The Happy Zone – QAV AU #916

QAV AU 916 Club
TK: [00:00:00] That’s all.
Cameron Reil­ly: Keep going.
TK: No, I’m stop­ping. Look.
Cameron Reil­ly: K. Keep going.
TK: no, no, I’m good.
Cameron Reil­ly: Tony’s just hav­ing a whinge.
TK: this is why Tim Cook’s leav­ing Apple.
Cameron Reil­ly: Yeah.
TK: Every time I buy anoth­er piece of tech­nol­o­gy, I’ve got­ta buy all the adapters and
Cameron Reil­ly: Yeah.
TK: I just went through a soft­ware upgrade recent­ly to what­ev­er the lat­est one is, Sequoia or some­thing. But you have your end­ing in Sono­ma. They’re bloody appro­pri­at­ing.
But you know, I’ve got all this mus­cle mem­o­ry, like for using emails where you click to the left to send an email. Now it’s on the right.
Cameron Reil­ly: Uhhuh
TK: Why the fuck change that? Like, how is that an upgrade for God’s sake?
Cameron Reil­ly: uh, wel­come to QAV, episode 9 1 6.
TK: This is, we title this episode, Old Man Shout­ing at Clouds.[00:01:00]
Cameron Reil­ly: Oh, okay. At clouds. Well, speak­ing of Don­ald Trump, how’s your week been, Tony?
TK: We weren’t speak­ing of Don­ald Trump.
Cameron Reil­ly: Well, you said old man shout­ing at clouds. That’s,
TK: Well, I think we have to start mea­sur­ing time in BC and AC. Before chaos and after chaos.
That’s, that’s what it is. It’s just chaos.
Cameron Reil­ly: Well, uh, you know, we’re gonna start a new seg­ment on this show this week, which is, uh, Tony reads the Bible uh, that’s what Don­ald Trump’s doing this week. Uh, Amer­i­ca reads the Bible. Have you heard about that?
TK: No.
Cameron Reil­ly: He’s doing a tele­vised ses­sion where he reads from the Bible. I’m not sure if it’s a dai­ly thing or a week­ly thing.
I’m not sure when he is gonna learn to read, but that’s
TK: pic­ture book? Oh, look at that. That’s a very ugly guy. There he is. Got ter­ri­ble clothes, bad hair,
Cameron Reil­ly: very low IQ
TK: strag­gly beard. Yeah.
Cameron Reil­ly: Very low IQ los­er. Yeah. I
pre­fer my
TK: that’s [00:02:00] Jesus.
Cameron Reil­ly: killed. Yeah.
TK: Look at that. He’s nailed to a cross. It’s a very basic cross. Not even the gold cross. Well, I see. He’s obvi­ous­ly doing penance for the AI post of him being Jesus. He’s try­ing to get back into good books with the Amer­i­cans. Yeah, the Chris­tians. Mm.
Cameron Reil­ly: Well, uh, Tony, crazy week, uh, as has become the norm. Um, New York Times arti­cle in front of me. White House shrugs off shaky econ­o­my as war exceeds Trump’s time­line. Stocks may be soar­ing again, but the war in Iran has start­ed to pinch the finances of many Amer­i­cans. Uh,
TK: Was that White House or Wall Street did you mis­quote there?
Cameron Reil­ly: no, says White House.
TK: Real­ly well, of course they’re gonna shrug it off. It’s bad news.
Cameron Reil­ly: rough­ly sev­en weeks into the war with Iran, investors have shrugged off the sky high price of oil, send­ing the S&P 500 this week to a fresh record high. This is [00:03:00] dat­ed April
TK: Yeah, so that’s Wall
Cameron Reil­ly: old.
TK: Street shrug­ging off the wall.
Cameron Reil­ly: exu­ber­ance on Wall Street has offered a sharp con­trast with the hard­ships fac­ing many Amer­i­cans who are feel­ing the finan­cial blow­back of a con­flict that Pres­i­dent Trump once promised would be brief, but seems to have no end in sight
TK: You once promised there would­n’t be any for­eign wars too. For­get about it being brief. That’s like,
Cameron Reil­ly: Oh,
TK: that’s like a, an excuse you give when you did­n’t do your home­work. Well, I’ll be brief. It was brief any­way.
Cameron Reil­ly: so. 2024. Think­ing of you Tony, have changed with high gas prices cut­ting deeply into many fam­i­lies’ bud­gets. The US econ­o­my is under increas­ing strain, rais­ing the odds that infla­tion will wors­en, unem­ploy­ment will rise, and growth will slow. This year
TK: All com­plete­ly cor­rect, but look, Amer­i­cans are whing­ing bitch­es. I, uh, I com­pare the cost of, um, petrol in the US or gas as they put it to [00:04:00] Aus­tralia. And uh, the $4 a gal­lon is equiv­a­lent to a dol­lar 50. Even tak­ing into account the cur­ren­cy changes exchanges. Dol­lar 50 per liter, which is half what I’m pay­ing at the moment at the bows­er.
So, you know, get over your­selves. Amer­i­cans
Cameron Reil­ly: $3
TK: pony up. Yeah. For diesel. Absolute­ly.
Cameron Reil­ly: got a diesel car.
TK: Yeah.
Cameron Reil­ly: I was sur­prised. I filled up our car yes­ter­day or the day before and it was only, I think two bucks.
TK: Okay.
Cameron Reil­ly: It was like
TK: That’s good.
Cameron Reil­ly: a few days ear­li­er or a week ear­li­er. Um, whing­ing bitch­es. I guess that’s the new, um, title for the episode. Uh, so yeah, like as we’ve said before, I think week after week after week after week, the stock mar­ket does­n’t seem to care. Uh, Wash­ing­ton Post arti­cle, here’s what the, uh, it wants me to pay for it. God damnit.
TK: Stop shout­ing at clouds.
Cameron Reil­ly: Okay. Hold on a [00:05:00] sec­ond here. Uh, let
TK: Yeah. You sent me, you said lis­ten to this. Cameron sends me all these links to the behind pay­walls and I don’t get to see them.
Cameron Reil­ly: you’ve
TK: Alright.
Cameron Reil­ly: Post sub­scrip­tion. I know it’s Wall
TK: No.
Cameron Reil­ly: You’ve got, yeah.
TK: I do find a way to get around them, but yeah.
Cameron Reil­ly: Here’s what the stock mar­ket might’ve got­ten wrong about the Iran war. Surge in opti­mism con­trasts stark­ly with con­tin­ued ener­gy sup­ply chal­lenges that threat­en long last­ing eco­nom­ic harm, and a mar­ket reck­on­ing as stocks soared.
This week in oil prices dropped amid an appar­ent cool­ing of ten­sions between the Unit­ed States and Iran. It may have left the impres­sion that the ener­gy shock that rat­tled the world is quick­ly fad­ing along with the risk of send­ing the glob­al econ­o­my into a reces­sion. But beneath that sur­face, a stark­ly dif­fer­ent real­i­ty is unfold­ing.
It is defined by dis­rupt­ed sup­ply lines and dam­aged infra­struc­ture, spark­ing increased con­cern among the peo­ple who pro­duce, trans­port, and depend on [00:06:00] ener­gy. The peo­ple clos­est to the indus­try are far more con­cerned about these dis­rup­tions and rec­og­nize the length of time it will take for things to return to nor­mal.
If they ever do, said Jer­ry Mor­ton oil and gas co-chair at the law firm Bak­er Botts. The fur­ther away you get from actu­al­ly being involved in pro­duc­ing oil, the less you seem to be con­cerned about the phys­i­cal real­i­ty and prob­lems that are there. Is the thing that gets me, Tony, is like, there’s just this sense of exu­ber­ance and opti­mism in the mar­kets.
That makes absolute­ly no sense to me.
TK: It, it does­n’t, and unfor­tu­nate­ly, I, yeah, I don’t like to pre­dict, but it, it’ll catch up with us, with us at some stage and the mar­ket will retrace dra­mat­i­cal­ly, I think. Um, not just, so a cou­ple of points on what you just report­ed. Uh, I can’t see the oil majors rely­ing on the Straits of Hor­muz if they can avoid it [00:07:00] going for­ward, because even if, even if they have to, in the short term, they’re pos­si­bly gonna have to pay a toll.
To use it, whether that’s a toll on Iran’s per­mis­sion or whether that’s some kind of sup­port for the US keep­ing the straits open. Um, there has been plans to build a pipeline down the west­ern side of the Strait so that oil can get through with­out hav­ing to wor­ry about inter­ven­tion. That’s a. Big, big cost, but I, I’m sure that that is being dust­ed off and they’re hav­ing a look at that, or they’ll find some oth­er way to, to get the oil out, which will be more expen­sive.
Um, so that’s prob­lem num­ber one. Prob­lem num­ber two is that the Straits of Hor­muz aren’t the only nar­row­ing in the sup­ply chain for oil. There’s also oth­er places like the Straits of Malac­ca, which um, could be shut down by Chi­na in a sort of sim­i­lar way that Iran’s con­trol­ling sup­ply chain, uh, the sup­ply chain.
And giv­en Chi­na’s mov­ing [00:08:00] away from its depen­den­cy on oil and gas, it’d be a real­ly neat trick to go for the elec­tric and then close down the Straits of Malac­ca, which would stop oil from get­ting to South­east Asia and pos­si­bly to us as well. So it’s, it’s not just one choke point. I, I would think that the oil indus­try’s look­ing at all the choke­points and build­ing plans and they, the prob­lem is not gonna be the low­est cost plans.
They’re gonna be the risk free plans and not cost mon­ey. And it’s not just oil. It’s gonna flow through to plas­tics, chem­i­cals, fer­til­iz­ers. Almost every part of the sup­ply chain has a cost increase because of this.
Cameron Reil­ly: I was read­ing a lit­tle bit about the idea of build­ing a pipeline across, well, what Qatar or Oman or what­ev­er is down on
that oth­er side of it. And yeah, it does­n’t sound like a week­end project.
TK: No it does­n’t.
Cameron Reil­ly: go to Bun­nings, get some pipe, throw it down. there’s some pret­ty big moun­tain ranges through there, so
TK: right.
Cameron Reil­ly: I read like hun­dreds of bil­lions of [00:09:00] dol­lars and decades to build a pipeline through there.
TK: Real­ly.
Cameron Reil­ly: yeah, It’s not a, not a short term solu­tion.
TK: Right.
Cameron Reil­ly: Elon can just fly rock­ets, some rock­ets there. Rock­ets can come up and come down on the oth­er side. Reusable rock­ets.
TK: Yeah, he’s, he’s pret­ty good at find­ing economies in infra­struc­ture, isn’t he? In gov­ern­ment? Gov­ern­ment depart­ments?
Cameron Reil­ly: Well,
TK: think I’ll be rely­ing on Elon, but I mean, they might do some­thing like put it on rail, for exam­ple, rather than ship it in in big tankers, which should be, again, cost­lier, but less risk.
So I think that’s gonna be the, there’s gonna be solu­tions like that until more per­ma­nent ones are found, but they’re gonna be cost­ly.
Cameron Reil­ly: Hmm. Well, speak­ing of gov­ern­ment depart­ments deal­ing with mon­ey, uh, New York Times today, uh, Trump admin­is­tra­tion takes steps to refund $166 bil­lion in tar­iffs. The gov­ern­ment debuted a sys­tem to repay importers. Two months after the [00:10:00] Supreme Court struck down tar­iffs at the heart of the Pres­i­den­t’s trade pol­i­cy. Uh, but guess who’s not get­ting any mon­ey back is the peo­ple who paid their mon­ey. Um, the con­sumers,
Amer­i­can con­sumers. They’re not get­ting refunds.
TK: Yet, you got­ta expect there to be class actions, would­n’t you?
Cameron Reil­ly: wow. Yeah. I mean, lawyers have got­ta make a buck, some­how. Got­ta feel sad for the lawyers. Um,
TK: of the Amer­i­can econ­o­my. The lawyer?
Cameron Reil­ly: Um, yes. Like just what, what a deba­cle like, uh, com­plete, com­plete and utter deba­cle.
TK: Yeah.
Cameron Reil­ly: guy has done
TK: Yeah.
Cameron Reil­ly: and utter mess any who in a sign of the expect­ed demand. More than 3000 busi­ness­es, includ­ing [00:11:00] FedEx and Cost­co, have already sued the Trump admin­is­tra­tion in a bid to secure their refunds before the appli­ca­tion web­site launched, with some cas­es filed even pre­dat­ing the Supreme Court’s rul­ing, but only the enti­ties that offi­cial­ly paid the tar­iffs are eli­gi­ble to recov­er that mon­ey.
