QAV #648 — Management Quality

QAV 648 Club

[00:00:00] Cameron: Wel­come to QAV episode 648, TK. And I tell you, I’m glad that I always say wel­come

[00:00:15] Cameron: to QAV at

[00:00:17] Cameron: the begin­ning of every show, because I’ve been doing these tran­scripts of our old episodes late­ly, and I’ll do like 10 at a time. So it’ll end up as, uh, was one big long doc­u­ment. All I need to do is search for the bit where I say wel­come.

[00:00:28] Cameron: And I know that’s the begin­ning of the next episode. We’re record­ing this, uh, 28th of Novem­ber, 2023. And I

[00:00:37] Cameron: tried to pull the pin on the show this morn­ing because I had lit­er­al­ly noth­ing to talk about, but you came up with some­thing, which is great. Just a qui­et week. No ques­tions. Noth­ing much has hap­pened in my week.

[00:00:48] Cameron: Invest­ing wise, just been kind of a bit of a ho hum

[00:00:52] Cameron: week.

[00:00:53] Tony: It been a good week for me.

[00:00:54] Tony: Like hap­py ASX cam. It’s been, uh, . Some of the stocks have turned around, which is always [00:01:00] nice.

[00:01:00] Tony: Yeah, I was trav­el­ing. I went up to Bris­bane for a, for a 60th birth­day par­ty for my broth­er-in-Law. So big shout out to

[00:01:06] Tony: Wall, great par­ty. And my sis­ter, and she won’t lis­ten, but Wal might pass it on.

[00:01:11] Tony: Um, and my nieces and nephews and all of their friends, it was love­ly and fam­i­ly.

[00:01:16] Tony: It was love­ly. Uh,

[00:01:16] Tony: par­ty up

[00:01:17] Cameron: That’s great. And we got to have lunch

[00:01:19] Cameron: with you on

[00:01:19] Cameron: Sat­ur­day in the fam­i­ly, which was nice. It’s

[00:01:22] Tony: Yes. Alex came up and Sean, it was a, it was, yeah, real­ly nice fam­i­ly

[00:01:25] Tony: qual­i­ty

[00:01:26] Cameron: Yeah, um, well, I, I did want to point out that the CVL pulled

[00:01:32] Cameron: pork, pulled, pulled, pulled, pulled, pulled,

[00:01:36] Cameron: pork curse turned around.

[00:01:38] Cameron: CVL rebound­ed

[00:01:41] Cameron: after we did the show last week.

[00:01:43] Cameron: Um, so that’s good. So the pulled pork

[00:01:46] Cameron: curse, hope­ful­ly peo­ple did­n’t buy it, then had to rule one and

[00:01:50] Cameron: then it turned

[00:01:51] Cameron: around. I actu­al­ly,

[00:01:53] Tony: maybe they, maybe they took a while to lis­ten to the pod­cast and now they’re buy­ing it

[00:01:56] Tony: en

[00:01:57] Cameron: right. I actu­al­ly, I added some [00:02:00] to a light port­fo­lio yes­ter­day, I think. So this is why I noticed it had turned around again. Uh, what else hap­pened this week? Oh, I post­ed my Python script for sen­ti­ment checks to the group, so a cou­ple of peo­ple were excit­ed about that, a cou­ple weren’t. Ed

[00:02:16] Cameron: Nixon said it was all like gob­bledy­gook, and it is.

[00:02:20] Cameron: But,

[00:02:21] Cameron: you know, that’s if you’re going to become coders.

[00:02:23] Cameron: I need to learn how to under­stand code. Any­way, I hope that helps some peo­ple. Let me know, I haven’t heard feed­back yet from any­body who,

[00:02:31] Cameron: uh, said they were going to give it a go. But, um, I hope it helps. Like for me, I can run a cou­ple of hun­dred sen­ti­ment checks.

[00:02:37] Cameron: I can, I just rerun, every Mon­day I run my

[00:02:40] Cameron: 3PTL update

[00:02:43] Cameron: script. So it, Um, gives me the lat­est sell prices for a cou­ple of hun­dred stocks, which I can just drop into the spread­sheet. They’re all updat­ed every

[00:02:50] Cameron: week. Um…

[00:02:52] Cameron: So, uh, let me know if any­one wants that. It’s good stuff.

[00:02:57] Cameron: What else? Port­fo­lio

[00:02:59] Cameron: per­for­mance. I did [00:03:00] my week­ly report this morn­ing.

[00:03:02] Cameron: Our dum­my port­fo­lio has­n’t had a good month, last 30 days. It’s under­per­formed, the STW. But, um,

[00:03:12] Cameron: I look at the, since incep­tion, we’re still doing about two and a half times.

[00:03:17] Cameron: Uh, the STW for the finan­cial year we’re doing, um, a lot bet­ter than the s st. I think the STW for the finan­cial

[00:03:28] Cameron: year is neg­a­tive half a per­cent.

[00:03:33] Cameron: And, uh, the dum­my port­fo­lio is up 3%.

[00:03:37] Cameron: But, um, if you look at the cap­i­tal gain, it’s actu­al­ly down a quar­ter

[00:03:42] Cameron: of a per­cent. Um, all of the upside is in div­i­dends.

[00:03:47] Cameron: So,

[00:03:49] Cameron: it’s

[00:03:49] Cameron: not ide­al. That’s

[00:03:51] Cameron: okay,

[00:03:51] Tony: it’s okay.

[00:03:52] Cameron: it’s bet­ter than noth­ing.

[00:03:53] Tony: div­i­dends. They’re impor­tant. Yeah. And we score them in the

[00:03:56] Tony: check­list, right? So

[00:03:57] Tony: they are

[00:03:57] Cameron: yes, but you’ve told me that [00:04:00] in the past, tra­di­tion­al­ly div­i­dends account for what about 20%, 25%?

[00:04:05] Cameron: Do you think if you’re upside?

[00:04:08] Tony: Yeah. 20 to 30 per­cent

[00:04:09] Cameron: Not a hun­dred per­cent, 110%.

[00:04:13] Tony: a short

[00:04:13] Tony: time­frame. So I’m will­ing to take it.

[00:04:15] Cameron: Oh, that’s true. And if I look at, but if I look at incep­tion, uh, which is over four years now, the cap­i­tal gain is only 5 per­cent

[00:04:25] Cameron: and the

[00:04:25] Cameron: income return is nine and a half

[00:04:27] Cameron: per­cent. Over that time. So it’s, you know, been the, the thing,

[00:04:34] Cameron: keep­ing our dum­my port­fo­lio per­for­mance up since incep­tion too. I don’t know what that means, but I get it bet­ter than noth­ing. STW includes income as well and

[00:04:47] Cameron: out­per­form­ing that by quite a lot. So it works at the end of the day.

[00:04:53] Cameron: That’s. Lit­er­al­ly every­thing I have to talk about for the for the

[00:04:58] Cameron: episode, Tony.[00:05:00]

[00:05:01] Tony: That’s all right. Well, I’ve got a cou­ple of things to talk about. Um,

[00:05:04] Tony: and, uh, I’ll do a pulled pork

[00:05:06] Tony: on Macmil­lan Shake­speare in a minute. Um, I, I want­ed to talk about the results of, uh, the ana­lysts. Analy­sis into buy­ing from the top of the buy list ver­sus buy­ing from the bot­tom and rule ones and 10 per­cent ver­sus 20%.

[00:05:24] Tony: So we can sep­a­rate that. And I think Alex is going to come on soon with a ques­tion. So I’ve got those three things to cov­er and you can pick

[00:05:31] Tony: the order.

[00:05:32] Cameron: Okay. I’ll stitch ’em

[00:05:33] Tony: Oh, sor­ry. There was a fourth thing too. Um, so I just had a thought. Um,

[00:05:39] Tony: I lis­tened to the free half hour show.

[00:05:42] Tony: Well, I lis­tened to it, um, occa­sion­al­ly. And it’s kind of strik­ing me that if you’re com­ing in new to the show, you would­n’t be get­ting a fla­vor of what QAV is.

[00:05:54] Tony: And also I did an inter­view with Phil Mus­catel­lo on Shares for Begin­ners recent­ly, [00:06:00] and lis­ten­ing back to that, it, you know, he asked a few ques­tions, you know, about what QAV is. And I think it might be worth­while just doing a quick recap on one part of QAV. At the top of the show, or the first half hour of the show, just to give peo­ple a flavour, who are new, as to what it is.

[00:06:17] Tony: And I guess the peo­ple who aren’t new might enjoy a

[00:06:20] Tony: recap onto

[00:06:21] Tony: things.

[00:06:22] Cameron: So when you say a recap, what are you think­ing? Like the,

[00:06:24] Cameron: the, the, an o an an

[00:06:26] Cameron: overview of the entire process or pulling out

[00:06:29] Tony: No, no,

[00:06:30] Tony: just yeah, pull out

[00:06:31] Tony: one

[00:06:31] Tony: piece

[00:06:31] Tony: of it so peo­ple can, might even ask ques­tions about it. But, uh, and they did in the ear­ly days. They’ve kind of dropped off now, but to give you an exam­ple, when Phil and I were talk­ing on his show, uh, he was ask­ing, how do I judge man­age­men­t’s qual­i­ty?

[00:06:44] Cameron: Mm-Hmm.

[00:06:45] Tony: Because often­times invest­ment ana­lysts talk about, you know, how impor­tant the cul­ture of man­age­ment is, how impor­tant, uh, good man­age­ment is.

[00:06:53] Tony: to a com­pa­ny. And Phil said, how do I do it? And I said, well, to judge the qual­i­ty of the man­age­ment, you’ve got to look at the [00:07:00] qual­i­ty of the fig­ures, because man­age­men­t’s always going to spin a sto­ry. And if you want a good sto­ry, go to a book­store, don’t, don’t buy a stock. So that’s an exam­ple, right? And, and we see man­age­ment qual­i­ty in the num­bers.

[00:07:13] Tony: We, we see good return on assets. We see, um, sor­ry, good return on equi­ty. We see, um, uh, good debt man­age­ment. Um, Div­i­dend Man­age­ment, all those kinds of things. Earn­ings per

[00:07:24] Tony: share growth, which are part of our

[00:07:26] Tony: check­list process. So, a lot of, you know, a lot of peo­ple either get turned off by invest­ment, or they focus entire­ly on the for­ward look­ing state­ments for a com­pa­ny.

[00:07:37] Tony: And that’s impor­tant, and we, we look at fore­cast earn­ings per share growth in, um, in our check­list. Uh, but, what I find is, what you’re doing when you, my expe­ri­ence is if you’re look­ing at what, The com­pa­ny says it will

[00:07:51] Tony: do, or what you think the com­pa­ny will do.

[00:07:55] Tony: You’re basi­cal­ly telling a sto­ry,

[00:07:57] Cameron: Yeah.

[00:07:57] Tony: right? You don’t, you don’t have any [00:08:00] fig­ures or facts that you can pull out to just,

[00:08:02] Tony: you can pull out plen­ty of fig­ures and facts to jus­ti­fy the sto­ry, but you don’t have any hard data.

[00:08:06] Tony: You’re, you’re doing almost like a prob­a­bilis­tic sce­nario of, you know, what if inter­est rates go up or down? What if there’s no, um, war going on some­where in the world? What if oil prices are up or down, et cetera, et cetera. And there­fore you’re. Pro­ject­ing what you think the com­pa­ny might be worth. And that, that to me is a best of sta­tis­ti­cal game and, and at worse,

[00:08:31] Tony: dumb luck to try and do that. So all we have to work on is what we have. Um, in the com­pa­ny reports that they’ve already done and then find a cat­e­go­ry or a type of com­pa­ny or a pro­file of com­pa­ny that we think gives us the best odds of see­ing it improve over time. So as we said, we look at the qual­i­ty of the com­pa­ny, um, low, low debt, good finan­cial health.

