QAV #642 — Is This Time Really Different?

 

[00:00:00] Cameron: Every­one record­ing? Yes, I can

[00:00:01] Cameron: see lit­tle red lights. Wel­come back to QAV, TK and ak.

[00:00:08] Cameron: It’s the, Kynas­ton attack with me today. Kynas­ton’s com­ing to me in stereo from Syd­ney. Wel­come, Tony. Wel­come, Alex.

[00:00:16] Tony: Hey Cam

[00:00:18] Alex: Thank you.

[00:00:18] Cameron: Hey, Tony. Why

[00:00:20] Cameron: you wan­na tell every­one why you’re in

[00:00:21] Cameron: Syd­ney? Alex,

[00:00:22] Cameron: sit­ting in the room

[00:00:24] Cameron: adja­cent to the man him­self, you’re TK

[00:00:27] Cameron: adja­cent.

[00:00:29] Alex: Yes, I am. Um,

[00:00:31] Alex: well, we tried to be real­ly

[00:00:32] Alex: clever and sit togeth­er, and of course that did­n’t work. So

[00:00:36] Tony: Our

[00:00:36] Tony: micro­phones

[00:00:37] Tony: bled into each oth­er’s record­ing.

[00:00:39] Alex: Yeah. No, I’m up here cause

[00:00:40] Alex: we, um, my part­ner and I’ve been on a sev­en week tour of

[00:00:46] Alex: the East coast and we’ve come back down to Syd­ney. So we’re here with mum and dad for a

[00:00:50] Alex: cou­ple of nights, which is love­ly and means that I can be here for the record­ing in per­son, kind of togeth­er.

[00:00:58] Alex: Slight­ly separate.[00:01:00]

[00:01:00] Cameron: You’ve been camp­ing around Aus­tralia.

[00:01:03] Alex: Yeah. East coast. So up to Cairns, I got up to the Dain­tree, um, and then back down. Yep. We have a tent on top of a car, which actu­al­ly works real­ly well. I was say­ing to dad just before I slept bet­ter in that tent than I did when we were actu­al­ly stay­ing at peo­ple’s places. So a bit of adjust­ment now back in reg­u­lar beds.

[00:01:23] Cameron: Was it like an air mat­tress or a real mat­tress?

[00:01:27] Alex: No, it was like, um, it was like a foam lay­er.

[00:01:31] Alex: Like two, foam lay­ers that kind of look like an egg car­ton and then sheets on top.

[00:01:37] Cameron: Oh, right. Ah, com­fy. That’s great. What was the high­light of the

[00:01:41] Cameron: trip for you?

[00:01:42] Alex: Um, I’d say K’gari, Fras­er Island. That was pret­ty fan­tas­tic.

[00:01:46] Alex: def­i­nite­ly go back there. And then I Sean, my part­ner did a scu­ba div­ing with a board. thing for three days. And I

[00:01:55] Alex: went on a tour to the Dain­tree and that

[00:01:56] Alex: was pret­ty fan­tas­tic because, we did­n’t real­ly see any­thing all day. We [00:02:00]apparently,

[00:02:00] Alex: appar­ent­ly had a 90 per­cent chance of see­ing croc­o­diles.

[00:02:03] Alex: Did­n’t see any,

[00:02:05] Alex: but

[00:02:05] Alex: as we’re com­ing back to cross back

[00:02:07] Alex: over to the South Dain­tree, there are a bunch of cars that were stop­ping on the road and

[00:02:11] Alex: the tour dri­ver was like, okay, get out your phone. Some­thing’s obvi­ous­ly

[00:02:14] Alex: com­ing up. some­one

[00:02:16] Alex: spot­ted a baby cas­sowary to the left. of the bus. Some­how they’re like brown.

[00:02:21] Alex: So they’re cam­ou­flaged. And then we’re like, Oh, the par­en­t’s around some­where. So we turned around and

[00:02:27] Alex: here’s this like dad cas­sowary, like three meters from us. It was amaz­ing. He was like, he had prob­a­bly a 10 per­cent chance at most of see­ing a cas­sowary.

[00:02:35] Alex: so it was pret­ty spe­cial.

[00:02:38] Cameron: No crocs, but you saw a cas­sowary. How tall was it They’re like huge, right?

[00:02:43] Alex: I think they they’re usu­al­ly

[00:02:44] Alex: around six feet ish. So per­son size, tall

[00:02:47] Alex: per­son

[00:02:48] Alex: size.

[00:02:49] Cameron: Well, that’s fan­tas­tic. I’ve nev­er seen

[00:02:51] Cameron: a cas­sowary in the, in the, in the natures. fan­tas­tic. Yeah, love­ly.

[00:02:57] Alex: cool. So it was [00:03:00] like 34 or some­thing, and then we’re going back to Mel­bourne and it’s about 14. So I’m going back

[00:03:04] Alex: to

[00:03:04] Alex: my nat­ur­al habi­tat.

[00:03:07] Cameron: Mine

[00:03:07] Cameron: too. I’m jeal­ous. It’s 30. 2

[00:03:10] Cameron: degrees in my office in Bris­bane this after­noon. I did­n’t even go upstairs

[00:03:15] Cameron: in the nice air­con, swel­ter­ing. Any­who, how are you TK? How was your trip back from Cape

[00:03:22] Tony: Yeah, good,

[00:03:22] Tony: thank you. it’s been wet the whole time. It’s now caught up with me in Syd­ney and rain­ing today. But yeah, no dra­mas. It was good. Had a, good trip. Had a cou­ple of days to myself at Cape Schanck, which was love­ly and, and then drove back to Mel­bourne and then back to Wag­ga and then back to Syd­ney over the last cou­ple of days.

[00:03:40] Tony: So, good to get out of the car today.

[00:03:45] Cameron: and sit at a desk and do QAV? Well, you could­n’t play

[00:03:48] Cameron: golf

[00:03:48] Tony: Alex and I went down to the gym, so that was good before.

[00:03:51] Cameron: Oh, good. Well, let’s get into it. This is episode 642, we’re record­ing this on the 17th of Octo­ber [00:04:00] 2023, and this time it real­ly might be dif­fer­ent, Tony. I snuck this one in, it was in my notes to you this morn­ing because I read it after that.

[00:04:08] Cameron: Howard Marks in the Finan­cial Review. Being quot­ed this morn­ing. Chan­ti­cleer, Howard Marks just said the most dan­ger­ous words for investors. The Wall Street icon has made one of the biggest calls in his career by pre­dict­ing those who con­fuse brains and a bull mar­ket might be about to suf­fer. Sir John Tem­ple­ton’s famous warn­ing that this time it’s dif­fer­ent.

[00:04:32] Cameron: Com­pris­es the most dan­ger­ous words an investor can utter because they invari­ably mean ratio­nal­iz­ing val­u­a­tions that look high rel­a­tive to his­to­ry. But Howard Marks, the Wall Street icon and founder of Oak­tree Cap­i­tal, says we often for­get that Tem­ple­ton also said the phrase may actu­al­ly be true 20 per­cent of the time.

[00:04:52] Cameron: Which is why Marks feels jus­ti­fied giv­ing his lat­est memo the provoca­tive title, This Time It Real­ly Might [00:05:00] Be Dif­fer­ent. Of course, at this point, I have to play this. It is dif­fer­ent every time. It’s always dif­fer­ent, Tony. It’s nev­er the same. Thank you, Alan Kohler. Uh, here’s Howard Marks cen­tral mes­sage.

[00:05:12] Cameron: The decline in inter­est rates that start­ed around 1980 appears to be over, and mar­kets and economies are start­ing to tran­si­tion to a new regime where eco­nom­ic growth may be slow­er,

[00:05:22] Cameron: prof­it mar­gins may be low­er. Default rates may be high­er, asset val­ues might not keep climb­ing,

[00:05:29] Cameron: mon­ey may not be as easy to bor­row, and investor psy­chol­o­gy may not be as uni­form­ly pos­i­tive.

[00:05:36] Cameron: The final point is impor­tant. Mark says, the vast major­i­ty of investors have, quote, with rel­a­tive­ly few excep­tions, only seen inter­est rates that were either declin­ing or ultra low or both, end quote. But I’ve also lived in a world where easy mon­ey has caused dis­tor­tions that investors have, in effect, grown accus­tomed to.

[00:05:56] Cameron: It caus­es things to be built that oth­er­wise would­n’t have been built, invest­ments to be [00:06:00] made that oth­er­wise would­n’t have been made. And risks to be born that oth­er­wise would­n’t have been accept­ed. Basi­cal­ly, cut a long sto­ry short, what he’s say­ing is that the last 30 years of invest­ing has been an anom­aly with declin­ing and then low inter­est rates.

[00:06:18] Cameron: And any­one who got good returns over that peri­od think they’re genius­es, but real­ly it was just a bull mar­ket and low inter­est rates. And this time it might real­ly be dif­fer­ent. And we could be in a long peri­od now of ris­ing inter­est rates or at least sta­ble high inter­est rates and low­er asset returns, low­er per­form­ing shares.

[00:06:41] Cameron: What do you think about that, Tony? And it also could just be Howard Marks try­ing to get peo­ple to read his memo.

[00:06:48] Tony: oh yeah, I’m not a fan of Howard Marks memo, or Howard Marks real­ly, despite the fact that, you know, obvi­ous­ly I acknowl­edge that he’s been a suc­cess­ful fund man­ag­er and investor over a long peri­od of time, but it [00:07:00] was­n’t, it was only a cou­ple of months ago he was telling us, I think it was him, he was say­ing he was con­vinced by his son to buy tech stocks again.

[00:07:07] Cameron: No, Bit­coin.

[00:07:08] Tony: Pick or some­thing.

[00:07:09] Cameron: cryp­to. Yeah. Buy cryp­to.

[00:07:10] Tony: Yeah. Any­way, but to address his points rather than to address him Yeah, I mean there’s a bit of truth in what he’s say­ing. We have had a Long term decline in bond rates or bond yields I should say And so there has been tail­winds behind the stock mar­ket How­ev­er, it has­n’t been like a steep straight decline from top left to bot­tom right.

[00:07:35] Tony: It’s been plen­ty of inter­est rate ups and downs along the way. And cer­tain­ly dur­ing my invest­ing time, there has been, um, yeah. So, but per­haps we have had a, um, A sweet spot for equi­ty invest­ments, but along the way there were def­i­nite­ly times when inter­est rates were high, at least as high as they are now.

[00:07:56] Tony: And, and you know, the mar­ket did what it did, it’s doing now. It did [00:08:00] just, and it goes through that hor­ri­ble cav­i­ta­tion peri­od where there’s some kind of shake­out and dif­fer­ence of opin­ions, and then even­tu­al­ly it cor­rects itself and keeps going because The mar­ket’s been around for more than the last 30 years, and it’s been going up for more than the last 30 years.

[00:08:15] Tony: So, longer term, it’s been, it’s been going up for the last 100, 150 years. So, you know, it will con­tin­ue to do so, but it’ll be dif­fer­ent sec­tors. high inter­est rates will favor some sec­tors over oth­ers. They cer­tain­ly won’t favor the rock­et to the moon. unprof­itable, you know, start­up com­pa­nies that are going to be uni­corns sup­pos­ed­ly, and there­fore you pile in with cheap mon­ey.

[00:08:42] Tony: and it will favor. More sol­id qual­i­ty com­pa­nies that have been around for a long time and have been through high inter­est rate cycles before. it’ll prob­a­bly, I think it’ll prob­a­bly favor banks, and finan­cial type stocks, may hurt com­modi­ties, but again, some­times the cycles and com­modi­ties.

[00:08:59] Tony: [00:09:00] isn’t, isn’t one to one cor­re­la­tion with inter­est rates. So yeah, so there’ll be swings and round­abouts as there always is. stock mar­ket’s not going to close. It’s not going to go broke. it’ll even­tu­al­ly ride itself in this cur­rent envi­ron­ment and get on with it.

[00:09:11] Cameron: So busi­ness as usu­al,

[00:09:12] Cameron: you

[00:09:13] Tony: Yeah. Yeah. I mean, there’s a lot of peo­ple out there try­ing to grab head­lines and I’m not one of them, but it’s just like, yeah, like it’s, this time isn’t dif­fer­ent. If you take a long enough time scale, we’ve been through this before, we’ve been through wars in the Mid­dle East, we’ve been through oil shocks far worse than this, we’ve been through inter­est rates much, much high­er than this,

[00:09:39] Tony: all those things

[00:09:39] Tony: that, you know, the mar­ket’s

[00:09:41] Tony: seen before, and yet it still trudges along, going

[00:09:45] Tony: up the hill to a sort of aver­age sort of 9 or 10 per­cent return over a long peri­od of time.

[00:09:51] Cameron: What were the inter­est rates like in

[00:09:53] Cameron: Aus­tralia in the, ear­ly nineties?

[00:09:57] Tony: Ear­ly 90s. So that was the… [00:10:00] Reces­sion we had to have. And yeah, I

[00:10:02] Tony: mean, the first mort­gage I had on a house had a 15. 75 per­cent mort­gage rate against it. So bond yields were prob­a­bly around about nine or 10%. And you know, the, the, the inter­est­ing thing about the, the. Eco­nom­ic envi­ron­ment when some­thing like that hap­pens is it favors retirees and, and, and peo­ple who just want a safe return.

[00:10:23] Tony: They put their mon­ey into banks, get paid a decent yield, or they put their mon­ey into annu­ities and get paid a decent rate of return, and they

[00:10:31] Tony: retire hap­py and safe

[00:10:33] Tony: and pull a car­a­van around Aus­tralia until they fall off the perch and don’t, don’t have to

[00:10:37] Tony: wor­ry about their, their income. So to some extent, that mon­ey goes out­ta the stock mar­ket and goes into.

[00:10:43] Tony: You know, bond or bond like,

[00:10:46] Tony: prod­ucts like annu­ities. but there’s still a heck of a lot of mon­ey left in the stock mar­ket.

[00:10:50] Tony: And, you know, again, when that

[00:10:52] Tony: peri­od of adjust­ment wash­es through, busi­ness gets on with it and the stock mar­ket starts to climb again.[00:11:00]

[00:11:00] Cameron: Look­ing at the All Ords, Sep­tem­ber 1990 it was around about 1, 400 and 10 years lat­er it was about 3, 200.

[00:11:10] Tony: Right.

[00:11:11] Cameron: at least some of that peri­od we had a high, much, much, much high­er inter­est rates than we have now. The mar­ket seemed to han­dle it okay.

[00:11:18] Tony: Yeah. And that tends to be the case. It’s more, I guess, you know, I’m not, I’m not going to pro­duce any fac­tu­al evi­dence for this. My feel­ing is that it’s the turn­ing points that the mar­ket does­n’t like when it goes from easy mon­ey to pay­ing a more real­is­tic or aver­age amount for bond yields or bor­row­ings, that it, it’s that kind of turn­ing peri­od in the mar­ket, the mar­ket becomes man­ic depres­sive for a while and then set­tles down and shakes out, you know, all the com­pa­nies that can’t afford to pay.