That means that the fuller uni­verse of peo­ple affect­ed by Mr. Trump’s poli­cies, includ­ing mil­lions of Amer­i­cans who paid high­er prices for the prod­ucts they bought, are not able to apply for direct relief. You’re tired of the win­ning yet Amer­i­ca.
TK: Well, it’s, that’s an inter­est­ing point as well. ’cause if, if, uh, there is a prece­dent set that the end user gets to pay for a, a gov­ern­ment act­ing ille­gal­ly, in this case it’s tar­iffs, then it must apply to oil as well. So it’s like gov­ern­ments act­ed ille­gal­ly, Con­gress has­n’t approved this incur­sion to the Straits of Hor­muz, what­ev­er you wan­na call it, and it’s pushed up all the prices for Amer­i­cans.
There’s anoth­er set of. Legal actions pend­ing, I would’ve thought,
Cameron Reil­ly: Yeah. Yeah, you’re [00:12:00] prob­a­bly right. Well, mov­ing clos­er to home. Um, big arti­cle in the finan­cial review about Hamish Dou­glass, for­mer­ly of
TK: sor­ry. Be, can I make one more point? I was gonna,
Cameron Reil­ly: Hmm.
TK: in my notes talk a lit­tle bit about the fact that in the earn­ings sea­son that’s hap­pen­ing in the US I saw an arti­cle report­ing on that for the bank­ing sec­tor. And the head­line was some­thing like, volatil­i­ty is our friend. And so the banks have been mak­ing huge mon­ey out of buys and sells dur­ing this peri­od of volatil­i­ty.
Um, so some­one’s win­ning out of it, and if some­one’s win­ning out of it, it’s prob­a­bly not gonna stop soon.
Cameron Reil­ly: Yeah, well, not to men­tion the peo­ple that, play­ing arbi­trage with the
TK: Yeah.
Cameron Reil­ly: uh, you know, who obvi­ous­ly have a bit of an inside track, I imag­ine.
TK: Mm-hmm.
Cameron Reil­ly: Yeah. It’s just a, like, it’s just such a huge grift. Um, I was talk­ing to one of my Amer­i­can, uh, TPN lis­ten­ers, uh, [00:13:00] on chat there, actu­al­ly. You, you, you, you met him, uh, Tim in the, uh, Vegas days.
I think you were there years ago. Tim Hen­ning, back when Markum and Ray and all of us were in Vegas, Tim was there. He was check­ing in and he was say­ing like, the whole thing is just a pyra­mid scheme. Like it’s just the guys at the top mak­ing all the mon­ey from the peo­ple down the bot­tom. And yeah, it’s
just, he’s dis­gust­ed with the whole thing.
TK: Well, but we’ve seen this before with the US elec­tions. They put a use­ful idiot in, they make lots of mon­ey. The use­ful idiot can make a bit of mon­ey as well them­selves, and
Cameron Reil­ly: Hmm,
TK: the machine just keeps grind­ing on.
Cameron Reil­ly: Hmm. Oh, back to clos­er to home. Hamish Dou­glass. Um, from Mag­el­lan, so it was a few years ago now. We watched sort of the, the Mag­el­lan, uh, implo­sion.
TK: Yeah.
Cameron Reil­ly: shock­ing at the time. I
TK: Mm-hmm.
Cameron Reil­ly: one of the most suc­cess­ful funds in Aus­tralia. High­ly respect­ed Hamish Dou­glass, high­ly [00:14:00] respect­ed. Then it all just, you know, I don’t remem­ber the details.
I just remem­ber some­thing implod­ed and he left and he got a divorce and some of his major back­ers pulled out and
TK: Cor­rect.
Cameron Reil­ly: was­n’t, was­n’t real­ly clear at the time. There were some bad invest­ments, but it was­n’t real­ly clear at the time what went wrong. And I. There was a big inter­view with him in the finan­cial review yes­ter­day, I think turns out that he had a, he had a break­down, came out as gay to his wife and four chil­dren. Um, and, uh, yeah, just, I don’t know, the, the, the pres­sure of, uh, liv­ing what­ev­er life he was liv­ing, um, real­ly took the. worst turn for the worst for him. So yeah, I felt pret­ty sad for the guy read­ing that arti­cle.
TK: Oh, did you?
Cameron Reil­ly: like, yeah, I did. It sound­ed, it sound­ed like he’d real­ly been through a rough I mean, know, being [00:15:00] as suc­cess­ful and as well known in invest­ing cir­cles as he is. And then, you know, going through this sort of los­ing his busi­ness and los­ing his, you know, mar­riage and hav­ing to come out as gay, which obvi­ous­ly was­n’t easy for him, appar­ent­ly says that he had an extreme case of post-trau­mat­ic stress dis­or­der and, uh, yeah.
So it was all pret­ty, pret­ty trau­mat­ic. So I felt, I felt bad for the guy. Did you read the arti­cle?
TK: I did, it was, uh, quot­ed from Joe Aston’s Ram­part
Cameron Reil­ly: Yeah.
TK: with him. Yeah, it was inter­est­ing. I thought it’s, um. Inter­est­ing from the point of view of the his­to­ry of it. Now we can see behind the cur­tain because it did­n’t make a lot of sense at the time.
Cameron Reil­ly: Yeah.
TK: did look like he was spin­ning out of con­trol.
’cause my rec­ol­lec­tion was he’d made a few stum­bles on the invest­ment side and then went miss­ing and then um, peo­ple had to step in to take over and there was the whole start­up of Bar­ren­joey, which was [00:16:00] being ques­tioned as well. So which has turned out to work out to work, have worked out well for them.
Um, so yeah, there’s obvi­ous­ly some­thing going on. There were a lot of rumors cir­cu­lat­ing at that time. Like, um, I think, uh, I should­n’t say I should­n’t attribute sources, but there were rumors around the fact that he was spend­ing his life sun­ning him­self on Pack­er’s yacht in the Mediter­ranean and had not paid enough atten­tion to the busi­ness and all sorts of things.
And you know, I guess in hind­sight, they’re typ­i­cal­ly the rumors that start to fly when some­one is hav­ing a prob­lem and. Isn’t deal­ing with it in the pub­lic, um, eye, I guess, and tak­ing time off and not answer­ing the phone or what­ev­er. So yeah, it is a shame. Hamish, Hamish Dou­glas was one of the first peo­ple I, um, start­ed to lis­ten to when the ASX put pod­casts up in the very, very ear­ly days of pod­cast­ing.
Rosa Mont­gomery was anoth­er one. Um, and, you know, I was fol­lowed their, their career. Uh, him and Dou­glas. Hamish [00:17:00] Dou­glas, sor­ry, uh, uh, not Hamish Dou­glas. He’s Hamish Dou­glas Mack­ay, I think is, which one’s he, he’s, we’re talk­ing about Mack­ay and there’s, Dou­glas is the oth­er one who found him, who’s now stepped back into, have a, a more hands-on approach to it.
So, yeah, so I, I’ve been a, along the jour­ney with them at least, um, watch­ing. Their announce­ments and um, lis­ten­ing to their pre­sen­ta­tions, et cetera. Uh, you know, there were peo­ple who were call­ing him the War­ren Buf­fett of Aus­tralia ’cause they had a great track record and they’re a lit­tle bit counter cycli­cal.
They came through the GFC, all that kind of stuff. So, uh, it is a shame when, when it, um, affects them per­son­al­ly. And it’s a shame too that the insti­tu­tion itself did­n’t gath­er around him a bit bet­ter and pro­tect him and, you know, deal with the fact that he was stressed and give him some time off or what­ev­er, or find some­one to sup­port him.
Um, that’s always a shame as well, I think, and it’s prob­a­bly a shame going for­ward from this kind of rad­i­cal hon­esty often does­n’t help a career [00:18:00] if he, if he isn’t retired, if he thinks he might have a future in the indus­try, it’ll be, it’ll take a a while for him to come back, I would’ve thought.
Cameron Reil­ly: He is only 57 young dude.
TK: Yeah.
Cameron Reil­ly: It says, um, in the end it was his wife Alexan­dra, who pulled the pin on Dou­glas’s time at Mag­el­lan, an invest­ment giant he’d helped to cre­ate 15 years ear­li­er after she found him sob­bing in the cor­ner of a hotel room say­ing he could­n’t go on, picked up the phone to Deputy Chair­man Hamish McClen­nan, and on Feb­ru­ary 7th, 2022, an announce­ment was released to the ASX that Dou­glas was step­ping down for med­ical rea­sons. The truth was that this rock­star fund man­ag­er had suf­fered a com­plete men­tal break­down and for over a year, he could not bring him­self to read a news­pa­per, turn on the tele­vi­sion, or even lis­ten to the radio. It was dur­ing that year, he, again, thought about sui­cide. I had Mag­el­lan, which was my life, and I had employ­ees and share­hold­ers who I deeply cared about, who I did­n’t want to lose, but I could­n’t see a way out.
He says, um, it’s part of the rea­son that Dou­glas says he’s [00:19:00] decid­ed to speak out pub­licly about his expe­ri­ence of being so high pro­file, com­ing out as a gay man, and feel­ing so iso­lat­ed that he thought about killing him­self. Had my wife not picked me up at that moment and actu­al­ly tak­en me to the farm.
You know, I don’t think I’d be here today. He says, and I, I, I guess my point with this is, you know, you, you and I have talked about this a lot. Um, I prob­a­bly pri­vate­ly over the years, but it does­n’t mat­ter. I, I tell peo­ple this, all I tell my kids this, you know, my adult kids, fame, suc­cess, mon­ey, all of that mat­ters.
Noth­ing unless you have your phys­i­cal health and men­tal health. Don’t think we live in a soci­ety that pri­or­i­tizes men­tal health as much as it should. We, we talk about it more today than we did, you know, 20, 30 years ago. We talk about phys­i­cal health a lot more now too. But you know, I think men­tal health is not real­ly the pri­or­i­ty.
I don’t find a lot of peo­ple real­ly, they might go to ther­a­py, but they [00:20:00] don’t know that they real­ly invest as much time and effort into hav­ing a philo­soph­i­cal frame­work that enables them to process life’s ups and downs. And you’re gonna go through those ups and downs. It does­n’t mat­ter how much mon­ey you’ve got, how much fame, you know, you’re gonna go through ups and downs in life.
And, uh, you need to have a healthy frame­work for pro­cess­ing those before you get into them. It’s like, no, no, no point being, you know, five XL t‑shirt size and hav­ing, you know, bypass surgery and then decid­ing to take your health seri­ous­ly. Right? It’s, you got­ta do it ear­li­er than that. Um, and uh, and I’m speak­ing from expe­ri­ence.
I wish I had tak­en my health seri­ous­ly a lot ear­li­er than I did, but I think it’s the same with men­tal health. You need to. Pri­or­i­tize it before you need it. ’cause you need to have that frame­work in place. And I think this is a clas­sic, uh, case in point,
TK: Yeah. So GHI for, uh, rais­ing the issues, um, and I, I, I, [00:21:00] again, I come back to the cor­po­rate per­spec­tive, which is fund man­agers are key men and, and, and women, and there’s key men risk in these com­pa­nies. And so I won­der what the board was doing at Mag­el­lan, like he said in his inter­view that he, and you just repeat­ed it, that he spent a year not being able to turn on the news or read a finan­cial news­pa­per.
I mean, that must have been evi­dent to some­one in the office at Mag­el­lan. Um,
Cameron Reil­ly: I think this is after he left, he had
TK: was it okay?
Cameron Reil­ly: left. Yeah. Yeah. He went to a farm and just
TK: Yeah. Any­way, but, but he would’ve been exhibit­ing signs I think before it got to a head.
Cameron Reil­ly: Lori masked it. Well, peo­ple mask, you know, they put on a brave face.
TK: Yeah, all of it’s pos­si­ble.
Cameron Reil­ly: Hmm.
TK: My point is that there’s got­ta be a plan in place to replace the key man.
Cameron Reil­ly: Mm-hmm.
TK: you know, when it hap­pened, I remem­ber peo­ple were ask­ing, is this a red flag? ’cause he’s, he’s left for med­ical rea­sons and that was all it said, you know, is, is that the usu­al, spend­ing more [00:22:00] time with the fam­i­ly?
Is that an excuse? What’s the prob­lem? Is he gonna come back after surgery? You know, what does that mean?
Cameron Reil­ly: Mm-hmm.
TK: Um, and then I think it took a while and then the, the oth­er part­ner stepped back into the busi­ness on a, a more day-to-day basis. But, uh, that took a while for hap for it to hap­pen, and peo­ple pulled large man­dates from the busi­ness.
So, yeah, it was­n’t, it looked like it was a, a cleanup oper­a­tion rather than a, a well-oiled plan being put in place.
Cameron Reil­ly: Yep. Well, speak­ing of cleanup, oper­a­tions, News Corp should not have been at the top of the buy list this week. Peo­ple.
