Major Feelgood: QAV AU #924

QAV AU 924

[00:00:00]

Cameron: TK’s back and he wants to kill the Sharks.

Tony Kynas­ton: I

Cameron: Str-

Tony Kynas­ton: I wan­na kill the politi­cians who want to kill the sharks.

Cameron: Oh, same thing. Polit­i­cal shark. You wan­na kill the polit­i­cal sharks.

Tony Kynas­ton: the echo cham­bers. For good­ness sake,

Cameron: Yeah. Yeah. Yeah, yeah, yeah, yeah. Wel­come back to QAV, Tony, uh, after your week off. You had a good trip? It was wet and rainy though, you said? Wet and. Three weeks.

Tony Kynas­ton: Wet and rainy, yep.

Cameron: Oh, that’s right, ’cause we did a show from Wag­ga, yeah.

Tony Kynas­ton: wet the next. Cyclonic, damp and humid.

Cameron: Yeah,

Tony Kynas­ton: beau­ti­ful one day, Sin­ga­pore the next.

Cameron: which as Robin Williams said, “It’s nice if you’re with your lady, but not nice when you’re in the jun­gle, hot and wet” Um, well, good to have you.

Tony Kynas­ton: you’re with Rod­dy?

Cameron: Yeah, you don’t wan­na be hot and wet when you’re with Rod­dy. Uh, this is episode 924. It is the [00:01:00] 16th of June 2026. A lot of things hap­pen­ing in the mar­kets, Tony. Um, the first thing, I would guess, that’s, uh, of direct impact with us is a sup­posed peace deal, worth the paper it’s writ­ten on, between the US and Iran.

Uh, we haven’t seen the paper or the terms of the deal yet, but-

Tony Kynas­ton: Uh, I mean, I know rules are rules. I sold, I sold some, uh, shares in oil com­pa­nies that I own because the oil price became a sell, but I’m l- I’m doing it hes­i­tant­ly going, “This is not gonna last. there’s not gonna be

Cameron: Yeah

Tony Kynas­ton: But, you know, rules are rules, so I had to sell

Cameron: I had to sell a ton of things, both in the Aus­tralian port­fo­lios and the Amer­i­can port­fo­lios. Inter­est­ing­ly, the US port­fo­lios, uh, stocks that I sold, we made like 30, 40% on all of them and I’d owned them for like three or four months. So it was okay. I was hap­py to get out. [00:02:00] Um, but hard to replace them. I’ve replaced one, but I’m strug­gling to find things to buy in the US at the moment.

And here too, the buy list here is down. I don’t know what yours looked like this week, but mine had, after I took out the crude oil com­modi­ties stocks, which was half of them, the rest were, you know, there was very lit­tle and stuff that I’d most­ly bought before. SUN, um, Sun­corp and, uh, let’s see, what was the oth­er one?

Can’t remem­ber now. Any­way, slim pick­ings. Yeah, CGF it was. Yeah, yeah. Slim pick­ings. Every– ‘Cause every­thing’s sort of Josephines.

Tony Kynas­ton: Hmm.

Cameron: it’s been a, it’s been a rough ride. Mar­ket’s up today. It dipped a bit this morn­ing, but it’s back up. But, uh, yeah, as you said, like, you know, Is- Israel’s not par­ty to this. They’re still say­ing they’re gonna stay in Lebanon.

Uh, you know, it’s.

Tony Kynas­ton: Was clear­ly, was won­der­ful of the Ira­ni­ans to give Don­ald Trump an 80th birth­day present. That’s prob­a­bly all it [00:03:00] is.

Cameron: On– It’s, it’s a won­der they did­n’t turn up to his, uh, wrestling match in the front lawn of the White House.

Tony Kynas­ton: The claw. The claw. The craw. Not the craw, the craw on the White House. Was­n’t that amaz­ing? It was. I real­ly, I’d love to have been there. It, it was he intro­duced as the, the Ham­mer of Hum­mus, the Ter­ror of Tehran.

Cameron: Oh, you need a. You got a. Yeah.

Tony Kynas­ton: Don­ald Trump.

Cameron: Oh, you got a, you got a career as a caller of wrestling match­es. Uh, yeah, absolute crazi­ness with all of that. Um, the great­est deal ever made to get us back to where we were before it all start­ed, but it looks like Iran’s get­ting $300 bil­lion in repa­ra­tions, is one claim. We don’t know the details, but I saw, I saw one analy­sis today that said that, um, Ger­many had to [00:04:00] pay 5 bil­lion in repa­ra­tions after World War II, I think, which indexed would be about $100 bil­lion, 90, $95 bil­lion.

The US are gonna pay Iran $300 bil­lion for their three-month. That’s one rumor. That’s, uh, prob­a­bly some­thing the IRGC are look­ing for, but how much they actu­al­ly get, giv­ing up sanc­tions, releas­ing funds, it’s all. No one knows

Tony Kynas­ton: And what do you think they’ll do with that mon­ey once they get it? Or what does Trump think they’ll do with that mon­ey once they’ll get it? Sea mines, land­mines, nuclear weapons,

Cameron: buy­ing more mis­siles. That’s, yeah, yeah. Well, the oth­er big new– So that’s been a, that’s been a, a big thing for us, uh, this week, hav­ing to sell our oil stocks, which we’ll prob­a­bly buy again a cou­ple of weeks from now. Uh, the SpaceX IPO, Tony. I, I drilled down into this one a lit­tle bit despite myself

Tony Kynas­ton: It feels like we’ve jumped the shark this week, Cam. I’ve gone away on hol­i­days and the [00:05:00] shark’s been jumped while I’m away

Cameron: It’s like peo­ple have been say­ing, like, which, which f- you know, mul­ti­verse are we liv­ing in here? So, um, I don’t know if you’ve seen the num­bers or saw my Tik­Tok on this, Tony, but, um, what is, uh, what’s our, what’s our PROPCAF cut­off, Tony? Can you remind me again what it is?

Tony Kynas­ton: times. Less than,

Cameron: S-

Tony Kynas­ton: be less than sev­en

Cameron: And what’s the aver­age PROPCAF for stocks on the mar­ket, Tony?

Tony Kynas­ton: Oh, I don’t know. I’d be guess­ing it’s about 16, but that’s just a guess

Cameron: 1516 from what I can tell.

Tony Kynas­ton: Yep

Cameron: Do you wan­na take a guess what SpaceX’s PROPCAF is right now, Tony?

Tony Kynas­ton: Well, I’m sur­prised it’s, it’s not infin­i­ty giv­en that it prob­a­bly does­n’t have any cash com­ing in. Not, not much. I guess it’s got the Star­link income, so it’s gonna be like 1,000 times I would’ve thought.

Cameron: Close, uh, 1,750 times, PROPCAF

Tony Kynas­ton: Bar­gain. Bar­gain. Gina, Gina knows a bar­gain when she

Cameron: [00:06:00] Oh, does­n’t she? Gina got a bil­lion in there some­where, I believe. SpaceX closed yes­ter­day at a near $2.1 tril­lion mar­ket cap. Their 2025 rev­enue was $18.7 bil­lion. Uh, that’s a price to sales ratio of about 112 times. That’s not earn­ings, that’s price to sales. They did­n’t have earn­ings. They post­ed a $4.9 bil­lion net loss for the year.

For con­text, Apple trades around nine times sales. Nvidia at the absolute peak of the AI mania was around 30 times. SpaceX just IPO’d at near­ly four times that while los­ing mon­ey, which Apple and Nvidia aren’t. So the only part of the com­pa­ny that actu­al­ly makes mon­ey is Star­link, uh, of which you’re a sub­scriber.

Tony Kynas­ton: Cor­rect

Cameron: part of their $11.4 bil­lion in rev­enue that they did

Tony Kynas­ton: could have sent me a [00:07:00] share, could­n’t they?

Cameron: They could have, yeah.

Tony Kynas­ton: ear­ly

Cameron: So you’re pay­ing a $2 tril­lion val­u­a­tion for what’s basi­cal­ly a satel­lite ISP com­pa­ny with a rock­et on its back and an xAI cash fur­nace bolt­ed on that they merged two months before they float­ed. So, but the, the best part, and I think, um, Alan Kohler point­ed this out in his arti­cle yes­ter­day, the total address­able mar­ket in their S1 doc­u­ment was $28.5 tril­lion, is their total address­able mar­ket

Tony Kynas­ton: Is that the GDP of Mars?

Cameron: Uh, that’s– I think Alan wrote, “That’s the num­ber you write down when you need the val­u­a­tion to make sense and the actu­al income state­ment won’t coop­er­ate.” It’s just like dot– like the dot­com b- bub­ble has [00:08:00] noth­ing on this. It’s just absolute insan­i­ty. Insan- not insan­i­ty that he had a crack at it, but insan­i­ty that peo­ple went into it.

I heard the invest­ment banks made $500 mil­lion in fees out of the whole thing,

Tony Kynas­ton: Yep

Cameron: peo­ple bought into it. Um, so I did a Tik­Tok say­ing, you know, our sev­en times PROPCAF is like, well, it’s sev­en times, you know, f- the aver­age of 15 times PROPCAF, I was say­ing on the Tik­Tok that 15 years to get your mon­ey back is a long time.

15 years ago, most peo­ple thought AI was 100 years away, at least. 50– A lot can hap­pen in 15 years. Even sev­en years is a long time these days. I don’t know what the world’s gonna look like sev­en years from now. 1,750 years, like 750 years ago was like 286 CE. The Roman Empire was still in full effect. Uh, I think Dio­clet­ian was [00:09:00] prob­a­bly emper­or.

The, the, the Chris­tian­i­ty was about 10% of the Roman Empire. It was still a rel­a­tive­ly small reli­gion. The, the Goths were still on the bor­ders caus­ing a lit­tle bit of trou­ble. I mean, a lot’s hap­pened in the last 1,750 years. Any­way, it’s mad­ness. Absolute mad­ness

Tony Kynas­ton: Well, a bit of growth brings that num­ber down, but you need a lot of growth to bring it down to a rea­son­able sort of num­ber. Yeah, look, it’s, it’s crowd psy­chol­o­gy, isn’t it? Peo­ple, peo­ple are invest­ing. They’re almost throw­ing their mon­ey at it, not car­ing what hap­pens to their mon­ey. I mean, some peo­ple, I guess, treat­ing it like a lot­tery.