[00:11:49] Tony: And just like it does­n’t reverse when, you know, if inter­est rates start to decline again, the mar­ket will take off. It’ll go through anoth­er peri­od of, you know, adjust­ing to a new envi­ron­ment and [00:12:00] dif­fer­ent sec­tors will have their day in the sun. Yeah, again, obvi­ous­ly with very high inter­est rates, it’s a tough eco­nom­ic sit­u­a­tion.

[00:12:09] Tony: Peo­ple start to go broke. Peo­ple can’t,

[00:12:12] Tony: you know, pay their mort­gages if they lose their jobs, all that kind of thing. So there’s cer­tain­ly, I’m not say­ing it’s sun­ny days all the time, but as you said, the stock mar­ket still went up, over the 10 year peri­od from, from that time on.

[00:12:26] Cameron: Well, and, you know, I guess to be fair, get­ting back to Howard’s point, inter­est rates came down a lot over that 10 year peri­od. I’ve got a chart here that says in 1990 they were at about 18%, 17, 18%. Then they dropped ear­ly 1992, they were down about… 7.5% and then they went down to about five, back up, down, up, down, up.

[00:12:51] Cameron: Came down sort of after the G F C, um, to around about three, 4%. Went up a bit and then came [00:13:00] all the way down to 2022. So in that peri­od from, so 2012 to 2022, we saw a decline all the way down to zero. But there was a peri­od there def­i­nite­ly from like 2000 up to 2010. Where they, they went up by 50 per­cent rough­ly, went from just below five up to sev­en and a half.

[00:13:21] Cameron: Um, so

[00:13:24] Tony: And yet that was my sweet spot for

[00:13:25] Tony: returns because it was com­ing out of the GFC. and again, the mar­ket was adjust­ing. There was a, if I remem­ber in about 2012, there was some kind of mini crash in com­modi­ties and every­one was throw­ing their

[00:13:37] Tony: hands up and, like that peri­od between 2010 and 2012, there was just tremen­dous tur­moil, erup­tions in the mar­ket, and

[00:13:46] Tony: I made heaps of mon­ey by just fol­low­ing the process.

[00:13:50] Cameron: actu­al­ly I was talk­ing about the decade before that from like 2000 to 2008, lead­ing up to the GFC. Real­ly?

[00:13:57] Tony: Same thing though, you know, it was [00:14:00] the tech crash com­ing out of 2000, then it was the World Trade Cen­ter, then it was the sec­ond Gulf War, which meant oil prices were going through the roof. It’s very rem­i­nis­cent of today’s mar­ket, where you have Peo­ple like Dalio and Howard Marks com­ing out and say­ing, Oh my God, this is, you know, this time it’s dif­fer­ent.

[00:14:22] Tony: We’ve nev­er had this before and that before, and this all hap­pen­ing at the same time, and it’s a crazy place and all this kind of stuff and, you know, grab­bing head­lines. But again, it was a real­ly prof­itable time for me to invest. I seem to recall, I start­ed real­ly going in heavy in the mar­ket. After the World Trade Cen­ter col­lapsed, um, and in about 2003 2004, the mar­ket went into a bull run all the way through until 2007 2008 with the GFC.

[00:14:53] Tony: So,

[00:14:54] Cameron: yeah, I’m look­ing at it here, the All Ords, August, Sep­tem­ber 2000 was, [00:15:00] 3200, as I said ear­li­er, 3200, by, end of 2007, it was 6, 779.

[00:15:10] Tony: not much, not much more than that today though, isn’t it?

[00:15:14] Cameron: Yeah, that’s right. It dou­bled over that eight year peri­od when inter­est rates were, went up by 50%.

[00:15:22] Tony: Yeah.

[00:15:23] Cameron: So not a lot of cor­re­la­tion, at least in that. So any­way, there you go.

[00:15:28] Cameron: That’s enough of that sto­ry. Let’s move on.

[00:15:31] Tony: And that’s what I find with Howard Marks. That’s, that’s kind of how I’ve always approached these, his

[00:15:35] Cameron: not always on the mark.

[00:15:38] Tony: Yeah, it’s, uh, yeah, enough of that update. Move on. That’s prob­a­bly the best com­men­tary you can have on him.

[00:15:43] Cameron: All right. Mar­ket updates. Uh, well, it’s a shit show out there. Let’s just,

[00:15:50] Tony: But this time it’s dif­fer­ent.

[00:15:51] Cameron: it. gold is a buy though, we, we agreed off air, which meant that a cou­ple of good com­pa­nies became a buy for [00:16:00] us this week, WGX and RMS, Large Cap Stocks, so check those out folks if you haven’t already, I have added a bit to my per­son­al port­fo­lio and the live port­fo­lio.

[00:16:12] Cameron: We’ve already held some RMS, but they both went through a quick sort of spike yes­ter­day too. Appar­ent­ly we’re not the only peo­ple who pay atten­tion to the gold three point trend line, I think, because both of those, when they hit our radar yes­ter­day, were already spik­ing. So get in there while you can, if you want.

[00:16:32] Cameron: Do not take that as finan­cial advice. See your accoun­tant. Talk to a finan­cial advi­sor first, but check them out. Port­fo­lio update! It’s going well, but, I did sit down this morn­ing to do my week­ly report to fol­low up on the con­ver­sa­tion we had last week about large caps ver­sus small caps in the dum­my port­fo­lio. I don’t know if you saw my

[00:16:56] Cameron: newslet­ter that I sent out this morn­ing, you saw that? Did you see, you saw the break­down? [00:17:00] So if I look at all of the stocks that we’ve held this finan­cial year, And then, divide them up by large caps, and large caps is mar­ket cap over a bil­lion, and small caps, I’m just say­ing any­thing under a bil­lion.

[00:17:15] Cameron: It does seem that, like, our high­est per­form­ing stock is SMR, which is a large cap stock, it’s up 45 per­cent so far this finan­cial year, and I’m only look­ing at this finan­cial year. But, Over­all, the large caps, haven’t per­formed as well as the small caps. That said, we have twice as many small caps as we have large caps.

[00:17:39] Cameron: So, you know, I don’t know how, I don’t know how to make sense of that, real­ly. I mean, I guess I’m buy­ing small caps because large caps just aren’t on the buy list as often as small caps are. Or, you know, at, at, dur­ing the mar­ket, volatil­i­ty, the small caps became buys before large caps did. Pos­si­bly because a lot [00:18:00] of them don’t have the same amount of eye­balls or cov­er­age or ana­lysts.

[00:18:03] Cameron: And we pick them up before the rest of the mar­ket does. But any­way, for what­ev­er rea­son,

[00:18:07] Cameron: we bought… More small cap stocks than we have large cap stocks. We’ve held this finan­cial year and they’ve cer­tain­ly out­per­formed as far as their port­fo­lio is con­cerned.

[00:18:17] Tony: And look, that, that makes sense because as you said, like if you look at the ASX, which is ranked by mar­ket cap, you know, the ASX 300 is 300 stocks, but you know, stocks over a bil­lion dol­lars, I’m going to guess and say it’s maybe 30, 40 stocks fit that cri­te­ria. I’m not sure what the num­ber is, but it’s going to be a, it’s going to be a lot more small cap stocks that you, you can shop, you know, to find things to buy than there are large cap stocks.

[00:18:44] Tony: So that’s just a fac­tor of. Using a mar­ket cap weight­ing of the ASX, so that’s the first thing. the sec­ond thing is that… It’s, you know, makes log­i­cal sense that a small cap has poten­tial­ly a lot high­er to go if it takes off than [00:19:00] a large cap stock does. but, but you bor­row, but you know, on a risk adjust­ed basis, it does­n’t say you should put all your mon­ey in small caps because they can also go down quite quick­ly too.

[00:19:11] Tony: They’re just more volatile and large caps tend to be less volatile. And as I said, as well, there are, you know, It does tend to move in cycles where small caps under­per­form and large caps out­per­form and then vice ver­sa. So, yeah, it’s, it’s, to me, it’s nev­er been a the­mat­ic thing about whether you buy a small cap or a large cap, it’s just, uh, buy the next thing on the buy list.

[00:19:33] Cameron: And obvi­ous­ly peo­ple like your­self and those of us that are trad­ing in our super port­fo­lios where we have large ADT, large mar­ket cap restric­tions, you know, we don’t have the choice. Any­way, you have to buy large cap stocks. So the play­ing field is lim­it­ed, but it does explain why I think it was Steven who point­ed out in an email to me last week that.

[00:19:54] Cameron: He has a high ADT restric­tion as well. And that his per­for­mance over [00:20:00]the last cou­ple of years has been aligned with yours and my super port­fo­lio, uh, as opposed to the dum­my port­fo­lio. And I think his the­sis is prob­a­bly cor­rect that it’s been the small cap stocks that have, uh, helped the dum­my port­fo­lio out­per­form our, uh, Own port­fo­lios.

[00:20:19] Tony: And the bench­mark. Yeah.

[00:20:22] Cameron: Yes. Yeah, exact­ly.

[00:20:24] Tony: I think so. I mean, the only oth­er thing I can think of is that, you know, now QAVs are out there and we’re trans­par­ent with when we buy and sell and, um, you know, maybe our mem­bers are all buy­ing and sell­ing at the same time. And they’re all, they, the major­i­ty of them have an ASX 300 thresh­old, uh, and we’re step­ping on each oth­er’s toes in some way.

[00:20:45] Tony: And maybe peo­ple lis­ten­ing in who aren’t even QAV mem­bers are also fol­low­ing what we do You know, jam­ming

[00:20:50] Tony: us,

[00:20:50] Cameron: be a good thing though, if

[00:20:51] Tony: I would have thought,

[00:20:53] Cameron: it would push the price up, not down.

[00:20:56] Tony: well, yeah, that’s what I thought too. I mean, I was think­ing about this a lot [00:21:00]lately as one of the, you know, things is that in my thoughts about why have I only per­formed for the last two years or, you know, it’s been, been while I’ve been doing QAV, um, and If every­one buys at exact­ly the same time, and then that buy­ing sort of pres­sure stops, maybe the stock retreats again, and we force the sell, and then we all sell on the same day, and then it rebounds again after a lit­tle while after that, so there could be some­thing in it, but I haven’t been able to fig­ure out exact­ly what, with any sort of fac­tu­al analy­sis yet.

[00:21:31] Cameron: Well, that’s a the­o­ry. Alright, there you have it peo­ple. Don’t buy what Tony’s buy­ing.

[00:21:36] Tony: you be a bit ran­dom out there please, peo­ple?

[00:21:39] Cameron: Yeah… You’re mess­ing with his returns. Hey, can you um, pull up the bread lat­er for me? I got a tech­ni­cal ques­tion to ask him.

[00:21:46] Tony: Go

[00:21:47] Cameron: Bring up… Bring up PGH. I’ve had a cou­ple… like this recent­ly, both in terms of look­ing at US stocks and, uh, Aus­tralian stocks. So you can see on the chart that the [00:22:00] bread let­ter says that it’s above its sec­ond buy line,

[00:22:02] Tony: Yes.

[00:22:04] Cameron: it’s been a Josephine late­ly.

[00:22:07] Tony: Yeah, it’s just gone above it. It’s above that now. Yep.

[00:22:11] Cameron: just gone above the sell line, but in my mind, it’s still a Josephine because it’s got anoth­er lit­tle peak there on the right of the sec­ond buy line.

[00:22:20] Cameron: So apolo­gies for peo­ple lis­ten­ing to this at home, but just trust me. So, so to the right of the sec­ond buy line, there’s anoth­er lit­tle peak and then it drops down again. Now. When I spoke to Brett about this yes­ter­day with respect to anoth­er stock, he said, well, it’s because, and if you drew a ruler between the H1 and then that lit­tle peak on the right there, it does­n’t cross the line.

[00:22:47] Cameron: It just goes straight through the two peaks and there’s no third point for a three point trend line,

[00:22:55] Tony: Right. Okay. Yep.

[00:22:56] Cameron: Because it just cuts straight through that. So he said the way the [00:23:00] code works is it needs to be able to find that third point where the graph cross­es it. Which is why it’s not draw­ing a sec­ond byline there, but I think, to me, that’s still a Josephine.

[00:23:11] Cameron: Now, I could just draw anoth­er line through that and say, well, it’s above that line, and there­fore it’s good to go. But that’s not a three point line, real­ly, so… I’m left won­der­ing, should I just shut up and lis­ten to the Bre­da lat­er on this, or, and say, no, it’s not a Josephine, even though it has dropped back a bit from its month end a cou­ple of months ago,

[00:23:35] Cameron: or,

[00:23:36] Tony: look­ing at the bread lat­er and it’s the cur­rent price for PGH is 72 cents. Pre­vi­ous month clos­es 70. So it’s, I

[00:23:44] Tony: think it’s, it’s not, it’s above its buy line and it’s not a Josephine. I think it’s a buy.

[00:23:49] Cameron: yeah, but you go back a cou­ple of months and it was high­er than that. So there’s

[00:23:51] Cameron: a, there’s a lit­tle peak there

[00:23:53] Cameron: that’s high­er than 73 cents, go back two months.

[00:23:57] Tony: So you’re say­ing like if it was last month and there was a, it was a [00:24:00]Josephine

[00:24:00] Tony: last month. Yeah.

[00:24:03] Cameron: Well

[00:24:03] Cameron: even, uh, yeah, like it’s

[00:24:06] Cameron: it’s gone up and it’s been retreat­ing,

[00:24:08] Cameron: it’s, and I can’t draw a sec­ond byline through that

[00:24:12] Cameron: peak.

[00:24:14] Tony: Yep. So you’re say­ing the short term trend is down, is what you’re say­ing?

[00:24:19] Cameron: Yes.

[00:24:20] Tony: Yeah, except it has turned up in the last cou­ple of days it looks like, or this month.

[00:24:25] Cameron: Yeah. It’s peaked up above the month close, but the month close was down on the

[00:24:29] Cameron: pre­vi­ous month close, which was down on the pre­vi­ous mon­th’s close. So I don’t know. I look at that and I go, well, is that pos­i­tive sen­ti­ment or not? Yeah.

[00:24:38] Tony: Well, I think the first thing to say is if you’re not con­fi­dent and you think it’s not pos­i­tive sen­ti­ment, then don’t buy it. But for me, the way I’m look­ing at the graph is it could be a falling knife, but the speed at which it’s the graph is descend­ing has stopped and actu­al­ly turned around kind of. We got a flat bot­tom back in May when the price was 65 cents and it’s hold­ing [00:25:00] above that.

