­thing else. But what do you think about those sorts of pat­terns when [00:20:00] some­thing com­pa­ny like this comes out with their results, drops, then recov­ers, then repeats?

I mean, I think there’s, um, ccc, C‑C-P-C-C‑A Cred­it Corp is one of those. The, the, the CCP. Yeah.

Tony Kynas­ton: uh, we are obl. His­tor­i­cal­ly, they haven’t been, but yet, um, Ing­ham’s been a bit of a dis­ap­point­ment. I think, uh, it has all the hall­marks of a val­ue by a good val­ue stock, as you say, just cycles between a very, like a rea­son­able, rea­son­ably nar­row range of share price move­ments, which tend to go side­ways.

So it has­n’t real­ly pro­gressed. Um, which is kind of strange because I would’ve thought with all the cash they’re throw­ing off, they should be able to con­sol­i­date the indus­try. Um, per­haps they’re, they can’t do that now ’cause they own so much of it and the ACCC will get inter­est­ed in them. Um. Uh, the lat­est down­grade. I think it’s as much about its results. Well, well, it is about the [00:21:00] results, but that stems from the Wool­worths con­tract. Um, reduc­ing with them. I don’t think they’ve lost the con­tract com­plete­ly, but Wool­worths are going to bring on oth­er com­peti­tors as well. And, uh, yeah. So, um, it’s dis­ap­point­ing. Uh, it, know they’ve turned over their CEOA few times in the last few years, so that’s also not a good look.

Um, but yeah, I, I just can’t, I can’t under­stand this com­pa­ny real­ly. I think it should be doing bet­ter than it is, but giv­en the fact that it’s mov­ing side­ways, I’m hap­py to, to, um, to not invest in it, to sell it once it goes below. Sell one.

Cameron: Oh, well, it has well and tru­ly gone below its cell line. That’s why I sold it. Um, yeah, the sell price is, uh, $3 and six. It’s cur­rent­ly $2 80. Scott, in our ques­tions, I might, he, he brought up ING, he points out, so the Wool­worths con­tract is now reduc­ing the amount of chick­en they can sell to them and [00:22:00] pres­sur­ing mar­gins as they’re now sell­ing more on the whole­sale mar­ket.

Did they sign the con­tract in the last week? No, it was in Feb­ru­ary, five months ago. If so, why not announce that at the time? Any insights on why they did­n’t tell us back in Feb­ru­ary?

Tony Kynas­ton: No. And they should have if they did­n’t. I, I’m not that famil­iar with the com­pa­ny. I haven’t fol­lowed it for a while ’cause it’s, it’s dis­ap­point­ed me once too many times as well. Um, but yeah, that sounds like a mate­r­i­al dis­clo­sure They should have made. It also high­lights one of the prob­lems with the busi­ness.

If you have, if you are a sup­pli­er to one of the large super­mar­kets, you gen­er­al­ly don’t dic­tate the terms they do, you’re a price tak­er. But I do know from, uh, the pool pork I did on Ing­hams a few years ago is that they were also a big sup­pli­er to the restau­rant mar­ket. So, uh, the fast food mar­kets. So they have been try­ing to diver­si­fy away from super­mar­kets.

But, uh, and I would’ve thought, I mean, every­one, every ana­lyst that [00:23:00] the cov­ers this com­pa­ny or cov­ers the indus­try says when cost of liv­ing is dif­fi­cult, this com­pa­ny should do well because peo­ple drop from steak to chick­en, right? ’cause it’s cheap­er. Um, and they drop from eat­ing out to fast food take­aways like KFC, uh, but, um, does­n’t seem to be fly­ing through to Ing­hams for some rea­son.

Again, I, I, you know, I won­der about the man­age­ment of Ing­hams giv­en all the

Cameron: So

Tony Kynas­ton: good things we can say about it.

Cameron: I’m look­ing through announce­ments on Stock Doc­tor back in Feb­ru­ary. Noth­ing I can see here about the Wool­worths con­tract. On the con­trary, in May 6th of May, they did a reaf­firm­ing FY 25 guid­ance and trad­ing update that said, Ing­ham’s group pro­vid­ed that reaf­firm­ing FY 2025 guid­ance for core poul­try vol­ume growth of less than 1% to less than 3%, and under­ly­ing EBITDA of 236 mil­lion to 250 mil­lion.

Group called poul­try vol­umes declined 2.2% in the [00:24:00] first nine months com­pared to the same peri­od, blah, blah, blah, blah, blah. And the share price was up 2.2%. After that came out. So appar­ent­ly there was noth­ing in that that shocked the mar­ket. And then they come out with the full results and the share price drops 18.63%.

So

Tony Kynas­ton: Yeah, if

Cameron: there you go.

Tony Kynas­ton: guid­ance in May and they don’t meet it in June, that’s, um, that’s, pret­ty poor, I think. And you know, the, I I, Scott makes a good point. I, all I could sug­gest is he goes and talks to a class action lawyer about, um, about tak­ing on com­pa­ny over their dis­clo­sure habits because, uh, unfor­tu­nate­ly, the great phan­tom in the sky, the ASX will prob­a­bly do noth­ing about, uh, about this sale.

Cameron: well, it’s not one of our stocks, but we do hear it talked about a lot. CSL.

Tony Kynas­ton: oh, [00:25:00] yeah.

Cameron: No, I’m mov­ing on. CSL. How many times have we heard about what a great com­pa­ny CSL is? Uh, great com­pa­ny. Great Aus­tralian com­pa­ny. Great stock.

Tony Kynas­ton: it’s come across, it’s come across our desk twice now, cam, uh, I think we had mem­bers of the, was it the Syd­ney Val­ue Invest­ing Club?

Cameron: Yeah.

Tony Kynas­ton: I think it was them. May I, I should­n’t attribute it to them because I can’t be

Cameron: I,

Tony Kynas­ton: but I thought, we cer­tain­ly had some­one on who sup­port­ed CSL as a val­ue stock, uh, on the basis that thought it was gonna be worth more in the future and you could buy it, um, at val­ue now, even though it’s always been seen as a growth stock by, uh, by investors. And of course it def­i­nite­ly was part of the Rudy, uh, Philip

Cameron: yes,

Tony Kynas­ton: Dyke, um, all weath­er stock port­fo­lio. And he came on

Cameron: yes.

Tony Kynas­ton: in the ear­ly days of QAV and spoke about CSL and how, how great it was. Well. All I can say is the all weath­er stock port­fo­lio is [00:26:00] prob­a­bly going through a snow­storm at the moment. And I’ve I’ve got a quote from, from Rudy.

He, he says, I can con­firm it almost hurts my eyes to see CSL shares trad­ing on 14. My mind goes, dude, you’re look­ing at the wrong ASX code. Sure­ly,

Cameron: 214, not $2 14. 214.

Tony Kynas­ton: You’re right.

Cameron: Yeah.

Tony Kynas­ton: Yeah. So, um, I feel sor­ry for him, but, um, it’s, look, his­to­ry repeats. It’s, if you buy some­thing on a high PE ratio, yes, it will go up for a while, may go up for years, but when it crash­es, all that high PE ratio dis­in­te­grate quick­ly.

Cameron: So I’ve got a, uh, an inter­view with him from a year ago, August, 2024, on, um, Livewire where he said it, uh, it’s time to shine, was now Rudy is extreme­ly bull­ish on the out­look for CSL. He argues that CSLs [00:27:00] time to shine is now that the stock could be on its way to $400, if not $500 a share. Um, I look point out that when we had Rudy on prob­a­bly five years ago, um, it was trad­ing at about, uh, uh, Jan­u­ary, 2020.

It was trad­ing at $312. It’s now $215, so it’s down near­ly 30% since then.

