QAV AU 907 — Mass vs Gas

 

Cameron: [00:00:00] Wel­come to QAV Aus­tralia. Tony, episode 9 0 7. We’re record­ing

this on the 17th of Feb­ru­ary, 2026. RIP. Bob­by. Val Tony.

Tony: Yes.

It’s a shame. 95 though. Good innings. Great actor.

Cameron: innings, but he was still work­ing up until I looked on IMDB. He was work­ing in 2022. He made like two or three things, or they came

out in 2022. Any­way, that’s crazy.

Tony: Mm,

Cameron: one of those

guys,

Tony: yeah.

Do you recall what he won the Oscar for?

Cameron: uh, was it the apos­tle

Tony: No,

Cameron: no? No, what was it?

Tony: per­son­al­ly, I thought prob­a­bly his worst movie, ten­der Mer­cies.

Cameron: Oh, right. Don’t think I’ve seen that.

Tony: You haven’t missed much. Very, I should­n’t, I should­n’t, uh, put it down. It’s a very qui­et,

uh, you know, mean­der­ing movie. It does­n’t go any­where.

Cameron: [00:01:00] Right.

Well, it’s fun­ny when I went to his IMDB this morn­ing and I’m like, oh, Robert Devale love his films. So I was look­ing through and going.

Yeah, but when I was look­ing through him, I’m like, I don’t think I’ve seen any of his work since the eight­ies. Real­ly. I think col­ors with Sean

Penn was prob­a­bly the

Tony: Yeah.

Cameron: thing of his.

No, I saw the apos­tle, I did see that. Uh,

the one he direct­ed that was good, but it, it was­n’t

like as full of a

resume as I would’ve thought. Like I saw like in that same era of actors, gene Hack­man,

Jack Nichol­son. I’ve seen a lot more of their work from the eight­ies, nineties, two thou­sands, uh, I dun­no when Jack retired, but than I did of, uh, Robert Val, but loved Robert Val’s, obvi­ous­ly his work in the, sev­en­ties, obvi­ous­ly the,

Tony: Yeah. Yep. Oh, apoc­a­lypse Now.

Cameron: and Apoc­a­lypse Now, Colonel Kil­go­re.

Tony: yeah, that’s the best. And it was in, uh, what was it, THX? Is it 1 38 or some­thing? [00:02:00] 1 1 3 8. Yeah. Yeah. I was real­ly sur­prised when I final­ly got round to watch­ing that, that he was the star

Cameron: Very young. Very

Tony: stu­dent film. Yeah.

Cameron: Lucas film.

Tony: Hmm.

Cameron: Um, yeah, I loved, uh, I was read­ing the New York Times obit and he said peo­ple would come up and quote the, uh, I love the smell of Napalm in the morn­ing line to him like that. Like it, they were the only peo­ple who knew it. Like they’d come up, they’d go, Hey,

hey, hey, love the smell of Napalm in the morn­ing.

Tony: Uh.

Cameron: Like despite his, the impor­tance of his role in the first two God­fa­ther films. Not a lot of quotable lines, but the bit that I love the most. And there’s a cou­ple of scenes that I come to mind when I think of him in those films. And they’re both from the sec­ond film. Um, you remem­ber when, uh, the hit goes, the attempt­ed hit on Michael goes down at the com­pound and Michael tells, calls Tom in and says, you know, I [00:03:00] know you’ve been upset that I’ve kept you out­ta the fam­i­ly busi­ness, but uh, you are the only per­son I can trust and, and. Tom gets real­ly emo­tion­al ’cause he felt like Michael was keep­ing him on the out­side. And Michael explains, I was doing it for a rea­son. So you are the only per­son that isn’t involved. And I, and then when, so they have this emo­tion­al scene and then Michael just sort of walks away and Tom says to Roc­co, the body­guard do X, X, and X, you know, and Roc­co goes, where’s Michael?

And Tom just goes, Roc­co. Get the things or do the thing. He just like, he just snaps into com­mand mode with this tone of voice, like he’s

now the boss. This was great per­for­mance. Any­way, there’s anoth­er, anoth­er one going, Tony.

Tony: Yeah, I know

it was, um, it was, uh, there were some scenes though in the God­fa­ther, like that scene with the. Pro­duc­er in Hol­ly­wood, I rep­re­sent a fam­i­ly [00:04:00] busi­ness. They don’t like the lime­light. Yeah.

Cameron: Yeah. Yeah.

Tony: Yeah. He has a request to make a view. Yeah. And he just plays, he plays it real­ly cool all the way through. Like he’s just not gonna be threat­ened.

He’s not gonna be the turd.

Yeah.

Cameron: Well, let me tell you, my Jew Mick friend,

Tony: Gid­dy. Gid­dy friend,

Cameron: yo, he says, I’m, I’m, uh, I’m Jew­ish Irish. let me tell you, my jic friend. I have one client. Yeah. No. Great scenes. Great scenes.

Cameron: All right. Um, so where were we? Oh, my newslet­ter. You liked my mass ver­sus gas, uh, thing

Tony: I did. Yeah, that was a great anal­o­gy. And

I even had a, a

fol­low up for it too, an arti­cle I saw, if you are ready for it.

Cameron: yeah. Yeah.

Tony: Yeah. So, um.

I was read­ing the Wall Street Jour­nal and I came across an arti­cle, [00:05:00]

so with in Cam’s email, he spoke about gas giants

and oth­er types of plan­ets and stars and

how they relat­ed to growth stocks ver­sus val­ue stocks and qual­i­ty

stocks, and. Uh, I kind of

latched onto that ’cause I found an arti­cle in the Wall Street Jour­nal say­ing

that there was one major issue that investors, um, investors are cop­ing with or grap­pling with in the us and that is that

you can’t find any sort of depre­ci­a­tion expens­es

list­ed on

the income state­ments for Alpha­bet, Google, Ama­zon Meta, Microsoft to Ora­cle.

So like, how much have they been spend­ing

on Cap­i­tal Works recent­ly Camp.

Tens of bil­lions, I would’ve thought. Hun­dreds of bil­lions. Yeah. And from mem­o­ry, did­n’t Jensen Huan came out and say their chip life is only four, four years before you need to replace

their, the graph­ic chips?

Cameron: I, I dun­no about need to, I think there’s some [00:06:00] Chi­nese AI com­pa­nies that are

run­ning on old­er gen­er­a­tions of their chips, but you would prob­a­bly want to because of the, like, the increase in

capa­bil­i­ties they’re hav­ing every year. You know, Moore’s law lev­el dou­bling of capa­bil­i­ties.

Tony: how much do you think that they would be? So let’s say it’s a four

year shelf life for the chips, it means they should write them

down at least 25% a year. Um, and yet, you know, the Wall Street Jour­nal is report­ing, there’s no depre­ci­a­tion expens­es

list­ed on any of the income state­ments for the Mag

sev­en stocks.

And then they con­trast­ed it.

with, Um, with, uh, indus­tri­al com­pa­nies and they picked two rail­road com­pa­nies quin­tes­sen­tial­ly asset

heavy indus­try, and they quote num­bers from Union Pacif­ic and Nor­folk South­ern. Each report depre­ci­a­tion is a stand­alone oper­at­ing expense on

the

income state­ment. That way investors know the oth­er expense

lines don’t include any of it.

Um, yeah, so basi­cal­ly

it’s, it’s mixed up some­where else in the income state­ments and investors can’t [00:07:00] see.

What it’s gonna cost these com­pa­nies

in four or five years to replace

all the CapEx spend­ing, the mon­ey they’re spend­ing now.

Cameron: Hmm. So how does that tie into my mass ver­sus gas

Tony: Well, they’re gas

giants. They’re even inflat­ed even more ’cause they’re not,

depre­ci­at­ing, not vis­i­bly depre­ci­at­ing their assets. I mean, I, I,

I I untoned that they can’t, that they can get away with not

depre­ci­at­ing the assets. It’s got­ta be a, ’

Gen­er­al accept­ed account­ing prin­ci­ple that they have to apply to, but I’m not that famil­iar with the US account­ing

prac­tices, but it should be called out as a depre­ci­a­tion

item on their, um, on their bal­ance or their p and

l and it’s not,

Cameron: Now lis­ten, I have spent so much time try­ing to get my head

around Amer­i­can account­ing, par­tic­u­lar­ly a DR stuff for my, my thing this week. Um, not a,

just the whole how ADRs work ’cause I’m doing a Kore­an

stock again on, uh, QAV Amer­i­ca this week. Don’t, I don’t wan­na spend any more time, think­ing about Amer­i­can account­ing man and [00:08:00] how it all works.

