Transcript QAV 615

QAV 615

Cameron  00:00

Hel­lo, folks, it’s Cameron, sit­ting here by myself in a co-work­ing space in sun­ny Bund­aberg. It’s the 11th of April and I’m post­ing an inter­view that Tony and I did a cou­ple of weeks ago. Tony is cur­rent­ly watch­ing the US mas­ters in Augus­ta, Geor­gia. Very busy, very impor­tant work that he’s doing there. I’m on a qua­si-vaca­tion try­ing to spend as much time on the beach with my fam­i­ly as pos­si­ble. So, it’s a short show today. Inter­view with Simon Shep­herd from The Invest­ing Newslet­ter Group. As I said, we record­ed this a cou­ple of weeks ago. Real­ly great ser­vice that Simon has cre­at­ed, I think, that helps all of us com­pare the per­for­mance of the invest­ment newslet­ters in the Aus­tralian mar­ket­place. So, let’s jump into it and have a chat with Simon Shep­herd, and we’ll be back for a nor­mal show next week with a bit of luck. Ciao, have a great week. Mar­ket’s up today, look­ing good.

Cameron  01:03

Wel­come to QAV. I don’t know what episode this is because hon­est­ly, I don’t know when we’re going to put this out. But we’re record­ing it, for the record, on the 13th of March 2023. TK and I have a spe­cial guest with us today: Simon Shep­herd from The Invest­ment Newslet­ter Group, aka TING. I like that, it’s a pret­ty cool acronym. Is it an acronym? That’s an acronym, I think. TING. Wel­come to QAV, Simon.

Simon  01:29

Thanks, Cameron, good to be here.

Cameron  01:31

Accord­ing to TING’s web­site, or tinglive.com.au if the peo­ple at home want to check it out while we talk about it, they track invest­ment newslet­ters, do com­par­isons of the top invest­ment newslet­ters in Aus­tralia and look at their buy rec­om­men­da­tions, track the per­for­mance of their rec­om­men­da­tions, and bring a lit­tle bit of much need­ed trans­paren­cy to the invest­ing newslet­ter indus­try. Is that a fair­ly accu­rate sum­ma­tion of what you’re doing there, Simon?

Simon  02:05

Yeah, that’s spot on.

Cameron  02:06

Do you want to tell us a lit­tle bit more about what it is and why you start­ed it?

Simon  02:10

Yeah. Cameron, I think being an investor myself and also a finan­cial advi­sor, you know, what I found is there’s plen­ty of choice out there with var­i­ous newslet­ters, var­i­ous styles, some have been going for a long time. In fact, from what I can see, most of them been going for a long time, which is prob­a­bly a good sign. But there was no uni­fied way to check their results, no clear way to find it on each of their respec­tive web­sites, and they all speak a bit of a dif­fer­ent lan­guage, both in the way they approach invest­ing, but also if and at all, if they report returns. So, I thought, you know, would­n’t it be great if there’s some way we could, as best we could, do an apples-to-apples com­par­i­son, so to speak. So, we built this thing, start­ed track­ing these ser­vices com­ing up on two years ago. You know, all being well, over time we might expand it depend­ing on how things go, but we thought you know, six or sev­en is a good start. We try to have a vari­ety of dif­fer­ent styles and invest­ment approach­es in there as well. And what we did was sort of tried to repli­cate what a typ­i­cal, you know, invest­ment jour­ney might be for your stan­dard mum and dad DIY investor, self-direct­ed SMSF trustee, what­ev­er you want to call it, by build­ing a hypo­thet­i­cal or a paper port­fo­lio of twelve stocks in each of the bas­kets. So, one bas­ket for each of those sev­en newslet­ters, basi­cal­ly.

Cameron  03:29

My big con­cern Simon is I don’t think you real­ly under­stand the finan­cial ser­vices indus­try. Nobody wants clar­i­ty and trans­paren­cy. The whole idea of the finan­cial ser­vice indus­try is to com­pli­cate it as much as pos­si­ble.

Simon  03:41

No one wants to talk to me. It’s fun­ny.

Cameron  03:43

It’s real­ly con­fus­ing, so peo­ple just throw their hands up and go. “Oh, well, I’ll just do this one.” Yeah, you got it all wrong, Simon.

Simon  03:53

Well, it keeps me in a job, right?