Tony Kynas­ton: Yeah,

Cameron: So, yeah.

Tony Kynas­ton: I’m not, I don’t want to, um, pause going on Rudy. He picked the wrong

Cameron: Yeah.

Tony Kynas­ton: and that’s, we all do. No, I don’t, because, well, because, you know, he’s a fel­low trav­el­er who’s out there try­ing to, um, edu­cate peo­ple and how to invest. So, you know, I, I actu­al­ly would encour­age peo­ple to go and check out his method­ol­o­gy for cre­at­ing your weath­er stock port­fo­lio.

It’s a neat idea. just, he, I dis­agree with him at the time. I dis­agree with him. But now that if you buy a high, [00:28:00] high­ly over­val­ued growth stock, of how good the busi­ness is, at some stage it will hit a speed bump and the val­ue, the growth pre­mi­um will dis­ap­pear. And they. Go up the stair­case and down the ele­va­tor quick­er val­ue stocks or oth­er stocks in the mar­ket. it’s, it’s a salu­ta­to­ry warn­ing for all the peo­ple who are out there buy­ing the growth stocks on the ASX or in the US Now, it’s gonna, the same thing’s gonna hap­pen,

Cameron: It dropped from $271 when its results. Came out to 213 last week, and I was pret­ty spot on with my guessti­mate about when he was on. It was the end of Jan­u­ary, 2020 30. 1st of Jan­u­ary, sea­son two, episode four. And, uh, it says Tony. Also in this episode, Tony dis­cuss­es the effect the Wuhan virus has had on the ASX in our port­fo­lio this week.

It’s back when we were call­ing it the Wuhan Virus.

Tony Kynas­ton: right? The Wuhan.

Cameron: Yeah. Before [00:29:00] it just became COVID and it was the Wuhan clan. Um, well that’s all I’ve got in my, uh, list of things. Apart from ques­tions, what have you got? Tk.

Tony Kynas­ton: A few things. Um, we, we’ve spo­ken about a cou­ple of the stocks, which haven’t done well out of report­ing sea­son, but I want­ed to cov­er some of the ones that have done well. So all those sports group, uh, a SG, been on the buy list for a while. Uh, a stock, a stock site, an analy­sis site called Tip Ranks says, sports group lim­it­ed stock move­ment is pri­mar­i­ly dri­ven by a report­ed 8% increase in rev­enue, despite a sig­nif­i­cant 46% decline in prof­it due to acqui­si­tion expens­es and amor­ti­za­tion, the com­pa­ny’s recent con­trol over BS Still­well Motor Group is seen as a poten­tial pos­i­tive fac­tor tip ranks reports.

Year to date price per­for­mance, 65.5%. [00:30:00] despite this, a SG is still on the buy list. So it’s done well. Seems to be. Uh, by acqui­si­tions. Um, and it’s a, it’s a car deal­er­ship aggre­ga­tor, so that makes sense. And any­one liv­ing in Mel­bourne will know Bibb Steel’s Motor Group as being a large deal­er­ship, uh, in Vic­to­ria.

So a SG has done well since report­ing. Its, um. Its lat­est results, pep­per mon­ey, which I think has been the top of the ball list, if not one or two, um, for most of the year. Um, they report­ed their num­bers recent­ly and their year to date price per­for­mance is up 58% and mon­ey have said Prime Res­i­den­tial and com­mer­cial mort­gages rose 171% over the first half of 24 25, account­ing for 70% of new busi­ness at pep and Mon­ey. By con­trast, non-con­form­ing lend­ing Now accounts were just 30% of new orig­i­na­tions down from [00:31:00] 60% in the first half of 24. Strong demand for prime mort­gages and asset finances bol­stered Pip­pa Mon­ey’s loan book growth accord­ing to its half year results. For the six months to June 30, the non-bank lender revealed total ori­gin. Orig­i­na­tions rose 38% On the pri­or cor­re­spond­ing peri­od, reach­ing 4.5 bil­lion appli­ca­tions were also up increas­ing 10% on the pri­or half and 30% on the, the year pri­or to 6.8 bil­lion new mort­gages across Aus­tralia and New Zealand jumped 53% to 2.8 bil­lion and 21% com­pared with the sec­ond half of 2024. That’s report­ed from a com­pa­ny called the, uh, the advi­sor, anoth­er ana­lysts site. uh, yeah, great results from pep­per mon­ey and they’ve rejigged their busi­ness­es away from qual­i­ty loans in favor of, uh, prime lend­ing Sovi­ets. It’s

Cameron: Hmm,

Tony Kynas­ton: the busi­ness. Uh, and the

Cameron: wait.

Tony Kynas­ton: to talk about is Par­en­ti, the stock I own and one of my, one of [00:32:00] the, uh, of my favorites.

Um, and I looked at the stock graph this morn­ing and it’s almost ver­ti­cal since the results came out. So it’s real­ly pow­er­ing on, uh, and Aus­tralian min­ing, uh, uh, web­site that fol­lows. Min­ing Com­pa­ny says Par­en­ti has pow­ered through the 24 finan­cial year with a records well FY 25 finan­cial year with a record break­ing result, includ­ing a record $333 mil­lion in under­ly­ing earn­ings in inter­est, tax­es and amor­ti­za­tion rev­enue hid­den all time high of 3.49 bil­lion, up 4% on FY 24, dri­ven by growth and drilling ser­vices. And anoth­er, anoth­er steady con­tri­bu­tion from con­tract min­ing, et cetera, et cetera. EBITDA up 6%, up 9.6%. Npa up 8%. statu­to­ry npa. Up and a lot of extra free cash flow, which has meant, uh, that debt has been reduced to $311 [00:33:00] mil­lion. and they’ve increased their div­i­dends. So year to date, par­en­tis is up 51.6% accord­ing to Yahoo Finance,

Cameron: I’ve got that and a bunch of port­fo­lios. It’s been in the dum­my port­fo­lio since May of last year. It’s up 121% since then. So yeah, it’s done very well. Um, of the oth­er ones you men­tioned, uh, who’d you do before then? Uh, PPM, yeah,

Tony Kynas­ton: uh, pep­per

Cameron: we hope.

Tony Kynas­ton: and all

Cameron: Yeah. PPM we’ve held in a cou­ple of port­fo­lios a dum­my port­fo­lio in the light port­fo­lio since May of this year.

Up 30% in each of those and a SG I’ve had in the light port­fo­lio since May of this year as well. It’s up 48% since then, so doing very well some of those stocks. Nice work.

Tony Kynas­ton: Yeah. I know you haven’t done a port­fo­lio update, but the light port­fo­lio seem to be to find their feet in terms of [00:34:00] tag­ger,

Cameron: Yeah, I, I’ll do that. So the light, so we have the four light port­fo­lios that all start­ed at dif­fer­ent times. The first one, which start­ed just as Ukraine inva­sion hap­pened and inter­est rates start­ed going up, is still not under water. It’s up 5.4% since, um, Feb­ru­ary, 2022. Uh, ver­sus the bench­mark up about 10%.

So it’s half as good as the bench­mark, but uh, the sec­ond port­fo­lio is 15% ver­sus nine and a half, it’s up. The third port­fo­lio is up 14% ver­sus 12.7 for the bench­mark. And the third one, the fourth one, is up 18.5% ver­sus 12.5 for the bench­mark. So as a group for the four port­fo­lios, accord­ing to Navexa meth­ods of cal­cu­la­tion, the group is up 14 point half per­cent ver­sus the bench­mark up 11.8.[00:35:00]

The dum­my port­fo­lio, if I go back to, if I do the five year thing, w port­fo­lio is up 17.7% for five years ver­sus the bench­mark up 11.6. And in the last, like one year, uh, the dum­my port­fo­lio is up 30% ver­sus the bench­mark up 16. So

Tony Kynas­ton: Vir­ginia.

