QAV AU 848 — ASX Meltdown, Bauxite Boom, and the Case of the Vanishing CEO

 

Cameron: Wel­come back to QAV Aus­tralia, Tony. 8 48 record­ing this the 2nd of Decem­ber, 2025, near­ly the end of the year. Again, Tony, it’s school hol­i­days in a week.

Chrisy and I are like, we, we bare­ly sur­vived the last Christ­mas school hol­i­days. How can it be Christ­mas school hol­i­days again already?

Tony Kynas­ton: know. It’s amaz­ing, isn’t it?

Cameron: Uh

Tony Kynas­ton: it’s, we’re in sum­mer and it’s not hot down here at all. I’m hot in here ’cause I’ve got the doors closed and win­dows closed ’cause they’re doing some lawn­mow­ing on the golf course. But, um, you know, it’s bare­ly 15 degrees down here and it’s the first, sec­ond day of sum­mer. It’s incred­i­ble.

Cameron: Come to Bris­bane. Tony. Come to Bris­bane. I teach you a thing or two. Yeah.

Tony Kynas­ton: degrees is great. I love it. But it’s just so

Cameron: Oh, per­fect.

Tony Kynas­ton: it’s like 30 in sum­mer down here.

Cameron: That’s why I miss Mel­bourne.

Tony Kynas­ton: Mm.

Cameron: Um,

Tony Kynas­ton: miss­es.

Cameron: alright, well let,

Tony Kynas­ton: back.

Cameron: I don’t, I don’t get that. I don’t hear that. You know, no one’s, no one’s say­ing, Hey, what hap­pened? Where’d you go? Actu­al­ly, that’s what I try. I get [00:01:00] invit­ed all the time. Peo­ple say, you should come down, hang out. Steve San­ti­no invit­ed to fly Chris­sy and Fox and I down to stay at his farm.

And Michael Seward from, uh, what’s his kinet­ic? The com­pa­ny he runs keeps invit­ing me down. You don’t invite me down, but that’s okay. You’ve had enough. Um, oh, thanks. Uh, I tell you who does­n’t have an open invi­ta­tion is the ASX, um, an embar­rass­ing fail­ure of the as X’s pub­lish­ing sys­tem. Left sev­er­al stocks, unable to trade for much of the day.

This is yes­ter­day. And the embat­tled share mar­ket oper­a­tor scram­bling to iden­ti­fy and fix the cause of the hours long out­age. Accord­ing to the finan­cial review, the out­age is the lat­est in a spate of buns for the ASX as its abil­i­ty to run key finan­cial mar­kets, infra­struc­ture and over­see tech­nol­o­gy and oper­a­tional gov­er­nance has been seri­ous­ly questioned.[00:02:00]

And then the pho­to that the ASX post­ed is a reflec­tion of a guy look­ing through a win­dow to the ASX, to the a tick­er board from the nineties. And, um, he looks bizarrely like Don­ald Trump Jr. I dun­no why Don­ald Trump jr’s look­ing at the ASX. But, uh, there you go. What do you think about the as X’s per­for­mance yes­ter­day, Tony?

Tony Kynas­ton: It’s, it’s prob­a­bly par for the course for the ASX and oth­er sna­fu. But, um, yeah, it’s, it’s, it’s get­ting beyond the joke. Now. The real, the oth­er sad thing is. The was hop­ing there’d be a com­peti­tor to the ASX, um, via the CI Chica­go Board of Exchange bought out, um, one of the oth­er small, uh, stock exchanges in Aus­tralia and was sup­posed to launch big, but then was bought out by some­body else in Amer­i­ca who’s now put it up for sale.

So that’s not going ahead. So, um, [00:03:00] we’re stuck with the ASX and the ASX is creak­ing at the seams and, you know, they’re, they’re just, they’re just trip­ping over their shoelaces every day. It’s just, um, it’s just get­ting get, it’s like the, it’s like the stages of grief. You get angry and then you go, that’s just how life is now.