Cameron  03:55

Exact­ly, exact­ly. What do you hope to achieve with TING?

Simon  04:00

Look, I think it’s real­ly, the idea is that it’s a use­ful tool or a por­tal, just a research chan­nel that peo­ple can use to help them make bet­ter deci­sions, bet­ter informed deci­sions. I can’t stress enough it should­n’t be sole­ly us to make a deci­sion. It should just be one of your toolk­it of due dili­gence or research meth­ods that you look at when you’re shop­ping around for a newslet­ter or look­ing to add more newslet­ters, or what­ev­er it is. But ide­al­ly, that’s what we want. I mean, in a way, you know, maybe it ends up being like a finder.com for invest­ment newslet­ters, for exam­ple. So, it’s an evolv­ing process. But yeah, at this stage, it’s pre­dom­i­nant­ly focus­ing on, let’s have some hypo­thet­i­cal bas­kets in there, see how they go, peri­od­i­cal­ly rebal­ance them, keep an eye on the on the buy list, etc. And in a way, in the nicest pos­si­ble way, hold these newslet­ters account­able to what they’re say­ing that they’re try­ing to do, which is obvi­ous­ly beat the mar­ket.

Cameron  04:53

And when do you start tak­ing mon­ey from the newslet­ters to give them an upper hand in the report­ing?

Simon  05:00

Would you like to be the first?

Cameron  05:02

Absolute­ly.

Simon  05:04

Is that an offer?

Cameron  05:05

We’ll sign up to it, get in on the ground floor. That’s the way Google makes mon­ey, right? Putting it gen­tly.

Simon  05:15

They do very well, yeah.

Tony  05:17

And some of the oth­er com­par­i­son sites and oth­er indus­tries as well, which we won’t men­tioned.

Simon  05:21

Yeah, exact­ly.

Tony  05:23

Can I just ask Simon? Great idea.

Simon  05:25

Thanks, Tony.

Tony  05:26

I went to your web­site, there’s, I think sev­en or eight newslet­ters ranked there. The ones I had a look at, the only com­mon thing I could find about them was they’re the ones that don’t pub­lish their returns. They don’t have what we call a dum­my port­fo­lio on their web­site. So, is that why you’ve picked them? Or is there some oth­er unique com­mon­al­i­ty?

Simon  05:45

Yeah, pos­si­bly. I mean, prob­a­bly that’d be a sec­ondary con­sid­er­a­tion. It was­n’t an explic­it screen­ing tool, per se. I think it was more just let’s pick a vari­ety of dif­fer­ent styles, and hey, great if they dis­play results, fan­tas­tic. But to be hon­est with you, I did­n’t want to jump in down that rab­bit hole with, you know, what is that chart, how do you work the num­bers out? I was like, “you know, I’ll just do it myself,” and where we can try to be con­sis­tent with our approach.

Tony  06:10

And I encour­age peo­ple to go to your web­site and have a look. But I had looked today, and I think out of the sev­en or eight that are there, there were two or three who were beat­ing the mar­ket. So, has that been the con­sis­tent sort of per­for­mance since you’ve start­ed? Or is this unusu­al?

Simon  06:25

It’s still ear­ly days with the data. So, we did­n’t real­ly start run­ning any kind of cumu­la­tive league table, if you will, until late last year. These num­bers are, gen­er­al­ly speak­ing, going to run a quar­ter­ly — we do month­ly read reviews and rebal­ances — but we’ll pub­lish results at the end of each quar­ter. And cer­tain­ly, as of today, those rank­ings are fair­ly, you know, the num­bers have changed a bit because the mar­kets come off as you’d be aware since mid Feb, par­tic­u­lar­ly after last Fri­day. But broad­ly speak­ing, they’re kind of still sit­ting in that cat­e­go­ry. I can screen share with you, if you want me to put the table up.

Tony  06:58

Let me just ask a cou­ple of ques­tions. So, first of all, why do you think that the major­i­ty of the invest­ment newslet­ters, at least in the peri­od you’ve tracked them, have under­per­formed the mar­ket? Because as you said, they’ve been around for a long time.