Cameron: gang­busters the, the US port­fo­lio while I’m here, we’ll do that when we get to the US show.

But for the, for the 12 months, the US port­fo­lio is up 22.2% ver­sus the s and p 500, up 14. So the dum­my port­fo­lio in Aus­tralia is out­per­form­ing our US port­fo­lio over a 12 month peri­od. So go fig­ure that ’cause the US port­fo­lio, the US mar­ket is com­plete­ly bonkers. For all time, which [00:36:00] for ref­er­ence, I start­ed it in Sep­tem­ber, 2023.

The US port­fo­lio is up 73.8% ver­sus the s and p 500, up 44.9. So doing quite well. But uh, some­body at kung fu asked me today, so what are you doing for the rest of the day? I said, oh, I’m record­ing. A cou­ple of invest­ing shows. One about the Aus­tralian mar­ket, one about the US mar­ket. And he said, which does it mat­ter to invest in?

I said, does­n’t mat­ter. Does­n’t mat­ter if you know what you’re doing and you have a sys­tem, it’s all the same. Right. Real­ly.

Tony Kynas­ton: been my expe­ri­ence. Yeah,

Cameron: Yeah. Um, so there you go. So, um,

Tony Kynas­ton: Speak­ing

Cameron: yeah.

Tony Kynas­ton: the US mar­ket, I, I I, I did note, I think it was Fri­day of last week and over the week­end and Mon­day of this week, the mar­ket’s kicked on, uh, because, uh. Mr. Pow­ell, the Fed chief, spoke at Jack­son Hole and he talked about the [00:37:00] fact that, I’ll try and find the quote for you.

Um, where is it now? He, he basi­cal­ly talked about, uh, here we go. The bal­ance of risk appears to be shift­ing. Pow­ell said, while labor mar­kets look sta­ble, it is a curi­ous kind of bal­ance that results from a marked slow­down in both the sup­ply of and demand for work­ers. That has led to an unusu­al sit­u­a­tion in which the risks of worse than expect­ed labor mar­ket out­comes aris­ing.

He said, and if those risk mate­ri­al­ize, they can do so quick­ly in the form of sharply high­er lay­offs and ris­ing unem­ploy­ment. So he’s come out and said. Mar­kets look­ing risky or the econ­o­my’s look­ing risky. mar­ket went up a cou­ple of per­cent. In fact, the, the arti­cle I’m quot­ing from, from the Wall Street Jour­nal says that, uh, uh, the Dow Jones Indus­tri­al aver­age, the s and p 500 and the NASDAQ com­pos­ite all fin­ished Fri­day with the gains of rough­ly [00:38:00] 1.5 to 2%. So, so Fed Chief is cau­tion­ing that look­ing dicey in terms of its econ­o­my. The mar­ket goes up because every­one’s hop­ing he’ll cut rates. It’s a, it’s through the look­ing glass. I think some­times with the, with the way the mar­ket reacts to the fed’s, uh, announce­ments.

Cameron: Yeah. Bonkers, old, bonkers.

Tony Kynas­ton: Yep.

Cameron: What else?

Tony Kynas­ton: I, I came across, uh, some­thing on Face­book, a meme that said noth­ing says pro­duc­tiv­i­ty, like 28 peo­ple in a meet­ing. I thought that was quite fun­ny about the pro­duc­tiv­i­ty coun­cil last week.

Cameron: Uhhuh? Yeah.

Tony Kynas­ton: Yeah. So that’s all I’ve got. I’ve got a pulled pork to do can, if you’ve got noth­ing else,

Cameron: Um, well. Yeah, I think Scot­t’s oth­er ques­tions, I think you’ve sort of cov­ered, um, he, he asked if we could do a review of results across the buy list, [00:39:00] stocks that got a nice bump or a big drop and why they were pun­ished, reward­ed. I think we’ve done some of that. Any­way, we’ll keep doing that as we go. Uh, over the weeks, he says he’s sit­ting on cash due to the no buy­ing dur­ing report­ing sea­son rule, and won­der­ing if I top up cur­rent hold­ings, PPM, for exam­ple, on the back of good results whilst culling a cou­ple of not so good, which will free up some more dol­lars to invest.

Look­ing at UING and OMG. Well, you should have already sold ING if you’re fol­low­ing the three point trend line rule. I can’t remem­ber. Where’s o Media? I think I did. I Oh no, I sold them. No, they’re, oh, the OMG. They’re OML. Who’s OMG? Oh my God. I think it means OML. I’m guess­ing they are down for me, but they’re not a sell yet.

Um, although their three point sell is kind of ver­ti­cal, it’s $2 and they’re at a dol­lar 67. But I was in the black on them, so I held, I’m down 2% on them [00:40:00] now. Mm. I don’t know. Should I sell?

Tony Kynas­ton: Should you sell? I’m not gonna give per­son­al finan­cial advice.

Cameron: It’s not per­son­al. It’s QAV advice. It’s not my port­fo­lio. It’s a QAV port­fo­lio. It’s one of the light port­fo­lios. It’s a man­age­ment deci­sion.

Tony Kynas­ton: If it, has­n’t trig­gered a cell vol­ume, then you should keep it.

Cameron: No, it has so.

Tony Kynas­ton: Well then sell it.

Cameron: Oh my God. So, you know, we’ve got a, we’ve got a few stocks and this was one of them. TP G’s, anoth­er one where the three point cell line is ver­ti­cal. Um, and so it was sort of out­pac­ing the stocks and TPG for exam­ple. I’ve asked you about this before and you sort of con­curred that we should­n’t sell TPG.

I’m up 6% on it, even though its sell line is $5. Sell price is $5 65. It’s cur­rent­ly at $5 27. So it’s below the sell line, but it’s up 6% from when I bought it. And the share price has been going up. It’s not that the, it has­n’t breached the sell [00:41:00] line because the share price has been going down. It’s breached the sell line because the sell line’s going up.

’cause it came off a load dur­ing the last, you know, mar­ket crash. Right. So it was one of those, I haven’t, uh, it has been going down though in the last month by the looks of it. It’s dropped a bit. OML is anoth­er one. That was in that sit­u­a­tion, but it’s gone back­wards a lot and is now, I’m now in the red on it so

Tony Kynas­ton: I think

Cameron: it does­n’t go.

Tony Kynas­ton: are cells. Um,

Cameron: Right.

Tony Kynas­ton: from, from the clas­sics, from the clas­sic, sort of below the cell line approach. I under­stand what you’re say­ing now about, um, it’s ris­ing quick­ly and so the cell line’s trav­el­ing along, it’s, it’s low points, but the low points are, are ris­ing quick­ly. Um,

Cameron: what about cog finan­cial ser­vices? ’cause it’s the oth­er one that’s tech­ni­cal, three point sell, sell, sell prices, a dol­lar 87. [00:42:00] Its prices a dol­lar 73, but I’m up 26%. And again, it has­n’t, and it has­n’t real­ly come back, come back a lit­tle bit from where it was at the begin­ning of August, but it’s, um, the share prices has been going up con­sis­tent­ly since Feb­ru­ary.

Tony Kynas­ton: sor­ry, what’s the code? Is it COG?

Cameron: Yeah. COG.

Tony Kynas­ton: Let me have a look at the grab.

Cameron: I’ve been mak­ing excep­tions for these, but um, I think those oth­er two, I prob­a­bly should let go

Tony Kynas­ton: Yeah, I agree. think you should prob­a­bly hold, if it was me, I would hold on to Cog and, um, it’s month on month is still slight­ly high­er and that means that in a cou­ple of days it’s the 26th of August as we talk, uh, that there’ll prob­a­bly be a new L two and the share price would prob­a­bly be above it

Cameron: a cou­ple of days. Is that what you’re say­ing?

