QAV #643 — A Technical Correction

 

[00:00:00] Cameron: Wel­come back to QAV. This is episode 643 TK. Do you have a super­pow­er, Tony?

[00:00:11] Tony:

[00:00:11] Tony: Uh, I like, um, if I’ve got one it’s the same as Ricky Ger­vais, not giv­ing a fuck.

[00:00:17] Cameron: it’s not like Antho­ny Pratt. You’re just rich. That’s his super­pow­er, appar­ent­ly.

[00:00:22] Tony: No, not in that league, that’s for sure.

[00:00:23] Cameron: You’ve been read­ing these, uh, Pratt sto­ries that have been com­ing out this week.

[00:00:27] Tony: cer­tain­ly gives cre­dence to all the con­spir­a­cy the­o­rists who believe the rich are con­trol­ling the world, that’s for sure.

[00:00:32] Cameron: Yeah, you know, he seems to be on record say­ing that he throws his mon­ey around in order to have influ­ence with every­one from King Charles to Don­ald Trump to who knows who,

[00:00:46] Tony: Yeah, I’m not sure what buy­ing influ­ence with King Charles actu­al­ly gets you as a busi­ness per­son, real­ly.

[00:00:50] Cameron: King Charles on the speed dial. You know, you know, you want me to, I can make a, I can make a call to King Charles, he’ll, he’ll answer my call, get your cred­i­bil­i­ty in a room. [00:01:00]It’s like that old, that old sto­ry about the, uh, I can’t remem­ber who I first, I’ve heard lots of dif­fer­ent ver­sions of this, but this, the sto­ry of the, uh, guy in the restau­rant in Syd­ney, Ker­ry Pack­er walks in, guy’s sit­ting there at the table, he sees Ker­ry Pack­er walk in.

[00:01:17] Cameron: And he, Ker­ry sits at a table by him­self. The guy gets up and he goes over to Ker­ry. He says, Mr. Pack­er, sor­ry to inter­rupt you, but, uh, my name’s John. Huge fan of yours. Been fol­low­ing your career for decades. Lis­ten, uh, you don’t know me. You don’t know me any­thing, but just won­der­ing if you could do a fel­low busi­ness­man a favor.

[00:01:35] Cameron: Like I’m, I’m try­ing to close this big deal. Got a client going to meet me for lunch. This could be make or break for me. I’m just won­der­ing on your, we’ll prob­a­bly be here for a while on your way out. If you would­n’t mind just, you know, stop­ping at our table and say­ing, hey John, how’s it going? It’ll give me a huge amount of cred­i­bil­i­ty and help me close the deal.

[00:01:55] Cameron: And Ker­ry’s like, yeah, all right. You know, he’s, he’s hav­ing a good day. Just, I don’t know, he just sold Chan­nel 9 to [00:02:00] Alan Bond or some­thing. He’s feel­ing pret­ty good. Yeah, all right, mate. So now lat­er Ker­ry fin­ish­es his 25 cours­es and he gets up, he walks out, he stops at the table and he pats this guy and he goes, hey John, how’s it going?

[00:02:11] Cameron: John looks over, he goes, fuck­ing hell, Ker­ry, I’ve told you, don’t inter­rupt me when I’m in the mid­dle of a meet­ing.

[00:02:21] Tony: Oh, that’s gold.

[00:02:22] Cameron: does that with, Go does that with King Charles, maybe that’s Antho­ny Prat­t’s mod­el. Well, enough lev­i­ty for this show, it’s been anoth­er dis­mal week on the ASX, Tony, uh, mar­ket has been down yet again, tick­ing up a lit­tle bit today, but, uh, not, you know, not

[00:02:41] Tony: Well, thank good­ness

[00:02:41] Cameron: impact on the week.

[00:02:44] Tony: it has ticked up today because today is the anniver­sary of Black Tues­day in 2007 when the US stock mar­ket overnight dropped 20 per­cent in one ses­sion. Hmm.

[00:02:57] Cameron: that was, uh, thought the [00:03:00] GFC was­n’t until 2008, what, what

[00:03:02] Tony: No, it start­ed in 2007. Yep. I’m not sure what the cat­a­lyst would have been, but it was prob­a­bly going to be some­thing like, uh, Lehman Broth­ers not being bailed out, or there was the bank in the UK which also was­n’t bailed out and went broke. North­ern Rock, I think it was called, some­thing like that. Yeah. So,

[00:03:21] Cameron: Mae and Fred­die Mac and all of those came lat­er.

[00:03:24] Tony: And Alan, I don’t know if you, I just hap­pened to have the ABC News on last night when I got in at 7. 30 and Alan Cole does his shtick on at the end of the news on the busi­ness and he showed a graph of this year ver­sus 2007 and it’s, you can over­lay one graph on the oth­er. And this was lead­ing up to yes­ter­day before Wall Street opened.

[00:03:45] Tony: So it was like, I woke up this morn­ing and went, phew, his­to­ry did­n’t repeat.

[00:03:51] Cameron: Right. Well, I’m look­ing at the one year chart. The ASX is almost back to where it was a year ago.

[00:03:59] Tony: Mm hmm.

[00:03:59] Cameron: [00:04:00] If I look at a two year chart, it’s down about 10 per­cent from where it was two years ago. A 5 year chart, it’s up a lit­tle bit, maybe 10 per­cent from where it was 5 years ago, but it’s uh, you know, not, not a great look­ing chart, that’s for sure.

[00:04:18] Tony: Yeah. Well, I thought you were going to cheer me up today. After all the prob­lems in the mar­ket.

[00:04:24] Cameron: No, no cheer­ing up to be done, Tony, I saw in the… ABC yes­ter­day, Aus­tralian share mar­ket moves into a tech­ni­cal cor­rec­tion as war and infla­tion real­i­ties hit home. Tech­ni­cal cor­rec­tion is a bit of a finan­cial mar­kets jar­gon for a mar­ket fall from a recent peak of 10 per­cent or more. ASX200 hit an all time high of 7, 628, August 13, 2021, and a peak of 7, 558 on Feb­ru­ary 3rd this year.

[00:04:58] Cameron: But as of [00:05:00] yes­ter­day, it had fall­en 10 per­cent since then. Not sure what today’s slight gains mean, but, uh, yeah, it’s been a, been a hell of a cou­ple of years.

[00:05:10] Tony: Yeah, and we were talk­ing off air before about how this reminds me of the GFC, and we had an accel­er­at­ed ver­sion of this going into COVID, um, and I guess the process helps us through all this, but it’s just hard los­ing mon­ey while you’re wait­ing for it to go to cash and find things to buy, and it could be a long way off, I just don’t know, but, um, yeah, I mean, good to have some more, some more lev­i­ty, and, uh, I guess, you know, put things in per­spec­tive, at least we’re not, In Gaza at the moment or, um, Ukraine or, you know, out of job, out of work or what­ev­er.

[00:05:47] Tony: So it’s, um, we’re com­plain­ing about los­ing a bit of paper mon­ey, which is, um, puts it in per­spec­tive, I think.

[00:05:54] Cameron: Well, how do you cheer your­self up in times like this, Tony, apart from giv­ing your­self per­spec­tive?

[00:05:59] Tony: play more [00:06:00] golf.

[00:06:02] Cameron: Now that you’re off the booze, you can’t even drink to cheer your­self

[00:06:05] Tony: Well, prob­a­bly a good thing dur­ing these times. I might trick myself to for­get, but, um, any­way, look at Alex’s art. That’s the way they always cheers me up.

[00:06:14] Cameron: Hel­lo, Alex. Wel­come to the show.

[00:06:16] Alex: Oh, thank you. Thank you. Hel­lo.

[00:06:18] Cameron: It’s a nice thing of your dad to say. Look­ing at your art cheers you up.

[00:06:21] Tony: yeah.

[00:06:22] Alex: Yeah, so it’s nice. Thank you.

[00:06:25] Cameron: Not, not look­ing at you, just look­ing at your art. No,

[00:06:28] Alex: Yep.

[00:06:31] Cameron: I thought he would have led with that myself, but you know.

[00:06:34] Tony: Alex knows as soon as she and I get into a room, we just. Gig­gle away, don’t we?

[00:06:39] Alex: We just gig­gle at each

[00:06:40] Tony: each oth­er laugh.

[00:06:43] Cameron: Well you are very fun­ny look­ing, I must say. The two of you have amused me no end. Ah yeah, there’s a lot of gnash­ing of teeth out there in QAV land, Tony, and I get it. I did a post yes­ter­day about stay­ing ful­ly invest­ed, and again, going back to those stud­ies [00:07:00] about, you know, if you’re not invest­ed in the 10 best days, what it does to your returns and the 20 best days.

[00:07:06] Cameron: Some­body sent me an email and said, yeah, but what if you’re not invest­ed in the worst 20 days? It sort of accused me of cher­ry pick­ing the data and I said, well, that’s a good point. It’s a fair point, but I think my read­ing of all of these stud­ies is that what peo­ple tend to do is we have the worst days.

[00:07:26] Cameron: And then they capit­u­late after the worst days. It’s not like you can pre­dict the worst days and you get out before the worst days hap­pen. Although maybe there can be bad days and you get out and then the worst days come lat­er on, but I don’t know. Do you think there’s any mer­it in the idea of just capit­u­la­tion and miss­ing out pos­si­bly on the worst days as well as the best days and it all bal­anc­ing itself out over the long

[00:07:50] Tony: Well, it prob­a­bly does bal­ance out with both strate­gies stay­ing in and stay­ing out and try­ing to pick it. But yeah, it’s, I think it’s a fool’s game try­ing to pick the mar­ket. [00:08:00] But that prob­a­bly does make sense that the mar­ket, if you look at the 20 worst days in the mar­ket, they’ve been pret­ty hor­rif­ic.

