JUST THE TIP: QAV AU #920

QAV AU 920 CLUB VIDEO

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Tony Kynas­ton: All right. Well, let’s do it. Wel­come to QAV Aus­tralia, episode nine twen­ty, Tony. It’s the 19th of May, 2026. Taco Mon­day. Tony, Taco Mon­day. As opposed to Taco Tues­day?

I thought it was still Nacho Mon­day.

Cameron: Nacho, taco, what­ev­er you want.

Tony Kynas­ton: Both.

Cameron: Trump said he was gonna bomb the crap out of Iran this week again, but changed his mind again.

Tony Kynas­ton: Yeah.

Cameron: Mid­dle East­ern coun­tries asked him to wait. ‘Cause they’re hav­ing great nego­ti­a­tions with Iran right now. It’s all going so well, so great. Uh, till tomor­row. We’ll see what hap­pens tomor­row.

Yes­ter­day, the ASX dived to a sev­en-week low, but seems to have jumped up, uh, today. I was just hav­ing a look. It’s popped back up. I don’t real­ly under­stand why. I don’t under­stand any­thing that it does. Goes up, goes down. Makes no sense to me. Does it make any sense to you?

Tony Kynas­ton: No. I mean, there’s some sense to be made in it. Like it’s, as you say, it’s [00:01:00] off a lot, uh, and, and, you know, for good rea­son. Bond yields are increas­ing because inter­est rates are up because, you know, the world does­n’t know what it’s doing. Um, and that, that puts a bit of a damper on the econ­o­my. But I think it’s also the bud­get from last week as well. Bank is down odd per­cent in the last, uh, week or so. And part­ly that’s because of what, all the, all the fore­go­ing dis­cus­sions on Trump and the Straits of Hor­muz, but a lot of it’s to do with the fact that the Comm­Bank is a huge lender to res­i­den­tial hous­ing, and mar­ket’s kind of digest­ing changes to cap­i­tal gains tax, chang­ing, changes to neg­a­tive gear­ing in the bud­get. It’s marked Comm­Bank down, and because it’s the largest stock in the index, or it was any­way last week, the ETFs have to sell out of it as well, or the index hug­gers sell out. So it becomes. The mar­ket sell downs become self-per­pet­u­at­ing to some extent, um, which I think is a fea­ture of [00:02:00] where we are with a lot of pas­sive invest­ing in the mar­ket.

But it, it will. In some ways it’s the tail wag­ging, wag­ging the dog, real­ly.

Cameron: Yeah. Well, good news. Mor­gan Stan­ley, uh, equi­ty strate­gist Chris Nicol says that the ASX 200 is gonna rock­et 8% with­in a year.

Tony Kynas­ton: I’ll take that bet.

Cameron: Mind you, he–

Tony Kynas­ton: I don’t like to fore­cast what the ASX is going to do, but how can he be so accu­rate?

Cameron: Well, he pre­vi­ous­ly expect­ed the share mar­ket to hit that tar­get by the end of twen­ty twen­ty-six, but now he’s pushed his fore­cast back by six months.

Tony Kynas­ton: So he’s say­ing. So, so what’s the date? He’s say­ing mid 2027 and it’ll be

Cameron: With­in the next year.

Tony Kynas­ton: now,

Cameron: Yeah. Yeah.

Tony Kynas­ton: Okay, that’s prob­a­bly a safe bet.

Cameron: As surg­ing com­mod­i­ty prices boost earn­ings across the mate­ri­als and ener­gy sec­tors off­set­ting a slow­down in con­sumer fac­ing stocks, he says. But, uh, hmm.

Tony Kynas­ton: Yeah, well, [00:03:00] I, you know, I think, I think, I think we’re actu­al­ly in a dan­ger­ous place with ris­ing infla­tion, um, which does­n’t appear to come down soon. I mean, the oil price isn’t gonna reset any time mean­ing­ful­ly, I don’t think soon. And that’s gonna prob­a­bly mean more inter­est rate ris­es. I think the mar­ket’s a bit on the fence with that, but I don’t see how it can be avoid­ed, but who knows?

Again, I don’t fore­cast. Um, cou­pled with changes in the bud­get, you know, we’re, we’re, we’re see­ing the largest, the largest stock in the index down, so the index will, will be down because of that. But, um, you know, there’s. I think, you know, get­ting back to the bud­get dis­cus­sion, I think there’s a lot that’s gonna unfurl in the com­ing months about how it’s going to affect the way that peo­ple their invest­ments, what they invest in, um, what shape it takes, [00:04:00] what the win­ners and losers are, and they’re just not appar­ent at the moment.

And they’re, again, they’re hard for me to work out, but they’ll. the mar­ket will work them out in time. I’m think­ing of things like, you know, um, for exam­ple, what hap­pens to rentals if you can’t neg­a­tive­ly gear exist­ing hous­es except for those who are doing it now? You can’t, uh, come into the mar­ket and do it new.

You got­ta say even­tu­al­ly that means you’re either forc­ing renters to go into new builds like apart­ments, and we become a nation of apart­ment dwellers, or rents will have to go up because, um, they’ve got to com­pen­sate for the loss of neg­a­tive gear­ing. So be impacts there. Um, uh, what hap­pens, what hap­pens to the way peo­ple invest?

So one thing that struck me out of one of the head­lines from the bud­get is that going for­ward, there’s a min­i­mum 30% tax [00:05:00] on cap­i­tal gains. Um, so that’s a min­i­mum regard­less of what the infla­tion are. But that, the, the thing that struck me is that’s the same amount that you pay if you’re in a, in a com­pa­ny.

So is, is there some kind of way of struc­tur­ing bor­row­ing so that you can neg­a­tive­ly gear into prop­er­ty in a com­pa­ny and pay no, no worse CGT than what you’re oblig­ed to pay under the new indi­vid­ual, um, bud­get announce­ments? So there’s a few things that have to play out. There was a, a lot of things changed in the bud­get, trusts as well as neg­a­tive gear­ing and cap­i­tal gains, and I think it’ll, it won’t take a whole heap of time. You know, the big end of town in the finan­cial advice space is already work­ing out ways to try and min­i­mize the impacts on their cur­rent, um, cur­rent hold­ings. So it’s, it’s a watch this space. [00:06:00] But, um, until that plays through, I think the mar­ket’s gonna be in a bit of tur­moil. I think the fact that the oil price, I can’t see the oil price get­ting back to what it was before the, the war in Iran, uh, for a very long time. Um, you know, and anoth­er side effect is if you, if you can’t, uh, neg­a­tive­ly gear as much as you could in the past, does that. there’s changes to cap­i­tal gains tax. Does that put a pre­mi­um on owner/occupier hous­es? Do peo­ple like, you know, Jen­ny and I stay in our hous­es longer because it’s, because the owner/occupier house is now the only invest­ment you can make? Even super­an­nu­a­tion, which is large­ly tax-free, now has tax­es kick­ing in at, was it, uh, it’s now about three mil­lion dol­lars, what­ev­er the caps indexed to this year. Uh, so what does that do to the, the down­siz­ing of peo­ple? What does it do to [00:07:00] inter­gen­er­a­tional han­dover of assets? All that kind of thing. Um, I think it’s very inter­est­ing, and I think it’s got a lot, a lot to play out, and it’s gonna affect the mar­ket.

Cameron: Hmm. Yeah, well it’s, I mean, it’s inter­est­ing to me that these things aren’t all well under­stood already. Like how long does it take for finan­cial experts and gov­ern­ments to work all this stuff out? Should­n’t it have all been in the gov­ern­ment mod­el­ing? Should­n’t they have released it all? This is exact­ly what’s gonna hap­pen, how it’s all gonna play out.

Tony Kynas­ton: Well, the gov­ern­ment has released a lot of mod­el­ing, and of course it’s, it’s kind of favor­able to the changes. So they’re say­ing that rents are gonna go up in a amount, and there’s gonna be, I think, I for­get the num­ber now, tens of thou­sands of homes avail­able to new home, um, first home buy­ers. But, uh, you know, that’s, that’s not, I think, how it’s gonna play out. I think that there’s, I’ll, give you an exam­ple, a con­crete exam­ple. When I lived in New Zealand, [00:08:00] almost or a large num­ber of peo­ple, cer­tain­ly the, the peo­ple we asso­ci­at­ed with, did­n’t own their own prop­er­ty. They owned anoth­er prop­er­ty which they put in a trust and rent­ed out to some­body else, which then allowed them to rent where they lived in. And that was a more tax effec­tive way of doing things than own­ing your own prop­er­ty. It’s that kind of con­vo­lut­ed solu­tion which I think may emerge from these changes. Um, I don’t think it’ll hap­pen overnight because it’ll be thought of by one per­son who’ll give it to a few clients who’ll then have to tell their friends, et cetera, et cetera. It’s not like it’s, it’s gonna be a known out­come on day one.

Cameron: Hmm.

Tony Kynas­ton: And I think, I’m not sure how the bud­get’s work­ing in this case. I guess it’s all leg­is­lat­ed, but, um, maybe the leg­is­la­tion has­n’t been announced yet or, or released yet and. Or if it has been, it has­n’t been combed through in detail by the appro­pri­ate legal and tax experts.

But, um, it gen­er­al­ly takes a lit­tle bit for [00:09:00] the opti­mal struc­ture to be found and, and it may be that it’s gonna be a sur­pris­ing opti­mal

Cameron: Hmm.