TK: Mm-hmm.
Cameron Reil­ly: I went to buy it, I was gonna add it both to the light port­fo­lio and then lat­er to my super port­fo­lio. ’cause I’m hav­ing a hard time find­ing any­thing to put in my super port­fo­lio after I sold Reg­is and I was part of my brain was like, ah, I mean part from the just gag reflex of hav­ing to buy Rupert. Um, I thought there was some­thing going on. And then I was look­ing at the, look­ing [00:23:00] at my report that I was prepar­ing for the light port­fo­lio and I looked at the PROPCAF and I was like, well that’s high. Um, and then yeah, real­ized that there was a prob­lem with the report­ing. So I’ve added it to my notes and my check­list now, so it won’t hap­pen again.
Apolo­gies to every­one, but yeah, you, think did point out a cou­ple of weeks
TK: Yeah.
Cameron Reil­ly: yeah, that the Stock Doc­tor num­bers were wrong again,
TK: Yeah, so I, I looked into that this morn­ing. So Stock Doc­tor say­ing is say­ing that there’s 42, I guess that’s. 42 mil­lion shares out­stand­ing.
Cameron Reil­ly: Hmm,
TK: But Yahoo Finance is say­ing 548 mil­lion. So, and I think Yahoo’s right?
Cameron Reil­ly: hmm. And, uh, from mem­o­ry, I actu­al­ly did email Stock Doc­tor about this
TK: Yeah.
Cameron Reil­ly: and told them to look into it and then did­n’t make a note. So for­got. ’cause I have the mem­o­ry of a gold­fish, so, so hope­ful­ly nobody bought that with­out check­ing first. And if you did, do your own [00:24:00] research before you buy stuff.
Peo­ple, I dun­no how many times I need to say that. I mean, I, I can’t be good look­ing and per­fect, um, all the time, uh, you know.
TK: So which one are you? You can’t be both.
Cameron Reil­ly: yeah, some days I’m per­fect, some days I’m good look­ing. Um, thank you to Mark, to, uh, Har­graves who did email me after I’d already picked it up and advised every­one, but I, I appre­ci­ate him tak­ing the effort to reach out and let me know that I’d screwed up. Um, Hori­zon, Tony, we’ve talked about Hori­zon and Q. Quite a few times over the last four or five weeks, attempt­ed acqui­si­tion, the board said, no, this came out April 16th, but I only saw the last cou­ple of days from Mals. Uh, dear Adam slash Sir, I dun­no what they’re sug­gest­ing about my, uh, gen­der deci­sion, but okay.
TK: You are not gonna come out are you can if you like. It’s okay.[00:25:00]
Cameron Reil­ly: I’ve been com­ing out on my his­to­ry shows with Ray for 13 years. Tony Hori­zon Oil Lim­it­ed Off Mar­ket takeover bid for Q Ener­gy Resources Lim­it­ed. Sec­ond sup­ple­men­tary bid­ders state­ment. We act for Hori­zon Oil Lim­it­ed in respect of its off mar­ket takeover bid for all of the ordi­nary shares in Q Ener­gy Resources Lim­it­ed that Hori­zon did not already have a rel­e­vant inter­est in blah, blah, blah.
Um, so appar­ent­ly they’ve got over 50% of
TK: Yeah.
Cameron Reil­ly: now is the bot­tom line.
TK: Yeah. I thought it was an inter­est­ing sec­ond bid­der state­ment with no bid. It was just, it was just basi­cal­ly say­ing we own more than 50% now, so you should accept. Our cur­rent offer,
Cameron Reil­ly: Yeah.
TK: which is the cur­rent offer for those who don’t know, it’s, uh, 0.8 of 1 cent per share cash plus 0.5625 Hori­zon shares.
As of this morn­ing, Hori­zon was trad­ing at 23 cents. So [00:26:00] that val­ues Q at 13.70 cents, and I think the price has now dropped back to match that 13 cent price.
Cameron Reil­ly: Dang.
TK: Um, yeah, so I guess that’s, that’s the first thing to note. The, that price around the bid price, um, which sug­gests the mar­ket does­n’t expect a high­er offer, and I would­n’t expect a high­er offer either.
They’ve got a, if there is a high­er bid com­ing in, they, the Q, uh, Hori­zon already had more than 50%, so it’s gonna be hard to, to, uh, dis­lodge them, I would’ve thought.
Cameron Reil­ly: I own a cou­ple of parcels of Hori­zon, none of Q, but a cou­ple of Hori­zon, and it’s down since I added them ear­ly last month.
TK: So just be, if any­one owns Q out there, um, not giv­ing finan­cial advice, but just have a good think about whether you wan­na sell on mar­ket or hang around. So my rule of thumb is that, uh, when it looks like it’s all done [00:27:00] and dust­ed, um, it’s prob­a­bly worth bet­ter off sell­ing and putting your mon­ey to work some­where else because this could drag on.
Now, um, anoth­er bid could come along. So, you know, I could be wrong. Um, some­one, some­one who’s already agreed to sell to Hori­zon might renege. Um, it’s it, but it’s an unusu­al cir­cum­stance if that hap­pens. Uh, you don’t wan­na wait and what­ev­er you do, don’t wait for com­pul­so­ry acqui­si­tion, which means that Hori­zon get to prob­a­bly 90% of the share­hold­ing and then under, under the, uh.
Cor­po­ra­tions Act, they can acquire the remain­ing 10%. Um, but they have a fair bit of time to do that, uh, and they get to acquire at the bid price and you have to wait, you know, poten­tial­ly months for your check. So you’re bet­ter off watch­ing what’s hap­pen­ing, watch­ing the announce­ments, and sell­ing out before that hap­pens.
Cameron Reil­ly: Speak­ing of acqui­si­tions, and this is, we’ll talk a bit more, more about this in our Amer­i­can show, but, um, Top­golf Call­away, I’ve been [00:28:00] say­ing recent­ly it was up, it’s up 43% since we added it, uh, on the 12th of Novem­ber. I only just found out last night why the 18th of Novem­ber, a pri­vate equi­ty firm took it over,
TK: Ah,
Cameron Reil­ly: gob­ble it up.
So, uh, oh. Hel­lo? Green smooth­ie girl. Thank you. Thank you.
TK: can I have one too?
Cameron Reil­ly: Tony wants one too. Oh, I wish I could send her one. Yeah, she said she would send you one if she could. Yeah. So a week after we added it to the port­fo­lio, it got acquired. Well, the Top­golf, uh, sec­tion of it did too. So not the Call­away side of it.
TK: Yep.
Cameron Reil­ly: sold off the Top­golf bit.
So. Did­n’t know that. Just saw the price go up, thought that’s nice, but appar­ent­ly some­body else saw val­ue in it as well. Mov­ing right along. Uh, last thing on my list of talk­ing points for Aus­tralia, Duratec is pleased to advise the Duratec Joint Ven­ture, DEJV, it’s [00:29:00] 50 50 joint ven­ture with URec has been award­ed a $281 mil­lion con­tract for the infra­struc­ture upgrades to sup­port future sub­ma­rine capa­bil­i­ty HMAS Stir­ling on the Dia­man­ti­na wharf at Gar­den Island in West­ern Aus­tralia. Very nice. I just men­tioned that ’cause I love Duratec. Uh, uh, I own them in a bunch of dif­fer­ent port­fo­lios, uh, includ­ing the W port­fo­lio and the light port­fo­lios added them. The first time to the light port­fo­lio. Novem­ber 22. Cur­rent­ly up 456% since I added that, added ’em again on June 23 to anoth­er light port­fo­lio.
It’s up 296%. Feb­ru­ary 23, I’d add ’em to the dp. It’s up 290%. Then there were a cou­ple of, well, three times I list­ed them as a pos­si­ble buy for our light sub­scribers and they’re up 168 to [00:30:00] 231%, um, since ear­ly 2023. So yes, hats off to con­tin­ued suc­cess for our friends at Duratec. A five bag­ger. I think that’s the first five bag­ger had in my time at QAV.
Tony?
TK: Well, that’s great. I can see why you love them.
Cameron Reil­ly: Nah,
TK: Yep.
Cameron Reil­ly: bag­ger in three. Uh, yeah, three and a half years. Wow. Well, we should have sold that when they did. A hun­dred per­cent. Tony. We should have tak­en prof­its off the table.
TK: Or when they pulled back a lit­tle bit.
Cameron Reil­ly: Yeah. Yeah. When they dropped back a lit­tle bit. Yeah. Should have,
TK: Hmm.
Cameron Reil­ly: done a hug line. Um, I’m kid­ding. As sar­casm folks. Uh, ’cause I’m a whing­ing bitch­es. Um, I don’t know. What do you got on
your,
TK: and winge and win, as you say, on the golf course.
Cameron Reil­ly: uh, winge and win­ners?
TK: Yeah. Winge and win. Yep.
Cameron Reil­ly: Oh, okay. Why?
TK: No. Oh, well usu­al­ly, usu­al­ly if I’m out [00:31:00] on the golf course, I’m whing­ing about this or that or what­ev­er. You play bet­ter. At least it means you’re focus­ing on your game. And what’s around you?
Cameron Reil­ly: okay. What do you got on your list of talk­ing points today? TK.
TK: Well, not so much win­ning. A cou­ple of, cou­ple of neg­a­tive arti­cles. Uh, just want­ed to take time to talk about Viva Ener­gy. So with the price of oil rid­ing high, you would’ve thought they’d be doing well, but, um, they’ve had. Three toe stubs in the last cou­ple of weeks. I did a Pulled Pork on them a lit­tle while ago when the, just after the war start­ed, and they looked the goods, but at the time we, we talked about, uh, On the Run, which was their con­ve­nience store pur­chase from South Aus­tralia, and they had to write it down and the COO fell on his sword and left the com­pa­ny, um, main­ly because of that write down.
But then I read anoth­er call, I think it was last week, uh, may have been just before that, but, uh, the write down was­n’t cal­cu­lat­ed [00:32:00] cor­rect­ly accord­ing to the reg­u­la­tor. And so PwC or who’s the audi­tor was ques­tioned over the cor­rect write down cal­cu­la­tion. And I think they had to take anoth­er 25 mil­lion odd pro­vi­sion at that stage.
And then, uh, lo and behold, when every­thing’s. Through the refin­ery. It blows up. There’s a fire at Gee­long last week, which every­one would’ve heard about in the news. But, um, it seems like bad things come in threes for this busi­ness. Uh, so I, I just won­der what that means for man­age­ment going for­ward.
Cameron Reil­ly: Our stock take you think?
TK: No, no, I don’t think that at all.
I, I mean, why would you try and you, you, I think per­son­al­ly what’s prob­a­bly hap­pened is the refin­ery was meant to have a go through a main­te­nance, uh, nor­mal sort of main­te­nance plan where they would’ve shut down parts and repaired them. But because they’re pump­ing 7 24 at the moment, they prob­a­bly deferred some of that and then the valve burst and, uh, it start­ed the fire.
So [00:33:00] I think they’re try­ing to dance between delay­ing, defer­ring and doing as lit­tle main­te­nance as pos­si­ble at the moment to keep every­thing run­ning quick­ly, um, and pump­ing as much as they can. And that. Did­n’t work for them last week.
Cameron Reil­ly: Hmm.
TK: Yeah. But I mean, I look at, I look at them, I look at Wood­side, I look at San­tos and oth­er gas play­ers and oil com­pa­nies, and you think, why aren’t you worth mul­ti­ples of what your stock was trad­ing at before the Iran war?
And now that mar­gins are so high and none of them seem to be. So I don’t know what that reflects whether there’s oth­er things going on with these com­pa­nies. But yeah, it, what it does reflect is that when the oil price goes up, it does­n’t flow flow through to their mar­gins or they do bad things at the time, and that reflects neg­a­tive­ly on the shares.
But any­way, I just high­light­ed that, um, I thought the micro­scope’s on Viva and it’s, it’s high­light­ing some prob­lems [00:34:00] with the com­pa­ny. Hope­ful­ly they’ll come through it and they’ll improve, but, um, gee, we, this is their time to shine and it has­n’t worked.
Cameron Reil­ly: Well, to be fair, their share price in the mid­dle of Feb­ru­ary was a dol­lar 70. It’s now $2 37, so
TK: And it was high­er before the it
Cameron Reil­ly: I,
TK: halt­ed trade and then came back on.
Cameron Reil­ly: well, yes, it was up $2 65 and it’s
come back down, but you know, they’ve, they’ve had a pret­ty good cou­ple of months.
TK: Oh yeah. They’re def­i­nite­ly up and, but they should be up a lot, should­n’t they? A lot, a lot more per­haps than what they are.