I’m gonna grieve for it and move on. But, um, it’s, it’s a, it’s a poor state of affairs and I would­n’t be sur­prised if we see some heads roll at the ASX soon,

Cameron: Hmm.

Tony Kynas­ton: but I dun­no if you Blood will actu­al­ly help. I, I think they’ve got­ta almost. Rebuild the, the core IT infra­struc­ture from the, from the ground up is what it seems like

Cameron: Weren’t they doing that? Was­n’t it all gonna be rebuilt around, um, what do you call it? Put blockchain

Tony Kynas­ton: it was. Um, but well not the core infra­struc­ture, the chess sys­tem, which is part of, I guess it is core infra­struc­ture. Part of the core infra­struc­ture. that’s the

Cameron: part of it? Yeah.

Tony Kynas­ton: who owns [00:04:00] what shares and then sends us

Cameron: Hmm,

Tony Kynas­ton: every quar­ter or month or what­ev­er it is, quar­ter I think say­ing, here’s all the trades you’ve done.

And you can look at it and go, yeah, that’s me. I did that. And you can ver­i­fy that no one’s hacked it or your shares or what­ev­er. Um, but we’re still get­ting paper-based state­ments, which is crazy in this

Cameron: hmm.

Tony Kynas­ton: The ASX might have shares in Aus­tralia post ’cause they’re prob­a­bly only peo­ple still using it. And uh, but that’s been. blockchain idea was thrown out a cou­ple of years ago when the man­age­ment changed and now what­ev­er they’re doing still has­n’t hap­pened, and now oth­er IT sys­tems are creak­ing as well.

Cameron: Well, the oth­er sto­ry I saw on the Fin yes­ter­day that I thought was worth talk­ing about how this lit­tle known fund is beat­ing Aus­trali­a’s top investors. When Emanuel Dat decid­ed to open his fund to exter­nal investors in 2018, he could­n’t have imag­ined that his [00:05:00] strat­e­gy would be out­per­form­ing Aus­trali­a’s best investors.

Except in QAV just a few years lat­er. To start with DATs jour­ney into funds man­age­ment was far from con­ven­tion­al. He worked in a range of pri­vate fam­i­ly busi­ness­es, from com­mer­cial real estate to tourism and med­i­cine before decid­ing to use the fam­i­ly’s mon­ey to invest, which would even­tu­al­ly become DAT Cap­i­tal’s Absolute Return fund.

Uh, dat quick­ly devel­oped a knack, the dat knack for stock pick­ing and his fund got off to a fly­ing start when it launched. He bought shares in Buy Now pay lat­er Dar­ling After­pay at $7 and wrote it beyond $50 and snapped up Sil­ver and Zinc Explor­er Adri­at­ic Met­als when it was trad­ing below $1 before it got tak­en over at $5 56 a share.

Uh, let’s see. The strat­e­gy has gained an aver­age of 20.4% per annum net of fees over the past [00:06:00] sev­en years, mak­ing it the best per­form­ing, long only Aus­tralian equi­ty fund in its peer group accord­ing to fund mon­i­tors. It also ranks in the top four funds over 1, 2, 3, and five year time­frames.

Tony Kynas­ton: I saw the arti­cle too. I, I caught my atten­tion. I, we should get the guy on and talk to him. He’d love to, love to talk to some­one like him, the out­sider com­ing into the funds man­age­ment indus­try. Um, I think it’s a, it’s a good sto­ry because, um, unfor­tu­nate­ly dri­ven a lot by reg­u­la­tion. The funds man­age­ment indus­try is fair­ly vanil­la and every­one’s offer­ing sim­i­lar sorts of things.

And we see that in the returns when they tend to hug the bench­mark because you don’t hug the bench­mark, you’ll have a down year, which we’ll see funds out­flow. So every­one hugs the bench­mark, but good to see some­one back there con their con­vic­tion with some mon­ey, um, and set up a fund. So [00:07:00] not, it’s prob­a­bly not my style of investor ’cause he seems to be buy­ing gross stocks, but that’s okay.