[00:08:56] Tony: All those kinds of things. And then we look at how much cash flow, we [00:09:00] put a big empha­sis on how much cash flow it’s got. Um, pos­i­tive cash flow, obvi­ous­ly. And, you know, we look at things like, is the equi­ty increase, net equi­ty increas­ing con­sis­tent­ly? All those kinds of things. And then we put the val­ue over­lay on it because…

[00:09:14] Tony: We know that, um, if some­thing is priced to per­fec­tion and the future isn’t per­fect, which it often isn’t, then it’s got more chance of being, of com­ing down and being volatile. So, yeah, so I just want­ed to kind of just recap on a point of QAV to try and paint a pic­ture of what QAV

[00:09:30] Tony: is if some­one comes in

[00:09:31] Tony: you.

[00:09:32] Cameron: You know, what I nor­mal­ly do, near­ly every free episode, it may not have been the case last week, but near­ly every free

[00:09:38] Cameron: episode has your pulled pork in it.

[00:09:41] Cameron: Because I fig­ure the pulled pork is the

[00:09:43] Cameron: case study for how you think about valu­ing stocks. You’re pulling it apart and look­ing at all of the num­bers.

[00:09:52] Cameron: But I think last week we had a lot of chit chat about oth­er stuff that I thought was inter­est­ing, so I threw all that in instead, but

[00:09:58] Cameron: yeah. But we can do [00:10:00] anoth­er bit of a break­down and add it in too,

[00:10:02] Cameron: that’s all

[00:10:02] Cameron: good.

[00:10:05] Tony: just a thought. Maybe peo­ple can let us know what they would like to hear and raise some

[00:10:09] Tony: ques­tions about it.

[00:10:10] Cameron: Good idea.

[00:10:11] Cameron: Hi

[00:10:11] Cameron: Alex!

[00:10:12] Alex: Hi.

[00:10:14] Tony: Hi,

[00:10:15] Tony: hun.

[00:10:16] Alex: Hi,

[00:10:17] Tony: Nice paint­ing behind you.

[00:10:19] Alex: Thank you.

[00:10:21] Alex: Good, because I am cov­ered in paint right now.

[00:10:24] Alex: I’m scared to touch my lap­top because I’ve got so much on my hands.

[00:10:30] Tony: What, you think you’re paint­ing, are

[00:10:31] Tony: you?

[00:10:31] Cameron: It’s

[00:10:31] Alex: Yeah,

[00:10:32] Alex: pret­ty much.

[00:10:33] Cameron: good to see you on the

[00:10:33] Cameron: week­end.

[00:10:35] Alex: Yeah, the week­end. was

[00:10:36] Cameron: to see you.

[00:10:36] Cameron: both.

[00:10:38] Cameron: What have you got for us this week, AK?

[00:10:40] Alex: Well, I pre screened this

[00:10:41] Alex: ques­tion with dad and I’m still not sure

[00:10:43] Alex: it’s the great­est ques­tion of all. But, um, I was think­ing. Uh, one’s invest­ing strat­e­gy would change if, say, they were a, you know, pro­fes­sion­al artist or some­thing like that, where you have a, you know, a [00:11:00] big chunk of your income com­ing at, you know, from a sale three times a year or some­thing

[00:11:04] Alex: like that.

[00:11:05] Cameron: Hmm.

[00:11:06] Alex: Um, so

[00:11:07] Cameron: Just a…

[00:11:07] Cameron: cou­ple of mil­lion dol­lars here, a cou­ple of mil­lion dol­lars there, a cou­ple of mil­lion

[00:11:10] Cameron: dol­lars

[00:11:10] Cameron: there,

[00:11:13] Tony: Yeah, you won’t have to invest. You’ll just live off the pro­ceeds of your sales the rest of your life.

[00:11:18] Tony: Yeah, invest more, invest more time in doing your art and pro­duc­ing more art.

[00:11:24] Tony: Yeah, don’t wor­ry about

[00:11:25] Cameron: But half of that has to go to

[00:11:26] Cameron: hero­in and then the oth­er half goes to

[00:11:28] Tony: Oh, don’t say that.

[00:11:30] Cameron: Isn’t that what all great artists

[00:11:31] Cameron: do? It’s like, isn’t it fueled by hero­in or is it

[00:11:34] Cameron: just

[00:11:35] Cameron: Brett White­ley I’m think­ing of? the

[00:11:39] Alex: it’s not a…

[00:11:41] Alex: much, of a jump.

[00:11:43] Cameron: paint fumes are the gate­way drug.

[00:11:45] Cameron: Yeah,

[00:11:46] Cameron: that’s how you get start­ed.

[00:11:47] Alex: terps.

[00:11:48] Tony: ha

[00:11:48] Tony: ha ha ha.

[00:11:49] Cameron: All right. I don’t want to

[00:11:50] Cameron: encour­age your drug habit. Con­tin­ue. Your

[00:11:53] Tony: Yeah, is that

[00:11:54] Cameron: your father’s giv­ing

[00:11:54] Cameron: me dirty looks, encour­ag­ing your

[00:11:55] Cameron: drug habit.

[00:11:57] Alex: He gave

[00:11:57] Tony: I’m not.

[00:11:58] Alex: Sting, not Sting, um, [00:12:00] Flea’s lat­est

[00:12:00] Alex: auto­bi­og­ra­phy. Is it some­thing for the chil­dren.

[00:12:03] Alex: Drugs for the chil­dren? Acid.

[00:12:06] Alex: And he, before he

[00:12:07] Alex: gave

[00:12:07] Alex: it

[00:12:07] Alex: to me,

[00:12:08] Alex: Flea,

[00:12:09] Alex: from,

[00:12:09] Cameron: Oh, Flea. Oh, yeah, right.

[00:12:12] Cameron: I love Flea. I

[00:12:17] Alex: now I’m not encour­ag­ing you to take drugs.

[00:12:22] Alex: That’s the pur­pose of

[00:12:23] Alex: me

[00:12:23] Alex: receiv­ing this book.

[00:12:25] Tony: ha ha ha

[00:12:27] Cameron: found it yes­ter­day. This is com­plete­ly off the track. You know, Ala­nis Moris­set­te’s big first track, You Ough­ta Know. Um, Flea played bass on that track. I saw some­body do a break­down of that track on Tik­Tok the oth­er day, and it’s Flea play­ing bass. Yeah, he’s doing like a guest bass shot

[00:12:45] Cameron: on that. Any­hoo!

[00:12:48] Cameron: Back

[00:12:48] Cameron: to your ques­tion, Alex, when you’re mak­ing a mil­lion

[00:12:50] Cameron: dol­lars a paint­ing, yes,

[00:12:53] Alex: or just any­one that I don’t know how com­mon this is, but any­one who does­n’t have

[00:12:58] Alex: con­sis­tent cashflow.[00:13:00]

[00:13:00] Tony: Look, it’s very com­mon, not just from the arts com­mu­ni­ty, but, uh, like when I was work­ing cor­po­rate, um, some­times up to half my income would be paid as a bonus once a year. So my invest­ing could be very lumpy on

[00:13:13] Tony: that basis. So, but

[00:13:16] Tony: like. In your cir­cum­stances, I think,

[00:13:18] Tony: and also it was in mine, um, you’ve got to almost bud­get what you think your needs are going to be for the year and make sure you have enough cash to cov­er that

[00:13:27] Tony: because you don’t want to tie up um, cash in an invest­ment and then find it’s gone down and then find

[00:13:35] Tony: you have to sell it.

[00:13:36] Tony: because you need it. Mon­ey to pay the rent or for

[00:13:40] Tony: food or what­ev­er. So I think bud­get­ing is an impor­tant part of it. Sort of plan out your year and say, I need this much for rent and this much

[00:13:46] Tony: to eat and live

[00:13:47] Tony: and this much for trav­el and, and, you know,

[00:13:51] Tony: hav­ing

[00:13:51] Tony: fun, all those kinds of things. Uh, and then work out of

[00:13:55] Tony: that, um, how much above that you’re going to, do you expect to

[00:13:58] Tony: get from your, [00:14:00] um, Irreg­u­lar income.

[00:14:01] Tony: So I’m, I’m assum­ing, well, even if it was just all from art sales

[00:14:05] Tony: and it comes in irreg­u­lar, you’d still have to do that process and make sure you have enough to live on. Um, or you just sim­ply wait till the year and see if you’ve got some left over as well, but have a fair idea of what you

[00:14:16] Tony: need for the next year.

[00:14:17] Tony: Uh, but I’m also,

[00:14:19] Tony: Guess­ing you’ve prob­a­bly got some kind of part time job going

[00:14:23] Tony: as well. So a lot of

[00:14:24] Tony: your, your basic needs are met.

[00:14:26] Tony: Um, and one of the, so I guess a cou­ple of guid­ing prin­ci­ples. One is if you think that you’re going to invest in the share mar­ket, but you might need to take it out for an emer­gency or if you, um, haven’t bud­get­ed well or some­thing unex­pect­ed comes along, you, you do run the risk of hav­ing That

[00:14:43] Tony: That mon­ey go down

[00:14:44] Tony: in val­ue.

[00:14:45] Tony: The share mar­ket’s gone down in the inter­ven­ing peri­od because over the long term it goes

[00:14:49] Tony: up, over the short term it

[00:14:50] Tony: can be volatile. So that’s got to be tak­en

[00:14:53] Tony: into con­sid­er­a­tion. So you might

[00:14:54] Tony: decide that, You know, you’d rather put some of the mon­ey into the bank

[00:14:59] Tony: for a rainy [00:15:00] day in case you need to

[00:15:00] Tony: pull it out.

[00:15:01] Tony: And then after it’s been there for 12 months,

[00:15:03] Tony: decide then to put that into the share

[00:15:05] Tony: mar­ket, for exam­ple. Um, but yeah,

[00:15:07] Tony: it’s, it’s, it’s basi­cal­ly say­ing here’s what I need to live on.

[00:15:11] Tony: Here’s a bit of a buffer, a con­tin­gency, and then the rest goes

[00:15:14] Tony: into the share mar­ket. It’s almost like dol­lar cost aver­ag­ing.

[00:15:16] Tony: If you have sort of three income spurts dur­ing the year and you think you can

[00:15:22] Tony: put some aside

[00:15:23] Tony: then you know buy

[00:15:24] Tony: into the index fund or buy into the next

[00:15:25] Tony: share on the buy list that you want

[00:15:27] Tony: to buy at that time but just make sure that

[00:15:29] Tony: you can com­mit to hav­ing it there

[00:15:31] Tony: for a longer peri­od of

[00:15:32] Tony: time and it’s not going to have to get pulled out because you may run the

[00:15:35] Tony: risk of crys­tal­liz­ing a loss when

[00:15:37] Tony: you don’t want

[00:15:37] Tony: to

[00:15:38] Alex: Makes

[00:15:39] Alex: sense.

[00:15:39] Alex: Thank you.

[00:15:41] Tony: any fol­low up

[00:15:42] Tony: ques­tions

[00:15:43] Alex: when we were

[00:15:43] Alex: chat­ting

[00:15:43] Alex: before, you said some­thing about invest­ing in things that you can pull your mon­ey out of quick­ly. Was

[00:15:48] Alex: that?

[00:15:50] Tony: well i think i think that’s the ben­e­fit of the share mar­ket yeah so i’ve always I’ve always

[00:15:55] Tony: actu­al­ly slight­ly pre­ferred the share mar­ket to say putting mon­ey

[00:15:58] Tony: into prop­er­ty, which I still

[00:15:59] Tony: [00:16:00] do, um, because I can’t sell a

[00:16:03] Tony: house quick­ly, but if I do need to

[00:16:05] Tony: to access the cash for

[00:16:07] Tony: what­ev­er rea­son, um, I

[00:16:09] Tony: can, I can sell shares imme­di­ate­ly

[00:16:11] Tony: and get the mon­ey with­in two days.

[00:16:12] Tony: So I think, um, you know, even though I would­n’t, I would­n’t tell you to use the share mar­ket like a

[00:16:18] Tony: bank, use the bank for things you might have to pull out with­in the next 12 months, but

[00:16:22] Tony: cer­tain­ly if you ever do have a. a real­ly press­ing need to liq­ui­date some of the port­fo­lio, you can get the

[00:16:28] Tony: mon­ey out quick­ly. And that’s

[00:16:30] Tony: dif­fer­ent to if you bought, um, you know, a prop­er­ty or some­thing else, which is, requires a, um, a

[00:16:35] Tony: time to, to liq­ui­date.