It may go up. They might get three hun­dred times their mon­ey like they did with Tes­la. So, know, it’s, it’s a bit like Bit­coin, isn’t it? I’m gonna of put my toe in the mar­ket and see what hap­pens, is what I think the– most peo­ple are say­ing. But it

Cameron: often referred to, you’ve often referred to Elon as a Bond vil­lain. I think, you know, Bond vil­lains had [00:10:00] noth­ing on Elon. Bond vil­lains would’ve loved to. Like, if you had a, if you had a Bond movie where the Bond vil­lain became the world’s first tril­lion­aire by launch­ing a, a com­pa­ny that says we’re gonna send rock­ets to Mars,

Tony Kynas­ton: He should

Cameron: would’ve got laughed out of the cin­e­ma.

Yeah. Yeah, I’m, I’m sure he pl- played with the idea. He loves nam­ing all of his things after books and films and, you know, Grok

Tony Kynas­ton: But, the

Cameron: is off, out of a book

Tony Kynas­ton: it seems like. I, I mean, you nev­er know what you’re buy­ing with Elon because it could be– he piv­ots a lot and get, you know, becomes an inter­na­tion­al bor­ing machine or some­thing like that, or mag- mag­net­ic trains or what­ev­er, maglev trains, um, or brain chips, so you nev­er know. from what I can tell, the con­crete plan or the imme­di­ate con­crete plan is to put data cen­ters in space.

Cameron: Che

Tony Kynas­ton: And so that’s a– there’s a busi­ness case for that, but they did­n’t spell it out, and the ana­lysts that I’ve seen who have tried to spell it out say it’s not gonna work ’cause it’s just too expen­sive. Um, you [00:11:00] know, if they, if data cen­ters stop being built on Earth because of con­cerns about, you know, elec­tric­i­ty usage and water usage and things like that, then maybe space is the answer. But a lot of ifs and maybes in that analy­sis, I think

Cameron: Well, the big thing I think, uh, you know, I think, um, like Elon’s an impres­sive­ly ambi­tious guy. You got­ta hand him that. He’s, uh, done a lot of inter­est­ing things. Cer­tain­ly not a very sta­ble genius, uh, in the last few years. I’m not exact­ly sure I’d be putting my trust in his abil­i­ty to, uh, get much done, uh, with his, uh, mood swings on a con­sis­tent basis.

But like, you know, Tes­la was inter­est­ing, but now the Chi­nese have stomped all over that. Robots are inter­est­ing, but I’m pret­ty sure the Chi­nese are gonna flood that mar­ket as well, and I think they’re gonna flood the space mar­ket too. He’s got a bit of a head start on Chi­na. Chi­na’s still try­ing to get their– I can’t remem­ber the name of their, um, satel­lite launch­ing [00:12:00] ser­vice, but, um, I have looked into it in the past.

They’re a few years at least behind. Uh, I think their, their plan is to have a few, like 500 satel­lites up this year ver­sus his twen- 19,000 or what­ev­er it is. But, um, it’s only a mat­ter of time before they catch up and, uh, then the eco­nom­ics of every­thing change dra­mat­i­cal­ly from what was in his S1, I think once the Chi­nese catch up

Tony Kynas­ton: Yeah

look, I agree. And, uh, you know, I’ve seen some analy­sis say­ing there’s so much space junk up and all that now that putting data cen­ters up there is be resist­ed. So,

Cameron: Yeah

Tony Kynas­ton: be a blight on, um, on our sky, in our sky. So

Cameron: Well, it only just takes one piece of space junk to hit your data cen­ter and, uh, then you, you got prob­lems. Hmm. They do have sys­tems in place to pre­vent those space junk from run­ning into satel­lites already, but, uh, yeah. Any­way, mov­ing right along. Big chip sell-off, uh, last week, Tony. Hun­dreds of bil­lions of dol­lars wiped off of the val­ue of US [00:13:00] microchip giants.

Shares in Broad­com, US chip mak­er build­ing AI proces­sors for Ope­nAI, slumped 15% after it issued weak­er than expect­ed sales fore­casts and, uh, all of the oth­er major play­ers went down as well. And this is, uh, inter­est­ing tim­ing because both Anthrop­ic and Ope­nAI are also look­ing at going pub­lic in the n- near future.

So as these chip busi­ness­es are all strug­gling and all the tech giants have not had a good cou­ple of weeks. Share price wise, of course, did you see what hap­pened to Anthrop­ic and their Fable mod­el last week?

Tony Kynas­ton: Uh, the one that was blocked by the US gov­ern­ment from being used.

Cameron: Yeah.

Tony Kynas­ton: Yeah

Cameron: That’s, uh, depressed all of us. It– Fable, I used it for the 48 or 72 hours or what­ev­er it was avail­able, uh, was amaz­ing. It was tru­ly, [00:14:00] tru­ly amaz­ing.

Tony Kynas­ton: In

Cameron: Stuff– Just its abil­i­ty to code things that I had been strug­gling with, with Opus 4.8, their top mod­el before that, for weeks try­ing to get it. Uh, threw the same prob­lem into Fable, one shot.

Went away for an hour, fixed it, wrote it, came back, all done.

Tony Kynas­ton: Hmm

Cameron: I was like, “Holy crap, that’s insane­ly good.” So it was a huge step up, and I hope we get it back. Tay­lor was liv­ing on it as well. He’s been depressed ever since they blocked it. Um, it j- its, its abil­i­ty to code

Tony Kynas­ton: avail­able for 24 hours or 48 hours, was­n’t it?

Cameron: 4872, but we were all just. But they said at the time they, they were only gonna have it as avail­able as, as part of the plan until June 22nd any­way, and then they were gonna come up with some sort of a new billing mod­el for it. So every­one was try­ing to get all of their cod­ing done in two weeks, and then it got pulled for very spu­ri­ous rea­sons, by the [00:15:00] sounds of it.

The lat­est news is today that some­body at Ama­zon, I think it was the CEO of Ama­zon, spoke to the US gov­ern­ment and said, if you gave it a code base and said, um, “Find the secu­ri­ty flaws in this,” it would say, “Sor­ry, I can’t do that.” If you said, “Fix this code,” it would then tell you all the secu­ri­ty flaws. Um, but, uh, uh, peo­ple have been point­ing out, secu­ri­ty ana­lysts have been point­ing out that all of the top-tier mod­els will do exact­ly the same thing.

It would do it in a bet­ter way ’cause it was more pow­er­ful. But, um, just the fact that the US gov­ern­ment, I think, is now, uh, you know, pulling top-tier mod­els off the mar­ket­place, demand­ing that they pull it out of the mar­ket­place and giv­ing them. I think they gave them 90 min­utes to do it ini­tial­ly, to can­cel it, is a inter­est­ing lev­el of, uh, admin­is­tra­tive inter­fer­ence.

Par­tic­u­lar­ly, you know, the Biden admin­is­tra­tion put in some sort of AI guardrail poli­cies, and one of the first things Trump did, [00:16:00] like on day one, was sign an exec­u­tive order say­ing that they could­n’t inter­fere with AI. And then I think he tried to get that in the OBBB, Big- One Big Beau­ti­ful Bill Act, and then it got watered down before it was signed by the Sen­ate.

But, uh, now they’ve gone from, “No one can inter­fere with AI. We have to rule the AI. We have to be bet­ter than every­body,” to, “You can’t have that out there. That’s too pow­er­ful.” So, hmm Any­way

Tony Kynas­ton: Well, I mean, I think it’s, um, you know, you’ve men­tioned the two of the three, or we’ve talked about now the three big IPOs that have either hap­pened or are hap­pen­ing, uh, it real­ly reminds me of the peak bub­ble boom now with this hap­pen­ing. And I did see an arti­cle in Busi­ness Insid­er about this, um, which says that the race to go pub­lic among mega cap tech com­pa­nies might be a warn­ing to investors that the tech field stock boom is near­ly over. That’s because there’s an impor­tant [00:17:00] sign that the IPO rush is send­ing a sig­nal that last flashed dur­ing the boom of pub­lic offer­ings from the late 1990s to the ear­ly 2000s. to ana­lysts at TS Lom­bard, the mega IPOs on tap sig­ni­fy a desire among com­pa­ny insid­ers and ear­ly investors to offload stock on the pub­lic at the peak of the mar­ket. It’s exact­ly what hap­pened dur­ing the dot-com boom. Yeah. So. And a‑apart from the fact there’s been a lot of, um, analy­sis about where’s the mon­ey com­ing from for three big IPOs, and,

Cameron: Mars

Tony Kynas­ton: who’ll go. Yeah, Mas, who’ll go first? Will it be Anthrop­ic or, or, um, Ope­nAI? Because the sec­ond one to mar­ket might not get off. all that kind of stuff. And what’s gonna be sold by the index­es to buy into these uh, these, um, IPOs. And that’s the oth­er inter­est­ing thing, is that peo­ple have been– the reg­u­la­tors are bend­ing over back­wards for these IPOs to hap­pen. So the, I mean, the [00:18:00] peo­ple that ben­e­fit, I sup­pose, are the, are the list­ing exchanges and the bankers.

Um, but there’s typ­i­cal­ly rules in place. As we saw with the Cus­cal list­ing in Aus­tralia, that it does­n’t become part of the index for twel- up to 12 months, we weren’t– we were find­ing it was­n’t com­ing in our down­loads because it did­n’t have a GICS code, is part of that list­ing index inclu­sion process. Um, US index­es have said, “Nope, SpaceX can come in a week after list­ing into the index­es.” ASX or who­ev­er’s doing it in Aus­tralia, I’m not sure if it’s the ASX or the gov­ern­ment, has said, “Yeah, sure, we’ll do the same.” So, you know, basi­cal­ly can laugh about this being a, a sort of a crazy cham­ber of peo­ple invest­ing and throw­ing their mon­ey at Elon, but real­ly it’s, it’s every­one, because you’ve got your mon­ey in a super fund in Aus­tralia, chances are it’s gonna have a share of SpaceX and the oth­er IPOs as they come on and get includ­ed in index­es.

So one [00:19:00] of the rea­sons why it is a wor­ry that this is poten­tial­ly peak AI and peak tech bub­ble, and when it turns down, it’s going to affect, uh, um, a lot of us.