It’s like lev­els of com­plex­i­ty

above my pay

Tony: Well, if you took, if you don’t declare depre­ci­a­tion in your income state­ment, you’re actu­al­ly inflat­ing your prof­its by a,

ter­rif­ic amount. That’s, I guess, the bot­tom line for it. That’s the gas giant

anal­o­gy. Um, yeah, which I just find amaz­ing.

Cameron: You are inflat­ing your prof­its.

Tony: cause you, you should have a, a line, like when

you look at any Aus­tralian com­pa­ny and it’s got income expens­es, um, tax

inter­est, and then it will say amor­ti­za­tion and depre­ci­a­tion. So if they’ve bought some­thing

and they’re rid­ing off good­will, it goes in

there. If they have, Um,

Uh, if they have plant and equip­ment

And it’s gonna need replac­ing, they have to

pro­vide for that upcom­ing expen­di­ture, um,

over time. And there are rules around that.

Um, depend­ing on the type of

equip­ment. And the gov­ern­ment can change those rules from time to time to

give busi­ness­es a, a boost.

You

know, if they slow down and depre­ci­a­tion required on

assets and busi­ness­es get more prof­it because that’s a cost, it’s a [00:09:00] non-cash cost,

but

it’s even­tu­al­ly gonna be a cash cost when they have to,

you know, pay for it, um, to replace the asset.

Cameron: Hmm. Well, yeah, just read­ing the

book on physics. Um. I just start­ed

think­ing, yeah, it just sort of struck me while read­ing it that mass is mass and grav­i­ty is sort of what we’re attract­ed to, right?

Real heav­i­ness about, but not all the time. Not a hun­dred

per­cent of the time, but some form

of,

you know, seri­ous busi­ness.

Some­thing going on. Real cash. Cash is cash is, mass, is

where I end­ed up.

Tony: Yeah. Right. Makes sense.

Cameron: speak­ing of lack of

mass, our buy list, noth­ing, there’s noth­ing going

1. I’ve been run­ning dai­ly buy lists for the last

week and, uh, even this morn­ing, I ran one this morn­ing ’cause I in my news alerts, I saw that a cou­ple of com­pa­nies had report­ed M‑A-H-A-Z‑J,

cou­ple of those, but none of them were on the [00:10:00] buy

list and. Part­ly because lots of things are josephine’s

still. Any­way, the only thing that’s been show­ing up for the last few days is DSK dusk group, and I just can’t bring myself to buy it again. It’s, it’s tak­en

over from a TP

Tony: You. You’re get­ting emo­tion­al. You’re get­ting emo­tion­al about your

Cameron: I am.

I, I

Tony: point of QAV is to take the emo­tion out of

invest­ing.

Cameron: I know, I know in my light email

yes­ter­day, I said, Tony’s gonna break me for this,

but I’ve, it’s a peren­ni­al, well, it’s got a fair­ly small a

DT, it’s like 50 k.

Tony: Yep.

Cameron: But I’ve bought and sold it three times in the

last 18 months and always had to rule

one it. with­in a cou­ple of months because it gets to, gets on our buy

list, ran about the

same

price, like 95 cents a buck or some­thing like that. And then it always becomes a rule one with­in a cou­ple of months, three

times. So there you

Tony: So you [00:11:00] going, we gonna put, you know, put either they’re all on the check­list, is it? If it’s it’s, three strikes and you’re off, you’re

out.

Cameron: so That’s right. yeah, yeah.

yeah. Three strikes and you’re out. Yeah. You get three

Tony: You know what’s gonna hap­pen. This’ll be the

one that takes off. It’s the fourth. Fourth time lucky. Yeah. well, it’s up to you if you, if you can sleep at night not buy­ing

it, then.

Cameron: Well, I keep think­ing some­body else, some­thing else will turn up on the buy list tonight when I run it, And then I run anoth­er

one and it’s still just DSK, and it’s, I’m like, oh, come on. I know there was one stock, I

can’t remem­ber which one it was now, but I’ve talked

about it in the past where I’d bought and sold it three or four times.

I think it’s one of the

Tony: Mabb,

you. You don’t like Mabb. You don’t

like Atlas,

Cameron: well, no, no, the,

1. The point of this one is I had bought and sold it a few

times. And then it had come Good

Tony: Yeah. Right.

Cameron: And you know, it turned out to be a huge win. and I was like,

I’m glad I fol­lowed the rules and just kept buy­ing it rather than got emo­tion­al about it, but, but I can’t remem­ber what it

Tony: Atlas Pearls maybe. [00:12:00] Any­way,

Cameron: No, it nev­er did. Good.

Tony: done

good recent­ly. Yeah.

Cameron: it any­way. Yeah. Not while I had to sell some stuff yes­ter­day. Had to sell S‑G-L-L‑V, which

for

some rea­son stands for Rice Grow­ers. Sun Grain, I think. Is that the SG?

Tony: I would think so.

Cameron: It became a three point trend line sell, and I thought, oh, I won­der if I can get a

com­mod­i­ty chart for rice.

It’s not one of the

things that. I have tracked, I found it in

Trad­ing View or Trad­ing Eco­nom­ics or one of those, but they would­n’t let me get a month­ly chart with­out pay­ing a high­er lev­el of fee, but it. looked like it was doing

okay. Did­n’t look like it was drop­ping. Their price dropped

17% late­ly. but it was up 63% in 2025. So my

guess is maybe

some prof­it tak­ing going on. Um, also a bit of a soft

top line [00:13:00] rev­enue and low­er. Cal­en­dar, year 26, plant­i­ng

fore­casts. But, uh, we did very well out

of it. We bought it. Um, I had three parcels.

April 25. Novem­ber 24. Decem­ber 23. Sold it at 107% for that par­cel, 46% for the Novem­ber 24, and Uh, April 25 was 30% plus a, cou­ple of

nice div­i­dends along the way.

So we did well out of that in the var­i­ous port­fo­lios.

Tony: It does, it does. I, I am won­der­ing whether peo­ple are sit­ting on the side­lines dur­ing

report­ing sea­son as we are. cause like as you say,

um, when I do it I did a down­load yes­ter­day and,

uh, I, have a

lot of stocks on my buy list, but they’re all

josephine’s, so, um, because I don’t, I don’t fil­ter out the Josephine’s and, um, yeah.

It just makes

me won­der that if there aren’t peo­ple sit­ting on the side­lines wait­ing for the dust to set­tle after report­ing sea­son.

Cameron: Yeah. They’ve learned the same les­son we have that you can’t trust Con­fes­sion sea­son. Yeah. Maybe.[00:14:00]

I also had to sell plen­ty group. It was a three

point trend­line sell.

Um, got out­ta that at

16% up and then had to sell Maya. Um, as I indi­cat­ed last week, IWI held onto it for a few more days than I, a few days longer than I should have hop­ing I would­n’t have to, but I did down

22% Mabb when I got rid of it. also had to

sell it from my super port­fo­lio. So thanks for noth­ing,

Tony: Bug­ger.

Cameron: Um, in the light email this

week, I men­tioned that the best per­form­ing

stock for the.

last 30 days was South­ern Cross Elec­tri­cal SXE. It was up 13% over the last

30 days, but we hold it in two parcels since 2023. The first one, August 23, bought it at 78 cents. Uh, it’s up 278% since then, And the sec­ond par­cel, Novem­ber 23, bought it [00:15:00] at 82 cents. It’s up 260% since then. So like the one I talked about last week, what­ev­er that was, I can’t remem­ber. But we’ve got a num­ber of these in the light port­fo­lios now, and, of course the dum­my port­fo­lios as well that We’ve just been

hold­ing them for years now, and they’ve done 300%, 400%, what­ev­er it is. um, it’s just goes to show you that we don’t

sell when they

hit some sort of arbi­trary

price. We don’t rebal­ance, we hold onto our water, our flow­ers, we said last week or the week

Tony: Paul Louise. Water, the

flow­ers.

And there’s um,

there’s a quote you just remind­ed me of a quote from the pulled pork I’m

doing from a guy called Chris Cuff, which I’ll go into in a lit­tle bit more detail lat­er. But He

says, time is the

friend of

good busi­ness­es. Which I think is appro­pri­ate in this case, and that’s prob­a­bly why the,

the um, light port­fo­lios are doing bet­ter now.

They’ve had time for those flow­ers to grow,

um,

Cameron: Yeah.

Tony: which [00:16:00] they did­n’t In the ear­ly

days. Not enough time.

Cameron: Well, the mar­ket obvi­ous­ly

has been a lit­tle bit stead­ier too for the last year. it was very tur­bu­lent that 22, 23

Tony: Yeah.