Tony Kynas­ton: Yeah.

Cameron: A cou­ple of days.

Tony Kynas­ton: Yeah.

Cameron: Any­one old enough to remem­ber that? Just us.

hold on. Cell ING and OMLI take care of [00:43:00] that. Thanks for con­firm­ing that. Alright. Uh.

Tony Kynas­ton: He should have, he should have enough stuff in Stock, Doc­tor now to find some­thing to buy, but I, I’d cer­tain­ly be hap­py buy­ing more of pep­per mon­ey the way it’s going.

Cameron: Um, Lind­say Aus­tralia. I He says he reviewed their results pre­sen­ta­tion and whilst the cur­rent posi­tion is not awe­some, it looks like they’re still well posi­tioned to bounce back once the new busi­ness they have acquired recent­ly embed­ded in, they’re back to about what I bought them for in April.

So do you guys think they’re worth stay­ing the course or is my inter­pre­ta­tion way off?

Tony Kynas­ton: Yeah,

Cameron: well.

Tony Kynas­ton: mean, again, um, we got rules for sell­ing them above its cell line. Sounds like it’s, has­n’t trig­gered a rule one for Scott yet. So if it was me, I’d be hold­ing onto it, not, not try­ing to pre­dict how long it takes for acqui­si­tions to through to the bot­tom line or any of that kind of stuff.

Cameron: Yeah, I, I hold LAU in three [00:44:00] port­fo­lios, Scott, um, the dum­my port­fo­lio and two, actu­al­ly two parcels in one light port­fo­lio. Must have dou­bled up on it at some point. I’ve held it since June of 22. In the dum­my port­fo­lio, it’s up 57%. August 22 in one light port­fo­lio, up 38% and Sep­tem­ber 22 in anoth­er light port­fo­lio in the same light port­fo­lio.

Sor­ry, sec­ond par­cel. It’s up 15%. So like, it has­n’t shot the lights out in the last three years, but, um, it has­n’t breached.

Tony Kynas­ton: Yep.

Cameron: Yeah, it’s come down a lot. It was, wow, 2020, mid 2023 was a dol­lar 35, so it’s 66 cents now. It’s halved over that peri­od of time, but I haven’t sold it. Hmm.

Tony Kynas­ton: So, yeah, not giv­ing Scott per­son­al finan­cial advice, but the process is to wait for it to be a rule one or a three point trend line sell, and not try­ing to won­der too much about the [00:45:00] under­ly­ing busi­ness and what man­age­ment are doing and what acqui­si­tions they’re mak­ing, et cetera.

Cameron: Yeah, it’s still on the buy list, by the way, this week. So that means the check­list is still say­ing it’s a, it’s a buy where it is today. So if it has­n’t breached a sell line and a sell trig­ger and it’s still a buy, the fun­da­men­tals are still good.

Tony Kynas­ton: Mm hmm.

Cameron: All right. Who are you doing to pull pork on? Tk.

Tony Kynas­ton: Mabb Finan­cial, which,

Cameron: were gonna do that.

Tony Kynas­ton: ’ cause I, you read my notes.

Cameron: No, I did. I, I don’t ize. I like to be sur­prised. I’m like,

Tony Kynas­ton: you don’t?

Cameron: yeah, no,

Tony Kynas­ton: send­ing them. I’ll stop

Cameron: yeah. No, it’s all right. Yeah, no, I wan­na be sur­prised. Um. No, because I had­n’t seen them before. I had, I had to check them for a qual­i­fied audit when I saw them on the check­list on the week­end. ’cause I had, I had­n’t seen ’em before and I thought, yeah, Tony will do them ’cause they’re [00:46:00] new-ish for us.

Tony Kynas­ton: they’re a rea­son­ably large spot too.

Cameron: That sur­prised me. Yeah, they’ve got a big A DT.

Tony Kynas­ton: Hmm. DT of 1.3 mil­lion,

Cameron: Hmm.

Tony Kynas­ton: Yeah.

Cameron: Ooh.

Tony Kynas­ton: So, uh, Mabb Finan­cial peo­ple may rec­og­nize the name MOIs Group, so they changed their names uh, Mabb Finan­cial a few years ago was called MOIs. And MOIs. They, some, some lis­ten­ers may also rec­og­nize as being a large US um, finan­cial firm. So they do have the license to, uh, to do busi­ness. With Elli in Aus­tralia and, and for a while they have to use their name and one of their direc­tors is, uh, is one of them, is Ken Ellis from the US. So, um, he has a stake in this com­pa­ny in Aus­tralia too. So they’re all link link­ages back to the US com­pa­ny, even though this was set up by a cou­ple of Aus­tralians who still remain on the board. M, Mabb Finan­cial. Who are they? So [00:47:00] Stock­bro­ker, invest­ment man­ag­er, asset man­ag­er, uh, lend­ing bro­ker and busi­ness and cor­po­rate advi­sor. So kind of cov­er­ing the water­front there for, um, for finan­cial ser­vices, uh, they have a num­ber of dif­fer­ent oper­a­tor there, a num­ber of dif­fer­ent brands. They own a mort­gage broking brand called Fin Haw. They man­age hotels under the brand name of Red Cake Hos­pi­tal­i­ty. that came about after they set up a, uh, a fund called the Red Cake Hos­pi­tal­i­ty Fund, then decid­ed that man­ag­ing, uh, some of those hotels was a good, uh, good idea in a good way of max­i­miz­ing the returns in the fund. Uh, and the Red Cape Hos­pi­tal­i­ty Fund has over a bil­lion dol­lars invest­ed in Aussie hotels. They’re a non-bank lender with a brand called Mabb Mon­ey. Uh, they have a brand called Mid­dle, which is some kind of, uh, tech­nol­o­gy that allows bro­kers to quick­ly gath­er client infor­ma­tion and to trans­fer it [00:48:00] quick­ly across to, lend­ing providers. Uh, and they have a retail con­sul­tan­cy and shop­ping cen­ter man­ag­er brand called RET Pro. So, uh, I guess they’ve evolved to have a fin­ger in a num­ber of, num­ber of pies. They say them­selves that they’re a glob­al alter­na­tive asset man­ag­er spe­cial­iz­ing in pri­vate cred­it, real estate, hos­pi­tal­i­ty, unique oper­at­ing assets and pri­vate equi­ty and ven­ture cap­i­tal. And they also man­age tra­di­tion­al asset class­es, includ­ing equi­ties, bonds, and cash. Uh, they have 12.7 bil­lion under man­age­ment. So they, they’re rea­son­ably large they’re what they call them­selves as active man­agers. So they only invest, but they also wear appro­pri­ate, direct­ly oper­ate and man­age many of the real estate and hos­pi­tal­i­ty assets, includ­ing hotels, mari­nas, and shop­ping cen­ters. Uh, they orig­i­nate and man­age many of the loans in their cred­it funds. [00:49:00] so their, their mantra is that they believe that in-house, hands-on man­age­ment and exper­tise results in bet­ter risk man­age­ment and stronger long-term per­for­mance of the assets they invest in and man­age on behalf of their clients. Uh. Their mort­gage they call it, has $155 bil­lion in loans avail­able from over 80 banks. I say, sor­ry, I’m gonna say avail­able, um, on loan uh, non-bank lenders. And, uh, they rep­re­sent 3,700 bro­kers and 400,000 cus­tomers rough­ly. So, um. Rea­son, it’s a pret­ty large mort­gage broking busi­ness, they also pro­vide loans direct­ly through their Mabb mon­ey plat­form. Uh, they kind of start­ed out in, um, funds man­age­ment, but also evolved into cor­po­rate advi­so­ry. And their cor­po­rate advi­so­ry busi­ness in Aus­tralia is called Air Mabb Mobile Aus­tralia. And they pro­vide finan­cial advice for clients [00:50:00] across merg­ers and acqui­si­tions, strate­gic advi­so­ry equi­ty and debt cap­i­tal mar­kets, cap­i­tal, restruc­tur­ing advi­so­ry equi­ties, research and trad­ing. And they say that they oper­ate as the exclu­sive part­ner in the Aus­tralian mar­ket for New York Stock Exchange list­ed Glob­al Invest­ment Bank, MOIs and. Com­pa­ny. So they began back in 2009, amidst the shad­ows of the glob­al finan­cial cri­sis. Uh, they com­menced in Aus­tralia as a cor­po­rate advi­so­ry busi­ness, MO and com­pa­ny, they were in part­ner­ship with the, uh, MO and com­pa­ny in the us. And, uh, they rebrand­ed to, first of all, um, MOS Aus­tralia from MOS and Com­pa­ny, uh, when they list­ed on the ASX in 2017, and then changed their name to Mabb Finan­cial Group in 2021. And that was done to reflect the broad­en­ing of their busi­ness activ­i­ties since the found­ing as an invest­ment bank­ing part­ner­ship with Mel Laws and Com­pa­ny. Uh, [00:51:00] they start­ed off in Syd­ney in 2009 with just five employ­ees, and they now have over 700 peo­ple and over a hun­dred bil­lion dol­lars in assets across Mabb mul­ti­ple class­es. Uh, they talk about one of their key. Strengths is, um, employ­ing high­ly expe­ri­enced and moti­vat­ed staff, but crit­i­cal­ly their peo­ple share a strong align­ment with our clients and share­hold­ers by own­ing approx­i­mate­ly 40% of the com­pa­ny and co-invest­ing in many of the man­aged funds that, uh, EMA offer. Um, so that’s, that’s the com­pa­ny, uh, lat­est results were quite good, which is what’s dri­ven, the share price appre­ci­a­tion recent­ly, but also the fact that their new num­bers put them on the buy list, where­as the old num­bers did­n’t. Uh, so the lat­est results though, busi­ness growth across the group, uh, for the first half, um, under­ly­ing rev­enue was [00:52:00] 26% up, and so was EPS, uh, growth on the first half in 24, npa uh, was 26, 22 0.6 mil­lion. And EPS was 14 cents, and they were both up 27 and 26% respec­tive­ly on the first half in FY 24. they, um. claim that since list­ing at two $32 35 and 2017, Mabb Finan­cial has deliv­ered its share­hold­ers a total return of 19% per annum. Uh, the MD went on to say in the results announce­ment that under­ly­ing EPS in the sec­ond half of 2025 is expect­ed to be mate­ri­al­ly high than in the first half, believe that the group is in great shape to deliv­er strong earn­ings growth into the future so that, uh, those results put a bit of a rock­et under the stock price.