Cameron: Hmm. Well, I tell you who else is, uh, at the end of his rope, Mr. Schmedli from Findy by the sounds of it.

Tony Kynas­ton: Tak­ing a breather

Cameron: Uh, ASX release 5th of June 2026, so this is a cou­ple of weeks ago. Dig­i­tal pay­ments and finan­cial ser­vices provider Findy Lim­it­ed today announced an order­ly board tran­si­tion to sup­port the com­pa­ny’s next phase of growth and strate­gic devel­op­ment.

Effec­tive imme­di­ate­ly, cur­rent non-exec­u­tive direc­tor, Steven Ben­ton, will assume the role of non-exec­u­tive chair­man of Findy and join the TSI board as a non-exec­u­tive direc­tor. As part of this planned tran­si­tion, Nicholas Schmedli will revert to a non-exec­u­tive direc­tor role and retain the chair­man­ship of [00:20:00] Trans­ac­tion Solu­tions Inter­na­tion­al, TSI.

Uh, Mr. Schmedli will be direct­ly involved in the con­tin­ued growth of TSI and will focus on exe­cut­ing again– exe­cut­ing, sor­ry, against plans for the IPO of the Indi­an busi­ness. He still has­n’t come on the show, Mr. Schmedli, but, uh, we, we don’t own his shares any­more, so that’s fair enough.

Tony Kynas­ton: Yeah.

Cameron: I thought that was– it’s

Tony Kynas­ton: time, though

Cameron: Uh, Hori­zon have offered, uh, their final takeover. Final, it’s like Kiss’ final con­cert tour. Uh, it’s the final, yeah, the final, final, final takeover offer for Q Ener­gy Resources. This was dat­ed the 9th of June, so I don’t know what’s hap­pened since then. Hori­zon now has a rel­e­vant inter­est in 52.21% of all Q shares cur­rent­ly on issue, and accord­ing­ly has exceed­ed the 50.1% min­i­mum accep­tance condition.[00:21:00]

The offer con­sid­er­a­tion has been, been declared best and final. I won­der if they are using the same nego­ti­at­ing team as Trump’s nego­ti­at­ing team for Iran

Tony Kynas­ton: It’s actu­al­ly a, an offi­cial term, best and final. It’s,

Cameron: Is it?

Tony Kynas­ton: yeah,

Cameron: Ah, right

Tony Kynas­ton: takeovers, and best and final means that they can’t increase it. I think that for a peri­od of time, might be three months or six months,

Cameron: Hmm.

Tony Kynas­ton: com­pet­ing bid-bid­der comes in. it’s, it is a way of try­ing to, um, lever­age accep­tances.

Um, in doing so, they’re also con­strain­ing them­selves to rais­ing the bid

Cameron: They, um, should have threat­ened to blow them back to the Stone Ages first and then offer them $300 bil­lion in repa­ra­tions instead.

Tony Kynas­ton: They should have said, “Hey, it’s my

Cameron: Yeah,

Tony Kynas­ton: Come on, guys.”

Cameron: do, do me a sol­id. Hori­zon share price on the 2nd of April was 28 and a half cents. It’s [00:22:00] cur­rent­ly 21 cents. Q Ener­gy Resources was so, hmm

Tony Kynas­ton: I think the, the bid is a y– I think Q share price is a cou­ple of cents above the bid at the moment, um, which would indi­cate to me, and, and look, no, I’m not gonna give advice, but it would indi­cate to me that, either peo­ple think there’s anoth­er bid com­ing, which I think is very unlike­ly or, uh, it’s time to sell on the mar­ket, um, and, and get out. They’ve got fifty-two per­cent of the com­pa­ny, so it’s unlike­ly anoth­er bid­der will emerge because they’re gonna have to then duke it out with a big share­hold­er for con­trol of the com­pa­ny. and, you know, the, the, um, the mar­ket will con­tin­ue to arbi­trage the offer price because it’s based on the Hori­zon price, which will go up and down, um, which will dri­ve Q up and down.

So, know, large­ly when you get best and final offers, the [00:23:00] game’s over and you don’t, def­i­nite­ly don’t wan­na be caught hold­ing Q shares when they get to the stage of nine­ty per­cent of accep­tances and then you’re, um, com­pul­so­ri­ly acquired, which can take months and months and months for the check to arrive

Cameron: Right. So, uh, I don’t think we hold. No, we don’t hold any Q shares in any of our port­fo­lios that I can see. Yeah, so the offer at the moment is for 0.5625 Hori­zon shares and $0.008 cash per Q share. So that’s, uh, con­vo­lut­ed

Tony Kynas­ton: Yeah

Cameron: Any­who, we don’t hold it. We do hold. Do we hold Hor- No, we don’t hold Hori­zon either. Oh, so it’s noth­ing for, as far as I’m con­cerned. But if any­one does hold either of them, you might want to pay atten­tion to that

Tony Kynas­ton: def­i­nite­ly. Def­i­nite­ly keep look­ing at it make up your mind when to sell. Um, you know, it’s [00:24:00] not hard to throw those num­bers into Chat­G­PT, and it’ll tell you whether it’s high­er or low­er than the offer price. With.

Cameron: Hmm.

Tony Kynas­ton: price for Q is high­er or low­er than the offer price.

Cameron: Hmm.

Tony Kynas­ton: um, you can make up your own mind going for­ward what to do

Cameron: Ben sent me an arti­cle by Chris Leit­ner from Leit­ner & Com­pa­ny, which I thought was inter­est­ing. I have invit­ed Chris onto the show before. Nev­er replied to me. Um, he’s in Spring Hill. I might just go and camp out in his office and, uh, do a, do a Bud Fox, take him a box of cig­ars, see if I can get his atten­tion.

Uh, why val­ue ETFs under­per­form and most ETFs are poi­son. He says, “I’ve pre­vi­ous­ly shown why val­ue stocks excel. I now show why val­ue ETFs don’t, and also why fac­tor, sec­tor, and the­mat­ic ETFs are tox­ic.” And he says, uh, “I’ve, over the past few months, I’ve demon­strat­ed that val­ue stocks great­ly out­per­form [00:25:00] momen­tum stocks.

Val­ue also thrash­es growth. Small caps out­per­form growth stocks, but val­ue out­paces small caps.” Can you hear that?

Tony Kynas­ton: Yeah

Cameron: Bloody hell

Tony Kynas­ton: That’s, that’s poor tim­ing of them

Cameron: Go with a wind blow­er at the front of my win­dow

Tony Kynas­ton: They should be banned, leaf blow­ers, I think.

Cameron: Real­ly? Like sharks?

Tony Kynas­ton: And sharks, yeah.

Cameron: Yeah

Tony Kynas­ton: cull the leaf blow­ers. For­get the sharks.

Cameron: The actu­al devices or the peo­ple hold­ing them?

Tony Kynas­ton: Oh, I don’t care. Same, same out­come.

Cameron: Human sac­ri­fice

Tony Kynas­ton: Same out- Get Mr. Cather onto it.

Cameron: Any­way, I’ll keep going. Peo­ple can put up with the back­ground noise. Oh, I’m not sure I can. Come on, dude

Tony Kynas­ton: Isn’t it rain­ing up there? What’s he doing,

Cameron: No, sad­ly not.

Tony Kynas­ton: Uh

Cameron: Has been. He’s tak­ing his one oppor­tu­ni­ty when it’s not rain­ing to use his leaf blow­er around the yard

Tony Kynas­ton: there look­ing out the win­dow wait­ing for the

Cameron: [00:26:00] Mm-hmm.

Tony Kynas­ton: out so he can get his leaf blow­er out

Cameron: Any- hope­ful­ly it’ll be done in a minute.

Tony Kynas­ton: Hmm.

Cameron: Let’s push through. Um, small caps out­per­form growth stocks, but val­ue out­paces small caps. On aver­age and at extremes, val­ue out­per­forms the S&P 500 index, growth stocks, and small caps.

More­over, val­ue reli­ably suc­ceeds, not least because spec­u­la­tion usu­al­ly fails. These results demon­strate that the ben­e­fits of val­ue invest­ing are real. How­ev­er, as I show in this arti­cle, they’re not easy to obtain. Above all, it’s not a mere­ly, not a mere­ly mat­ter Not a mere­ly mat­ter.

Tony Kynas­ton: It’s

Cameron: It’s, it’s, it’s not a mere­ly mat­ter of.

I think he means not a mat­ter mere­ly, but he’s got them back to front. Of select­ing an exchange trad­ed fund which con­tains the word val­ue. Val­ue usu­al­ly out­per­forms, but flag­ship val­ue ETF nev­er has. Any­way, he goes on and does a break­down of val­ue ETFs and why they under­per­form, et cetera, et cetera. Um, but not [00:27:00] to be a dick about it, but I went to the leitner.com.au web­site, looked at their invest­ment phi­los­o­phy.

Uh, our invest­ment objec­tive’s to pre­serve wealth and to cre­ate wealth. Our 10 invest­ment prin­ci­ples are pret­ty good. Num­ber one, ignore the mar­ket and mar­ket experts. Two, don’t try to pre­dict the econ­o­my and ignore those who do. Three, ana­lyze busi­ness­es, not the mar­ket or the econ­o­my. Four, buy only when the price is right.

Five, ignore insti­tu­tion­al and bureau­crat­ic imper­a­tives. Six, buy with the inten­tion to hold indef­i­nite­ly. Sev­en, diver­si­fy, but don’t over-diver­si­fy. Eight, remem­ber that risk accom­pa­nies any invest­ment. Nine, adopt a sen­si­ble cri­te­ri­on of suc­cess. 10, explain our­selves plain­ly and remem­ber the peo­ple involved.

So I thought it was a nice lit­tle list.

Tony Kynas­ton: Yeah, it

Cameron: then I looked at their per­for­mance his­to­ry. [00:28:00] Uh, each $1 invest­ed on the 30th of June 1999, if the div­i­dends were rein­vest­ed, would by June 30th, 2025, have grown to $7.21, which equates to a com­pound rate of growth of 8.2% per annum, which under­per­forms the index. So,

Tony Kynas­ton: Oh. Well he’s self-ful­fill­ing because in his arti­cle he says that man­agers, 90, 95% of man­agers under­per­form the index giv­en enough time

Cameron: And they actu­al­ly have a chart, uh, on their web­site, uh, on this page, incep­tion to June 2024, which shows them under­per­form­ing the index. So, um, I would’ve left that out. But any­way, would’ve made it hard for peo­ple to fig­ure that out for them­selves. Any­way, so sor­ry, Chris Leit­ner. I have invit­ed you on the show and the invite’s still open, but, um, yeah.