Cameron: Uh, so. results

announce­ments I’ve seen come out this week. Dusk group, obvi­ous­ly. Um, uh,

Tony: I should ask you this

ques­tion offline, but, um, you men­tioned dust a

DT are, now that the dum­my port­fo­lio has grown, are you check­ing each pur­chase to see if it’s the right, Uh, a DT size for the pur­chase? In oth­er words, it’s what­ev­er the port­fo­lio sizes you’re buy­ing, um, has to

be less than 20% of a DT cause that will have grown over

Cameron: Well, no. But,

Tony: But you will from now on

Cameron: I have an a

DT fil­ter any­way,

that’s I think, prob­a­bly high enough to [00:17:00] accom­mo­date it, but, uh,

you know, I’ll dou­ble check that.

Tony: How many stocks are in the dum­my port­fo­lio. now? Is it

15?

You dun­no off­hand. That’s all right. Do it lat­er. Do it off offline. It’s fine.

Cameron: I’m make, I’m mak­ing a note of to add to my task list check a DT for dum­my and light port­fo­lios, uh, um, dum­my port­fo­lio. Oh, I’ve got my, I’ve got my sheet open here. I can do this pret­ty quick­ly. Do, do, do, do. DP is,

um, 13 in the

Tony: Okay. And it’s, it’s, it’s, uh, about $50,000

worth

now, isn’t it?

Cameron: Oh, uh, yeah. No, it’d be

Tony: Is it okay?

Cameron: over six years. Um, oh no, you’re right. 50,000. Yeah. Okay,

Tony: Yeah. So [00:18:00] 50,000 divid­ed by 13. If, if they’re all equal parcels and they won’t be.

Cameron: Yeah, should be about 3,800 each.

Tony: yep. And then so your a d T’s got­ta be five times that, so. 20 grand rough­ly.

Cameron: Yeah. I doubt I’m buy­ing any­thing with an A DT under 20 grand. I mean, I have a FIF 15 grand fil­ter on any­way. uh, right. Mov­ing right

along.

Um.

What else is on my list here? Oh, yeah, so results

have come out for DSK Arise

in Hold­ings, as I men­tioned, a ZJ McMa­hon Hold­ings,

M‑A-H-O-M-L-I-K-J-I-H-G-F-E-D-C-B‑A. Yeah, you’re wav­ing.

Tony: Yeah, sor­ry, you cut

out.

Then just froze for a minute.

Cameron: Oh, uh,

okay. I was just

read­ing the list of com­pa­nies that I’ve seen come out

with reports. [00:19:00] A‑Z-J-M-A-H-O-M‑L. um, EDU not an

uh, results, but they’ve announced the com­ple­tion of selec­tive buy­backs. EDU advis­es that fol­low­ing share­hold­er approval of the extra­or­di­nary gen­er­al meet­ing held

on the 12th of Feb­ru­ary, 2026, it has

com­plet­ed the selec­tive buy­back of

shares from Mal­fa Edu­ca­tion.

Tony: Jer­ry. Yeah,

Cameron: Mal­va

Mal­va.

Tony: Dolores.

Cameron: And

Delores. That’s right.

Uh, and

Invest­Tech Aus­tralia in aggre­gate, 18

mil­lion ful­ly paid ordi­nary shares were bought back rep­re­sent­ing 12 point a 5% of the com­pa­nies issued share

cap­i­tal pri­or to com­ple­tion, so that’s good. Good job. EDU

do we hold EDU? I don’t know.

Tony: Dun­no if we owned, it’s cer­tain­ly been on the buy list. I did the

pulled pork last year on EDU.

Cameron: Yeah. Let me just [00:20:00] check my list. EDU

eed. Yeah, we do. We hold it in one of the light port­fo­lios. It’s up 31%. Good job. EDU. that’s only since Sep­tem­ber last year too. Nice work.

Tony: so is EDU show­ing will DDU then be

show­ing as a buy­back

com­pa­ny in the check­list that you do each week?

Cameron: ooh. Should do. Yeah,

Tony: When you, uh, I think we said we check

it at the half, half year­ly And four ULY results, or maybe just the four uly results to see if the shares went

down from mem­o­ry.

Cameron: That is what we are said.

Tony: Mm-hmm.

Cameron: Is that what we said? Yeah. Okay. Okay. Well, they’re not on my buy list this today, this morn­ing, so I can’t real­ly check. I, I, I rejigged my script.

This week, uh, or late last week to

only run on

com­pa­nies that have report­ed. So I have a report­ing sea­soned script

Tony: Oh wow.

Cameron: which is [00:21:00] faster.

Does the Stock Doc­tor down­load fil­ters out, does all the

nor­mal fil­ters like the

prop calf fil­ter, and then it also fil­ters on report date, and then just runs on the ones that have had a, report in the last six

Tony: Yeah. Right. Good.

Cameron: but and E D’s not on that list, so, uh, yeah. Can’t tell you, but yes. Um, I

will, I have to run my audit check again and my buy­back check, uh, dur­ing this month as there are things on the buy list to buy. not much point when there’s

noth­ing to buy. Email from Scott,

Aris acquires Peel. Peel Min­ing Lim­it­ed is pleased to

announce that it has entered into a bind­ing scheme imple­men­ta­tion deed

with Aris Resources a IS under which Ariss has agreed to acquire a hun­dred per­cent of the issued shares of Peel. By way of a scheme of arrange­ment.

Thoughts from the QAV gurus

Issu­ing shares over 300 mil­lion, I think I hold them since Octo­ber last year, and they’re track­ing pret­ty well 22% up, says.

[00:22:00] Scott, what do you think of all of that, Tony?

Tony: Wow. You, I, I dun­no if it’s your end on my end, but you are cut­ting

out

bad­ly

now, so I’m not sure. It could be at my end. It seems to be.

Cameron: You’re not sure what I said or you’re not sure what

you think No, no, I heard what

Tony: you said. I’ve now got

a,

well, it could be at my end. I’ve now got

a rotat­ing piz­za ball, uh, on my screen here. It’s, it’s locked up. All right,

I’ll try and try and push on as I just

Cameron: it’s fun­ny ’cause you are, you are. Your, your, your video and audio is work­ing fine for me.

Tony: Okay, well

I dun­no what’s going on then. Uh, okay, so a IS buys

peel. Um. It’s a good deal, for Peel share­hold­ers, which isn’t a QAV

stock ’cause they’re, they’re get­ting like

a, a big boost to

their share price. I

think. Uh, there’s some­thing like a 49% pre­mi­um

that peel’s, uh, pre merg­er clos­ing [00:23:00] price that,

um, a IS has agreed to pay. It’s an inter­est­ing type of deal,

1. Uh, a IS which IS a,

for, for any­one who’s inter­est­ed,

go back and lis­ten to the pulled

pork I did on them last year. But a IS is a, um, amongst oth­er things, a Cop­per mine oper­a­tor in the Cobar region,

which is not too far from Dub­bo and New South Wales, kind of in the mid­dle

of New South Wales. and, um,

uh, it owns a mine

there called Tri­ton or Tri­ton.

and uh, peel, which also owns. Cop­per mines in the area is beside it. Um, but also has a cou­ple of explo­ration

per­mits and, and

acreages under under­way as well.

So the, the cop­per side of things, the pro­duc­ing

mine that’s already there is being spun out and merged into a IS. The oth­er assets, the more

spec­u­la­tive

explo­ration assets are being rebadged, uh, with a new name and list­ed sep­a­rate­ly on the

ASX. And[00:24:00]

at, at the moment, the lawyers are refer­ring to that as the New­Co

in EWCO.

Um, so Peel share­hold­ers will get shares in New­Co Plus, um, shares in, Uh, a IS. a IS picks up an

extra cou­ple of hun­dred kilo­tons of cop­per, which

means that its cur­rent, mine life will go out past 10 years, which is some­thing

that, um, small­er min­ing com­pa­nies are always try­ing

to do, try­ing to extend their mine life.

’cause that’s, that’s an issue for them. Um, so. uh, that’s a tick for a IS under this

deal. Not unusu­al to see, uh, com­pa­nies pay like

a near­ly 50%

pre­mi­um to, uh, to merge or take out anoth­er com­pa­ny.

So that’s not unusu­al, but it is a rea­son­ably

high pre­mi­um to pay. um, and they’re being dilut­ed. So cur­rent, uh, Aries share­hold­ers are being dilut­ed by about 25% because the Peel share­hold­ers will

wind [00:25:00] up, um, get­ting about 20.5% of Aris.