I’d like to talk to him.

Cameron: I will reach out and see if we can get him on the show. Um, as a ref­er­ence point, the dum­my port­fo­lio over the last six years is returned 17% per annum on aver­age. So here’s 20%. Over sev­en years. I dun­no how we would’ve done if we’d been around anoth­er year, but, uh, yeah, it’s doing pret­ty well, even com­pared to our per­for­mance over that peri­od of time.

So we can’t sneer at it as I nor­mal­ly would do, although I can say that the, the light group, uh, uh, just while I’m on port­fo­lio stuff, all time is cur­rent­ly at 20%, 20.41% over a short­er time­frame than his though, ver­sus the index at 10.24. [00:08:00] So that’s, uh, pret­ty good. The last, uh, let me see, 30 days, my cam­era is block­ing my screen here.

Last 30 days we’re down, light group is down 0.6% ver­sus the mar­ket down almost 3%. Uh, has not been a good month for the mar­ket. Uh, that’s it, that’s my port­fo­lio update for the day.

What else? What else have I got? Uh, tow­er Tow­er’s been on our buy list over the years. They just came out with some results. Report­ed a record under­ly­ing prof­it of 107.2 mil­lion for FY 25 and pro­vid­ed guid­ance for FY 26 NPA of 87 to 97 mil­lion. Strong earn­ings and guid­ance indi­cates sol­id oper­a­tional per­for­mance, um, under, well no total div­i­dends for the year amount to 24 and a half cents per share.

Um, [00:09:00] so Tow­er, I keep gonna go say Tow­er Records, but uh, it’s not, not Tow­er Insur­ance Com­pa­ny. Yeah.

Tony Kynas­ton: Insur­ance. Com­pa­ny. I did the pulled pork on ’em a cou­ple of years ago they’re dual

Cameron: Hmm.

Tony Kynas­ton: the Aus­tralian, one of the prob­lems is the Aus­tralian list­ed part of Tow­er is, um, small, a DT does­n’t have much trade going on.

Cameron: And our friends at E Road.

Tony Kynas­ton: Now the New Zealand

Cameron: Um,

Tony Kynas­ton: New Zealand show.

Cameron: yeah.

Tony Kynas­ton: a US

Cameron: Yeah.

Tony Kynas­ton: show, and now a Kiwi show. Look at

Cameron: Have we, uh, I think we’ve already talked about the erode results, haven’t we?

Tony Kynas­ton: Uh,

Cameron: we cov­ered them.

Tony Kynas­ton: had a write down, if I remem­ber cor­rect­ly, or they had a, they announced their results and the shares went down because they were

Cameron: I,

Tony Kynas­ton: prob­lems with the US busi­ness from mem­o­ry.

Cameron: yeah, that’s right. Um, any­way, just as a reminder, their half year, 26 results free cash flow, 6.2 mil­lion with nor­mal­ized [00:10:00] free cash flow at 16.7 mil­lion after remov­ing one off 4G upgrade costs. Real­ly 4G upgrade.

Tony Kynas­ton: you go straight to five?

Cameron: Well, you know, they, they, they, they wan­na wait for the bugs to get out­ta five first. It’s, five’s only been around for 15 years.

Tony Kynas­ton: like, like me in

Cameron: Um,

Tony Kynas­ton: the bugs, wait for peo­ple’s liv­er to explode before I take any

Cameron: yeah, there’s some bad reports about the ozem­pic, uh, com­ing out this week. Right. Some

Tony Kynas­ton: ideation.

Cameron: yeah. ’cause you’re look­ing skin­ny. I get that. I, I look at myself all the time in the mir­ror. I look at my abs and I think

Tony Kynas­ton: exem.

Cameron: I, that sucks hon­est­ly, that, that is the worst thing for me about Ozem­pic is I’m sure peo­ple look at me and go on pic.