Tony Kynas­ton: um, it may change as, uh, as opti­mal solu­tions come to light, and it may have impacts on the mar­ket too, which we, again, you know, I don’t fore­cast or plan, but, you know, we’ll, um, take it in our stride using the QAV sys­tem. But again, I’m remind­ed, uh, or like I came across a quote from Buf­fett this week, which I think is again appro­pri­ate to the sit­u­a­tion with, uh, changes in tax­es and struc­tures. The quote goes some­thing like, “If you know a per­son who has a good invest­ment but does­n’t want to do it because of tax rea­sons, send him to me. I will unbur­den him.” In oth­er words, tax is a con­sid­er­a­tion, but don’t let it get in the way of a good invest­ment.

Cameron: Speak­ing of Buf­fett, Fox was watch­ing this, uh, [00:10:00] real­ly trip­py ani­mat­ed show.

Tony Kynas­ton: Real­ly?

Cameron: Trip­py. Uh, made by an Aussie, but it’s an Amer­i­can show. Um, and there was an episode he was watch­ing yes­ter­day. I was in the kitchen sort of half watch­ing, and War­ren Buf­fett appeared in it, an ani­mat­ed ver­sion of War­ren Buf­fett.

The boss in this, uh, episode had like a smoky room coun­cil of busi­ness lead­ers and War­ren Buf­fett appeared in it. I was like, “Oh, it’s War­ren Buf­fett.”

Tony Kynas­ton: And Fox

Cameron: It was–

Tony Kynas­ton: he was, I sup­pose.

Cameron: No, no, it’s just this total­ly weird, you’re like, not a cameo. It was­n’t real­ly Buf­fett, but an ani­mat­ed War­ren Buf­fett in some kids car­toon.

I’m not sure it’s a kids car­toon, actu­al­ly.

Tony Kynas­ton: Hey, hey, sor­ry. Before we leave that dis­cus­sion of the bud­get too, one last thing I want to say is that I did notice that, um, where the gov­ern­ment has increased expen­di­ture in this bud­get, like giv­ing peo­ple hun­dred and fifty dol­lar tax break and, um, increas­ing [00:11:00] fund­ing for hos­pi­tals and that, that kind of thing. They’ve large­ly said they’re fund­ing it by sav­ings in the NDIS, and I think that’s, that’s got­ta hap­pen. It’s a good thing, and there’s obvi­ous­ly rort­ing going on in the NDIS, and it could be a lot, uh, lean­er and more effi­cient than it is because you read sto­ries about peo­ple in paper-based claims and that kind of thing. Like they can save some mon­ey. But I think what’s gonna hap­pen is down the track they’re gonna real­ize that what they’ve done with the NDIS is to basi­cal­ly buy the votes of a lot of peo­ple who weren’t get­ting the sup­port they prob­a­bly were due in the past. And if they try and take back some of that, um, largesse that the NDIS pro­vides, then it’s gonna hurt them in the polling. And, uh, I think that day will dawn on them as we get clos­er to a fed­er­al elec­tion, I think they may not be able to bank all the sav­ings they think they can bank. Then that’s gonna cre­ate, again, all kinds of, [00:12:00] um, prob­lems, with expen­di­ture and, and, um, poten­tial­ly anoth­er round of tax increas­es or, or greater debt for the gov­ern­ment, which will then like­ly have an impact in the bond mar­ket, which will then lift inter­est rates for retail mort­gage hold­ers.

So it’s. There’s, I, I can’t see a clear run­way, um, at least in the next year or two, as how things get a lot bet­ter than where they are now, at least.

Cameron: Hmm. And, you know, that’s not even talk­ing about the impact that AI is gonna have on the econ­o­my, but, you know, let’s not

Tony Kynas­ton: Well, that’s all

Cameron: go down that rab­bit hole.

Tony Kynas­ton: it? Good. It’s good. Great impact. Elon lost his, uh, legal case I saw today.

Cameron: Yeah. Because of the statute of lim­i­ta­tions had, had expired, appar­ent­ly, accord­ing to the jury.

Tony Kynas­ton: Okay.

Cameron: Would’ve thought that he would’ve known that going into it.

Tony Kynas­ton: Yeah.

Cameron: You men­tioned [00:13:00] bonds. So I’ve been read­ing a lit­tle bit about the US. Yeah, maybe he did. That’s the prob­lem. And I went, “Nah, you’ll be fine.

You’re a genius.” Um, glob­al bond mar­kets were sold off hard last week. US 30-year yield went above 5% for the first time since 2007, appar­ent­ly. And I’ve, uh, and I always have to kind of go back to square one and try and under­stand what this means when bond rates go up and the impact that it has on the econ­o­my, ’cause it’s nev­er real­ly clear in my head.

So when the gov­ern­men­t’s hav­ing trou­ble get­ting peo­ple to buy trea­suries, they have to put inter­est rates up to make it more attrac­tive.

Tony Kynas­ton: Cor­rect.

Cameron: Then peo­ple that cur­rent­ly own bonds, if you own a 30-year bond at 4%, you don’t wan­na be earn­ing 4%, so you have. you sell that off at a [00:14:00] dis­count to what you paid for it, and then that dri­ves the price of bonds down.

How does it all work?

Tony Kynas­ton: Yeah, it’s, it’s a bit like that. Um, what hap­pens is if you’re hold­ing a bond, say it’s worth a hun­dred dol­lars that you’ve, you’ve bought from the gov­ern­ment at four per­cent, a new bond gets issued at five per­cent, then the hun­dred dol­lars, um, gets low­ered by the dif­fer­ence. And so you might have. If you want to sell that bond, you might get nine­ty-six dol­lars back or nine­ty-eight dol­lars back for, um, the hun­dred dol­lars you paid.

So you’re tak­ing a, a hair­cut from a cap­i­tal gains point of view, or you can hold it to matu­ri­ty and get a hun­dred dol­lars back, but you’re earn­ing four per­cent when you could be earn­ing five. So there’s a trade-off that the bond traders do, um, to, to do that. But, you know, it’s more com­pli­cat­ed than that.

They. a bond, uh, you know, some­one who’s doing it for a [00:15:00] liv­ing or who needs to do it in their busi­ness will hold a whole port­fo­lio of bonds at dif­fer­ent rates and dif­fer­ent matu­ri­ties so that they can bal­ance out, um, changes a bit more eas­i­ly. They can trim it to match the cur­rent yield or they can, you know, increase or decrease what they hold of cer­tain bonds to do that.

So it’s, you know, more com­plex than just sell­ing one and buy­ing anoth­er one. But what it means in gen­er­al is as, the, as. There’s, there’s a psy­cho­log­i­cal effect. So if, if you think the gov­ern­men­t’s going to have to issue a bond at a high­er rate than what it’s issu­ing it now, then you’re not gonna buy the cur­rent bond. And so that, that in itself means the gov­ern­ment can’t get the bond away, so they have to increase the yield to entice a sale. That becomes part of the mix as well, that kind of, um, behav­ioral ele­ment to the whole thing. But what it. But what is also at, at play is what’s called bond vig­i­lan­tism, and that’s, that’s the real killer. [00:16:00] Where the bond mar­ket will say, “We’ve eval­u­at­ed the risk of tak­ing on a, uh, a gov­ern­ment bond, UK gov­ern­ment, Aus­tralian gov­ern­ment, Aus­tri­an gov­ern­ment, what­ev­er, US gov­ern­ment, and we think it’s more risky now to hold your gov­ern­ment bond because you haven’t bal­anced the books in the bud­get. You’re spend­ing like a drunk­en sailor, and you’re rack­ing up debt.

Every time you issue a bond, you’re not pay­ing down the old ones. You know, we’re now get­ting a lit­tle bit more wor­ried that at some stage there’s gonna be a crash.” Um, and so that’s prob­a­bly the biggest dri­ver, and that’s why that’s why the bond mar­ket pret­ty much dri­ves the world because as the, as the, the yield on bonds goes up or down, it flows through the mar­ket.

So, you know, it, it, banks, banks who are basi­cal­ly issu­ing bonds and buy­ing bonds and tak­ing deposits, all of those things are linked to the US bond mar­ket usu­al­ly, [00:17:00] or at least the gov­ern­ment bond mar­ket in the coun­try you’re oper­at­ing in, and they’re set by that. And so often­times they’re as sim­ple as what’s called the bank bill swap rate plus two per­cent or what­ev­er the mar­gin the bank wants is. So it’s, it’s, it’s lit­er­al­ly in the con­tracts tied to the, the bond rate. Um, and so what it means is, is as the yields go up on, on bonds, bor­row­ing costs for a com­pa­ny, um, goes up because they’re either, you know, buy­ing bonds and it’s, it’s cost­ing, cost­ing them more to do that, or they’re bor­row­ing from a bank and it’s cost­ing them more to do that.

So they. It slows the econ­o­my down. And if it gets to be such a prob­lem that the econ­o­my grinds to a halt, then yeah, we’ve got a prob­lem. Um, and that’s why even as a share mar­ket investor, you have to under­stand the bond mar­ket dri­ves the world. There’s a, there’s a love­ly quote from a guy called James Carville, and I spoke about read­ing his [00:18:00] book a lit­tle while ago. He says, “I used to think that if there was rein­car­na­tion, I want­ed to come back as the pres­i­dent or the pope or as a.400 base­ball hit­ter. Now I would like to come back as the bond mar­ket. You can intim­i­date every­body.” So um, what Trump says, no mat­ter what he does, no mat­ter the fact that he’s put his appointee into the Fed chair, they’re gonna have to raise inter­est rates if the bond mar­ket keeps, um, rais­ing inter­est rates.