Cameron Reil­ly: I dun­no, it’s beyond my pay grade, Tony. I dun­no. I know that I own them in a cou­ple of port­fo­lios, includ­ing my super port­fo­lio, and they’re up about 14% since I added them on the 17th of March. So, you know, I’m not com­plain­ing.
TK: Okay. Well, I’ll move on. I, I guess the, the point is I think the board will be look­ing at man­age­ment with all these prob­lems.
Cameron Reil­ly: Okay.
TK: The next arti­cle [00:35:00] I want­ed to talk about was the banks and I’m, I guess this goes back to our first. Arti­cle in the, in, was it The New York Times about the Amer­i­can econ­o­my? But this is, I, I guess, a fore­shad­ow for the Aus­tralian econ­o­my.
It’s, um, I’m always very ner­vous when banks start rais­ing pro­vi­sions for bad and doubt­ful debts. Um, as I said before, I don’t like to pre­dict, but that is one thing which is often the canary in the coal mine for the econ­o­my in Aus­tralia. And then even­tu­al­ly the, a bad econ­o­my flows through to a bad stock mar­ket.
So both West­pac and NAB have come out in the last week or so and they’ve increased their bad debt buffers and, um. The West­pac, uh, announce­ment said that they were brac­ing for, for poten­tial loss­es from ener­gy inten­sive busi­ness cus­tomers hit by the fuel price squeeze. Uh, but the NAB one talks about, um, [00:36:00] about, uh, NAB rais­ing its pro­vi­sions because they were, uh, fore­cast­ing a, a rise in unem­ploy­ment.
And that’s prob­a­bly not just about the oil price, but also about inter­est rate ris­es and oth­er cuts because of AI, et cetera. So, um, it’s often been a cor­re­lat­ing issue between the amounts banks, uh, have on their books for bad debts and their share price. Um, and it’s always a good time to buy banks when that pro­vi­sion is being writ­ten is being decreased, but now it’s being increased.
You know, we have to, I’m not gonna change the rules ’cause I own ANZ and there’s still a buy. But, um, yeah, in terms of a fore­cast­er for the Aus­tralian econ­o­my, it’s not good.
Cameron Reil­ly: Increas­ing their War­ren Buffer, that what they call it, War­ren Buffer. A
TK: Bad debt.
Cameron Reil­ly: not on my buy list.
TK: Yeah, it was, I, I saw that it was on your list and I did mine this morn­ing and it was a 0.1 on my buy list this morn­ing.
Cameron Reil­ly: Oh,
TK: So I dun­no if there’s been a change in the stock price, [00:37:00] which has nudged them on, but Yeah.
Cameron Reil­ly: Yeah. Well look, it just stands to rea­son from
all that stuff that we men­tioned before, that it’s gonna be a tough, it’s gonna be a tough for a lot of busi­ness­es and peo­ple in the next what­ev­er peri­od of time, the way things are going. But
TK: And that’s one of the won­der­ful, the won­der­ful things about the stock mar­ket is it’s, it’s, you’ve got the bru­tal­i­ty of busi­ness­es out there who are mak­ing deci­sions about their finan­cial futures and they’re now pro­vid­ing more for the risk of a reces­sion. So you don’t have to form an opin­ion your­self.
Cameron Reil­ly: Hmm
TK: Um, you can watch what the experts are doing.
Cameron Reil­ly: hmm. Yes. And yet the mar­ket’s near­ly at an all time high. It’s off a
TK: Cor­rect.
Cameron Reil­ly: Today, but still pret­ty close.
TK: Yep. So it’s, that’s not good news, I don’t think. We’ll, we’ll keep trad­ing the way we do and see where we end up, but yeah,
Cameron Reil­ly: Hmm.
TK: sus­pect that, uh, it’s gonna get worse before it gets bet­ter.
Cameron Reil­ly: So what you’re say­ing is go to cash, [00:38:00] sell every­thing, go to cash, is
TK: I’m not say­ing that, I’m say­ing, uh, I’m say­ing the banks, uh, think­ing it’s gonna get worse before it gets bet­ter.
Cameron Reil­ly: Oh,
TK: Whether that means we go to cash now or in next month or in six months. I don’t know.
Cameron Reil­ly: You’re not Chick­en Lit­tle-ing it.
TK: No
Cameron Reil­ly: Okay. Chick­en Lit­tle.
TK: Chick­en Lit­tle. No, the sky isn’t falling. It’s the first increase in bad debts and, uh, you know, I’d have to go back and do some kind of analy­sis to see whether it’s the first or the third increase in bad debts that, you know, is when the share mar­ket tips over. But it’s, it’s a trend that’s start­ing now.
Cameron Reil­ly: I’ve got so many, um, episode title pos­si­bil­i­ties here today. It’s, you might use all of them. Old man shout­ing at clouds, whing­ing, bitch­es, war­ren buffers, and Chick­en Lit­tle. Oh dear.
TK: that’s good.
Cameron Reil­ly: Yeah.
So
TK: you
can put out, put out dif­fer­ent ver­sions. Put out, [00:39:00]
Cameron Reil­ly: Yeah.
TK: Yeah. And then make one the col­lec­tors item. There’s only two.
Cameron Reil­ly: uh, it’s
AB test­ing. See which,
which, uh, one does bet­ter.
TK: yeah. Good idea. Um, cou­ple of things on, speak­ing of War­ren Buf­fett, I got round to read­ing Greg Abel’s first let­ter to share­hold­ers, uh, from, uh, his take, or he’s become the CEO of Berk­shire Hath­away now, and he gets to write the annu­al let­ter, which came out in Feb­ru­ary and I did­n’t notice it come out.
I just picked it up recent­ly. So, um, that was inter­est­ing in itself. I guess the fact that he was­n’t get­ting the same sort of, uh, media cut through that the sage gets.
Cameron Reil­ly: Hmm.
TK: Um, but a cou­ple of things I that I picked up on, he, he still is quot­ing War­ren a lot, and one of the things he quot­ed on was, um, uh, com­ment that War­ren Buf­fett made a long time ago that he drew, drew inspi­ra­tion from a, a base­ball play­er called Ted Williams.
And Ted Williams, uh, said that he divid­ed the strike zone into 77 [00:40:00] seg­ments and tried to swing only at pitch­es in a much small­er hap­py zone, result­ing in a career, um, high and all time Hall of Fame, high bat­ting aver­age back in 1941. So that kind of remind­ed me of QAV that, that we also don’t swing at every pitch and don’t, don’t chase trends and don’t try and, you know, fol­low the hot hand.
We just dis­till things down into a sub­set of the share mar­ket and then wor­ry about whether they’re, which one of those to buy. So very sim­i­lar com­ment,
Cameron Reil­ly: The Hap­py Zone. Anoth­er
TK: the Hap­py Zone. Anoth­er title. Yeah.
Cameron Reil­ly: I like that one. Yeah. The Hap­py Zone.
TK: Yeah.
Cameron Reil­ly: I like that.
TK: Um, oth­er thing I noticed in the, in Greg’s let­ter, and it’s, you know, I’m not try­ing to pick on Greg, it’s, um, big shoes to fill for him and he’s, he’s, War­ren would­n’t have picked him if he was a clown. So, uh, you know, he’s, he’s very com­pe­tent. But, um, one thing I noticed was he talked a lit­tle about cul­ture.
So he was talk­ing about the [00:41:00] strength of the, of the Berk­shire Hath­away decen­tral­ized man­age­ment style, which I’ve always admired because I’ve worked in big com­pa­nies and they can be very bureau­crat­ic, and if some­one low down makes a mis­take, they feel the full, full force of that bureau­cra­cy reign­ing down on them.
Where­as Berk­shire Hath­away’s a bit dif­fer­ent. Um, they don’t get in the way. They, they claim to hire good peo­ple who are a good cul­tur­al fit and then. Empow­er them to go out and, uh, make their busi­ness­es grow them­selves, and they just check in from time to time, CEO to CEO and see how things are going. So I think that is a, a very strong mod­el.
But, um, one of the things I noticed was that, uh, Greg has now writ­ten down the Berk­shire Hath­away cul­ture and put it in a pol­i­cy so that that might be a very small bureau­cra­cy, but it’s cer­tain­ly a change from when Char­lie Munger, uh, Char­lie and uh, uh, War­ren lived and breathed the cul­ture and talked about it rather than writ­ing it down as a man­dat­ed pol­i­cy.
So, um, all the things that Char­lie and War­ren have said are in the pol­i­cy, um, about not bring­ing the [00:42:00] com­pa­ny’s, uh, com­pa­ny’s name into dis­re­pute and always act­ing eth­i­cal­ly and all those kinds of things. But just thought it was an inter­est­ing depar­ture from con­tin­u­ous­ly say­ing it, which Greg is still doing, to actu­al­ly writ­ing it down and mak­ing it a pol­i­cy.
And I won­der how many times that prece­dent will get bro­ken in the future going for­ward, and the bureau­cra­cy might creep into Berk­shire.
Cameron Reil­ly: Yeah, I think when you go through, uh, the, the loss of the two sort of fig­ure­heads like War­ren and Char­lie, maybe it is a time to sit down and just, uh, cod­i­fy the, the
TK: Yeah.
Cameron Reil­ly: that they’ve left behind and still, par­tic­u­lar­ly while one of them still around to approve that, cod­i­fy that and con­firm it. But yeah, it’s, it’s gonna be very dif­fer­ent. But that pol­i­cy that you men­tioned, I, I, I tell, um, peo­ple this often when I talk about, when I start­ed at Microsoft, my very first day with my hir­ing man­ag­er at Microsoft in 1998. He sat me down and he said, you know, we had a quick [00:43:00] chat. I flew up to Syd­ney Quick Chat and he said, look, we hired you ’cause you’re smart.
Here are the five things that you need to get done in the next six months. If I can help, you know, gimme a call. We’ll have a week­ly call. You know, we’ll catch up every Mon­day and just, you tell me if you need any help, how things are going apart from that, just go get it done. Right. That was it. It was like, and then it changed.
TK: Yeah.
Cameron Reil­ly: Uh, 5, 6, 7 years lat­er, the cul­ture changed dra­mat­i­cal­ly and it became very micro­man­age­ment. But in the, in the, in the hey­day of Microsoft, it was very much, yeah, we hire you ’cause you’re smart. Go get it done. We’ll stay out­ta your way if you need help, come to me. Right.
TK: Yeah.
Cameron Reil­ly: yeah. And I think that’s a great way to man­age, um, hard­work­ing, ambi­tious peo­ple is just
TK: Mm.
Cameron Reil­ly: stay out­ta their way, you know?
TK: Cor­rect. Yeah, I, I found that some of the com­pa­nies I worked for, that some of the peo­ple who were ris­ing to the top were very good at man­ag­ing the bureau­cra­cy rather than the busi­ness.
Cameron Reil­ly: Yes.
TK: the lawyers and the HR [00:44:00] peo­ple and things like that were get­ting a bit of an out­side say,
Cameron Reil­ly: mm
TK: and then what I would’ve thought.
Um, but yeah. And I also had boss­es who would say that, you know, don’t, don’t both­er me. I’ll send you off to do some­thing. And as soon as they heard that there was a road­block or a first speed bump, they’d be all over you, like a rash. And I’m like, Hey, I’m fix­ing this. If I need help, I’ll let you know. But yeah.
Cameron Reil­ly: yeah. Alright, so, oh, and, and, um, you prob­a­bly saw this as well, uh, there was a thing, it might have been in the finan­cial review today, that Tim Cook’s replace­ment has been announced as well.
TK: Cor­rect. Yeah. The hard­ware, the hard­ware design guy’s tak­en over.
Cameron Reil­ly: yeah. Inter­est­ing times.
TK: Well, if he’s lis­ten­ing, stop chang­ing the frig­ging don­gles for Mac­Books.
Cameron Reil­ly: Stop touch­ing Tony’s don­gle. There’s anoth­er title for today’s,
TK: Leave my don­gle alone.
Cameron Reil­ly: Yeah.
TK: and I’ll have to sit in the cor­ner and not not read news­pa­pers for a year. If you [00:45:00] touch my don­gle,
Cameron Reil­ly: still wish you had a flop­py disc dri­ve? That’s what you want.
TK: I don’t mind progress, but there’s got­ta be a bet­ter upgrade pro­ce­dure. Like if they’re gonna change the,
Cameron Reil­ly: Give him back his flop­py. That’s what Tony wants. I
TK: if they’re gonna make the out­let ports, dif­fer­ent sizes, give you an adapter with the Mac­Book so you can still keep using all your own
Cameron Reil­ly: you
TK: con­nec­tions.
Cameron Reil­ly: Tony. You got­ta buy one at the Mac store for $120.