Um, so. in a nut­shell, Aris is pay­ing about $200

mil­lion for the assets

and peel that at once. It’s being dilut­ed by about 20%, and

it’s pick­ing up a cou­ple of hun­dred

mil­lion kilo­tons of cop­per, which is about. a 66% increase in its, Um,

its cop­per resources. So all in all, it’s prob­a­bly a good deal for Aris as

well. But a lot will hinge on the syn­er­gies they expect to get

because what they’ll be able to do is to

run, you know, two mines with prob­a­bly the same over­head as one. Cer­tain­ly from the extrac­tion side of things and what­ev­er crush­ing and

pro­cess­ing they’ll do, they’ll run both mines

through their cur­rent plants and they’ll prob­a­bly

spread man­age­ment and oth­er costs across both mines.

So that’s a win. Um, and they’ll get, uh, a 10 year

mine life ex, uh, for their cur­rent mines and a big

boost in their cop­per assets. Uh, there’s no debt involved

in this, so Eris is [00:26:00] going to issue new

shares, which is why share­hold­ers are being

dilut­ed. Um, So, no debt,

no cap rais­ing. um, so look on, on paper, I think it’s fair for Ariss, good deal for Peel. and I guess in

all, as in all these kind of cas­es,

you watch to see what the sen­ti­ment is. Ariss is down a lit­tle

bit since the announce­ment, but as we’ve said before,

most

stocks are josephine’s at the moment. So most stocks are com­ing off highs, which Aris is doing. So, um, I would­n’t be too con­cerned about that. But the oth­er thing to note is it’s, um, it’s a scheme of arrange­ments, so it takes a bit of time.

So the way this

works, it’s not like s just issue shares and then.

And then cut a check for Peel. This is, uh,

um.

The lawyers draft a scheme of arrange­ment. It’s agreed by both boards. it’s

sent to a judge who puts a

stamp on it say­ing it’s fair.

Any­body who wants to object can go through the courts

and object.

I’m not sure about share­hold­er votes. I can’t remem­ber how it

works in scheme of

arrange­ments. Um, I think from mem­o­ry. One side [00:27:00] gets a vote, one side does­n’t. But

any­way, um, gen­er­al­ly if you don’t like it, you go to court. Uh, but all this won’t

sort of start until about may

and be wrapped up in about three or four months after that depend­ing on any

holdups that hap­pen.

So, um, it’s a bit of a drawn out process and we’re

not too wor­ried about sen­ti­ment at this stage. But yeah, just keep your eye on it for the next three or four months.

Cameron: Scott says he’s held a IS since Octo­ber and they’re up about

22%. I dun­no how that works. Um, I’ve held them since Decem­ber and they’re down 8%. um, look­ing at their chart, they kind of blew up from about end of August 21st of August. They

were trad­ing at 20 cents. Then by the mid­dle of Octo­ber, they’re up to near­ly 60 cents. They’re back down to 51 50

Tony: yeah, I, I kind of recall

last year they did a cap rais­ing to pay down a

lot of debt.

And I think that was one of the rea­sons why the share price start­ed to [00:28:00] improve

after that. ’cause they were pret­ty much debt free, or at least they paid off a large amount of the debt

last year.

Cameron: Right.

Tony: Watch the space, I guess. Watch the sen­ti­ment.

Cameron: Yeah. Alright, well, that’s all I’ve got on my list of things to

talk about tk, and I’ll do a. Dum­my, I’ll do a port­fo­lio report after you get through your notes,

I guess.

Tony: Okay.

Uh, so I’ve

just got­ta talk

about a

NZ

since uh, it’s a stock I hold

and was on the

buy list last year.

It’s, um,

it’s come back a lit­tle bit today. I think it’s

down

3% today, but it. was

up as much as 10% on Thurs­day.

And if any­one has­n’t

fol­lowed their results, um, they put out a

first quar­ter

result, which is the first,

uh, the first,

results after the

new

CEO took over Nuno Math­os. And

accord­ing to the AFR

from Feb­ru­ary 12,

um, Math­os

announced he

would imple­ment a

strat­e­gy known as a NZ

2030,

which includ­ed slash­ing

3,500 jobs.[00:29:00]

He

want­ed to sim­pli­fy the bank, cut

dupli­ca­tion, accel­er­ate the inte­gra­tion of Sun­corp, improve a and

Z’s tech­nol­o­gy and finance, non-finan­cial

risk man­age­ment, and build a

new lead­er­ship

team.

Now the results are

begin­ning to trick­le in on

Thurs­day.

Math­os deliv­ered a sol­id first quar­ter cash

prof­it that was up

6%.

A NZ

shares sawed 8.5%

to 40 35

and are

up by one third.

Since Mat­tos start­ed in the

role

last May,

this is the first quar­ter

with his plan ful­ly imple­ment­ed.

Atlas Funds Man­age­ment MI

ana­lyst Michael Hayes said. You are start­ing to see it flow

through a

NZ report­ed an

improved net inter­est mar­gin, which is a key mea­sure of prof­itabil­i­ty and low­er bad

debts over

the three months

to end of Decem­ber,

which was wel­comed by investors And con­sid­ered the

good sign for the broad­er bank­ing sec­tor.

Cameron: Hmm.

Okay.

Tony: so

so a n Z’s been good

to

me, um, in my port­fo­lio,

which

is, uh, which is good.

Cameron: [00:30:00] Yeah, I hold it in my super port­fo­lio too. It’s up 30% since I added it July last year. Got it.

In a light port­fo­lio around about the same time. It’s up

31%. Got it in the dum­my port­fo­lio since Octo­ber 23, and it’s only up 53%. It’s also in the light port­fo­lio two

light port­fo­lios. I hold it. Three light port­fo­lios.

That’s weird. Um, yeah, up 55. Oh, and my super. I got two. Anoth­er one in super two going back to Novem­ber 23, up 56%. Yeah. Not, not bad, but sur­pris­ing

that some of these big stocks have kicked on.

Tony: Yeah, for a

big bank, it’s doing well.

Cameron: Yeah.

Tony: Yep. Uh, so that was it. I’ve got, the only

thing I’ve got left now is a pulled

pork to do as a request

for, for, uh, Phil from

last week.

Cameron: Well, before you do that, I’ll just do a quick, uh, port­fo­lio update for, peo­ple who are inter­est­ed. Um, the dum­my port­fo­lio last five years is up 17% [00:31:00] per annum. Break­down of that these days is about 9.5% cap­i­tal gain and 9.1% income return. so, it’s about even split,

uh, ver­sus it’s

up 17, as I said, per Adam

ver­sus

the index up, uh,

9.3.

So not quite dou­ble mar­ket over that time­frame, but pret­ty close. Uh, last 12 months, the dum­my port­fo­lio is

up 26%

ver­sus the index up 9.2. So, two and a half times rough­ly. The split on that is 18%

cap­i­tal gain and 8% income return. Uh, this finan­cial

year it’s

up 22.8 ver­sus 7.3. So not too bad the like group.

All timers up 20.53% ver­sus 11. For the, uh, [00:32:00] index split again is about 50

50 50, 11% cap­i­tal gain, 9.5% income return. And for

the finan­cial year it’s up 28% ver­sus sev­en for the mar­ket. So, um. Yeah, port­fo­lios

are hav­ing

a con­tin­ue to have a good.

year despite a lit­tle bit of weak­en­ing, weak­en­ing recent­ly. Uh, look­ing very good.

That’s

that.

Tony: Well,

we’ll see

how report­ing sea­son

goes And, we can start buy­ing again, which will be good.

Cameron: Yeah.

Tony: Yeah.

Cameron: Okay. Who are you doing as your pork this week,

Tony?

Tony: got a request for, uh,

from Phil,

and it’s, um,

the

code

tick­et, The tick­eter

code is

gv.

VV

sor­ry,

but I’ll start again. GVF,

 

It’s called

the Staud, S‑T-A-U-D‑E,

cap­i­tal Glob­al

Val­ue

Fund.

Um,

this

was a request, it’s

actu­al­ly [00:33:00] a a,

lick, a list­ed

invest­ment

com­pa­ny.

So

we

don’t we don’t have those

in our buy list

any­more. We, we start­ed

off doing QAV with them

in and we took them

out and

uh,

so if any­one

does want

to include

LICs or ETFs in their down­loads and

they’re

using Stock

Doc­tor,

and I dun­no

about Stock Edia, but

Stock Doc­tor

any­way,

they

can, um, click

on the QAV.

Uh,

fil­ter and then click

the unclas­si­fied

but­ton in the GIC

sec­tion of the fil­ter

set­up.