[00:16:38] Alex: Oh, thank you.

[00:16:40] Cameron: well That’s it.

[00:16:42] Alex: that’s

[00:16:42] Alex: it.

[00:16:43] Alex: I did text Sean to see if he had any

[00:16:45] Alex: ques­tions and he said he

[00:16:46] Alex: chat­ted with you on Sat­ur­day. So when?

[00:16:51] Alex: Yeah. Oh,

[00:16:52] Tony: We did.

[00:16:52] Tony: Yeah.

[00:16:53] Cameron: tell him to,

[00:16:53] Cameron: save it,

[00:16:54] Tony: At the, at the

[00:16:55] Cameron: tell him to save it for the

[00:16:55] Cameron: show

[00:16:56] Cameron: next time, it’s a waste talk­ing to Tony off air, I [00:17:00] don’t get to

[00:17:00] Cameron: use

[00:17:00] Cameron: it,

[00:17:01] Alex: Yep.

[00:17:02] Cameron: con­tent,

[00:17:03] Alex: No wor­ries.

[00:17:04] Tony: Yeah, I tell all the good stuff

[00:17:05] Tony: off

[00:17:06] Cameron: yeah,

[00:17:06] Alex: I’ll start record­ing all con­ver­sa­tions.

[00:17:10] Cameron: you, that would be,

[00:17:12] Cameron: that would be

[00:17:13] Cameron: good,

[00:17:14] Cameron: alright thanks

[00:17:15] Cameron: Alex, have

[00:17:16] Cameron: a great week,

[00:17:17] Tony: Thank you.

[00:17:18] Tony: Yep. Back to those mil­lion dol­lar

[00:17:20] Tony: paint­ings.

[00:17:21] Alex: all right, bye!

[00:17:23] Tony: Bye. Alrighty. It’s a good ques­tion. That’s, um, prob­a­bly fair­ly com­mon. I would have

[00:17:31] Tony: thought.

[00:17:31] Cameron: yes, I imag­ine so, I mean I’m sure a lot of peo­ple have spurts of extra

[00:17:37] Cameron: income that they want to invest.

[00:17:41] Tony: Okay. Should I do a

[00:17:42] Cameron: Let’s do that, Tony. I was just look­ing up to see if you’ve ever done Macmil­lan Shake­speare before. I can’t

[00:17:48] Cameron: find any pulled pork in it before,

[00:17:51] Cameron: but I feel like we’ve talked about it a num­ber of times,

[00:17:55] Tony: Well, I think that might be because we’ve talked

[00:17:57] Tony: about fleet part­ners or what was called Eclipse, which [00:18:00] is a com­peti­tor of Macmil­lan

[00:18:01] Cameron: right?

[00:18:01] Cameron: I always think Macmil­lan

[00:18:02] Cameron: Shake­speare is a book com­pa­ny. Uh,

[00:18:05] Tony: Yeah,

[00:18:06] Cameron: Cause Macmil­lan Press is a book com­pa­ny. and Shake­speare wrote books,

[00:18:10] Cameron: but not a book com­pa­ny. It’s kind of

[00:18:13] Cameron: con­fus­ing.

[00:18:16] Tony: Yeah, got it. Yeah, no, it’s not. It’s a, it’s a

[00:18:19] Tony: Novat­ed Leas­es and Salary Pack­ag­ing

[00:18:22] Cameron: Right. BSL.

[00:18:26] Tony: things, can you tell me if we, if I’ve done Blue Scope Steel, because I was also think­ing about doing that, but I thought I might’ve done it recent­ly.

[00:18:36] Cameron: Hmm. Not com­ing up as a pulled pork,

[00:18:38] Cameron: no.

[00:18:40] Tony: Alrighty, I might do BlueScape Steel then, because it came up on the buy list as well. Yeah, okay, so Macmil­lan Shake­speare, as I said, Salary Pack­ag­ing, Inno­v­a­tive Lease Man­ag­er, Fleet Man­ag­er, a lit­tle bit of financ­ing for vehi­cles and insur­ance, peo­ple who are work­ing in cor­po­rates or insti­tu­tions, like, uh, [00:19:00] Teach­ers or hos­pi­tals or some­thing like that may have their salary pack­aged, includ­ing a car.

[00:19:07] Tony: And so com­pa­nies like Macmil­lan Shake­speare do that ser­vice. They gen­er­al­ly out­source it. So you don’t have to have a large and com­plex HR depart­ment to run this kind of pack­ag­ing ser­vice for your staff. You can out­source it to com­pa­nies like Macmil­lan Shake­speare, or you can just do the vehi­cle part of it.

[00:19:27] Tony: But yeah, so Novat­ed leas­ing, um, is a, if peo­ple don’t know what that is, if they don’t lease their vehi­cles or haven’t, it’s just very sim­ply that you, rather than buy the car, you lease it for a peri­od. It’s usu­al­ly around three years. And the, I guess the impor­tant things are the val­ue of the car, the inter­est rate, and what’s called the bal­loon pay­ment at the end.

[00:19:50] Tony: So as we know, as soon as you dri­ve a new car out of the lot, it goes down in

[00:19:54] Tony: val­ue. And so, uh, that, that affects the

[00:19:58] Tony: bal­loon pay­ment. [00:20:00] So typ­i­cal­ly, and, and the, the sort of amounts you assign to each of these allo­ca­tions will affect how much you pay in lease pay­ments. But if, for exam­ple, you have, um, a large bal­loon pay­ment at the end.

[00:20:14] Tony: In oth­er words, when the lease fin­ish­es, you still owe the rest of the pay­ments on the car in one pay­ment. It’s called a bal­loon pay­ment. Um, and you can either. Uh, put the car through an auc­tion and sell the vehi­cle and use the pro­ceeds to pay off that bal­loon pay­ment. Or you can, um, essen­tial­ly pay it your­self and buy and own the car.

[00:20:35] Tony: So it does come down two and three years time, you know, whether it’s a good deal for you or not, and whether you can recov­er the mon­ey from the sale or not, um, at auc­tion for the bal­loon pay­ment. And so that there­fore some peo­ple will have a very, um, will try and low­er their bal­loon pay­ment, but that means that they’re pay­ing more often the lease.

[00:20:52] Tony: In month­ly lease pay­ments. And some peo­ple will do the reverse. They’ll say, um, I’ll, I’m hap­py to be aggres­sive on the bal­loon pay­ment [00:21:00] and,

[00:21:00] Tony: um, accept a big­ger one and pay less

[00:21:02] Tony: as I go. So that’s what Nova Leas­ing is. Um, a few mov­ing parts, but it’s han­dled by this com­pa­ny. And as I said before, there are oth­er.

[00:21:09] Tony: Two oth­er main com­pa­nies that I know of that do it, MMS, which has prob­a­bly only come on the buy list in the last, uh, since the last results, um, the last cou­ple of months. Um, and there’s a fleet part­ners, which used to be called Eclipse, which has been on the buy list for quite a while. And anoth­er one, which we haven’t seen, I don’t think on the buy list

[00:21:26] Tony: called, I think it’s called Smart Group, SIQ.

[00:21:30] Tony: They’re the three, um, the three main ones. Um, These com­pa­nies, I guess, are

[00:21:36] Tony: hav­ing a bit of a, um, a tail­wind at the moment because a lot of

[00:21:41] Tony: peo­ple are want­i­ng to novate, uh, elec­tric vehi­cles, uh, because of the, I guess, their, um, there’s a tran­si­tion to that kind of, uh, motor vehi­cle. But also, recent­ly, in the last, I think it was the last bud­get, the gov­ern­ment changed the rules so that there’s no fringe ben­e­fits tax [00:22:00] payable on, um, cer­tain EVs up to a cer­tain val­ue.

[00:22:05] Tony: So, um… And fringe ben­e­fits tax is one of the rea­sons why this whole lease, sort of, novat­ed lease busi­ness sort of grew up out of peo­ple try­ing to min­i­mize or try­ing to, um, find a way of get­ting a ben­e­fit from their com­pa­ny, i. e. a car pack­age, with­out, whilst min­i­miz­ing the FBT for the com­pa­ny. So… Um, pay­ing no FBT on elec­tric elec­tric vehi­cles, even though they might be a bit more expen­sive, makes them more attrac­tive to peo­ple who are leas­ing them through cor­po­ra­tions.

[00:22:35] Tony: And so, for exam­ple, um, this com­pa­ny, MMS, Macmil­lan Shake­speare, have said that, uh, new EV leas­es were 36 per­cent of their, of their busi­ness in the last quar­ter. And that, um, New leas­es have increased 28 per­cent year on year. So there’s cer­tain­ly a tail­wind hap­pen­ing in the car leas­ing busi­ness, and you can see it in the clips, sor­ry, Fleet Part­ners as well [00:23:00] around EV leas­ing.

[00:23:02] Tony: A cou­ple of oth­er things that are hap­pen­ing with this busi­ness at the moment. Uh, one of the oth­er list­ed car deal­er­ship stocks called APEgers, A P E is their code, has bought a 6 per­cent stake in Macmil­lan Shake­speare, and, uh, nei­ther com­pa­ny has come out and pro­vid­ed any com­men­tary on that, um, but, uh, ana­lysts are sort of assum­ing that It’s going to help Macmil­lan Shake­speare’s sup­ply chain for EVs because AP Eagers has just got­ten into some deal­er­ships for brands such as BYD, the elec­tric car com­pa­ny, and one of the issues and one of the risks for Apple.

[00:23:40] Tony: Com­pa­nies like MMS’s is some kind of prob­lem with sup­ply chain for new elec­tric vehi­cles. If there was a prob­lem with, you know, sup­ply of chips or, or any oth­er, for any oth­er rea­son why EVs were in high demand and they could­n’t be, could­n’t be bought, then they’re more like­ly to have [00:24:00] a sup­ply from one of their own share­hold­ers.

[00:24:02] Tony: But they haven’t come out and said that there’s a, there’s a Defin­i­tive sup­ply chain tie up or any sort of con­tract, but I sus­pect that’s, um, that’s what’s poten­tial­ly dri­ving it. Uh, I’m going to jump now into the num­bers, but I will come back and talk about some of the issues and some of the pos­i­tives, I guess, for a com­pa­ny like this, um, at the end.

[00:24:21] Tony: So doing my analy­sis on a share price of 17. 45. Um, it’s, I noticed today the mar the Share price was up, um, this morn­ing when I start­ed doing the analy­sis it was down, so, um, it might be slight­ly high­er than 17. 45 now, but not by much. ADT for this com­pa­ny is high, so it’s 3. 2 mil­lion on aver­age per day, so that’s quite good.

[00:24:44] Tony: And this is one of the, um, One of the com­pa­nies on our buy list that is a star growth stock in the Stock Doc­tor uni­verse and also a star income stock, so Stock Doc­tor high­ly rates this com­pa­ny and we score it as a 1.

[00:24:57] Tony: 5 because of that. The inter­est­ing thing [00:25:00] I found in doing this analy­sis though was that the Stock Doc­tor finan­cial health is sat­is­fac­to­ry and dete­ri­o­rat­ing, so I thought it was inter­est­ing that they were giv­ing it a star stock.

[00:25:09] Tony: Rat­ing, um, even though it had what they call dete­ri­o­rat­ing finan­cial trend, but I think that’s because it, um, has dropped from strong

[00:25:18] Tony: and it’s now down to sat­is­fac­to­ry

[00:25:20] Tony: and Stock Doc­tor still rates. And as we do sat­is­fac­to­ry as being, um, a score that we

[00:25:26] Tony: give it a score, Stock Doc­tor rate is being accept­able as well.

[00:25:28] Tony: So even, uh, even though it’s dete­ri­o­rat­ing, it’s going from strong to sat­is­fac­to­ry. So we, um, we take one off for that, um, dete­ri­o­rat­ing trend, but. That might be a bit harsh in this case, but we’ll see. This com­pa­ny, uh, has, um, 100 per­cent of prof­its being paid out in div­i­dends, which is an inter­est­ing, uh, phe­nom­e­non, I think.