Don’t know why they’re under­per­form­ing the index

Tony Kynas­ton: I mean, there were some good, good points made in that arti­cle. Um, was [00:29:00] very lengthy. Chris, Chris likes to write long tomes on, uh, on var­i­ous things,

Cameron: Hmm.

Tony Kynas­ton: they’re usu­al­ly pret­ty good. And, um, you know, his point, he draws on the research, which I just said that fund man­agers under­per­form giv­en enough time.

He tries to drill down into why that’s the case, and he talks about, even if you’re a val­ue investor fund man­ag­er, you’re still, fight­ing psy­chol­o­gy to wait for val­ue stocks to return, to regress to the mean, return to good per­for­mance, and that can be hard. on top of that, you’ve got the weight of peo­ple redeem­ing from your fund because if it could take years to back to pos­i­tive per­for­mance for val­ue stocks com­pared to the index.

And so you, capit­u­late and try and buy some of the stocks that oth­er fund man­agers are buy­ing as well. So that’s a pret­ty sen­si­cal, sen­si­ble argu­ment, I think, as to why, uh, val­ue funds under­per­form. The oth­er point I took out of it was be care­ful with ETFs. I mean, Chris makes the point that label might say it’s a val­ue ETF, but he pro­duced a cou­ple of real­ly [00:30:00] good exam­ples to show that the top hold­ings were not val­ue stocks. Um, val­ue is sim­ply described by, say, if you’re look­ing at the val­ue index, which var­i­ous peo­ple like S&P put out, um, as just the low­est, the low­est decile or low­est quin­tile of PE ratios. And of course, that’s not the only def­i­n­i­tion of val­ue. even in some of the val­ue ETFs, like their biggest share­hold­ing was Berk­shire Hath­away, which you’d think it would be a va-val­ue stock, but it often isn’t it often trades way above its book val­ue.

So, um, yeah, just Chris makes some good points in that arti­cle which is worth read­ing

Cameron: Hmm Uh, what else have I got? Dogs of the Dow, Tony. I did, uh, did an arti­cle last week, um, and as I was read­ing, um, uh, what’s his face’s book? Um, O’Shaugh­nessy. Again,

Tony Kynas­ton: Yep. Yep

Cameron: after our, after our chat with Tobias,

Tony Kynas­ton: Mm-hmm.

Cameron: Carlisle, because try­ing to get [00:31:00] O’Shaugh­nessy on the show, try­ing to get Toby to intro­duce us to Jim and get him on the show.

I was going through his book and there was, um, chap­ter 15. Uh, I’ll, I’ll read a bit of it. Um, “Don’t fight the tape. Make the trend your friend. Cut your loss­es and let your win­ners run. All these Wall Street max­ims mean the same thing. Bet on price momen­tum. Of all the beliefs on Wall Street, price momen­tum makes effi­cient mar­ket the­o­rists howl the loud­est.

The defin­ing prin­ci­ple of their the­o­ry is that you can­not use past prices to pre­dict future prices. A stock may triple in a year, but accord­ing to effi­cient mar­ket the­o­ry, that will not affect next year. Con­verse­ly, anoth­er school of thought says you should buy stocks that have been most bat­tered by the mar­ket.

This is the argu­ment of Wall Street’s bot­tom fish­ers, who use absolute price change as their guide, buy­ing issues after they’ve done poor­ly. Let’s see who is right.” So he did his analy­sis look­ing at a sort of [00:32:00] 43-year peri­od, I think, from 1951 to 1994, and con­clud­ed that win­ners con­tin­ue to win and losers con­tin­ue to lose.

So if you just pick the stocks that were the best list from 1951 and put all your mon­ey into then and then just went away and came back, they had a com­pound return of 14.45%. If you bought the worst list from 1951, they had a com­pound return of 2.54% a year. Big dif­fer­ence

Tony Kynas­ton: Yeah. And I mean, that was, that was an eye-open­er for me many decades ago when I first start­ed invest­ing because I thought it made sense because of regres­sion to the mean that if you bought the cheap­est stocks, the ones that have been bat­tered the most, that they’ll, they’ll do the best. And I, I think it was bloody Rene Rivkin who, um, point­ed out that that was­n’t the case when I first came across that kind of analy­sis and I looked into it fur­ther and yep, they’re right. Um, which is I guess the old [00:33:00] one that we. the old adage that we use, pull your weeds and let your flow­ers bloom is much more impor­tant

Cameron: He quot­ed Damon Run­y­on. Uh, Run­y­on’s quote is apt, “Win­ners con­tin­ue to win and losers con­tin­ue to lose.” Do you know much about Damon Run­y­on?

Tony Kynas­ton: Yeah, he’s a great, great, uh, writer of horse rac­ing sto­ries the Depres­sion era.

Cameron: Thought you’d like that. I, um, down­loaded an omnibus of his short sto­ries, start­ed read­ing it. Um, best known for the Broad­way tales that became the musi­cal Guys and Dolls. Wrote sto­ries cel­e­brat­ing the world of Broad­way in New York City that grew out of the Pro­hi­bi­tion era, gam­blers, hus­tlers, and show­girls who spoke dis­tinc­tive wise­crack­ing slang where gang­sters had col­or­ful names like Nathan Detroit, Har­ry the Horse, and Good Time Char­lie.

Um, Run­y­on’s most famous quote is, “It may be that the race is not always to the swift, nor the bat­tle to the strong, but that’s the way to [00:34:00] bet.” And any­way, I start­ed think­ing about the Dogs of the Dow, which we’ve talked about over the years. Uh, and sim­i­lar sort of con­cept, but it’s the stocks that have done the worst that are also pay­ing a div­i­dend.

And there’s this guy, Michael B. O’Hig­gins, uh, who wrote a book about the Dogs of the Dow. But then there’s one done in Aus­tralia that we’ve quot­ed in the past. Um, what’s the name of the guy? Let me look up his name again. Do-do- Hugh Dive, uh, Atlas Funds Man­age­ment. He’s been doing it for 10 or 11, 12 years.

So I went and he does, he does­n’t do an, uh, uh, like a full report of all of them. He does them year by year, but does­n’t give you, like, a list of all of the years. So I, I went back and dug up all of his reports from 2014 to [00:35:00] 2024. The ASX

200 returned 7.5% per annum over that peri­od, and the Dogs, the Aus­tralian Dogs, returned 10.3% com­pound over that peri­od.

Tony Kynas­ton: Mm-hmm.

Cameron: So bet­ter,

Tony Kynas­ton: Yep

Cameron: um, than the, just buy­ing the index. But, um, I did hi- I d- I then did his num­bers from 2020 to 2025 for a direct com­par­i­son to QAV, the longest I could. So 2020 to 2025, ASX 200 aver­age annu­al return or com­pound annu­al return, I’ll do that, CAGR was 8.2%.

The Dogs was 10.5%. Uh, the QAV dum­my port­fo­lio was [00:36:00] 16.8%. So he beat. Well, not he. The Dogs beat the, um, index by a cou­ple of points. We dou­bled the index. So, uh, yeah, Dogs is okay if you’re not doing any­thing else. If you don’t have any oth­er strat­e­gy, it’s not too bad. It’ll beat, beat the index long term, I think, but not by much.

We do much bet­ter. Any thoughts on that? No?

Tony Kynas­ton: made you feel good?

Cameron: That’s my name. Major, Major, Major Feel­go­od. That’s my, that’s my new title. My– You, you can call, you

Tony Kynas­ton: yeah.

Cameron: can call me Major Feel­go­od.

Tony Kynas­ton: One of the minor, one of the minor char­ac­ters in Catch 22, Major Feel­go­od.

Cameron: Yeah. Or, um, a musi­cal by, uh,

Tony Kynas­ton: Yeah.

Cameron: Sul­li­van and what­ev­er.

Tony Kynas­ton: Made you feel good, yeah.

Cameron: Ground con­trol to Major Feel­go­od.

Tony Kynas­ton: What’s hap­pened at the track today? It made you feel good. [00:37:00] Yeah.

Cameron: that’s the title for the episode

Tony Kynas­ton: dogs of doubt every year in Jan­u­ary ’cause it comes up as an arti­cle in the AFR about it or on Livewire or some­thing like that.

And, um, gen­er­al­ly it’s a long term, yeah.

Cameron: Yeah, but we’d nev­er done, we’d nev­er done like a, a 10, 11 year, um, study of it, ’cause he makes it hard to go back and do it myself. Yeah. And I, and I’ve looked at your, and I looked at all your notes and you’ve, you always say, “Yeah, it’s not, not a bad idea.” But a- again, it’s not just the worst per­form­ing, it’s the worst per­form­ing that also are pay­ing a healthy div­i­dend.

Tony Kynas­ton: Right

Cameron: Hmm. And so it’s like, um, yeah, high div­i­dend yield. Low­est per­form­ing with the high­est div­i­dend yield

Tony Kynas­ton: Yeah, but you’re also elim­i­nat­ing com­pa­nies which are fail­ing because they’re still pay­ing a div­i­dend, so they’ve got

Cameron: Yeah, right.

Tony Kynas­ton: Yeah.

Cameron: Yeah

Tony Kynas­ton: Like you– Uh, like next year when you have SpaceX as the dog of the Dow and it’s not pay­ing a div­i­dend, you just can’t include it[00:38:00]

Cameron: Uh, um, cou­ple of la- la- la- late minute news items. SXE issued a trad­ing update. Uh, South­ern Cross Elec­tri­cal, which I hold in a cou­ple of port­fo­lios. 15th of June, yes­ter­day, trad­ing update. Uh, FY26 upgrad­ed. Under­ly­ing EBITDA guid­ance increased to at least 75 mil­lion from 72 mil­lion, dri­ven by strong H2 per­for­mance.

So good on them. I hold them in two light port­fo­lios, uh, both from 2023. One is up 390%, the oth­er is up

Tony Kynas­ton: Wow.