So GIC is

the

um, is

the

list of

codes

to say

which indus­try

the com­pa­ny belongs to.

and

unclas­si­fied is where licks

and ETFs

are.

We

don’t

click that but­ton to do a

down­load,

so we. Gen­er­al­ly put them in. And we took them out

because, for a cou­ple

of rea­sons.

Um, one,

uh, licks real­ly,

I mean the, the, buy

list was set up to

Score. Uh,

oper­at­ing

com­pa­nies

based on their met­rics and

LICs are invest­ment, [00:34:00] um,

funds rather than oper­at­ing

com­pa­nies.

So they kind of have

dif­fer­ent

met­rics. So the, the

main one oper­at­ing

cash

flow

gets

mud­died

in a

LIC or any

oth­er sort

of fund

because it’s, um, where all the.

Incomes and

out­flows

for, uh, cap­i­tal rais­ings and new cus­tomer, new clients

com­ing in that they get put into oper­at­ing

cash

flow.

So what might look like a strong peri­od of oper­at­ing

cash

flow for

an

LIC may actu­al­ly be a

peri­od of under­per­for­mance

of the fund, but it’s just that they’ve

had, uh,

peo­ple, um,

they’ve

done a cap­i­tal rais­ing and pe more peo­ple are now on the

reg­is­ter, for exam­ple. So, um, we, we took them out of the,

out of the. The

buy list process.

And also

too,

the sort of a sec­ondary

rea­son is

that, um, we’re essen­tial­ly

oper­at­ing

our own

funds, so we’re com­pet­ing with ICS as

well, and

the very

few

out there

that get QAV like returns. and

we’ve spo­ken

about the

prob­lems that man­aged

funds

have

in

terms of

being, you know, pigeon­holed to one

type of

1. Um, and

[00:35:00] that, uh,

dif­fer­ent types

come

in

cycles

and,

uh,

they tend

to hug The

index

so they

don’t have long peri­ods of under­per­for­mance. They’d

rather give up out­per­for­mance, all that kind of

thing applies

to, to most

licks. So we gen­er­al­ly out­per­form them any­way,

so,

um,

we

don’t have LICs or ETFs

in our down­loads.

Uh,

so I dun­no much about this

com­pa­ny. Um,

so I had to go and do

some research on

1. And

it,

it’s also

also

worth not­ing that GVF is cur­rent­ly a

cell.

On

our

three point trend­line

graph,

so we

would­n’t be buy­ing it

any­way, even if it’s called well in, um, in

our check­list.

Uh,

the oth­er thing to note is that we

still have.

June,

2025.

Annu­al

results,

num­bers in Stock Doc­tor, like we have

for a lot of com­pa­nies.

So,

um, again,

we,

I’d

be wait­ing for the, uh,

first half

results

to

come into Stock, Doc­tor, before I made

a deci­sion about

this com­pa­ny and whether I

should buy it

or sell it or not,

even if

it, um,

does tick up

on the,

uh,

bread lat­er. Um.

[00:36:00] First

thing

I noticed about this fund is that it’s

offi­cial­ly,

uh, head, or it was

based in Lon­don. It’s

just trans­ferred back to Aus­tralia in the last year

or

1. But,

um, for a long time it was based

in Lon­don, even though

it’s list­ed on

the

ASX, uh, so am run by

Aus­tralians.

Um, so that’s an

inter­est­ing sort of, uh, mix of,

um.

of,

uh,

loca­tion

and

peo­ple. And the sec­ond thing I noticed

is that Chris

Cuff

is a direc­tor of

1. Um, there’s only

four peo­ple on the board. One

is,

uh,

Uh, miles Staud, who

was the, uh, port­fo­lio man­ag­er

and Chief

invest­ment

offi­cer,

um, Jeff

Wil­son,

who peo­ple will rec­og­nize as

a name, um, for the per the per as the

per­son who

runs all of

the w uh, Wil­son Asset

Man­age­ment.

Uh,

port­fo­lio of licks, of

which they’re acquired a

lot at the

moment.

um,

he’s

on the

board, Chris Cuf­f’s on the board. there’s

a, um, inde­pen­dent, uh, chair

and there’s mole

sta

but that kind of,

um, struck me as being

inter­est­ing because

that’s two,

[00:37:00] Two. Um. Very

big investor

heavy­weights, uh, from Aus­tralia on the board of a

very small list, uh,

list­ed invest­ment

com­pa­ny.

And the mar­ket cap for

this

com­pa­ny is,

uh, just under 300

mil­lion.

And they did say they were

gonna close off to new investors when they reached

300 mil­lion. So that’s

maybe

why it’s

around

that $300

mil­lion or

lev­el.

Um, If any­body out

there who does­n’t know who Chris

Cuff

is, I just might

spend a minute talk­ing

about

him.

Uh, he’s an Aussie

val­ue invest­ing

leg­end. He

ran

Colo­nial First

State,

uh,

which was part of Colo­nial Mutu­al,

which was a

an insur­ance com­pa­ny,

which I

was

bought by Comm­Bank

in about

2000.

Uh, but he took

Colo­nial

First dates. Port­fo­lio man­age­ment ser­vices from

a three per­son

start­up to

$90 bil­lion in

funds under man­age­ment, uh, with­in 13

years

from 1990 to

2003.

And

dur­ing that time, uh, colo­nial Mutu­al Demu­tu­al­ized in 97 and then

was acquired

by Comm­Bank [00:38:00] in 2000.

Um,

Chris

Cuff is firm­ly in the val­ue

invest­ing mold.

He’s. Def­i­nite­ly,

uh, buf­fet,

uh, Gra­ham type, uh, val­ue

investor,

focus­ing on

strong

bal­ance sheets, good

man­age­ment, sus­tain­able earn­ings. As I said before,

one of

his famous quotes

is Time

is

the friend of Good, the good

busi­ness.

Um,

he’s repeat­ed­ly said

investors

should ignore short

term

mar­ket

move­ments, macro­eco­nom­ic

pre­dic­tions, and

instead focus on the

busi­ness fun­da­men­tals

under­ly­ing.

Um,

he did

leave Colo­nial.

Uh, first

State, uh, at, in,

let’s see, back in

about

2003. So he estab­lished a

great name for him­self.

Went on and did var­i­ous things.

Was a

direc­tor of a

lot of com­pa­nies and still

is com­pa­nies like UniSu­per, A

MPI think

he was a NAB direc­tor for a while. Um, he’s a direc­tor

or was a

direc­tor of Hearts and Minds. The, the, so Insti­tute. Uh, char­i­ta­ble

fund,

uni, uh, I

said Uni Super,

Argo

Invest­ments,

et cetera. et [00:39:00] cetera. Prob­a­bly more

than I can

even, um, list

here.

Uh, and he also has done a lot of char­i­ty work. So he set

up a fund called

Third Link Invest­ment

Man­agers,

and, um, they

invest client funds in

oth­er

invest­ment

funds, but then, um,

donate

the prof­its to

char­i­ty.

So, um, he’s done a lot

of char­i­ta­ble

work

since leav­ing, uh,

colo­nial,

um.

So that’s a

bit of, that’s a bit

of

Chris Cuff in a nut­shell.

He

also start­ed

cuff

links,

which I don’t know

if peo­ple are aware

of,

but

it’s

worth

check­ing

out.

Um, it’s a

kind of social media

plat­form for

investors,

uh,

CU FFE

links. Um,

I know a lot

of the kind peo­ple will post their, the

stab

will

post their,

it’s a place where peo­ple go

to share their

ideas

on

com­pa­nies and what’s hap­pen­ing in the mar­kets, and then debate

it

Uh, to be hon­est, it

does­n’t float my

boat. I

don’t like debat­ing stock ideas with peo­ple.

I just

do my analy­sis and make a

deci­sion. Don, I

don’t real­ly care what the

opin­ions are of

oth­er peo­ple, but

it might

be,

um, might be help­ful for [00:40:00] some lis­ten­ers to

have a look at

it and,

and,

form their own

opin­ion. So

that’s

that’s

Chris Cuff.

He’s on the board

and now about

Stout itself.

So Miles Staud appears to

be

the

son

of

Char­lie

Staud,

who again is

a, um.

A known name in

val­ue

invest­ing in

Aus­tralia.

And, uh, he

worked at a com­pa­ny called Port­fo­lio

Part­ners,

which was a major insti­tu­tion­al

man­ag­er,

I think it was part of Mac­quar­ie

Bank. And

then,

uh, tran­si­tioned to

a

1. Very sim­i­lar rep­u­ta­tion

to Chris Cuff,

but not as well known.