[00:08:05] Tony: And if you’re in there, you’re suf­fer­ing. And share­hold­ers of Cred­it­Corp last week would know how that feels, unfor­tu­nate­ly. Uh, so yeah, there might be some mer­it in that. But yeah, luck­i­ly, well, at least for me, any­way, I got out of Cred­it­Corp the day before it dropped because it crossed its three point trend line sell, which was prob­a­bly as much of as luck as good man­age­ment.

[00:08:27] Tony: But. But yeah, fol­low­ing the rules helps in this kind of time, I think, uh, because it takes the emo­tion out of it.

[00:08:34] Cameron: Yeah, um, so for I’m sure every­one did see this, but CCP col­lapsed last week, um, just after you said it was prob­a­bly the one stock you would buy and hold onto for 10 years. I don’t know if that had any­thing to do with it. Um,

[00:08:49] Cameron: but yeah, across the three point sell line, I sold it from my own port­fo­lio and the QAV port­fo­lios, and then the next day it [00:09:00] dropped.

[00:09:00] Cameron: I think like 30%, maybe anoth­er 8 per­cent the day after. Um, I’ve got a quote here from some­where. CCP was the worst large cap today, down 30 per­cent after reveal­ing an antic­i­pat­ed 14 per­cent impair­ment of the car­ry­ing val­ue of its US pur­chased debt ledged assets. The impair­ment is esti­mat­ed to pro­duce a one off reduc­tion in CCP’s NPAD of 45 mil­lion.

[00:09:28] Cameron: Cred­it Corp said the impair­ment has arisen from a sus­tained dete­ri­o­ra­tion in col­lec­tion con­di­tions. I mean, that seemed like a bit of an over­re­ac­tion. I mean, I went back over CCP’s his­to­ry because I knew, I know you’ve talked about this, um, when we’ve talked about CCP over the years. I think you’ve said before that, uh, the CEO tends to under…

[00:09:54] Cameron: Um, under promise and over deliv­er. Yeah. And if I look back, even over the last [00:10:00] five years, they’ve had a lot of big dips, lot, uh, begin­ning in April 22, they were trad­ing at 30 bucks. Um, by June 22, they dropped down to 19. So that’s a 30 per­cent drop again. Then it recov­ered and then it declined again, recov­ered up to 24, then declined down to 17, uh, sort of from August to Octo­ber.

[00:10:24] Cameron: So they’ve had lots of. Uh, you know, I mean, obvi­ous­ly leav­ing aside March 2020 when it dropped from 37 down to 9. 80, um, and then recov­ered back up to 33. They seem to have a lot of, uh, uh, quite a few big dips in recov­er­ies over the last cou­ple of years. But what do you, what do you think about a one off impair­ment?

[00:10:46] Cameron: Con­tribut­ing to a near­ly 40 per­cent decline in a mat­ter of days. Is that an over­re­ac­tion or is that a rea­son­able reac­tion?

[00:10:54] Tony: Well, it depends how you, you know, what point of view you come from. I think it’s an over­re­ac­tion. How­ev­er, um, [00:11:00] I called it a 10 year stock last week and it dropped. Um, my, I’ll give, I’ll give you my think­ing for the 10 year stock and I’m, uh, this isn’t in no no, this is by no means me try­ing to Jus­ti­fy that posi­tion.

[00:11:13] Tony: I’m hap­py to admit that I was wrong with my tim­ing on this one. How­ev­er, I’ve seen Cred­it Corp and owned Cred­it Corp over the last 20 odd years. Um, Thomas Barighi, the guy who runs it, I think is one of the best CEOs I’ve seen. There’s prob­a­bly only three or four peo­ple I’d put in that camp. Peo­ple like Antho­ny Las­car, uh, Antho­ny Scali from.

[00:11:35] Tony: Nick Scali, um, maybe the, the, I think it’s the Wil­son broth­ers who run Rees, uh, or the Wil­son fam­i­ly who run Rees, the, uh, per­son who runs ARB, who I’ve, the names escapes me for the moment, but any­way, there’s not many top tier CEOs that I would look at and say they’re a good CEO. And my cri­te­ria is that they’ve been there for a long time through thick and thin.

[00:11:56] Tony: So they’ve grown up and down with the indus­try, uh, rather [00:12:00] than just sort of para­chut­ing in for their four or five year stint from a dif­fer­ent. CEO posi­tion and then leav­ing with a gold­en hand­shake. Um, and they, they’ve been, I guess, like, I’ll call it trans­par­ent and hon­est with their share­hold­ers. They, they tend to over promise and under deliv­er.

[00:12:15] Tony: They tend to quick­ly tell you if there’s a prob­lem. They tend to take that kind of pun­ish­ment on the share price on the chin, but they ride it out. Uh, and if I look at I guess my per­spec­tive on CCP and its share price is if you look going back to the GFC, before the GFC it was trad­ing around 12 a share, it dropped down to as low as 42 cents in the bot­tom of the GFC.

[00:12:38] Tony: So if you had bought it, Then, um, it got up as high as 35 before COVID hit. So that’s a, you know, near­ly a hun­dred times increase in the share price in that, uh, in that peri­od. And it did decline though dur­ing COVID back to 13. Um, which it recov­ered from some­what. And now it’s back [00:13:00] around those lev­els now.

[00:13:00] Tony: So it’s, it’s def­i­nite­ly a volatile stock. And I think what tends to hap­pen with CCP is peo­ple say it’s not a good stock to own dur­ing a reces­sion or a down­turn in the econ­o­my. And that’s cer­tain­ly what they’ve, um, flagged hap­pened in the U. S. So, and this is actu­al­ly an alarm bell. I think it’s pos­si­bly a red flag on the U.

[00:13:19] Tony: S. econ­o­my, but what they said was that peo­ple are walk­ing away from their debt replace­ment plans in the U. S. So, um, The way this busi­ness works is they buy… Uh, debt ledgers from com­pa­nies like banks or cred­it card providers, and typ­i­cal­ly what hap­pens is the bank or the cred­it card provider or the tel­co or the util­i­ty has decid­ed it’s too expen­sive for them to col­lect the last, say, 20 per­cent of peo­ple who owe them mon­ey.

[00:13:46] Tony: They put resources into call cen­ters, etc. to get most of the bills repaid, but then they just give up and they sell off. The rump and then Cred­it Corp buys it and oth­er com­pa­nies like Cred­it Corp and they go out and try and col­lect as much as [00:14:00] they can from that mon­ey. So they’re only pay­ing usu­al­ly pen­nies in the dol­lar to buy the debt ledger because they won’t.

[00:14:05] Tony: Col­lect a whole heap because some peo­ple just can’t afford to pay. Some peo­ple they’ll have trou­ble even track­ing down. But the way Cred­it­Corp works, and which I’ve always had a lot of admi­ra­tion for, is they, they talk to the cus­tomers and they work out a plan. And then they, um, you know, they try and sup­port the cus­tomer in achiev­ing that plan and giv­ing them some slack when they can.

[00:14:26] Tony: And then even to the point where over time they have a good cred­it. His­to­ry or pic­ture of this cus­tomer. And then I can actu­al­ly lend that cus­tomer mon­ey, which is a grow­ing stream of their busi­ness. So, you know, that’s, that’s far removed from the sort of men­tal pic­ture I had of a debt col­lec­tor when I was, you know, start­ing out before I bought shares in CCP 20 odd years ago, where I, you know, I thought peo­ple were going around with base­ball bats and forc­ing peo­ple to.

[00:14:50] Tony: to make their repay­ments or under threat of phys­i­cal pain or send­ing the sher­iff around to repos­sess assets or what­ev­er. And that’s not what CCP does. So they’ve been [00:15:00] quite, um, quite good and quite fair in this space. But what hap­pens when peo­ple say, look, I just can’t abide by my Debt repay­ment plan, as they have in the US, and they’re walk­ing away.

[00:15:11] Tony: I guess the impact on the per­son is, in the US in par­tic­u­lar, is their cred­it score goes down, but it was already down because they fell into arrears with their cred­it card state­ment or who­ev­er they owe mon­ey to, a bank or a util­i­ty. But it gets worse if Cred­it­Corp then lists them as being a write off.

[00:15:29] Tony: So it does have an impact for peo­ple over there, but it’s at the stage now where the impact on their cred­it score is, is not worth try­ing to repay. Cred­it Corp on the repay­ment plan. So I’m going to draw the anal­o­gy that that’s a bit like when peo­ple were just hand­ing back their house keys to the bank dur­ing pre GFC when I’m just going, look, I’m under­wa­ter on my mort­gage.

[00:15:52] Tony: It’s not worth me try­ing to even ride this route here, have the keys back. So I think it’s a real. Canary in the [00:16:00] coal mine for the US econ­o­my, which is like, which is one risk, I sup­pose. And Cred­it Corp, you know, will there­fore have dif­fi­cul­ty col­lect­ing mon­ey if things do go into a reces­sion in the US.

[00:16:11] Tony: And I think that’s what’s prob­a­bly dri­ving the share price decline at the moment. How­ev­er, they will. Come through it and they will, um, what tends to hap­pen is it, either the banks will stop sell­ing off their dis­tress lists until the econ­o­my writes them­selves and they can get some mon­ey for them, or Cred­it Corp can buy them for a real­ly, real­ly cheap price and then almost sit on them for a cou­ple of years and then col­lect out­sized mar­gins when the econ­o­my turns up again even­tu­al­ly, and they can col­lect mon­ey from peo­ple.