They just. They’ll get into a, um, a sit­u­a­tion where they’re, they’re hav­ing to print mon­ey to keep up if they don’t, if the cen­tral bank does­n’t or the Fed does­n’t raise inter­est rates, and, uh, that you get into a stagfla­tion envi­ron­ment. So, you know, the, the, the bond mar­kets are telling the US to tidy its house and stop giv­ing tax breaks to rich peo­ple and stop rack­ing up mul­ti-tril­lion dol­lar debt, start pay­ing some of it down, Trump’s [00:19:00] ignor­ing it, and he’s put his appointee into the Fed say­ing, “You got to low­er inter­est rates.”

Now, that hap­pens, you’ll see a major dis­con­nect between the bond mar­ket and the Fed, and that’ll. They’ll prob­a­bly see inter­est rates on bonds or div­i­dends on bonds or yields on bonds go up even more, um, which will just be cat­a­stroph­ic for the, um, for the econ­o­my in the US. Already start­ing to, to have prob­lems.

I mean, the, the oil price, even though, even though they have large­ly their own, um, their own oil, it’s still flow­ing through to increas­es at the pump. Um, and that’s, uh, hurt­ing them. I’m just try­ing to find anoth­er quote. Excuse me. Um, and, uh. Here we go. Infla­tion, what I’m look­ing for was the lat­est infla­tion print in the US, which is up to three point eight per­cent April. Um, and that’s also what’s, um, [00:20:00] dri­ving bond yields as well. They, need to cov­er infla­tion in the bond yield, oth­er­wise they’re, they’re buy­ing some­thing which is going back­wards in real terms. So, um, that’s, that’s part of the mix as well. But the ques­tion I, I sort of, um, have been think­ing about, infla­tion’s going up in the US, infla­tion’s up here as well, because of oil.

When, when will it come down? And there was an inter­est­ing arti­cle in The Wall Street Jour­nal last week, and it was, uh. The head­line was, “Are we out of the woods on oil?” Uh, the, the author of the arti­cle, the reporter of the arti­cle does­n’t think so. And, uh, he inter­viewed a, a chap called Amad Hus­sein, is a com­modi­ties econ­o­mist at Cap­i­tal Eco­nom­ics.

And said, “The urgent imme­di­ate grab for phys­i­cal car­goes has died down. How­ev­er, we are draw­ing down those stocks pret­ty quick­ly, and as a result, prices will have to rise as a direct con­se­quence of [00:21:00] that, con­se­quence of that.” And he’s talk­ing about what’s called bot­tom­ing out in the oil indus­try, where, with­out enough flows, um, get­ting out of, uh, Sau­di Ara­bia, um, and the Mid­dle East, uh, you start to draw down on all the oil that’s in ships which are in.

around the world, all the oil that’s sit­ting in the big code tanks at ter­mi­nals start to get drawn down. As we’re find­ing out in Aus­tralia, most peo­ple only have two months sup­ply, much more than that. And so we’re get­ting pret­ty close to the stage where that’s gonna start to bot­tom out. Uh, this, this econ­o­mist says that he expects that if the strait remains closed and the inven­to­ry draw­down con­tin­ues, oil prices could top a hun­dred and forty dol­lars a bar­rel next month. Um, and he says, “Even if Wash­ing­ton and Tehran switch to, reach a swift deal the Strait of Hor­muz, the phys­i­cal flow of Gulf oil won’t imme­di­ate­ly bounce back. Clear­ing [00:22:00] pos­si­ble mines, repair­ing infra­struc­ture, and untan­gling mar­itime logis­tics will push the resump­tion of nor­mal ship­ping traf­fic back by at least two to three months.” That’s com­ing from the IEA. Uh, anoth­er ana­lyst called Tamas Var­ga from the Lon­don-based oil bro­ker PVM said, “Sup­ply is unlike­ly to recov­er in the next few weeks or next few months, even if the strait opens tomor­row.” Um,

Cameron: Which it won’t.

Tony Kynas­ton: Yep. So as, as, um, Ollie used to say at The Stand, “This is anoth­er fine mess you’ve got us into.” Not gonna clear away but, but, uh, it’s a long-wind­ed way of say­ing, I think bonds are gonna go up. I think gonna stay high. I think the, the Fed’s gonna be put into a vice want­i­ng, Trump’s appointee there want­i­ng to low­er rates when every­thing else is going up.

That’ll be inter­est­ing to see what hap­pens, and it could be. And I think we’re still gonna see inter­est rate [00:23:00] ris­es in Aus­tralia, but, you know, that’s a fore­cast. But all in all, it’s, it, it’s, um, it’s gonna test that eight per­cent rise in the ASX bet that that ana­lyst, uh, made you said before.

Cameron: Well, the inter­est­ing thing, and this is the bonkers part of it, you know, the bond yields are up, but also the S&P 500 is up 17% since March. So the mar­ket’s boom­ing ahead, at least the high tech part of it is. I’ve, our port­fo­lio, US port­fo­lio has come back a lot in the last week, two weeks, so there are impacts hap­pen­ing in the low­er part of the mar­ket.

But, um, you know, over­all, the S&P’s still boom­ing despite bond rates going up, so it’s this bizarre sit­u­a­tion.

Tony Kynas­ton: Yeah. I mean, you can look up graphs of, of the S&P ex the Mag Sev­en stocks, and you can see

Cameron: Hmm.

Tony Kynas­ton: at

Cameron: Hmm?

Tony Kynas­ton: Um, it. And our [00:24:00] port­fo­lio does­n’t include those, those tech stocks, so I can under­stand why it’s com­ing back. So it’s this, it’s

Cameron: Hmm.

Tony Kynas­ton: I think

Cameron: Hmm.

Tony Kynas­ton: it’s, Main Street is doing it tough, where­as the, as the Mag Sev­en are doing well.

But, you know, but as we’re see­ing with all the stocks we’ve talked about in the last few weeks, which have come off PE ratios, uh, or two of those tech stocks might do well longer term. But even in the dot-com bub­ble when it burst, you could buy Ama­zon for four­teen

Cameron: Hmm.

Tony Kynas­ton: ’cause they’re all on high ratios. There’s a cir­cu­lar, cir­cu­lar econ­o­my going on with Nvidia and com­pa­nies so they can buy chips from Nvidia. There’s, there’s gonna be a day of reck­on­ing at some stage for them, even if it’s just, um, I don’t know why, but it came across my stream last night. I had a, a clip from, from Bernie Sanders, of all peo­ple, say­ing he was putting a, a piece of leg­is­la­tion to [00:25:00] the Con­gress, what­ev­er. I think he’s a sen­a­tor, isn’t he? To the Sen­ate maybe or the Con­gress say­ing that he was want­i­ng a mora­to­ri­um on data cen­ter build­ing. Plen­ty of sto­ries about local com­mu­ni­ties reject­ing data cen­ter appli­ca­tions because of pow­er usage and things like that. That could be the, the crimp that slows the AI going, uh, from going for­ward

Cameron: Hmm.

Tony Kynas­ton: steam

Cameron: Hmm. Could be. Well, I was gonna talk about a local tech stock, Xero, a, um, saw a sto­ry the oth­er day, “Anthrop­ic threat clouds Xero’s out­look as US expan­sion drags down prof­it. Account­ing soft­ware firm Xero’s $3.9 bil­lion acqui­si­tion of US bill pay plat­form Melio Pay­ments has weighed on its prof­its, while Chief Exec­u­tive Sukhin­der Singh Cas­sidy’s take-home pay was hit by the com­pa­ny’s falling share price.”

Um, she took over from, uh, my old boss, [00:26:00] um, who, who was run­ning it there for a while. But, um, they, their share price plum­met­ed this week, Xero. Uh, and up, though, today, but it, it was, uh, 86 bucks on the 6th of May, fell down to 73 on the 14th of May, back up to 80 bucks today. Seems to be all over the place. But the, um, you prob­a­bly would­n’t have seen this, but, uh, in the last week, uh, Anthrop­ic, the com­pa­ny that makes Claude, uh, had announced a plu­g­in for Xero, which I’ve been using this week.

So you can basi­cal­ly talk to Claude, and it will inter­ro­gate your Xero account if you have Xero, and it’ll tell you what’s going on, and it’ll, you know, do your finan­cials for you. Um, won’t be long before it’ll put them in and man­age it all, and

Tony Kynas­ton: Yeah.

Cameron: uh, your auto­mat­ed book, it’ll be your [00:27:00] book­keep­er and your accoun­tant and all of that kind of stuff.

How that impacts on Xero’s rev­enues direct­ly, I don’t know, but it’s gonna impact on the peo­ple that are the inter­me­di­aries between peo­ple and busi­ness­es and their Xero instance, I think, like Rud­dy. But, uh, I think the threat for these sorts of com­pa­nies is, and we’ve seen this with Atlass­ian as well, is this idea that all of the soft­ware ser­vices lay­er is gonna be replaced by some sort of AI func­tion­al­i­ty in the near future.

Tony Kynas­ton: Well, I think, I think all of those things are poten­tial­ly true and prob­a­bly are true, um, to some extent, and I don’t know what the time­line will be.

Cameron: Mm.

Tony Kynas­ton: Again, like as we said last week with CSL, these, these com­pa­nies that trade on high P/Es, it’s AI or some­thing else, there’s always some­thing that comes along to trip them

Cameron: Mm, mm.

Tony Kynas­ton: um, it’s just such a bad idea, I think, [00:28:00] invest­ing in them.

So I had a look at the, the P/E for Xero in Stock Doc­tor, and it’s still cur­rent­ly, accord­ing to Stock Doc­tor, three hun­dred and sev­en­ty-five times earn­ings.

Cameron: Oh.

Tony Kynas­ton: It’s, it’s fore­cast to drop to sev­en­ty next year. So it’s, it’s still grow­ing at a, at a good rate, but even at sev­en­ty times earn­ings,

Cameron: Yeah.

Tony Kynas­ton: But

Cameron: Yeah.