[00:25:00] Tony: So, um, I under­stand what you’re say­ing, but I’m look­ing at it say­ing it could also be the start of an uptrend, but you know, there’s no rush to buy. You could wait anoth­er month and see what hap­pens.

[00:25:10] Cameron: yeah, well, there’s not a lot to buy at the moment though, so, this, this was at the top of my buy list, and I was like, yeah, I don’t know, yeah, okay, I just want­ed to get your thoughts on how to read a chart like that, but at the end of the day, like, I do go by my gut now, if I, if, if, if the chart says it’s a buy, but to me it looks a bit slip­pery, I’m like, hmm, yeah,

[00:25:34] Cameron: I

[00:25:34] Tony: by your gut now. Your gut,

[00:25:35] Cameron: Yeah, yeah,

[00:25:36] Cameron: yeah,

[00:25:36] Tony: works a lot bet­ter than 30 years of invest­ing

[00:25:38] Cameron: Ha ha

[00:25:39] Tony: Okay, good. That’s great. Can we, can we do a pod­cast with your gut? Hel­lo, wel­come to Cam’s gut.

[00:25:45] Cameron: Ha ha ha ha ha ha ha ha ha. Hel­lo! I just watched that Sein­feld episode last night, where his

[00:25:51] Cameron: girl­friend’s stom­ach makes rum­bling nois­es and he turns it into a lit­tle char­ac­ter. La la la! And she gets upset and leaves him.

[00:25:59] Cameron: [00:26:00] Any­hoo. no, it’s just, it’s not the process. It’s, I’m not sure that the, the rules in the chart, uh, accu­rate­ly telling me that it’s above a sec­ond byline or not.

[00:26:12] Tony: Okay. No, that’s fair. I think if you’re unsure, then don’t go. It looks fine to me. I trust the bread lat­er, but, um,

[00:26:20] Tony: yeah.

[00:26:20] Cameron: what you’re say­ing is if

[00:26:21] Cameron: I don’t know, I should vote no.

[00:26:24] Tony: Oh, don’t start

[00:26:25] Tony: that.

[00:26:26] Cameron: Oh! Ha, ha, ha, ha, ha, ha,

[00:26:28] Tony: oh, oh boy. Thank you for bring­ing that up again, I thought I

[00:26:31] Cameron: ha, ha, ha, ha, ha. Man, I’ve been, I’ve been just, I don’t know, depressed the last cou­ple of days,

[00:26:38] Tony: Yeah, I’m so ashamed to be Aus­tralian.

[00:26:41] Cameron: Me too, I’m embar­rassed to be Aus­tralian

[00:26:43] Tony: mis­er­able bas­tards out there.

[00:26:46] Cameron: I can’t, I just, uh, any­way, let’s not get into that.

[00:26:50] Tony: No, Alex and I have already had a half, hour or two of griev­ing over that one.

[00:26:55] Cameron: yeah. Oh, man, just. Yeah, I don’t know. I’ve got [00:27:00] noth­ing to say. Chuck Feeney died, Tony.

[00:27:04] Tony: Yeah, I actu­al­ly did­n’t know about him until you sent me the link. I prob­a­bly would have come across him, but I had­n’t remem­bered who he was.

[00:27:13] Cameron: Um, the man that War­ren Buf­fett called My Hero died aged 92. And appar­ent­ly he is the guy that put togeth­er the Giv­ing Pledge, by the sounds of it. He was a bil­lion­aire. Made his mon­ey through invest­ing in cig­a­rettes, sand­wich­es, liquor,

[00:27:37] Tony: Duty Free Stores,

[00:27:39] Cameron: S. ser­vice­men. Yeah, duty free to U. S. ser­vice­men over­seas in the 50s and 60s.

[00:27:45] Cameron: Uh, inter­est­ing­ly, tried to keep his name out of the media. Par­tial­ly because of all of the tax free ben­e­fits he was get­ting from sell­ing stuff duty free, as I under­stand it. But! Also decid­ed he was going to give [00:28:00] away all of his wealth. He famous­ly said, I want the last check I ever write to bounce. I’m not sure if that actu­al­ly hap­pened, but he gave away,

[00:28:09] Tony: That’s your mot­to too, isn’t it? And the one before that, and the one before

[00:28:15] Cameron: is, I just hope the next check I write does­n’t bounce. I just, uh, um, the, uh, don’t depress, I’m already depressed over the vote. Tony, don’t depress me more. He, uh, he appar­ent­ly gave away every­thing, all of his bil­lions, left, kept 2 mil­lion for him­self and his wife to live on. Um, so not noth­ing. But, uh, he and his wife lived in a two bed­room apart­ment in San Fran­cis­co, drove an old Vol­vo.

[00:28:45] Cameron: Trav­eled econ­o­my class and com­mer­cial air­lines, but gave away 99. 975 per­cent of his

[00:28:53] Cameron: for­tune, accord­ing to Moth­er Jones. He kept about 25

[00:28:57] Cameron: for every 100, 000 he gave away.[00:29:00]

[00:29:01] Tony: that’s impres­sive. Um, Alex, what do you think about that? Shall I give away all my mon­ey?

[00:29:05] Tony: Before you inher­it?

[00:29:07] Alex: Well, I’m going to be a super famous artist, so,

[00:29:10] Alex: you

[00:29:10] Alex: know,

[00:29:11] Alex: enjoy your life.

[00:29:12] Tony: I agree.

[00:29:13] Alex: Just putting some pos­i­tive think­ing out

[00:29:15] Cameron: Oh, that’s on record

[00:29:16] Tony: yeah, so as soon as you sell a paint­ing for a mil­lion bucks, I can start

[00:29:20] Tony: giv­ing

[00:29:21] Alex: Sure. as soon as

[00:29:22] Alex: you

[00:29:22] Alex: start buy­ing my

[00:29:23] Alex: paint­ings for a mil­lion bucks,

[00:29:24] Alex: you’re going to start

[00:29:24] Alex: giv­ing it away.

[00:29:26] Tony: Right, so I give the, I buy the paint­ings off you and then you give the mon­ey

[00:29:30] Alex: Uh, that’s, yeah, no, not quite.

[00:29:37] Tony: Any­way, yeah, I mean, it’s a great sto­ry. If, um, peo­ple should look him up. I was actu­al­ly impressed by the sec­ond arti­cle you sent me about how he’d giv­en a heap of mon­ey to sci­en­tif­ic research in Queens­land.

[00:29:49] Cameron: Yep, he helped fund the Uni­ver­si­ty of Queens­land, the Queens­land Uni­ver­si­ty of Tech­nol­o­gy, the Insti­tute for Mol­e­c­u­lar Bio­science, Aus­tralian Insti­tute for Bio­engi­neer­ing and [00:30:00] Nan­otech­nol­o­gy, the UQ Cen­tre for Clin­i­cal Research and the Queens­land Brain Insti­tute. He is QUT and

[00:30:09] Tony: small­est Insti­tute? We need a big­ger

[00:30:11] Tony: micro­scope. We need a big­ger micro­scope at the Queens­land Brain Insti­tute.

[00:30:15] Cameron: Yeah, well, it’s sim­ple research. They just go, yeah, we could­n’t find any. Let’s move on.

[00:30:20] Tony: Yeah. Dark mat­ter. That’s what we call it.

[00:30:22] Cameron: He was QUT’s and UQ’s great­est indi­vid­ual donor. And there’s a walk­way at the uni­ver­si­ty named in his hon­or. Uni­ver­si­ty of Queens­land, Feeney Way. I’ve walked down Feeney Way. And, and, uh, did­n’t real­ly know any­thing about him.

[00:30:40] Cameron: So there you go. What a, what a life well lived and, uh, very huge in the gen­eros­i­ty. And I know you and your wife, uh, believe in gen­eros­i­ty. That’s part of the rea­son why you do the show.

[00:30:52] Cameron: And your love­ly wife wrote a book

[00:30:55] Cameron: that, uh, well, the gist or the gist, the [00:31:00] gist,

[00:31:00] Tony: I can nev­er remem­ber. I think it’s the

[00:31:01] Tony: gist of gen­eros­i­ty, isn’t it, Al? Do you

[00:31:03] Alex: Yeah, gist of

[00:31:04] Alex: gen­eros­i­ty.

[00:31:05] Tony: It’s always been con­fus­ing.

[00:31:06] Alex: The gist of gen­eros­i­ty, yep.

[00:31:08] Tony: Yeah, that’s what I thought. I always get con­fused though.

[00:31:11] Cameron: Yeah,

[00:31:12] Tony: And, and look, and we give, we don’t give away mil­lions to char­i­ty, we give away the char­i­ty now, and Jen­ny’s on the board of the Breast Can­cer Research Foun­da­tion.

[00:31:21] Tony: And just going back to the Feeney bequests to the, or Feeney dona­tions to Queens­land Research. You know, for all those knuck­le drag­ging peo­ple who vot­ed no out there, who say to me from time to time, ah, sci­en­tif­ic research, what’s the, you know, bloody hell, I nev­er used alge­bra since I stud­ied it at school.

[00:31:41] Tony: Queens­land Uni­ver­si­ty came up with the vac­cine for cer­vi­cal can­cer. So, you know, go home and ask your wife what the ben­e­fit there is in donat­ing the sci­en­tif­ic research with that lit­tle fac­toid.

[00:31:52] Cameron: Peo­ple tell you that they don’t like sci­ence, what?

[00:31:56] Tony: Yeah, I mean, I’ve had peo­ple,

[00:31:57] Cameron: need to hang out with a high­er class of

[00:31:58] Cameron: peo­ple,

[00:31:59] Tony: I, well, [00:32:00] I do. That’s, that’s true. If you, if you find some­one, let me know, but,

[00:32:05] Cameron: Oh! Hey!

[00:32:07] Tony: I mean, the three, except for this present com­pa­ny, I am doing it right now, but that’s once a week, right? But, um, oh yeah, I get all this shit all the time. I know, you know, what did I study maths at school for?

[00:32:18] Tony: I nev­er use it now. Okay, well, give me your phone. Give me your sat nav, give me your car. It’s like… It’s because you don’t hap­pen to use them. Some­body a bit smarter with a bit more gump an appli­ca­tion did and you have to thank them for it. Sor­ry, I’m on my soap­box there. I’ve just had a… Unfor­tu­nate­ly, Aus­tralia is going the way of the US where it’s just… Dumb peo­ple are being manip­u­lat­ed and they’re start­ing to say the same things as I hear peo­ple in the US say, and it’s just so annoy­ing.

[00:32:46] Cameron: it’s late stage cap­i­tal­ism, Tony.

[00:32:48] Tony: Is that what it is?

[00:32:49] Cameron: Yeah. Yeah, I think so. It’s, um, you know, it’s, there’s a lot of mon­ey tied up in keep­ing peo­ple dumb and igno­rant and say­ing stu­pid stuff. [00:33:00] So they vote the way you want them to vote

[00:33:02] Cameron: and they don’t pay atten­tion to the things that you don’t want them to pay atten­tion to.

[00:33:07] Cameron: And the whole QAnon Trump, Trumpy Fox News sort of brain virus that infect­ed the U. S. is infect­ing peo­ple here. And I look, I’ve been say­ing this for, on my shows for 20 years. My fear has always been that we would go the way of the U. S. And I’ve been

[00:33:25] Tony: And we are,

[00:33:26] Cameron: We are, yeah, slid­ing down that.

[00:33:29] Tony: when I hear the rub­bish com­ing out of peo­ple’s mouths, par­tic­u­lar­ly from one side of pol­i­tics about the voice, it’s just, yeah, it, we’re, we’re on, we’re already there. It’s unfor­tu­nate, but we’re already there.

[00:33:42] Cameron: Any­who, mov­ing right along, Joe Aston, Joe Aston’s farewell col­umn, did you read that?

[00:33:49] Tony: I did. Yeah, it was great. He’s a good writer, isn’t he?

[00:33:53] Cameron: It was delight­ful. He just took a swing at every­one and any­one.

[00:33:59] Tony: Well, I [00:34:00] was wait­ing for the para­graph on what the lawyers cost or what the defama­tion amounts were for set­tle­ment and all that kind of stuff, but he did­n’t touch on that.

[00:34:10] Cameron: There was some stuff, I mean, apart from the fact that, um, it was just fun and he just took shots at a lot of Aus­trali­a’s rich­est peo­ple. I liked his analy­sis and, you know, it sort of reflects Sort of a lot of the stuff that we’ve talked about over the years and we’ve said on the show, um, where he just talks about sort of the, the lev­el of respect that are giv­en to rich, and suc­cess­ful busi­ness peo­ple in this coun­try that they prob­a­bly don’t deserve.

[00:34:43] Cameron: Yeah, again, he talks about the sto­ries and the nar­ra­tives and

[00:34:46] Cameron: that kind of stuff, but I, I like some of this stuff. He says, We all wrap our­selves in sooth­ing sto­ries to dilute our inse­cu­ri­ty and feel legit­i­mate and worth­while in the world. That’s how I rec­og­nize the pat­terns of delu­sion and cor­po­rate ego­ma­ni­acs [00:35:00] because I’m accus­tomed to see­ing them in myself.

[00:35:03] Cameron: And then he goes on to say, You can ana­lyze their inven­tions and half truths because the best lies are lies of omis­sion. And you can say, this man is talk­ing pure crap, dear read­er. That’s dif­fi­cult or even impos­si­ble to do as a reporter when you’re rely­ing on their voice, not your own, to tell the sto­ry. So that’s the first thing.

[00:35:23] Cameron: Like, Stephen Mayne, when he was on our show, when he’s been on my oth­er shows before, talked a lot about that, how Jour­nal­ists real­ly, by and large, busi­ness jour­nal­ists in par­tic­u­lar, just regur­gi­tate what they’re told and they don’t, uh, ana­lyze it or break it down very often. So, at the end of the day, the gen­er­al pub­lic is just get­ting fed what­ev­er the PR depart­ment of the busi­ness wants them to be fed.

[00:35:47] Cameron: And he says, these peo­ple are often just the high­est paid per­son in the build­ing. I mean, if Twig­gy wants to be crazy, at least he’s got his name on the door. The ones who are com­plete­ly delud­ed are the ones who’ve just com­man­do crawled to the top [00:36:00] of the steam­ing pile, and then expect us to adore them.

[00:36:03] Cameron: You haven’t tak­en any risk, pal. You’ve just lucked in. That’s the oth­er inop­por­tune truth about this caper. Luck plays a huge role in busi­ness, though you’d nev­er know it from the hero­ic self nar­ra­tives of chief exec­u­tives. It’s nev­er enough either to be rec­og­nized for your com­mer­cial acu­men. That’s the soul­less part of the cap­i­tal­ist endeav­or.