I know

Tony Kynas­ton: tell you,

Cameron: 10 hours a week of kung fu. That’s what it is. That’s my ozem­pic.

Tony Kynas­ton: I tell you, we went to a, a hotel in Mel­bourne, um, a pub that we used to fre­quent [00:11:00] when Alex was a baby, so. 26 years ago, 25 years ago, I won’t name it. It’s um, in uh, sort of Pish area, but up the road from where we used to live and we used to go there, uh, rea­son­ably fre­quent­ly with friends for meals and things. And there was a nice of sub­ur­ban pub, good food. Alex said she want­ed to go back there recent­ly. So we went along to it and it’s now like a pump­ing sort of place full of South Arrow yup­pies and, and uh, I felt real­ly out of it because they were all in their twen­ties and thir­ties, they were all, all super skin­ny.

Like it was­n’t like, even if you go into a night­club, there’s always gonna be, you know, some­one who’s not right thing. These peo­ple were just like a focus group for Ozem­pic, just look­ing at them all going, this is unnat­u­ral­ly, this is an unnat­u­ral­ly skin­ny cohort of the pop­u­la­tion all gath­er­ing in the same place

Cameron: Yeah.

Tony Kynas­ton: one time.

Yeah, [00:12:00] it’s quite

Cameron: You don’t think peo­ple are just going to the gym and exer­cis­ing and work­ing out?

Tony Kynas­ton: Yeah, well if they were, it’d be, I think the bell curve in terms of skin­ness. It’d be a lit­tle bit wider. ’cause it’s, you know, you go to the pubs where young peo­ple are and there’s all shapes and sizes, but not every­one under, uh, under­weight basi­cal­ly,

Cameron: Well, I, I, I have to, that, that just reminds me, I went into the city. I don’t go into the city here in Bris­bane very often. Like maybe once a year I go into the city. Uh, and I went in a cou­ple of weeks ago to have break­fast with Steve San­ti­no, who was in town and. I, it struck me just walk­ing through the city sort of peak hour.

’cause I got in there like sev­en o’clock in the morn­ing or some­thing. Every­one was look­ing skin­ny. I was like, do peo­ple in Bris­bane always look this skin­ny? I haven’t real­ly noticed. Every­one was look­ing skin­ny and it was like strik­ing and sur­pris­ing to me how skin­ny every­one looked. But there can’t be that many peo­ple in the [00:13:00] pop­u­la­tion on Ozem­pic, sure­ly.

Tony Kynas­ton: I can, I can name a few. It’s, it’s quite pro­lif­ic.

Cameron: Real­ly? Hmm.

Tony Kynas­ton: And there’s a com­pa­ny called Euca­lyp­tus, which makes it through some kind of com­pound­ing phar­ma­cy. I don’t under­stand, but they make a local vari­ant of it. Um, there’s about four or five dif­fer­ent prod­ucts now. Uh, Yeah. I know a num­ber of peo­ple who have it.

And the fun­ny thing is, one per­son in par­tic­u­lar has gone from being look­ing unhealth­ily over­weight to look­ing unhealth­ily skin­ny, you know, you know, that sort of gaunt look, peo­ple get, if they’ve lost too much weight, you kind of wan­na ask them though they’ve got can­cer or some­thing. It’s, yeah.

Cameron: That’s what my kids still say to me every time they see me. Have you got can­cer?

Tony Kynas­ton: Mm.

Cameron: Okay. No, I have kung fu kung fu can­cer. I joined a cult instead. The kung fu cult.

Tony Kynas­ton: As opposed to the

Cameron: Uh, yeah, back to, back to Erode. We talked about ero, I think in [00:14:00] Octo­ber when the CFO resigned and the share price crashed by 34%. Um, has not got­ten bet­ter since then.