Cameron: So,

like, what. They’re one of those com­pa­nies that I can remem­ber look­ing at them and think­ing, “What? South­ern Cross Elec­tri­cal? They do elec­tro– They’re a bunch of elec­tri­cians that do elec­tri­cal works, not [00:39:00] real­ly gonna take over the world.” Up 400%.

Tony Kynas­ton: in sight, no Mars in

Cameron: Yeah, yeah.

Tony Kynas­ton: no float­ing data cen­ters yet.

Cameron: Up every 200% a year. It’s been good. And the last news item I’ve got is, uh, a cou­ple of peo­ple have emailed me this.

Thank you. Perseus has increased their on-mar­ket share buy­back to $150 mil­lion. Hold that in a bunch of port­fo­lios as well, includ­ing my super. It’s up 132% since April ’24 of my super, up 76% in a cou­ple of light port­fo­lios since March 2025. So yeah, done pret­ty well. Perseus as well. Good on them for their

Tony Kynas­ton: Even, even with all, even with all that sov­er­eign risk of African gold fields.

Cameron: Hmm.

Tony Kynas­ton: Yeah, com­pared

Cameron: like

Tony Kynas­ton: oper­at­ing in Aus­tralia that have strug­gled to get min­ing per­mits.

Cameron: Hmm.

Tony Kynas­ton: Mm-hmm

Cameron: That’s my notes, TK. What else you got?[00:40:00]

Tony Kynas­ton: Oh, a cou­ple of things. Uh, we may have touched on some of them. Um, I had. It caught, caught my eye last week that the Kore­an stock mar­ket went into a, um, a trad­ing halt when it dropped 8%. Um, and I guess we’ve touched on this when you were talk­ing about Broad­com before and some sell-off in US tech stocks.

But, uh, yeah, the Kore­an, uh, mar­ket stopped. It actu­al­ly shut. So they have. Stock mar­kets have a thing called cir­cuit break­ers, so when they drop too far too quick­ly, they, they, um, halt trad­ing to stop, uh, some­thing from hap­pen­ing. Um, you don’t see it very often, but it is anoth­er tremor in the, the whole sto­ry of, you know, we’re get­ting pret­ty close to the top of the AI mar­ket, I think.

And, uh, that was, that was large­ly led by some of those Kore­an, uh, tech com­pa­nies like Sam­sung drop­ping quick­ly. So it’s the kind of thing that, you know, I used to [00:41:00] see back in the dot­com days when the Nas­daq would go into a trad­ing halt. So, um, it’s more back­ground noise, I guess, that, that makes me ner­vous about what’s hap­pen­ing to the mar­kets at the moment.

Cameron: KOSPI

Tony Kynas­ton: yes, the KOSPI is the Kore­an mar­ket.

Cameron: Hmm. So, so I just was, I read up a lit­tle bit about that. So they, it dropped rough­ly 8% in ear­ly trad­ing, and they sus­pend­ed it for 20 min­utes. That’s all?

Tony Kynas­ton: Yeah, that’s nor­mal­ly how these things work. If, if it had have kept falling after that, they would have put it into a longer trad­ing halt, typ­i­cal­ly

Cameron: Right. So what do they do, Tony? They, cir­cuit break­er goes off, they stop, and then they, what? Bring it back and then s- see what hap­pens?

Tony Kynas­ton: Cor­rect. Yeah

Cameron: Okay. W- what, what’s the. How do you think the 20 min­utes is gonna have an effect? Peo­ple like, like auto­mat­ed sell­ing [00:42:00] calls have to stop and peo­ple can check to see that there’s not a

Tony Kynas­ton: Yep.

Cameron: that’s run amuck or some­thing.

Is that what it is?

Tony Kynas­ton: exact­ly what it’s designed to do. It’s to stop

Cameron: Right.

Tony Kynas­ton: um, which have occurred in the past where was pro­grammed in, um, and ran amok basi­cal­ly, and

Cameron: Yeah, right

Tony Kynas­ton: a par­tic­u­lar sec­tor. Um, but it’s also, I guess, to a bit of a breather if there’s a pan­ic wave of sell­ing going on, peo­ple can assess it.

Cameron: Right

Tony Kynas­ton: you know, if you’re sit­ting at your desk with your feet up and sud­den­ly the mar­ket’s down eight per­cent or ten per­cent, you pay atten­tion and decide what to do, and this

Cameron: Right

Tony Kynas­ton: guess, to, to and have at least a bit of a look at it and a cool head before it con­tin­ues to trade. Hmm

Cameron: Right. Inter­est­ing. Okay

Tony Kynas­ton: Yeah. See, we haven’t seen it for a long time, but it’s, it’s hap­pened once now and it may hap­pen again, but it’s usu­al­ly a sign that, peo­ple are head­ing for the door

Cameron: Right.

Tony Kynas­ton: Mm.

Cameron: Hmm

Tony Kynas­ton: cou­ple of oth­er things. RBA meets today, [00:43:00] so we’ll see what they do with i- inter­est rates, uh, giv­en infla­tion’s been high. And I, I think the real­ly dif­fi­cult task for them now is to decide what’s gonna hap­pen with the oil price.

Is, is there gonna be a deal signed phys­i­cal­ly on Fri­day? Um, is, is the gov­ern­ment gonna keep the, uh, reduc­tion in the tax that they charge on fuel going? The road user charge on fuel that they, they have less­ened when the price went up. Um, because if those two things hold, then that lessens infla­tion and so the RBA may not have to put prices up, up– put, um, rates up.

But, uh, very hard to pre­dict. Uh, my guess is they’ll keep them on hold and, and wait and watch for all these things to play out. Uh, but yeah, they’re, they’re cer­tain­ly fac­ing that dilem­ma of ris­ing inter­est rates. Sor­ry, ris­ing infla­tion being caused by a par­tic­u­lar thing which looks like it may be com­ing off. So do you wait or do you raise inter­est rates [00:44:00] and then cut them again in the future if it does come off? But they meet today. We’ll know pret­ty soon what they’re doing. Um, the last thing to men­tion is it’s com­ing up for June 30, which is end of tax year in Aus­tralia, and peo­ple should be aware of what their CGT posi­tion’s going to be, their cap­i­tal gains tax looks like. and I, again, not giv­ing finan­cial advice and there are rules around this, so check with your advi­sor or Google what the rules are. But, um, there is no point if you’re gonna pay a cap­i­tal gains tax bill, bill hold­ing onto some­thing which is at a loss from a, from a cap­i­tal point of view. You may as well sell it and, um, off­set the loss­es against the gains before June 30.

So just have a look at that your­self, um,

Cameron: Even if it has­n’t breached a sell trig­ger?

Tony Kynas­ton: Yeah. Well, why pay, why pay tax on a gain if you’ve got a loss in your port­fo­lio? There are rules around when you can buy back in, but, um, you could buy some­thing else and, and [00:45:00] steer well clear of those rules, or you can wait some time and steer clear, clear of those rules too.

But yeah, if. I mean, seek finan­cial advice, but it, it does seem strange to me that you would pay tax when you’ve got a loss to off­set against that tax before June 30

Cameron: Hmm. Okay. We don’t have that in our accept­able sell trig­gers. It’s an inter­est­ing one

Tony Kynas­ton: Okay.

Cameron: Might, maybe it should be in the, should be in the Bible

Tony Kynas­ton: Yeah. Well, poten­tial­ly.

Cameron: Hmm.

Tony Kynas­ton: just to check your sta­tus before June 30 and then sell. Yeah, sure

Cameron: Hmm. Che

Tony Kynas­ton: Yep. It’s

Cameron: Hmm.

Tony Kynas­ton: year. I’ve just done it myself last week.

Cameron: Right

Tony Kynas­ton: and, uh, but yeah, you got­ta take your own sit­u­a­tion into account. You may have car­ry for­ward loss­es from pri­or years, all that kind of thing work through, but just, um, it, yeah, it’s,

Cameron: Hmm.

Tony Kynas­ton: sense to me to sell some­thing if it’s at a loss

Cameron: Hmm.

Tony Kynas­ton: uh, before you pay tax on the gain

Cameron: I’ll make a note

Tony Kynas­ton: [00:46:00] And the last thing I’ve got is a Pulled Pork on Sun­corp Group, which is back on the buy list this week

Cameron: Okay

Tony Kynas­ton: Don’t think I’ve done them before. I could­n’t see them on our list, um,

Cameron: Hmm.

Tony Kynas­ton: so which prob­a­bly means they haven’t been on the buy list before. Uh, and

Cameron: But there’s

Tony Kynas­ton: to look at them because they’ve had a, now a year or so, 18 months since they demerged their bank­ing busi­ness and sold it to ANZ

Cameron: Right. Well, off you go

Tony Kynas­ton: Okay. So it’s a high ADT com­pa­ny, has a QAV score of 0.1, so it’s at the very bot­tom of our buy list. So, you know, it’s pos­si­ble that if the share price ris­es or some­thing else hap­pens next week that it may be off the buy list, but time to have a look at it. Uh, I mean, I cer­tain­ly know who Sun­corp is. It’s, it’s been a in the back­ground of pret­ty much most of my life grow­ing up in Queens­land, start­ing off as, um, dif­fer­ent brands like the SGIO, [00:47:00] um, which was the State Gov­ern­ment Insur­ance Office.