Tony Kynas­ton: the results they put out were good. So they

Cameron: Mm.

Tony Kynas­ton: num­bers, top line growth of thir­ty per­cent. Um, they are, they are hav­ing prob­lems with the US acqui­si­tion and how many times have we seen an Aus­tralian com­pa­ny, this is a New Zealand com­pa­ny, go to the US and have prob­lems?

But, but they

Cameron: Hmm.

Tony Kynas­ton: out­side of Melio, I think it’s called, or Melio, in the US any­way. So they’re still grow­ing, but, you know, at, at, as soon as these com­pa­nies say, “Hey, we can’t grow any­more,” or they come across a, a prob­lem like AI, they’ll flick a switch and say, “Well, let’s [00:29:00] go after prof­it now.

We’ll, we’ll mon­e­tize what we’ve got and grow it at slow­er rates,” and then the share prices just drop.

Cameron: Hmm. Yeah. I mean, there’s gonna be a new tech­nol­o­gy par­a­digm at some point. You, you don’t have 70 years to catch up to your price to earn­ings, right? There’s gonna be a

Tony Kynas­ton: Yeah.

Cameron: par­a­digm shift in five years, 10 years, at some point that’s gonna come after your first mover advan­tage.

Tony Kynas­ton: Or even just a com­peti­tor.

Cameron: Yeah. Well, a com­pa­ny that, uh, is a lit­tle bit dif­fer­ent but is doing well is Genus­Plus Group, Tony.

I saw this in my news items today. We’ve talked about them in the past. GNP is their code. We hold them in a light port­fo­lio. Bought them in Novem­ber 2024 at $2.54. [00:30:00] They’re up 283% since then. Um, so that’s all right, in a year and a half. Uh, they went into a trad­ing halt, uh, today, uh, I think. Let me just pull up this sto­ry if I can find it again.

Genus­Plus. There it is. Genus has agreed to acquire 100% of MPC Kinet­ic, MPK, for an upfront cash con­sid­er­a­tion of 325 mil­lion, deferred cash con­sid­er­a­tion of 25 mil­lion payable six months post-com­ple­tion, and earn out cash con­sid­er­a­tion of up to 50 mil­lion sub­ject to achiev­ing FY27 EBIT tar­get of 70 mil­lion.

MPK is a lead­ing provider of gas gath­er­ing and well main­te­nance ser­vices to tier one cus­tomers in the Queens­land onshore gas sec­tor, as well as con­struc­tion ser­vices for renew­able ener­gy and major pipeline projects in Aus­tralia. [00:31:00] So, uh, well done to Genus­Plus, uh, on that acqui­si­tion. Hope­ful­ly, it goes well.

But if you’re a Genus­Plus share­hold­er, I guess we’ll wait to see how that plays out. But yeah, they’re, they’ve been on a mas­sive run for the last, uh, cou­ple of years.

Uh, not doing as well is Fin­bar, FRI. Fin­bar is a prop­er­ty devel­op­ment com­pa­ny whose core busi­ness lies in the devel­op­ment of medi­um to high den­si­ty res­i­den­tial apart­ments and com­mer­cial prop­er­ty with­in the Perth met­ro­pol­i­tan area. We talked about them a few months ago, late last year, and you were talk­ing about West­ern Aus­tralian con­struc­tion infla­tion and the impact it might have on mar­gins and project fea­si­bil­i­ty.

And,

Tony Kynas­ton: on Fin­bar.

Cameron: that’s right. And, um, they have now become a rule one sell in the dum­my port­fo­lio. [00:32:00] I added them in Decem­ber last year at 89 cents. They’re now at 70 cents. They sort of been toy­ing with the 20% rule one line for the last cou­ple of days. They went below it, then they went back above it. They’re back below it today, so I’ll have to let them go when I get a chance.

So I also held them in a light port­fo­lio, uh, where I added them a lit­tle bit ear­li­er at 81 cents. They’re get­ting close to a three point trend line sell there at 68 cents. So if any­one out there is hold­ing FRI, you might wan­na keep a close eye on that. It could either be a sell or might be a sell close short­ly.

Toby wants to go fish­ing, Tony.

Tony Kynas­ton: Yeah,

Cameron: To-

Tony Kynas­ton: that.

Cameron: Toby’s sug­gest­ing a fish­ing trip, uh, Port Phillip, uh, Bay Heads, uh, around Octo­ber to Decem­ber. There you go.

Tony Kynas­ton: Hope­ful­ly

Cameron: You’ve.

Tony Kynas­ton: part of that [00:33:00] peri­od, not the whole three

Cameron: No, the whole thing. And he’s just, yeah, three month fish­ing trip.

Tony Kynas­ton: palace.

Cameron: Yeah, that’s it. “Snap­per,” he says. Snap­per in Port Phillip. So any­one who wants to go fish­ing with Toby, Port Phillip, let us know.

Sug­gest­ing a QAV fish­ing trip.

Tony Kynas­ton: Yeah, sure. I’ll be. I’m hap­py to be involved. I’m not a fish­er­man, but, uh, a cou­ple of hours on the port, on the, on the bay would be fun.

Cameron: Just get a line hang­ing off a golf club.

Tony Kynas­ton: Yeah. Actu­al­ly, I could prob­a­bly hit a few old golf balls into the bay.

Cameron: Love­ly.

Tony Kynas­ton: Yeah

Cameron: That’s how you go fish­ing. You just sort of hit him with a golf ball.

Tony Kynas­ton: Like Kramer. Hope­ful­ly it

Cameron: Yeah.

Tony Kynas­ton: in the, in the whale spout.

Cameron: The sea was angry that day, my friends. Like an old man try­ing to take back soup at the deli.

Tony Kynas­ton: Yeah.

Cameron: I reached deep into the blow­hole of that great fish, mam­mal, what­ev­er. What have you got on your list of talk­ing points, TK?

Tony Kynas­ton: [00:34:00] Uh, did you, do you hear the sto­ry behind that? You ever see Jer­ry, Jer­ry Sein­feld talk­ing about they kept adding to the sto­ry, and one, one of the final lines was asked what, what the brand of golf ball was that George pulled out of the whale and, and

Cameron: Yeah.

Tony Kynas­ton: “Titleist.” And then you knew Kramer hit it in.

Cameron: Yeah.

Tony Kynas­ton: to. Like, they wrote that the night before. They had to get per­mis­sion from the com­pa­ny that makes Titleist golf balls

Cameron: Right

Tony Kynas­ton: it and go to air, and they, like, got per­mis­sion like five min­utes before they start­ed record­ing they could say Titleist.

Cameron: Right. Won­der why they had to have per­mis­sion?

Tony Kynas­ton: Yeah, I don’t know.

Cameron: Any­way, there you go. What you got?

Tony Kynas­ton: So get­ting back to the bud­get, and, uh, it’s, it’s kind of bor­ing to keep going back to it, but one thing that did, did sort of tick­le my fun­ny bone was the fact that there was an arti­cle at some- some­where that I read that the Trea­sury fore­casts for the Sep­tem­ber quar­ter are bet­ter than the [00:35:00] RBA’s to the bud­get. begs the ques­tion, why the hell do we have two build­ings of econ­o­mists doing sep­a­rate fore­casts? don’t we

Cameron: Well, m- the RBA’s

Tony Kynas­ton: to give the RBA what they want and to give Trea­sury what they want?

Cameron: Well, ’cause the RBA is inde­pen­dent of the gov­ern­ment tech­ni­cal­ly, isn’t

Tony Kynas­ton: Yes.

Cameron: Uh, you don’t want the gov­ern­ment just mak­ing up stuff. You want some­body that’s inde­pen­dent to the gov­ern­ment.

Tony Kynas­ton: Well, you’d hope that the Trea­sury isn’t just mak­ing up stuff for the bud­get too then real­ly. the Trea­sury should rely on the RBA’s num­bers. But why have two, why have two pools of econ­o­mists?

Cameron: Hmm.

Tony Kynas­ton: strange.

Cameron: Hmm. Well, you know,

Tony Kynas­ton: yeah.

Cameron: gonna, who’s gonna hire all the econ­o­mists then, Tony?

Tony Kynas­ton: fudge the fig­ures if the Trea­sury can’t?

Cameron: Yeah.

Tony Kynas­ton: Um, so I’ve got, uh, a pulled pork to do, and [00:36:00] was.

There’s three requests out­stand­ing. One was on, one was for CXZ, and when I start­ed to look at doing a pulled pork on that last night, it, it jogged my mem­o­ry and I’ve already done that, and that was back, uh, in episode 731 on the 31st of July, 2024. um, I can’t remem­ber who request­ed this pulled pork, but if they wan­na go back and have a look at CXZ, done one back then.

Cameron: Right.

Tony Kynas­ton: in a minute.

Cameron: Just the tip? See, there’s an episode. There’s an epis- There’s the title for this week.

Tony Kynas­ton: And, uh, then we still have, I still have, uh, um, WEB, W‑E-B, the trav­el com­pa­ny to do. Uh, so I’ll do TIP today, WEB, WEB next time. But I just want­ed to high­light that when I was look­ing at those, um, in prepa­ra­tion, I did see that WEB is under takeover [00:37:00] offer, and it’s a takeover.