It, it was try­ing to get $2 56 on the 16th of Octo­ber, dropped down to dol­lar 60 by the 20th of Octo­ber, recov­ered briefly to a dol­lar 88 and is now trad­ing at a dol­lar 24. So it’s dropped from $2 56 to a dol­lar 24. It’s halved in six weeks. Uh, glad our. Cell trig­ger got us out when it did. That could have been much worse.

Tony Kynas­ton: look at my and and I, the MD high­light­ed again that if, if, and when Aus­tralia adopts a. Uh, an e what they called an E Rock, I think it’s called, uh, any­way, a user charge for elec­tric vehi­cles using roads. that E road will be in a [00:15:00] good posi­tion to be able to facil­i­tate that, but um,

Cameron: Right,

Tony Kynas­ton: that was part of the pro­duc­tiv­i­ty round­table, we haven’t heard much about it since.

Cameron: right. Uh, what else have I got? Tony Com­mod­i­ty updates. Some big changes in the com­mod­i­ty list this week. Uh, we have been talk­ing recent­ly about how every­thing, except gold was a sell this week. Cop­per became a buy, plat­inum became a buy. Zinc became a buy, and steel became a buy. LNG and gold were already buys.

I did some inves­ti­ga­tion. Into what might be behind that. And appar­ent­ly for cop­per, there have been some fair­ly major sup­ply dis­rup­tions that have recent­ly emerged. Mines such as the Freeport McMoRan Berg Com­plex in Indone­sia and out­puts slow downs in Chile and Peru have sig­nif­i­cant­ly reduced refined cop­per pro­duc­tion glob­al­ly.

As a result, inven­to­ries are tight­en­ing and ana­lysts now expect a [00:16:00] struc­tur­al sup­ply deficit in 2025 2026. This tight­en­ers tight­ness mat­ters what she said, espe­cial­ly because cop­per is heav­i­ly used in elec­tri­fi­ca­tion, renew­able ener­gy infra­struc­ture, data cen­ters. Demand that remains strong or is grow­ing, uh, sim­i­lar for plat­inum sup­ply con­straints are also sig­nif­i­cant.

Min­ing out­put is report­ed­ly at mul­ti-year lows in 2025 while demand from jew­el­ry and invest­ment has increased. So yeah, sup­ply side pres­sure on some of those things means they’ve become buy­ers. Again. Again,

Tony Kynas­ton: There was an arti­cle on the Wall Street Jour­nal just recent­ly say­ing that peo­ple were once again tak­ing man­hole cov­ers off to get at the cop­per wire and steal it and climb­ing tele­graph poles and steal­ing cop­per wire so you can tell when the price is up for cop­per.

Cameron: I know I, I know you did­n’t real­ly get into the wire, but there’s, uh, great sort of recur­ring sto­ry­line of one of the meth addicts, bub­bles in the wire, going out to [00:17:00] build­ing sites and steal­ing all of their cop­per, and then going back, uh, the next day and sell­ing it to the fore­man at the site

Tony Kynas­ton: And the

Cameron: for cents on the dol­lar.

Tony Kynas­ton: the cops and say, here’s, here’s the guy who stole our cop­per.

Cameron: Yeah. No he did­n’t. So, uh, some big news, uh, last week, Tony. The

Tony Kynas­ton: bub­bles? Not to steal the stuff. Just say, look, save your time and effort, or put you on the pay­roll. Just don’t steal it.

Cameron: Yeah, that’s bril­liant. Yeah. See, that’s, that’s why you get paid the big bucks. Tony. Um, the CEO of Fleet­wood sud­den­ly left the build­ing last week,

Tony Kynas­ton: Buck­ing­ham.

Cameron: or not he w

Yes, yes. Uh, but some great songs came out of it. It was tur­bu­lent, but we got some great songs. [00:18:00] Um, Mr. Bruce Nichol­son, this is the, uh, the announce­ment that came out. Fleet­wood Lim­it­ed advis­es that Mr. Bruce Nichol­son has depart­ed from the role of man­ag­ing direc­tor and chief exec­u­tive offi­cer effec­tive imme­di­ate­ly.