[00:16:40] Tony: Um, but it’s just that inter­ven­ing peri­od when we’re going into decline until we come out of the decline that peo­ple don’t want to own. Cred­it Court. Um, so my, my sort of feel­ing is that it’s one to watch when it does turn up again. It’ll prob­a­bly have out­sized returns. And my evi­dence for that is the GFC in COVID when, when you were get­ting [00:17:00] 50 times sort of returns by hold­ing it for five or 10 years after those events, par­tic­u­lar­ly the GFC.

[00:17:06] Tony: In terms of the one off pay­ment to your ques­tion, Cam, the one off impair­ment, sor­ry. It’s an, it’s a non cash item. And basi­cal­ly what it means is that they paid all this mon­ey for debt ledgers in the US and they’re now say­ing that they’re, they’re worth less because going into the mar­ket for new ones, they’re pay­ing less.

[00:17:25] Tony: And also too, they’re say­ing, well, we just can’t recov­er the kinds of debt repay­ments we can to jus­ti­fy the price that we bought it at. And so they’re writ­ing it down on their bal­ance sheet as an asset. And the only way to do that is to take a paper hit to your P& L. Dou­ble book­keep­ing. You’re pay­ing mon­ey to write down an asset.

[00:17:45] Tony: It’s got to come from some­where. It comes from the P& L. But there’s been no dol­lars chang­ing hand in the real world. No cash chang­ing hand. So oper­at­ing cash flow isn’t effec­tive, which is what we focus on. So prob­a­bly the more impor­tant thing [00:18:00] is that they’ve high­light­ed that they think that their income from the US debt col­lec­tions will be 10 mil­lion dol­lars less.

[00:18:06] Tony: Then, um, they orig­i­nal­ly focused, or they orig­i­nal­ly, um, told the mar­ket, uh, last time they made, um, dis­clo­sures. So, it, but they’re still say­ing they expect to col­lect between 80 and 90 mil­lion, um, NPAT from the U. S., uh, down from 90 to 100. So, it… You know, it’s not, again, it’s not the end of the world as it cur­rent­ly stands, but peo­ple are extrap­o­lat­ing that for­ward.

[00:18:31] Tony: They’re say­ing if peo­ple are repay­ments, it’s going to get worse. If it gets worse, there could be more write downs, etc, etc. So it’s a kind of a, it’s um, peo­ple, I think the big end of town is say­ing, let’s get out of Cred­it Corp until things set­tle down in the econ­o­my, par­tic­u­lar­ly in the U. S. And we, we can see it com­ing through the oth­er side.

[00:18:51] Cameron: Well, let’s hope they’re wrong

[00:18:53] Tony: Well, I think I’m right. I think, I think the share price, you know, will, well, if the U. S. econ­o­my does­n’t [00:19:00] go bust and it’s look­ing like it may, um, then, uh, well, I mean, it’s always a two edged sword, right? I mean, that’s, that’s the sec­ond point I want­ed to raise dur­ing this dis­cus­sion is that, um, we’re real­ly in an era of, of the econ­o­my being dri­ven by cen­tral banks.

[00:19:18] Tony: And if, if the US econ­o­my does dete­ri­o­rate quick­ly, uh, then the cen­tral banks will cut inter­est rates. And that may be a good thing for the stock mar­ket, won’t be nec­es­sar­i­ly a good thing for cred­it corp, but you know, it will be a good thing for the stock mar­ket. So it’s real­ly hard to pre­dict the sec­ondary effects of what’s going on in the econ­o­my at the moment.

[00:19:38] Tony: But I think the, the fact that peo­ple are walk­ing away from their repay­ments is a bad sign for the bot­tom end of the econ­o­my in the US. And I guess the third point I want­ed to make when I was doing my. Analy­sis of all this was Cred­it Corp had been in decline for a cou­ple of months pri­or to their announce­ment.

[00:19:54] Tony: So that to me says either some­one was very savvy as an invest­ment ana­lyst and worked out that [00:20:00] cus­tomers in the U. S. were walk­ing away from their repay­ment plans or there’s been a leak some­where. Um, so I think there might be, you know, I, I tend to think ASIC is bloody awful at, at mon­i­tor­ing dis­clo­sure, and I think Cred­it Corp is very good at com­ing for­ward as quick­ly as they can, but clear­ly some­one used some­thing in the months pre­ced­ing up to this, um, decline, and either the smart mon­ey did well, or, uh, there was a leak, and, you know, you’d have to think that at the man­age­ment meet­ing a month before, um, the dis­clo­sure, they were see­ing the trend start­ing to appear, not say­ing that, uh, You know, they should have dis­closed then or that any­one did any­thing bad and I haven’t seen any sell­ing by direc­tors or any­thing like that.

[00:20:42] Tony: But you know, poten­tial­ly some­one, um, in, in the com­pa­ny told a mate who told a mate and start­ed sell­ing their shares. But, um, yeah, it’s that, that in itself was a bit of a flag as well that some­thing bad was com­ing. And

[00:20:55] Cameron: Yeah, I mean, I know it’s been declin­ing for the [00:21:00] last six months. I’m just over­lay­ing its chart with the STW chart. Um, yeah, cer­tain­ly has declined a lot more than the STW over that peri­od of time, which has declined, like, CCP’s been declin­ing since Jan­u­ary 22, and it was trad­ing at, uh, what’s that there, thir­ty, thir­ty three bucks, yeah,

[00:21:33] Tony: have a look at the last cou­ple of months. I think it start­ed to real­ly turn down. Before the big drop last week.

[00:21:39] Cameron: yeah, yeah, it was, uh, trad­ing at about twen­ty bucks back in July 23. And it’s dropped down to 12 bucks, as you said, it’s like half since then, but uh, yeah, I mean it start­ed to decline, you know, Feb­ru­ary 22 when the Ukraine war broke out, so when [00:22:00] the mar­kets start­ed to tum­ble around, so it seems to have been tied with that and has­n’t recov­ered since.

[00:22:08] Cameron: Well, speak­ing of mar­ket indi­ca­tors, you know, for the last, Five or six weeks each week when we put out the buy list, um, I’ve been doing this chart track­ing the num­ber of new buys, well the num­ber of buys on our buy list ver­sus the num­ber of new three point trend­line sales ver­sus the num­ber of Josephines that are on our buy list.

[00:22:30] Cameron: And it’s been track­ing along fair­ly steady until this week when trend­line sales real­ly spiked. from the pre­vi­ous week. There was about, uh, 29 or 30 of them on the 16th of Octo­ber jumped up to over 60 this week, three point trend line sells. So, uh, the buys declined a lit­tle bit, but that’s rel­a­tive­ly steady.

[00:22:55] Cameron: It’s, they’ve been sit­ting between sort of 70 and 80 buys over the last [00:23:00]six weeks. Um, the josephines have been rel­a­tive­ly steady between 30 and 40 josephines, but the three point trend­line cells real­ly spiked. I don’t know what I read into that, if any­thing.

[00:23:15] Tony: Well, I mean, I think we’re just paint­ing a pic­ture now that ASX is down, um, com­pa­nies like Cred­it Corp of sig­nal­ing hard times in the US, um, the share price graph this year looks like it did in 2007. I mean, I would­n’t think the odds of a US reces­sion in par­tic­u­lar are increas­ing every day. And I guess that was, um, you know. I know there’s some ques­tions about this lat­er, but that’s the point I want­ed to raise today too. If this is real­ly both­er­ing peo­ple, um, you know, if you’ve got debt, cer­tain­ly think about putting mon­ey into an off­set account or buy­ing down debt. If you’re going into the mar­ket at this stage, I’d be, um, I would­n’t be going in all on one day.

[00:23:56] Tony: I’d be like, if you’ve just retired or some­thing, and you’re putting mon­ey into your super account [00:24:00] to, to invest, I’d be doing it, um, via dol­lar cost aver­ag­ing over a 12 month peri­od, some­thing like that. Um, the trend at the moment isn’t our friend. So if peo­ple are, you know, if it’s mak­ing peo­ple unhap­py or they’re not feel­ing con­fi­dent, then, you know, by all means, take some mon­ey off the table.

[00:24:17] Tony: Um, you may miss out on the, on the upturns, or you may have some mon­ey still in the mar­ket and you get ben­e­fits from that, but there’s no point mak­ing your­self sick over this. It’s, it’s what the mar­ket

[00:24:27] Cameron: you’ve got to be able to sleep at night,

[00:24:29] Tony: Yeah, exact­ly.

[00:24:32] Cameron: if you don’t have the stom­ach for it. Don’t make your­self sick.

[00:24:35] Tony: And it, and it, it, it, it’s like, it’s no sign of weak­ness not to have the stom­ach for this. It’s, it’s not a great time to be in the mar­ket. Expe­ri­enced peo­ple have seen it before, but if you’re new to it, I under­stand com­plete­ly.

[00:24:46] Cameron: All right. Well, that’s all I have in my, uh, notes.

[00:24:49] Tony: Alright, shall I do a pulled pork?

[00:24:51] Cameron: Are you pulling today, Tony?

[00:24:54] Tony: pulling up, hope­ful­ly not pulling down, Reg­is Resources, so the [00:25:00] code is RRL, and the rea­son for doing it is it’s a large ADT stock, it has some­thing like 6 mil­lion dol­lars trad­ed per day, so a very large stock, it’s just come back on the buy list today, just snuck up above it’s 3 point trend line. As of this morn­ing, I haven’t checked the mar­ket today for it, but, uh, it was on the way up yes­ter­day and today. Uh, and it makes sense because, uh, I’ve seen this hap­pen before to my invest­ments in these kind of times. The gold price ris­es as peo­ple, again, try and get out of share mar­kets and find an asset to park their mon­ey in.