[00:25:49] Tony: And cer­tain­ly a dif­fer­ent, um, approach to cap­i­tal man­age­ment or to Prof­it man­age­ment com­pared to its com­pet­i­tive fleet part­ners, which peo­ple can go back and [00:26:00] check the pulled pork on that, but they don’t pay a div­i­dend unless they’ve changed recent­ly. And they, they do an ongo­ing share buy­back with their excess cap­i­tal.

[00:26:09] Tony: Com­ing from prof­its. Inter­est­ing­ly enough though, I kind of won­dered which one was the bet­ter strat­e­gy and I over­laid their share, their share price graphs and they both sort of cor­re­late pret­ty strong­ly. Um, but I think Macmil­lan Shake­speare, depend­ing on when you start, I guess had slight­ly a bet­ter result over time than, than Fleet Part­ners, but they do both track very sim­i­lar, um, share price graphs.

[00:26:34] Tony: But it does mean the yield on this com­pa­ny is over 7%, which is good for us. So we give it a tick for that. Um, What else can I talk about? The return on equi­ty was strong at 35%, even though we don’t score on that. I know some peo­ple are inter­est­ed in it. Uh, the PE for this com­pa­ny was rea­son­ably high for a stock on the buy list at 16 times.

[00:26:56] Tony: Um, but it’s in the mid­dle of its range, not the high­est or low­est, um, [00:27:00] over the last three years, but it is high, which is get­ting up there. So there might be a slight issue with val­u­a­tion on this com­pa­ny because also too, Uh, it was way above our IV1 and IV2 cal­cu­la­tions, and it was, uh, net equi­ty per share was 2.

[00:27:16] Tony: 09, um, and even at book plus 30, which would be 2. 72, it’s way below the cur­rent share price of 17. 45. It’s not scor­ing well on those kinds of val­u­a­tion met­rics, but its Prop­Caf is about six times. So it’s scor­ing well on that met­ric of hav­ing lots of cash being thrown off. Uh, Earn­ings Per Share fore­cast growth of 12%, which is pret­ty healthy, but not scor­ing for us because growth over P is 0.

[00:27:45] Tony: 76 and we look for a 1. 5. Thresh­old. And I think the rea­son why it’s below our tar­get is because of that high ish P. E. of 16 times. Uh, the check­list scores [00:28:00] it for hav­ing an own­er founder because two of the direc­tors hold 13%, but when I dug into those, they’re not actu­al­ly founders in the com­pa­ny, but they are expe­ri­enced indi­vid­u­als in terms of invest­ment.

[00:28:13] Tony: Um, One runs a fund and one’s been a, um, has a long his­to­ry of, uh, uh, work­ing in the invest­ment space. So I did­n’t want to change the score, even though it’s not an own­er founder. You have two direc­tors hold­ing 13 per­cent and they’re very expe­ri­enced in invest­ing in cap­i­tal mar­kets. So I think that’s still a good thing for the com­pa­ny.

[00:28:34] Tony: Uh, Did­n’t get, I got a zero for con­sec­u­tive­ly increas­ing equi­ty. So that was an inter­est­ing thing. Uh, and it was­n’t a recent upturn in the, in the share price on the buy list. It, it was above its buy price by a long way and trend­ing upwards, but, um, not since the last, uh, results came out. So can’t score it for that.

[00:28:54] Tony: So all in all, um. The com­pa­ny on the qual­i­ty basis gets 9.5 out­ta 15, which is [00:29:00] 63%, and just sneaks into the bot­tom of the bio list with a qav score of 0.11 based on that, um, that good prop calf. So have a look at it. Uh, if the share price keeps going up, it may not be on the bio list for too much longer.

[00:29:14] Tony: And if you like some­thing which pays you a, a, a high div­i­dend yield, this might

[00:29:18] Tony: be some­thing to have a look at for your

[00:29:20] Cameron: And don’t just sell it because Tony did a pulled pork on it and try and bring about the pulled

[00:29:25] Cameron: pork curse for shits and gig­gles.

[00:29:27] Cameron: Stop it. Cut it out, peo­ple. We

[00:29:30] Cameron: hold it.

[00:29:31] Tony: And I hope, I hope it does­n’t, because I should dis­close as well that I own shares in

[00:29:35] Tony: Macmil­lan Shake­speare.

[00:29:35] Cameron: I don’t, but we have a cou­ple of parcels in the light port­fo­lios that are up three per­cent since I added them at the end of Octo­ber. But I got­ta say, FPR has been a good one. Um, It’s up 25 per­cent since we added it at the end of June, begin­ning of July in, yeah, I do hold that one, and it’s in the dum­my, and it’s in

[00:29:54] Cameron: light.

[00:29:55] Cameron: Um, it’s had a cork­er of a

[00:29:58] Cameron: finan­cial year so [00:30:00] far.

[00:30:01] Tony: and sor­ry, I just want­ed to come back to

[00:30:04] Tony: the rest of what I want­ed to talk about. Um, I, I want­ed to do an out­line of the risks for the, for this com­pa­ny, and it’s one of the rea­sons why some­times these novat­ed lease com­pa­nies, busi­ness­es get on the, on our buy list is because there are, um, peo­ple have been burnt in the past and so there is some risks involved.

[00:30:21] Tony: Um, one of them is gov­ern­ment pol­i­cy and there was a time under the RUG gov­ern­ment when they changed FBT rules which affect­ed these com­pa­nies and they, they dropped quite quick­ly after bud­get night. Um, pol­i­cy was then reversed because of that. Not just because the share prices went down, but because a lot of com­pa­nies com­plained they could­n’t man­age their FBT lia­bil­i­ties as well as they were under the old rules.

[00:30:44] Tony: So that’s one thing to be mind­ful of. So if there is a change to FBT leg­is­la­tion in the future, it will affect this

[00:30:50] Tony: com­pa­ny. They’re cur­rent­ly going

[00:30:52] Tony: through this big EV

[00:30:54] Tony: bump, so there could be some road­blocks or some speed bumps along the way on that. That [00:31:00] could come about because of changes to EV pol­i­cy.

[00:31:04] Tony: Um, from, from gov­ern­ments, if they change from time to time, or, um, or that FBT, um, ben­e­fit for, for buy­ing an EV could go away. So, there’s cer­tain­ly some

[00:31:14] Tony: gov­ern­ment pol­i­cy risk in this com­pa­ny. There’s also risk in terms of if EV,

[00:31:18] Tony: if elec­tric vehi­cles are some­how,

[00:31:21] Tony: um, Either

[00:31:22] Tony: becom­ing dif­fi­cult to source

[00:31:24] Tony: because of chip demand prob­lems or

[00:31:26] Tony: bot­tle­necks, or they’re becom­ing more expen­sive because they are, because demand’s increas­ing, that could be a prob­lem.

[00:31:32] Tony: So the fact that these com­pa­nies

[00:31:34] Tony: are wed­ded to EVs now could

[00:31:37] Tony: be an issue for them. But I guess that also applies to any vehi­cle. I remem­ber dur­ing COVID there was dif­fi­cul­ty sourc­ing vehi­cles from over­seas. And Aus­tralia does­n’t man­u­fac­ture vehi­cles any­more, so it’s not like you can just Buy a Hold­en for the next three years

[00:31:51] Tony: or a four, you’ve still got to wait for some­thing to come from over­seas gen­er­al­ly.

[00:31:56] Tony: Um, the oth­er thing that was, that I want to high­light

[00:31:58] Tony: is that ana­lysts [00:32:00] do have prob­lems valu­ing the future cash flows for these busi­ness­es. And

[00:32:03] Tony: that’s a, um, because of the nature

[00:32:05] Tony: of them, they, they tend to ten­der for work. So, you know, Wool­worths might put its novat­ed lease busi­ness out for its employ­ees out to ten­der.

[00:32:14] Tony: One of the big play­ers will pick it up, but it’s usu­al­ly. Com­mer­cial Incom­pe­tence, what the terms

[00:32:19] Tony: are and what the length of the con­tract is. So it can be hard to do a DCF and

[00:32:23] Tony: make the right assump­tions when you sort of try and sum up all these opaque con­tracts. So that’s one thing that I’ve heard

[00:32:29] Tony: ana­lysts com­plain about in the past. What else is there? The div­i­dend pay­out ratio of 100 per­cent I think is an

[00:32:36] Tony: inter­est­ing one. I don’t know if it’s always been at that lev­el. It is for this

[00:32:40] Tony: year, but obvi­ous­ly if the prof­it goes down, the div­i­dend goes down and that is, if that’s a rea­son why some­one’s buy­ing the

[00:32:47] Tony: stock, it might lead to some sell­ing. Um, it also is inter­est­ing too, that if they’re pay­ing out all their prof­its in, in div­i­dends, what are they invest­ing in the com­pa­ny? Now I did see in one of the Man­age­ment results, I [00:33:00] had a look at that. They were putting CapEx into the com­pa­ny. So, um, the 100 per­cent pay­out ratio might just be, uh, some­thing pecu­liar to this cur­rent peri­od, and they might

[00:33:09] Tony: change it going for­ward.

[00:33:11] Tony: But, um, even­tu­al­ly a com­pa­ny will need to rein­vest in itself. So, 100 per­cent isn’t sus­tain­able. Um, Get­ting back to con­tracts, I’ve seen indus­tries that oper­ate in this kind of envi­ron­ment and, for exam­ple, the

[00:33:26] Tony: min­ing ser­vice con­trac­tors, when a com­pa­ny is in a com­pet­i­tive space

[00:33:33] Tony: up against some strong com­peti­tors.

[00:33:35] Tony: And basi­cal­ly most of their income is com­ing from win­ning con­tracts that cre­ates a

[00:33:40] Tony: high­ly com­pet­i­tive

[00:33:42] Tony: envi­ron­ment and it often leads to mar­gin

[00:33:44] Tony: ero­sion. So even though the mar­gins on

[00:33:46] Tony: these com­pa­nies are rea­son­able now and quite good, um,

[00:33:50] Tony: if, uh, there is some kind of, um,

[00:33:53] Tony: you know, if the num­ber of con­tracts out there starts to lessen for what­ev­er

[00:33:56] Tony: rea­son, um, you know, like a down­turn in the econ­o­my, we [00:34:00] could see a strong Ero­sion in mar­gins

[00:34:03] Tony: as they com­pete fierce­ly for con­tracts. Um, hav­ing said all that though,

[00:34:07] Tony: um, some of the pos­i­tives, uh, the indus­tries that these com­pa­nies tend

[00:34:14] Tony: to work in, uh, I’ll call them defen­sive indus­tries. So the com­pa­nies which gen­er­al­ly need their employ­ees to

[00:34:21] Tony: have a car or com­pa­nies where the

[00:34:23] Tony: employ­ees have grown used to hav­ing a car. So like, like, I said, like

[00:34:27] Tony: Wool­worths or Safe or, um, Coles, but in par­tic­u­lar, like even hos­pi­tals and.

[00:34:34] Tony: Um, the edu­ca­tion depart­ment needs to send staff out and, you know, um, uh, what’s the word, uh, um, teach a class when the teacher’s sick, what­ev­er that term is, I for­get now, relief teach­ing, um, or send peo­ple on, on, you know, six month assign­ments out into the coun­try, uh, and they need a car, uh, um, health work­ers who need to vis­it peo­ple in their homes.

[00:34:56] Tony: A lot of times, these con­tracts are kind of very sta­ble. [00:35:00] And, um, and that’s a plus for these com­pa­nies that they, uh, they do tend to do well through all parts of the cycle, eco­nom­ic cycle.

[00:35:11] Cameron: I won­der what the impli­ca­tions for these com­pa­nies are if and when we move

[00:35:17] Cameron: towards self dri­ving cars to change

[00:35:20] Cameron: their busi­ness mod­el at all.

[00:35:24] Tony: Yeah. It’s a good ques­tion. I mean, you, I guess that the answer

[00:35:27] Tony: to that is whether you buy it and it dri­ves you or whether you just call it up on your phone and it turns

[00:35:33] Tony: up. So yeah, I don’t know.