Um,

obvi­ous­ly he men­tored miles,

um,

miles.

Uh, grew up in Syd­ney,

went to work in

finance in Lon­don for

RBC

Roy­al Bank of

Cana­da,

and

then for a, a hedge fund

based in Lon­don called Met, met

Age

Cap­i­tal and then struck

off on his

own to set

up,

uh,

the,

uh, the glob­al

val­ue

fund.

He

set

up a com­pa­ny actu­al­ly called Stout Cap­i­tal, of which

one of the funds is the

Glob­al Val­ue

Fund, and [00:41:00] Stout Cap­i­tal is the fund Mabb Fund,

man­ag­er. So they get

the, uh, invest­ment fees from run­ning

these

funds.

Um, in terms of the

actu­al fund

itself. Some­thing that peo­ple

might find inter­est­ing is its

glob­al focus,

so it’s a, It’s run by Aus­tralians.

It’s a val­ue invest­ing fund, but it tends to

invest in

Europe and the US and, um, oth­er

mar­kets

over­seas.

They do

occa­sion­al­ly

invest in Aus­tralia as well, but not very often.

Um, and the asset they

list in one of their most

recent

returns

is a com­pa­ny called

US

Mas­ters Res­i­den­tial

Prop­er­ty Fund.

So even

though it’s ASX

list­ed,

it’s a

port­fo­lio of New

York and New Jer­sey prop­er­ty.

 Uh,

it list­ed on

the

ASX 11 years ago,

and

since

that time, it’s returned just at

11.4% cagr,

um,

with

11% con­sec­u­tive

years

of pos­i­tive

per­for­mance. So not QAV style

num­bers, but

it has­n’t

had a draw

down year.[00:42:00]

Uh.

Which is I

guess, a good thing

and it’s cer­tain­ly

done

bet­ter

than that recent­ly. So last year

saw

a per­for­mance of

19.2%

total share­hold­er return.

Um,

it’s a long short fund, so

they

do,

uh, short

stocks

and,

uh, there was some

analy­sis I saw to say that they

under­per­formed when the

MAGA stocks start­ed

tak­ing off in the

US

and they were

short­ing some of those and they got a lit­tle

bit burnt from

that. But,

um, oth­er­wise they’ve

had pret­ty

good per­for­mance.

Um.

I found an inter­est­ing sto­ry

about moles sta­to

in he in the AFR

from 2022.

And it

talks

about, um,

a par­tic­u­lar

sit­u­a­tion that

he got involved

with,

uh, when he went

up

against a comp,

uh, a

com­pa­ny that was run

by Nel­son

Peltz, one of the,

uh, titans of Wall Street. and

um.

Peo­ple may have heard of his name.

Um, he ran a fund

in the

uk, which was set up as a

special,[00:43:00]

uh, or

an oppor­tu­ni­ties fund. So It meant to have.

a short, uh, shelf life. It was gonna be set up, buy some

assets, turn them around, um, sell them Uh, so real­ized the, uh, dis­count deval­u­a­tion and then return the mon­ey to share to share­hold­ers. GVF rec­og­nized that that was a, a good thing as a val­ue investor to be invest­ed in. But then along the way, the man­age­ment decid­ed to, uh, stop mak­ing it a

um, a short term fund and try­ing to make it an ongo­ing fund, which means The um. the real­iza­tion of the asset sales and the

val­u­a­tion improve­ment would’ve gone back into, um, Nel­son Pels fund and, and, would’ve been rein­vest­ed from there.

And oth­er

sit­u­a­tions, not nec­es­sar­i­ly a bad thing, but not what they promised at the start.

And, uh, miles style thought that uh, that was a, uh, some­thing he did­n’t like. And

he, uh.

Found some oth­er like-mind­ed investors who actu­al­ly over­turned the chair of that fund. So the AFR wrote an arti­cle about them and the David and Goliath sto­ry, uh, against [00:44:00] Nel­son Peltz. And they also men­tioned, um, uh, miles Stout’s wife, Emma David­son, uh, who is, now the, uh. Uh, CEO

of the Stout Cap­i­tal,

uh, com­pa­ny and also man­age­ment man­ag­er of cor­po­rate affairs. So she has also a career in Lon­don Finance and head­ed up the trad­ing desk for City Group in the UK and Ire­land. and so has a lot of expe­ri­ence at, um, uh, share trad­ing and run­ning funds as well. She had, Uh, also set up her own fund in the uk.

Um, but they decid­ed to con­tin­ue with the val­ue fund and they actu­al­ly relo­cat­ed back to Aus­tralia. Togeth­er, um, to uh, raise

a fam­i­ly. Uh, so they’re back in Aus­tralia now even though they still have, um, a finance team in the UK run­ning invest­ments from there as well. They, um, the AFR arti­cle says, stow and David­son see them­selves as a dif­fer­ent to typ­i­cal

activist hedge fund investors [00:45:00] because their cap­i­tal comes from the bot­tom of the

mon­ey tree to pull, to pull, togeth­er the first $50 mil­lion in their fund. The cou­ple went down under on road­shows togeth­er. Using Wilson’s, Jeff Wil­son skills as a whis­per­er of retail

investors. On those trips, David­son fell in love with rur­al and region­al Aus­tralia, and both became enam­ored of the idea that they were in a posi­tion to cham­pi­on the finan­cial inter­ests of the lit­tle guy.

Excuse me. Uh, fur­ther on in the arti­cle, Mabb

Stroud talks about his invest­ment

phi­los­o­phy. He says Cap­i­tal­ism is won­der­ful at allo­cat­ing resources all around the sys­tem to where they’re going to

be more effi­cient­ly used, but it has a lot of exter­nal­i­ties where it falls over.

I think one of them is cor­po­rate gov­er­nance. He said the agency prob­lem in cap­i­tal­ism, he says, is that man­agers of investors’ mon­ey are often moti­vat­ed by inter­ests and pri­or­i­ties that are not aligned with those of the investors.

But the the­o­ry does­n’t always work out In prac­tice, espe­cial­ly in the small cap end of the mar­ket, boards often end up sid­ing with the man­ag­er, and a temp­ta­tion to do that [00:46:00] is height­ened by the high turnover of share­hold­ers

and their lack of engage­ment.

Uh, Stroud says, you look at cap­i­tal mar­kets today, the aver­age hold­ing peri­od for a share in the US

has gone from three years to two years, and today it’s nine months. So if you are a board direc­tor, the share­hold­ers come and go every nine months. You build no rela­tion­ships with them and you nev­er talk to them. Stroud

says, pas­sive invest­ing, which stout is pay­ings not to dis­re­spect, has only increased the ten­den­cy for

investors to ignore cor­po­rate gov­er­nance. In today’s mar­kets, investors are often more ready to divest.

Then to seek improved per­for­mance. Staud says we spend a lot of our life try­ing to drag boards back, remind­ing them where they’re sup­posed to be

focused. Often that means replac­ing a direc­tor or two. Sad­ly, it very occa­sion­al­ly means replac­ing an entire board, and for one in 20 it means wind­ing a com­pa­ny up. the arti­cle con­tin­ues and out­lines GVF strat­e­gy STA David­son and their small team based

not far from the Bank of Eng­land, sc the world sco uh, [00:47:00] sort­ing the wheat from the chaff.

The chaff is any list­ed fund or com­pa­ny trad­ing below the val­ue of its assets. the week com­pris­es those instances where a change in man­age­ment strat­e­gy, or in the worst case sce­nario, a sell off of the assets could unlock that dis­count. Typ­i­cal­ly, the recipe includes find­ing at least a few share­hold­ers on the tar­gets reg­is­ter.

Who are ready to get behind the GVF LED

push. So that was an arti­cle as I said, from the AFR back in 2022,

uh, by Hands Van Lewin in Decem­ber

28th, 2022.

So that gives the you a fla­vor of who runs the fund.

Um, a bit about its philoso­phies, uh, and now a bit about

its results. So again, going back to their last annu­al results, uh, FY 25 rev­enue was up 17.8% prof­it after tax up

21.07%. And I noticed that they changed their reg­is­tered

address from Lon­don to Live Street in Carl­ton.

So the, uh. I guess the strouds have moved down to

Mel­bourne, uh, from the [00:48:00] QAV point of view, uh, a DT for this stock is only 117,000 per day. So not too bad, but, uh, won’t suit big investors.

And as I said, the mar­ket cap’s just under 300 mil­lion. Stock price for the, uh, analy­sis is a dol­lar 35. IV one is only 71 cents. IV two we don’t have because there’s no

bro­ker

cov­er­age, uh, for the small capic.