[00:25:37] Tony: Um, his­tor­i­cal­ly it’s been gold. Some peo­ple argue it’s cryp­to at the moment, but I don’t buy that. It’s gold, um, or it could be bonds, or it could be real estate, or what­ev­er, or cash. That’s the oth­er point I think I should have made when I was talk­ing before about, um, if you’re feel­ing unloved by the mar­ket and want to rest, um, you’re get­ting 5% Yield by putting your mon­ey into a 3 month term [00:26:00] deposit, um, or if you have an off­set account against your mort­gage you’re prob­a­bly get­ting more like 6 or 7 per­cent giv­en where mort­gage rates are now.

[00:26:06] Tony: So that’s not a bad option. You’re get­ting, you’re get­ting not only are you sleep­ing at night. Um, you’re get­ting rec­om­pense for doing it. So, um, that’s a con­sid­er­a­tion for those peo­ple who are feel­ing, um, uh, ner­vous in this mar­ket. Any­way, back to Reg­is Resources. Um, it’s, it’s, uh, an Aus­tralian gold min­er.

[00:26:26] Tony: It’s based in WA. Uh, it has three main projects. Uh, and each project, I call them projects rather than mines because they tend to be a clus­ter of mines. So they’ve start­ed off with one mine and then they’ve done lots of explo­ration and drilling in the area and set up, um, small­er satel­lite mines, I guess we’ll call them in the area.

[00:26:47] Tony: But the three clus­ters of mines, one is called Duke­ton in WA, one is, they own 30 per­cent of anoth­er one called Trop­i­cana, which is, uh, A cou­ple of hun­dred, three hun­dred Ks north­east of Kal­go­or­lie in [00:27:00] WA and then they’re devel­op­ing a min­ing area in New South Wales called Macphillian and, oh sor­ry, Macphillim­ie and that’s still in devel­op­ment and they’re wait­ing for approvals for that but if that comes online in the next year or two that’ll be a mate­r­i­al increase in the amount of gold they can sell.

[00:27:17] Tony: They’re back on the buy list this week so that’s one rea­son for doing a pulled pork on them. I guess, Com­pa­nies who are sell­ing gold at the moment are doing real­ly well and there’s a num­ber of gold com­pa­nies on the buy list and a num­ber of gold com­pa­nies in my port­fo­lio as well at the moment. Again, not by design, just just how the buy list works.

[00:27:37] Tony: And I guess it makes sense because the Reg­is Resources called out that they Have been mak­ing about 600 an ounce mar­gin on their gold sales. Um, so the Aus­tralian gold prices up around 24, 2, 400 an ounce. And they’re, um, they’re all in sus­tain­able costs for this com­pa­ny’s around about [00:28:00] 1, 800 an ounce. So, you know, you’re mak­ing a good mar­gin even for, um, uh.

[00:28:06] Tony: Mines that may still be a high cost oper­a­tion, and this isn’t nec­es­sar­i­ly a low cost pro­duc­er at 1, 800, all in sus­tain­able costs, but with the gold price at a high­er lev­el, they’re doing well. They haven’t done well in the last year or two, and the rea­son for that is they got caught out by the rise in the gold price, and they hedged.

[00:28:26] Tony: Their deliv­ery, and this hap­pens from time to time with all kinds of resource pro­duc­ers. They, they feel a bit ner­vous about the gold price in this case, or any oth­er com­mod­i­ty that they’re hav­ing to, hav­ing to sell into the future. And they, they, um, con­tract to make deliv­ery at a cer­tain price. And so in this case, it was just under 1, 600 an ounce.

[00:28:47] Tony: They were mak­ing deliv­ery at, um, which is called hedg­ing. And the hedg­ing is almost fin­ished. I think it’s about all their con­tracts that are about 70 per­cent deliv­ered at the moment, and they’ve got a lit­tle bit to go next year and then they’ll be ful­ly unhedged. So they’ll get [00:29:00] from next year onwards, they’ll get the full val­ue of that mar­gin spread between the gold price and what their costs are.

[00:29:06] Tony: But it did mean that this year in the lat­est results in June, they made a loss of some 24 mil­lion, uh, because of the hedg­ing. Um, so I think that’s the upside with this, this com­pa­ny. I think that’s why the share price is tick­ing up at the moment. A, the gold price is going up with all the uncer­tain­ty in the world, and B, the hedge book is almost deliv­ered for this, for this gold min­er so they’ll start mak­ing full told odds on their mar­gins going for­ward.

[00:29:32] Tony: And I guess C, um, if McPhile­mys gets, um, gets a nod, I can’t see a rea­son why it would­n’t. Uh, in the next cou­ple of years, they’ll prob­a­bly get anoth­er sort of 25 to 30 per­cent boost in their sales. So it’s all kind of, the tail­winds are start­ing to, to form behind this com­pa­ny. Uh, going through the num­bers, uh, I’m doing this on a share price of 1.

[00:29:54] Tony: 64. It’s less than con­sen­sus tar­get. Uh, the com­pa­ny sus­pend­ed [00:30:00] div­i­dends when it made a loss. Um, and they are say­ing then they’re not going to pay a div­i­dend in this half. They, they, they will think about bring­ing them back next year, but they’re also bal­anc­ing that up with the costs of bring­ing McPhile­mys on to, uh, into pro­duc­tion online, um, I guess as quick as pos­si­ble.

[00:30:15] Tony: So they may not pay div­i­dends next year. Um, the Prop­Caf for this com­pa­ny is cur­rent­ly sit­ting at 2. 7 times. So I’m real­ly focus­ing on the cash­flow for this one. It made a loss last year, so you can’t real­ly look at the PE or, um, IV1 or IV2, which all use earn­ings per share, which is neg­a­tive. Um, to get a val­u­a­tion han­dle on things.

[00:30:35] Tony: So we’re not going to score any of those, uh, PE. Um, we’re going to focus on Prop­Caf. Uh, Net Equi­ty Per Share we’ll also focus on. So Net Equi­ty Per Share for this com­pa­ny is 2. 04, which is above the share price of 1. 64. So we can buy this at less than it’s, it’s equi­ty posi­tion, which is a great thing to do.

[00:30:56] Tony: And obvi­ous­ly less than book plus 30. So, um, [00:31:00] don’t be sur­prised if the com­pa­ny before it. Pays div­i­dends, weighs up a buy­back as well. That, I think that would be on the agen­da when they’re trad­ing below its net assets. Uh, we don’t see any fore­cast earn­ings per share in Stock Doc­tor. And I found that quite strange because I looked it up in Stock Doc­tor and there are some 11 ana­lysts cov­er­ing this, um, this com­pa­ny, I did­n’t have a chance to go.

[00:31:24] Tony: To all those indi­vid­ual stock bro­kers and look up reports on the com­pa­ny. And I may not even be able to, if I’m not a client of them all any­way. Um, but it seems sur­pris­ing. There’s so many bro­kers cov­er­ing this com­pa­ny and no one’s pro­vid­ing a earn­ings per share fore­cast. So, I mean, hope­ful­ly we’re get­ting in ear­ly to beat them, but obvi­ous­ly I think that might be a bit of an, uh, an error in Stock Doc­tor’s process.

[00:31:46] Tony: And I know they have some. Pol­i­cy around that. I think they need three bro­kers to pro­vide an earn­ings per share fore­cast before they start pub­lish­ing one. So it could be that. I’m not sure. Um, but we’re not scor­ing it. It’s not scor­ing it for that, but that may hold back the [00:32:00] score, is I guess what I’m high­light­ing.

[00:32:02] Tony: Direc­tors hold about 1. 5%, so we’re not scor­ing it, um, for an own­er founder. Uh, we’re giv­ing it a zero in PE because, um, it’s neg­a­tive at the moment. It has just become a new 3. 0. Upturn, so we’re giv­ing it a one for that. It has­n’t had con­sis­tent­ly increas­ing equi­ty, not sur­pris­ing if it made a loss last year because of its hedg­ing.

[00:32:22] Tony: So all in all, not a great qual­i­ty score, 9 out of 15 or 60%, but because of that cheap, uh, Prop­Caf, the price to oper­at­ing cash flow ratio, It’s giv­ing a QAV score of 0. 22. So it’s um, it’s a large ADT stock of some six mil­lion dol­lars and it’s back on the buy list now with a QAV score of 0. 22, large­ly based on val­u­a­tion.

[00:32:44] Tony: I think this is one to trade, as prob­a­bly all gold stocks are in the long term, but um, the risk for this com­pa­ny are they’re a hun­dred, as of next year, they’ll be a hun­dred per­cent exposed to the gold price, which is hap­py days when the gold price is up like this, um, but if [00:33:00] they’re If their costs stay at around 1, 800 Aus­tralian, um, to pro­duce the gold, uh, then the share price can re, can retrace back to that kind of lev­el pret­ty quick­ly and squeeze their mar­gins.

[00:33:13] Tony: Um, they did high­light that 1, 800 they thought was a high cost this year, so, uh, it’s always, it’s always dif­fi­cult to pre­dict the sec­ondary effects of going for­ward with this, because if the gold price starts, Reduc­ing, they’ll prob­a­bly start reduc­ing their costs in line. So they’ll do what­ev­er they can to main­tain mar­gin.

[00:33:30] Tony: But that’s cer­tain­ly a risk is the gold price retreas­ing. I’ve said in my notes here, there’s a risk that if peace breaks out, this com­pa­ny will, will, uh, turn down. Um, I’m not sure what the like­li­hood of that is though. Uh, the oth­er pos­i­tive is McFil­lamy’s approval is some­where in the next 12 months and they can get that up, up and run­ning quick­ly after that, hope­ful­ly.

[00:33:50] Tony: Um. Uh, I did also high­light dur­ing my analy­sis and I did this based on the U. S. gold price because it was in Stock Doc­tor rather than the Aus­tralian one. [00:34:00] And peo­ple can look this up if they’ve got Stock Doc­tor mem­ber­ships. But, um, the U. S. gold price at least from sort of 2018 over the last five years has gone from 1, 200 U.