[00:35:34] Cameron: I mean, that’s kind of the vision that I hear out of Tes­la and Uber and peo­ple who are sort of, uh, bull­ish about that is no one will own a car. I keep telling Fox, he’s prob­a­bly nev­er going to have to get a dri­ver’s license. He’s prob­a­bly nev­er going to have to own a car in his life. If you need to get any­where, you’ll just call up a car, it’ll turn up in your

[00:35:57] Cameron: doorstep a minute lat­er and it’ll take you where you [00:36:00] want to go and

[00:36:01] Cameron: drop you

[00:36:01] Cameron: off and Bob’s your uncle.

[00:36:03] Cameron: Huh?

[00:36:05] Tony: You think that’s actu­al­ly a real­i­ty? I mean, I’ve heard lots of ana­lysts say­ing it’s always on the hori­zon that these dri­ver­less vehi­cles are com­ing and they’ll nev­er

[00:36:12] Tony: actu­al­ly get here. It’s too hard.

[00:36:14] Cameron: Well, they

[00:36:15] Cameron: exist. And they’re on the roads now

[00:36:19] Cameron: in Cal­i­for­nia.

[00:36:22] Cameron: I’ve seen videos of peo­ple jump­ing in dri­ver­less Uber kind of things, tak­ing them

[00:36:28] Cameron: places.

[00:36:29] Cameron: So the tech­nol­o­gy is there whether or not it reach­es mass

[00:36:32] Cameron: scale. I don’t know. I guess that depends on a whole bunch of fac­tors.

[00:36:37] Tony: Yeah, right. Yep. That’s a good ques­tion. I

[00:36:40] Tony: can’t

[00:36:41] Tony: answer it. We’ll

[00:36:42] Cameron: Yeah. And we don’t, we don’t try and pre­dict, et cetera, et cetera, but it will be inter­est­ing to see how that plays out. Like I can, I mean, the only ques­tion I have is like, okay, if I want to dri­ve up to Bund­aberg to vis­it my mom, or if you want to go on vaca­tion some­where, it’s a five hour dri­ve. Are you going to?

[00:36:59] Cameron: Rent [00:37:00] an elec­tron­ic car for the whole, I mean, a self dri­ving car for the whole peri­od, or not? Prob­a­bly. I mean, if I think about what it costs to buy and own and main­tain a car, if you’re only using it on a long jour­ney, Once a year, twice a year to go on vaca­tion, prob­a­bly makes sense eco­nom­i­cal­ly just to rent one for the week or the

[00:37:26] Cameron: two weeks of the month that you’re going on your vaca­tion, depend­ing on what

[00:37:29] Cameron: the prices are going to be like, but yeah, even just

[00:37:33] Tony: Yeah, I would

[00:37:34] Tony: have thought, I would have thought

[00:37:35] Tony: if that was a com­pelling argu­ment that you’d see more of those go cars and zip cars and things like that around, you just don’t, I see, there’s always a car space near­est for the, the rent car, the share car, but

[00:37:48] Tony: it gen­er­al­ly just sits there from what my

[00:37:50] Cameron: Well, but that’s because we live in a soci­ety where peo­ple do val­ue car own­er­ship and they have their own cars, right? But I’m think­ing 10, 20 years from now, [00:38:00] by the time Fox is 20,

[00:38:02] Cameron: so what’s that, 11 years from now, whether he will own a car. Uh, whether or not that will even be a prac­ti­cal con­sid­er­a­tion or a nec­es­sary con­sid­er­a­tion between Zoom and dri­ver­less cars or rideshar­ing even, depend­ing on how much time you spend in the car.

[00:38:21] Cameron: Like, we still live in a world where a lot of peo­ple go to the office, they go to the city. It’s inter­est­ing, you know, uh, dur­ing COVID there was this whole thing about peo­ple won’t go into the office any­more after COVID. And, uh, as far as I can tell from the Fin Review, cor­po­ra­tions and employ­ers are try­ing to shut that shit down over the last year, forc­ing peo­ple back to the office. I haven’t real­ly drilled into it to under­stand why, because it does­n’t affect me, but, um, do you under­stand why they’re try­ing to push peo­ple back to the office? Is it just a man­age­ment

[00:38:55] Cameron: over­sight

[00:38:55] Cameron: thing? Yeah. [00:39:00]

[00:39:00] Tony: guess it is part­ly that. Maybe there are three rea­sons. The two rea­sons I can think of that

[00:39:04] Tony: I’ve read about is, uh, the com­pa­ny’s pay­ing rent on the space, so

[00:39:08] Tony: they want to use it. Um, but, you know, that’s, that argu­ment does­n’t exist in per­pe­tu­ity because even­tu­al­ly the lease will be up

[00:39:15] Tony: and they can lease less space.

[00:39:18] Tony: Um, but the, the argu­ment that peo­ple like Jen­ny use is

[00:39:21] Tony: that, um, there’s not enough net­work­ing

[00:39:24] Tony: and infor­mal men­tor­ing going on. So peo­ple aren’t learn­ing enough about

[00:39:30] Tony: the busi­ness and, um, And now, you know, some peo­ple say, well, I can jump on a Zoom call and ask

[00:39:35] Tony: the ques­tion of any­one. So that’s, yeah, I don’t, maybe that’s just the way Jen­ny oper­ates.

[00:39:39] Tony: I don’t know. Um, and then I have got, you know, a friend who, um, real­ly want­ed peo­ple sit­ting out­side his office because he did­n’t want to have man­age­ment con­trol and over­sight of them, but that’s, that’s their style. So there is, you know, peo­ple, com­pa­nies are start­ing to, I think, I think it was one of the gas com­pa­nies said, you’ve got to come into the office to get your bonus.

[00:39:58] Tony: Um, if you don’t. You don’t [00:40:00] get a bonus, um, but I’ve also, you know, there are also unions push­ing back say­ing, hey, you know, we, we see a lot of ben­e­fits in work­ing from home. Um, it does­n’t make sense for me to have, you know, for staff to com­mute for an hour each way each day. Um, it is actu­al­ly, yeah, when you take every­thing into account, it may be more pro­duc­tive to work from home.

[00:40:19] Tony: The staff feel bet­ter, they’re moti­vat­ed, they, you know, they’re on call all the time, um, just because, and they don’t have to spend two hours, lose two hours of their day. So some of that’s going

[00:40:28] Tony: to

[00:40:28] Tony: be avail­able for pro­duc­tive work.

[00:40:30] Cameron: And you think about the impact of that on soci­ety in terms of free­ing up the roads, less, you know, less require­ment for spend­ing on infra­struc­ture, road main­te­nance, road repair, new high­ways, road deaths, the reduc­tion in road deaths, the impli­ca­tion of that on the health­care sys­tem, or acci­dents and all that kind of stuff, insur­ance impli­ca­tions of low­er road deaths, low­er Hos­pi­tal­iza­tions from acci­dents.

[00:40:59] Cameron: I mean, [00:41:00] I mean, I think it’s a, I sus­pect that try­ing to push peo­ple back into the office as a 20th cen­tu­ry man­age­ment mind­set, that might be a gen­er­a­tional thing, because I’m not sure where the Atlass­ian boys are at, but the last I heard, they were telling peo­ple don’t come into the office, we’re scal­ing down our

[00:41:18] Cameron: offices, work from home.

[00:41:20] Cameron: Can’t remem­ber if they. Turned

[00:41:21] Cameron: around on that or not, but um, it’ll be inter­est­ing

[00:41:25] Tony: Well, appar­ent­ly they are build­ing an office, a wood­en office build­ing in

[00:41:28] Tony: this, in Syd­ney CBD, so they’re going to have to staff it with

[00:41:32] Cameron: a wood­en office build­ing.

[00:41:35] Tony: Yeah, they want­ed to build the

[00:41:36] Tony: biggest wood­en

[00:41:37] Tony: mul­ti storey office build­ing in the world. So if it

[00:41:39] Tony: is the biggest, but that’s that’s their dream. And it’s, I think they’re start­ing, if they haven’t start­ed work on it already, it’s start­ing soon down near the cen­tral train sta­tion, I think. Yeah. Um, yeah, I think it’ll be a blend of what, um, one trend I thought might hap­pen and I haven’t seen it hap­pen and maybe I’m just not aware of it is, if, if there is legs to this [00:42:00] argu­ment of the, the com­mut­ing is actu­al­ly detri­men­tal to pro­duc­tiv­i­ty, um, I would have thought, and com­pa­nies are free­ing up leas­es in the, in the, in the city and CBD office floors, I would have thought some­one would have said, you know, like a com bank or some­one big would have said, okay, we’re going to free up leas­es.

[00:42:18] Tony: This floor in the cen­tral office, but we’re going to put a lit­tle hub out in Par­ra­mat­ta or Liv­er­pool and Syd­ney because, you know, 10 or 20 per­cent of our office work­ers come from out in the west­ern sub­urbs in Pen­rith or some­thing like that. And so,

[00:42:34] Tony: you know, they can still come in and get

[00:42:36] Tony: enough inter­face with oth­er work­ers and enough inter­face with local

[00:42:39] Tony: man­age­ment.

[00:42:39] Tony: But it’s only going to be a 15 minute com­mute for you rather than the full hour.

[00:42:46] Tony: But I haven’t

[00:42:46] Tony: seen

[00:42:46] Tony: that

[00:42:46] Tony: hap­pen yet.

[00:42:48] Cameron: Again, it might be a 20th cen­tu­ry mind­set. I mean, like, this is the, this week is the 19th anniver­sary of when I start­ed G’day World. And I [00:43:00] left Microsoft six months, well, five months before that

[00:43:02] Cameron: So I’ve been work­ing from home more or less. I mean, I had a stretch when I was in the ad agency in the Val­ley, um, just after the GFC and I ran the Cig­ar Lounge for a cou­ple of years, but.

[00:43:17] Cameron: More or less, I’ve been work­ing from home for the last 19 years and I can’t imag­ine,

[00:43:24] Cameron: uh, hav­ing to go into an office every day, even when I did work in the ad agency in the lounge, you know, it was sort of, I was rock­ing up it. 10, 10 30 in the morn­ing and leav­ing at two, you know, a lot of the time it was, I’d go in and show my face and wave the flag and go in for a meet­ing or some­thing with a client, but then I’d work from home the rest of the time.

[00:43:47] Cameron: just can’t, I can’t imag­ine hav­ing to get back into that mind­set of spend­ing an hour each way in peak hour traf­fic to get to an office. Like that just sounds like hell on [00:44:00]

[00:44:00] Cameron: earth. I get to lis­ten to a lot more

[00:44:02] Cameron: pod­casts,

[00:44:03] Cameron: but, um, I think the down­sides.

[00:44:06] Tony: Yeah, and peo­ple adapt, you know, they read books on the

[00:44:08] Tony: train. A lot of, you know, peo­ple I’ve worked with actu­al­ly start­ed work and I jumped in their car and put their car phone on and, you know, lis­ten to all their voice­mails, return all their calls, that kind of thing. I don’t know how

[00:44:17] Tony: safe that is, but that’s what they did.

[00:44:19] Cameron: You can make

[00:44:20] Tony: And for prob­a­bly half, half my life, I was in,

[00:44:23] Tony: at head

[00:44:23] Tony: office and then would try and live rea­son­ably

[00:44:26] Tony: close. to the CBD to keep the com­mute to half an hour or so, um, which is doable. Uh, but the oth­er half, I was out in the field, you know, run­ning busi­ness­es. Um, you did­n’t, did­n’t want to be in the office. You need­ed to be out clos­est to the, to the shop front.

[00:44:41] Tony: Um, and that worked. That’s exact­ly how it should have worked. It worked fine. So, um, and you came in like once a quar­ter or once a month for a meet­ing and caught up with your boss and met your col­leagues and, you know, joked around and passed shared expe­ri­ences and things. If that works.

[00:44:57] Cameron: Yeah, it does. It’ll be inter­est­ing to see how it [00:45:00] plays out. Any­way, uh, that’s that. Thank you for that Paul Pork on MMS, Tony. I want­ed to ask you, since our con­ver­sa­tion about Char­lie Munger over the last cou­ple of weeks, have you giv­en any more thought to the Mag­nif­i­cent Sev­en idea that Char­lie had, where

[00:45:17] Cameron: we’ve got to be buy­ing

[00:45:19] Cameron: the tech

[00:45:20] Cameron: com­pa­nies if we

[00:45:21] Cameron: want to

[00:45:22] Cameron: stay com­pet­i­tive?