One of the bid­ders is Hel­loworld, anoth­er trav­el com­pa­ny that was on our buy list last year at some stage. And they’ve, uh, there was an arti­cle in the Fin Review about, about the takeover. So, um, just quick­ly, Web­jet was demerged from the hotel, hotel room aggre­ga­tor Web Trav­el Group Sep­tem­ber twen­ty twen­ty-four. its shares have sunk from a dol­lar nine to trade at a record low of fifty cents as of Mon­day, which was last week. And, um, Web­jet will report its twen­ty twen­ty-six year results on Thurs­day this week, and, um, that’s gonna be ger­mane to the takeover dis­cus­sions. so one of the com­pa­nies try­ing to take it over is called Ari­adne, Ari­adne, in, com­bi­na­tion with a, um, investor called BGH, and then Hel­loworld has a stake, uh, in this, um, [00:38:00] tar­get. uh, Hel­loworld’s stake in the tar­get’s grown slight­ly since the failed bid, yeah, it’s prob­a­bly about all I can say on it at the moment. So it’s very much in play, but, um, we may have some more infor­ma­tion by the time I get around to doing a pulled pork for it in two weeks.

Cameron: Okay.

Tony Kynas­ton: And the oth­er bit of news is that, um, Per­en­ti, a stock that I own, but it’s also I think on the buy list at the moment, or it was recent­ly. It had a con­tract win which s‑saw its shares go up eight point five per­cent. They’ve since come back up a lit­tle bit since then. So Per­en­ti is a drilling com­pa­ny, par­tic­u­lar­ly, um, to the min­ing sec­tor, uh, they bought a busi­ness called Barmin­co, which they still oper­ate. And, uh, they’ve been, Barmin­co was select­ed by Belle­vue Gold the under­ground min­ing con­trac­tor for the Belle­vue Gold project in WA, and the [00:39:00] con­tract val­ue is esti­mat­ed at eight hun­dred and fifty mil­lion dol­lars over the next four years.

So that’s, uh, sup­port­ed the Per­en­ti share price a bit there.

Cameron: Hmm. Excel­lent. I, I hold a cou­ple of parcels of them in my super. One is up 70%, the oth­er is down 15%, which I added in Sep­tem­ber last year. So I hope they, uh, turn it around.

Tony Kynas­ton: Sor­ry about that. I was get­ting a call from the per­son who’s bring­ing my deliv­ery.

Cameron: Oh, do you need to take it?

Tony Kynas­ton: No, he’s gone. I’ll, I’ll call him back after this.

Cameron: Oh, okay.

Tony Kynas­ton: Yep.

Cameron: He might be at your front door.

Tony Kynas­ton: he could be. No, but Jen­ny’s still around some­where, so she’ll

Cameron: Oh, okay. Right.

Tony Kynas­ton: Um, he’s not due till 3:00, so we should be okay. And

Cameron: Hmm.

Tony Kynas­ton: I’ve got a pulled pork to do on Invest Part– uh, TIP Pri­vate. So are you ready for that?

Cameron: Yeah, hit me with the tip.

Tony Kynas­ton: Hit you with the [00:40:00] tip. Okay. So a cou­ple of things for me to, um, to, just, I guess, announce upfront Team Invest Pri­vate Group. The, the first thing is it’s a very small ADT stock. There’s only $6,000 trad­ed aver­age. But this is a

Cameron: Hmm.

Tony Kynas­ton: I’ll, do the pulled pork

Cameron: Hmm.

Tony Kynas­ton: sec­ond thing to note is, is that it’s, uh, it’s cur­rent­ly a sell. even though it’s got a good QAV score, it’s a sell based on sen­ti­ment, so it’s below its sell line. So any­one was inter­est­ed in, in look­ing at this, they would would have to wait until it became a, a buy again on the trend lat­er. But the, the thing I also need to declare is that, uh, Team Invest Pri­vate Group, TIP, had a rela­tion­ship with a busi­ness I’m a direc­tor of, um, which is Clime Invest­ment Wealth. uh, I, I don’t think there’s a share­hold­ing any­more. I think TIP sold out of Clime at the end of last year, but, um, to my join­ing the board, uh, [00:41:00] they had a direc­tor, um, Andrew Cole­man was a direc­tor also of Invest­ment Wealth because they were a share­hold­er. but that was pri­or to my join­ing the board. Clime and TIP have had a rela­tion­ship where they’ve done of cross-mar­ket­ing, um, turn­ing up at each oth­er’s events to, to, um, cross-pro­mote. had, um, via a com­pa­ny called Enver, which was a advice busi­ness that, um, I think TIP had some­thing to do with, and then Clime looked at buy­ing and I, I don’t think it ever went ahead. uh, Enver was involved with TIP and was involved with CIW at some stage. And our cur­rent CEO, um, Michael Barag­wanath, out of Enver as well. So of a, bit of a long-wind­ed say, way of say­ing that I just want­ed to declare my, uh, involve­ment with Clime, which has had a rela­tion­ship with TIP, I want­ed to be upfront with that.

And just to be clear that, uh, my [00:42:00] analy­sis is in no way pro­mot­ing TIP, um, because of any involve­ment that they have with Clime.

Cameron: All right.

Tony Kynas­ton: any­way, oh, I guess the last thing to, to dis­close is that, is that in a loose way, TIP could be seen as a com­peti­tor of QAV. But, um, I take the view that there are many peo­ple teach­ing val­ue invest­ing, and the more peo­ple pro­vid­ing edu­ca­tion, the bet­ter.

So I’m not con­cerned about that either. Um, who are TIP? So I’m rely­ing on, uh, a report com­ing out of a com­pa­ny called Pitt Street Research, who did a, a big deep dive on them back in, back in twen­ty twen­ty-four. they say, “Team Invest Pri­vate Group is a Syd­ney-based invest­ment com­pa­ny. is one of only a hand­ful of invest­ment com­pa­nies list­ed on the ASX arguably the most unique. TIP has gone through a sub­stan­tial evo­lu­tion in its more than two decades of exis­tence, from an infor­mal club [00:43:00] of high net worth ind-indi­vid­u­als edu­ca­tion and stock pick­ing before start­ing a pri­vate equi­ty offer­ing. TIP list­ed in two thou­sand and nine­teen and is now a diver­si­fied finan­cial insti­tu­tion with a funds man­age­ment busi­ness, pri­vate equi­ty, um, and invest­ment edu­ca­tion busi­ness. Team Invest has a Gra­ham and Dodd val­ue invest­ment phi­los­o­phy, on buy­ing under­val­ued com­pa­nies with strong fun­da­men­tals at a price low­er than their intrin­sic val­ue. In par­tic­u­lar­ly, TIP seeks out, uh, what they call smart com­pa­nies, SMART, being an acronym for com­pa­nies with a clear strat­e­gy, strong moats, low risk with man­age­ment the Team Invest pri­vate team can trust. This phi­los­o­phy is employed in its invest­ing activ­i­ties and is in– taught to its clients edu­ca­tion and advice seg­ment. com­pa­ny takes an active inter­est in the gov­er­nance and growth of com­pa­nies it direct­ly invests in. [00:44:00] Indeed, it seeks out com­pa­nies that could cro- could grow mate­ri­al­ly with the ben­e­fit of men­tor­ship and patient cap­i­tal. The strat­e­gy is pay­ing off, as evi­denced by its one point six bil­lion dol­lars of funds in its edu­ca­tion and advice busi­ness and a fur­ther two hun­dred and forty-four mil­lion dol­lars in funds under direct man­age­ment.” Uh, that’s the busi­ness in a nut­shell. A bit about its per­for­mance. The Team Invest web­site reports a back-test­ed auto­mat­ic Aus­tralian port­fo­lio.

So essen­tial­ly their ver­sion of a dum­my port­fo­lio, uh, but it’s back-test­ed, um, and it uses their con­scious investor fil­ter­ing pro­gram. And, uh, the peri­od they back-test­ed is two thou­sand and one to two thou­sand and twen­ty-five, and they claim it that that gen­er­ates a six­teen point two per­cent gross return. So, um, that’s all good. Uh, I d- I did note that the start­ing year was two thou­sand and one, which was, um, when the dot­com bub­ble burst or just after it, so that might [00:45:00] inflate val­ue investor-like returns because the val­ue investors came back into their own after the dot­com bub­ble burst, but that’s by the by, I guess. Um, Team Invest do offer two funds. They actu­al­ly offer three, I think, but the two funds I could find, uh, open to the pub­lic on their web­site, um, being the Con­scious Investor Fund and the Team Invest Access Fund. One’s a, a whole­sale fund and one’s a retail fund. uh, the web­site reports that the Access Fund was start­ed in twen­ty twen­ty-two, it’s the retail fund, as at thir­ty-first of March this year has returned a four point three eight per­cent annu­al return. The Con­scious Investor Fund start­ed ear­li­er in two thou­sand and thir­teen and has returned nine point eight four per­cent per annum ver­sus the ASX 200 accu­mu­la­tion index return of eight point two five per­cent. Um, so that’s a whole­sale fund, and they both have lim­its on redemp­tion peri­ods and amounts, but that’s not that unusu­al for, um, [00:46:00] unlist­ed Aus­tralian funds. And they list in the, um, in the, uh, Aus­tralian list­ed space. Um, have dif­fer­ent fee struc­tures. Con­scious Investor Fund has a flat four hun­dred and fifty dol­lars per month fee, regard­less of how much is invest­ed. in lieu of a per­cent­age-based man­age­ment fee, and they have a per­for­mance fee of twen­ty per­cent of returns above six per­cent. The Access Fu- Access Fund charges some­thing slight­ly dif­fer­ent, a one per­cent man­age­ment fee and a per­for­mance fee of fif­teen per­cent above the ASX 200 accu­mu­la­tion index. also oper­ate, or I have seen them, uh, seen it report­ed they oper­ate a pri­vate equi­ties fund the TIP Finan­cial Ser­vices Oppor­tu­ni­ty Fund. but I, I could­n’t get much infor­ma­tion on that one from the web­site, so maybe it’s closed at the moment. Uh, but any­way, they, think they do have some oth­er funds besides the two, uh, that they’ve list­ed specif­i­cal­ly on the web­site. Um, in the, uh. The thing about this busi­ness is, [00:47:00] uh, I guess because of its his­to­ry, they kind of have a fly­wheel busi­ness mod­el.