I think it had the first sky­scraper in Bris­bane from mem­o­ry. Cer­tain­ly the biggest for a while. Um, so they’re a Queens­land-based insur­ance com­pa­ny. Uh, they. Peo­ple will be famil­iar with the brands of AAMI, A‑M-I, GIO and Apia, amongst oth­ers. They also oper­ate Vero, which is a com­mer­cial insur­ance brand, but a large part of their busi­ness is in the retail, uh, sort of, car and house and con­tents insur­ance. They also have spe­cial­ist insur­ance for land­lords, et cetera, um, and busi­ness, as I said. Uh, they ser­vice nine mil­lion cus­tomers across Aus­tralia and New Zealand accord­ing to their web­site, they the sec­ond largest gen­er­al insur­er mar­ket share in Aus­tralia. IAG holds the most with twen­ty-nine per­cent. Uh, Sun­corp have twen­ty-sev­en per­cent, and then it drops off to QBE with ten, Allianz with eight, and then small­er brands like Youi and Bud­get Direct mak­ing up the rest. [00:48:00] They have been around for a long time. They trace their ori­gins back to 1902 when the Queens­land Agri­cul­tur­al Bank, uh, first pro­vid­ed loans to rur­al Uh, and also trace their arms, uh, their, their her­itage back to three oth­er or to three arms, so that one plus the insur­ance arm, which was estab­lished by the Queens­land Gov­ern­ment called the State Acci­dent Insur­ance Office, um, which pro­vid­ed work­ers’ com­pen­sa­tion and then also expand­ed into gen­er­al and life insur­ance. that became SGIO, which I spoke of before, and then even­tu­al­ly became Sun­corp in 1985. they also had the rur­al financ­ing arm as a, as a part of their her­itage, when the Queens­land Ag Bank expand­ed com­mer­cial lend­ing over the decades and, you know, that makes sense. If you’re pro­vid­ing ser­vices to farm­ers, you might want to also lend for their equip­ment [00:49:00] uh, that, uh, even­tu­al­ly trans­formed into what was the gov­ern­ment-owned QIDC or Queens­land Indus­try Devel­op­ment Cor­po­ra­tion.

Um, then also too, their her­itage is traced back, uh, via the build­ing soci­ety route, back to the Met­ro­pol­i­tan Per­ma­nent Build­ing Soci­ety, which was found­ed in Bris­bane, I think back in about 1959, and then it con­vert­ed to the pub­licly list­ed bank in 1988, which was called Met­way Bank when it list­ed. Uh So a lot of, uh, a lot of things came togeth­er for this com­pa­ny in Queens­land. The Queens­land Gov­ern­ment in 1996 merged the state-owned Sun­corp and QIDC with Met­way Bank, that, that cre­at­ed and this was, um, what a lot of the indus­try was doing at the time, cre­at­ing, uh, ban­cas­sur­ance com­pa­nies or some­times called all­fi­nanz with a Z, uh, [00:50:00] com­pa­nies where the.

It was seen that, uh, there were some syn­er­gies in, in putting banks togeth­er with insur­ance com­pa­nies. Uh, and so that was the kind of that dom­i­nat­ed for most banks in Aus­tralia back, back then. the gov­ern­ment main­tained a 68% share­hold­ing, how­ev­er, it sys­tem­at­i­cal­ly sold down its shares achiev­ing full pri­va­ti­za­tion by 1998 then, and then in 2002, com­pa­ny sim­pli­fied its brand­ing from Sun­corp Met­way, Met­way to just Sun­corp. Uh, they went on a bit of an acqui­si­tion spree, and in 2001 they bought GIO Gen­er­al, uh, which was the large. sec­ond largest insur­ance com­pa­ny, com­pa­ny in Aus­tralia at the time. Oh, sor­ry. After they acquired GIO, it made them the sec­ond largest, insur­ance com­pa­ny, uh, in Aus­tralia. also acquired Promi­na in 2007. that was near­ly an $8 bil­lion deal, uh, and that gave [00:51:00] them the brands of, uh, insur­ance busi­ness­es like AAMI, Apia, Shan­nons and Vero, and they all came under the Sun­corp umbrel­la. then, um, most recent­ly, and I guess a, a lit­tle bit of inter­est to peo­ple like me who hold ANZ shares, was that they decid­ed to de-merg­er their, uh, uh, busi­ness from their bank­ing busi­ness and they applied, uh, to let ANZ buy the, the, um, Sun­corp bank for $4.9 bil­lion which even­tu­al­ly got through, uh, all the reg­u­la­to­ry hur­dles in July of 2024 and that was­n’t an easy thing to do because ACCC opposed the, um, the pur­chase by ANZ because it was going to lead to more con­cen­tra­tion in the bank­ing sys­tem. But it, it got waived through. They also had to, uh, ANZ had to give under­tak­ings to the Queens­land Gov­ern­ment about, um, clos­ing branch­es or ATMs or, [00:52:00] or cut­ting staff for, I think three years, um, after the sale. Uh, but, um, I mean, gen­er­al­ly it was thought it was a good thing because, uh, these kind of region­al banks, which I’ve spo­ken about before, like Bendi­go Bank and, um, of Queens­land, face lot of s- hur­dles being sub­scale com­pared to the major four or five if you count Mac­quar­ie. but also they face, um, uh, they have to hide– hold high­er, uh, amounts of cap­i­tal to pro­tect them in a run sit-sit­u­a­tion that’s forced on them by APRA for pru­den­tial rea­sons. And so they have found it dif­fi­cult to com­pete a lev­el play­ing field with the big, uh, the big, um, four or five. And so, Sun­corp decid­ed it did­n’t want to be in the bank­ing game any­more, and so they, uh, they sold to ANZ part­ly because of that sub­scale issue. Uh, and in fact, Sun­corp had been [00:53:00] doing their darn­d­est to try and reduce their cost base any­way, and they’d, they’d shut two-thirds of their branch­es the 10 years pre­ced­ing the sale and were down to 60, um, branch­es oper­at­ing when they made the sale. Um, there was also, uh, a cou­ple of oth­er prob­lems that they faced.

The, the bank­ing sys­tem, um, faces large tech­nol­o­gy invest­ment hur­dles. they, they often oper­ate on very old, decades-old, uh, core oper­at­ing sys­tems which require lots of, uh, tech­nol­o­gy invest­ment and even­tu­al­ly replace­ment, and, um, it just becomes very dif­fi­cult for these small­er banks to be able to afford to do that. Uh it was, it was also, I guess, appar­ent to ana­lysts, but also to the, the lead­ers of Sun­corp that this, this ban­cas­sur­ance or all finance, uh, the­mat­ic that swept through the indus­try back in the ’80s and ’90s was­n’t real­ly play­ing out. all the big banks Aus­tralia [00:54:00] have divest­ed their insur­ance arms large­ly.

They may still sell insur­ance prod­ucts, but they’re often a, a white label provider, or they have a small busi­ness them­selves for lega­cy rea­sons. but run­ning an insur­ance busi­ness is a, is a oper­a­tion. they’re not easy busi­ness­es to run, and then there was­n’t much syn­er­gy between doing that and run­ning a branch net­work retail bank.

So made sense for, for Sun­corp to divest its bank and find a good sell­er. I think was prob­a­bly a good buy­er. Um, there, there was a lot of talk for a long time that Ade­laide, uh, Bendi­go Ade­laide may have been a pur­chas­er, but, um, I think, did a bet­ter deal with ANZ get­ting a cash, uh, sale away rather than a scrip, um, offer­ing to, uh, a, a play­er like Bendi­go Bank. Um, any­way, the. When the deal was done, it did unlock immense val­ue for Sun­corp share­hold­ers, and they, uh, [00:55:00] were quite pru­dent in giv­ing most of the pro­ceeds back. So of the $4.9 bil­lion cash price, they returned $4.1 bil­lion to um, in div­i­dends and and r- and cap­i­tal returns as well. So that made, uh, FY25 look very good for Sun­corp.

So, in FY25, there was a 52% in net prof­it after tax. there was a f- a mas­sive, uh, cap­i­tal return, um, per share, uh, at the time, and a plus a cent per share spe­cial div­i­dend, and there was a $400 mil­lion share buy­back, which end­ed just, uh, in the first quar­ter, this year. So, a lot of mon­ey was returned.

It, it does kind of make com­par­isons and this results look a bit, um, a bit ane­mic, but you are com­par­ing, uh, this half with a half when there was all those, cash returns and buy­backs going on. [00:56:00] the oth­er thing that hap­pened in the last sort of six months for this com­pa­ny was that there’s been, um, as there often is with insur­ance com­pa­nies, par­tic­u­lar­ly Queens­land-based ones, uh, nat­ur­al, nat­ur­al.

I, I’ll call them nat­ur­al cat­a­stro­phes. They– I, I. They are, um, things to be, uh, hap­pen­ing to you, but, you know, real­ly they’ve– they ha- they hap­pen with reg­u­lar­i­ty in Queens­land, whether it’s cyclone or hail­stones or what­ev­er. Um, and insur­ance com­pa­nies have to, have to man­age this, uh, and hold the right pro­vi­sions. Looks like Sun­corp under­pro­vid­ed, uh, for an unusu­al year of, um, uh, uh, cat­a­stro­phes. So July and Decem­ber 2025, there were nine sep­a­rate declared cat­a­stro­phe events and over sev­en­ty thou­sand claims because of those. Uh, Sun­corp had pro­vid­ed four hun­dred and fifty-three mil­lion dol­lars for these, um, claims, which is prob­a­bly about the [00:57:00] aver­age. but in, in fact, they incurred one point three bil­lion dol­lars of claims. So um, big hit to their, uh, pro­vi­sions and their earn­ings because of that. and if you look at the com­par­i­son of first half twen­ty-six, which is the lat­est results with the first half of twen­ty-five, net, net prof­it after tax was down from over a bil­lion dol­lars to two hun­dred and six­ty-three mil­lion. and, uh, cash earn­ings were like– were also down from eight hun­dred mil­lion to two hun­dred and sev­en­ty, and the buy­back was stopped. So it’s– it is a bit hard when you’re com­par­ing a bumper year with the, with the cur­rent year. Uh, but I think the telling thing for me out of all of that was that there was an unusu­al, list of par­tic­u­lar­ly hail­storms that was caus­ing the most of the prob­lems, um, in the sec­ond half of last year. and of course that, that, uh, hurts gen­er­al insur­ers, hurts the pol­i­cy­hold­ers even more. But, um, [00:58:00] you get a lot of hail dam­age in cars and bro­ken win­dows in hous­es and things like that. So, that affect­ed their results. Um from the QAV point of view, though, the, uh, it, if the share price come back a lit­tle bit, it helps us because, um, it’s back on the buy list.

So ADT is fifty-three point five mil­lion. price for my analy­sis is eigh­teen fifty-five, uh, which was the price yes­ter­day. eigh­teen fifty-five is only nine­ty-six per­cent of con­sen­sus tar­get, but it’s way above our IV1 of four thir­ty-six and IV2 of eight fifty-six. So see­ing val­ue from that per­spec­tive, but we are see­ing it from a PROPCAF per­spec­tive. Stock Doc­tor Sun­corp as a star income stock, which we score an extra half a point for. I did kin­da scratch my head over that because the yield on, uh, Sun­corp is three point five six per­cent, is not. It’s prob­a­bly mar­ket. [00:59:00] I don’t know what the mar­ket yield is at the moment, but it, it’s not, um, high enough for us to score it against the mort­gage, uh, mort­gage rate going out there in the moment.