Simon  07:11

I mean, it could part­ly be the sea­son that we’re in. So, what I mean by that is, you know, you’ve been in the mar­ket a long time, cer­tain styles tend to come in out of favour for poten­tial­ly long peri­ods, right? Val­ue ver­sus growth being a clas­sic one that’s often talked about in the press, and all the empir­i­cal data, and so on and so forth. So, it could pos­si­bly be not a reflec­tion that those ones that are under­per­form­ing the mar­ket are nec­es­sar­i­ly bad, it just might be the style that’s in vogue at the moment that’s over­tak­ing the oth­er styles in terms of per­for­mance. And look, to be hon­est with you, again, full dis­clo­sure, I think that we need more data, right. So, the longer I’m run­ning this thing, the bet­ter the more sup­port I get, the more inter­est, because that’ll just encour­age us to keep going and hope­ful­ly fill it with more infor­ma­tion, and so forth. So, it’s real­ly ear­ly days, it’s kind of hard, you know, oth­er than sort of my gut feel that I’ve just giv­en you, it’s kind of hard to give prob­a­bly any­more, you know, sci­en­tif­ic analy­sis, if you will, I think.

Tony  08:04

I was gonna ask you, how long do you think you need before you’ve rid­den through those cycles? So, all things being equal, the per­for­mance is accu­rate?

Simon  08:11

Yeah, I mean, maybe not so much accu­rate is the right descrip­tion — because it’s accu­rate now — but in terms of imply­ing…

Tony  08:18

Reflec­tive.

Simon  08:18

… Con­clu­sions, yeah, from dif­fer­ent styles, prob­a­bly three or four years, I guess. I mean, what it is a very long term? An aver­age stock mar­ket cycle is what, maybe fif­teen years, right? From boom, to bust, to boom again. Again, I stand to be cor­rect­ed, but this is just broad num­bers. You know, most of my clients, if they’ve got direct equi­ties, I say, “look, you need to be in it for at least five, prefer­ably sev­en, prefer­ably longer.” Not nec­es­sary say­ing this won’t be of val­ue now. And I think what’s inter­est­ing is over time, if we, you know, do like a game board approach — have you heard of the game board? You know, Van­guard pub­lished their game board where every year they’ve got the six or sev­en major asset class­es and they’re colour cod­ed, and each year they’re kind of shift­ing around? So, with, obvi­ous­ly, the top being, in that year, the top code or asset class being the best per­former, and num­ber sev­en or eight being the worst. And the point of the chart with Van­guard is to show that it’s very hard to pick one asset class and con­sis­tent­ly see it per­form over time at the top of the game­board. So, one idea we’re work­ing on as we get more data sets for these newslet­ters is to pos­si­bly have a game board. And again, that’d be a great way to fig­ure out whether these guys are lucky or they’re doing some­thing con­sis­tent­ly and repeat­able. So, time will tell I think, on that front.

Tony  09:25

And I think the key is the game board does­n’t just have the lat­est peri­od, it also has since incep­tion in his­to­ry.

Simon  09:31

That’s right.

Tony  09:32

Yeah, that’s the real chal­leng­ing thing, I think, because as you say, every dog is going to have its day in the short term. It’s the ones that have sur­vived and are con­sis­tent that’s impor­tant.

Simon  09:41

As my old boss used to say, even a bro­ken clock is right twice a day.

Tony  09:45

Yeah.

Cameron  09:46

And just with that, in terms of, you know, you said at the begin­ning that these newslet­ters, some of them have been around a long time. But your his­to­ry on them with TING only goes back two years. Is there any rea­son why you can’t grab the last ten years of their rec­om­men­da­tions and throw those into a report?

Simon  10:03

I think it’d be extreme­ly labour inten­sive, if at all, they were, you know, open to giv­ing me that infor­ma­tion. So, the­o­ret­i­cal­ly, the answer would be yes, right? But, you know, how many resources do we have? How many hours in the day? And this is assum­ing that all of these guys would open up their books and give us their rec­om­men­da­tions ten years ago?

Cameron  10:20

Why would­n’t they?

Simon  10:21

Pos­si­bly, but yeah, pos­si­bly not.

Cameron  10:25

If they’ve done a good job, just tell them to send you a spread­sheet.

Simon  10:29

noth­ing to hide, right?

Cameron  10:31

No. I mean, it’s like, if they say, “oh, no, we don’t want to do that,” you just put that on your web­site. “We invit­ed them to give us their rec­om­men­da­tions for the last ten years, they declined, read into that what you will.”