[00:36:23] Cameron: You also need to be loved for your char­i­ty, patron­age, and your high­ly selec­tive cor­po­rate social respon­si­bil­i­ty. You can’t just be Mr. Prof­it, you’ve got to be Mr. Altru­ism, Mr. Com­mu­ni­ty. The desire to be fat­ed is all a part of the rar­efied delu­sion state. Like, I’m not adverse to see­ing these guys, uh… Spend mon­ey and be altru­is­tic and do good things for the com­mu­ni­ty.

[00:36:45] Cameron: But, uh, yeah, I do agree with him that, uh, there’s a huge amount of luck and sur­vivor bias in a lot of these busi­ness nar­ra­tives.

[00:36:55] Tony: absolute­ly. And I, you know, open­ly admit from my expe­ri­ence with cor­po­rate, [00:37:00] it’s not the smartest per­son or the best busi­ness per­son who gets to

[00:37:03] Tony: the top. It’s gen­er­al­ly the best net­work­er.

[00:37:06] Tony: And the best syco­phant.

[00:37:07] Tony: So, yeah.

[00:37:09] Tony: And, and my, my test for that

[00:37:11] Tony: is, and you can do it your­self, but over the years, I’ve looked at all the peo­ple who’ve walked out the door after being

[00:37:17] Tony: a CEO of a top com­pa­ny and they’ve gen­er­al­ly walked out with 20, 30, 40

[00:37:22] Tony: mil­lion. And you look for their name on the BRW rich list in 10 years time, not there,

[00:37:30] Tony: they don’t know how to allo­cate cap­i­tal, they don’t know how to invest, they don’t know what to

[00:37:33] Tony: do with mon­ey. And yet they were in

[00:37:35] Tony: charge of, you know, employ­ing a hun­dred thou­sand

[00:37:38] Tony: peo­ple and push­ing. Cap­i­tal Allo­ca­tion Around,

[00:37:42] Cameron: What, what do they tend

[00:37:44] Cameron: to do when they retire?

[00:37:47] Tony: Oh, Go On Boards, Go On Jun­kets, Go Into Thick Packs, uh, A lot of them just fade away. Um, yeah, I could­n’t, it’s, it’s an inter­est­ing ques­tion, but prob­a­bly the board route’s the most com­mon. [00:38:00]

[00:38:00] Tony: Um, and you know that, yeah, they may not be moti­vat­ed to make any more

[00:38:05] Tony: mon­ey. So I I give them that, but, uh, you know, they made a lot of mon­ey and they’re just going to enjoy it and that’s fine.

[00:38:12] Tony: But, but my point is that they did­n’t get to the be CEO of the

[00:38:16] Tony: com­pa­ny because they were good at busi­ness. They got there because they

[00:38:18] Tony: were good at manip­u­lat­ing peo­ple and net­work­ing and. And prob­a­bly play­ing Machi­avel­lian

[00:38:24] Tony: games to get to the top. As Joe Astin said it much more suc­cinct­ly, Com­man­do crawl­ing up the pile of shit.

[00:38:30] Tony: That’s, that’s their core com­pe­ten­cy. And, uh, and look, you know, um, uh, case in point, and I’m not sin­gling this per­son out for any par­tic­u­lar rea­son, oth­er than they’re the most recent, um, Have a look at what Alan Joyce does. He’s, um, he’s gonna, you know, picked up 15 mil­lion bucks on his way out of Qan­tas.

[00:38:49] Tony: You may have to hand some of that back, I guess, if there’s a big share­hold­er back­lash, um, at the, uh, you know, in the near future. Um, but yeah. Um, I doubt if we’ll [00:39:00] see his name on the BRW rich list in the future, but yeah, com­pared to Twig­gy For­rest, who, who is, is dif­fer­ent. He built the busi­ness up from scratch, took all the risks and yeah, he might be a bit

[00:39:10] Tony: crazy, but at least he’s, as Joe Astin said, has his name on the door and he’ll prob­a­bly stay on the rich list for the rest of his life.

[00:39:18] Tony: Very dif­fer­ent, very dif­fer­ent peo­ple, which is why we like own­er founders in the check­list.

[00:39:23] Cameron: Hmm. All right. That’s all I’ve got on my talk­ing list. What have you got?

[00:39:28] Tony: Noth­ing. I’ve got Alex, she’s here. She’s going to ask some ques­tions. I’ve got a pulled pork.

[00:39:35] Cameron: Love­ly. Who are you pulling?

[00:39:39] Tony: Pulling down. Uh, Par­en­ti.

[00:39:43] Cameron: Love­ly. Get into it.

[00:39:44] Tony: this, was a request, uh, from last week. I sus­pect it was a request because Par­en­ti has just final­ized an acqui­si­tion of a com­pa­ny called DDH1 that was on our buy list. So per­haps it was­n’t implic­it, [00:40:00] was­n’t explic­it in the ques­tion, per­haps it’s implic­it.

[00:40:02] Tony: The per­son who asked it was want­i­ng to know whether they should stick with Par­en­ti now that DDH has been merged into them, rolled into them. Uh, and I’ll go through that. Um, so first thing to notice, to note is that Par­en­ti, so code is PRN, is cur­rent­ly a cell on the bread loader. So it’s a three point trend line cell.

[00:40:24] Tony: So, um, you know, bear that in mind as I go through all this. I’m not… Say­ing, uh, I’m not rec­om­mend­ing it to any­one to buy. I’m, I’m doing this as, uh, uh, because some­one asked for it. Uh, so the com­pa­ny, if peo­ple don’t know, it’s a large min­ing con­trac­tor and fol­low­ing the, it’s merg­er on the 6th of Octo­ber,

[00:40:43] Tony: so just in the last week or so, uh, it’s now the largest min­ing Ser­vices Con­trac­tor on the ASX and prob­a­bly one of the largest ones in the world.

[00:40:55] Tony: The merg­er with DDH1 was good. Per­en­ti pri­or to the [00:41:00] merg­er was basi­cal­ly an under­ground mine con­trac­tor. DDH was a large drilling sup­pli­er. So that was, I guess, a part of the busi­ness that Par­en­ti did­n’t have. So it’s still with­in the min­ing ser­vices space, but it’s, I guess, diver­si­fy­ing away from just doing under­ground mine works.

[00:41:20] Tony: I think that’s prob­a­bly a good thing for them. It seems like a rea­son­ably can­ny sort of merg­er of, uh, of two com­pa­nies. The, it was done by what’s called a scheme of arrange­ment. So there was nev­er any sort of, uh, fierce takeover bat­tle for this com­pa­ny. Um, scheme of arrange­ments are often used. In the Aus­tralian mar­ket, in a nut­shell, the acquir­ing com­pa­ny approach­es the tar­get board and says, Hey, um, we’re not pre­pared to go through an on mar­ket sort of duel for the com­pa­ny.

[00:41:49] Tony: Here’s our deal. If you like it, uh, you know, put it to a share­hold­er vote, we’ll put it to a vote of our share­hold­ers. And then they take it to a judge to, um, give [00:42:00] it a tick and it goes through, um, as a merg­er under cor­po­ra­tions law. So that’s what’s hap­pened in this case. PRN paid 50 mil­lion in cash for DDH, but issued 279 mil­lion in shares and offered those as part of the pay­ment to DDH1 share­hold­ers.

[00:42:21] Tony: And they had a choice that they could, DDH share­hold­ers could take the cash. Uh, or take the shares or take a com­po­nent of both up until the 50 mil­lion was exhaust­ed. Uh, so it’s, this is a bit of a tricky one because when I get to the num­bers, they’re based on the pre merg­er. So this is DD, this is Par­en­ti pri­or to DDH I’ll talk about.

[00:42:44] Tony: We won’t know what the num­bers look like until Decem­ber or till Feb­ru­ary rolls around real­ly when we get Decem­ber’s num­bers, which is the post merg­er num­bers. So just bear that in mind. But a cou­ple of, I guess a cou­ple of points is the. I think [00:43:00] the announce­ment about the, the offer was made in about July and the shares of PRN have fall­en since then.

[00:43:08] Tony: Um, I think they were around about 1. 20 or so in July and they’re now down to about 1. 06. So that, I mean, that could also be because the mar­ket’s down, um, in that time and there’s been plen­ty of things going on in the world, the press­ing share prices, but it could also be that the peo­ple who have done their due dili­gence and Put the Pro­for­ma bal­ance sheet and Pro­for­ma P& L togeth­er for the merge enti­ties and worked out that, you know, it’s, um, it’s not a bad deal, but it’s, it’s prob­a­bly, um, you know, the sum of the parts might be 10 per­cent worth, worth less than what they were sep­a­rate­ly, per­haps.

[00:43:43] Tony: Uh, so sen­ti­men­t’s impor­tant in this one, and as I said, this com­pa­ny’s just become a sell. If it did turn up, and it could because the, the Par­en­ti num­bers were strong, the DDH num­bers were strong. Put them togeth­er, they should be. Strong when you com­bine them, but [00:44:00] I haven’t done that piece of analy­sis because it would have tak­en all day to go through the num­bers and make assump­tions, etc.

[00:44:06] Tony: Uh, but I sus­pect even though it’s a sell now, it’s just a sell. It’s only, you know, it’s less than 10 per­cent below its buy line, so it could, you know, in an upturn, see it come back onto the buy list as a merged enti­ty. Um, so just bear that in mind when I’m going through these com­ments, com­ments. So a bit, a bit more about Per­en­ti, um, 11, 000 employ­ees, so very large, oper­ates in 30 mines around the world.

[00:44:33] Tony: Uh, plus they now have, since the merg­er, 100 drilling sites, and we know that, um, min­ers are always try­ing to drill for, uh, new ore veins to either extend their cur­rent projects or to, to find new ones. Um, but Per­en­ti’s been around for 36 years, so it’s been around for a while. Uh, works… Across Aus­tralia, Africa, North Amer­i­ca, UK and Europe.

[00:44:56] Tony: So it’s, it’s a pret­ty large com­pa­ny [00:45:00] in their lit­tle sphere.

[00:45:01] Tony: Even though the com­pa­nies, the par­ent com­pa­nies are called Par­en­ti and until recent­ly DDH, uh, peo­ple might know some of the brand names which have been absorbed into these two over the years. So com­pa­nies like Barmin­co, SWIC, and Oztrail. I think they were all list­ed on the ASX at some stage. And I think SWIC and Oztrail, in the time we’ve been doing QAV, have been on the buy list.

[00:45:27] Tony: Um, so they, they might be known to us. Uh, some of our lis­ten­ers. Uh, the oth­er point I want­ed to call out about, uh, Per­en­ti is that, uh, as soon as they merged, they announced a buy­back pro­gram and they had­n’t been buy­ing back shares in finan­cial year 22. So this may just be a con­tin­u­ance of that. How­ev­er, it’s inter­est­ing that they’re, they’ve issued new shares and now they’re buy­ing them back.

[00:45:52] Tony: So it could be like a nice tricky way to. Reduce the pur­chase price of DDH. [00:46:00]If they issued shares, the share prices dropped back 10 per­cent and they’re going to buy them back. It’s a, it’s a nice way of get­ting a bit of a dis­count on the orig­i­nal stick­er price that they offered for the com­pa­ny. Uh, but I think what’s also dri­ving it is this com­pa­ny does­n’t pay a div­i­dend.

[00:46:19] Tony: And I sus­pect the rea­son why it does­n’t pay a div­i­dend is because it. Does­n’t have any or many frank­ing cred­its because a lot of its income is com­ing from over­seas from Africa and from the US and from Europe and you only get frank­ing cred­its for tax paid in Aus­tralia, so

[00:46:35] Tony: I sus­pect that they’re see­ing buy­backs as a dif­fer­ent way of dis­trib­ut­ing excess cash to the ben­e­fit of share­hold­ers, but that start­ed up with­in a week of the deal being done, so I thought that was inter­est­ing.

[00:46:49] Tony: Thank you. The oth­er inter­est­ing thing I found out was that the com­pa­ny sold 150 mil­lion of non core busi­ness and assets just pri­or to announc­ing its offer for [00:47:00] DDH. Uh, and if you recall, they offered 50 mil­lion plus issu­ing new shares. So they do seem to be a board that’s pret­ty savvy at cap­i­tal allo­ca­tion and cap­i­tal man­age­ment.

[00:47:11] Tony: So I think that’s prob­a­bly a tick, um, to them. And, uh, the, uh, Man­ag­ing their cap­i­tal well, um, low debt, uh, huge amounts of cash. I think there’s about 300 mil­lion of cash sit­ting on the bal­ance sheet as of the 30th of June. They’ve obvi­ous­ly spent some to acquire this com­pa­ny, but, but not all of it. So that’s a good sign, um, to go through the num­bers and some of the oth­er num­bers on this com­pa­ny.

[00:47:38] Tony: Uh, it’s a, it’s a rea­son­ably large com­pa­ny. It has an ADT of just over 2 mil­lion per day. So it’s. Very liq­uid. I’m doing my num­bers on a price of 1. 045, so

[00:47:51] Tony: 1. 045 per share, which is less than the con­sen­sus tar­get, which is good. I’ve just noticed Stock Doc­tor’s gone back to giv­ing us a [00:48:00] fore­cast val­ue for a while, that’s stopped, but the fore­cast val­ue on Stock Doc­tor is 1. 375, so the com­pa­ny’s Um, well below that price and the fact that they’re buy­ing back their shares sug­gests that the com­pa­ny thinks they’re under­val­ued as well.

[00:48:14] Tony: Uh, Stock Doc­tor finan­cial health is strong and steady. Uh, there’s no own­er founder, so, uh, we can’t give it a tick for that. Some­times there is with these com­pa­nies, but I sus­pect that they’ve been, uh, you know, part of the lit­tle com­pa­nies that have been bought up as this com­pa­ny has evolved. But no own­er founder on the board.

[00:48:34] Tony: Um, the PE is 8. 26, which is not the high­est or the low­est, although it’s rea­son­ably low at the moment, but we don’t score it. Inter­est­ing­ly enough, again, pri­or to the merg­er, uh, Prop­Caf is only 1. 6 times, which is Real­ly, real­ly cheap. And I guess that’s a tes­ta­ment to the cash the com­pa­ny’s throw­ing off. So that’s, um, that’s some­thing that’s in its favor.

[00:48:57] Tony: And I would think with a low prop CAF like that, [00:49:00] even with the acqui­si­tion, it’s prob­a­bly still going to be on the buy list once Decem­ber num­bers come out. But I guess that’s a pre­dic­tion and I’ll wait and see.

[00:49:08] Tony: The share price of 1. 45 is greater than IV1 but less than IV2, so it gets a score for that. IV2 for this com­pa­ny is 1. 86, large­ly dri­ven by fore­cast increase in earn­ings per

[00:49:21] Tony: share. I was­n’t able to… Tell whether the fore­cast was based on the merg­er or whether this was kind of a pre merg­er fore­cast. I sus­pect it takes into account, um, the merg­er because, uh, con­sul­tants are fore­cast­ing that the earn­ings per share should increase by near­ly 50%, which, uh, on a growth over PE basis gives us a 5.