The board of Direc­tors has made this deci­sion as part of its com­mit­ment to ensur­ing the com­pa­ny’s long-term suc­cess and align­ment with strate­gic pri­or­i­ties. Does­n’t sound good, does it?

Tony Kynas­ton: No, unfor­tu­nate­ly I haven’t been able to find out any bet­ter rea­son than that. Through the search­ing, I’ve been able to, there’s a cou­ple arti­cles. From what I could see of them now, I just regur­gi­tat­ing the press release say­ing that there was a, um, dis­con­nect between the CEO and the board. Um, I’d be wait­ing all a week for some­thing to come out about, you know, he’s shacked up with his sec­re­tary or, um, you know, the whis­tle, uh, whistle­blow­ers come out and the ledge, this or that or what­ev­er.

But, um, [00:19:00] noth­ing’s, noth­ing’s come out, which is inter­est­ing in itself. But yeah, just based on that release, it was a red flag. I think that’s a real­ly mis­han­dled CEO tran­si­tion.

Cameron: Yeah, well I did sell it, uh, had it in a light port­fo­lio. I think, um, I sold it. At, uh, $2 52 share. Price has gone up a lit­tle bit since then. It’s now $2 60. It’s recov­ered a bit, but yeah, just based on that as a red flag. Nev­er a good look When the CEO gets shown the door sud­den­ly like that

Tony Kynas­ton: Not even

Cameron: and I replaced it.

Tony Kynas­ton: you know, fam­i­ly rea­sons or they often have a

Cameron: Nah.

Tony Kynas­ton: they? When they exit quick­ly.

Cameron: Yeah. Yeah. Health rea­sons, fam­i­ly rea­sons to focus more on his fam­i­ly, to pur­sue oth­er oppor­tu­ni­ties. You’ve got the pro­for­mas there instead. I replaced it in the low port­fo­lio with SDI. You ever come across [00:20:00] SDI lim­it­ed Tony.

Tony Kynas­ton: kind of, um, den­tal implant man­u­fac­tur­er or den­tal, I don’t know, crowns or some­thing. Yeah,

Cameron: Yeah.

Tony Kynas­ton: I was gonna

Cameron: Den­tal.

Tony Kynas­ton: but they’re a fair­ly small A DT, but I can, if you want,

Cameron: They’re very small. Yeah. Yeah, but it was just sort a weird lit­tle busi­ness to see turn up. So any­way, we’ll see how they do. What have you got on your list of talk­ing points today? Tk

Tony Kynas­ton: Uh, just like you. I ha I only had one to talk about, which was, um, group, which is the, uh, print­ing com­pa­ny, um, code is IGL. So like­wise, they just had their A GM and, um, out a, uh, an update on how things were going and great. Um, they had some things to say about cost Fin uh, cost effi­cien­cies and prof­it mar­gins, uh, they were, they did guide that, um, net [00:21:00] prof­it for FY 26 was expect­ed to be to. Bot­tom of the pre­vi­ous­ly guid­ed range, is nev­er quite a good look. So the shares have come off a lit­tle bit, but not, not a whole lot. there’s still a few things to, like, they men­tioned that at the ag GM they were piv­ot­ing into, um, logis­tics, pack­ag­ing, print­ing, so get­ting out of the sort of cat­a­logs and mag­a­zines, stuff they were doing or mag­a­zine inserts and get­ting more into bot­tles and car­tons and cans and things like that. Um, so that’s, you know, it’s, they’ve come off a lit­tle bit. They’ve still been a strong per­former this year and their short term and say last five year per­for­mance is still quite good. So

Cameron: That’s good.

Tony Kynas­ton: Um, the only oth­er thing I had was a pulled pork on metro min­ing, so I can do that now. But I think you’ve got a cou­ple of ques­tions.

So it’s up to you what goes first.