Recent­ly look­ing at the QAV num­bers, stock price is $9 12 At the time of the analy­sis, which is a slight­ly under con­sen­sus tar­get, about [00:53:00] 12% below con­sen­sus tar­get, but, but above our IV one and IV two, IV one is only 81 cents, and IV two is only $3 34. So. A bit of a dif­fer­ence there between what we think val­ue is and what the con­sen­sus tar­get is.

But I think what’s hap­pen­ing is that the, the peo­ple who are fol­low­ing this com­pa­ny are fac­tor­ing in, um, large earn­ings per share growth in the near term, and we’re a bit more con­ser­v­a­tive, com­pa­nies yield­ing 2.19%. So it is pay­ing a div­i­dend but not scor­ing well enough for us to, And a tick on the check­list. Net equi­ty per share is $2 22, and I note the, the net tan­gi­ble assets is below that. So we can’t buy this stock for any­thing like book val­ue. So, um, at least on the, our sort of con­ser­v­a­tive mea­sures, it’s look­ing a lit­tle bit over­val­ued. Uh, Stock Doc­tor finan­cial health and trend is mar­gin­al and recov­er­ing so mar­gin­al as finan­cial health does­n’t score for us.

But recov­er­ing scores a two. [00:54:00] And, uh, I like stocks that are, are in the recov­er­ing finan­cial phase. They tend to do well. I went through the stock of Appear results and, and the num­bers weren’t look­ing great, and I’ll just quick­ly cov­er them. They ranked a qual­i­ty, uh. The qual­i­ty rank­ing is 37 and the F score is only three out of nine. But when I drilled down on it, I think the stock­o­pe­dia num­bers haven’t been updat­ed for the lat­est results and it still looks like they’re using 2024 num­bers. So if any­one’s using Stock Edia out there rather than Stock Doc­tor as their feed, just check to make sure you’ve got the right, um, 20, 25 num­bers, uh, before you score it. Um, so I’m kind of park­ing the stocked num­bers for the moment. Uh, PE ratio is 57 times, which is the high­est in three years, so we give it a neg­a­tive on our check­list for that prop cap though is, uh, it’s only trad­ing at 4.4 times the oper­at­ing cash flow. So strong oper­at­ing cash flow at the moment.

Cameron: Wow.

Tony Kynas­ton: I did notice, like this is a, this is a finan­cial [00:55:00] firm, so some­times it can be affect­ed by inflows and out­flows, which it looks like this com­pa­ny can be.

But in the oper­at­ing cash flow line, there was a inter­est income. Um. Line, which is going up a lot, and I think that’s what’s dri­ving the oper­at­ing cash flow. So I think that is legit­i­mate income in it from a busi­ness point of view, rather than stock, uh, rather than fund inflows and out­flows, which is dri­ving the prop cap. Uh, earn­ings per share growth is fore­cast­ed 102%, which means that it scores for us on EPS over pe. Even though the PE is high, get a score of 1.78 and our, our cut­off for a score is 1.5. The oth­er thing to like about this com­pa­ny is that the direc­tors hold 36% of the stock. both of the two of the found­ing part­ners, Christo­pher W and Andrew Pritham, both on the board, uh, Christo­pher is the co.

CEO. Pritham is, is one of the co-founders. Um, he holds 8.5% and I [00:56:00] can’t remem­ber what Christo­pher holds, but it’s around the same sort of amount. So they’re both still hold­ing a bit. Ken MOIs from the states, from the US MOIs com­pa­ny, he sits on the board and he holds 16%. So, um, uh. Large own­er­ship of founders. The MOIs in the US is down as hold­ing 10.2%. I could­n’t quite work out whether that was incor­po­rat­ed and m MOIs is 16 or sep­a­rate. But, um, either way there’s still large hold­ings between, um, own­er founders and the US Malis com­pa­ny as well. Uh, does­n’t have, this com­pa­ny does­n’t have con­sis­tent­ly increas­ing equi­ty, so we can’t score it for that. But over­all qual­i­ty score is 10 out­ta 15 or 67%, and the QAV score is 0.15. So it, it scores rea­son­ably well for a large com­pa­ny. of the strengths I, I like about it, um, large, uh, share­hold­ing by own­er founders. I would think the link with the US Well­ness Group has to be a pos­i­tive, um, from the fact that [00:57:00] there’s a lot of expe­ri­ence, um, that they can draw on.

There’s, there’s prob­a­bly also a lot of, um, know, net­work, uh. Link­ages that they can make, which would help them. Uh, I like their mod­el of being both an investor in assets, but then also oper­at­ing it them­selves. think that, you know, gives them focus. Um, quick abil­i­ty to improve oper­a­tional effi­cien­cies, um, but also I guess, uh, you know, anoth­er income stream from that same invest­ment.