[00:34:10] Tony: S. an ounce up to 2, 000, just under 2, 000 U. S. an ounce. So, you know, that’s, that’s not quite dou­bled, but it’s been a big increase over the last five years. Um, so the trend is cer­tain­ly sug­gest­ing the gold price will keep increas­ing, and per­haps that’s been dri­ven by increas­ing inter­est rates, um, or just uncer­tain­ty in the world, but it’s, it’s cer­tain­ly an upward trend for a long time now.

[00:34:33] Tony: So any­way, they’re the risks and the, and the pos­i­tives, and I think it’s fun to trade based on the gold price trend.

[00:34:41] Cameron: I added a cou­ple of parcels of it yes­ter­day

[00:34:43] Cameron: to some light port­fo­lios. Yeah. Well, it was also one of the only things you could buy this week, you

[00:34:53] Tony: Again, not sur­pris­ing, we can buy gold stocks at this stage of the cycle. Yeah.

[00:34:57] Cameron: Yeah, I think I’ve bought three in the last week, you

[00:34:59] Tony: [00:35:00] Yeah.

[00:35:01] Cameron: some of the only things on there. That and GEM, G E M, um, G8 Edu­ca­tion, I think.

[00:35:06] Tony: Okay.

[00:35:07] Cameron: Small cap stock though, I think. Um, alright, thank you for that, Reg­is. Well, will we do the ques­tions?

[00:35:15] Tony: Yeah, sure. I’m good to go.

[00:35:17] Cameron: Then we can talk about Mr. Inbe­tween.

[00:35:19] Tony: Yeah, good.

[00:35:21] Cameron: All right. Alex, what have you got for us today from the lis­ten­ers?

[00:35:25] Alex: I’ve got a ques­tion from Sam. Could TK com­ment on the per­for­mance of the AFI this cal­en­dar year? It has been a sig­nif­i­cant and mate­r­i­al depar­ture of their cor­re­la­tion to the XAOAI, which I had to look up, is the ASX All Ords Accu­mu­la­tion Index. Cheers, Sam.

[00:35:41] Tony: Thanks, Sam. Good ques­tion. Uh, And as peo­ple know, I’m a fan of AFI as being a low cost way of invest­ing in the share mar­ket. It’s been around for a very, very long time. Has a very low man­age­ment expense, expense ratio, um, around the sort of num­ber that ETFs do, or even low­er than ETFs, like it’s like about [00:36:00] 0.

[00:36:00] Tony: 15%, some­thing like that might be 0. 2%, very low. Um, I can give you the. The sort of short answer as to what I think is hap­pen­ing, uh, so I think the dif­fer­ence at the moment is that, uh, rather than look at XAOAI, if peo­ple want to have a look at this along with us, um, have a look at STW, which is the, the ETF that tracks XAOAI, so it’s the, it’s the ASX 200 index with the div­i­dends rein­vest­ed.

[00:36:28] Tony: Um, which kind of is a good proxy to, to bench­mark your­self against. Uh, that has­n’t, um, well that’s been per­form­ing a lit­tle bit bet­ter than, than AFI. Um, but they are both going down, I, I has­ten to add. And, um, if you look at the graph of the two of those two shares over­laid, they, they tend to direc­tion­al­ly go the same, but occa­sion­al­ly one will rise slight­ly above the oth­er one.

[00:36:51] Tony: At the moment the gap’s widened a bit, and STW is, is above. Uh, AFI, and I think the rea­son is because one’s a [00:37:00] list­ed invest­ment com­pa­ny, which is AFI, and one’s an

[00:37:03] Tony: ETF. And the, okay, so the imme­di­ate dif­fer­ence is that, um, the ETF every day tells you what the under­ly­ing assets are worth, so it does a mark to mar­ket val­u­a­tion and then pub­lish­es it, and it has what’s called a mar­ket mak­er sit­ting as part of its struc­ture, buy­ing and sell­ing, um, shares or options or futures, or I’m not sure how STW actu­al­ly trades, but it basi­cal­ly, uh, mim­ics the, very close­ly, the move­ments of the ASX200, um, on a dai­ly basis.

[00:37:33] Tony: And so it sticks pret­ty close to that graph, uh, if not exact­ly one to one cor­re­la­tion, it’s pret­ty close. How­ev­er, AFI is a close end­ed fund. So, um, what we’re prob­a­bly see­ing at the moment is that peo­ple are say­ing, uh, they’re sell­ing out of AFI, um, pos­si­bly going into the ETF because it’s per­form­ing bet­ter.

[00:37:55] Tony: Um, but what that means is that AFI, Aus­tralian [00:38:00] Foun­da­tion Invest­ments, will still have the same mon­ey invest­ed in the, in the stock mar­ket because an ETF, every time some­one sells a share, has to sell an under­ly­ing share or an under­ly­ing asset to pay that per­son out. Where­as, um, when AFI trades, it’s a, it’s a share­hold­er trad­ing with anoth­er share­hold­er and the under­ly­ing fund isn’t, isn’t forced to buy or sell.

[00:38:24] Tony: That means though that AFI can trade at less than its net tan­gi­ble assets or above its net tan­gi­ble assets from time to time. At the moment it’s trad­ing at less than NTA and I think that’s because peo­ple are sell­ing because they’re wor­ried about the mar­ket even though that’s forc­ing the share price of AFI below mar­ket per­for­mance.

[00:38:42] Tony: That won’t always hap­pen but it is at the moment where­as SDW is track­ing the mar­ket. The oth­er thing that’s dif­fer­ent between these two stocks at the moment is AFI’s Div­i­dend yield is low­er than STW. So I know AFI don’t always, um, try and track the mar­ket exact­ly. They [00:39:00]do, they do take sort of, um, over­sized or under­sized posi­tions in com­pa­nies they like.

[00:39:05] Tony: Um, but their yield is, is cur­rent­ly about 1 per­cent low­er than STW. So you could even be see­ing peo­ple sell out of AFI and buy STW if they’re a retiree, for exam­ple, just to get a bet­ter yield. So I think that’s what’s hap­pen­ing. But if you look at the graphs direc­tion­al­ly, they both go in the same direc­tion.

[00:39:22] Cameron: Any

[00:39:22] Cameron: fol­low up ques­tions, Alex?

[00:39:24] Alex: Just absorb­ing. Yeah, I mean, I only ever look at the three point trend line when I look at AFI for whether I, you know, want to buy into it or not. So

[00:39:34] Alex: I don’t look at the macro

[00:39:36] Tony: It’s been a sell for a

[00:39:37] Tony: while. I think the three point

[00:39:39] Tony: trend line for it, yeah, has been,

[00:39:40] Tony: a sell for a while, yeah. So, if that’s what you’re doing, that’s good because you’re sold out and you’re prob­a­bly sit­ting in cash wait­ing for it to be a buy again. So, that makes sense too. Per­haps that’s what’s hap­pen­ing in the mar­ket as well.

[00:39:53] Alex: Cool. Thank you.

[00:39:54] Tony: Okay.

[00:39:55] Cameron: you, Alex. Have a good week. Thanks for all your work on the buy list. Bye, Alex.[00:40:00]

[00:40:00] Cameron: this is a, this is a ques­tion from Anony­mous. Did­n’t want their name attached to this, uh, ques­tion. Um, I’m hav­ing trou­ble stay­ing enthu­si­as­tic about my invest­ment port­fo­lio and it’s frus­trat­ing to watch it go between 0 per­cent and neg­a­tive 20 per­cent over the past few years.

[00:40:16] Cameron: I think the aver­age mar­ket down­turn slash bear mar­ket is about 9 to 12 months. It feels like these unprece­dent­ed times just keep going with no end in sight and we are bleed­ing cap­i­tal with no reserves. Death. By a thou­sand cuts. I was think­ing about Ali’s recent post on the Face­book group about the return required to over­come a loss.

[00:40:36] Cameron: A 20% loss requires a 25% price increase. I know TK was able to lever­age against his house com­ing out of the G F C and the cap­i­tal loss­es sus­tained dur­ing this time. Giv­en the fre­quen­cy of mar­ket draw downs, can those of us that can’t lever­age against assets actu­al­ly over­come these loss­es in the short and long term and achieve Q A V like returns.[00:41:00]

[00:41:00] Tony: Well, yeah, I think so. Um, I guess my evi­dence for that is over the long term, the mar­ket’s gone up at rough­ly 10 per­cent per annum. So, uh, even though it zigza­gs a lot, you gen­er­al­ly, the recov­er­ies are a lit­tle bit stronger than the down­turn. So, yes, you should def­i­nite­ly be able to recov­er your loss­es. But, uh, do I have a crys­tal ball to say how fur­ther we’re going to keep suf­fer­ing loss­es and when they’ll turn up again?

[00:41:23] Tony: I don’t. It’s look­ing, as I said before, I’m paint­ing a pic­ture of, uh, of increas­ing bleak­ness in the U. S. and the gold prices reflect­ing that as well, so I don’t think it’s going to turn around any­time soon. So, Mr. or Mrs. Anony­mous, or Ms. Anony­mous, um, again, if it’s, if it’s wor­ry­ing you, then you, or you feel like 20 per­cent is enough to, The stom­ach in terms of a give back to the mar­ket, then yeah, at least go some­what to cash and, and take the four or 5 per­cent offered by the banks for your cash at the moment.

[00:41:55] Cameron: Yeah, as we said before, if you don’t have, if you know, if it’s mak­ing you [00:42:00] lose sleep or you’re feel­ing sick over it, you know, make the right deci­sion for your health. All right. Thank you for that. Alex, as I under­stand it, this is a ques­tion from Alex, I should say, as I under­stand it, the check­list isn’t made up of tra­di­tion­al fun­da­men­tal invest­ing met­rics like ROE and DCF based on his­toric rev­enue growth, but instead scores dif­fer­ent val­u­a­tion met­rics to see if a stock is under­val­ued.