So they start­ed off being, um, a group of investors invest­ing for them­selves, and they start­ed doing, uh, direct invest­ments in pri­vate com­pa­nies, and, uh, that’s turned out well for them. So, pri­vate equi­ty often mea­sures returns through a mul­ti­ple, through a, um, a mea­sure­ment called MOIC, mul­ti­ple on invest­ed cap­i­tal, and, um, the com­pa­ny reports that they’ve had a three times MOIC on their unlist­ed invest­ments over twelve years, and that prob­a­bly equates to about a nine or ten per­cent CAGR. Um, I don’t have all the details to be able to cal­cu­late that, but that’s prob­a­bly rough­ly in line with what they’re get­ting through their oth­er fund. Why do they use MOIC? Uh, and that it’s basi­cal­ly because hav­ing a mark-to-mar­ket abil­i­ty, ’cause it’s because they’re invest­ing in unlist­ed com­pa­nies, they’ve got to take into accou-account the mon­ey they put [00:48:00] in and what they, what it’s now worth at the moment using uh, been real­ized through div­i­dends or trans­ac­tion sales or rebuys, um, then what­ev­er the, what they think the unlis-unlist­ed val­u­a­tion is for that com­pa­ny at the moment.

So it, it, that’s typ­i­cal­ly what the met­ric that’s used by the pri­vate equi­ty mar­ket. Any­way, that’s, that’s how they start­ed out. They then used the cash flow from those invest­ments to grow the busi­ness, also used them as proof cas­es in their investor edu­ca­tion sem­i­nars. that side of the busi­ness, which is called Team Invest, report sev­en hun­dred plus or sev­en hu- about sev­en hun­dred mem­bers, of their club and, um, they, they do have dif­fer­ent, uh, mem­ber­ship streams, but, uh, Gem­i­ni reck­ons the aver­age is about ten thou­sand per year for access to edu­ca­tion and the Con­scious Investor soft­ware, which is a, a fil­ter­ing soft­ware based on research, uh, and fil­ters the ASX [00:49:00] com­pa­nies much the same as we do with QAV. Well, when I say much the same, it’s the same process, but dif­fer­ent fil­ters. and then they also, if you remem­ber, h- you have access to lots of sem­i­nars and group meet­ings where you can pull apart, um, invest­ment oppor­tu­ni­ties. and of course, some of those peo­ple then go on to invest with the Team Invest funds.

So it’s, it’s a bit of a fly­wheel mod­el for them, which has, uh, worked suc­cess­ful­ly over the years. oth­er thing to men­tion is that the same invest­ment phi­los­o­phy and fil­ter­ing soft­ware is used through each arm of the busi­ness, cre­at­ing a uni­fied struc­ture in their ecosys­tem. that’s the, they’re kind of true to their, their word as val­ue investors. to give you a fla­vor of what they’re invest­ed in in the unlist­ed space, have a num­ber of com­pa­nies which they own out­right, 100%, three com­pa­nies they own a third of. So the un- they hold out­right that are unlist­ed, uh, one of them’s called GLT, which is, stands for Gra­ham Lusty [00:50:00] Trail­ers, they man­u­fac­ture alu­minum trail­ers for semi-trail­ers, the, the big rigs you see, uh, on the high­ways. They own a busi­ness called Icon Met­al, which is, um, busi­ness that pro­duces struc­tur­al steel fab­ri­ca­tions and things like balustrades and handrails for busi­ness­es, um, and the like. have a busi­ness called Automa­tion Group, which is a high tech engi­neer­ing firm, and they pro­duce indus­tri­al automa­tion sys­tems. Uh, they own a busi­ness called East Coast Traf­fic Con­trol, which as the name sug­gests, safe­ty plan­ning, road­side crews, um, safe traf­fic flows for large con­struc­tion sites and civ­il con­struc­tion firms and local gov­ern­ment road author­i­ties. And last­ly, they have a, a 100% own­er­ship of a com­pa­ny called Kit­o­my, is a, a major pro­duc­er of cus­tomiz­able kit homes in Aus­tralia. And then they own a third of Col­or Cap­i­tal, [00:51:00] is a, a, a fran­chisor com­pa­ny, and prob­a­bly the most notable fran­chise that peo­ple will rec­og­nize is The Cof­fee Club of cof­fee shops in s- in shop­ping malls. also own a third of a com­pa­ny called Warthel Court, which is a prop­er­ty devel­op­er, and they own a third of a com­pa­ny called Mul­ti­me­dia Tech­nol­o­gy, is an IT of hard­ware AV equip­ment.

Um, so that’s, that’s the unlist­ed space. bit on the his­to­ry. Uh, the com­pa­ny was orig­i­nal­ly found­ed in 2007 by three part­ners, Cole­man, who still remains as an owner/founder on the board of the com­pa­ny, Dr. John Price, who was the math­e­mati­cian who designed the con­scious investor fil­ter­ing soft­ware that under­pins the val­u­a­tion mod­els, and Mark Mor­land, who was an expe­ri­enced busi­ness own­er who helped scale the orig­i­nal clubs. And they got togeth­er because they were frus­trat­ed by tra­di­tion­al finan­cial advice, [00:52:00] and they want­ed a way to, uh, uh, improve their invest­ment returns. And then in, um, 2012, the, uh, com­pa­ny decid­ed to tran­si­tion from a stock pick­ing club into a direct pri­vate equi­ty investor. Howard’s, Howard Cole­man’s son, Andrew Cole­man, on, uh- Into the com­pa­ny in two thou­sand and twelve, and he co- he co-found­ed the Team Invest pri­vate arm back then, and they start­ed invest­ing, um, uh, pri­vate­ly. Andrew Cole­man was for­mer­ly with Cred­it Suisse, uh, as an invest­ment banker, and he obvi­ous­ly, could help struc­ture the ini­tial pri­vate acqui­si­tions, and he still serves as the MD and CEO. So that’s, that’s, uh, who’s involved. This com­pa­ny has an own­er-founder and an own­er-founder’s son with mate­r­i­al stakes. lat­est results aren’t great. So, um, I’m look­ing at the Decem­ber twen­ty twen­ty-five [00:53:00] half. Rev­enue was down three point five per­cent com­pared to the first half in twen­ty twen­ty-four. prof­it after tax was down forty per­cent to reduced per­for­mance fees, um, in the funds and, you know, um, with the num­bers I read out before, they’ve had a tough year. I, I did notice in some of their, um, their newslet­ters that they had been a buy­er of com­pa­nies like CSL and RMD at the end of last year. So know if they still hold them and when they got out, but if they still hold them, they would have been, down this year based on those cou­ple of hold­ings at least. so per­for­mance fees are down. they do also put out num­bers which they call look-through earn­ings, a bit like Berk- Berk­shire Hath­away does, as a way of try­ing to give vis­i­bil­i­ty to what the unl- unlist­ed com­pa­ny per­for­mance is like. Um, and if you look at those com­pa­nies. Well, actu­al­ly, it’s the total look-through earn­ings for the com­pa­ny, includ­ing those. TIP report­ed an increase in rev­enue of four per­cent [00:54:00] and, but EBITDA down thir­teen per­cent. they don’t give a net prof­it after tax line for look-through earn­ings because they don’t pay any tax on those. They’re still tied up in the unlist­ed com­pa­nies. So, um, has­n’t been a great year for them, but, um, they have had good years in the past. they’re also con­duct­ing a share buy­back, but, um, I has­ten to add when I looked at their cur­rent share count ver­sus what it was last year, the shares are down, but not enough for us to score them as hav­ing a buy­back. Mov­ing on to the QAV num­bers. As I said, ADT is only six thou­sand. It’s a thir­ty-two mil­lion dol­lar mar­ket cap com­pa­ny. Stock price for the analy­sis is a dol­lar nine­teen. Um, there’s no con­sen­sus tar­get, so affect the scor­ing a lit­tle bit, so I can’t do an IV2. IV1 is only twen­ty-four cents, which is much below the tar­get of a dol­lar. Sor­ry, the stock price of a dol­lar nine­teen. Uh, they are pay­ing a div­i­dend, but its yield is two point five per­cent. Um, Stock Doc­tor finan­cial health tre- trend, [00:55:00] uh, is steady and, and the finan­cial health score is strong. Stock­o­pe­dia have a qual­i­ty rank of only six­ty-four for this com­pa­ny and an over­all rank of six­ty-nine, so they’re not, uh, lik­ing it from those. from the per­spec­tive of qual­i­ty.