So, um, I like that mod­el. There’s also been a large growth in pri­vate cred­it over the last few years and in the mort­gage bro­ker mar­ket, and we’re see­ing that in a num­ber of com­pa­nies on, on the buy list. Um, we spoke about pep­per mon­ey before who are also play­ing in that space. And it does seem like the banks, the major banks in Aus­tralia have seed­ed a large part of the lend­ing mod­el to, um, to oth­er play­ers and, uh, or Mabb Finan­cial is cap­i­tal­iz­ing on that. Um, [00:58:00] on the risk side of things, I mean, you can’t go past the risks of the to be there for any­thing, which is, um, uh, funds man­age­ment base, which is just basi­cal­ly that the mar­ket is, in over­val­ued ter­ri­to­ry and we’ll prob­a­bly cor­rect at some stage, but who knows when. So there’s a kind of nor­mal mar­ket risk for this com­pa­ny as being a fund man­ag­er. The oth­er thing that, um, I want­ed to high­light, uh, I dun­no whether this is the start of a trend or a tem­po­rary thing, is that of the red Cape, uh, com­peti­tors in the hotel. Um, indus­try are start­ing to report. Um, decreas­ing sales and dev group came out recent­ly and said that, uh, their sales were down. I can’t remem­ber the oth­er one I was look­ing at, but any­way, and there has been some report­ing that, um, that there is a gen­er­al decline in the take up of alco­hol usage by younger peo­ple in par­tic­u­lar. So I’m not sure if that’s a trend which will affect this com­pa­ny over time. But they cer­tain­ly have oth­er strengths that they buy besides hotels. [00:59:00] So that’s, uh, Mabb Finan­cial Group. It looks like a good addi­tion to the buy list.

Cameron: I read a report the oth­er day that said young peo­ple are drink­ing less, smok­ing less, and hav­ing less sex,

Tony Kynas­ton: What’s

Cameron: and that the three were the three were con­nect­ed. Well, the three were con­nect­ed. It said,

Tony Kynas­ton: Oh real­ly?

Cameron: Hmm, well, peo­ple aren’t going out

Tony Kynas­ton: Oh,

Cameron: drink­ing as much, so you know, appar­ent­ly you don’t go out, you don’t get laid.

Tony Kynas­ton: Well, I was about to say my daugh­ter does­n’t drink much, but, um, I don’t wan­na com­ment

Cameron: Oh wow.

Tony Kynas­ton: as much.

Cameron: Wow.

Tony Kynas­ton: She does­n’t go out much either. I dun­no

Cameron: Right.

Tony Kynas­ton: but, uh, it does, it does seem to be a thing

Cameron: Tay­lor does. Tay­lor’s going out all the time in la, but Hunter, not so much.

Tony Kynas­ton: I don’t

Cameron: And I’ve talked to

Tony Kynas­ton: though, is he?

Cameron: No, nei­ther of them are drinkers. They both, um, have learned from fam­i­ly expe­ri­ences, [01:00:00] uh, that they, they are very cau­tious with the boost they drink, but just keep a very, very tight lid on it.

Yeah. Um, well after hours then, Tony, thank you for that MAF

Tony Kynas­ton: Yeah.

Cameron: set.

Tony Kynas­ton: we, we spoke about ya Won­ga, um, which was a love­ly trip. We’re lucky with the weath­er too. It was quite, quite nice. Even though the tem­per­a­ture was say­ing it was like five degrees in the morn­ing, it would, we were still get­ting around in our shirt sleeves. It was hold­ing up quick­ly. Did­n’t feel like a, um, a cold day. It was love­ly. Uh, we had a horse run on Sun­day Lake For­est, which missed the start, so it did­n’t do too well. Um,

Cameron: What’s that mean? What does miss the start mean?

Tony Kynas­ton: uh,

Cameron: turned up late. Got stuck in traf­fic. No one.

Tony Kynas­ton: played up in the bar­ri­er. and then when all the hors­es jumped, it did­n’t, that was a,

Cameron: Oh,

Tony Kynas­ton: came

Cameron: real­ly?

Tony Kynas­ton: from the

Cameron: You’ve got one job. Horse.

Tony Kynas­ton: Well, jock­ey.

Cameron: it the, is it the jock­ey’s fault? Like, who gets the blame for that?

Tony Kynas­ton: [01:01:00] Uh, it can be the jock­ey’s fault, but I think in this case, if it played up in the bar­ri­ers, it was just bad tim­ing. The start is sup­posed, is sup­posed to keep an eye on the hors­es and, and not start the race until all the hors­es have set­tled and to go. But if, um, if

Cameron: Right?

Tony Kynas­ton: in the bar­ri­er then the bar­ri­er doors open, we, um, we missed it

Cameron: The horse is just like, not, not feel­ing it today. Don’t wan­na, don’t wan­na be here. Don’t wan­na be in this thing. Why have you got me locked into this lit­tle booth?

Tony Kynas­ton: could

Cameron: out.

Tony Kynas­ton: could be

Cameron: Let.

Tony Kynas­ton: of rea­sons. Could be, know, got a bit of an nig­gling injury. Could be that it’s just overex­cit­ed does­n’t want the jock­ey on board, who knows, gets excit­ed like it’s ready for com­pe­ti­tion and starts to rear and buck and all sorts of things. You know, I’ve, we ask them and they nev­er tell us. That’s a

Cameron: Give AI a few more years.

Tony Kynas­ton: line.

Cameron: Oh real­ly? Okay.

Tony Kynas­ton: Why did the horse run so slow? You know, well, I asked it and nev­er told me.

Cameron: [01:02:00] Nice.

Tony Kynas­ton: Uh, been lis­ten­ing to your catch up with David Markham, which was real­ly nice on the bull­shit

Cameron: It was nice

Tony Kynas­ton: Hmm.

Cameron: and I’m hop­ing you’ll come on this week. Uh, he said he’ll come back and Ray and I are sup­posed to do a bull­shit fil­ter this week, so I’m hop­ing David will be able to come back on and we can do more pol­i­tics stuff, but it was real­ly love­ly to catch up and have a chat with him. Haven’t spo­ken to him for a cou­ple of years.

Tony Kynas­ton: but I, um, I haven’t lis­tened to the whole thing yet ’cause it’s about, goes for about an hour and a half. But, um, I had a chuck­le to myself I think prob­a­bly in the first 10 min­utes you said about two words. And, and David non­stop. So it was a very dif­fer­ent cadence to inter­views with David, which took me back to the napoleon­ic times.

Cameron: That, that was where my pod­cast­ing start­ed. Just ask David a ques­tion and then sit back and relax for an hour or two.

Tony Kynas­ton: Yeah. But I

Cameron: Yeah,

Tony Kynas­ton: It’s great to hear, uh, hear the catch up.

Cameron: I like, he’s doing well. He is, as he said, he turns 80 in Decem­ber. And speak­ing of peo­ple who turn [01:03:00] 80 or are 80, oh man, the who a tour­ing at the moment. What’s left of them? Pete and Roger. I, I read an inter­view with him in the New York Times yes­ter­day, which was talk­ing about, you know, this is the 15th time they’ve done it.

This is our last tour. Tour and whether or not they’re gonna work again and all this kin­da stuff. Then I saw on YouTube, peo­ple have filmed the entire con­cert. So I went and had a look at one. It was in Newark, just like from, I don’t know, a few days ago. Sen­sa­tion­al, like Roger Dal­try is 81 and he hits every note.

You know, I expect­ed him to do what McCart­ney does, which is pull down a reg­is­ter occa­sion­al­ly when you’ve got a real­ly high note. No, no. He goes up, he, he push­es it fur­ther than he did when he was 35. His voice is amaz­ing, and Pete on gui­tar is just as amaz­ing as he ever was. He’s not, as, you know, his wind­mill arm isn’t wind bill as us and Roger twirling the mic.