Simon  10:44

I’m not mak­ing friends in a hur­ry here, am I?

Tony  10:47

Oh, no, you’re our friend.

Simon  10:51

That’s all that counts, guys.

Tony  10:53

I guess the oth­er point to make, just on that, is that a lot of these newslet­ters also have a fund, and you can cer­tain­ly look at the fund his­to­ry. I’ve often found that the fund is rad­i­cal­ly dif­fer­ent in its per­for­mance to the newslet­ter if they actu­al­ly declare a per­for­mance in the newslet­ter.

Simon  11:09

Good point. And, again, you’ve got to, I guess, as a poten­tial sub­scriber, you know, think about what axes these guys might have to grind, if any axe, you know. So, are they pro­duc­ing green­house prod­ucts? That’s a great exam­ple, Tony, are they run­ning funds, are they launch­ing ETFs, and how does that work with this busi­ness, and is it con­flict­ed? All those kinds of things as well. So, there’s a lot more work one can do as a researcher on this stuff. We’re just kind of chal­lenged by resources and time and what’s going to be… But yeah, great sug­ges­tions, great insight. And case in point: Intel­li­gent Investor, which is, you know, Alan Kohler, Eure­ka report, they’ve been around a very long time, well-fund­ed, well backed. Alan Kohler is an amaz­ing com­men­ta­tor, but a ter­ri­ble mar­ket *timer*. Ridicu­lous. And he’s the first per­son to say that, too. Luck­i­ly, he does­n’t run the newslet­ter ser­vice for the stock pick­ing, as you prob­a­bly know. But any­way, they’ve launched the inter­na­tion­al share fund, like, just over the week­end, I think, and they’re push­ing that in their newslet­ters. It’s a free world, right? But the trick is to under­stand, where’s their edge? What’s their busi­ness mod­el. So, again, it’s about going in eyes open. And hope­ful­ly, as a start, a tool like this can at least help peo­ple fast track some of the infor­ma­tion they might be look­ing for to make a deci­sion.

Alan Kohler  12:21

“It is dif­fer­ent every time. It’s always dif­fer­ent, Tony, it’s nev­er the same.” *Record­ing from pre­vi­ous episode*

Cameron  12:26

Sor­ry, that’s my, I have to put in an Alan Kohler clip telling Tony that “this time it’s dif­fer­ent” every time we men­tion Alan Kohler. I’m con­trac­tu­al­ly oblig­ed to play that clip,

Simon  12:35

Is there like a dol­lar jar or some­thing? You put $1 in the jar?

Cameron  12:37

Yeah.

Simon  12:38

Buy a round of drinks on Fri­day.

Tony  12:40

We usu­al­ly play it when some­one says, “this time, it’s dif­fer­ent.” You know, “Bit­coins gonna go to the moon, and Gamestop is gonna go to the moon.”

Cameron  12:48

“Inter­est rates are always going to be low.”

Simon  12:51

For­ev­er.

Cameron  12:51

We had Alan on the show a few years ago, and he was try­ing to tell Tony, “this time, it’s dif­fer­ent.” It was clas­sic.

Simon  12:58

I would’ve loved to be a fly on the wall.

Tony  12:59

Just wind­ing back the con­ver­sa­tion on how you man­age the web­site. So, you said that you put togeth­er a dum­my port­fo­lio from each newslet­ter and then rebal­ance it. So, that may or may not affect per­for­mance, because a lot of these newslet­ters don’t tell you how to actu­al­ly invest, they just say, “here’s a rec­om­men­da­tion,” and it’s up to you to decide how big your port­fo­lio is when you buy and sell. So, why did you pick rebal­anc­ing, and not just buy and hold or some oth­er style of invest­ing?