TK: yeah, after you get home and find out noth­ing fits, then you got­ta go back to the Mac store. It’s like, tell me when I’m there, will you? Yeah. Yeah. Any­way, um, next issue I next, uh, arti­cle I had to talk about was, uh, I noticed the BFL was back on the buy list this week, uh, cer­tain­ly on mine and, um, I thought it might come back on our buy list when I did the Pulled Pork on it before the Iran war when we, or maybe just after when we were look­ing at things to buy and there was noth­ing to buy.
So I did a Pulled Pork on some­thing pre buy list. That was [00:46:00] BFL, the, uh, Papua New Guinea bank. It was back on the buy list today. If any­one liked what they heard in that Pulled Pork, they can look to buy it now.
Cameron Reil­ly: Again, was­n’t on my buy list, but, okay. It looks like they’ve just gone over their lat­est byline.
TK: Hmm. Which puts them on the buy list.
Cameron Reil­ly: Yeah. Yeah. Well, it was­n’t when I did mine on Sat­ur­day, but,
TK: Okay.
Cameron Reil­ly: Very good. Finan­cial group.
TK: And the oth­er, oth­er buy list stock to talk about, I’m not sure if it’s a buy this week, but Cash Con­vert­ers, um, they’ve come out, uh, with some upgrades and again, to talk­ing to this theme of the econ­o­my, wors­en­ing Cash Con­vert­ers is a place you go and arrange, uh, loans, um, and pawn, uh, items, uh, appli­ances or what­ev­er to raise mon­ey.
And so it’s usu­al­ly doing good busi­ness when the econ­o­my’s [00:47:00] tough. But they came out and said recent­ly that dur­ing the six months to Decem­ber, Cash Con­vert­ers post­ed rev­enues of $206 mil­lion up 8% com­pared with the same peri­od in the pre­vi­ous year. And their, what they call their cashies loan book, which com­pris­es short term loans of between 2000 and $10,000 had more than dou­bled to $58 mil­lion.
Cameron Reil­ly: And I lie, it was on my buy list. It was num­ber three on my buy list this week Should have been num­ber two ’cause I should­n’t have had NWS on there. So there you go.
TK: Which one? Cash Con­vert­ers or BFL.
Cameron Reil­ly: BFL
TK: Okay.
Cameron Reil­ly: BFL. Yeah.
TK: Yeah.
Cameron Reil­ly: No Cash Con­vert­ers was­n’t on.
TK: Okay.
Cameron Reil­ly: Hmm.
TK: But it has been in the past.
Cameron Reil­ly: Yeah.
TK: yeah, again, it’s just talk­ing to this theme of the busi­ness­es are show­ing us that the econ­o­my’s turn­ing before the stock mar­ket, uh, real­izes, I think. Okay.
Cameron Reil­ly: Yeah, the, the stock mar­ket does­n’t lis­ten to these busi­ness­es.
TK: They, it will even­tu­al­ly. Yeah.
Cameron Reil­ly: Uh
TK: the last thing I’ve got to [00:48:00] talk about is a pulled pork, uh, which is on Cus­cal as a request, uh, by Dave from Youi. And I got­ta tell you, he’s, he’s real­ly prov­ing his worth, Dave. Um, because Cus­cal was­n’t on my buy list, it was­n’t even in my down­load. And I think he did allude to the fact in his email request that he was find­ing it in, uh, data from Stock­o­pe­dia, but not in Stock Doc­tor.
So that was the first thing I looked at when I did my pulled pork analy­sis.
Cameron Reil­ly: hmm.
TK: So, um, shall I do that now? Do you have any­thing else? Alright, so I did a bit of dig­ging around and the rea­son why. Isn’t in Stock Doc­tor, or in our down­load, in our fil­ter, our QAV fil­ter is because it’s cur­rent­ly has an unclas­si­fied GICS code, GICS code, uh, and we don’t, uh, nor­mal­ly down­load those because most­ly that code is used for fund [00:49:00] man­agers.
And, uh, we’ve tak­en those out of our, our down­loads because, um, num­ber one, oper­at­ing cash means some­thing dif­fer­ent to a fund man­ag­er com­pared to a, a indus­tri­al type busi­ness. And num­ber two, um. If you, you know, find a fund that does bet­ter than QAV, then go ahead and invest in it. But oth­er­wise, chances are you are sub-opti­miz­ing your port­fo­lio if you’re using QAV and then buy­ing funds.
Um, any­way, that’s up to you. But, um, yeah, Stock­o­pe­dia does have it in their GICS code, but it’s in the indus­tri­al sub­cat­e­go­ry, sor­ry, the indus­tri­als cat­e­go­ry, sub­cat­e­go­ry pro­fes­sion­al and com­mer­cial ser­vices. And that just does­n’t seem cor­rect to me. Um, but I did some dig­ging around and appar­ent­ly it can take a while for a new­ly list­ed com­pa­ny and this com­pa­ny list­ed in Novem­ber, 2024 to set­tle on a GICS code, um, which kind of seems strange.
So I dug [00:50:00] into why that was the case and used Google Gem­i­ni to tell me about that. And it basi­cal­ly boils down to a cou­ple of rea­sons. The first one is that, um. The data providers them­selves can often allo­cate a code to, to com­pa­nies rather than take it from a sort of cen­tral repos­i­to­ry. Um, the rea­son they don’t do that, uh, one of the rea­sons they don’t do that is the cen­tral repos­i­to­ry isn’t like a, like a pub­licly list­ed and, uh, freely avail­able, uh, reg­istry.
It’s owned by the rat­ings agen­cies like S&P and they charge a lot for it accord­ing to Google Gem­i­ni. So some­times the data providers do their own allo­ca­tion and to do that, they have found in the past that they can’t go on what the IPO says the com­pa­ny does because it could change. After it lists.
And so they wait for the first annu­al report and then they do a, a rev­enue test and decide [00:51:00] what, uh, code to allo­cate to a par­tic­u­lar com­pa­ny based on the major­i­ty of its rev­enue. So some stock providers are just get­ting around to doing that now, giv­en that, um, they’re wait­ing for the annu­al report, the maid­en annu­al report for Cus­cal, um, that that all seems, you know, kind of, you know.
Ama­teur­ish, in my opin­ion, should be fair­ly easy to allo­cate a com­pa­ny to a code or have a cen­tral repos­i­to­ry of the code. But then again, the code changed appar­ent­ly. So anoth­er rea­son that Gem­i­ni gave me why these GICS codes are often, um, looked at by ana­lysts at this, at the data provider, uh, com­pa­nies is because there was a reclas­si­fi­ca­tion, um, by the rat­ings agen­cies in 2023, and they moved a heck of a lot of com­pa­nies out of the infor­ma­tion tech­nol­o­gy, uh, sub­sec­tion and into either finan­cials or indus­tri­als.
And that was because a lot of com­pa­nies had called [00:52:00] them­selves tech com­pa­nies to get a bump in their share price and weren’t, weren’t real­ly tech com­pa­nies. And if you look at Cus­cal, I guess it’s um, it’s a dif­fi­cult one to allo­cate because they. They are a bit of a Fin­Tech, they’re also a bit of a ser­vices com­pa­ny, and they’re also an ADI, um, uh, an approved deposi­tary insti­tu­tion, which means they can be a bank, so it’s dif­fi­cult to allo­cate them.
And so per­haps either the rat­ings com­pa­nies have it at, made a final deter­mi­na­tion and every­one’s wait­ing for the maid­en report, or the data providers like Morn­ingstar, which Stock Doc­tor uses, does­n’t want to pay S&P to, to, um, sub­scribe to the cen­tral repos­i­to­ry. And it’s still, and it’s still wait­ing to make up its mind, but for what­ev­er the rea­son, Stock­o­pe­dia has one cat­e­go­ry, which looks like it might’ve been either pre IPO or based on the IPO.
And I don’t think this is an indus­tri­al com­pa­ny, uh, [00:53:00] or two. Um, every­one’s wait­ing for the maid­en annu­al report to come out. So long sto­ry short, we don’t have a prop­er GICS code for this com­pa­ny yet, so it’s miss­ing out on our down­load. What I did today though, to be able to do this pulled pork was to put the unclas­si­fied back into the QAV down­load.
And I think I might keep doing that myself. And I guess if peo­ple use my down­load, they might wan­na look at chang­ing the Stock Doc­tor queries as well. So if you, if you are doing that, you go into the Stock Doc­tor fil­ter sec­tion and you can see on the right hand side there’s a whole table of uh, GICS cat­e­gories.
They’re all select­ed except for the top box, which is unclas­si­fied. So I’ve now clicked on that one and select­ed it, and that gives me every­thing. And I’ll just have to men­tal­ly not include funds type busi­ness­es in my um, buys. You know, man­u­al­ly going for­ward myself, I’ll just ignore them men­tal­ly. Uh, they’re usu­al­ly pret­ty easy to spot ’cause they’re all, you know, Pin­na­cle, uh, uh, [00:54:00] yeah, Pin­na­cle Invest­ment or, uh, Pin­na­cle Invest­ment Funds, not the com­pa­ny itself or, um, or BetaShares or some­thing like that.
So often­times they have a four dig­it code, um, ASX code. So that’s anoth­er way to tell them, but they’re pret­ty easy to, to fil­ter out your­self. But it will allow us to pick up any oth­er anom­alies like Cus­cal that, um, that are com­ing in the future. Um. I can, I can cer­tain­ly see why the GICS clas­si­fiers are strug­gling, um, to find a home for Cus­cal.
Um, they oper­ate on the, uh, I think it’s called the NPP, so it’s a new pay­ments plat­form, which is the sort of, uh, peer to peer, uh, real­time pay­ments plat­form, which is grad­u­al­ly, I should­n’t say grad­u­al­ly, it was grad­u­al­ly at the start, but it’s now get­ting a lot of growth as the way to, um, uh, for, for banks and for basi­cal­ly any­one in the pay­ments uni­verse to make, uh, pay­ments and trans­ac­tions.
And, uh, the banks are get­ting on board with a thing [00:55:00] called Osko, which you may have seen in your bank­ing app. If you, um. Pay peo­ple direct­ly. Uh, but they’re also, because Cus­cal are also a ser­vice provider to, um, com­pa­nies, for exam­ple, they, they help, uh, look after cus­tomer data to pre­vent hack­ing and to have it com­ply with the pri­va­cy laws.
Um, and they’re also, as I said before, an autho­rised deposit-tak­ing insti­tu­tion. So, um, they can be treat­ed like a bank as well. So there are a num­ber of dif­fer­ent things, um, in the GICS sys­tem, and it’s tak­ing a while for them to be allo­cat­ed. Um, what, who are they? Well. They’re the only com­pa­ny out­side the major banks with an end-to-end sys­tem con­nect­ing to every pay­ment type, um, to process any pay­ment type.
So it allows the likes of Bendi­go and Ade­laide Bank, ING or Square to process cred­it and deb­it cards, real-time pay­ments or cash with­drawals from ATMs. [00:56:00] So it’s basi­cal­ly a bank­ing net­work for the small guys, I guess is one way to look at it. And for busi­ness­es that sit out­side the major banks and don’t have rela­tion­ships there, they’re Aus­trali­a’s largest inde­pen­dent provider of end-to-end pay­ments and what they call reg­u­lat­ed data solu­tions out­side the big four banks.
What’s the reg­u­lat­ed data solu­tion? I hear you ask and that’s the bit that helps, uh, orga­ni­za­tions store cus­tomer data for safe­ty rea­sons and also for pri­va­cy leg­is­la­tion rea­sons, and. I did stop and think about that because I think that does car­ry some risks to Cus­cal because hack­ers are get­ting bet­ter and bet­ter at caus­ing data breach­es.
But I guess it also makes sense because, um, there’s a lot of com­pa­nies who are spooked over this risk and they’re pre­pared to out­source it to a pro­fes­sion­al, uh, per­son to look after it for them. Um, but the, that’s a small part of the busi­ness. The big­ger part of the busi­ness is end-to-end pay­ments, and there’s a few dif­fer­ent, um, cat­e­gories to that part of the busi­ness.
There’s real time pay­ments, which I spoke about [00:57:00] before. Often over the NPP plat­form. There are also, there’s a lot of work that this com­pa­ny does on finan­cial crime solu­tions. So they do fraud mon­i­tor­ing pro­gram for cards, and they do fraud mon­i­tor­ing pro­grams for real time pay­ments. They are a card issuer, so if a bank or some­one like that, a small bank or a cred­it union wants to issue a cred­it card or a deb­it card, Cus­cal can do that for them.
They also enable mobile pay­ment sys­tems and, um, card ser­vices for these, uh, small­er, uh, play­ers. They allow, um, oth­er pay­ment types to be, um, to be man­aged for those small­er banks, like, uh, BPAY, um, direct entry, what’s called real-time gross set­tle­ments. So that’s where you, so the, uh, batch feed, bulk pay­ments into a sys­tem, into the pay­ment sys­tem.