He starts at the begin­ning and kind of flubs it, [01:04:00] but, and then he has a chuck­le to the audi­ence. But in terms of per­for­mance, unbe­liev­able for men in their eight­ies. Unbe­liev­able. They are the new rock gods. I mean, the Stones are prob­a­bly hit­ting that as well. And you know, as far as I know, they’re still kick­ing it.

But Mick love Mick, but Mick­’s not adul­tery. Like Mick does­n’t, you know, I’m a mid­night ram. He does a bit of a Bob Dylan, and you can’t always get what, it’s not like singing Who are You or Pin­ball Wiz­ard or, you know, any of those tracks. Like Dory real­ly had to sing. And he can still do it. It’s his sta he reminds me of Rus­sell May from Sparks, who’s, I think he’s 76 or 77, and he still hits real­ly high notes.

Every­thing, like his vocal per­for­mance is insane­ly good. His broth­er Ron is 80, like they’re up there as well. Those guys still [01:05:00] doing two hour co show shows every night. Rus­sel­l’s bounc­ing all over the stage, hit­ting every note. That’s, ah, man, like this gen­er­a­tion of rock­ers that has been going for 50, 60 years in the who’s case.

60, 64. 64, I think, uh, their first album came out.

Tony Kynas­ton: I went to the WHO turns 50 con­cept when I was liv­ing in Toron­to. That would’ve been prob­a­bly 10 years ago. yeah.

Cameron: So Ed Whis­tle would’ve been gone by then?

Tony Kynas­ton: Oh,

Cameron: Yeah, I think he,

Tony Kynas­ton: in the nineties.

Cameron: Real­ly? Oh, okay. Right.

Tony Kynas­ton: He was about 50 years of age when he went. Uh, did you notice if, uh, Zach Starkey was still play­ing on drums? Because I know he was sacked, but I thought there

Cameron: No.

Tony Kynas­ton: talk he was gonna be rein­stat­ed.

Cameron: They sacked him. They rein­stat­ed him, and then they sacked him again. That was part of the New York Times arti­cle. They’re like, what’s going on? And actu­al­ly Pete had a good line. He goes, he was nev­er, he was nev­er my favorite drum­mer. In fact, none of our drum­mers have been my favorite drum­mers. I did­n’t even like [01:06:00] Moon.

I did­n’t like Moon as a drum­mer. I’m like, who does­n’t? Nick could­n’t like Moon.

Tony Kynas­ton: real­ly? Go. Uh, if you get a chance, go and watch the Is of White con­cert. Um, it’ll be on YouTube. It’s prob­a­bly only about half an hour when the, who are play­ing. But, um, some­thing hap­pens, I think it’s might be whis­tles, amp blows and so there’s just Moon and Pete left and they start goes on for like, I don’t know how long, five, 10 min­utes, where Pete will play some­thing on gui­tar and Moon echo out in the drums, and then Moon will play some­thing on the drums and Pete echo out the gui­tar and they just had this amaz­ing rap­port going back and for­wards.

Cameron: Oh, fan­tas­tic.

Tony Kynas­ton: it’s incred­i­ble. Yeah.

Cameron: I had a, a friend over, uh, one of Fox’s school friend dad’s, who’s a heavy mod­el rock guy. And we, I, I, I have his kid comes over from school. Chris­sy brings him home on a Thurs­day after­noon. I look after the boys. He get, he fin­ish­es work late and comes and picks his kid up. And by the time he’s gone on, I’ve [01:07:00] always got some­thing on YouTube usu­al­ly, and it was like the Aussie trib­ute con­cert, or I’m watch­ing some­thing and he and I sit there and, or it’s a Go betweens doc­u­men­tary or some­thing like that.

We’re always talk­ing about music and I had, um. Who con­cert­ed on from like the sev­en­ties. And we got talk­ing about it and I said, have you, have you seen the video, the offi­cial video for Who are you? I think it’s Who are you? He goes, no. I goes, oh, my got­ta see this. Kei­th, like just Kei­th in the offi­cial video, he’s got his head­phones gaffer taped to his head as he often did, but just the faces that he’s pulling, like the cam­er­a’s real­ly up close and he’s doing his drum solo or what­ev­er he is doing.

And you know, a after the, you know, in, uh, who guess who are you? When it sort of breaks down, the song breaks down and the synth comes in. And then he and Kei­th comes back in

Tony Kynas­ton: Boom.

Cameron: and it starts build­ing up and yeah. And then he’s just like, he’s, he’s like, he’s just going nuts, pulling [01:08:00] mon­key faces and, oh, so enter­tain­ing.

So enter­tain­ing.

Tony Kynas­ton: Yeah.

Cameron: love moonie.

Tony Kynas­ton: That was when the kids were all right, was­n’t it? And he’s there rolling his

Cameron: Yeah. Yeah,

Tony Kynas­ton: Yeah.

Cameron: he does that in this too, when they’re all singing around a mic, doing the,

Tony Kynas­ton: that’s from

Cameron: yeah.

Tony Kynas­ton: the kids are All right.

Cameron: Oh, okay.

Tony Kynas­ton: Yeah. Great, great doc­u­men­tary. I,

Cameron: Uh, after we spoke a cou­ple of weeks ago, I watched The Man Who Fell to Earth on SBS

Tony Kynas­ton: good.

Cameron: and I’m now read­ing the book that it was based on. I did­n’t know this, but the guy who wrote that book also wrote the book that the Queen’s Gam­bit was based on the Net­flix series that blew up a few years ago.

He also wrote the book that, what’s the, uh, the Hus­tler was based on

Tony Kynas­ton: Oh,

Cameron: the Paul New­man film and the sequel, the Col­or of Mon­ey. He wrote those books as well, so he was quite a pro­lif­ic. Sci­ence [01:09:00] fic­tion slash appar­ent­ly he was a major drug addict and gam­bler gam­bling addict. And so he wrote books about what he knew and the, the man­field work is quite good.

Um, but yeah, the film real­ly held up well and I’d for­got­ten Rip Torn was in it.

Tony Kynas­ton: Hmm.

Cameron: And I love Rip Torn. He’s like, he was like one of my all time favorite Amer­i­can actors and, uh, see­ing here a young rip torn in a, well, kind of mid­dle aged rip torn I guess. But before all of the stuff that he did in the lat­ter part of his career.

Gar Lar­ry Shan­dler, Lar­ry San­dler, the Gary Sling Show, and you know, Lar­ry Sanders show Gary Ling and, um, men in Black and 30 Rock. And he had a great late part of his career. But I remem­ber I saw him not long ago. He was in, um, Steve McQueen film where he’s. The, the pok­er play, the, the Cincin­nati kid

Tony Kynas­ton: All

Cameron: Rip Torn is sort of the num­ber one guy that he needs to play in that, uh, he’s like some Tex­an with his drawl and what­ev­er.

Yeah, great actor. Any­way, [01:10:00] so thanks for telling me that was on SBS. That was great. I real­ly enjoyed it.

Tony Kynas­ton: Yeah.

Cameron: And then I saw a, I saw a Leonard Cohen doc­u­men­tary on SBS after that too, which was fan­tas­tic. It’s all about Hal­lelu­jah, the song, hal­lelu­jah.

Tony Kynas­ton: Mm-hmm.

Cameron: And how the album that he wrote that for, you know, he famous­ly wrote like 180 vers­es for that song over 10 years, and the final ver­sion had five or six vers­es and, um, then he did it, he’d do it live and he’d do dif­fer­ent vers­es.