[00:45:24] Tony: I haven’t, um, and I’m not going to say Char­lie’s wrong. Uh, but yeah, well, I found out that he, he said that he was buy­ing Apple when it was 10 times earn­ings. I thought that was more like the Char­lie Munger I know. So yeah, if there’s a down­turn at some stage and those com­pa­nies become cheap, like I guess I’d look at them, but I’m not, I’m not invest­ing over­seas.

[00:45:45] Tony: I pre­fer to invest in Aus­tralia. Um, just to be, just to be clos­er to the news and the, um, and, uh, and touch and feel and know the peo­ple who are run­ning the com­pa­nies, all that kind of thing. Um, you know, Apple’s got a high enough [00:46:00] pro­file, it prob­a­bly qual­i­fies to do it from over­seas, but, um, yeah, I just pre­fer invest­ing in

[00:46:04] Cameron: hmm,

[00:46:05] Cameron: hmm,

[00:46:07] Tony: I haven’t, no, I haven’t giv­en any more thought to it. And poten­tial­ly that’s hurt­ing me.

[00:46:13] Tony: I mean, I have seen oth­er arti­cles say­ing that, yes, the last five years, I think it was, or sev­en years, has, um, if you look at the U. S. stock mar­ket with­out those, I mean, they’ve changed names over, over the peri­od. The FAANG stocks, the Super 7, or what­ev­er they’re called now.

[00:46:27] Tony: Um. You know, it’s pret­ty flat. The index is pret­ty flat and all the growth has come from those stocks. But I won­der, you know, I, I don’t like jump­ing onto the train after it’s left the sta­tion. It’s, yeah, if, if, if they’ve had that tremen­dous amount of growth, will it con­tin­ue? And are you pay­ing too high a price for that growth to

[00:46:48] Tony: con­tin­ue now? It would be my

[00:46:50] Cameron: hmm, hmm,

[00:46:53] Cameron: All right. Well,

[00:46:55] Cameron: I think maybe we can draw a line under this episode for [00:47:00] now. Tony, we can do a bit of after hours chit

[00:47:01] Cameron: chat, and then we can get into the,

[00:47:03] Cameron: um, Ryan analy­sis for

[00:47:06] Cameron: our next episode. What do you

[00:47:07] Cameron: think?

[00:47:08] Tony: Okay. Yeah. We’ll do that today rather than

[00:47:10] Cameron: Yeah, we’re com­ing up to sort of 50 min­utes for

[00:47:13] Cameron: this

[00:47:13] Cameron: episode.

[00:47:14] Tony: Okay.

[00:47:15] Cameron: Well, after hours, I’ve had a big week of after hoursy

[00:47:19] Cameron: stuff.

[00:47:19] Cameron: Tony, uh, do you have any­thing you want to get in

[00:47:21] Cameron: before I start rant­i­ng and rav­ing about

[00:47:24] Cameron: Napoleon and oth­er

[00:47:25] Cameron: things?

[00:47:26] Tony: Ah, no, I think we prob­a­bly cov­ered it, it was good to go up to Bris­bane for the week­end, see you guys, see my sib­lings and their fam­i­lies and peo­ple I had­n’t seen for a long time, so love­ly, love­ly par­ty, hap­py

[00:47:39] Tony: 60th as well, it was a good night,

[00:47:41] Cameron: hap­py 60th. Well, and, well, if you’re lis­ten­ing to this, I believe you’re now a bee­keep­er and we

[00:47:46] Cameron: go through a ton of hon­ey. So you need, you need to hook us up with some of that hon­ey, sweet, sweet hon­ey, wall hon­ey, wal­l’s hon­ey. Well, Tony, um, as you know, [00:48:00] I went to see the Napoleon film with Hunter and Tay­lor last week, Rid­ley Scott.

[00:48:04] Cameron: Now, you know, maybe some of the peo­ple lis­ten­ing to this, what kind of a role Napoleon has played in my life. Very big, insane­ly big role Napoleon has played in my life. I became sort of

[00:48:19] Cameron: obsessed with Napoleon when I was about 19 or 20. A good friend of mine, Michael Sewards, who’s now the CEO of, um,

[00:48:28] Cameron: uh, what­ev­er the air­port

[00:48:30] Cameron: bus com­pa­ny

[00:48:31] Cameron: is in Mel­bourne.

[00:48:31] Cameron: Can’t remem­ber what its cur­rent name is. They changed names, but.

[00:48:34] Tony: Yeah, it’s changed names recent­ly, it was

[00:48:37] Tony: just Sky­bus, but now it’s big­ger than

[00:48:39] Cameron: He’s now the co CEO of Sky­bus, uh, but Mike and I worked togeth­er when we were

[00:48:43] Cameron: like 19, 20, and, and we were good bud­dies, still

[00:48:46] Cameron: are, but we went into a book­store, there’s a lit­tle book­store down near, um,

[00:48:50] Cameron: the, uh, Sky­bus. Um, what’s the,

[00:48:53] Cameron: what’s the

[00:48:54] Cameron: big park in the mid­dle of

[00:48:56] Cameron: Mel­bourne?

[00:48:58] Tony: Albert

[00:48:58] Cameron: No, no, no, no. the [00:49:00] main one.

[00:49:00] Cameron: Um, the big, the

[00:49:02] Cameron: Botan­i­cal Gar­dens, Botan­i­cal

[00:49:03] Cameron: Gar­dens.

[00:49:05] Cameron: There was a lit­tle book­store

[00:49:06] Cameron: on the, on the sort of South Yarra side of the Botan­i­cal Gar­dens. We were in there one day,

[00:49:11] Cameron: again, this is like, I don’t know, ear­ly nineties, late

[00:49:14] Cameron: eight­ies, ear­ly nineties. And

[00:49:16] Cameron: we’d just been for a run around

[00:49:17] Cameron: the TAN, and he said, um, you ever read, there was a book on Napoleon, he said, you ever read any­thing about Napoleon?

[00:49:22] Cameron: I said, no. He said, oh man, you got to read this. It’s amaz­ing. So I bought Vin­cent Cron­in’s biog­ra­phy on Napoleon. It’s writ­ten in like 71. And it blew my mind. And, uh, I became sort of qui­et­ly obsessed with Napoleon. And over the course of the next 10 years, read a hun­dred books on Napoleon. And then of course, uh, start­ed the pod­cast with David Markham, um, in 2006, I think it was my first his­to­ry pod­cast and it was the first ever long form

[00:49:53] Cameron: his­to­ry pod­cast in the his­to­ry of

[00:49:54] Cameron: pod­cast­ing in the sto­ry of pod­cast­ing.

[00:49:57] Cameron: We did

[00:49:57] Cameron: like

[00:49:59] Cameron: I don’t know, 70, [00:50:00] 80

[00:50:00] Cameron: episodes, many of which were three hours long, um, over the course of the next few years. As a result of

[00:50:07] Cameron: that pod­cast, he invit­ed me to a JARXIO, to a Napoleon con­fer­ence in

[00:50:12] Cameron: 2008. He was going to present me with a medal for my con­tri­bu­tions to Napoleon­ic his­to­ry. That’s where I met Chris­sy.

[00:50:21] Cameron: Uh, so

[00:50:22] Cameron: it had a big impact on my life. So the Rid­ley Scott film, uh, that’s just come out was sort of a big deal. I was skep­ti­cal from the

[00:50:30] Cameron: get go, A, because I think Rid­ley’s best years are well behind

[00:50:34] Cameron: him. B, because I thought Joaquin Phoenix,

[00:50:37] Cameron: though being a great actor and I love near­ly every­thing he’s done.

[00:50:40] Cameron: I thought he was too old to

[00:50:42] Cameron: play a young Napoleon and not the right

[00:50:46] Cameron: guy to play Napoleon. Any­way, my boys got. Uh, tick­ets to the pre­view of it last week because they’re hot­shots and they took me along.

[00:50:56] Cameron: It was god awful. Um, I’m still doing [00:51:00] rants

[00:51:00] Cameron: about it on Tik­Tok. For any­one out there who’s think­ing about going to see it, my mon­ey would be don’t.

[00:51:07] Cameron: It’s gonna be on Apple TV any­way, but it’s just ter­ri­ble. Absolute­ly shock­ing. As a Napoleon buff, he got It left out all the good stuff. The things that he did include, he got wrong or han­dled bad­ly, mis­rep­re­sent­ed. That’s what hap­pens when you let a Brit make a film about Napoleon. Just does­n’t under­stand Napoleon.

[00:51:34] Cameron: Basi­cal­ly pre­sent­ed him as a thug who… May have had some mil­i­tary suc­cess­es but it was­n’t because of his genius or his bril­liance or his work eth­ic, uh, like he

[00:51:49] Cameron: just got every­thing wrong and it was inco­her­ent, it was messy, my boys who know noth­ing

[00:51:56] Cameron: about Napoleon after­wards, I said before I [00:52:00] gave them my opin­ion, I said what did you

[00:52:01] Cameron: think and they were like, it was bor­ing and we could­n’t make sense of what was going on, it just jumped around too much and They did­n’t like it either, so it’s not just me.

[00:52:09] Cameron: But any­way, absolute­ly. I was infu­ri­at­ed when I got home.

[00:52:15] Cameron: Chris­sy said, Oh God, I can tell you’re real­ly

[00:52:18] Cameron: upset.

[00:52:22] Tony: I haven’t seen it yet, but I’m not going to until it comes out

[00:52:24] Tony: onto Apple, I don’t think. But I mean, from my per­spec­tive, I mean, I, I think Napoleon’s an inter­est­ing fig­ure because until I lis­tened to you and David Markham on the Napoleon pod­cast, I prob­a­bly had the British idea of Napoleon as being the lit­tle emper­or march­ing through Europe, almost like You know, a po, uh, a Putin or a, um, uh, a Hitler

[00:52:50] Tony: going through Europe, try­ing to, try­ing to annex coun­tries and expand the empire.

[00:52:55] Tony: And then, um, through Hubris, lost the bat­tle at Water­loo,

[00:52:58] Tony: um, to the good guys, [00:53:00] just like they did in World War ii. Yeah, the good guys have won again. Um, and that, that idea was just flipped on its head when I lis­tened to the, the Napoleon­ic pod­cast. So that’s the first thing. And, and I, you know, as you say, Rid­ley Scot­t’s a Britt and he’s.

[00:53:15] Tony: Prob­a­bly pro­duce some­thing more of the for­mer than the sec­ond. But I think for me, the thing that’s, um, if I pick the eyes out of all the things I’ve learned on the pod­cast that you guys did, I have very clear rec­ol­lec­tions of, of why Napoleon was spe­cial. And they start with, um, the

[00:53:35] Tony: way he changed mil­i­tary war­fare.

[00:53:38] Tony: So, uh, and I have two mem­o­ries of, of events around that. The one was the, I think it was the Siege of Nor­way, where the, the boats would, you know, line the har­bour and then the defend­ing boats would line the har­bour and the can­nons would all line up and fire at each oth­er and last man stand­ing would be the win­ner.

[00:53:59] Tony: Where­as Napoleon [00:54:00] start­ed com­ing in. in ser­i­al and the first ship would cop a lot of gun­fire as he sort of went from left to right across all the defend­ing ships but the sec­ond ship would cop less than the third and so there was a new way of approach­ing the siege from from that point of view and then there was also one of his ear­li­est um Infantry bat­tles, where pri­or to Napoleon, you’d have guys in very, very bright, pol­ished dress uni­forms tak­ing to a, almost like a foot­ball field with, you know, 50 a side, um, lin­ing up at a cer­tain dis­tance apart and tak­ing one shot at each oth­er.

[00:54:36] Tony: And that would decide the whole fate of the bat­tle. But Napoleon came in and said, no, no, I’m play­ing for keeps and, and, you know, over­run the oth­er side. And used all kinds of new mil­i­tary tac­tics and broke all the con­ven­tions of war­fare. And that was ground­break­ing as well. So he was an inno­va­tor. He was a, he was like, I need to, to win this.