Uh, they being an LIC, they have to, uh, put out their NTA every month and Jan­u­ary 31 NTA. Before tax was a dol­lar 29, so it’s just trad­ing a lit­tle bit above NTA at the moment. Um, again, that will change at the end of

Feb­ru­ary. Uh, there’s no

con­sen­sus tar­get for share price, so

we can’t score it against that. Yields pret­ty good, just under 5%, but not enough to

score it, uh, for being above the aver­age mort­gage rate.

Uh, Stock Doc­tor don’t give LICs a finan­cial health score or trend score, so I can’t use those to score,

1. Um, stock Edia gives it the qual­i­ty score of 78 and [00:49:00] an

over­all rank of 73, so it’s not shoot­ing the lights out from Wikipedi­a’s point of view, it gets an F score of five out of

nine and maybe a lit­tle bit unfair­ly. so um, uh. Stock. The F score

on stock Edia is, is mark­ing it down because

they think they have more debt.

Um, but when I drill down into it, I don’t think it’s debt. I think it’s actu­al­ly pro­vi­sions they take on their bal­ance sheet. And, um, pro­vi­sions for an LIC gen­er­al­ly are are, there to make sure they can meet their tax oblig­a­tions.

So

for exam­ple, if they’ve sold shares. Dur­ing the year, they ha they might have a big cap­i­tal gains tax bill, so they pro­vide for it until end of finan­cial

year. But it also is where they pro­vide for any man­age­ment fees that have to

get

paid. So if, if they’re hav­ing a good year, there’ll be a per­for­mance fee they need to pay. So, uh, per­haps that’s why they have pro­vi­sions on their bal­ance sheet. And both of those aren’t a bad thing, even though I believe ency­clo­pe­dia might be see­ing those as being debt.

Um, which [00:50:00] is

wrong. Uh, any­way, F score five, eight of nine. Um, over­all rank of 73 isn’t that

great. PE is 9.7 times, so not the high­est or the

low­est, so

we don’t score it for that. Pr/OpCaf is a lot 22 times, so it does­n’t meet our. Our hur­dle will cut off of sev­en times, so we can’t score it

for that. Debt.

Equi­ty per share is a dol­lar 19, so we can buy it for less than book plus 30,

which is a good thing. So it gets a tick for that. Uh, we don’t have earn­ings per share fore­cast growth, so

we

can’t, uh, give it a growth over PE score. Inter­est­ing­ly enough, we can’t score this for an own­er founder, even though Miles Stroud is, um,

the, uh, investor who set it up. Um, he does­n’t appear to have a large

stake in the

com­pa­ny and as list­ed as a, hav­ing a share­hold­ing of less than 1%, which real­ly sur­prised me. ’cause usu­al­ly these, These uh.

These types of investors become cor­ner­stone investors in the fund. So they can say that

they’re, um, aligned with the inter­est of the share­hold­ers. Now, [00:51:00] it’s entire­ly pos­si­ble that, Uh, his hold­ing is held through some kind of trust or com­pa­ny struc­ture, which was­n’t a par­ent and Stock Doc­tor, but Stock

Doc­tor have it list­ed of, uh, as less than 1%. And I can’t see any real­ly big, um, investors on the, uh, on the. Top 10 list­ing in the, um, uh, annu­al report.

So I can’t sort of point to some­where else that

Stroud might be, um, in, uh, hid­ing in terms of his hold­ings on the, uh,

on the vest­ing list, but I would’ve thought that was a bad thing. Um, any­way, unless, unless I’m wrong. Um, not a good thing. Uh, as I said, it’s a three point trend line sell, so we can’t score it for that. It does have, con­sis­tent­ly increas­ing equi­ty over the last five years,

so that’s a good thing. Um, it’s, uh.

That’s prob­a­bly one of the only good things in the qual­i­ty score. So out of a pos­si­ble 10, bear­ing in mind we

can’t give it a finan­cial health or trend score, it only scores one. So the qual­i­ty score for this com­pa­ny is 10% and the QAV score is 0.0.

[00:52:00] So to be fair, QAV scores are designed to, for oper­at­ing busi­ness­es and licks are a dif­fer­ent beast. So that’s part of the

rea­son why we can’t score it, How­ev­er, it, um,

a score of 0.0 isn’t great. Some of the risks and pos­i­tives, um. Obvi­ous­ly key man risk if some­thing hap­pens to the Stroud. Uh, but again, the key man’s not invest­ed in the LIC,

so, um, it, it will cer­tain­ly. far as we know. as far as we know, cer­tain­ly.

um, hurt, uh,

will will change, will prob­a­bly mean a change in strat­e­gy if

he goes. Um, but wait and see,

I guess there are cur­ren­cy risks. Um, they do talk about cur­ren­cy hedg­ing in their annu­al reports and and how they man­age cur­ren­cy risks. So they’re on top of it, but there still is always a risk that, um, over­seas cur­ren­cies depre­ci­ate, which of course, the US dol­lar’s doing now.

Uh, there’s risks asso­ci­at­ed with their short­ing of com­pa­nies, which, um. Hurt them when the Mag sev­en took

off. Uh, the pos­i­tives, I like, it’s the fact it’s a val­ue investor. I like the fact he’s men­tored by [00:53:00] his father, Char­lie and and Chris er Wil­son are still on the board. So they’re

obvi­ous­ly pro­vid­ing lots of advice to him. Um, and the oth­er pos­i­tive is, is over­seas expo­sure for peo­ple, uh, for val­ue investors in Aus­tralia. Who, um, might, uh, not know who’s over­seas or find it too com­pli­cat­ed from a cur­ren­cy or a tax point of view to do that. They can get val­ue invest­ing expo­sure through this, uh, LIC but it does­n’t score on our check­list.

It’s 0.0.

Cameron: 0.0.

Well, there you go.

Tony: Yeah. So I pulled pork on a non QAV stock this time.

Cameron: That’s how

des­per­ate we are. We’re doing non

QAV

stocks.

Tony: do dusk again.

Cameron: Next week we’ll just start

mak­ing up

stocks.

Tony: Well, I’ll send you a request in.

Cameron: porks on.

Tony: Send request from peo­ple. We’ll see how we

Cameron: Well, that’s my request is

you just

make some­thing

1. Yeah. Like an AI

would

Tony: Yeah. I tell you

what. I

was, [00:54:00] I I use AI more now in pre prepar­ing for this show in the US show, but every now and then you go,

oh, I bet­ter

check that fact. It does­n’t make sense. And sure enough, it’s wrong. And some­times even if I ask the ques­tion twice, I get a dif­fer­ent answer. So I’m always very care­ful about what I use.

Cameron: I’ve told you about

my run it past Dave?

process.

Tony: No, who’s Dave?

Cameron: Uh, I invent­ed this like last year. Um, futur­is­tic.

Dave is dou­ble AI ver­i­fi­ca­tion. DAIV run it past Dave. So I have a script that I’ve built, um, where I just. Can paste my thing in, And it’ll take, like if I get, I use Gem­i­ni

to

do most of my research these days, so I’ll take what it gives me and then I’ll put it into GR and into Chat­G­PT

and into Claude and into deep seek and

go ver­i­fy this, or fact check this for me.

And then it’ll come back with a whole bunch of stuff, and then I’ll give that

back to Gem­i­ni and go, all of [00:55:00] these engines

say, this

is right,

this

is

wrong. And it’ll give me a rebut­tal and then I’ll feed

it back through the loop and ask for sources and go check the

sources and yeah,

Tony: So, I’m sor­ry. I can’t do that, Dave.

Cameron: yeah, yeah, that’s

right. Yeah. I’m sor­ry, Dave. I, um, I,

 

Cameron: I was read­ing, oh, uh, day of the Jack­al, I think the oth­er day. And it was talk­ing about giv­ing some­body the

third degree. And I was like, where does that term come from? So I went into Gem­i­ni and

I said, where does the term the third degree come from? And it gave me this whole thing

about

Masons, free Masons.

There are three degrees of

mason­ry, and it was a third degree. And I was like. So I took that and I gave it to

Grok and I

Tony: Ha.

Cameron: check this. And he goes, yeah, yeah, no, that’s,

that’s real­ly where it

Tony: Sor­ry about that,

Cameron: So I took both of those and I gave it to

chat GPT, and it went, nah, that’s bull­shit. That’s, that’s not right at all.

So I took chat, GPTs and I gave it both back to Gem­i­ni and GR and said, [00:56:00] this is what chat GPT said, and they both

went. Oh yeah, yeah. No, we, we were just total­ly wrong on that. that. was, That

was, I dun­no where we got

that from. That was made up Chachi T’s. Right. And then I gave, I went back to Chachi PT and I said, they both con­ced­ed and it goes, isn’t that

inter­est­ing? Two mod­els were very con­fi­dent And they

were this is the thi I’ve been say­ing to Chris­sy, like, you know a lot of the, um.