Simon  13:27

There had to be some rules around it. And again, because they’re all dif­fer­ent, a dif­fer­ent lan­guage, we had to kind of come up with some kind of trig­ger or cat­a­lyst for a change based on their changes or their rat­ing changes. So, basi­cal­ly, for exam­ple, with Intel­li­gent Investor, which is, as you would know, a more tra­di­tion­al style of newslet­ter, kind of like a stockbroker’s report, fun­da­men­tal analy­sis and entry price, etc. And they have a buy list, and they have a hold list, etc. So, obvi­ous­ly, because we’re try­ing to repli­cate the jour­ney of a typ­i­cal investor, but not some­one who’s star­ing at a screen every day for every minute, we thought, well, we’ve got to draw a line in the sand and kind of come up with a bal­anced approach — that’s not the right word, but, you know, what’s a suit­able time­frame to review the port­fo­lio? So, we thought at mon­th’s end is a good time to do that. And so, basi­cal­ly, in the case of Intel­li­gent Investor’s port­fo­lio, end of each month, if it’s still there on the buy list, great, we’ll keep it. If it’s on the hold list, well, it’s prob­a­bly still got a good chance we’ll keep it as well. So, that’s just the rule for that one. If it drops off, then we sell it and we buy the newest rec­om­mend­ed buy on the fresh list, so to speak. So, repeat that process con­sis­tent­ly every sin­gle month. What’s been inter­est­ing about Intel­li­gent Investor is, in terms of rank­ing of turnover, it’s been one of the low­est of the uni­verse that we analyse. And as you can see, the best per­former as well. So, whether there’s a mes­sage in low turnover gets bet­ter results, like that’s anoth­er insight, you know, over time we might be able to gar­ner as well.

Tony  14:51

How do you invest, Simon, after look­ing at all these newslet­ters? Do you fol­low one your­self or try and take the best of each, or what?

Simon  14:57

So, I’ll answer that in two ways. The sec­ond bit first. Anoth­er prod­uct that we’re work­ing on, and you know, over time we might put some­thing togeth­er, is try­ing to build what we call a TING best dol­lar or a TING bas­ket, and maybe what­ev­er sys­tem we devel­op to cher­ry pick the top one or two from each of the providers, and then run that port­fo­lio and see how we go. So, that’s some­thing, again, in the devel­op­ment pipeline down the track, poten­tial­ly, but in terms of how I do per­son­al­ly, kind of my style, and it’s not a rec­om­men­da­tion, just answer­ing your ques­tion, I’m pret­ty much a val­ue type investor. You know, I have an account­ing and finance degree, I worked on a trad­ing desk for fif­teen years, finan­cial plan­ner for com­ing up on fif­teen as well. So, just the num­bers to me work, that’s just the way my brain works. But you’ve got to have good risk man­age­ment, the right mind­set, over­come those emo­tions when you’re los­ing mon­ey. And that’s the hard­est part, right, with any of these sys­tems, real­ly? Is stick­ing with it when you go through a tough peri­od. But broad­ly speak­ing, that’s what I’m attract­ed to, that style of approach. So, obvi­ous­ly, the Buf­fett style. You guys talk a lot about that on your web­site, as well, I’ve noticed. So, I can’t stress enough that’s what works for me. If you’re not that kind of per­son or investor, and you sub­scribe to a val­ue newslet­ter, it’s gonna be a dis­as­ter, right? Because you won’t be able to stick with it. I mean, you hope that you do, right? So, again, anoth­er idea with this is to try to fig­ure out, well, I kind of liked the way that Stock­o­pe­dia works. I’m a num­bers guy and datasets real­ly appealed to me, and I love to screen and cut and divide and cher­ry pick and have all these themes or a return on equi­ty fil­ter, or what­ev­er it might be. So, that’s great for that kind of men­tal­i­ty or think­ing or analysing process. But oth­er peo­ple might be visu­al. So, the Snowflake’s approach on Sim­ply Wall Street, right? It’s a real­ly quick, effi­cient way, if you’re a visu­al per­son. “Great, here’s how I can build my port­fo­lio. I don’t want to spend half an hour read­ing about the lat­est toi­let paper they’ve come up with that’s going to make them extra 1% mar­gin, you know, because they’re out in court.” What­ev­er it is, you know what I mean? So, we are blessed with an abun­dance of dif­fer­ent styles of newslet­ters.

Tony  17:00

I believe that your day job is look­ing after clients and giv­ing them finan­cial advice, do you have a process where you try and take them through the newslet­ters or the dif­fer­ent styles to work out what’s going to work for them when you’re talk­ing with them?

Simon  17:15

We don’t, actu­al­ly. So, this is more devel­oped for those that, I’d say for every client that comes to see us, there’s prob­a­bly five or ten that try to do it them­selves. And so, we’re try­ing to address that gap in that mar­ket and pro­vide a resource for those clients. And as we’ve been say­ing, it’s use­ful for me as well, right? Per­son­al inter­est, my Super­fund, my invest­ment strat­e­gy, etc. But for the most part, they’re pret­ty much stand­alone busi­ness­es, if you will, at this point.