[00:54:55] Tony: I’m going to win this. And I’m going to think about it. And then there was a time, I think it was before [00:55:00] he’s mar­ried to Josephine, where he’s in the bath and he’s got the maps. all over the floor plan­ning a cam­paign when he’s about to get mar­ried and now’s time he’s going no no i’ve got to work i’ve got to get ready for this mil­i­tary encounter and you know he’s got gen­er­als com­ing in and peo­ple com­ing in and say­ing you’ve got to get ready for your you’re wait­ing but he’s going no no look at this map This is what we have to do.

[00:55:19] Tony: And he’s plan­ning all the time. So that was anoth­er sort of apoc­ryphal sto­ry for Napoleon. And then you’ve got the oth­er side of things about, about what he did for France in terms of, you know, the, the rais­ing of sci­ence to a high­er lev­el and edu­ca­tion to a high­er lev­el, um, the, the, um, I guess it was­n’t nec­es­sar­i­ly just him, but the, the, the reduc­tion of the empha­sis of church in state affairs, um, all those kinds of things.

[00:55:46] Tony: So all those things, you know, stick in my mem­o­ry for Napoleon as being an inno­va­tor, as being a plan­ner. as being, um, detail dri­ven, you know, and then if you throw on top of that, the whole fact [00:56:00] that he was basi­cal­ly defend­ing him­self the whole time, even if he was being offen­sive, he was basi­cal­ly doing it to defend France from attack from some­where else because all the roy­al fam­i­lies were lin­ing up across Europe against him.

[00:56:12] Tony: So yeah,

[00:56:13] Tony: it’s my learn­ing through your pod­cast just flipped my whole

[00:56:16] Tony: idea of who and what Napoleon

[00:56:18] Cameron: And that’s why I became obsessed with him, because before I read Vin­cent Cron­in’s book, you know, I, I, I’d nev­er real­ly been inter­est­ed in his­to­ry up until that point. You know, I, I ignored it in high school, like most of us do, and, but the, the idea that I had that sort of had come through to me from osmo­sis grow­ing up in the Com­mon­wealth was that he was an ear­ly ver­sion of Hitler, ambi­tious, war­mon­ger kind of guy.

[00:56:42] Cameron: And Vin­cent Cronin, who was an Amer­i­can. Gave a very

[00:56:45] Cameron: dif­fer­ent 180 degree per­spec­tive. And so not only did

[00:56:49] Cameron: it intro­duce me to a dif­fer­ent side of Napoleon, it also start­ed me think­ing about the way that his­to­ry is brought down to us. The, cause The, ques­tion I had was, well, why did I have this [00:57:00] one idea if there’s a com­plete­ly

[00:57:02] Cameron: oppo­site idea?

[00:57:03] Cameron: So then I went and read anoth­er book on

[00:57:05] Cameron: Napoleon and it, it more, it was a

[00:57:07] Cameron: neg­a­tive. I’m like, okay, well, which one of

[00:57:10] Cameron: these is true? They can’t both be true. And that start­ed me on my

[00:57:14] Cameron: jour­ney of, well,

[00:57:16] Cameron: okay, his­to­ry is writ­ten by the vic­tors. And also his­to­ry is a lit­tle bit about

[00:57:22] Cameron: the facts, but also inter­pre­ta­tion of the facts.

[00:57:25] Cameron: And I’ve spent the rest of my life in

[00:57:27] Cameron: many ways, try­ing to fig­ure out that

[00:57:29] Cameron: sto­ry,

[00:57:29] Cameron: you know, And and unpick­ing things, right?

[00:57:33] Tony: And fun­ni­ly enough, Napoleon was a big pro­pa­gan­dist. He said us from the front would, you know, paint mil­i­tary

[00:57:39] Tony: suc­cess­es when he

[00:57:40] Tony: was in retreat. So it’s

[00:57:41] Cameron: He under­stood pro­pa­gan­da, um, as a weapon, as much

[00:57:44] Cameron: as any­one.

[00:57:46] Cameron: You’re right, and this is, so the, the, the Rid­ley film starts off

[00:57:49] Cameron: with the rev­o­lu­tion and, and the exe­cu­tion of Marie Antoinette, and then it pret­ty much goes straight into

[00:57:56] Cameron: Napoleon being sent to Toulon, skips

[00:57:58] Cameron: over, you [00:58:00] know, his child­hood, and, you know, if you don’t under­stand that, you

[00:58:03] Cameron: don’t real­ly under­stand Napoleon grow­ing up in Cor­si­ca, which had been an Ital­ian,

[00:58:09] Cameron: coun­try, uh, ran about up until the time he was born

[00:58:13] Cameron: when it got tak­en over by the

[00:58:14] Cameron: French. So he’s kind of an Ital­ian

[00:58:17] Cameron: kid. His

[00:58:18] Cameron: fam­i­ly had been aris­toc­ra­cy, but had lost all of their mon­ey. But he’s got an uncle who’s a car­di­nal who man­ages to get him sent

[00:58:27] Cameron: to a pri­vate mil­i­tary board­ing school, basi­cal­ly,

[00:58:29] Cameron: when he’s 10 years old. So he gets sent to live in this French

[00:58:35] Cameron: Mil­i­tary school, when he’s 10, he can’t speak French,

[00:58:39] Cameron: all the kids there are most­ly aris­to­crats, this is before the rev­o­lu­tion, they make fun of him, so

[00:58:46] Cameron: his char­ac­ter is sort of carved out of his expe­ri­ence as a young boy, and he devotes him­self to study.

[00:58:54] Cameron: And he becomes obsessed with study­ing the cam­paigns of Julius Cae­sar [00:59:00] and Alexan­der

[00:59:00] Cameron: the Great. And he wins

[00:59:02] Cameron: cam­paigns as a kid in, in, in the schools when

[00:59:06] Cameron: the kids are against each oth­er.

[00:59:07] Cameron: He becomes like the gen­er­al of the kids. His

[00:59:10] Cameron: bril­liance starts to come, his under­stand­ing of strat­e­gy and tac­tics is obvi­ous as a

[00:59:16] Cameron: child. Then when the rev­o­lu­tion breaks out, He

[00:59:20] Cameron: does­n’t fight for the

[00:59:21] Cameron: rev­o­lu­tion. He goes straight to Cor­si­ca to try and

[00:59:25] Cameron: sup­port the Cor­si­can rev­o­lu­tion against the French. He’s try­ing to cre­ate an

[00:59:30] Cameron: inde­pen­dent Cor­si­ca, but the guy, uh, Pao­lo Paoli­ni,

[00:59:35] Cameron: who’s run­ning the, the Cor­si­can rev­o­lu­tion, does­n’t like the Bona­partes. So he does­n’t let them

[00:59:41] Cameron: play a sig­nif­i­cant role. So Napoleon and his broth­ers say, well, screw you. They go back to

[00:59:46] Cameron: France. Napoleon joins the Rev­o­lu­tion­ary Army, he’s near­ly exe­cut­ed by Robe­spierre for being

[00:59:54] Cameron: part of the Roy­al Army, he man­ages to sur­vive

[00:59:57] Cameron: that, but then again, so the film just picks up in [01:00:00] Toulon, and they’re fight­ing the,

[01:00:01] Cameron: British,

[01:00:02] Cameron: and Rid­ley nev­er explains why they’re fight­ing the British.

[01:00:06] Cameron: Got out of the film, I said to my boys, do you under­stand why he was

[01:00:09] Cameron: fight­ing the British at Toulon? And they’re going, no, what,

[01:00:11] Cameron: what, what did the British have to do with it? As you say, the, the

[01:00:15] Cameron: key to under­stand­ing Napoleon, which Did­n’t

[01:00:18] Cameron: come across is

[01:00:20] Cameron: Nepal, you know, when, when the, the French exe­cut­ed their roy­al fam­i­ly, the mon­archs of Europe, they’d already had the Amer­i­can rev­o­lu­tion.

[01:00:30] Cameron: Now they had a Euro­pean rev­o­lu­tion. They’re like,

[01:00:32] Cameron: Oh, hold on a cot­ton pick­ing minute. You can’t have the

[01:00:35] Cameron: peo­ple going around killing kings.

[01:00:38] Cameron: If a king, if a, if a king kills anoth­er king, that’s okay. If a wannabe king kills anoth­er king, that’s kind of okay. But you can’t have the peo­ple ris­ing up against the nobil­i­ty.

[01:00:49] Cameron: That, that’s not accept­able. So the roy­al fam­i­lies of Europe tried to shut down the French rev­o­lu­tion and restore the Bour­bon monar­chy because it was high­ly unac­cept­able. to them, [01:01:00] because the idea might catch on. We’ll have rev­o­lu­tions every­where if we let them get away with this bull­shit. So Napoleon inher­it­ed these wars against the Euro­pean mon­archs, and for the rest of his career, he would fight a bat­tle, win a bat­tle, Lee, he did­n’t over­throw any of the oth­er monar­chies.

[01:01:19] Cameron: He always said, you’re my broth­er. Uh, you know, let’s be friends. Let’s, he would sign a peace treaty. Let’s all be friends. Let’s, I just want to rebuild France. Let’s all get along. Then they would form a coali­tion against France. and attack France again, and he’d go fight anoth­er war, and he’d win, and then he’d set all these peace treaties in place, and this just went on and on and on.

[01:01:42] Cameron: As you say, it was defen­sive bat­tles, but Rid­ley nev­er explains that, and at the end of the film, he points out all the peo­ple who died dur­ing the Napoleon­ic Wars, like it was Napoleon’s fault! It was­n’t Napoleon’s fault! So, you know, he just

[01:01:56] Cameron: gets every­thing wrong. It was infu­ri­at­ing, but on [01:02:00] a

[01:02:00] Cameron: hap­pi­er note, David Ten­nan­t’s back in

[01:02:02] Cameron: Doc­tor Who.

[01:02:03] Cameron: Tony,

[01:02:04] Tony: Yeah, I saw that. What a great

[01:02:06] Cameron: Was­n’t it Was­n’t it just fun? It was stu­pid. It made no

[01:02:11] Cameron: sense, but it was just

[01:02:13] Cameron: joy­ous,

[01:02:16] Tony: I thought so too. And kid

[01:02:17] Cameron: kid like. It was just glo­ri­ous fun. I had this

[01:02:22] Cameron: big shit eat­ing grin on my face through the whole thing. I had tears in my eyes. I was just so hap­py. Oh, thank

[01:02:31] Cameron: you to Rus­sell T Davies for com­ing

[01:02:34] Cameron: back and bring­ing back Tenet for a few episodes.

[01:02:37] Cameron: It was won­der­ful.

[01:02:38] Tony: yes. I,

[01:02:39] Tony: I I share that whole­heart­ed­ly.

[01:02:41] Tony: I

[01:02:41] Cameron: Alex, I for­got to ask Alex, uh, did she enjoy it.

[01:02:44] Tony: Well, I I texted her

[01:02:45] Tony: off

[01:02:45] Tony: ’cause she was talk­ing about it on the Sun­day and then, um,

[01:02:49] Tony: which remind­ed me to watch it when I got got home and she said it was okay. She did­n’t, did­n’t, she thought it was good, but not great. So I was sur­prised by that, but I, I just saw that was real­ly

[01:02:58] Tony: real­ly

[01:02:59] Cameron: loved it. It [01:03:00] was stu­pid, but hilar­i­ous, just fun.

[01:03:03] Tony: Yeah.

[01:03:04] Cameron: Um, I’ve been read­ing this book I men­tioned to you ear­li­er off air, Lysenko’s Ghost. Um, so… You know, uh, Lysenko was Stal­in’s favorite agron­o­mist, and he was, end­ed up the head of, sort of, biol­o­gy in, in the Sovi­et Union for decades, up until, I think, 65. Um, and he’s infa­mous in, I guess, sci­en­tif­ic and polit­i­cal his­to­ri­an cir­cles for, Basi­cal­ly car­ry­ing a lot of the blame for the death of 50 mil­lion peo­ple, for his bad ideas about

[01:03:38] Cameron: agri­cul­ture. And the thing was, he sort of reject­ed… Mendelian genet­ics and was more, uh, sup­port­ive of Lamar­ck­ian, um, inher­i­tance of acquired char­ac­ter­is­tics. He was a big believ­er, as many peo­ple were at that time [01:04:00] around the world, even in the West, but par­tic­u­lar­ly in Europe, that if you, and if you, um, Treat­ed an ani­mal or a plant or a human well that they would adapt and they would pass on cer­tain char­ac­ter­is­tics to the next gen­er­a­tion because of their treat­ment, not because of their genet­ics, but because of how they’ve been treat­ed, the way that you might, um, uh, domes­ti­cate ani­mals.