[00:49:45] Tony: 89 times num­ber, which is way above our hur­dle of 1. 5, so it scores well for that. Again, on the val­u­a­tion met­rics, and this is pre merg­er, the net equi­ty per share for this com­pa­ny is 2. 34. Cur­rent share price is around 1. [00:50:00] 05, so it’s trad­ing at less than half its book val­ue, which is amaz­ing. We hard­ly ever see some­thing that deeply dis­count­ed to assets.

[00:50:08] Tony: There is a bit of a dif­fer­ence between net equi­ty per share and net… tan­gi­ble assets of about 20%, but even if you use net tan­gi­ble assets, you’re still buy­ing it real­ly cheap­ly, um, com­pared to what you, um, com­pared to what the equi­ty and asset val­ue is that’s avail­able. I think the dif­fer­ence is prob­a­bly going to be good­will because, uh, the com­pa­ny has grown by acquir­ing oth­er com­pa­nies and, and, um, as we know, the dif­fer­ence between You know, the book val­ue of an acquired com­pa­ny or the asset val­ue of an acquired com­pa­ny and what they pay for it gets put onto the, um, the bal­ance sheet as good­will.

[00:50:44] Tony: So I think that’s what’s hap­pened here. Um, with­out going into heaps of detail on that, that could be a good thing or a bad thing, but it’s only about 20 per­cent dif­fer­ent. So it’s not going to be, um, mate­r­i­al to the con­ver­sa­tion about how cheap this com­pa­ny is, giv­en you, you’re buy­ing it at, um, [00:51:00] half its book val­ue and maybe 80 per­cent if you use net tan­gi­ble assets.

[00:51:05] Tony: Uh, In terms of the man­u­al­ly entered data, it does­n’t have con­sis­tent, con­sis­tent­ly increas­ing equi­ty, but it is close. I think it… Um, the, the year where it did­n’t con­sis­tent­ly grow its equi­ty was prob­a­bly pan­dem­ic relat­ed, but it’s cer­tain­ly back on track to, to, to do it now, so that may change in about, um, over the next cou­ple of halves and in 12 months or so.

[00:51:28] Tony: Uh, all up the qual­i­ty score for this com­pa­ny is 9 over 16, which is only 56%. So that’s, that’s, uh, some­thing to watch out for. It’s not, not, um, it’s kind of medi­um. It’s not over­ly high, not over­ly low, but it’s not, not, it’s not great. Uh, and the QAV score over­all is 0. 35, which is very high, um, we don’t have it on our buy list because it is a 3 point trend­line sell, but if it was­n’t, it would come out pret­ty high up on the buy list and be a high ADT stock up there, [00:52:00] so I haven’t gone through and done the pro for­mas, um, on the merged enti­ty, but I sus­pect, because this is a large ADT stock, there are ana­lysts out there who are watch­ing it close­ly, and we’ll see, you know, their num­bers reflect­ed in the sen­ti­ment, um, in the share price for this com­pa­ny.

[00:52:17] Tony: I would­n’t be sur­prised at all if it… Gets an upturn as, as peo­ple do crunch num­bers and, um, and I guess more infor­ma­tion flows through from the com­pa­ny, per­haps at the quar­ter­ly report­ing time or the AGM. And, uh, we see this come back onto the buy list. Um, sum­ma­ry and pros and cons. So, pre acqui­si­tion, the num­bers were real­ly good.

[00:52:40] Tony: All the met­rics were up in terms of sales and prof­it and cash flow. Uh, so that, I think that was all good.

[00:52:46] Tony: Again, I made a note here to watch for Decem­ber num­bers. So I think that’s, um, when we get to see the

[00:52:51] Tony: first sort of set of results with merged num­bers. Uh, I guess the ques­tion some­one might be ask­ing if they had a DDH [00:53:00] and did­n’t take the cash offer is,

[00:53:02] Tony: should they, what should they do now? Stay as a DDH

[00:53:05] Tony: share­hold­er or sell?

[00:53:07] Tony: I guess if it was me, I’d prob­a­bly sell

[00:53:09] Tony: now because it has become a three point trend sell. Uh, and I say that, you know, Ful­ly know­ing that it could become a buy again, because it’s not too far below its buy line. But yeah, I would sell until we get some clar­i­ty on those num­bers. Uh, hav­ing said that, the, even though the share price is a bit low­er than it was when the merg­er went through, the buy price is drop­ping each month as well, so next, you know, even if the share price did­n’t move from here, it would­n’t be a stretch of the imag­i­na­tion to see the, it cross the buy price in the next sort of six months.

[00:53:41] Tony: So, one to watch for sen­ti­ment. Um, pros and cons, uh… It’s, um, I, I think that the, the d the PTI board show­ing them­selves to be good cap­i­tal allo­ca­tors, the com­pa­ny has very good, very strong cash flow. D D H did as well. It was on our, on our bio [00:54:00] list site. I can’t see that chang­ing too much in the future. Uh, a big pro for is it’s, it’s trad­ing on very low prop calf num­bers.

[00:54:08] Tony: Uh, and, but it does have a, uh, a low qual­i­ty score. And, um, inter­est­ing­ly enough, the slo­gan for this com­pa­ny is Expect More. And that’s kind of how I thought might be a good tagline for this is that I would expect more and bet­ter qual­i­ty score results from a com­pa­ny, um, which appears to be this cheap and well man­aged.

[00:54:29] Tony: Uh, Expect More was kind of a com­ment I used to get some­times on my report cards at school. So when I slacked off, so, um, Uh, that’s the pos­i­tives for the com­pa­ny. The neg­a­tives, um, I remem­ber doing a deep dive on DDH and that com­pa­ny, which will become a big part of the merge com­pa­ny, um, is real­ly all about drill rig uti­liza­tion, and I do recall going back, uh, in com­mod­i­ty down­turns in the past that Drilling com­pa­nies can get strand­ed hold­ing onto [00:55:00] assets which just aren’t being uti­lized and then they become unprof­itable.

[00:55:03] Tony: Now, um, I’m not sure if DDH has leased their drill rigs and they can return them in that sit­u­a­tion, or whether they own them and they’re paid off or what­ev­er, but that is a risk with this kind of com­pa­ny. If there is a glob­al down­turn and min­ing activ­i­ty comes off, that’ll hurt them. Uh… I guess, um, it’s prob­a­bly belongs in the pos­i­tive camp, but it

[00:55:27] Tony: could be a risk. Uh, their earn­ings are boost­ed by the low Aus­tralian dol­lar because a lot of their earn­ings come from over­seas. And so when the Aus­tralian dol­lar is low, they get trans­lat­ed back into the local cur­ren­cy with a bit of a bit of a mar­gin boost that’ll go away if the Aus­tralian dol­lar starts to rise, but at the moment it’s a good.

[00:55:46] Tony: Tail­wind for the com­pa­ny. Um, but it’s, again, it’s one to watch. And, um, I guess the oth­er issue for them is they don’t, they aren’t get­ting a hold of many frank­ing cred­its. They did say they will review their div­i­dend pol­i­cy going for­ward. [00:56:00] Um, so the buy­back might change into being, uh, a pay­ment, a div­i­dend pay­ment if they get enough rank­ing cred­its, uh, which they might get from DDH, which has a large pres­ence in Aus­tralia.

[00:56:10] Tony: So yeah, inter­est­ing com­pa­ny to go through. Thanks for the ques­tion, um, request­ing it. Uh, Let’s watch the space and see, first of all, what Sen­ti­ment does over six months, and then sec­ond­ly in Feb­ru­ary when we get Decem­ber num­bers, what the Mer­chant Enti­ty looks like.

[00:56:26] Cameron: Yeah. I remem­ber when its results came out, when they had like record results at the end of the last finan­cial year and the share price crashed by 12 per­cent or some­thing, and.

[00:56:37] Cameron: We’re all like, what the hell? One of our Light mem­bers is actu­al­ly, uh, works at PRN and, uh, remem­ber he sent me an email at the time say­ing, quick feed­back from the CEO, mar­ket did­n’t like lack of a div­i­dend, giv­en con­sid­er­a­tion of a div­i­dend was pre­vi­ous­ly stat­ed when lever­age was under one. But with refi­nanc­ing due next year, they want­ed to keep some [00:57:00] buffer, plus allo­ca­tion of future funds slash invest­ments to elec­tri­fi­ca­tion, risk man­age­ment, and min­ing tech­nol­o­gy, which have a num­ber of years pay­back rather than short­er term returns to share­hold­ers.

[00:57:11] Cameron: Loss of first U. S. ten­der and big local ten­der weren’t seen as large neg­a­tives. And I asked him if he want­ed to try and get the CEO to come on the show. He said he’d work on that for us.

[00:57:23] Tony: Okay. It’ll be inter­est­ing to get him on. Or her. Um, but it could also have been, I think the announce­ment of the merg­er was, um, raised soon after their results. So that could have also played into that mix. Large share issuance com­ing up.

[00:57:39] Cameron: Yeah. Good stuff. Alright,

[00:57:43] Cameron: well, time for ques­tions. Alex, are you going to chan­nel the oth­er

[00:57:49] Cameron: Alex? What are you going to do for us today?

[00:57:52] Alex: I feel like I’ve been real­ly over

[00:57:53] Alex: rep­re­sent­ing the Alex’s recent­ly, so I’m going to do

[00:57:55] Alex: Charles’s.

[00:57:56] Cameron: You are right?

[00:57:58] Cameron: Oh, you’re going to start with the [00:58:00] Charles, okay.

[00:58:00] Alex: Um, so Charles

[00:58:01] Alex: says, I have a cheeky ques­tion for you guys. Imag­ine the mar­kets were to the­o­ret­i­cal­ly close for

[00:58:07] Alex: 10 years and you had to ful­ly invest and buy 10 busi­ness­es on the ASX this week. Please list the top 10 you would com­mit to. Note this

[00:58:15] Alex: game does not allow more than two LICs

[00:58:18] Alex: two ETFs and, two

[00:58:19] Alex: banks.

[00:58:20] Alex: Good luck.

[00:58:21] Tony: Hmm. Yeah, I don’t think I have, I don’t have 10 because I only sort of did this this morn­ing and it’s crack­ing my brain. Uh, I prob­a­bly would start with the LICs first of all, and, and def­i­nite­ly put Aus­tralian Foun­da­tion invest­ments in there. Um, Prob­a­bly Wash­ing­ton Sol Pat­tin­son’s, I think they’re well man­aged and, uh, per­haps Argo, which is anoth­er big one on the ASX.

[00:58:48] Tony: If peo­ple want to know my views on Licks, I can go back to some of the shows at the begin­ning. They’re a good way to start invest­ing, I think, and the AFI has been around as long as the share mar­ket. It’s very well run, yet [00:59:00] mar­ket like returns and good div­i­dends. So, um, that would be very close to the top of my list.

[00:59:05] Tony: In terms of oth­er com­ments about this game, uh, I would­n’t be buy­ing min­ing com­pa­ny stocks, so that takes a lot of, a

[00:59:15] Tony: lot of com­pa­nies straight off the table. I did think about FMG, Fortes­cue Met­als Group. Um, I don’t know what that com­pa­ny is going to look like in 10 years time. It may be a green hydro­gen com­pa­ny or it might be, um, an iron ore com­pa­ny or a bit of both.

[00:59:28] Tony: I’m not sure, which, um, was the rea­son I’m not going to nom­i­nate it. Uh, but just gen­er­al­ly, I prob­a­bly would­n’t want to go into a com­mod­i­ty com­pa­ny for 10 years. Blind­ly and not being able to trade it. I think the com­mod­i­ty cycles,

[00:59:43] Tony: you know, are prob­a­bly short­er than 10 year ones, so.

[00:59:46] Tony: Um, there is often­times a long term

[00:59:49] Tony: com­mod­i­ty cycle, which is much longer than 10 years, and to put that into per­spec­tive, when I first start­ed work­ing Uh, back in the mid 80s, um, I did see a graph of the [01:00:00] ASX and I think it was, the biggest sec­tor was min­ing.

[01:00:03] Tony: And then, um, about 20 years lat­er, the biggest sec­tor was finance and min­ing had shrunk and now we’re back to both being dom­i­nat­ed by finan­cials and min­ing. So there are some big swings over long peri­ods of time, but I would­n’t feel com­pa­ny com­fort­able now sug­gest­ing a min­ing stock to be held for 10 years.

[01:00:22] Tony: Um, so my nom­i­na­tions are num­ber one, Cred­it Corp. I’ve always liked Cred­it Corp, and I kind of like my think­ing behind this game is what are the com­pa­nies I’ve owned over long peri­ods of time? They’ve kind of always been on the buy list, and I’ve had them in my port­fo­lio. I do trade in and out of them, but they’ve been around for a long time, and the first one’s Cred­it Corp.

[01:00:43] Tony: But I say that know­ing that it’s a, it just turned into a sell today. So it’s not, it’s either a great time to buy, um, but it’s, it’s not one that I’ll be hold­ing for much longer. Um. Barl, I think it’s a great, well run com­pa­ny in a niche [01:01:00] sec­tor in the mar­ket and I think it will do well longer term. And I would­n’t at all be wor­ried under its cur­rent man­age­ment to put it aside for 10 years.

[01:01:08] Tony: Next, next cab off the rank is Mac­quar­ie Group. Um, I’ve always admired, you know, the, the plucky, Bank that’s tak­en on the glob­al big plays in invest­ment bank­ing. They do a great job, um, and the cul­ture’s great and their risk man­age­men­t’s great. The famous loose tight risk man­age­ment, um, struc­ture where you can basi­cal­ly do what you like as long as, as long as it’s with­in their broad­er risk man­age­ment para­me­ters.

[01:01:35] Tony: So it does tend to fos­ter entre­pre­neur­ship, entre­pre­neur­ship in a large com­pa­ny, which is the best of both worlds. I think I’ve got the ben­e­fit of the bal­ance sheet. And they’ve got an entre­pre­neur­ial approach to growth. So MQG is on my list. And the third one is JB Hi Fi, which again is anoth­er com­pa­ny I’ve admired for a long time.

[01:01:57] Tony: And it’s been on and off our buy list and I’ve owned it [01:02:00] at dif­fer­ent times over the years. I think they dom­i­nate their cat­e­go­ry, very low mar­gin retail­er dom­i­nat­ing that sort of elec­tri­cal cat­e­go­ry. It’s, it’s my go to shop if I need to buy some­thing. You know, like pod­cast micro­phones or a new lap­top or what­ev­er.