Tony  17:42

Yeah, well, my last ques­tion is prob­a­bly fol­low­ing on from what Cam said: have you had any of the newslet­ter pro­pri­etors con­tact you at all and try to explain the results in more detail?

Tony  17:50

Not yet, but it’s prob­a­bly only a mat­ter of time when word gets out.

Simon  17:51

Cool. I think I’m fin­ished, Cam.

Cameron  17:56

Well, I was gonna ask what kind of feed­back you’ve had from the oth­er newslet­ters? Have you reached out to them and said, “hey, we’re doing this, do you want to help us? Do you want to give us access to your data?” Or any­thing like that? Are you inter­act­ing with them, or are you just doing it at arm’s length?

Simon  18:10

The obvi­ous call would be Intel­li­gent Investor, would­n’t it? The obvi­ous call would be the two that are smash­ing it, because I’m sure they want to get the word out. So, that’s where I would start if I was doing that. But at this stage, I haven’t. You know, it sounds like, again, an obvi­ous thing to do, you guys have got lots of great ideas. It’s real­ly resources at this point more than any­thing, just try­ing to jug­gle my main line busi­ness, and you know, sup­port this sort of research arm as well. So, over time we may do that. Actu­al­ly, I lit­er­al­ly approached Find­er about this, and they said it was­n’t suit­able for them. But pod­casts and just investor edu­ca­tion chan­nels, things like that, real­ly, where there might be inter­est­ed in in peo­ple using this tool.

Tony  18:46

You’ve got to become a Tik­Tok influ­encer — that sounds like a dis­ease. I mean, it’s great what you’re doing. You’re on the same wag­on as we are, try­ing to de-jar­gon the indus­try and show some sun­light on it so peo­ple can do it them­selves. It’s great.

Simon  19:09

Yeah, I mean, the invest­ment field is very democ­ra­tised — it that the right word? Every­body gets a vote, right? Any­body can open an account with a thou­sand bucks. And I mean, a lot of peo­ple should­n’t, but those that do, let’s give them the best that they can, right? And as I was say­ing to Phil on Shares for Begin­ners a few weeks ago, I think, not so much impor­tant is select­ing the right newslet­ter, but stick­ing with the strat­e­gy when you’re hav­ing a rough patch. That’s where you can real­ly do the dam­age or hit the home runs, right? And so, it comes down a bit to the mon­ey man­age­ment and the risk man­age­ment, and I think that’s where a lot of peo­ple fall over as indi­vid­ual investors. So, this is only the start­ing point, right? Buy­ing the stock is prob­a­bly the eas­i­est thing. It’s the rebal­anc­ing, the tak­ing prof­its or cut­ting loss­es, posi­tion siz­ing, all that stuff. Even if you’re not a day trad­er or doing this for a liv­ing as a pro­fes­sion­al, what­ev­er you want to call it. So, I think we’re as an indus­try, there’s still a lot of stuff we could do to help peo­ple fig­ure that out. So, real­ly impor­tant.

Tony  20:06

It’s a good point. And in fact, that’s prob­a­bly an issue — I don’t know if you want to high­light this — but it’s a bit like the league tables that get pre­sent­ed now for fund man­agers. You don’t want peo­ple to chase the top per­form­ing per­son on your list, because they may not, they prob­a­bly won’t be the top per­form­ing per­son the next peri­od; they’ve just had their good run.

