QAV #650 — Turducken

QAV 650 Club
[00:00:00] Cameron: All
[00:00:05] Cameron: right,
[00:00:06] Cameron: QAV650 back with TK in the, in the stu­dio,
[00:00:11] Cameron: in the booth, TK in the booth down in Cape Schanck, the Cape Schanck
[00:00:15] Cameron: booth. How are you TK?
[00:00:18] Tony: Very well, thank you. Enjoy­ing my time down here.
[00:00:21] Cameron: Enjoyed your week off? Played some golf?
[00:00:23] Tony: played some golf. Yeah, we’ll talk about it in after hours.
[00:00:27] Cameron: Oh,
[00:00:27] Tony: Had, good fun.
[00:00:30] Tony: What do you want to talk about now? We can if you like.
[00:00:32] Cameron: well, you
[00:00:33] Cameron: can give, give peo­ple the high­lights now and then we can talk about it in depth and after hours. So you played in a char­i­ty tour­na­ment, how did you
[00:00:40] Tony: won.
[00:00:42] Cameron: Wow.
[00:00:43] Tony: Yeah, it was good. We played, um, Uh, a cou­ple of days of
[00:00:48] Tony: a
[00:00:48] Tony: course called Penin­su­lar Kingswood!
[00:00:50] Tony: which is
[00:00:52] Cameron: Not the Kingswood!
[00:00:53] Tony: yeah, real­ly good, real­ly, um, up their course in terms of qual­i­ty and pre­sen­ta­tion. [00:01:00] And they spent many, many mil­lions on it recent­ly. So that was good fun. But then the third day of our Mel­bourne trip is always back to Wood­lands, uh, for a char­i­ty day to raise mon­ey for Leukody­s­tro­phy.
[00:01:11] Tony: And, uh, yeah, we won. It’s a mod­i­fied Ambrose, so we all tee off
[00:01:15] Tony: and then we pick the best tee shot and we all play our
[00:01:18] Tony: own game from there. And the per­son with the best
[00:01:21] Tony: score on that hole, we score on the score­card and we, we killed it. We played
[00:01:26] Tony: well.
[00:01:28] Tony: We com­bined Well, Hmm.
[00:01:30] Cameron: I mean, just nobody under the age of 50 is going to get my Kingswood joke. But, um, and the, uh, the mod­i­fied Ambrose. I thought that was a sex­u­al posi­tion, but, uh, it’s a, it’s a golf­ing thing, is it?
[00:01:41] Tony: it’s a golf­ing thing. Yes. Yeah, there were, I don’t, there weren’t, if there were some, there weren’t many females on our golf day, so
[00:01:50] Tony: Yeah. It was­n’t a mod­i­fied sex­u­al posi­tion.
[00:01:53] Cameron: Named after the, uh, Bish­op of Milan in, uh, 480 [00:02:00] CE.
[00:02:02] Tony: I’ll take your word for that.
[00:02:04] Cameron: Yeah, actu­al­ly 480, no, 380, 380CE, Bish­op of Milan, Bish­op Ambrose,
[00:02:11] Tony: Okay. Dun­no who the golf was­n’t around then, so I dun­no who it was named after. Amer­i­cans called a scram­ble, they have a dif­fer­ent word name for
[00:02:18] Tony: it, as they do for a lot of things in golf.
[00:02:22] Cameron: And just gen­er­al­ly speak­ing.
[00:02:24] Tony: Yeah.
[00:02:25] Cameron: I thought that was a sex posi­tion too. Maybe there’s just, you know, all of my sex posi­tions are named after golf­ing things.
[00:02:34] Tony: Yeah.
[00:02:34] Cameron: Tues­day night, Tues­day night in our house is Texas
[00:02:37] Cameron: Scram­ble Night. Sor­ry, I for­got which pod­cast I’m on. Char­lie died, Tony!
[00:02:44] Tony: Yeah, what a
[00:02:44] Cameron: between when we last talked, and today, and
[00:02:47] Cameron: I did talk about him a bit last week, but I thought you’d prob­a­bly want to throw your, uh, two cents in, so, uh, you know, you’re the per­son who first told me about
[00:02:58] Cameron: Char­lie Munger many [00:03:00] years ago, I’d nev­er heard of the guy before, but you told me about him, and told me that you thought he was even bet­ter than War­ren, and that I should get a book and read it, and I did even­tu­al­ly, Tell me about your love life with Char­lie Munger, your rela­tion­ship with Char­lie Munger.