So I was a bit sur­prised to see s- it, um, as a star income stock in Stock Doc­tor, which they usu­al­ly reserve for high­er pay­ing stocks, but I don’t know the his­to­ry. Per­haps it was, um, done in the past and it’s a lega­cy issue for them when the yield was high­er. Uh, Stock Doc­tor do mark it as strong and steady for finan­cial health and trend, so that’s good. the PE is twen­ty-one point eight times that’s not the high­est or the low­est, so we give it a, a zero for that. uh, it is a recent three-point trend line upturn, so we score it for that. have a con­sis­tent­ly increas­ing amount in equi­ty, and that’s pos­si­bly because they, they swal­lowed a whole heap of cash when, um, ANZ bought the bank, and now it’s get­ting back to where it, uh, would nor­mal­ly sit. is five point four times, so I like that, and that’s why it’s on the buy list. Net equi­ty per [01:00:00] share is nine dol­lars forty-two, so we can’t buy it for book or book plus thir­ty. earn­ings per share growth is only four per­cent, so it does­n’t score for us on growth over PE. the yield, as I said before, is only three and a half per­cent, so we can’t score it for that. Uh, does­n’t have an own­er founder, obvi­ous­ly can’t score it for that. So over­all, eight point five out of six­teen for qual­i­ty, which is only fifty-three per­cent and just scrapes in at point one over­all. I guess if I look at it, um, the, the things I like about it, it’s a large ADT stock, uh, on the buy list again. it’s get­ting back to focus­ing on its core busi­ness of insur­ance, which I think is good. It’s the num­ber two play­er in Aus­tralia, which is also good, makes it pret­ty, um, large and steady. Uh, but insur­ance com­pa­nies, um, you know, have, have risks, um, not the least of which is the weath­er events which, um, seem to hit Queens­land, uh, prob­a­bly more than the oth­er states, but, um, cer­tain­ly are hard to [01:01:00] pre­dict and there­fore pro­vide for. there has been a bit of talk in the, in the press recent­ly about the gov­ern­ment start­ing to focus on increas­es because, uh, all of the gen­er­al insur­ance com­pa­nies have been putting up their prices. As peo­ple will know, when it comes time to, you know, renew their house and con­tents pol­i­cy or their car insur­ance pol­i­cy. know, I think I faced about a ten or twelve per­cent increase in my house and con­tents this year, not with Sun­corp, but with anoth­er insur­er. Uh, which is the insur­ance com­pa­nies, um, you know, reflect­ing the infla­tion that’s hit­ting the con­struc­tion indus­try in par­tic­u­lar. Um, so but, but there will be s- uh, some reg­u­la­to­ry scruti­ny on that, which may make it hard­er for them to recov­er cost increas­es in their busi­ness. but also too, insur­ance busi­ness­es are fair­ly opaque and, um, dif­fi­cult to ana­lyze and, or pre­dict they rely on invest­ment income from their float, which we’ve talked about before with, with Berk­shire Hath­away. But, uh, [01:02:00] the float in Aus­tralia is reg­u­lat­ed again, um, pret­ty intense­ly. And so typ­i­cal­ly they invest in gov­ern­ment relat­ed bonds or equiv­a­lents. And those, those, yields are going up at the moment as inter­est rates rise, which is one of the rea­sons why the share price is increas­ing, for this com­pa­ny. but it does mean that they’re not get­ting sort of stel­lar returns or stock mar­ket returns, um, like Berk­shire Hath­away does, from that, from that invest­ment.

But it does mean it’s pret­ty safe. but you’ve got to be able to, um, about what the invest­ment return’s going to be. You’ve got to think about what the re-rein­sur­ance pro­file is for com­pa­nies like this. So they, uh, lay off a lot of their claims expo­sure with rein­sur­ance com­pa­nies, and so they take a small­er mar­gin, uh, for a less risky pro­file. Uh, and that can, that can change with, with con­tracts that are being renewed all the time. then weath­er makes them dif­fi­cult to fore­cast [01:03:00] as well. So, uh, you know, insur­ance com­pa­nies, uh, can be, uh, though they’re large, hold good mar­ket share, they can still go up and down a lot, um, as bonds move and as the weath­er, uh, becomes, uh, more vari­able than, than, um, aver­age. So that’s Sun­corp Group. Um, have a look at it if you need to buy a large ADT stock. Per­haps like me, you’ve sold out of your all inter­est at the moment, so it might be of inter­est to you. But, uh, it may also off the buy list fair­ly soon. The buy list fair­ly soon

Cameron: And it’s down today, so, uh, don’t buy it today.

Tony Kynas­ton: Yeah

Cameron: Hmm. It’s dropped the last cou­ple of days from $18.75 on the 12th down to $18.28, so down a lit­tle bit well, thank you, TK. I think that gets us to after hours. Been a few [01:04:00] weeks. What’s been keep­ing you amused?

Tony Kynas­ton: Uh, I think I heard you talk about it while I was away, but I’ve been watch­ing Spi­der Noir with Alex. It’s, it’s pret­ty good. Lik­ing

Cameron: get f-

Tony Kynas­ton: Cage act­ing

Cameron: got, I only got like three or four episodes into it and then I kind of got dis­tract­ed. But, uh,

Tony Kynas­ton: out? Hmm

Cameron: Fan­ta said it was worth keep­ing up with, but how far into it are you?

Tony Kynas­ton: Yeah, we’re at episode three as well,

Cameron: Oh, okay. Right.

Tony Kynas­ton: it. I think it’s

Cameron: Hmm. I like, um, Nico­las Cage has­n’t had much to do there, but I like, uh, Bren­dan, what­ev­er his name is, Glee­son.

Yeah, he’s always fun to watch.

Tony Kynas­ton: I agree. Yep, play­ing the bad guy.

Cameron: Yeah.

Tony Kynas­ton: Musk char­ac­ter.

Cameron: Yeah. Okay

Tony Kynas­ton: Watched anoth­er one, uh, uh, episode of, uh. Sor­ry, doc­u­men­tary on Net­flix called Vardy. Um,

Cameron: Hmm

Tony Kynas­ton: don’t know if you’d like it, but I, I quite enjoyed it. Rod­dy and I watched it. It’s about an Eng­lish soc­cer [01:05:00] play­er, um, who was a bit of a lad uh, uh, got into soc­cer late ’cause he was too busy drink­ing and, and fight­ing and all that kind of stuff. then, uh, a man­ag­er sort of picked him out as an up-and-com­ing tal­ent and stuck with him through all the grades, and even­tu­al­ly he start­ed play­ing for Coven­try, then went on to win the EPL as a huge out­sider. uh, it’s a bit of a rocky sto­ry real­ly, but, um, it was fun to watch. Rec­om­mend that to the sports fans out there

Cameron: What else?

Tony Kynas­ton: f- uh, been lis­ten­ing to My Favorite Toy, the new Foo Fight­ers album. Came out, I think, in April.

Cameron: Hmm.

Tony Kynas­ton: quite good

Cameron: Hmm, did­n’t pick you for a Foo Fight­ers fan

Tony Kynas­ton: Yeah, yeah, I like the Foo Fight­ers. I

Cameron: Hmm. I like kung fu. Is it kung fu fight­ers? I’m a kung fu fight­er

Tony Kynas­ton: Uh, been read­ing, um, a book on Jef­fer­son [01:06:00] by Christo­pher Hitchens, which is real­ly good. I rec­om­mend that. out for a while, but I came across it recent­ly.

Cameron: He’s been dead for 10 years, so I’d hope so

Tony Kynas­ton: Yeah, so it’s been, it’s been out for a while. like his writ­ing style, but, um, uh, I– it’s going into all the detail of, uh, the ear­ly days of Amer­i­ca, um, which I was­n’t that famil­iar with, so that’s been

Cameron: Hmm. Hmm.

Tony Kynas­ton: Yeah. Um, you know, talk­ing about lit­tle things like, uh, how Jef­fer­son cribbed a quote on, um, the pur­suit of. called? The pur­suit of life, hap­pi­ness. No. Uh, what’s the quote? The life. What’s in the Con­sti­tu­tion? The pur­suit of hap­pi­ness, life. I’m get­ting that mixed up

Cameron: Yeah, can’t remem­ber

Tony Kynas­ton: Yeah, any­way. Orig­i­nal­ly, it was instead of

Cameron: Life, lib­er­ty, and hap­pi­ness for all. Li- lib­er­ty and some­thing, yeah

Tony Kynas­ton: But orig­i­nal­ly, the orig­i­nal quote was from Locke, and it was life, lib­er­ty, and prop­er­ty. um, so giv­en the sort of dou­ble-edged mean­ing prop­er­ty had back [01:07:00] then, they decid­ed to change it to the pur­suit of

Cameron: Ah, yeah

Tony Kynas­ton: which, um, I thought that was inter­est­ing. But

Cameron: Jef­fer­son, Jef­fer­son liked his, uh, female prop­er­ties too, did­n’t he?

Tony Kynas­ton: He did, and he still, he still kept slaves,

Cameron: Hmm.

Tony Kynas­ton: even though he did a lot of work in the Con­sti­tu­tion to try and, uh, get around the own­er­ship of slaves. He sort of danced the thin, the, the line there. And that’s– I thought that was inter­est­ing, and at the very start, when Christo­pher Hitchens says, “Look, no one’s all good or all bad.” This, this guy, you know, was all about life and lib­er­ty, but he held slaves. So you know, you got­ta judge him on that basis, I guess.

Cameron: Hmm

Tony Kynas­ton: and but there’s a lot, lot in there about the, um, the rea­sons for seek­ing inde­pen­dence to– a lot to do with the Eng­lish and the French War. Um, uh, how mon­ey was required by the Eng­lish to fight those var­i­ous wars, and how they were tax­ing Amer­i­cans to do that. Um, how, you know, at the end of some of those wars, they had a chance of, I think, uh, was it Guade­loupe in the West [01:08:00] Indies? They had the chance of either tak­ing that or Cana­da, um, over as a colony, uh, from the French, and they chose Cana­da. And, uh, if they had have cho­sen Guade­loupe, that would’ve had a dif­fer­ent out­come for the his­to­ry of Amer­i­ca.