And, uh, they also do acquir­ing solu­tions. So, um, that’s a pret­ty big part of their net­work, which looks after ATM solu­tions and what’s called mer­chant acquir­ing, which is kind of the, the, um, real time [00:58:00] sys­tems that allow you to tap your card at the cof­fee shop and pay for cof­fee and have that trans­ac­tion inter­act with the bank­ing net­work.
And, um, I had a lit­tle bit to do, uh, in that area at Coles Myer, where we had our own, um, acquir­ing soft­ware and, and hard­ware. And it enabled us to save mon­ey on, uh, all of the ATM, all of the, uh, sor­ry, EFTPOS machines and cred­it card read­ers and all the var­i­ous, um, retail out­lets. So it’s a pret­ty big type of infra­struc­ture that into, um, so if about them as the big bank­ing, uh.
Bank net­work skele­ton. That’s pret­ty much what they do. They have a long his­to­ry. They go back to, um, par­al­lel the, uh, advent of cred­it unions in Aus­tralia back in the 1960s. And, uh, cred­it unions were set up based on state by state leg­is­la­tion, but they sort of soon found a, a need to have both a, a rep­re­sen­ta­tive body and a body that could look after and pro­vide [00:59:00] ser­vices to them.
And even­tu­al­ly that was fed­er­at­ed and Cus­cal was formed to do those things. Uh, that was back in 1992. So the sort of fore­run­ners of Cus­cal went back to the six­ties. Cus­cal was formed in 1992 to do it fed­er­al­ly and, um, it was an amal­ga­ma­tion of state bod­ies doing sim­i­lar type work, but also, um, as, uh, tech­nol­o­gy start­ed to, um, go up a gear.
Uh, these small cred­it unions need­ed help and ser­vices and they, they, um, want­ed to, uh. Uh, pool their, their pro, uh, pool their needs and be ser­viced by their a provider that they owned. So, uh, Cus­cal was set up, it stands for the Cred­it Union Ser­vices Cor­po­ra­tion of Aus­tralia Lim­it­ed. That’s what Cus­cal stands for.
Um, and any­one famil­iar with cred­it unions will know that they’re not for prof­it and owned by their mem­bers. And so that’s orig­i­nal­ly how Cus­cal was also set up. It was owned by the mem­bers of the, of the peak body. Um, but it’s had a, uh, a time­line which kind of [01:00:00] par­al­lels tech­nol­o­gy and bank­ing. In the last sort of 50 or 60 years, they, uh, Cus­cal’s pre­de­ces­sor body launched Aus­trali­a’s first ATM back in 1977.
In 1983. That. Pre­de­ces­sor body was an ear­ly adopter of the Visa scheme in Aus­tralia and became the first Aus­tralian mem­ber of the Visa Inter­na­tion­al Card Sys­tem. In 2009, Cus­cal launched the first redi­ATM scheme, uh, and that allowed cus­tomers of small­er finan­cial insti­tu­tions to access a nation­wide ATM net­work with­out any fees.
’cause back in the ear­ly days of ATMs, they were linked to a bank that was putting out the ATMs. 2014, they launched the con­tact­less card pay­ments in Aus­tralia, um, oth­er­wise known as Visa pay­Wave, and also known as the HCE based sys­tem. HCE stands for host card emu­la­tion sys­tem, and, uh, a Cus­cal. The Cus­cal Chief Infor­ma­tion Offi­cer was the first per­son in Aus­tralia to [01:01:00] per­form a live con­tact­less Visa pay­Wave trans­ac­tion back in 2014 when he pur­chased two packs of Tim Tams at a 7‑Eleven store in Syd­ney CBD.
2014, uh, the com­pa­ny acquired, uh, a com­pa­ny called Strate­gic Pay­ment Ser­vices Pro­pri­etary Lim­it­ed. And that real­ly helped Cus­cal rein­force the its pay­ments capa­bil­i­ties, par­tic­u­lar­ly in mer­chant acquir­ing. And it also allowed Cus­cal to diver­si­fy away from the cred­it union base and picked up Bendi­go and Ade­laide Bank, as well as Mas­ter­card as share­hold­ers.
Um, so again, it was, it was orig­i­nal­ly owned by the, the cred­it unions, but it was start­ing to take on some banks and, and cred­it card issuers as share­hold­ers as well. 2016 and 17, Cus­cal became the first ADI to launch con­nec­tiv­i­ty solu­tions for all of the pays. And that what that means is Apple Pay, Google Pay, and Sam­sung Pay.
And that enabled [01:02:00] clients to be some of the first Aus­tralian finan­cial insti­tu­tions to offer their cus­tomers all three pays. And that was an inter­est­ing time in the bank­ing sec­tor. I remem­ber it. Well, but, um, allow­ing Apple Pay into the pay­ments net­work was resist­ed strong­ly by the big four banks for a cou­ple of rea­sons.
Um, they want­ed access. The big four banks want­ed access to the NFC chip inside iPhones for their own pay­ment apps. Uh, some­thing that see that Apple resist­ed. Uh, and sec­ond­ly, they did­n’t wan­na pay trans­ac­tion fees to Apple. Um, Apple charged the issuers, the banks a trans­ac­tion fee when some­one used Apple Pay, uh, in the retail loca­tion, but then pro­hib­it­ed them from pass­ing on the charge to cus­tomers in their var­i­ous con­tracts.
So the banks feared los­ing own­er­ship of the cus­tomer rela­tion­ship to Apple and, um, they actu­al­ly applied the big four banks applied to the ACCC to be able to nego­ti­ate with Apple and I guess the oth­er mobile phone com­pa­nies as well, [01:03:00] um, on a, on a joint basis. But the ACCC denied the bank’s request to nego­ti­ate col­lec­tive­ly rul­ing that the poten­tial anti-com­pet­i­tive impact of the bank’s col­lec­tive action was out­weighed by the ben­e­fits.
And then, so the banks then had to think about what to do about Apple. And the win­ning strat­e­gy, I guess, was be to, was to be the first bank to sign the deal with Apple, which was prob­a­bly gonna be on bet­ter terms than the banks that fol­lowed. But as soon as one bank signed a deal with Apple, the rest all fol­lowed, and we are where we are today.
But, um, Cus­cal pio­neered that, and their banks were the first ones to, um, to let peo­ple pay with a bank cred­it card via their Apple Pay at the point of sale. Uh, in 2018, uh, they enabled more than 60% of the finan­cial insti­tu­tions that launched on day one of the new pay­ments plat­form, which is the real time plat­form, which is now form­ing more and more of the skele­ton, uh, infra­struc­ture net­work for bank­ing pay­ments.
In [01:04:00] 2019, they launched a, uh. Uh, I guess it’s a fund man­ag­er, uh, or cer­tain­ly a finan­cial advice busi­ness called 86 400, which is a dig­i­tal bank with an ADI license. Um, in 2019 as well, Cus­cal’s phys­i­cal ATM assets and the redi­ATM scheme was sold to Arma­guard. And in 2021 Cus­cal sold 86 400 to NAB. Um, 2000, uh, 2020, they launched the cus­tomer data right plat­form.
So this was to enable shar­ing of cus­tomer data, um, between bank­ing clients because of open bank­ing, but also, um, main­tain­ing the cus­tomer’s right to pri­va­cy. With that infor­ma­tion, 2022, um, they allowed, uh. Um, Pay­To pay­er on the, they were the first peo­ple to allow Pay­To on the nation­al pay­ment plat­form, uh, and its ser­vices in [01:05:00] 2022.
They acquired a com­pa­ny called my CDR Data, which again, uh, helped ’em with this, uh, stor­ing of cus­tomer data and obey the pri­va­cy leg­is­la­tion. 2023. They require, they acquired the mate­r­i­al con­trol­ling inter­est in a com­pa­ny called Basiq, that’s B‑A-S-I‑Q, which is a data and open bank­ing, API plat­form busi­ness, which allows Cus­cal’s, uh, expan­sion into, um, uh, devel­op­ing a, uh, apps and APIs for their prod­ucts.
2024, uh, Cus­cal list­ed on the ASX in, on the 25th of Novem­ber. Code was CCL. Code is CCL. Um, and as I said before, pri­or to its list­ing, Cus­cal was owned by a con­sor­tium of Aus­tralian, uh. Banks, cred­it unions and strate­gic part­ners like Mas­ter­Card and Bendi­go and Ade­laide Bank. Um, they held sig­nif­i­cant stakes and there were small­er invest­ments from, uh, insti­tu­tions like Peo­ple’s Choice Bank Aus­tralia and Teach­ers Mutu­al.
And I [01:06:00] know that there was, um, a 12 month escrow, uh, peri­od after the IPO for some of those share­hold­ings, which came out obvi­ous­ly in Novem­ber last year. And, uh, that kind of tidied up the reg­is­ter a lit­tle bit. ’cause I think pri­or to that peri­od there was a lot of guess­ing about whether those orig­i­nal share­hold­ers were gonna main­tain their inter­est or sell it down.
Um, and so that’s kind of resolv­ing itself as we speak if it’s not already resolved. So, um, that will help, uh. Any, uh, it will help the liq­uid­i­ty of the stock, but it will also help any­body who is wait­ing for a sell­ing wave 12 months out to pass through. So, um, one of the rea­sons why it’s going up now is that’s all hap­pened.
Uh, the stock price is going up now. Uh, and last­ly, 2025, the Cus­cal com­plet­ed acqui­si­tion of a com­pa­ny called Indue, I‑N-D-U‑E, um, which was a real-time pay­ments provider. So they paid $75 mil­lion to, uh, acquire Indue, [01:07:00] which brings us right up to the, uh, last cou­ple of days where, um, Cus­cal after buy­ing Indue, has agreed to buy a com­pa­ny called Pay­mark, which is New Zealand’s orig­i­nal EFTPOS net­work.
And I wan­na just talk about this, um, quot­ing from. Uh, an arti­cle in the Intel­li­gent Investor, which I think might have even come out yes­ter­day. So, um, the comp, the cost Cus­cal has agreed to buy Pay­mark from, uh, the French, French com­pa­ny World­line for $27 mil­lion. And the deal’s expect­ed to com­plete by 30th of June this year.
So a bit about Pay­mark. It was found­ed in 1989 by the coun­tries, the New Zealand coun­tries, uh, biggest banks. Um, it was the first EFTPOS provider in New Zealand. It oper­at­ed the switch that routes, pay­ments, autho­riza­tions between mer­chants, acquir­ing banks and card issuers. Every time a Kiwi taps to pay at a super­mar­ket or petrol sta­tion, there’s a good chance it’s going through Pay­mark’s [01:08:00] infra­struc­ture.
The busi­ness process­es over 1.5 bil­lion trans­ac­tions a year and serves all four major New Zealand banks along­side mer­chants. In every indus­try, around 75% of New Zealand’s mer­chants are con­nect­ed to the Pay­mark net­work. So it’s a big busi­ness in New Zealand, um, has a bit of an inter­est­ing his­to­ry. Pay­mark was sold by the banks to the French group Ingeni­co for, uh, New Zealand dol­lars, 190 mil­lion in 2018.
And then World­line, um, bought Ingeni­co in 2020. But now Cus­cal is pay­ing only $27 mil­lion Aus­tralian for that, uh, Pay­mark busi­ness. So it’s, uh, buy­ing it for a very cheap price. And that’s because World­line itself is in finan­cial trou­ble and is forced to sell assets glob­al­ly. So Pay­mark was in the fir­ing line for one of those asset sales because it was due to suck up $21 mil­lion in cap­i­tal expen­di­tures, um, which were required over the next five years, and Cus­cal will now absorb that.
[01:09:00] So even though it’s pay­ing 27 mil­lion, it’s also stump­ing up 21 mil­lion over time for these cap­i­tal upgrades that they’re required, but still, uh, uh, a lot cheap­er than 190 mil­lion New Zealand that was paid in 2018. For this busi­ness, uh, Pay­mark is expect­ed to gen­er­ate Aussie $5.4 mil­lion net prof­it next year, imply­ing that Cus­cal is pay­ing just five times earn­ings for a near monop­oly asset with guar­an­teed trans­ac­tion growth ahead.
For com­par­i­son. The oth­er, um, acqui­si­tion that they did this year that Cus­cal did the Indue acqui­si­tion, was struck at 25 times earn­ings. So Pay­mark, uh, won’t pro­vide the same oppor­tu­ni­ties for scale as Indue. Uh, the cap­i­tal project wound in 2030, and after that, the busi­ness, they will gen­er­ate a reli­able grow­ing stream of earn­ings.