Lead­ers of the AI

com­pa­nies are doing the rounds again at the moment, um, say­ing all the white col­lar jobs are gonna go on the next 18 to 24 months. We’re not tak­ing it seri­ous­ly enough. This is gonna hap­pen and

we’re, You know, no one’s

real­ly prepar­ing soci­ety for this,

Cameron: Alright. Uh, Tony just got cut off while we were talk­ing about some­thing. AI ver­i­fi­ca­tion. Yes. Yeah. And how are they gonna fix it? I was say­ing all these guys are say­ing it’s gonna take over the world and take all of our jobs, but, um, they can’t even, uh. Make it reli­able yet. [00:57:00] So I, I don’t know. I’m not hear­ing any of ’em talk about what they’re gonna

do to make it reli­able.

I assume they have a plan, but I dun­no what that plan is. So, I have heard them talk about it briefly some time ago, but before it’s gonna take over the world they need to get it to be able to give you a, we need, peo­ple need to be con­fi­dent that we’re not just being led down the gar­den path con­stant­ly.

Tony: Yeah, exact­ly. It’s like the main­stream media, isn’t it? Can I real­ly believe this?

Cameron: or just talk­ing to peo­ple, um, or lis­ten­ing to CEO’s fore­casts of their, uh, next year’s rev­enue.

Tony: Lis­ten­ing to Gas Giants Blovi­ate. Mm

Cameron: Yeah. Alright, well, let’s do a quick after

hours, Tony. Uh, what else you got?

Tony: Uh, a cou­ple of shows under Salt Marsh. I don’t know if you’ve seen that. Um,

Cameron: No, what’s that?

Tony: on HBO, if you like, shows like we do, like Shet­land, um, so it’s a police pro­ce­dur­al. This one’s set in Wales [00:58:00] on

the, on like a marshy.

Area of Wales near the beach, which floods and gets cut off from the main­land. Clas­sic closed, closed room detec­tive sto­ry.

You know, the storm blows in, clos­es off the island, some­one dies, how do they die? Who’s the cul­prit? All that kind of thing. But very moody, atmos­pher­ic, um, small town. Lots of skele­tons in the clos­et. That’s real­ly good. I like it.

Yep.

Cameron: Hmm.

Tony: So that’s on. And we watched, uh, deliv­er me from nowhere

last night, which is pret­ty good too.

You seen that?

Cameron: What’s that? No, what’s

Tony: The Bruce Spring­steen biopic about the mak­ing of Nebras­ka. Real­ly inter­est­ing. You are a Nebras­ka fan,

Cameron: Uh, yeah, sure. I mean, look, I, I’m not the world’s biggest Bruce Spring­steen fan, but I, I, I can lis­ten to

his stuff and kind of dig it a lit­tle bit. This is

The one with Jere­my Allen White from the Bear in it.

Tony: Yeah.

Cameron: How does he do?

Tony: Yeah,

pret­ty good actu­al­ly. I, I’m not a fan,

but he was good in this and Jere­my Strong was fan­tas­tic in it as well. He played [00:59:00] John John Lan­dau, Bruce Spring­steen’s

man­ag­er, who’s kind of like his father

fig­ure as well. cause the whole thing’s about Bruce’s prob­lems with his father. He used to beat him as a kid.

And all the songs on Nebras­ka are real­ly dark and. Down­beat and how he had to try and clear his con­science of all those things before he sort of took the next stage in being a megas­tar. ’cause up until then, even though he’d had suc­cess and he had a lot of suc­cess with the albums before that, he was still kind of known for being a bar band, out­er Jer­sey, and all that kind of stuff.

Um, yeah, so, you know, born to Rum kicked him off, but, um. At, at the time he was record­ing Nebras­ka in his bed­room, they were also start­ing to lay down tracks for born in the USA, and Bruce was say­ing, look. Can’t deal with that right now either. Great track­’s, got­ta get this off my chest. Um, went into the record­ing stu­dio with a cas­sette say­ing, you know, mas­ter this for me.

And every time they’d mas­ter it. it’d be, don’t take a dis­tor­tion out, don’t take the echo [01:00:00] out. I want it to sound like ear­ly sun record­ings with Elvis Pres­ley. All that kind of stuff. So in the end they just, they found some old record com­pa­ny dude who could. Like, go back to the real­ly old press­ing machines and, and make a press­ing from this cas­sette, and then put it out with­out any press, any cov­er­age, any, um, tour to back it up. and it goes to num­ber three in the charts. and then uh, you know, he kicks on after that with born in the US and becomes a megas­tar. So it’s pret­ty good. It’s good. It’s all back in Jer­sey, hang­ing around with his child­hood friends, um, school bud­dies, that kind of thing, try­ing to come to terms with his upbring­ing, dri­ving past the house where he lived as a kid a lot, and it’s now run down and remem­ber­ing his, you know, upbring­ing, which had a, which was very, very mixed with his father.

Loved his moth­er, but very mixed with his father. So, yeah, it’s, it’s good. I real­ly enjoyed it. I love Nebras­ka, one of my favorite records. Real­ly good. Hmm.

Cameron: real­ly?

Tony: And the [01:01:00] good thing is too, I remem­ber at the time, like I, I heard about it through word of mouth. Like it was released in 83, I think 82, 83. And you know, peo­ple would say, Hey, check this out.

And they, you, So, I’d lis­tened to it. And they’d go, gee, that first track, it sounds like this movie I, saw called Bad­lands. And then in in Live Me From Nowhere, you see Spring­steen watch­ing Bad Lands on tv. Then he goes to the library, to the micro fish And research­es it and then. Writes a song about it, then cross­es out the pro­nouns and makes him the star of the song.

It’s, you know, it’s just great to get, ’cause Bad­lands. Mar­tin Sheen, ear­ly movie, sis­sy Spac­er. Yeah, Ter­ence Mal­ick direct­ed. So it was just at the time I remem­ber get­ting all this sort of bounc­ing between one ref­er­ence to anoth­er, back to Malik, back to him which was real­ly kind of cool as well. So that’s all explored in the movie as well. it’s good.

Cameron: Hmm. I’m nev­er a big fan of biopics. I strug­gle with Biopics for some rea­son, but, um,

I can’t think of many biopics. I like the John­ny [01:02:00] Cash

Tony: Mm-hmm.

Cameron: that Riv­er Phoenix

Tony: is kind of rem­i­nisce. This is, we, we were watch­ing it last night and we both said this is like walk the line. Yeah.

Cameron: Okay. It’s the only one, when I think of Biopics, it’s the only one that I ever remem­ber actu­al­ly lik­ing. Did­n’t mind the Ali one with Will Smith, But yeah, usu­al­ly the, the prob­lem I have is that like the peo­ple that are play­ing, the peo­ple are nev­er as charis­mat­ic or as good as the actu­al peo­ple.

So it’s kin­da like,

Tony: It was like, um, entourage, right? If, if Vin­cent had it been a movie star, he would­n’t be star­ring at a TV show, right? So,

Cameron: yeah. Tay­lor’s, uh, final­ly got into watch­ing that. He’s been bing­ing it. He told me yes­ter­day that they just fin­ished sea­son four or some­thing, and he’s like, uh, it’s crazy how much this is my

Tony: Yeah, I would’ve thought, yeah, exact­ly. You should ask him who’s, who’s Tur­tle, who’s he? Who’s of any dra­ma?

Cameron: well, he’s

Tony: Oh, he’s he. Oh, okay.

Cameron: He’s Z. Yeah, that’s right. Yeah. Yeah. He’s the sen­si­ble one that [01:03:00] needs to.

I’m

Tony: He’s the

Cameron: try­ing to reign in all of the, uh, you know Yes. The flighty types.

Tony: Hmm.

Cameron: alright, well I got noth­ing. Um, you got any­thing

Tony: Nope, that’s all.

Cameron: Alright, let’s go talk Amer­i­ca. Thanks Tony. Thanks lis­ten­ers. Have a

Tony: and thanks for the request. Give us some more requests for pulled porks while our bile list is emp­ty.

Cameron: just make ’em up if you have to. Mm-hmm.

 

Quote of the day:

“Alexan­der the Great and his mule dri­ver both died and the same thing hap­pened to both. They were absorbed alike into the life force of the world, or dis­solved alike into atoms.”

Med­i­ta­tions

Mar­cus Aure­lius