Simon  20:26

That’s right. Mean rever­sion, sur­vivor­ship bias. Again, you’d know the dataset prob­a­bly a lot bet­ter than me, but that’s why I think, you know, this is just one tool, right? If over time it devel­ops some insight that there is one or two of these ser­vices that has an edge and they can con­sis­tent­ly repeat it, well, that’d be inter­est­ing and amaz­ing. We’ll see what hap­pens, right, and if time will tell. But we know, you know, empir­i­cal­ly and sta­tis­ti­cal­ly, that val­ue over the very long term does out­per­form. But again, that’s very long term, right? I mean, we’ve had up until about two, three years ago, as you would know, the tra­di­tion­al growth ver­sus val­ue growth has been smash­ing it because of the tech heavy, the tech over­weight in that space. And that’s obvi­ous­ly screened out from a lot of the val­ue investors’ approach­es and funds, and so forth. So, so much of the infor­ma­tion again, you know, the dev­ils in the detail, right? And this is where I think the press have a lot to answer for, even more than our indus­try, is they just are absolute­ly atro­cious at report­ing infor­ma­tion in the right way that gets peo­ple think­ing in the right way and not pan­ick­ing and, you know, fear and greed, it’s just… Okay, again, it gets back to what axe do they have to grind? They want to get eye­balls on their web­site, they want peo­ple to pan­ic or jump or react, because that’s how they get paid. So, again, when you’re doing home­work for a newslet­ter, or a man­aged fund, or an ETF, it’s like, well, you know, what’s their edge? How are they mak­ing their mon­ey off you? And if you know that, you can make bet­ter deci­sions.

Tony  21:47

Yeah, well, accord­ing to the news­pa­pers, were going to be at war with Chi­na in three years’ time. So, this is all kind of irrel­e­vant, real­ly, isn’t it?

Simon  21:53

Oh, there goes a jet now, actu­al­ly. They’re land­ing in Chatswood. Crazy.

Cameron  21:58

You know, our newslet­ter for QAV Light, which we only start­ed about a year ago, one of the rea­sons we did is we were talk­ing to one of our club mem­bers who said that he had some expe­ri­ence with the Mot­ley Fool newslet­ter, and he was say­ing the prob­lem with Mot­ley Fool’s newslet­ter is that they will tell you what to buy, but they don’t tell you when to sell it. And so, peo­ple hold it and don’t know when to let go of it. So, you know, one of the things we do with our Light port­fo­lio is we tell peo­ple when we’re buy­ing some­thing for our port­fo­lio, and when we’re sell­ing it and why we’re sell­ing it, so they know it might be time to let it go. Is that com­mon across the newslet­ters that you’ve looked at? You men­tioned before that they have a buy list, and a hold list and things just don’t appear on the buy list any­more. Is that-do they tell peo­ple when to sell stuff and why to sell stuff that’s pre­vi­ous­ly been on their buy list? Or do they just let peo­ple work it out for them­selves?

Simon  22:57

I think broad­ly speak­ing, yes. It’s a good ques­tion and real­ly impor­tant one, right? Because it’s that mon­ey man­age­ment thing again and try­ing not to blow your­self up. Broad­ly speak­ing, yes, but it varies so wild­ly, Cameron, across the dif­fer­ent newslet­ters. And in some cas­es, they don’t, because it’s not their role. So, again, clas­sic exam­ples like a Stock­o­pe­dia or Sim­ply Wall Street, right? It’s just a num­ber, it’s up to you then to build your own risk man­age­ment sys­tem, which is why, obvi­ous­ly, it’s not for every­body to do that approach. But the more tra­di­tion­al ones that you’ve men­tioned, in one way or anoth­er, they do. But it can be quite slow mov­ing, com­pared to what I’ve read, and what I think you guys do, it’s like, as long as your clients or sub­scribers are watch­ing the email and you’re exit­ing and your rule num­ber ones been acti­vat­ed, which I pre­sume is you know, nev­er lose mon­ey, right? War­ren Buf­fett? Then, you know, that works quite well. But again, got­ta have the per­son that’s watch­ing their inbox, right? Oth­er­wise, they’re going to miss it. So, broad­ly speak­ing, they will address it, but some much bet­ter than oth­ers. Some have hard stop loss­es, like Stocks Down Under, for exam­ple. They’ve got huge volatil­i­ty in their returns, prob­a­bly one of the broad­est REITs, in oth­er words, biggest loss­es and biggest gains, of what we’ve seen so far. And they’re not mas­sive­ly under­per­form­ing the mar­ket, but they have hard stops, right? And broad­ly speak­ing, they aim for 20 to 40% upside, you know, 20% down­side, and I think it’s over­ly sim­pli­fy­ing things some­times, but at least they’ve got a pol­i­cy, right? It’s trans­par­ent. So, if you go in there, you know, okay, great — and like you guys on your web­site — “this is what we’re tar­get­ing, twice the long-term return of the Aussie mar­ket, min­i­mal down­side,” so on and so forth. So, you might have mul­ti­ple small loss­es in yours, like you’ve flagged depend­ing on what time you come into the port­fo­lio, but then a five bag­ger or a ten bag­ger that makes up for it. So, yeah, again, it comes down to, you know, dis­clo­sure, edu­ca­tion, doing your home­work, and first and fore­most know­ing what kind of investor you are, what res­onates with you. Because if you can’t fol­low orders and rip the band aid off when you hit the stop loss, there’s no point even hav­ing a stop loss, right? You’ve got to come up with anoth­er method as your risk man­age­ment. Oth­er­wise, who know what can hap­pen.