The return on cap­i­tal on the pur­chase price looks like­ly to be over 20%. One thing to note is to fund the deal. Cus­cal is rais­ing Aussie 33 mil­lion in new equi­ty. Uh, the bulk of this is. [01:10:00] Via an insti­tu­tion­al place­ment of $30 mil­lion, priced at $4. And I saw in an announce­ment this morn­ing that that’s already com­plet­ed.
Um, and, uh, that, uh, relat­ed, uh, sor­ry, that, uh, that place­ment, um, meant that there was a just under a 4% dilu­tion of exist­ing share­hold­ers. So it’s a mod­est dilu­tion com­pared to what, um, uh, Cus­cal are gain­ing in the Pay­mark busi­ness. But, uh, if peo­ple are either think­ing of buy­ing into this com­pa­ny or already own it, they should be aware that there’s also a share pur­chase plan for retail, uh, share­hold­ers of the busi­ness.
And that’s also pri uh, priced at $4 per share. Uh, and I think last time I checked the share price for Cus­cal was above that. Um, I’ll just have a look at the cur­rent price on Cus­cal. Um, it’s been ris­ing. Dra­mat­i­cal­ly since this, uh, announce­ment. Um, it’s 4 91 at the moment, so it’s, it’s doing, it’s doing [01:11:00] very well.
Peo­ple are lik­ing this deal. Uh, so it’s kind of easy mon­ey if you do have access to that SPP. You can buy shares at $4 when they’re trad­ing at $4 90. I, I think it’s a deal done. Um, so Cus­cal’s core com­pe­ten­cy is run­ning pay­ment switch­ing infra­struc­ture. Pay­mark does that exact­ly. It’s in an, an adja­cent mar­ket with a near iden­ti­cal oper­at­ing mod­el.
So there are no hero­ic assump­tions need­ed to, um, look for syn­er­gies or what­ev­er the busi­ness already works. Um, and, uh, Intel­li­gent Investor’s com­ment was, these kinds of assets at this kind of price are rare. It’s the best deal they’ve seen for a while. And that was from an arti­cle by, uh, Gau­rav Sod­hi, uh, on the 20th of April.
It was yes­ter­day in the Intel­li­gent Investor. He also referred back to some pri­or. Intel­li­gent Investor arti­cles and one of them will just again, high­light here. Uh, this I think was, um, uh, an update, uh, fol­low­ing the list­ing Intel­li­gent Investor notes that when list­ing, [01:12:00] there are three rea­sons for buy­ing the stock.
One is that the vol­ume of trans­ac­tions across the new pay­ments plat­form is grow­ing explo­sive­ly. Uh, that’s because con­sumers now pay for small pur­chas­es like cof­fees and train rides with a tap rather than with cash, which gen­er­ates addi­tion­al fee income for Cus­cal for anoth­er rea­son, uh, why this com­pa­ny’s doing well.
Thank, thank Net­flix stream­ing ser­vices like Spo­ti­fy and Ama­zon have been cit­ed with a clear change in con­sumer behav­ior from pay­ing larg­er annu­al sums to small­er, more fre­quent month­ly sub­scrip­tions. Every­thing from tv, music, insur­ance, toi­let paper, and tele­coms is all paid for on month­ly sub­scrip­tions.
Split­ting pay­ments into 12 neat sums is man­i­fest Cus­cal as it gen­er­ates 12 times the fees for the same annu­al pay­ment. The RBA reports that between 2013 and 2023, the num­ber of pay­ments per per­son rose from 330 to 730, and that is no doubt high­er today. And that was, uh, a quote also from [01:13:00] Sod­hi in the Intel­li­gent Investor.
So an inter­est­ing trend, which seems to be, uh, ben­e­fit­ing this com­pa­ny and cer­tain­ly show­ing it in the results. So the first half, 20, 26 num­bers finan­cial year, first half up till Decem­ber, 2025 shows that trans­ac­tion vol­umes were up 9%. Net prof­it after tax was up 13%. Earn­ings per share was up 4%. And the dif­fer­ence between the, the growth in net patent earn­ings per share was depressed a bit because there is a, an increased year on year share count.
Um, since list­ing or since that com­pa­ra­ble half, I thought it was also inter­est­ing to look at the busi­ness seg­ments. So, um, the issu­ing seg­ment was up 9%. So that’s the bit about, uh, the help small banks issue cred­it cards and deb­it cards. The acquir­ing side was up 10%, so that’s the, um, the back­bone that links to the retail­ers, uh, and their point of sale and routes the trans­ac­tions.
Back to the [01:14:00] banks and cred­it card com­pa­nies. Pay­ments are up 15% finan­cial crimes, uh, it was up 19% and that’s not them com­mit­ting finan­cial crimes. It’s them pro­vid­ing ser­vices to pre­vent them. And they pro­vide ser­vices to look at fraud detec­tion, both on the cred­it and deb­it card net­works, but also on the NPP net­works.
And like­wise, data ser­vices are up 8%. So I’m guess­ing that’s the, um, the cus­tomer, uh. Data ser­vices that they pro­vide. So good results all across and some inter­est­ing areas that they oper­ate in, in terms of QAV, uh, their ADT is 1.4 mil­lion, so it’s, it’s a rea­son­ably large. And liq­uid stock. Stock price for the analy­sis is $4 87, uh, which is below con­sen­sus tar­get by some 13%.
Um, IV1, how­ev­er, is a dol­lar rate. IV2 is 2 24. So we can’t buy it for less than those val­u­a­tions and we can’t buy it for less than book or book plus 30. Uh, net equi­ty per share is $2 and 3 cents and 2 63 for [01:15:00] book plus 30. So it trades high­er than what we think it’s worth on those basis. Cer­tain­ly can’t buy it for yield, which is 2%.
Um, Stock Doc­tor finan­cial health and trend was, uh, uncal­cu­lat­ed, which I found inter­est­ing. Um, I was­n’t sure whether that was because it was a rel­a­tive­ly recent list­ing or whether it was because it was a finan­cial ser­vices Cus uh, com­pa­ny, which Stock Doc­tor can some­times have dif­fi­cul­ty. Uh, uh. Ana­lyz­ing in terms of match­ing it back to its finance, its finan­cial health ratios, uh, which I’ve seen hap­pen before.
Um, cam, have you got access to Stock Doc­tor? ’cause when I was look­ing at this this morn­ing, I could­n’t get it to work. I kept get­ting a 4 0 4 error,
Cameron Reil­ly: Yeah, as
TK: but I,
Cameron Reil­ly: know. Let me just check.
TK: yeah, if you could check please, because I was­n’t able to get a, a rat­ing for Cus­cal and I was pulling this togeth­er and I’m still not get­ting one.
Cameron Reil­ly: Yeah, it’s up. Hold on. I just got­ta change to Aus­tralia.
TK: Can you have a look at Cus­cal for me? Thanks. [01:16:00] Just let me know what the, what the F score is and the rank­ings are, please.
Cameron Reil­ly: I can get to Stock­o­pe­dia, but when I try and go
TK: Yeah.
Cameron Reil­ly: it says it’s a 4 0
TK: Yeah, it’s the same prob­lem. I’m get­ting
Cameron Reil­ly: Is that the same with all Aus­tralian stocks?
TK: the same with Amer­i­can ones too. I could­n’t do, could­n’t look at the one you sent through for the US show, so I’m not sure what’s going on with them. So, yeah, so I can’t score it, uh, for that. Um, so just bear that in mind. If you are think­ing about buy­ing this stock, you might wan­na wait until Stock Doc­tor is up and work­ing and have a look at it.
I would­n’t expect it to be bad though. Um, uh, cer­tain­ly there’s been noth­ing called out by ana­lysts, uh, to be wrong with the finan­cial health with this com­pa­ny, so I’m not too wor­ried about it. And the num­bers look good going on with the QAV analy­sis. The PE is 23 times, um, which is kind of high. Uh.
Inter­est­ing giv­en that the PROPCAF is only 1.56 times. So PROPCAF is [01:17:00] real­ly good, but there’s an inter­est­ing cash burn going on between the oper­at­ing cash lev­el and the earn­ings per share. How­ev­er, there’s only a cou­ple of halves avail­able for this com­pa­ny. So even though the PE was 23 times and it was 18.8, at the time the results were announced, um, it was still the low­est, uh, avail­able.
So it does score for that. Um, fore­cast. Earn­ings per share growth is only 7%, so we can’t score it for growth over PE, which was only 0.3. Two does­n’t have an own­er, founder direc­tors only hold less than 2% of the stock, so I, I could­n’t find any­one to score it for there. Uh, all in all qual­i­ty I’m get­ting is nine out of 16 or 60% and that, and I’m not­ing the miss­ing Stock Doc­tor, finan­cial health and trend.
So. If Stock Doc­tor get around to scor­ing it, that will bump that, uh, that num­ber up, I would think. Uh, but either way, it does­n’t need it. The QAV score is 0.38 at the moment, which puts it pret­ty high up on the, on the buy list for me. Um, [01:18:00] and the inter­est­ing, so get­ting into the recent pos­i­tives, inter­est­ing thing is that, uh, is that dif­fer­ence between a strong PROPCAF and, uh, a high PE and I think pos­si­bly one of the rea­sons for that is because this is an ADI, uh, it’s sub­ject to APRA bank­ing reg­u­la­tions, so it’s hav­ing to.
Hold a cap­i­tal buffer, um, to, uh, pre­vent, um, or to, to be able to help dur­ing a run on any sort of deposits or banks. Um, I dun­no if that’s the most applic­a­ble rule for this com­pa­ny. ’cause uh, it’s, as far as I know, it’s not actu­al­ly issu­ing, uh, not, not tak­ing on retail deposits. Um, but it does have an ADI license, uh, any­way, it does have to hold cap­i­tal buffers, which I sus­pect is where some of that cash is being stored.
And. As we’ve seen with the small­er region­al banks, hav­ing that require­ment imposed on you means you are earn­ing, um, uh, less from bonds or what­ev­er else you’ve got invest­ed in that cap­i­tal buffer com­pared to what you could be invest­ing in a [01:19:00] high­er ROE type busi­ness. So it does depress the ROE over­all for the busi­ness and it’s not the best use of cap­i­tal and that might be one of the rea­sons why the PE ratio is high­er, uh, a lot high­er than the PROPCAF ratio.
Um, oth­er but beta as it may. Oth­er risks, um, big four banks are obvi­ous­ly for­mi­da­ble com­peti­tors, but this cus­tom, this com­pa­ny does have a lega­cy though of. Being fur­ther up the tech­nol­o­gy curve and, and more aggres­sive in terms of new tech­nol­o­gy and offer­ing it to small­er banks. And the big four banks are.
So if that con­tin­ues on, then they will have an edge. But at some stage, the big four banks may well turn the tables if it, if there’s like a large cap­i­tal, if injec­tion required for what­ev­er. Comes in the future, whether it’s AI or some­thing else. I don’t know. I think anoth­er risk for this com­pa­ny is a major data hack of cus­tomer infor­ma­tion.
They’re putting them­selves up as the, as a ser­vice provider to, to han­dle cus­tomer data. Um, and if there’s a breach, either, uh, a breach of pri­va­cy laws or, or [01:20:00] breach of, um, or a data hack, a loss of data, then that would be a, a prob­lem I think, for that part of the busi­ness. Um, but there are some oth­er pos­i­tives to like about it.
Uh, it seems like they’re good at doing deals. I mean, all the deals I spoke about before, um, have played out well for them. Cer­tain­ly the New Zealand deal looks ter­rif­ic, uh, from what I’ve read. Um, so they seem to be good at, uh, at that. And, um, I think. They’re, they’re sort of very, very for­ward on using the NPP, um, uh, and pro­vid­ing that, that ser­vices to retail cus­tomers, to mer­chants and to the small­er banks, which is good.
And the banks, the big banks are sort of reluc­tant­ly get­ting involved with that now. Uh, and inter­est­ing sort of lit­tle side note, I noticed when I was read­ing through the Cus­cal blurb on, on their strate­gies that the, one of their strate­gies was from cash to code. So, uh, I thought that was a good sum­ma­ry of, of where the pa the pay­ment sys­tem is mov­ing to, uh, uh, in, in [01:21:00] gen­er­al.
And they’re rid­ing that wave. So that’s Cus­cal. Thanks Dave for, uh, rec­om­mend­ing it and allow­ing me to find out if it was­n’t appear­ing in our buy list when it should have been.
Cameron Reil­ly: Thank you Tony. Cus­cal. Yeah, I saw that come through on Face­book and saw the whole GICS thing and won­dered what you’d make of that. So
TK: Crazy. It is crazy, isn’t it? Like, like I, when I was going down the rab­bit hole in the GICS codes, it’s actu­al­ly a mate­r­i­al issue because, uh, if you’re a fund man­ag­er and you have to main­tain a cer­tain allo­ca­tion to a cer­tain sec­tor, and either the GICS code changes because of a change in the pol­i­cy of the, the providers or, or your data provider has a dif­fer­ent GICS code to a dif­fer­ent data provider,
Cameron Reil­ly: Yeah.