How­ev­er, they do have an F score of eight out of nine, which is very high, so I’m not sure why it low­er for qual­i­ty when the F score is so high. Um, the PE score for the com­pa­ny is twen­ty-five times. Um, not quite the high­est, but not the low­est, so we don’t score it for that. What we do score it for is PROPCAF being of, uh, being two point nine eight times, so that’s, that’s pret­ty good. Lots of cash the com­pa­ny and, um, it’s boost­ing the score for us. Net equi­ty per share is three dol­lars twen­ty-one, which is way above the cur­rent stock price of a dol­lar nine­teen. So you can almost buy it for half of the book val­ue. Uh, stock, uh, plus thir­ty is four dol­lars sev­en­teen, so you can [00:56:00] def­i­nite­ly buy it below that. has­ten to add that NTA though is a dol­lar six­ty-eight, um, but that’s still above the cur­rent share price, so you’re buy­ing it for less than NTA. But there’s obvi­ous­ly good– car­ry­ing good­will for some of the acqui­si­tions the bal­ance sheet, which is the dif­fer­ence between the, uh, net equi­ty and net tan­gi­bles. there’s no fore­cast earn­ings per share, so I can’t do growth over PE for it. does score for hav­ing an own­er founder, so direc­tors are hold­ing just under thir­ty per­cent, most­ly by the father and son Cole­mans in this case, who’ve been around. Uh, the father’s been around since the start. Um, as I said, they are doing a buy­back, but not, uh, mate­r­i­al enough for us to score it for that. does­n’t have con­sis­tent­ly increas­ing in equi­ty, can’t score it for that. our qual­i­ty score is fifty-eight per­cent, sev­en out of twelve, and the QAV score is point two, which scores well, but, um, if you look at the bread lat­er, it’s, it’s still a sell based on sen­ti­ment, so we can’t buy it just yet. um, peo­ple can look, uh, look at [00:57:00] it, take their time, and then when it does become a bar­gain on sen­ti­ment even­tu­al­ly, um, which I’m sure a com­pa­ny like this will trad­ing on such a low PROPCAF, it’ll be seen as val­ue by some­one. Uh, uh, in terms of what I like and what I, um, what I think are gonna be issues for it, um, I like the low PROPCAF num­ber.

I like the own­er founder. I like the val­ue invest­ment style. like the dif­fer­ent arms to the busi­ness. I like the fil­ter­ing of met­rics, which is a, a QAV style of invest­ment. I like the off-mar­ket invest­ments. But, um, the funds are of a drag, uh, on the busi­ness. Um, they do gen­er­ate fees, but, um, there is a dis­con­nect between what the back test­ing is show­ing the fil­ters pro­duce and what they’re pro­duc­ing in the funds.

And, um, it– I, I could­n’t drill down enough to find out what the dif­fer­ence was being caused by, but it seems to be that age-old prob­lem that we’re, see­ing in fun- the funds man­age­ment indus­try, that it’s very hard to have mean­ing­ful out­per­for­mance over [00:58:00] time. So I’m not sure it is in this case, and I’m, and I, I know they have had peri­ods of mean­ing­ful out­per­for­mance.

So, um, it may just be that they’ve, um, had a bad year this year, but. and they’ll return to bet­ter per­for­mance. But, um, cer­tain­ly some­thing I’m learn­ing through my expo­sure to the indus­try is that, uh, funds stru- strug­gle to meet, beat the index in a mean­ing­ful way. And small funds, like the ones being oper­at­ed here, espe­cial­ly unlist­ed ones or even, even list­ed ones, they’re being squeezed by low cost ETFs. So, so the cou­pling, the fact that, um, they’re, not shoot­ing the lights out They, they can from time to time, but not on a, a con­tin­u­ing basis. And then they’re charg­ing per­for­mance fees for just, long-term aver­ages, either at the index or slight­ly below or slight­ly above. Um, they’re being squeezed out by, um, low­er cost ETFs, which are pro­vid­ing index per­for­mance in a guar­an­teed way. that’s an issue that they, they will come to grips with, I’m [00:59:00] sure, at some stage. but there is a lot, a lot to like with this com­pa­ny. Uh, and we score it well except for sen­ti­ment, and I’m sure it, um, would be looked at by peo­ple with small port­fo­lios when it does return, um, sen­ti­ment.

Cameron: Can you still hear slurp­ing nois­es now that I turned my micro­phone back on?

Tony Kynas­ton: No.

Cameron: Won­der­ing what you’re pick­ing up. Maybe it’s sub­con­scious­ly slurp­ing. You’re, you’re pick­ing up my thought pat­terns.

Tony Kynas­ton: Yeah. Could– I could be read­ing your alpha waves. Some­thing

Cameron: Yeah.

Tony Kynas­ton: Yeah.

Cameron: So I was gonna ask you what I’m miss­ing with this, look­ing at their web­site and the returns you men­tioned. So they’ve got this fund, the Team Invest Access Fund, incep­tion date 15th June, 2022, annu­al­ized return since incep­tion 4.38%. I looked at, uh, the dum­my port­fo­lio and gave it a start­ing date [01:00:00] of the 15th June, 2022.

It’s up 17.91%

Tony Kynas­ton: Mm-hmm.

Cameron: then ver­sus the SPDR up 11%. So they’re not just, you know, get­ting aver­age returns, they’re under­per­form­ing even the bench­mark by, you know, three times. Um,

Tony Kynas­ton: I

Cameron: so I’m try­ing to f- Hmm.

Tony Kynas­ton: Yeah, I think they list­ed the, the AS- ASX 200 accu­mu­la­tion index as the bench­mark. And accord­ing to them, uh, r‑r-r– Yeah, no, you’re right. They’re also that that’s sev­en­teen point six per­cent, so they’re under­per­form­ing it

Cameron: Hmm. So I, I, I don’t under­stand why peo­ple would invest in this. You said that they might have out­per­formed in the past, but I could­n’t find any num­bers on their web­site about past per­for­mance of funds.

Tony Kynas­ton: Yeah, if you have a look at. Oh, p‑past per­for­mance, you can’t. But, um, there [01:01:00] was a piece of research that, uh, Pitt Street team did, which was back in twen­ty twen­ty-four, which showed in that year they had a good year. Um, and their Con­scious Investor Fund has aver­aged nine point eight per­cent the past twelve years.

And, uh, I’d have to look it up what the ASX 200 accu­mu­la­tion did over that peri­od, but it out­per­formed by a cou­ple of per­cent, I think.

Cameron: Hmm. Yeah, I, I just saw that one too. So incep­tion day for that is F- Feb­ru­ary 2013. They say 10.11% per annum to the end of April, um, per annum. But yeah, that sounds like it’d be a lit­tle bit low­er than what the index, the bench­mark would have done.

Tony Kynas­ton: Yeah, well, they cer­tain­ly did­n’t have per­for­mance fees this year, so maybe they did bet­ter last year. Well, they would’ve.

Cameron: Actu­al­ly, on their web­site, they say the, uh, S&P 200 over [01:02:00] that time did 8.37% per annum on aver­age, so they did out­per­form. Hmm.

Tony Kynas­ton: Yeah, but like by about two and a half per­cent.

Cameron: Yeah, yeah. Not dou­ble mar­ket.

Tony Kynas­ton: No, and it’s not what they’re say­ing that their fil­ters pro­duced it when they did their back test­ing as well, which I think was six­teen some­thing per­cent.

Cameron: That’s what she said ear­li­er, yeah. It’d be inter­est­ing, like you, you men­tioned the prob­lems that funds have, and I, I still don’t real­ly under­stand what those are.

Tony Kynas­ton: Mm.

Cameron: Do you?

Tony Kynas­ton: think I ful­ly do either, but, uh, it’s cer­tain­ly preva­lent in the research and cer­tain­ly, you know, these, these are the kinds of exam­ples I keep see­ing,

Cameron: Hmm.

Tony Kynas­ton: um, to bear it out.

Cameron: I thought with your involve­ment in Climb, you may have come to have more insight into what those prob­lems are.

Tony Kynas­ton: Well, the only prob­lem that I can point my fin­ger at, um, is, is, uh, the, the sort [01:03:00] of I’ll call it the founder investor maybe. The first CIO, the orig­i­nal CIO, does well and then, um, they sort of becomes more hands-off in the invest­ment deci­sion and it– whether the peo­ple they’ve trained aren’t as good or haven’t picked up on the same skill set that they founder had and then, um, it– the per­for­mance goes down and Climb’s case, the founder’s now back being the CIO to.

And the per­for­mance has improved. So, um, whether this

Cameron: But,

Tony Kynas­ton: a, uh, like, you know, you’ve got to have Picas­so on the tools all the time. You can’t have Picas­so telling oth­er peo­ple how to paint, that, that kind of thing

Cameron: but don’t they have a mod­el?

Tony Kynas­ton: know.

Cameron: they have a spread­sheet? They just

Tony Kynas­ton: so

Cameron: you just fol­low the spread­sheet.

Tony Kynas­ton: fil­ters. Climb has its process, but for some rea­son once the founder gets out of the

Cameron: Hmm. Hmm.

Tony Kynas­ton: things regress back to the mean.

Cameron: Hmm. I,

Tony Kynas­ton: case in, in all cas­es either. It’s just what I’ve observed at, at Climb.[01:04:00]

Cameron: I do like this thing on their web­site. They say, “John West famous­ly used the adver­tis­ing slo­gan, ‘It’s the fish we reject that make us the best.’ And the com­pa­ny seeks to emu­late this prin­ci­ple by reject­ing the vast major­i­ty of poten­tial oppor­tu­ni­ties.” Good tagline. All right.

Tony Kynas­ton: Yeah. um. But look, all of those things giv­en, they’re still, they’re still trad­ing on a. They’re still throw­ing off lots of cash and they’re trad­ing on a PROPCAF of two times. So, um, except for the cur­rent sen­ti­ment which I, I imag­ine is being gen­er­at­ed by their cur­rent results, um, things– I think things will turn around.

Cameron: I just had a look. They’ve nev­er been on our buy list in the peri­od that I’ve been track­ing it. Yeah. So I’ve got, like, five years of his­to­ry, I think, and, um, they don’t appear once in that, so for some rea­son. Don’t know why. All right. Thank you TK for TIP. After Hours, Tony, what have you got?

What have you been up to this week?

Tony Kynas­ton: Uh, noth­ing much to report. I’ve had a lot of false starts. We watched Project Hail Mary the oth­er night. I was a bit dis­ap­point­ed by it so I can’t real­ly hard­ly rec­om­mend that.

Cameron: Hmm.