[01:02:16] Tony: Um, yeah, so very well run. And, uh, it’s, it’s, it’s got a moat to use Buf­fet­t’s terms. I think that were the three I came up with. Um, there are oth­er pos­si­bles which I’d put on the list, but they’re not. Buys at the moment. So they tend, the prob­lem with this game is you’re look­ing for a qual­i­ty com­pa­ny. First of all, you’ve got to have a com­pa­ny that’s going to sur­vive 10 years.

[01:02:37] Tony: It’s going to be around, um, and prob­a­bly still be list­ed. Uh, so you’re look­ing at com­pa­nies which are qual­i­ty, uh, and you’re still try­ing to find some­thing which you can grow or is a, is a decent buy now. So my next com­pa­ny would be ARB. Uh, which is the man­u­fac­tur­er of four wheel dri­ve acces­sories. Um, I’ve fol­lowed their sto­ry.

[01:02:59] Tony: Um, it’s pret­ty [01:03:00] much par­al­leled my invest­ment invest­ing career and I have owned them in the past, but because they are such a well run com­pa­ny with great met­rics, uh, they, they, their price is up. So I’m not the only per­son who thinks they’re a good com­pa­ny in oth­er words. And, and they’re usu­al­ly trad­ing at the expen­sive end of val­u­a­tion ranges.

[01:03:17] Tony: I haven’t looked at them recent­ly, but they prob­a­bly still are there. They haven’t been on the buy list for a very, very long time. Um, but cer­tain­ly a qual­i­ty com­pa­ny, which I think is well run and will be around for 10 years and, uh, and we’ll have some growth prospects. And I’m going to nom­i­nate one more, uh, Nick Scali, NCK.

[01:03:34] Tony: Um, again, uh, being around for my invest­ing. Life­time, oh, maybe a bit short­er than that, I think it was in the 1990s time peri­od, um, but yeah, well run, own­er founder, uh, it’s, it’s, sticks to its knit­ting, it’s got the drop ship mod­el down pat when it comes to Fur­ni­ture retail­ing. So you want to buy a sofa, you can get a qual­i­ty sofa [01:04:00] cheap­ly, but you have to wait for 12 weeks before they go back to Chi­na and man­u­fac­ture it and then have it deliv­ered to you.

[01:04:06] Tony: So that’s a great mod­el. It’s a niche mod­el and they’ve made, um, you know, good returns for share­hold­ers along the way. So they’re my five plus a cou­ple of licks. I could­n’t get to 10, um, in think­ing. The oth­er point I want­ed to make was I did some quick cal­cu­la­tions. I thought, okay, that’s my. 10 year holds.

[01:04:25] Tony: How have they done over the last 10 years? And this is why this game is so tough. Cred­it Corp has gone up about 170 per­cent over that 10 year peri­od, but that’s only 5. 4 per­cent CAGR over 10 years. Mac­quar­ie Group over the last 10 years is up 13 per­cent CAGR. JB Hi Fi is up 7. 9%. So I think the aver­age of those three is about 8.

[01:04:52] Tony: 7%, which is prob­a­bly about the index, um, per­for­mance, which kind of swings me back to buy­ing [01:05:00] Aus­tralian Foun­da­tion Invest­ments again, uh, to find some­thing which is going to be around for 10 years. and out­per­form the mar­ket is, I think, pret­ty hard to do. And it’s cer­tain­ly been my expe­ri­ence. And one of the rea­sons why I’m not a buy and hold val­ue investor is so many val­ue investors are.

[01:05:20] Tony: I think every­thing goes in cycles, includ­ing val­u­a­tion. And it’s a hard game to play. If it was an easy game to play, I’d buy my 10 stocks and then come back in 10 years time and rub my hands togeth­er. But that’s not the way this tends to work out.

[01:05:35] Cameron: Hmm. Well, for me, I’d just buy Alex’s paint­ings, because that’s the best bet,

[01:05:45] Tony: Yeah, well that, she’s got a, she’s got a, um, three month wait, so the mod­el on that one too is three year wait, some of those.

[01:05:53] Alex: Yep. Drop­ship­ping from Chi­na.

[01:05:55] Tony: Yeah.

[01:05:56] Cameron: Ha ha

[01:05:57] Tony: You’re like the Simp­sons, you out­source all the car­toon­ing to Korea

[01:05:59] Tony: [01:06:00] and they come back

[01:06:01] Cameron: ha ha ha.

[01:06:02] Tony: with the fin­ished prod­uct.

[01:06:03] Cameron: I think, like, the next 10 years is going to be inter­est­ing, um, not every busi­ness is going to be dra­mat­i­cal­ly affect­ed by arti­fi­cial intel­li­gence, but a lot of them will be, and a lot of the econ­o­my will be.

[01:06:15] Cameron: I think this is going to be a real­ly dra­mat­ic 10 years. I’ve spent the last, uh, week, Uh, deep div­ing inter­views with Ilya Sutskev­er, the chief sci­en­tist at Ope­nAI.

[01:06:30] Cameron: And just lis­ten­ing to him sort of project where they’re going from here and what he thinks is going to hap­pen. And, you know, he’s expect­ing, they’ve got a lot of run­way yet to, with the cur­rent mod­el of large lan­guage mod­els before they have to move to a dif­fer­ent. mod­el for arti­fi­cial intel­li­gence. But, um, yeah, I think it’s going to be a real­ly dra­mat­ic decade.

[01:06:55] Tony: Yeah, it prob­a­bly will be. And who knows what’s going to devel­op between now and then and, you [01:07:00] know, be the next big boom thing. I don’t, we, we won’t know. in advance what that’s going to be. Yeah, I mean, I get your point about AI and it will change things dra­mat­i­cal­ly, but so did the inter­net and oth­er, you know, the loco­mo­tive and the car and all those.

[01:07:16] Tony: And, uh, the way it tends to play out, in my expe­ri­ence in Aus­tralia at least, is that The large com­pa­nies roll with it and, you know, absorb AI and change their busi­ness prac­tices, but there’s still large com­pa­nies at the end of it. Um, and I, I did con­sid­er putting com­pa­nies like, you know, Com­Bank and Coles and Woolies, um, on this list of 10 stocks, but I think they’re prob­a­bly just going to get index returns as well over that time peri­od.

[01:07:44] Tony: But I would be fair­ly cer­tain that they’d be around, um, in 10 years time, which I think is the first hur­dle. To assure your­self off when you’re play­ing this game. Sec­ond hur­dle

[01:07:55] Cameron: big. It’s all going to be Bit­coin, Tony.

[01:07:57] Tony: yeah, we, would you buy Bit­coin now and then come back in [01:08:00] 10 years time and see how you went?

[01:08:02] Cameron: No, I would not.

[01:08:04] Tony: but Bit­coin was going to change busi­ness.

[01:08:06] Tony: I mean, you know, I’ve lis­tened to end­less pod­casts of, uh, what’s that guy? Cuban, Mark Cuban. And, um, all those guys from the States say­ing, Oh yeah, Ethereum is going to, you know, blockchain the world and for­get about cen­tral banks and bank­ing in gen­er­al. It’s all going to crum­ble. It’s like, okay, are still here.

[01:08:26] Cameron: we’ll see. Any­way, good ques­tion, Charles. Thank you for that. Uh, okay. So I’m going to read Alex’s ques­tion.

[01:08:33] Tony: These are left over

[01:08:33] Cameron: from last week’s Alex Franklin’s ques­tions, left over, TK has men­tioned learn­ing about three PTLs from a book or pub­li­ca­tion. Can he please share the name of that resource? He’s shak­ing his

[01:08:44] Cameron: head.

[01:08:45] Tony: I’m real­ly embar­rassed. I still, I still can’t recall what it was called. And it was, um, I mean, the sto­ry of it was this would have been after the GFC when I was cast­ing around, try­ing to find a good way to put some kind of, um, [01:09:00] sen­ti­ment into my invest­ing, which was large­ly val­ue based, but buy and hold.

[01:09:04] Tony: Pri­or to the GFC, uh, and it was an ebook. It was like a six page PDF and I think I paid about 20 bucks or 30 bucks for it. Um, it just was like one of those, uh, pop up ads on Yahoo Finance or some­thing as I was on the inter­net back in those days. Um, and, uh, you know, read their pre­sen­ta­tion and bought their prod­uct and then they dis­ap­peared.

[01:09:29] Tony: So, um, and the PDF is. Sit­ting on an old Microsoft XT or I B M XT in a land­fill some­where, from the,

[01:09:39] Cameron: I asked Chat­G­PT

[01:09:41] Tony: from the early.com era? Actu­al­ly, no, it would­n’t have been, it would’ve been from the about, yeah. 15 years ago prob­a­bly. Yeah. So, uh, I’m sor­ry Alex, I can’t point you towards it. I’d love to go back to it. Um, ’cause it laid it all out real­ly well.

[01:09:57] Tony: Um, made, made some good points about not get­ting [01:10:00] too car­ried up in the. Uh, away with the rules and, and keep­ing some sort of com­mon sense approach­es to it. And, uh, and I do recall their claim was that they were get­ting, that their returns were about 15 per­cent per annum, um, just using the three point trend line.

[01:10:16] Tony: So, um, that’s what, one of the things that attract­ed me to research it. And, uh, but I adopt­ed it as, as we know, as my way of, of using sen­ti­ment rather than going into, um, mov­ing aver­ages and all the oth­er, many oth­er ways you can. Do tech­ni­cal analy­sis, which I also looked into and nev­er real­ly appealed, A, because they were super com­plex and B, because they always had more excep­tions than they had rules.

[01:10:43] Tony: And I kept tying myself up in the nuts try­ing to use them. So, um, yeah. Sor­ry, I can’t help you, Alex.

[01:10:49] Cameron: if he could take a guess and it just rec­om­mend­ed a num­ber of books. It said Tech­ni­cal Analy­sis of the Finan­cial Mar­kets by John J. Mur­phy. Is a good one to read for [01:11:00]three point trend line chart­ing and all oth­er sorts of chart­ing. You ever read that?

[01:11:04] Tony: No, well, I’ve read books on chart­ing, that one does­n’t ring a bell though, but yeah, I spend a lot of time look­ing at can­dle­sticks and, uh, wave the­o­ry and Dow the­o­ry and all this kind of stuff, yeah,

[01:11:15] Cameron: All right, uh, Alex’s next ques­tion. There’s been dis­cus­sion about the min­i­mum port­fo­lio size to start being prof­itable giv­en fees and data source costs. Has Tony found a max­i­mum size where a port­fo­lio stops get­ting QAV like returns? The prompt behind this ques­tion is that friends have noticed their SMSF per­for­mance has under­per­formed rel­a­tive to their

[01:11:36] Cameron: non super QAV port­fo­lio.

[01:11:39] Cameron: And I sus­pect that’s due to being lim­it­ed to ASX 300 stocks. This harkens back to our ear­li­er dis­cus­sion, I think. I assume that once you get to a cer­tain ADT, you’re in blue chips. Has Tony noticed any­thing sim­i­lar?

[01:11:53] Tony: well, as I’ve said before, my per­for­mance is Dow, less than 8, QAV style, Per­for­mance in the [01:12:00] last few years, but I was in big­ger stocks, ASX 300 stocks, prob­a­bly even more than that before that and was get­ting good returns. So yeah, I, I guess see the pri­or dis­cus­sion. Um, but it does sort of think, you know, if you want to ask a sup­ple­men­tary ques­tion, what do you do about it?

[01:12:17] Tony: Um, I’m going to con­tin­ue to apply the for­mu­la and wait for it to turn, I guess, and maybe do some back­test­ing on some changes. Uh, but in the past I have done things like, uh, When, when sit­u­a­tions exist­ed like this, where I was find­ing it hard to find big blue chip QAV stocks to buy at one stage, I had a port­fo­lio of about 40 or 50 stocks of small cap stocks and that I did­n’t like that.

[01:12:43] Tony: Um, cause my, my the­o­ry going in was, well, if you can’t find big QAV stocks on the buy list. Buy from the top down and just buy more, but less of the stocks that you buy. Um, and with a large [01:13:00] port­fo­lio like that, I was get­ting more like index, I was get­ting index like per­for­mance. Prob­a­bly more impor­tant­ly was that the big­ger posi­tions in the port­fo­lio were real­ly dri­ving the per­for­mance, the, it was the dog wag­ging the tail.

[01:13:14] Tony: And so log­i­cal­ly you start to say, well, why don’t I just buy big­ger posi­tions in those big­ger sit­u­a­tions, which tend­ed to be the larg­er end of the small cap. ADT stocks, um, which even­tu­al­ly got me back into buy­ing the big cap stocks when they became avail­able as well. Uh, so yeah, so that, that, um, did­n’t appeal.

[01:13:34] Tony: Uh, I guess the last point to make is, um, if I ever do have prob­lems find­ing large ADT stocks to buy, I guess I’ve got… Two oppor­tu­ni­ties, three maybe. Con­sol­i­date, con­cen­trate the port­fo­lio, which is what I’ve been doing. Um, so don’t hold 15 to 20 stocks, hold less than that. Uh, num­ber two would be to buy stocks below 0.

[01:13:54] Tony: 1. Um, which I haven’t had to do

[01:13:57] Tony: yet, but that’s an oppor­tu­ni­ty to explore. [01:14:00] Uh, and num­ber three is to buy over­seas stocks that meet the cri­te­ria.

[01:14:04] Tony: For ADT and for the QAV score, which I haven’t had to do either. So there are oth­er oppor­tu­ni­ties out there if peo­ple are find­ing it, um, that they’re butting heads against their ADT lim­its, Um, to, to look at.

[01:14:18] Cameron: All right. Well, I think we

[01:14:20] Cameron: can wrap it up there and leave

[01:14:22] Cameron: Alex’s oth­er ques­tions for next week. Thank you again for send­ing so many good ques­tions,

[01:14:27] Tony: Yeah. They are good

[01:14:28] Cameron: Keep them. They’re not time, they’re not time sen­si­tive, so I can keep them up my sleeve. And we can get into after hours. I think we’ve already done Alex’s after hours.

[01:14:38] Cameron: Have you watched or read or lis­tened to any­thing cool, Alex, that you want to tell us about?

[01:14:46] Alex: Hmm. Um, well, not so much since we’ve been car­a­van­ing. Um, uh, but we start­ed Mis­sion Impos­si­ble last night and we all dropped off at about the halfway

[01:14:57] Alex: mark. So, [01:15:00]

[01:15:00] Tony: Was­n’t even that far, was

[01:15:01] Alex: uh, oh, not you guys. We, we made it maybe anoth­er 15

[01:15:04] Alex: min­utes and then I got just annoyed at how the plot went and turned it off.

[01:15:08] Alex: Yeah.

[01:15:09] Cameron: Yeah.

[01:15:10] Alex: It’s all right. I’m sure it’ll be fine. We just got to fin­ish it off. And I think the more annoy­ing thing is that it’s part one, like every­one looked at it and just groaned.

[01:15:19] Tony: Yeah.