[00:42:23] Cameron: The process of scor­ing and sum­ming these val­u­a­tion met­rics pro­duces a qual­i­ty score. Divid­ing that score by the ratio of price to oper­at­ing cash flow per share com­bines to indi­cate qual­i­ty and val­ue, even though Prop­Caf is already scored as a val­u­a­tion met­ric. Could TK please help me under­stand how he dif­fer­en­ti­ates between qual­i­ty and val­ue in his process?

[00:42:46] Tony: But this is com­ing from male Alex. Um, and, um, I think, I think the essence of the ques­tion is why am I putting val­u­a­tion met­rics in a qual­i­ty score? Um, and I think that’s just large­ly his­tor­i­cal. Uh, I [00:43:00] could, I should, I could. Evolve the process to clear­ly sep­a­rate qual­i­ty from val­ue, but at the moment, there are some val­u­a­tion scores in the qual­i­ty score process.

[00:43:11] Tony: Um, and I’ve just left it that way and kept call­ing it a qual­i­ty score. So, apolo­gies to Alex. Um, you’ll make a good, uh, school teacher by pick­ing me up, pick­ing me up on my ter­mi­nol­o­gy and gram­mar. Um, if I could be fucked, I’d change it, but I’m not. I’m going to keep call­ing it a qual­i­ty score. But Alex is right.

[00:43:28] Tony: Yeah, there are def­i­nite­ly some val­u­a­tion met­rics in there. Um, in terms of count­ing. I’m not sure if he’s sug­gest­ing I’m count­ing price to oper­at­ing cash flow twice, whether that puts a big toe on the scale. It does, but it also weeds out com­pa­nies that don’t have a good Prop­Caf before we get to the end score for the com­pa­ny.

[00:43:53] Tony: But it only is in the qual­i­ty part of the process. It’s only giv­ing com­pa­nies a one or a zero for… Oh, I think it might be two [00:44:00] for Prop­Caf less than sev­en. Um, so it’s not real­ly, in terms of weed­ing it out, it’s not going to weed out a whole heap, but it will weed out some. Um, there are oth­er val­u­a­tion met­rics in the qual­i­ty score, like IV1 less than IV1, less than IV2, less than book val­ue, less than book plus 30.

[00:44:16] Tony: Um, there’s a cou­ple of oth­er ones in there. Um, so yes, it, it, it, it’s. I could call them both QAV scores, but it just seemed eas­i­er to call one a qual­i­ty score because we are assess­ing, you know, man­age­men­t’s own­er­ship, um, pay­ing of div­i­dends and oth­er kind of qual­i­ty mea­sures in there. It’s just his­tor­i­cal­ly all being blend­ed into one.

[00:44:35] Tony: That’s all.

[00:44:36] Cameron: Did you even break it down before we start­ed the show, or did you just have a score?

[00:44:40] Tony: Uh, yeah, I did­n’t, I did­n’t call it qual­i­ty. I just had a score. Yeah.

[00:44:45] Cameron: Yeah.

[00:44:46] Tony: Yeah. And then start­ed divid­ing it by Prop­Caf because that was a good way of bring­ing the val­ue into the process.

[00:44:51] Cameron: Yeah.

[00:44:52] Tony: I kind of mag­ni­fied it. I mean, along the way I did, I did things like, um, you know, giv­ing the price to cash flow less than [00:45:00] sev­en, a big­ger score, um, and then just found it was, uh, it, it pro­vid­ed enough dif­fer­en­ti­a­tion if I divid­ed every­thing by the price to oper­at­ing cash flow.

[00:45:10] Tony: So we want a low price to oper­at­ing cash flow. So if you make it a denom­i­na­tor in the equa­tion, it, it favors com­pa­nies with low price to oper­at­ing cash flows. Um, I could have tak­en it out of the top line again, but it’s um, it’s not going to make a huge dif­fer­ence.

[00:45:25] Cameron: Alright, how are we going for time here?

[00:45:30] Tony: Oh sor­ry, I guess the oth­er thing too for leav­ing Prop­Caf in the qual­i­ty score is that it’s telling me that the com­pa­ny is mak­ing lots of cash flow, which is, which is actu­al­ly a qual­i­ty score. It’s just that I’m call­ing it, I’m also putting Prop­Caf in there. Bring an ele­ment of price into it. So yeah, I could prob­a­bly amend it to be strong oper­at­ing cash flow, but then I’d have to do research on what the cut­offs were for that.

[00:45:50] Cameron: think it’s fine. Tony, uh, last ques­tion. Uh, Tony, this is Alex again, has spo­ken about 15 to 20 stocks being ide­al, but 10 stocks being bet­ter, giv­en you can [00:46:00] stom­ach the volatil­i­ty. If you’re a younger investor with a longer time hori­zon to retire­ment, why would you not cre­ate a con­cen­trat­ed 10 stock port­fo­lio?

[00:46:10] Tony: I think that’s a good idea. Um, it’s kind of just, well, there is invest­ment research sur­round­ing a 10, uh, sor­ry, 15 to 20 stock port­fo­lio, um, as being ide­al. Uh, and we’re not, so the small­er the stock port­fo­lio, the greater the volatil­i­ty, but if you get the stocks right, the bet­ter the out­per­for­mance. Big­ger the draw­downs, I guess, dur­ing this kind of phase of the mar­ket.

[00:46:32] Tony: And if you get more than 20 stocks in the port­fo­lio, you tend to start regress­ing towards the index. So that’s the sweet spot if you’re, if you’re kind of, I hes­i­tate to use the term an aver­age investor, but if you’re some­one who wants to have a rea­son­ably hand­off, Hands off process and invest­ing, 15 to 20 makes sense.

[00:46:52] Tony: But I agree with Alex, a small­er port­fo­lio makes sense if you’re younger because you can ride out the volatil­i­ty. [00:47:00] Char­lie Munger sug­gests a four stock port­fo­lio. That’s what he has in his per­son­al hold­ings, one of which is Berk­shire Hath­away. But he also has, I think from mem­o­ry, Wal­mart and maybe Apple.

[00:47:11] Tony: I’m not sure what the oth­er two are. And we’ve had peo­ple on the show. Which I’m always remind­ed of, the Collins Street Investor, uh, Investor. CIO, I think his name was Michael Gold­stein from mem­o­ry, had him on a cou­ple of years ago, and he’s, he’s, he’s said con­sis­tent­ly, uh, why, why invest in your 20th best idea when you can invest in your best idea, and that’s some­thing which has stuck with me as well, so Per­son­al­ly, I’d be hap­py with a one stock port­fo­lio and then watch­ing it and trad­ing it as I’m fol­low­ing the rules.

[00:47:45] Tony: Um, I guess I’m get­ting down to that process over time. Uh, but yeah, I think Alex, you’re right. If you can, if you can ride out the volatil­i­ty, if you’re not the kind of per­son to say, holy hell, I’m down 50%, I’m going to sell out and, you know, [00:48:00] buy a house or some­thing or put it in the bank. And then rue the fact when the mar­ket goes up that you would have made a four or five times gain on your 50%.

[00:48:08] Tony: Um, then def­i­nite­ly a small con­cen­trat­ed port­fo­lio of well picked stocks and, and fol­low­ing impar­tial rules is def­i­nite­ly the road to wealth.

[00:48:18] Cameron: Michael Gold­berg,

[00:48:20] Tony: Thanks. Michael Gold­berg. Okay. Apolo­gies. Yep.

[00:48:23] Cameron: Alright, uh, last ques­tion, again from Alex, what would Tony do, WWTD, if he had a sig­nif­i­cant val­ue of cash, say 20 per­cent in his 20 stock port­fo­lio, most of his exist­ing posi­tions were a falling knife or below the sec­ond buy line, would he, A, top up posi­tions that are still a buy, even if they dom­i­nate his port­fo­lio by weight, A, Two, sit in cash until some­thing under­weight becomes a buy, thus buy­ing in at a dis­count.

[00:48:52] Cameron: Three, go over his 20 stock port­fo­lio rule and buy things that met the QAV buy cri­te­ria. Or four, [00:49:00] some­thing else, can I take a guess,

[00:49:04] Tony: Go ahead.

[00:49:06] Cameron: uh, go over your 20 stock port­fo­lio rule and buy some­thing that’s a buy.

[00:49:11] Tony: No, that’s, that’s, that’s the wrong answer. That’s all I would­n’t do.

[00:49:15] Cameron: Oh, no, I thought you would go big and then pare it back a lit­tle bit lat­er on when you had to sell stuff

[00:49:23] Tony: Oh, well, I think if I’m read­ing Alex’s ques­tion cor­rect­ly, he’s say­ing he’s got an invest­ment of 20 stocks. Um, he’s say­ing if the exist­ing posi­tions were a falling knife or below the 2BL, so I can’t buy. What are my exist­ing posi­tions? Then what will I do? I’d sit on cash and wait, wait for either some­thing in the port­fo­lio or some­thing.

[00:49:42] Tony: Well, it’d be some­thing in the port­fo­lio. I don’t want to hold more than 20 stocks. Um, as I said, we’ll start get­ting indexed like per­for­mance if we hold too many stocks. Um, yeah, so that’s what I would do. I’d, my first incli­na­tion in this sit­u­a­tion is to buy some­thing new. We 20 stocks. My [00:50:00] sec­ond incli­na­tion is to dou­ble buy some­thing in the port­fo­lio.

[00:50:04] Tony: There’s noth­ing to buy in the port­fo­lio. I have to sit on cash until there’s some­thing that meets one or two.