Tony Kynas­ton: the new. first three episodes of the new sea­son of Rivals dropped which we enjoy. Um,

Cameron: I’ve been mean­ing to watch that. That’s the David Ten­nant show.

Tony Kynas­ton: yeah. Yep. So that’s, that’s a bit of light enter­tain­ment and a bit of fun. but yeah noth­ing to re-re- to report. We have a, have a new horse which is like­ly to have its first start on Sat­ur­day at Sandown. That’s called Stars of Dom. So that’s one that Steve Mabb and I have a share in, um, has done well at the tri­al so we’re fin­gers crossed it’ll do well on Sat­ur­day at Sandown.

Cameron: Good luck.

Tony Kynas­ton: about all I’ve got for after hours, sor­ry.

Cameron: Ever seen 1971 Mike Nichols film, Car­nal Knowl­edge?

Tony Kynas­ton: I [01:06:00] have, but not since I was very, very young. Jack Nichol­son from mem­o­ry.

Cameron: Jack Nichol­son and Art Gar­funkel

Tony Kynas­ton: Right.

Cameron: off as sup­pos­ed­ly col­lege stu­dents, although Jack looks all of his 34 years that he had at the time when he record­ed, when he made it, and they’re kind of young, vir­ginal, misog­y­nis­tic guy. It’s, like, set in the late ’50s, I’d guess, maybe 1960, try­ing to sleep with Can­dice Bergen and then shar­ing Can­dice Bergen unbe­knownst to Ga- Art Gar­funkel, a very young.

Uh, I don’t think I’ve ever seen Can­dice Bergen that young, actu­al­ly. I think she was in her ear­ly 20s when she made it And then it kind of fol­lows them over the next 10, 20 years as they get old­er and lots of failed mar­riages and just pret­ty much misog­y­nis­tic men who see women as sex objects and, um, you know, strug­gle to have a mature rela­tion­ship.

[01:07:00] And, um, Jack ends up with, um, Ann-Mar­gret and, uh, does­n’t go well. But yeah, it’s, um, kind of real­ly inter­est­ing film. Yeah, like kind of inter­est­ing, uh, take­down of cer­tain kind of misog­y­nis­tic man. And con­sid­er­ing it was made in 1971, I imag­ine it would’ve been pret­ty

Tony Kynas­ton: Yeah.

Cameron: at the time.

Tony Kynas­ton: Was it, was it actu­al­ly meant to be a take­down of misog­y­nis­tic men at the time, or was it,

Cameron: Oh, I’m pret­ty sure. Yeah. Yeah. Oh, no, I th-

Tony Kynas­ton: Yeah.

Cameron: I, I mean, I don’t know, but it’s pret­ty. I mean, both Jack and Art Garf- uh, Gar­funkel end up kind of mis­er­able

Tony Kynas­ton: Yeah,

Cameron: and, you know, with a string of younger and younger women that, uh, quite quick­ly real­ize that these guys are pieces of shit and don’t wan­na be around them.

And yeah, it’s not a, it’s not a, [01:08:00] uh, uh, sup­port­ive view of these two char­ac­ters. They’re very– They’re suc­cess­ful finan­cial­ly. I think Jack­’s, uh, an accoun­tant and Art Gar­funkel’s a doc­tor, so they’ve got– they live in nice hous­es and nice apart­ments and have lots of mon­ey. But yeah, it’s just lone­ly, you know, uh, bit­ter men.

Hmm.

Tony Kynas­ton: I was– Yeah, gonna make a joke about the, what the name might have been of of them, but I won’t. Just keep

Cameron: Okay.

Tony Kynas­ton: safe. Um, but isn’t it inter­est­ing that, um, like huge stars like Jack Nichol­son, and I guess even Art Gar­funkel, were will­ing to take on neg­a­tive, like, anti-hero roles at that time in the ear­ly, in the ear­ly ’70s? I, I’ve been see­ing a bit of, um, uh, Robert Red­ford’s, what’s it called? Lit­tle and- Halsey some­thing. It was the, it was the movie that, uh, [01:09:00] Al Rud­dy, who pro­duced The God­fa­ther, left, um, The God­fa­ther. Well, actu­al­ly, it might’ve been before The God­fa­ther. Any­way, he– Around the time of The God­fa­ther, he made, um, he wr- he optioned the script, or he may even have writ­ten the script, got it to Red­ford, and Red­ford agreed to make it, and then he was able to fund it. it’s, yeah, Red­ford’s a sim­i­lar sort of char­ac­ter, play­ing a dirt bike rid­er who’s a real piece of shit who come and go from. And, um, and Down­hill Rac­er that Red­ford made was a sim­i­lar sort of role, and it’s real­ly inter­est­ing that those were will­ing to take on that kind of role.

Cameron: I don’t think Jack had real­ly made it big at that stage. I think, um, uh, “Five Easy Pieces” and, um, “Cuck­oo’s Nest” came after this, but you know, he had the lead role and, and he’s fan­tas­tic. Like, he starts off at the begin­ning of the film when he’s sup­posed to be a col­lege stu­dent, uh, very, very [01:10:00] charm­ing and has a way with the ladies and all that, and very, very con­fi­dent.

Um, but then he becomes hor­ri­ble and just lots of, you know, clas­sic Jack Nichol­son sort of rant, anger sort of things. And they absolute­ly– They’re– All the cast are fan­tas­tic. Um, we also watched “The Can­non­ball Run” recent­ly to go from, uh, sub­lime to ridicu­lous, and thor- thor­ough­ly enjoyed it. Thor­ough­ly enjoyed it.

Com­plete­ly bonkers. Uh, but John, uh, Burt Reynolds and Dom DeLuise togeth­er are just such a great, uh, great cou­ple. And, uh, Sam­my Davis and Dean are in it and, uh, yeah. Roger Moore play­ing him­self, but play­ing James Bond. He’s, he’s play­ing, he’s, he’s play­ing Roger Moore, but act­ing like he’s James Bond through the whole thing and [01:11:00] spoof­ing Bond.

We– Speak­ing of bonkers, we also watched some of the Euro­vi­sion Song Con­test over the week­end. We watched the first semi­fi­nal, and then we watched the grand final. Wow, that is, uh, that was some­thing.

Tony Kynas­ton: It’s always good fun, isn’t it? I did­n’t catch much of it. I just saw some high­light clips.

Cameron: It’s been years since I’ve watched any of it and, uh, Chris­sy’s nev­er real­ly seen it, being Amer­i­can.

Tony Kynas­ton: know. They don’t see it, do they?

Cameron: No. So I put it on, and she loved it. She thought it was ter­rif­ic. But yeah, it was wow, just over the top, com­plete mad­ness. Any­hoo, uh, they even had a song in the first semi­fi­nal. They had a song, like a big dance num­ber, full-on pro­duc­tion called “Aus­tria ver­sus Aus­tralia,” which was all about how peo­ple get them con­fused and how we should merge the two coun­tries and call it Aus­tralia and ha- [01:12:00] com­bine kan­ga­roos with ski resorts or some­thing and.

Any­way, it was com­plete­ly nuts. So that’s it for me. Hmm.

Tony Kynas­ton: be– I think it’s gonna be hard for Aus­tralia to ever win that con­test ’cause it’s, it’s by pri­mar­i­ly peo­ple in Europe,

Cameron: Hmm.

Tony Kynas­ton: with the knowl­edge too that the win­ner then hosts. And

Cameron: Hmm.

Tony Kynas­ton: I think that would be a shock to who­ev­er finances the Euro­vi­sion to send peo­ple down to Aus­tralia

Cameron: Uh.

Tony Kynas­ton: opposed to jump­ing in a van and going to, you know, Roma­nia

Cameron: Bul­gar­ia. Hmm.

Tony Kynas­ton: yeah.

Cameron: Well, Bul­gar­ia won, so I think they’ll be host­ing the next one. We did see, um, uh, what’s-her-face’s per­for­mance. Um,

Tony Kynas­ton: Delta.

Cameron: Goodrem’s per­for­mance. Yeah. Yeah, yeah. It was, it was ho-hum.

Tony Kynas­ton: Yeah, I thought so too. Every­one was

Cameron: Hmm.

Tony Kynas­ton: it, but I thought, Yeah.

Cameron: Hmm. Yeah, ho-hum.

Tony Kynas­ton: Yep.

Cameron: Com­pared to some of the per­for­mances which were just com­plete­ly off the charts [01:13:00] nuts. Yeah.

Tony Kynas­ton: would­n’t you if. I don’t know who actu­al­ly picks who goes on Euro­vi­sion for Aus­tralia, but put them

Cameron: Hmm.

Tony Kynas­ton: snif­fers on for God’s sake.

Cameron: All right. Yeah, okay. Or even Ray Gun.

Tony Kynas­ton: Yeah.

Cameron: I want­ed to see Ray Gun up there. She should rep­re­sent Aus­tralia for every­thing. Just, she’s got the one act. Rep­re­sent us at Euro­vi­sion. You could turn that into a musi­cal num­ber easy.

Tony Kynas­ton: And, and she’s lost her job, so she’s free.

Cameron: Oh, has she?

Tony Kynas­ton: take– There’s a bit of cost-cut­ting at a uni­ver­si­ty and she’s lost her job as what­ev­er

Cameron: Oh, that’s no good.

Tony Kynas­ton: Pro­fes­sor

Cameron: should–

Tony Kynas­ton: or some­thing at what­ev­er uni­ver­si­ty it was.

Cameron: She should’ve been, you know, the, the sort of the m- the mas­cot for that uni­ver­si­ty. Any­way, all right. Well, that’s it. Let’s go talk about Amer­i­ca. Tony, thank you. Have a good week.

Tony Kynas­ton: Bye.