[01:15:20] Cameron: one.

[01:15:20] Alex: one. There’s going to be a part two.

[01:15:23] Cameron: Mis­sion Impos­si­ble 7, but it’s part one.

[01:15:25] Alex: Yep.

[01:15:26] Cameron: Wow.

[01:15:27] Tony: for three hours.

[01:15:28] Cameron: Ha ha ha ha ha. I’ve got no prob­lem with a long run­ning time for a film if it keeps my inter­est. I’m look­ing for­ward to the four and a half hour ver­sion of Napoleon that Rid­ley Scot­t’s going to be com­ing out with, he says, and I think Scors­ese’s Killer of the Flower Moon has like got a three hour or three and a half hour run time or some­thing, I’m all up for that.

[01:15:50] Cameron: I’m down for as many hours, Rid­ley Scott I’m more doubt­ful about, even though it’s Napoleon, because I don’t think Rid­ley Scot­t’s been at the top of his game for a long time, but [01:16:00] Mar­tin Scors­ese, I’ll just. Yeah, he could just, I’ll sit there for a week and watch any­thing Scors­ese, par­tic­u­lar­ly if it’s De Niro.

[01:16:07] Cameron: What­ev­er he puts in front of me, I’ll just watch. No, no prob­lems.

[01:16:11] Tony: Yeah, no, I agree.

[01:16:13] Cameron: What else?

[01:16:14] Tony: Even the, uh, Crown Las Vegas Macau ad that

[01:16:18] Cameron: Yes,

[01:16:19] Tony: paid 15 mil­lion for. Scors­ese, di Caprio, and De Niro

[01:16:24] Cameron: That was great. Yeah. Um, what else have you guys got? What, what else have

[01:16:31] Cameron: you

[01:16:31] Tony: Oh, I’m still read­ing The Fall, so talk­ing about, um, Amer­i­can pol­i­tics and how they’re being cor­rupt­ed by the Mur­doch press. It’s, it’s a tough read in places. Cause it’s, it’s all about that, but there’s some real gems in there. You know, Roger Ailes, who I guess his great­est con­tri­bu­tion to busi­ness was that he worked out that a lot of Amer­i­cans want it to be 1965 still.

[01:16:56] Tony: And so he gave it to them in Fox News. Um, [01:17:00] and then it was inter­est­ing to, you know, some of the, up to the, the part where, uh, the Domin­ion Vot­ing Com­pa­ny is tak­ing Fox News and News Corp to, uh, Yeah, to the courts for libel, and that, hear­ken­ing back to the Joe Astin col­umn, it was, it’s pret­ty clear that Mur­doch was suc­cess­ful, Rupert Mur­doch was suc­cess­ful because he had some strong lieu­tenants who grew up in the Mur­doch envi­ron­ment and grew with Rupert, and espe­cial­ly his lawyers, Um, appar­ent­ly when Mur­doch first went to New York and bought a news­pa­per there, he, he start­ed using a small New York law firm who grew a lot, grew along with News Corp and grew to knew how Mur­doch oper­at­ed and, you know, devel­oped some rules, which was basi­cal­ly, um, set­tle as quick­ly as you can, don’t go to the courts because the jury’s [01:18:00] always going to pick on the big, bad media com­pa­ny, um, and, uh, But, you know, that was back in the ear­ly 90s when that hap­pened, I think, and all those lawyers have retired, and now Lach­lan was putting in his own lawyers into the com­pa­ny, includ­ing the one who was the chief in house coun­sel, who real­ly comes across as Want­i­ng to be a Supreme Court jus­tice and thought he might’ve got­ten a nod under Don­ald Trump.

[01:18:28] Tony: And so it was, was say­ing things like, we’re going to take this and fight it all the way to the Supreme Court, which is kind of the reverse log­ic to what the smart lawyers did, which was to say, no, we’re going to shut it down and set­tle it as soon as we can. Um, so yeah, inter­est­ing how that’s all played out, but yeah, inter­est­ing read.

[01:18:45] Tony: I’d rec­om­mend. Peo­ple read it if they want to know how Aus­tralia is going to prob­a­bly end up as well, and when it gets even more Mur­dochized as it has been. But the one I want­ed to men­tion, Cam, was The Rep­tile, which is on [01:19:00] Net­flix now. I don’t know if you’ve seen that yet, just came out in the last week or so.

[01:19:03] Tony: Look, it’s a, it’s a, Pret­ty basic police pro­ce­dur­al, but it stars Beni­cio Del Toro. And in terms of actors who I love to watch, I’d watch him sit­ting in a chair read­ing the yel­low pages. He’s, he’s great and real­ly good in this too.

[01:19:19] Cameron: Yeah, so it’s a police dra­ma. The Rep­tile.

[01:19:23] Tony: Yeah, he plays a cop, um, who comes into a new envi­ron­ment, uh, was cor­rupt in his last job, but kind of put that behind him and is look­ing for a new start. And then there’s a mur­der and he gets dragged into cor­rup­tion again in his new envi­ron­ment. It’s

[01:19:40] Cameron: Does he mum­ble in it?

[01:19:41] Cameron: I need him

[01:19:42] Tony: all the time. He’s great. He’s a great

[01:19:44] Cameron: He’s got­ta mum­ble. Yeah.

[01:19:45] Tony: Yeah, great mum­bler. And his wife is, I did­n’t work it out until I saw the cred­its, is played by Ali­cia Sil­ver­stone. Who just looks like a, you know, the way a 50 or 60 year old actress should look with­out make­up. So [01:20:00] great, great.

[01:20:01] Cameron: Good for her.

[01:20:02] Tony: Two great act­ing turns. But it’s got Eric Boghoss­ian who I always enjoy watch­ing in it.

[01:20:08] Tony: It’s got Justin Tim­ber­lake. plays a role in it. So it’s, it’s a real­ly good cast to watch. Um, basic sto­ry, but just well done.

[01:20:18] Cameron: Ah, great. Thanks for the rec. Uh, did you tell me last week you’d watched Hen­ry Sug­ar?

[01:20:25] Tony: Yeah.

[01:20:26] Cameron: We watched it, um, over the week. Yeah, loved it. Haven’t seen the oth­er ones yet, but just, just absolute­ly adored it. So deli­cious.

[01:20:35] Tony: Isn’t it? And just, just the right length too, I thought.

[01:20:40] Cameron: Yeah, it was great. Like just Wes Ander­son­’s lit­tle jew­el, jew­el box pro­duc­tion and every­thing. So neat and tidy and all of the per­for­mances were just deli­cious. Just, yeah. I just had a smile on my face for the whole thing.

[01:20:55] Tony: Yeah, me too. And Ray Fines was good, and Ben Kings­ley was good, [01:21:00] and Richard A. Awad­hi, and Dev Patel. Yeah, great

[01:21:04] Cameron: Cum­ber­batch.

[01:21:05] Cameron: Yeah. Real­ly, real­ly good. Um, so, uh, uh, talk­ing about, uh, slight­ly more seri­ous things. Are you a Steven Wol­fram fan? Have we spo­ken about Wol­fram?

[01:21:17] Tony: Yeah.

[01:21:19] Cameron: Did you read a new kind of sci­ence 20 odd years ago?

[01:21:22] Tony: And then I held my door open with it for a long time as well, because it was so big.

[01:21:26] Cameron: Yeah, I’ve still got it on my shelf down­stairs. Did you know he put anoth­er one out in 2020?

[01:21:32] Tony: Only because I think you post­ed some­thing on Face­book about the Ruli­ad.

[01:21:36] Cameron: The Ruli­ad, yeah. So I’ve been lis­ten­ing to a lot of inter­views with him recent­ly as well. And so I found out, I don’t know how this got past me, he put out anoth­er book dur­ing COVID called A Project to Find the Fun­da­men­tal The­o­ry of Physics. And I’ve been read­ing that, and it’s, it’s, so he’s tak­en a new kind of sci­ence, and he’s tak­ing it to a new lev­el.

[01:21:59] Cameron: Now, he’s [01:22:00] spent the last 25 years, since he wrote that, build­ing Wol­fram Alfr­er, all of these math­e­mat­i­cal tools, etc, etc. And, You know, he’s now say­ing that he’s more con­vinced than ever that the, what under­lies the uni­verse is, uh, some kind of rel­a­tive­ly sim­ple com­pu­ta­tion­al rule. And he’s try­ing to fig­ure out what that is now.

[01:22:25] Cameron: And he’s try­ing to get every, he’s try­ing to get peo­ple around the world to join him on the jour­ney to uncov­er it. And he’s, he goes through a lot of exam­ples of the rules that they’ve been com­ing up with, but it’s, it’s, it’s just, it’s a. Com­plete mind ben­der. But the, the, the, the great, um, out­come of this is he’s say­ing that there are prob­a­bly lots of rules run­ning simul­ta­ne­ous­ly out there in the uni­verse, [01:23:00] cre­at­ing their own laws of physics.

[01:23:01] Cameron: So basi­cal­ly say­ing that ev all of the laws of physics that we are aware of in the uni­verse, come from a par­tic­u­lar rule that’s run­ning, a

[01:23:13] Cameron: rel­a­tive­ly sim­ple rule. Obvi­ous­ly, the whole the­o­ry behind new kind of sci­ence is that from the,

[01:23:19] Cameron: what does he call it? The prin­ci­ple of com­pu­ta­tion­al equiv­a­lence, that you can start with some­thing that’s rel­a­tive­ly sim­ple, sim­ple ele­ment, sim­ple rule, but if you run it for long enough, it can cre­ate very, very com­plex out­puts.

[01:23:34] Cameron: Exact­ly.

[01:23:34] Tony: Like a frac­tal.

[01:23:36] Cameron: Exact­ly. So he’s say­ing that… Our uni­verse, what we can see in the uni­verse comes from that rule, but there may be oth­er rules run­ning simul­ta­ne­ous­ly in the uni­verse that we can’t be aware of because we exist in the slice of the uni­verse that’s cre­at­ed by one rule, and all the oth­er rules are [01:24:00] run­ning at the same time, but, you know, they’re cre­at­ing rules of physics that cre­ate beings that can only see what hap­pens inside of that uni­verse. Com­pu­ta­tion. We exist in one slice of com­pu­ta­tion. Any­way, it’s, uh, they’ve already, um, run enough rules and devel­oped

[01:24:19] Cameron: them where things like spe­cial rel­a­tiv­i­ty falls out of the rule. They can see how there’s the equiv­a­lent of spe­cial rel­a­tiv­i­ty, there’s the equiv­a­lent of quan­tum mechan­ics, there’s the equiv­a­lent of a whole bunch of fun­da­men­tal sci­en­tif­ic ideas and the­o­ries.

[01:24:37] Cameron: We might ask, well, Why is that so? Why is there a lim­it to the speed of light? Why does z equal mc squared? He goes, but when you look at the rule, you go, okay, well, I can now see why these things have to be that way, because the under­ly­ing rule leads to these out­comes. Any­way, I was won­der­ing if you’d come across it, because it’s been doing my head in.

[01:24:58] Cameron: I absolute­ly love it. It’s [01:25:00] been a great read.

[01:25:01] Tony: Yeah, good. I haven’t come, I haven’t read the book. I’ve just come across a few posts on Face­book. But yeah, it makes sense to me. It’s kind of like a poten­tial solu­tion to the Fer­mi Para­dox too, that in oth­er uni­vers­es or oth­er rules, struc­tures, there are plen­ty of civ­i­liza­tions that we’ve nev­er come across.

[01:25:19] Cameron: Speak­ing of which, I watched the trail­er for the Three Body Prob­lem

[01:25:22] Tony: Oh,

[01:25:23] Cameron: series last night on Net­flix, and have you seen it, the trail­er? It looks visu­al­ly beau­ti­ful, but the only audio, apart from some back­ground music, is Carl Sagan’s voice from Cos­mos, and he’s say­ing, some peo­ple say, that maybe we should stay dark.

[01:25:44] Cameron: And not let them know that you’re out there. So appar­ent­ly Carl Sagan artic­u­lat­ed the whole dark for­est hypoth­e­sis as part of Cos­mos back in the ear­ly eight­ies. So it’s just his voice and, you know, I’m sort of a [01:26:00] mas­sive Carl Sagan groupie because, you know, he was the guy, right? When we were grow­ing up, he was the guy that just made sci­ence sexy and cool,

[01:26:11] Tony: yeah, he was like the Bri­an Green today, back then.

[01:26:14] Cameron: Oh yeah, but far sex­i­er. He had turtle­necks.

[01:26:18] Tony: He did.

[01:26:19] Cameron: And that voice.

[01:26:20] Tony: Yeah, it’s kind of a French, French sort of look, was­n’t it, back then, yeah,

[01:26:24] Cameron: Which leads me to my next point. Have you watched any of the OSS 117 films?

[01:26:29] Tony: no,

[01:26:30] Cameron: Do you know who Jean Dujardin is? I apol­o­gize to Samuel for my French pro­nun­ci­a­tion. Did you ever see The Artist? The Acad­e­my Award win­ning film a few years ago?

[01:26:44] Tony: uh, I did, but I can’t, name rings a bell, I can’t recall it though, is that with um, Uh, I for­get. Tom, tell me about it.

[01:26:55] Cameron: Oh, so there’s a film in 2017.

[01:26:59] Tony: Adri­an Brody?[01:27:00]

[01:27:00] Cameron: Uh, no.

[01:27:03] Tony: Alex is

[01:27:04] Cameron: No,

[01:27:04] Tony: his head.

[01:27:05] Cameron: no.

[01:27:05] Tony: Have you seen it, Al?

[01:27:06] Alex: No, but I remem­ber see­ing the, um, like all of the head­lines for it when it was going through Khan and every­thing.

[01:27:13] Alex: It’s, it’s black and White, isn’t it? it’s, about an old­er guy and a younger girl.

[01:27:16] Cameron: Black and White, it’s, uh, basi­cal­ly about a silent pic­ture movie star set in the 20s, um, won sev­en Acad­e­my Awards, Best Film, Best Actor, Best Orig­i­nal Screen­play, Cin­e­matog­ra­phy, real­ly worth watch­ing. Any­way, the lead actor in it’s a French guy, uh, Jean Dujardin. Uh, he’s made a series of, uh, films called OSS 117, writ­ten and direct­ed by the same guy, um, who wrote The Artist.

[01:27:45] Cameron: Uh, Michel Haz­anavi­cius, Viciu, uh, Vicius, Vicius, any­way, let’s get off of my French pro­nun­ci­a­tion. Any­way, OSS 117 is a, it was a, it was a series of books. There were like hun­dreds of these books writ­ten [01:28:00] about a secret agent. They actu­al­ly, the first one came out, I think five or six years before the first Bond nov­el came out.