[00:50:10] Cameron: Well, I thought you’d said in the past that you’ll, you know, you’ll buy dou­ble posi­tions if you have to, and you can, um, uh, con­cen­trat­ing your risk a lit­tle bit, but then, you know, it’ll, you’ll try and even that out over time as you sell things, or you would go up a lit­tle bit. I mean, you know, go up to 22 or 23 and then pair back as soon as you have some­thing to sell.

[00:50:34] Tony: Yeah. Well, if I did, that makes sense as well, but, um, I’m more, I’m, I’m, I guess, again, on this theme of not try­ing to get a big port­fo­lio going 20, you know, 20 stocks is prob­a­bly my lim­it, I think.

[00:50:49] Cameron: right.

[00:50:49] Tony: But yeah, look, I could

[00:50:50] Cameron: there and just sit on cash.

[00:50:52] Tony: yeah, I could have said some­thing dif­fer­ent in the past, but that’s my cur­rent think­ing any­way.

[00:50:56] Cameron: Yeah, no, I could have that wrong too. All right, thank you [00:51:00] for that. Good ques­tions. That’s it, drew a line under it. What have you been doing for fun since we last spoke, Tony? And see­ing as the mar­ket’s not fun, what have you been doing for fun and enter­tain­ment?

[00:51:14] Tony: We’re see­ing con­certs. We went and saw Mark Sey­mour on Sat­ur­day night in the under­tow. That was great. Real­ly good fun.

[00:51:20] Cameron: Yeah.

[00:51:21] Tony: Yeah, so

[00:51:22] Cameron: he, uh,

[00:51:24] Tony: for peo­ple who don’t know, Markie was the lead singer of Hunters and Col­lec­tors. So, the con­cert was, I mean, Nean­derthal has been around now for a long time, so the con­cert was, um, I guess three quar­ters new stuff, but there was still half a dozen great old Hunters songs in there to, to jive to.

[00:51:39] Tony: It was great, real­ly

[00:51:42] Cameron: under­toes, his new band? Right.

[00:51:44] Tony: It is, yeah. Well, when you say new, I think they’ve been around for about sev­en years.

[00:51:49] Cameron: Do you, do you lis­ten to their stuff? Do you fol­low their stuff? Is it your fan?

[00:51:53] Tony: I am, but, um, I sort of resolved to go back and lis­ten to it again after the con­cert, because there was a lot of good stuff in there.[00:52:00]

[00:52:01] Cameron: Hmm.

[00:52:01] Tony: Yeah, but yeah, great

[00:52:02] Cameron: of that. I’ll have to check them out.

[00:52:04] Tony: Yeah. And he’s amaz­ing. I mean, he looks as fit as he does now at 67. And he did when I first saw him when I was about 26 or 20. I was at uni. So one of the bands I hired to play at the refec­to­ry when I was at uni.

[00:52:19] Tony: So I was prob­a­bly about 18 when

[00:52:23] Cameron: Yeah. He’s always looked kind of buff. Like he works out a lot,

[00:52:27] Tony: I would

[00:52:27] Cameron: of him­self and his voice is still good.

[00:52:29] Tony: Yeah, still great. Yeah, real­ly good.

[00:52:32] Cameron: That’s

[00:52:32] Tony: And a real­ly good

[00:52:33] Cameron: I men­tioned on your Face­book. I men­tioned on your Face­book post that, um, in one of the episodes of The Bear, one of the like, the, the, the big episodes of it, um, in Sea­son 2, sort of fin­ish­es with a cov­er ver­sion by Eddie Ved­der and some­body else of, um, I think it’s,

[00:52:54] Tony: Throw Your Arms.

[00:52:56] Cameron: Yeah, I think it’s Throw Your Arms Around Me.

[00:52:58] Cameron: Yeah. [00:53:00] You heard that cov­er ver­sion before?

[00:53:01] Tony: I have, yeah, it came out, oh, I think it was dur­ing a Pearl Jam con­cert in Mel­bourne about 20 years ago it came out.

[00:53:09] Cameron: Oh, real­ly? Yeah. No, I said to Chris­sy, Oh, wow, this is a Hunters and Col­lec­tors song. I did­n’t, and obvi­ous­ly Eddie Ved­der’s voice, but I had­n’t heard it before, but yeah, real­ly good.

[00:53:18] Tony: Yeah, it’s a clas­sic, that song, and it was great when he played it. Yeah. Oh, that’s the oth­er thing too, I watched the, um, Ego doc­u­men­tary about Michael Godin­s­ki, and Hud­ders were in that, and Godin­s­ki said it was, that Throw Your Arms Around Me was prob­a­bly the best song to come out of Aus­tralia ever. Which I, I, I prob­a­bly agree with,

[00:53:38] Cameron: Real­ly?

[00:53:38] Tony: yeah, but it’s a great

[00:53:40] Cameron: I had­n’t heard of that.

[00:53:41] Tony: sor­ry,

[00:53:42] Cameron: I had­n’t heard of it before. Is it good? The

[00:53:45] Tony: it’s real­ly good, yeah, so it’s a Michael Godin­s­ki sto­ry, I think it was actu­al­ly filmed just pri­or to his death as a doc­tor. doc­u­men­tary on his career, um, and it was released after he died. Um, and I think they prob­a­bly [00:54:00] had inter­views with the sur­viv­ing mem­ber of, mem­bers of his fam­i­ly after that to add in too.

[00:54:05] Tony: But yeah, oh, it’s fan­tas­tic. It goes right back to the 1970s when he was just first start­ing and, uh, Sky­hooks came along and gave him a real­ly big boost. Um, Sort of like it was, the sto­ry is just like any sort of small busi­ness. He kept, he kept sort of just sur­viv­ing and anoth­er act would come along and give him a great boost and he’d go lean for a while.

[00:54:25] Tony: And then anoth­er act would come along, give him a great, like say, split ends fol­lowed sky­hooks. And it just goes on from there. And then he sold, he sold the busi­ness. He sold half the busi­ness to Rupert Mur­doch, inter­est­ing­ly enough, to News Corp. And then root­ed ever since, and then, um, set up. After he’s, I think he must have sold the rest of it over time, and then he set up, um, anoth­er, uh, well he set up a tour­ing busi­ness to, to hon­our his non com­pete in the record­ing side of things, and then even­tu­al­ly went back and did a record­ing busi­ness.

[00:54:54] Tony: But you know, he’s had Debra Con­way, Paul Kel­ly, Cut­ters and [00:55:00] Col­lec­tors. So they’re all in the doc­u­men­tary speak­ing about him. Became good mates with Jim­my Barnes, with, um, you know, Bruce Spring­steen’s in the doc­u­men­tary, Sting’s in the doc­u­men­tary about how they just feel like Godin­s­ki was a true lover of music and a true sup­port­er of music.

[00:55:14] Tony: Talks about the times when Godin­s­ki, um, like with. With­in a week held a fundrais­ing con­cert dur­ing COVID for the musos who weren’t get­ting paid and the sup­port staff that weren’t get­ting paid. Just goes on and on. It’s just a real­ly great rol­lick­ing sto­ry about his life.

[00:55:34] Cameron: Hmm. Oh, I have to check it out. I remem­ber when he passed away, there was a lot of trib­utes from musi­cians came out in to hon­or him. Seems like he had a big impact.

[00:55:44] Tony: did. Yeah. And a world­wide impact too. He’s very well known over­seas. Was get­ting lots of famous artists to come and tour in Aus­tralia.

[00:55:54] Cameron: Where’s that doc­u­men­tary?

[00:55:55] Tony: So it was only avail­able, you had to buy it or rent it. So I think it was on Apple. [00:56:00] Either Apple or Prime, it was sev­en bucks to rent or some­thing. I guess what that means it’ll be released in time on the stream­ers.

[00:56:07] Cameron: Yeah. Rent­ing movies. That takes me

[00:56:12] Tony: Yeah, but it was good.

[00:56:15] Cameron: I often think about that when I, when I start get­ting upset about the num­ber of stream­ing ser­vices that I sub­scribe to. And then I, I remem­ber the days in the nineties when I’d go to the video store once or twice a week and get out four or five VHSs and it’d be like 25, 30 bucks a hit. To get them out, you do that four or five times a month.

[00:56:38] Cameron: It’s a lot more than the 30, 40 bucks a month I pay for stream­ing now. So, so we did­n’t blink at it back then real­ly. It was just, it was like excit­ing. You could watch what­ev­er you want­ed to watch. You’d had to drop five bucks or two bucks or what­ev­er it was for a VHS. Hmm.

[00:56:55] Tony: Yeah, I agree. And it was, it was a great way of learn­ing about movies too. [00:57:00]Cause like there was­n’t always a new release or a new block­buster out to rent, but which would dri­ve me into the. You know, the old­er movies and, and start to rip mean streets or, um, you know, even, even ear­li­er than that, some of the six­ties movies and fifties movies that were out was great.

[00:57:17] Tony: Good

[00:57:18] Cameron: great when you had, I, there was my local video store in Cam­ber­well Road where the guy that owned that would, yeah, he was a real cult film guy and he’d have sec­tions that like the Scors­ese sec­tion or the Bri­an De Pal­ma sec­tion and you could go and catch up on these films. You had­n’t seen all the Kubrick sec­tion or

[00:57:36] Tony: Well, the French, the French sec­tion too. I used to write a lot. French and Ger­man. Yeah.

[00:57:41] Cameron: Japan­ese lit­tle Kuro­sawa films, that kind of thing. Well, we final­ly caught up and fin­ished Mr. Inbe­tween the oth­er night. Uh, watched the final two episodes of that. Took us a long time to get through it, but wow. Well, I just got­ta, like, cred­it to every­one involved. [00:58:00] Uh, Nate Edger­ton and, uh, the guy who is the writer, cre­ator, uh, star of it, um, played Ray.