So yeah, inter­est­ing to go through and pick apart all that his­to­ry that was going on at the time, and the Amer­i­cans’ reac­tion to it.

Cameron: The orig­i­nal tax dodgers, as I always call them.

Tony Kynas­ton: Right

Cameron: The found­ing tax dodgers. Mm-hmm.

Tony Kynas­ton: And, uh, a cou­ple of good, good results from our hors­es this week. So Lake For­est broke a track record yes­ter­day at Pak­en­ham. I drove up to Pak­en­ham to watch it, to win a race, which was good. And.

Cameron: that mean? Like a record for that horse or like for the whole track?

Tony Kynas­ton: Yeah.

Cameron: Wow

Tony Kynas­ton: of dif­fer­ent sur­faces at Pak­en­ham. They have the, a grass sur­face, which is what most race cours­es do, but they also have a, what’s called a poly track, which is, uh, kind of a sand, rub­ber, syn­thet­ic mix, which, um, is an all-weath­er [01:09:00] track. So, uh, you race there when it’s in win­ter and the grass tracks get mud­dy and bogged.

Cameron: Right

Tony Kynas­ton: So it set the poly track record for 1,000 meters at Pak­en­ham yes­ter­day, which was

Cameron: Fan­tas­tic. Con­grat­u­la­tions

Tony Kynas­ton: Thanks. was fun. The train­ers are the Gala­gatos broth­ers, and they were very emo­tion­al and all over me after the race. A lot of fun. it very pas­sion­ate­ly, which was, which is good to see.

Cameron: Is that what you want?

Tony Kynas­ton: Yeah. then Stars of Dom, a horse I have, uh, shar­ing with Steve Mabb, that ran sec­ond on Sat­ur­day. So it’s had two sec­onds first two starts. So, um, we’re hope­ful it can the, take the prize, in the future. But two sec­onds isn’t a bad way to start a, a rac­ing career.

Cameron: Yeah.

Tony Kynas­ton: Hmm

Cameron: named after? Stars of Dom

Tony Kynas­ton: Dom Perignon. Yeah. Uh, it’s a bit of a pun.

We did­n’t name this one, but, um,

Cameron: Right

Tony Kynas­ton: uh, one of the man­agers at Lind­say Park, which is where it’s trained, is [01:10:00] called Dom, Dom Roden. So

Cameron: Uh

Tony Kynas­ton: they kind of named it after him, but also after cham­pagne. Yeah, so that was good. Good, good cou­ple of days to be a horse own­er.

Cameron: Yeah, con­grats. Very excit­ing Well, I watched the Colos­sus film that we talked about,

Tony Kynas­ton: Mm-hmm.

Cameron: um, after read­ing the book. Real­ly enjoyed the film.

Tony Kynas­ton: Oh

Cameron: it was great. Yeah, real­ly well done. Good sort of clas­sic film. And a lot of, like, great, uh, appear­ances from stars. Um, Mrs. Cun­ning­ham from Hap­py Days was in it, very young ver­sion of her, Mar­i­on what­ev­er her name was, Ross.

Tony Kynas­ton: Mm-hmm.

Cameron: And James, um, what’s his name? Um, Hong. James Hong. Um, the only Chi­nese Amer­i­can actor for the last 30 years in Hol­ly­wood who’s every­thing from, um, Wayne’s World through to Every­thing [01:11:00] Every­where All at Once, and, uh, Big Trou­ble in Lit­tle Chi­na, and all those sorts of films. He– a very young James Hong was in it, which was great to see.

He’s always one of my favorites. I think he had one line in the, in the film. Uh, yeah, no, real­ly, real­ly enjoyed it. Thought they did a good job. Changed it from the book a lit­tle bit, but pret­ty much the same sto­ry. I’m read­ing the sec­ond nov­el in that series now, which is inter­est­ing, where, um, Colos­sus. It’s fi- it takes place five years after the first one, and, uh, there’s a reli­gious cult set up around Colos­sus now.

He’s com­plete­ly tak­en over every­thing. He, it. And, um, the human resis­tance gets con­tact­ed by some group that says they’re from Mars, and they’re, they’re build­ing a, a counter sys­tem to have them.

Tony Kynas­ton: from Mars. Yeah.

Cameron: Yeah, yeah.

Tony Kynas­ton: Right.

Cameron: Um,

Tony Kynas­ton: ruled by the Grok AI on

Cameron: Well, as I think I told you, Elon named his [01:12:00] data cen­ter that runs Grok Colos­sus based on this book.

so maybe he thinks this is what he’s gonna have to do when Colos­sus takes over, is get to Mars and build the counter Colos­sus.

Tony Kynas­ton: Do you think, uh, do you think there’s a reli­gion around AI at the moment?

Cameron: Uh, there’s been a cou­ple of

Tony Kynas­ton: by the almighty AI

Cameron: I think there’s a cou­ple of, uh, actu­al peo­ple play­ing with the idea of AI-based reli­gions already. But I do think it’s a thing that’s gonna hap­pen. I mean, the way it plays out in the book makes total sense. Like a b- it’s, it’s the all-know­ing mas­ter of every­thing that’s run­ning every­one’s lives and has solved crime.

There’s no more crime, there’s no more vio­lence, there’s no more any­thing ’cause it sees every­thing. It– If you get arrest­ed, you get tried and exe­cut­ed with­in 30 sec­onds ’cause it’s got all the facts and all the data and it just, you know, beheads you. So, uh, yeah, I can see that play­ing out.

Tony Kynas­ton: Hmm.

Cameron: Chris­sy and I also watched Poor Things.

Tony Kynas­ton: Oh, that’s a great movie. I[01:13:00]

Cameron: Yeah. Yeah, yeah.

Tony Kynas­ton: Willem

Cameron: Trip­py as all hell. Willem Dafoe, yeah, great in it. And, uh, now I wan­na see the oth­er one. I think the first one they did togeth­er, Kinds of Kind­ness with Jesse Ple­mons and Emma Stone and Willem Dafoe, which is,

Tony Kynas­ton: I

Cameron: Yor­gos’ uh, go-to cast

Tony Kynas­ton: Yeah

Cameron: It’s his, um, his go-to peo­ple. Willem Dafoe’s always great, always well.

Do you hear about this film that’s– There’s a film that’s show­ing. Where is it? Um, in Tas­ma­nia, I think. It’s, uh, the Dark Mofo,

Tony Kynas­ton: Mm-hmm.

Cameron: um, Fes­ti­val that’s on at the moment. It’s a Willem Dafoe film that only 500 peo­ple have seen. One per­son is allowed to see it at a time in a cin­e­ma. You get, uh, a, a BMW picks you up, gives you, like, an army tag.

You get tak­en to a cin­e­ma that you, where you did­n’t know where you’re going. You get tak­en to this [01:14:00] place. You have to pr- pr- pr- pro­vide your iden­ti­fi­ca­tion, and you sit in the cin­e­ma and you see this film by your­self. And oh, before– When you get in the car, there’s a record­ing by Willem Dafoe that, uh, is played to you that basi­cal­ly is sort of not– is sort of the intro to the film.

He’s in char­ac­ter, and then when you get out of the film, there’s anoth­er thing that he says to you in a USB stick or some­thing that’s giv­en to you, and it’s a full expe­ri­ence that, yeah, only one per­son at a time is allowed to see. It’s,

Tony Kynas­ton: has any­one divulged what the movie’s about?

Cameron: Yeah, I read a review in The Guardian or some­thing today where some­body saw it, a review­er, and talked about it.

I did­n’t read it in detail. I was just skim­ming through them

Tony Kynas­ton: I have seen a, Willem Dafoe movie set in Tas­ma­nia.

Cameron: Hmm.

Tony Kynas­ton: out in the last 10 years. I think it was called The Hunter or some­thing like that. He–

Cameron: Oh, yeah

Tony Kynas­ton: It was very remote and moody, and he played a hunter who was look­ing. I can’t recall if he was try­ing to find a [01:15:00] Tas­man­ian tiger or he was try­ing to shoot, shoot one that had been found.

I can’t recall now. It was a very, like it was, was­n’t much hap­pen­ing in the movie, but it was beau­ti­ful­ly shot and great to watch. Very moody

Cameron: Human sac­ri­fices have been made. He had to go shoot Tas­man­ian tigers.

Tony Kynas­ton: no, I don’t, don’t

Cameron: Bob Kat­ter called him up. And I just saw the trail­er for the new Pao­lo Sor­renti­no film, Parthenope, which stars Gary Old­man.

Tony Kynas­ton: Oh, wow. Okay

Cameron: Yeah. Yeah, yeah. Check it out, Parthenope. You’ll love it. Um, looks great. Com­ing out soon. And then I’ve been lis­ten­ing to Aussie Crawl this morn­ing because they’ve just announced a reunion, the sur­viv­ing mem­bers of them.

Yeah, the Raines broth­ers and some oth­er guy. I thought, “Gee, I haven’t lis­tened to Aus­tralian Crawl for decades,” so I pulled out Siroc­co and start­ed lis­ten­ing to that. Such a- some catchy riffs. Oh, thank you, baby.

Tony Kynas­ton: Oh,

Cameron: Da-da-da-da, da-da-da-da, da-da-da-da, da-da-da-da, da-da-da-da-da. Yeah. Errol

Tony Kynas­ton: And great [01:16:00] lyrics. Beau­ti­ful peo­ple. Yeah. mean that, yep, where are those, you know, those cyn­i­cal Aussie bands from the ’70s and ’80s were great. Just tak­ing the piss all the time.

Cameron: Che

Tony Kynas­ton: Mm.

Cameron: Well, that’s all I got for you, TK. Um, no RBA announce­ment yet that I can see Let’s see the AFR. Nope, noth­ing yet.

Tony Kynas­ton: two six­teen, so I think it comes out

Cameron: Mm. 230. Mm. Mm. Mm

Tony Kynas­ton: All right

Cameron: Okay. Uh, hap­py hunt­ing every­body. We’re gonna go talk about Amer­i­ca.

Tony Kynas­ton: Okay.

Cameron: Ciao.

Tony Kynas­ton: luck.

Cameron: Yeah