[01:04:29] Cameron: And if you domes­ti­cate an ani­mal over gen­er­a­tions, you end up with ani­mals that are friend­ly to humans. There’s an exam­ple at the begin­ning of the book about Siber­ian fox­es that it was done with. But, uh… His, his view, his approach was­n’t very sci­en­tif­ic, and his attempts at domes­ti­cat­ing wheat to be grown in the tun­dras did­n’t work, and mil­lions of peo­ple died because of famines, large­ly as a [01:05:00] result of his bad sci­ence.

[01:05:02] Cameron: And so that’s always been known as Lysenko­ism, and his name is kind of dirt, even in, I think in 65, the Sovi­et Union, you know, basi­cal­ly bran­dished him a crim­i­nal. And he was tak­en, he lived until the ear­ly 70s, but he was removed from his posi­tion. They said he, you know, killed mil­lions of peo­ple. And as part of the de Stal­in­i­fi­ca­tion of the Sovi­et Union, they brought, they sort of tar­nished his con­tri­bu­tions as well.

[01:05:30] Cameron: Of course, In the 21st cen­tu­ry, we now under­stand about epi­ge­net­ics and how if you do cer­tain things that hap­pen to an organ­ism dur­ing their life­time can acti­vate cer­tain genes which can then be passed

[01:05:46] Cameron: on Thank in a Mendelian sense to future gen­er­a­tions. So it’s not a hard either or, there’s actu­al­ly a com­bi­na­tion.

[01:05:54] Cameron: So this, um, his­to­ri­an who wrote this book, Lysenko’s Ghost, who actu­al­ly did meet Lysenko when [01:06:00] he was still alive on one occa­sion, his name is Lau­ren Gra­ham. He’s a. Um, you know, uh, very respectable Amer­i­can, uh, sci­en­tif­ic his­to­ri­an who wrote this book. You know, he’s sort of talk­ing about, well, is it time that we sort of pay Lysenko his due, that he was actu­al­ly one of the ear­ly thinkers about epi­ge­net­ics.

[01:06:20] Cameron: He was just way ahead of his time and maybe he does­n’t deserve the harsh treat­ment that his­to­ry has giv­en him. So that’s,

[01:06:28] Cameron: it’s inter­est­ing, but it’s also just

[01:06:29] Cameron: inter­est­ing like the way that it evolved because

[01:06:32] Cameron: You know, Lamar­ck­ian views on inher­i­tabil­i­ty of acquired char­ac­ter­is­tics was very pop­u­lar, as I said, around the world until we start­ed to under­stand more about genet­ics.

[01:06:42] Cameron: But by the time we start­ed to under­stand more about genet­ics, that most­ly hap­pened in the West and that had hap­pened after the Sovi­et

[01:06:48] Cameron: West split after the Bol­she­vik rev­o­lu­tion when there was­n’t a lot of dia­logue between the East and the West in sci­en­tif­ic cir­cles. They weren’t able to get togeth­er at con­fer­ences [01:07:00] and share what they knew.

[01:07:01] Cameron: And they dis­trust­ed each oth­er and so the polit­i­cal ide­ol­o­gy and the polit­i­cal

[01:07:07] Cameron: com­pe­ti­tion between the East and the West sort of did­n’t allow that free trans­mis­sion of

[01:07:12] Cameron: ideas and it’s a real­ly com­pli­cat­ed and fas­ci­nat­ing sto­ry

[01:07:17] Cameron: that sad­ly led to the deaths of mil­lions of

[01:07:21] Cameron: peo­ple.

[01:07:25] Tony: Well, it was­n’t just Lysenko. I mean, if you, um, there’s a great book called Blood­lands about all the large swathes of peo­ple who died around that time and, and, it gen­er­al­ly hap­pened in that, in sort of part of Rus­sia and Poland and some of those oth­er areas sim­i­lar­ly locat­ed. where there was always shift­ing bor­ders and inva­sions and things.

[01:07:44] Tony: But that goes into, you know, the almost prison camps that were set up to farm for pro­duc­tion quo­tas in the Sovi­et Union, and how peo­ple were shot if they did­n’t, meet their quo­ta and all that, and the pol­i­tics around that, um, and how it was [01:08:00] just, the yields on the crops just, went down under that kind of sys­tem too.

[01:08:04] Tony: So it’s

[01:08:05] Tony: part­ly that.

[01:08:06] Cameron: Yes, part­ly that. I’m not a fan of Tim­o­thy Sny­der who wrote that book, but you know, when you, when you look at it from a deep­er per­spec­tive, when the Bol­she­viks took over Rus­sia, they had a pop­u­la­tion that was, you know, close to 200 mil­lion peo­ple and it was grow­ing rapid­ly. They had missed. Large­ly the indus­tri­al rev­o­lu­tion.

[01:08:26] Cameron: So they were behind the West. They had most­ly, you know, um, small, they’d come out of serf­dom, but it was basi­cal­ly small share­crop­ping, basi­cal­ly a bit like it was in Ire­land dur­ing the famines in Ire­land and, you know, the Bol­she­viks real­ized that they could­n’t, they weren’t going to be able to feed.

[01:08:45] Cameron: They’re grow­ing, rapid­ly grow­ing pop­u­la­tion for a start. Sec­ond­ly, um, they believed that they were going to be attacked by the West at some point in the near future, be it by the Ger­mans or the [01:09:00] Euro­peans, and they were, I mean not many peo­ple know this, but like the Amer­i­cans and the British both invad­ed Rus­sia dur­ing the white rev­o­lu­tion, or dur­ing the rev­o­lu­tion to sup­port the, the Roy­al­ists, um.

[01:09:12] Cameron: And you know, com­ing out of World War I, they were in a tough sit­u­a­tion, they’d lost a lot. So they knew they need­ed to

[01:09:18] Cameron: quick­ly

[01:09:19] Cameron: get up to speed. They had,

[01:09:22] Tony: Mech­a­nized and

[01:09:23] Cameron: yes. And

[01:09:24] Cameron: basi­cal­ly Stal­in’s view­point was, you know, you’re either on board with the plan or you’re not. We can’t afford to screw around. And if you, if you don’t get on board with the rapid Progress that we need to make, then you’re going to the gulag.

[01:09:41] Cameron: I mean, I don’t have time to screw around. You have to get with the plan or not. It was a bit, I always say it’s a bit like the trol­ley prob­lem, right? He’s got 200 mil­lion peo­ple he needs to feed. If a mil­lion peo­ple are going to get in his way. and try and stop that from hap­pen­ing because they don’t want to give up their crops for the [01:10:00] greater good of the soci­ety then he’s like okay well it’s either you or the oth­er 199 mil­lion peo­ple i have a respon­si­bil­i­ty to feed every­one and to build lots of tanks and a big army because we’re

[01:10:12] Cameron: about to get invad­ed And as it turns out he was too late i

[01:10:16] Cameron: mean he was­n’t ready by the time hitler invad­ed any­way but it’s a

[01:10:19] Cameron: tough

[01:10:20] Tony: And I think that’s cross­ing over it though, the mil­lion peo­ple who were try­ing to hang on to their lands, I mean, they had,

[01:10:25] Tony: um, the, the, it’s almost like they tried to, the gov­ern­ment tried to indus­tri­al­ize with­out any indus­tri­al­iza­tion, it was just all you peo­ple work hard­er, and we’ll build a big, a big wall around you and put guards in tow­ers to shoot you if you, if you don’t work hard­er, and, uh, and there’s, and all sorts of polit­i­cal ram­i­fi­ca­tions around that, so you had, you know, Chil­dren who are becom­ing politic, you know, Polit­buro mem­bers and their job was to weed out the peo­ple who weren’t on board and shoot them and all this kind

[01:10:55] Tony: of stuff. It

[01:10:55] Tony: was it was a very

[01:10:56] Tony: com­plex

[01:10:57] Cameron: It was very messy, no doubt, and it, and it [01:11:00] obvi­ous­ly failed mis­er­ably. But there’s great, there’s great con­ver­sa­tion that has been record­ed. I think it might have been at Yal­ta when Stal­in met with Churchill and he basi­cal­ly explained his sit­u­a­tion to Churchill as, you know, I’ve got these recal­ci­trant farm­ers that don’t want to fol­low the plan.

[01:11:21] Cameron: I, you know, I got to force them either to Be part of the plan or get out of the way. We, we can’t afford to have them slow­ing things down. And Churchill was like, yeah, I get it. You know, it’s, it’s, uh, I, I don’t envy your sit­u­a­tion. Any­way, as I always say to peo­ple, if you were Stal­in, it’s 1935 or 1930, what­ev­er.

[01:11:44] Cameron: 31, 32, 33. Hitler’s come to pow­er.

[01:11:48] Cameron: Hitler’s say­ing he’s going to invade the Sovi­et Union. Um, you’ve, you’ve got the Amer­i­cans that have bro­ken off ties. You’ve got the British that have bro­ken off ties.

[01:11:58] Cameron: You’ve got the Japan­ese

[01:11:59] Cameron: [01:12:00] fight­ing over the Manchuri­an bor­der. What do you do? You’ve got 200 mil­lion

[01:12:05] Cameron: peo­ple that you’ve got to feed.

[01:12:06] Cameron: You’ve got to rapid­ly indus­tri­al­ize.

[01:12:09] Cameron: It’s a real­ly tough sit­u­a­tion to be in. I don’t envy

[01:12:13] Cameron: Stal­in or any of those guys. But any­way, Lysenko’s Ghost, real­ly

[01:12:17] Cameron: inter­est­ing book. I made a pump­kin pie for Thanks­giv­ing.

[01:12:20] Cameron: Tony, my first pump­kin pie, worked a treat

[01:12:24] Tony: Why are you cel­e­brat­ing Thanks­giv­ing in

[01:12:26] Tony: Aus­tralia?

[01:12:26] Cameron: my wife was very sad that I did­n’t cel­e­brate it. And, um, she feels like I don’t val­ue

[01:12:32] Cameron: her most impor­tant tra­di­tion.

[01:12:38] Tony: okay, it’s sup­posed to be thank­ful for giv­ing, for last­ing through, you know, the crops that we were able to gath­er dur­ing the sum­mer and the har­vest and you’re giv­ing thanks for that. So do it in March. Don’t do it in,

[01:12:51] Tony: uh,

[01:12:52] Tony: don’t do it in

[01:12:53] Tony: Octo­ber

[01:12:54] Cameron: go, mar­ry an Amer­i­can woman and come back and tell me

[01:12:57] Tony: Yeah, I know. It’s a big thing for

[01:12:58] Tony: them,

[01:12:58] Tony: isn’t it? I was

[01:12:59] Tony: always

[01:12:59] Tony: [01:13:00] sur­prised by that.

[01:13:00] Cameron: I fig­ure there are lots of things I’m thank­ful for, Tony, includ­ing you and our QAV

[01:13:06] Cameron: lis­ten­ers. It does­n’t hurt me to. Make a, learn how to make a pump­kin pie. And it was bloody good too. I got to tell you, bloody good pump­kin pie. Thank you to Chat­G­PT for

[01:13:15] Cameron: giv­ing

[01:13:15] Cameron: me the

[01:13:15] Cameron: recipe. Thank­ful for Chat­G­PT as well.

[01:13:19] Cameron: All right. That’s after hours for me, Tony.

[01:13:23] Cameron: No, I’m also, I’m also watch­ing

[01:13:24] Cameron: Dolomite, but I

[01:13:25] Cameron: can talk

[01:13:25] Cameron: about that in the next episode.

[01:13:28] Tony: Okay.

[01:13:28] Cameron: right.

[01:13:29] Cameron: See you next, QAV a good week, every­one.

[01:13:33] Tony: Yeah. Hap­py ASX.

[01:14:00] [01:15:00]