[00:58:07] Cameron: Like, not a, not a bad episode in the three sea­sons, I thought. Every­thing was fan­tas­tic, the end­ing, he nailed the end­ing. Just left me with a big smile on my face, the final scene of the final episode. Just real­ly, real­ly great show, par­tic­u­lar­ly for an Aus­tralian show. Like, wow, what an achieve­ment.

[00:58:29] Tony: Yeah, I whole­heart­ed­ly agree. It’s been a real find for me too over the last cou­ple of years. And I just can’t believe that he, the lead actor, whose name escapes me, just has­n’t been in more stuff than just Mr. Inbe­tween. It’s incred­i­ble.

[00:58:41] Cameron: it, that’s all he’s ever done in his whole career. Um,

[00:58:46] Tony: And like as the, as the series went on, he start­ed to attract more and more actors, like known actors to play in the series.

[00:58:52] Tony: So he’s obvi­ous­ly get­ting the word out that this, Hey, this is worth being a part of.

[00:58:56] Cameron: Yeah, Scott Ryan is the guy’s [00:59:00] name. Um, yeah, like he, I know he’s sup­pos­ed­ly work­ing on some­thing else. Uh, now can’t wait to see what it is, but what an incred­i­ble achieve­ment that show real­ly was, David Her­ri­man. It was great, in it, um, the guy who plays Gaz­za, Justin Ros­ni­ak, like the whole cast, the girl who played his daugh­ter, who I think is Nat Edger­ton’s daugh­ter,

[00:59:24] Cameron: she was fan­ta yeah, yeah, she was fan­tas­tic, she watched her grow up and her per­for­mance was always fan­tas­tic,

[00:59:31] Tony: And uh, his girl­friend at one stage, um, what’s her name?

[00:59:34] Cameron: Brooke Satch­well

[00:59:35] Cameron: from the first sea­son.

[00:59:37] Tony: And then you had the guy from, who was the guy from Chances, that old soap opera.

[00:59:42] Cameron: Jere­my Sims in the last cou­ple of

[00:59:44] Cameron: episodes.

[00:59:45] Tony: it’s just, just great how they all make cameos again. It was fan­tas­tic.

[00:59:50] Cameron: Yeah. It was one of those things where I’d be like, Oh my God, it’s him. I haven’t seen him in 30 years. And Chris­sy’s like, what, what, who the hell are you talk­ing about? I’m like, [01:00:00] uh, I don’t know, some guy. I had­n’t even for­got­ten it was Chances. I thought he was off of like Home and Away or some­thing. I don’t think I ever watched the orig­i­nal.

[01:00:07] Tony: I thought it, I

[01:00:08] Cameron: But yeah, no.

[01:00:09] Tony: jumped the shark a lit­tle bit when they start­ed get­ting into the pedophil­ia ring and going out into the coun­try with the machine guns and all that kind of stuff. But up until then, it was just like, you could just imag­ine those kind of char­ac­ters, you know, with a phone.

[01:00:27] Tony: I’ve been sent around to col­lect the mon­ey. Yep. Yep. Pay him. Well, what’s your job? I’m here to make sure you pay him. It’s just like, all low key.

[01:00:39] Cameron: Well, that’s the thing about his char­ac­ter, Ray. He is just very low

[01:00:42] Tony: Yeah, prag­mat­ic, isn’t it? Yeah.

[01:00:45] Cameron: all he has to do is smile at you and you’re gonna, you’re gonna hand it over. If you’ve got half a brain,

[01:00:51] Cameron: just that smile.

[01:00:52] Tony: as soon as a smile comes on, you just know you’re in trou­ble, don’t you?

[01:00:56] Cameron: Yeah, yeah, yeah. [01:01:00] that was great. So thanks for putting me under that. I see, uh, your old mate Dez just dis­cov­ered it a week or so ago on

[01:01:05] Cameron: Face­book. He men­tioned he just got on it.

[01:01:07] Tony: Okay.

[01:01:08] Cameron: So if you ever talk to him again, you got some­thing to talk about. Um,

[01:01:13] Tony: I

[01:01:14] Cameron: Fox and I watched anoth­er one of the Roald Dahl Wes Ander­son films, Poi­son.

[01:01:19] Cameron: Have you seen that one?

[01:01:20] Tony: I haven’t, no, they’ve kind of dis­ap­peared off my list.

[01:01:24] Cameron: Oh,

[01:01:24] Tony: I’ve got to go and sort of fer­ret them out now.

[01:01:27] Cameron: Yeah, it’s real­ly good, you know, same as the first one. Yeah, same cast, uh, real­ly, real­ly well done. Beau­ti­ful­ly told. Yeah, good stuff. And yeah, I did my two hour show on Israel and Gaza on the bull­shit fil­ter last Fri­day. So that’s been a lot on my mind this week, is just what’s going on over there, speak­ing to some of my Israeli lis­ten­ers about their take on it, and how they feel about it, and that kind of stuff.

[01:01:55] Cameron: So, yeah. It’s obvi­ous­ly a com­plete clus­ter­fuck [01:02:00] and a tragedy and um, just, I don’t know, hor­ri­ble sit­u­a­tion all told, like Rus­sia and Ukraine.

[01:02:07] Tony: Hmm.

[01:02:08] Cameron: uh, very sad for all sides, every­one involved.

[01:02:13] Tony: Yeah, it is. And it’s not close to res­o­lu­tion. I feel like the Israeli gov­ern­ment is going to go in and try and get the hostages out. They’re going to try and exter­mi­nate Hamas, Hamas if they can. I don’t think that’s pos­si­ble. So it’s just going to be, it’s going to drag on prob­a­bly like the Ukraine war did, I feel.

[01:02:32] Cameron: Yeah, but I mean, it has been drag­ging on. This

[01:02:34] Tony: Oh, for

[01:02:35] Cameron: a hun­dred, it’s been going on for a hun­dred years over there, it’s uh, yeah. Some­thing big needs to change for it to ever get a res­o­lu­tion and um, I can’t see how

[01:02:46] Tony: No, you’re going to have to relo­cate 2. 3 mil­lion peo­ple out of Gaza some­how. And A, they may not want to go. And, uh, B, where do you put

[01:02:56] Cameron: push, or push Israel back below the, back [01:03:00] behind the green line or fur­ther.

[01:03:01] Tony: Yeah. I mean, that’s what I’m say­ing. You

[01:03:03] Cameron: real­ly make a, yeah, real­ly have a sol­id attempt at a two state solu­tion. But you know, the Pales­tini­ans don’t want a two state solu­tion. What they want, they want their own, their own coun­try back the way it was pre 1947.

[01:03:17] Tony: Yeah, and that’s pos­si­bly a mis­take they made. They had a chance of a two state solu­tion back in 1947, but they turned it down. Did­n’t want to give up any land. And I kind of have sym­pa­thy for that. I mean, like this whole thing of para­chut­ing all these peo­ple into your coun­try and say­ing, yeah, yeah, it’s not yours any­more is, um, well, it’s a whole, it’s akin to the whole, uh, Abo­rig­i­nal dis­cus­sion we had last week about inva­sion.

[01:03:42] Cameron: But it hap­pened 75 years ago, not. 250 years ago, even, you know, yeah. And, you know, it was, as I point­ed out in the episode we did last week, that hap­pened at a time when the devel­oped world was reject­ing. Immi­gra­tion. [01:04:00] Aus­tralia still had its white Aus­tralia pol­i­cy. The US was­n’t, weren’t tak­ing Euro­pean immi­grants.

[01:04:07] Cameron: Aus­tralia was bare­ly start­ing to think about tak­ing Ital­ian and Greek immi­gra­tion from after World War II, but cer­tain­ly not Jew­ish immi­gra­tion. The rest of the world was like, No, we’re not accept­ing Jew­ish immi­grants. You know, I always talk about the, on my shows, the Evian Con­fer­ence. That, uh, FDR called in the ear­ly 1940s to try and fig­ure out what to do with the, uh, Jew­ish refugees out of Ger­many.

[01:04:37] Cameron: Hitler said, I will send the Jews any­where in the world that, that will take them. I’ll pay for the trans­port. Yeah, I’ll send them any­where you want. And the rest of the world said, no, we don’t want them. Not our prob­lem. And you know, they were still com­ing out of the great depres­sion and, you know, ramp up for World War II and all that kind of stuff.

[01:04:58] Cameron: But I, I like [01:05:00] Aus­trali­a’s for­eign min­is­ter at the time was Mr. White and we had the White Aus­tralia pol­i­cy, not named after him, but I’d like to think it was. He famous­ly said at the, uh, or infa­mous­ly said at the Evian con­fer­ence, Aus­tralia does­n’t have a racial prob­lem and we don’t intend on import­ing one. Real­ly?

[01:05:19] Tony: Because they’re all

[01:05:20] Cameron: to our Indige­nous pop­u­la­tion about that? We don’t have a racial prob­lem? Any­way, uh, yeah. It’s just been a long time brew­ing that mess, and

[01:05:32] Tony: Yeah, and I feel uncom­fort­able even offer­ing opin­ions because I don’t know enough about it. And my opin­ions are prob­a­bly plat­i­tudes, real­ly.

[01:05:41] Cameron: Yeah. Alright, well with that, um, hap­py, hap­py ASX­ing, Tony.

[01:05:48] Tony: Yes, hap­py ASX camp. I was going to lead off with that, but it just did­n’t seem appro­pri­ate. Hap­py, hap­py ASX for next week.

[01:05:57] Cameron: Yes, you too. [01:06:00] QAV a good week, every­one.

[01:06:01] Tony: right, bye.

 [01:07:00]