[01:28:06] Cameron: So. Pre Dates Bond. And they’re sort of seri­ous. I think he’s an Amer­i­can, uh, secret agent with French ances­try. But, but the film sort of, they made some films and they died out in the, I don’t know, the 70s or some­thing. But, uh, These two guys, Jean Dujardin and Haz­anovi­ci, uh, re re imag­ined it, and he’s a French secret agent, and he does a com an absolute­ly stun­ning Sean Con­nery imper­son­ation through these whole things, but they’ve

[01:28:43] Tony: does he give up at the first chance though?

[01:28:46] Cameron: give

[01:28:46] Tony: I

[01:28:47] Cameron: Uh,

[01:28:48] Tony: Like the French did.

[01:28:49] Cameron: oh, wow, that’s, that’s harsh. Uh, he’s, he’s, but he’s like, he’s stuck in the 60s. He’s sex­ist, he’s [01:29:00] racist, he’s smarmy. Um, and they real­ly pushed the whole French colo­nial, like we’re watch­ing the third one at the moment, it’s on SBS, which is, um, OS, OSS117, From Africa With Love. So they’re going, he goes to Africa to try and stop some rebels from over­throw­ing the pup­pet dic­ta­tor of

[01:29:19] Cameron: this lit­tle African nation that the French are con­trol­ling, like the ver­sion of the Con­go or some­thing.

[01:29:25] Cameron: And he’s just com­plete­ly racist, whilst think­ing that he’s this won­der­ful white colo­nial who’s gone over there and spread­ing his colo­nial mag­ic every­where. It’s just, it just real­ly, they real­ly play up the… You know, the racism and sex­ism of Bond movies from that peri­od, and also take a real­ly big jab at French colo­nial­ism, uh, in the whole process.

[01:29:50] Cameron: But he’s just, he’s real­ly, real­ly fun­ny, this guy.

[01:29:53] Tony: Yeah, sounds good.

[01:29:55] Cameron: if you haven’t seen any of those films, I high­ly rec­om­mend them. We’ve, we’ve been just

[01:29:59] Tony: Sounds [01:30:00] like Life on Mars,

[01:30:01] Cameron: Uh, yes, but fun­ny. Yeah, exact­ly.

[01:30:05] Tony: on Mars was hilar­i­ous. Yeah.

[01:30:07] Cameron: Well, yeah, I guess a lit­tle bit. It was­n’t real­ly a com­e­dy though.

[01:30:12] Tony: Oh, I thought it Was Yeah. Kind of action com­e­dy.

[01:30:16] Cameron: Yeah.

[01:30:16] Tony: I love that guy and that, the, the sex­ist cop and the, you know, the old style cop, the Gene Genie.

[01:30:22] Cameron: yeah, with the big,

[01:30:24] Tony: Come out, you’re sur­round­ed by armed bas­tards.

[01:30:26] Cameron: yeah. So enjoy­ing that. And then I’ve just been spend­ing a lot more time with Chat­G­PT, script­ing, doing a whole bunch of, I was lying in the, I was get­ting some, a crown replaced at the den­tist the oth­er day, just lying there with my eyes closed for a while, actu­al­ly, no, it was­n’t at the den­tist. It was while I was at my Kung Fu. Physio, get­ting my shoul­der put back in, had my, put my shoul­der out last week. And, um, I was think­ing, you know, it’s just, I won­der if I could auto­mate this process. That I’ve been [01:31:00] get­ting a human free­lancer to do for the last cou­ple of years. And it would take her like four or five hours to go through the buy list and give me the, the buy and sell and 2BL prices for every­thing.

[01:31:12] Cameron: I won­der if I could auto­mate that. And I came home and with­in half an hour. GPT had writ­ten a script that would just auto­mate the whole process for me. And I could then do a US ver­sion of that. So now, you know, I had the prob­lem of, you know, all these US stocks, see­ing if they were above their sell lines and their 2BL lines.

[01:31:31] Cameron: Now I’ve got a script that just does it for me. And, uh, it just, I use GPT to write a script that just checks it all. And I was like, wow, so cool. Any­way. Yes. I feel like a, a coder Tony. It’s so cool to actu­al­ly be able to code stuff, you

[01:31:50] Tony: Yeah, no, that’s great. No, well done.

[01:31:54] Cameron: Tech­nol­o­gy is amaz­ing.

[01:31:55] Tony: Yeah.

[01:31:57] Cameron: Alright, well that’s all I’ve got for you.

[01:31:59] Cameron: Thank you, Tony.

[01:31:59] Cameron: [01:32:00] Thank you. Ak. The T Attack Tech. Attack

[01:32:03] Alex: Thank you.

[01:32:04] Cameron: The T tick attack Aka­ka,

[01:32:08] Tony: Well, we’re both AKs, aren’t we? Yeah.

[01:32:11] Alex: Yep.

[01:32:12] Cameron: oh

[01:32:12] Alex: not con­fus­ing at all.

[01:32:13] Cameron: Ack Ack. Yeah.

[01:32:15] Tony: to myself, I’ll nev­er do that. Cause my

[01:32:16] Tony: grand­moth­er’s was Anne Kynas­ton and I, and occa­sion­al­ly we’d get her mail and we’d get

[01:32:21] Tony: con­fused. I said, I’ll nev­er have a child with the same ini­tials,

[01:32:26] Tony: but we did.

[01:32:27] Cameron: Bet you don’t go by Antho­ny except for like, for­mal things, right?

[01:32:30] Cameron: Well,

[01:32:31] Alex: sor­ry, can I have two lit­tle shout outs before we end up? Um, first I want­ed to shout out,

[01:32:38] Alex: uh, A QAV sub­scriber, my uncle War­ren,

[01:32:42] Alex: it’s his 60th birth­day this year and he’s got­ten into bee­keep­ing, which is very cool. So… We’ve had lots of love­ly chats, um, stand­ing around the hive. I don’t think he’s

[01:32:53] Alex: start­ed tak­ing his hon­ey. to mar­kets yet, but if you’re in the Bris­bane area,

[01:32:59] Cameron: We…

[01:32:59] Alex: [01:33:00] see­ing walls,

[01:33:00] Alex: hon­ey.

[01:33:01] Cameron: Well, you got­ta tell what we

[01:33:03] Cameron: want­ed because a guy at our Kung Fu stu­dio about six months ago said, Hey, do you like hon­ey?

[01:33:08] Cameron: And I was like, yeah, he goes, Oh, here, I’ve got some hives. And he gave us, it was like the first real nat­ur­al hon­ey we’d have and it blew our minds. And then he has­n’t been back to Kung Fu since. so We’ve been going all over the place

[01:33:23] Cameron: look­ing for nat­ur­al hon­ey. It real­ly makes a dif­fer­ence. So you have to tell Uncle Wal if he’s lis­ten­ing that, uh, I real­ly, I’ll be a cus­tomer of that.

[01:33:33] Cameron: We’ll buy a ton of it.

[01:33:35] Alex: Yeah, it’s so good. He gave me two, um, bot­tles that I watched him pour from a frame.

[01:33:40] Cameron: Oh

[01:33:42] Alex: fan­tas­tic. and it was my birth­day, so it was my birth­day present for two jars. I let every­one sam­ple from one jar and I imme­di­ate­ly hid the oth­er one. Mum said she even went into like our room at the, in the cold coast to try and…

[01:33:54] Alex: See if she could find it. I think it was more of a recon­nais­sance, like, can I do [01:34:00] it? And she could­n’t because that’s how seri­ous­ly I like Bar­ney,

[01:34:03] Cameron: yeah, you’ve got to hide your hon­ey,

[01:34:05] Alex: and then my oth­er kind of shout out and look, you know, it won’t get back to her, but my best friend, Angel­i­ca, she’s, we met in school togeth­er in Cana­da.

[01:34:16] Alex: She moved back to Moscow and got an apart­ment near the Red Square, near her fam­i­ly a cou­ple years ago. Um, she’s an artist as well and, um, obvi­ous­ly war broke out, so she fled to Israel to Tel Aviv. And she’s been liv­ing there the last cou­ple of, I think the last year. and a bit too. And we got the mes­sage on Mon­day, so yes­ter­day, that, um, she’s in Athens.

[01:34:45] Alex: She made it, out. She’s with her friend’s fam­i­ly. So I just want­ed to send pos­i­tive,

[01:34:51] Alex: man­i­fest­ing pos­i­tive things for her. um, and, you know, I guess we’re all six degrees of sep­a­ra­tion from these kinds of things. So I’m sure there are oth­er [01:35:00] mem­bers, club mem­bers out there who, um. If they’re still lis­ten­ing, this late in the pod, um.

[01:35:06] Alex: who would be con­nect­ed some­how.

[01:35:07] Alex: So I just want­ed to say

[01:35:08] Alex: that, you know, it’s pret­ty ran­dom. a 24 year old from Mel­bourne has any con­nec­tion to either Israel, Ukraine or

[01:35:17] Alex: Rus­sia, but, um, you know, we’re all kind of affect­ed in some way. So yeah, just putting pos­i­tive

[01:35:24] Alex: affir­ma­tions out there for

[01:35:26] Alex: every­one affect­ed.

[01:35:27] Cameron: mmm, yeah, it’s a com­plete mess over there. We had some friends that were, came over from Israel and they, it was fam­i­ly that was at Fox’s school last year and then they moved back to Israel ear­li­er this year. They’re right in the mid­dle of it, um, you know. they’re just in a ter­ri­ble sit­u­a­tion and, yeah, um.

[01:35:51] Cameron: I’m going to talk about It on the bull­shit fil­ter on Fri­day, but the whole sit­u­a­tion over there has been a mess for a long time. The pol­i­tics of it and [01:36:00] the sup­port for var­i­ous sides. It’s, uh, like obvi­ous­ly this, this has been a com­plete tragedy on all sides, but it was you know. It was com­ing. It was one of those things that they just kept kick­ing the can fur­ther and fur­ther down the road.

[01:36:19] Cameron: Even­tu­al­ly, some­thing like this was going to hap­pen. So I remem­ber when this fam­i­ly moved back to Israel, I was like, Why on earth would you move back to Israel after you’ve been here? Like, I mean, I get it. There’s fam­i­ly con­nec­tions and ties and stuff like that, but why would you go and put your­self in a hot pot like that when you could, you know, we have our no votes and stuff like that, but, uh, you know, we’re not in the mid­dle of a war zone. Any­way.

[01:36:48] Tony: Oh, did she? I’ll look for­ward to that. That’d be inter­est­ing to lis­ten to the bull­shit fil­ter on that one. The, um, I’ve been read­ing sort of these, I guess they’re kind of semi con­spir­a­cy the­o­ries. So I’ll be inter­est­ed in your take when you go into a deep dive [01:37:00] around the Israeli pol­i­tics and the, um, changes to the judi­cial law and whether this BB.

[01:37:08] Tony: to con­tin­ue to do what he wants to do and have peo­ple focus on the war rather than what’s going on to to change the pow­er struc­tures in Israel.

[01:37:17] Cameron: yeah. Um, I, I’m sure some of those things, uh, con­ve­nient for him, but, you know, I think it prob­a­bly has a lot more to do with the attempts at Bro­ker­ing peace between Sau­di Ara­bia and Israel and Hamas and the Pales­tin­ian peo­ple just feel­ing like they’re increas­ing­ly giv­en up on and mar­gin­al­ized. I did a long series on the Cold War show about the cre­ation of Israel.

[01:37:46] Cameron: We did like a 20 part series going through the whole cre­ation of Israel, going back to the sort of the late 1900s and all the way through to 1950. And. You know, the bot­tom line [01:38:00]is there were peo­ple liv­ing there. The Pales­tin­ian peo­ple did­n’t get any say in what hap­pened. You know, the Unit­ed Nations just made a deci­sion. Oh yeah, we’re going to carve out a huge chunk of this land and give it to these, most­ly Euro­peans, Euro­pean Jews that decid­ed they want­ed to move there.

[01:38:19] Cameron: The Pales­tin­ian Arabs

[01:38:20] Cameron: did­n’t get a say. They were just pushed to the side and said, deal with it. Suck it up, princess. It’s, it was bru­tal. And, uh, and you know, it’s been bru­tal ever since they fought back, they want­ed to keep their home­land and the oth­er side just had more mon­ey, more weapons, uh, bet­ter part­ners.

[01:38:40] Cameron: And it’s just been a shit show ever since. But if you, if you go back, like it’s the prob­lem with the whole Israel Pales­tine thing, my life­time has always been, you know, the, the Pales­tini­ans will say, well. We did this because they did that and the Israelis say, well, we did this because they [01:39:00] did that. But if you go back to what’s the orig­i­nal sin, it was that this whole, you know, land was just tak­en away from these peo­ple that were liv­ing there and has been jus­ti­fied many ways from Sun­day ever since.

[01:39:18] Cameron: And, um, the

[01:39:19] Tony: away from us by the, by the Romans orig­i­nal­ly.

[01:39:23] Cameron: yeah, sure. And they took it away from some­body before the

[01:39:28] Tony: Hmm.

[01:39:29] Cameron: So, you know, you can go back as far as you want. But like I always said that, yeah, sure. The Jews should have had, um, some land giv­en to them after World War II. And it should have been Ger­many. I always say they should have had half of Ger­many.

[01:39:45] Cameron: Give them half of Ger­many. At least, you know, the Ger­mans prob­a­bly had that com­ing. The Pales­tini­ans did­n’t do any­thing to them. Pales­tini­ans did­n’t, did­n’t run con­se­cra­tion camps in World War II.

[01:39:58] Tony: Well, it’s a good point. I’ve often [01:40:00] won­dered why the Jews, you know, did­n’t migrate back to Poland or to Ger­many where they had big cul­tur­al ties and fam­i­lies that were left any­way, um, from pri­or to the war.

[01:40:13] Cameron: yeah. And there was, there were lots of sug­ges­tions around there. There was a sug­ges­tion that they come to Aus­tralia. There were lots of pro­pos­als in the 30s and 40s for dif­fer­ent places where they could go. Um, for var­i­ous rea­sons, they want­ed to go to Pales­tine. Um, but it, you know, the Pales­tin­ian peo­ple weren’t includ­ed in that deci­sion.

[01:40:38] Cameron: So it was a bad deci­sion and every­thing that’s hap­pened ever since then goes back as far as I can tell to that orig­i­nal sin. But that does­n’t get talked about in the media. The media cov­er­age is Hamas shot rock­ets. Not why. You know, what dri­ves peo­ple to acts of ter­ror? That’s the ques­tion that does­n’t get [01:41:00] talked about in the main­stream media.

[01:41:02] Tony: Yeah. I mean, yeah. No, I under­stand what you’re say­ing.

[01:41:06] Cameron: have a good week! QAV a good week. We should get out of here. Ciao. Thanks guys.

[01:41:13] Tony: All right. Thanks Cam. Have a good week.

[01:41:17] Alex: Thank you. See ya.