TK: it very hard to keep your port­fo­lio bal­anced.
Cameron Reil­ly: Yeah. So should I both­er adding GICS codes to my sheets or the, the code of [01:22:00] oth­er? Should we do
it in
TK: I think we should because, uh, if, if this hap­pened once, it could hap­pen again that we’re miss­ing out on oppor­tu­ni­ty.
Cameron Reil­ly: it’s not like, there aren’t oth­er oppor­tu­ni­ties though, is it’s
TK: Any­way, I’ve done it. It’s up to you what you do. Not giv­ing you spe­cif­ic finan­cial advice.
Cameron Reil­ly: cod­ing advice. Thank you, TK, and thank you Dave. Good job, Dave. Alright, after hours. Tony, what you got?
TK: Uh, a cou­ple of things. So, uh, Jen­ny and I start­ed watch­ing a new, I think it’s a new, it’s actu­al­ly sea­son two, so it’s not new, um, a new sea­son of, uh, Patience. So we’re actu­al­ly going back to the first sea­son, which is on the iView plat­form. I think it’s actu­al­ly drop­ping sea­son two on the ABC on Sun­day nights as well, which we’re enjoy­ing.
Anoth­er twist on the, um, the Sher­lock Holmes theme. This time it’s an autis­tic lady from the, um, crim­i­nal records divi­sion of [01:23:00] the York Police that keeps find­ing pat­terns in the data and help­ing the police solve crimes. And it’s kind of fun ’cause they, they’re basi­cal­ly ran­sack­ing all the Agatha Christie and Sher­lock Holmes sto­ries and dress­ing them up in mod­ern guise and they’re drop­ping lit­tle, uh, you know, um, East­er eggs so you can work out what it is, uh, accord­ing to char­ac­ters’ names or what­ev­er, or, so the, the data­base that this lady works on is called the HOLMES Data­base, which is the name, the acronym for the crim­i­nal records data­base in the UK.
So yeah, it’s fun, it’s pret­ty light, but we’re enjoy­ing it.
Cameron Reil­ly: Nice.
TK: that was good. Jen­ny was away for part of last week and I hap­pened to rewatch the Entourage movie. I think it’s from 2015. Have you ever seen that? You prob­a­bly have.
Cameron Reil­ly: I did when it came out. I remem­ber it not being great.
TK: I, I, I did too. But the rewatch was fan­tas­tic. I real­ly enjoyed it. ’cause it, um, it’s just wall to wall cameo [01:24:00] basi­cal­ly.
Cameron Reil­ly: Yeah.
TK: um, which is prob­a­bly my crit­i­cism at the time, but now it’s just fun,
Cameron Reil­ly: Right.
TK: you know, watch­ing, watch­ing Kelsey Gram­mer com­ing out of a fam­i­ly, uh, mar­riage coun­sel­ing ses­sion as Ari’s going in and just rant­i­ng and rav­ing.
It’s, it’s kind of fun. War­ren Buf­fett makes a cameo in it at one stage, um, which is good. And what I had­n’t noticed from last time, um, was, uh, the quote at the end of the movie when, uh, when Ari. I mean, spoil­er alert Ari was a stu­dio head. Ari Gold, who was the agent for Vin­cent Chase, became the stu­dio head, um, left the stu­dio head.
It looks like he resigned before he was fired and took his sev­er­ance pay and put it into Vince’s movie that was run­ning over bud­get, which got him fired in the first place. And then at the end, it, it turns out to be a fan­tas­tic hit and he makes lots of mon­ey out of the invest­ment. And Ari Gold’s quote is, War­ren Buf­fet­t’s going to be blow­ing us for invest­ment advice in the future, which I thought was a great quote.[01:25:00]
Anoth­er title for the show.
And last­ly, after hours, um, I’m wear­ing my Har­bour­town golf shirt ’cause the PGA Tour was in Hilton Head this week­end. And it brings back hap­py mem­o­ries from me from three years ago when I was over there. As part of my 60th birth­day trav­els, and one of my mates rung up and said, Hey, we were stand­ing there three years ago on that day, and coin­ci­den­tal­ly the same per­son won the tour­na­ment.
Um, that was one when we were there, so, uh, brought back some hap­py mem­o­ries.
Cameron Reil­ly: from last week’s show.
TK: That was Rory McIl­roy. That was from the Mas­ters. So Hilton Head fol­lows a week after the Mas­ters.
Cameron Reil­ly: Uh,
TK: It’s only about a three or four hour dri­ve from Augus­ta down to Hilton Head, an Eng­lish­man called Matt Fitz­patrick,
Cameron Reil­ly: Right?
TK: which is kind of good because they’ve got this tra­di­tion, like in, in Augus­ta, they give you a green jack­et.
When you win Hilton Head they give you a, what they call a plaid jack­et. It’s a red [01:26:00] tar­tan jack­et. So looks bet­ter on Matt Fitz­patrick than it does on one of the US recip­i­ents. Nor­mal­ly it’s very loud and I, I could­n’t, I’m wear­ing my QAV hat today, but I actu­al­ly have a, um, a, a cap from Hilton Head, which is in red plaid.
I was try­ing to find it, but it’s in stor­age in Syd­ney.
Cameron Reil­ly: Right. Very good. Well, I’ve watched a few good things. Uh, this week, the Gaunt­let, 1977, Clint East­wood
direct­ed, uh, star­ring him and Son­dra Locke,
TK: His, his part­ner? Yeah.
Cameron Reil­ly: his part­ner, and I think they had been togeth­er on Out­law Josey Wales before this. And then it looks like he direct­ed this basi­cal­ly as a vehi­cle for her, I think.
TK: Cor­rect. Yeah.
Cameron Reil­ly: And, um, I read up on the sto­ry of her and the two of them and all of that kind of stuff, which was inter­est­ing. But not a, not a ter­rif­ic film, but the cou­ple of, [01:27:00] have you seen it recent­ly?
TK: No, I have seen him a cou­ple of times, but not recent­ly.
Cameron Reil­ly: The cou­ple of things that stood out for me, and num­ber one is she’s great. Like, she, like for the peo­ple who haven’t seen it, he’s a, he’s a griz­zled cop who gets sent by his new police com­mis­sion­er to, he’s, he’s in Phoenix. He, he’s sent to Vegas to get this hook­er and bring her back for some noth­ing tri­al.
She’s a noth­ing wit­ness of a noth­ing tri­al. His new uptight police cap­tain or com­mis­sion­er, what­ev­er it says. Um, he goes to get her Son­dra Locke in prison and she starts scream­ing that she’s gonna get killed. And if he takes her, they’re gonna kill him too. He, he slaps her back into the cor­ner of a thing.
It’s the usu­al sort of mid sev­en­ties Clint, you know, sort of misog­y­nis­tic vio­lence against women thing. But as it plays out, he’s sort of a dumb cop who can’t see the plays and she’s the smart col­lege edu­cat­ed. [01:28:00] hook­er who sees all the angles and all the plays, and is telling him what’s gonna hap­pen and who’s betray­ing him.
And, so, and she does a great job. But, um, the oth­er thing that jumps out is the, the shootouts are insane, 80,000 bul­lets fir­ing into hous­es that then end up col­laps­ing and bus­es. And it’s just like over the top
TK: Yeah.
Cameron Reil­ly: Ram­bo esque, like late eight­ies Ram­bo esque vio­lence. Not First Blood Ram­bo, but like crazy Ram­bo. So he kind of went all out with this lev­el of Sam Peck­in­pah par kind of shootout stuff that’s just insane. And they go on for like sev­en min­utes, these shootouts. But as, um, some­body I read a review point­ed out Clint, and this is after Dirty Har­ry and all of the, the spaghet­ti west­erns. He only fires his [01:29:00] gun twice and it’s nev­er to shoot some­body.
He shoots a lock off a door once and shoots some­thing else like a petrol tank or some­thing. But it’s, you know, he’s not the guy, he’s the guy get­ting fired. Shot at, not the guy shoot­ing in this one. Any­way,
TK: There sup­posed to be a moral dimen­sion to it. Is there
Cameron Reil­ly: I, I dun­no about that, but I think it was, um, it was just, he sort of did a 180 on it. He’s not, he’s, he is sort of the hard, tough guy in the end, but, um, not real­ly the typ­i­cal Clint hero in it. He’s, uh,
TK: He’s the pat­sy, isn’t he? Yeah.
Cameron Reil­ly: kind of, yeah, he’s the pat­sy who’s, uh, boss­es, uh, betray­ing him. Which is obvi­ous for the first time you see the boss, you go, oh yeah, he’s a bad guy. But she was great. I real­ly, real­ly thought she did a, a tremen­dous job. I also watched the Liam Nee­son Naked Gun reboot.
TK: [01:30:00] ter­ri­ble.
Cameron Reil­ly: Thor­ough­ly
TK: Oh.
Cameron Reil­ly: it.
TK: Oh, I hat­ed it. I thought it was shock­ing.
Cameron Reil­ly: not as good as Leslie Nielsen. No one can ever do Leslie
TK: No,
Cameron Reil­ly: lev­el good. But I, I thought it was fan­tas­tic and I
TK: real­ly
Cameron Reil­ly: the
TK: hat­ed it.
Cameron Reil­ly: Liam Nee­son, with all of you know, the act­ing cred­its and the his­to­ry he’s got, was pre­pared to do some­thing
that absolute­ly ridicu­lous at his age as Leslie Nielsen, uh, did
before him.
No,
TK: Play against type. Yeah. I thought it was awful.
Cameron Reil­ly: Uh, we start­ed watch­ing Knight of the Sev­en King­doms after you rec­om­mend­ed it, and, uh, we’re only three or four episodes into it. Just got the, I dun­no, one of the ear­ly spoil­ers any­way, who the young kid is.
We saw that, that was the last episode we saw. was great. I’m enjoy­ing that.
Very dif­fer­ent pac­ing to Game of
Thrones, but I’m enjoy­ing it. And I’m read­ing, um, Galileo, uh, I, uh, I down­loaded like a col­lec­tion of his writ­ings and I’m read­ing his first one at the moment, the Side­re­al Mes­sen­ger where he’s [01:31:00] writ­ing to Cosi­mo de’ Medici about, oh yeah, I’m the first guy that’s ever seen the moon.
I looked at the moon. How’d you do it? Oh, I built a tele­scope. You built a tele­scope? Yeah, yeah, yeah. Built a tele­scope. Spent a
TK: Wow.
Cameron Reil­ly: built myself a tele­scope I think it was 60 times mag­ni­fi­ca­tion,
TK: Wow.
Cameron Reil­ly: uh, built his own thing, ground his own lens­es, then, uh, the first human being to see the moon. He goes, you know what?
It’s not smooth. Every­one appar­ent­ly thought the moon was. Smo, they thought all of the spheres were
smooth like crys­tals. And he is like, nah, this thing has got moun­tains and craters and val­leys. And I’ve
TK: Wow.
Cameron Reil­ly: Imag­ine that.
TK: Yeah.
Cameron Reil­ly: I was par­tic­u­lar­ly in light of the recent Artemis, uh, mis­sion and the
TK: Just
Cameron Reil­ly: that we got.
TK: saw a great car­toon of the astro­nauts bury­ing the Epstein files in the dark of the [01:32:00] moon.
Cameron Reil­ly: Oh, did you see the video of Trump today? a press­er and some­body start­ed ask­ing him about the Epstein files and he just start­ed rant­i­ng and rav­ing about we are build­ing the great­est ships, the biggest ships, uh, the great­est ships the world has ever seen. And you know, the Democ­rats wan­na dis­tract you with the Epstein files.
It’s a noth­ing sto­ry. The fact that you cam­paigned on it and said, and all of your peo­ple said that it was the most impor­tant thing that we all need­ed to find out about. Um, any­way. Yeah. Galileo amaz­ing. I mean, just being the first per­son to see the moon.
TK: Wow.
Cameron Reil­ly: Amaz­ing stuff. Any­way. Enjoy­ing it. Uh, well that’s it Tony.
Uh, we got­ta go, we got­ta go quick­ly do the US show because I need to go jump­start Tay­lor’s car ’cause the bat­tery’s dead and I need to dri­ve it to kung fu in an hour. So, uh, [01:33:00] we need to
TK: Okay.
Cameron Reil­ly: out.
TK: Alright.
Cameron Reil­ly: Thank you for that, TK. Thank you every­body. Have a good week.
TK: Yep. Hap­py ASX.