But the album that, that was on the label. Um, can’t remem­ber which label it was. Colum­bia Records, I think, um, refused to put the album out. They said it was, the album was ter­ri­ble. They hat­ed it. There weren’t any good songs on it, and they refused to put it out e even though they paid for it to be record­ed.

So it end­ed up com­ing out on some lit­tle two bit label and did­n’t sell. No one bought it, and that was it. It just, LL [01:11:00] Leonard thought he was done, thought his career was over, and he was in his six­ties at this point. And then they talk about how that song, um, um. Some­body did a trib­ute album to Leonard Cohen and John Kale picked that song and did a ver­sion of it.

And then one of the women who was the pro­duc­ers of the Shrek film loved the John Kale ver­sion and want­ed to put that in the film. They actu­al­ly had it rere­cord­ed by some younger dude, but the John Cal ver­sion end­ed up in the film any­way. And then, um, Buck­ley,

Tony Kynas­ton: Mm-hmm.

Cameron: his name was, Jeff Buck­ley.

Tony Kynas­ton: Yep.

Cameron: He, before he was any­one, he was play­ing in this lit­tle club in New York and some­body said, um, he was look­ing for songs to play and it was kin­da [01:12:00] like, you know, just throw songs out.

And some­body said he did­n’t know the Leonard Con con­ver­sion. Some­body gave him the, it’s on kale ver­sion. He did his own ver­sion of that. Every­one loved it. It was on the album. He died before it came out. Then it became a huge hit and then every­one on every Amer­i­can tal­ent show like Amer­i­ca’s Got Tal­ent, what­ev­er.

There was always some­body doing the Jeff Buck­ley ver­sion of Hal­lelu­jah. And it blew at one point, three ver­sions of it were in the top 20 in the US There was some Amer­i­ca’s Got Tal­ent star who had done it, the Jeff Buck­ley ver­sion. They were num­ber one and two, and then Leonard’s ver­sion was like num­ber 20 or num­ber 18 or some­thing.

Tony Kynas­ton: Lan cov­ered it too. I

Cameron: I saw her.

Tony Kynas­ton: Yeah.

Cameron: Oh, I saw her do it in a trib­ute con­cert to him after he died too, which was great. It actu­al­ly, the film fin­ish­es with her doing it live, which was a stun­ning per­for­mance. Um, [01:13:00] yeah, so they’re just talk­ing about how this song, the label hat­ed it, would­n’t even put the album out. And then it just got this mas­sive life and, and then they talk about Leonard’s career.

I mean, the whole thing’s about Leonard’s whole career and how the last chap­ter of his life was just amaz­ing, you know? He was so beloved and, um, yeah, it’s amaz­ing. Real­ly great, real­ly great doc­u­men­tary.

Tony Kynas­ton: I’ll look it up. Thanks.

Cameron: Mm, goes on SBS. Yeah. Yeah. So thanks for, thanks for putting me on sb s. Lot of good stuff. Yeah. And I’ve been read­ing a good book.

Uh, I’ve been read­ing, uh, Zhang Wei­wei. He’s a Chi­nese schol­ar at Fudan Uni­ver­si­ty, um, on Chi­na. He’s got a cou­ple of books on Chi­na’s eco­nom­ic and polit­i­cal mod­el is the first one from 2012 I’m read­ing, is called the Chi­na Wave, uh, where his sort of break­down on the Chi­na mod­el, sim­i­lar to the one that I read by the Cana­di­an Schol­ar, Daniel A.

Bell a few years ago. But it’s him sort of break­ing down. And this [01:14:00] guy’s like, he’s an advi­sor to Xi Jin­ping and he was a, I think he was an inter­preter for Dong Xiaop­ing when he was younger. So he’s been in the upper cir­cles of the CCP for most of his life. But he has a great way of just explain­ing why Chi­na does it, the way that Chi­na does it, and why it works, in his opin­ion, why it has worked so well, why it con­tin­ues to work, you know, and why the West does­n’t under­stand Chi­na’s mod­el.

It’s like, lis­ten, we’ve been doing things our own way for 3000 years. You guys come along and think you know how to do things. We, we, you know, we’ve been doing this for a long time. We’ve just inte­grat­ed the best of all the things that Chi­na’s been doing for 3000 years. And, you know, we’re back on top baby and we know how to make this this work.

So just sit back and watch. So, um,

Tony Kynas­ton: I saw a

Cameron: yeah, it’s,

Tony Kynas­ton: Um, it

Cameron: hmm.

Tony Kynas­ton: in the review of a book, uh, about, about Chi­na and com­par­ing it to the US by a, a Chi­na, a Chi­nese per­son who had spent a lot of [01:15:00] time in Chi­na, but then was study­ing in the US and spent time there too. Uh, but the quote was great. It said that the dif­fer­ence between Chi­na and Amer­i­ca is at the heart of the Chi­nese econ­o­my are engi­neers and at the heart of the US econ­o­my are lawyers. I thought that was a

Cameron: Inter­est­ing.

Tony Kynas­ton: Mm-hmm.

Cameron: Yeah. But he just talks about, you know, the, the polit­i­cal mod­el, the social mod­el, and the busi­ness mod­el and the eco­nom­ic mod­el and, and how they work in Chi­na and how, as we’ve talked about before, you know, you’re allowed to be a bil­lion­aire, but you’re not allowed, as a bil­lion­aire, you’re not allowed to have any con­trol over the polit­i­cal sys­tem.

Um, we’ll let you be a bil­lion­aire, but don’t think you’re gonna have any say in what hap­pens polit­i­cal­ly. And as soon as you get too big for your boots, you get tak­en to a lit­tle room and reed­u­cat­ed about

Tony Kynas­ton: It sounds

Cameron: how things work.

Tony Kynas­ton: the moment.

Cameron: Yeah, it does actu­al­ly. Yeah, very much so. [01:16:00] Speak­ing of which time to go do our US show?

Tony Kynas­ton: Yeah.

Cameron: Alright.

Tony Kynas­ton: it’s

Cameron: Uh.

Tony Kynas­ton: week for me any­way in the mar­ket, so hap­py ASX every­one else out there. I know not every­one’s done as well dur­ing report­ing sea­son, but um, hope­ful­ly enough peo­ple have.

Cameron: Yeah. Well, I think gen­er­al­ly speak­ing, if I look across all of the port­fo­lios that I run, they all seem to be doing well, . Thanks, tk. Have a good one.

Tony Kynas­ton: You too.

Bernard: Q A V is a check­list-based sys­tem of val­ue invest­ing devel­oped by Tony Khigh­ne­ston over 25 years. To learn more about how it works and how you can learn the sys­tem, vis­it our web­site, Q A V Pod­cast dot com dot A U.

This pod­cast is an infor­ma­tion provider and in giv­ing you prod­uct infor­ma­tion we are not mak­ing any sug­ges­tion or rec­om­men­da­tion about a par­tic­u­lar prod­uct. The infor­ma­tion has been pre­pared with­out tak­ing into account your indi­vid­ual invest­ment objec­tives, finan­cial cir­cum­stances or needs. Before you decide [01:17:00] whether or not to acquire a par­tic­u­lar finan­cial prod­uct you should assess whether it is appro­pri­ate for you in the light of your own per­son­al cir­cum­stances, hav­ing regard to your own objec­tives, finan­cial sit­u­a­tion and needs. You may wish to obtain finan­cial advice from a suit­ably qual­i­fied advis­er before mak­ing any deci­sion to acquire a finan­cial prod­uct. Please note that all infor­ma­tion about per­for­mance returns is his­tor­i­cal. Past per­for­mance should not be relied upon as an indi­ca­tor of future per­for­mance; unit prices and the val­ue of your invest­ment may fall as well as rise. The results are gen­er­al advice only and not per­son­al prod­uct advice.

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