Tony  24:59

One of our com­mon ques­tions is, “I missed my sell point and it’s now down 30%. What should I do?”

Simon  25:09

Same answer as last time: sell it.

Tony  25:12

Yeah, two weeks ago.

Simon  25:14

Where were you when we sent the newslet­ter?

Cameron  25:16

The oth­er thing we see a lot with our club mem­bers, par­tic­u­lar­ly new club mem­bers, is they’ll come in and, you know, they’ll know that the rule is to sell-our rule one is if it drops 10% below your buy price to sell and rede­ploy your funds. But quite often we’ll have peo­ple go, “I don’t think so.” They’ll go, “I’m not going to,” you know, they’re going to do it their own way for a while. That usu­al­ly lasts six or twelve months, and then they go, “okay, maybe that was­n’t such a good idea. Maybe I should just fol­low the rules.”

Simon  25:47

Like I say to my kids, you’ve got to learn the hard way some­times.

Tony  25:50

Yeah, true.

Cameron  25:51

Some­times.

Simon  25:52

The pain of loss.

Cameron  25:53

There’s noth­ing wrong with that.

Simon  25:55

It’s how we learn, right, it’s how we grow.

Cameron  25:56

Invest­ing Uni­ver­si­ty. That’s right.

Simon  25:58

Exact­ly.

Cameron  26:00

All right. So, just that URL again, for peo­ple: tinglive.com.au. What does it cost to sub­scribe to tinglive, Simon?

Simon  26:10

At this stage is com­pli­men­ta­ry. So, we’re just build­ing it up, test­ing it. Yeah, the more sup­port we get the bet­ter. Over time, we might come up with some kind of rev­enue pro­gramme or what­ev­er. But at this stage, it’s real­ly just come along, have a look. The next run will be for updat­ed results. So yeah, peo­ple can just jump on and sub­scribe to the reports and see how we go.

Tony  26:33

Excel­lent. Well, real­ly great idea. Maybe you should put the cost of the newslet­ter sub­scrip­tion along beside the results, so you can get an ROI cal­cu­la­tion as well.

Simon  26:41

Again, I’ll give you a call for some con­sult­ing work. I don’t think I could afford you, but any­way.

Tony  26:49

I dun­no, cup of cof­fee. It’s more than you’ll get from Cam, that’s for sure.

Simon  26:56

But yeah, I have thought about that as well. So, yeah, there’s so many ways you can slice this infor­ma­tion. So, it’s real­ly about feed­back, right? I wel­come any sug­ges­tions. And when you sub­scribe, there’s just a short ques­tion in there just ask­ing peo­ple what they’re look­ing for in the newslet­ter, because we want to make some­thing that’s a val­ue to as many peo­ple as pos­si­ble.

Cameron  27:15

Well, any­thing that brings more trans­paren­cy to the invest­ing world I think is a good thing. So, well done, Simon. Con­grat­u­la­tions and best of luck with it. Thanks for com­ing on the show.

Simon  27:25

Thanks guys. Yeah, my plea­sure. Let’s talk again soon.

Tony  27:29

Thank you.

Cameron  27:30

The QAV Pod­cast is a pro­duc­tion of Space­craft Pub­lish­ing Pro­pri­etary Lim­it­ed, autho­rised rep­re­sen­ta­tive of AFSL 520442 AFS, rep­re­sen­ta­tive num­ber 001292718. Please don’t make any invest­ment deci­sions based sole­ly on lis­ten­ing to this pod­cast. This is pre­sent­ed as gen­er­al advice only and not per­son­al finan­cial advice. We don’t know your per­son­al finan­cial cir­cum­stances. Please see a finan­cial plan­ner before mak­ing any invest­ing deci­sions.