[00:03:17] Cameron: How long ago did you dis­cov­er Char­lie Munger?
[00:03:20] Tony: say I was just. Talk­ing to Alex about this before, I’d say mid 90s is when I dis­cov­ered Char­lie Munger, through War­ren Buf­fett, through the mak­ing of An Amer­i­can Cap­i­tal­ist, the Roger Lowen­stein book, which I hearti­ly rec­om­mend for any­body. And then from there, I just kept vac­u­um­ing up all the stuff I could read about Buf­fett and Munger.
[00:03:44] Tony: But the good thing about, about read­ing about Munger is it was­n’t just about invest­ing, it was about, there were lots of Phi­los­o­phy of life things. There was lots of, um, Oh, well, I mean, he, he wrote a book called Lat­tice Work, um, or The Lat­tice, [00:04:00] I think it was called Lat­tice Work, about how you should try and under­stand as much as you can about all, all dif­fer­ent, um, edu­ca­tion­al areas, cause they all.
[00:04:11] Tony: Um, they all inter­link like a lat­tice and then that, that forms the back­drop to your invest­ing deci­sions. Cause it, you know, he, he’d talk about how, uh, casi­nos would use psy­chol­o­gy to get gam­blers to, to gam­ble and how pok­er machines flash lots of lights and play loud noise to attract peo­ple to, to that par­tic­u­lar machine.
[00:04:34] Tony: And, um, you know, he said, if you want to, if you, you should­n’t gam­ble in casi­nos, but if you want to gam­ble in the casi­no, find a. The Qui­etest Pok­er Machine in the Dark­est Cor­ner. It’s prob­a­bly the one they’re try­ing to hide that pays out the most. So just lit­tle wits and wis­doms like that have always, I think, been just, just lit­tle bon­nets in life.
[00:04:53] Tony: He’s, he’s just been spot on. And, and the Poor Char­lie’s Almanac is a great read. And I’ve got a copy at home, signed by [00:05:00] Char­lie, actu­al­ly. And, um, it’s based on Ben Franklin’s book, um, what was that one called now? Poor Some­one’s Almanac. Uh, any­way, which was a book about Ben Franklin’s wis­dom on farm­ing. And we still use some of those say­ings today about the oily bird catch­es the worm and you, you sow what you reap and all those kinds of things.
[00:05:22] Tony: Um, so they were like apho­risms that, that Ben Franklin used. And, uh, And then Char­lie’s sort of had the same sort of style of pass­ing on knowl­edge. It’s real­ly, it does talk for hours and hours and hours, but the con­cepts are just dis­tilled into a cou­ple of cou­ple of words and they’re always spot on. And if, you know, I went along to the Berk­shire and War­ren would talk for hours and he’d throw it to Char­lie and Char­lie would just say a very sim­ple sen­tence, which would just sum up every­thing.
[00:05:54] Tony: And some­times he’d say, I have noth­ing fur­ther to add. And that was,
[00:05:57] Tony: that
[00:05:57] Tony: was just as good. [00:06:00] So, uh, yeah, look,
[00:06:01] Cameron: Poor Richards almanac,
[00:06:03] Tony: thank you. Poor
[00:06:04] Cameron: because he used a pseu­do­nym to pub­lish it,
[00:06:06] Cameron: Richard Saun­ders.
[00:06:07] Tony: Right. Okay. Yeah, I haven’t looked at it for a long time. Um, but yeah, I was sad for his pass­ing. I mean, it was expect­ed. I mean, the guy was 99. He was a month shy of his 100th birth­day. So to even get to be that old, I think, is amaz­ing as well, because they’ve, they’ve nev­er been, um Shy at eat­ing about their diets, about how they eat peanut brit­tle and coke and drink coke and all that kind of thing.
[00:06:31] Tony: And, and I’m not sure about Char­lie, but War­ren loves a good steak and would often con­duct busi­ness at Gorat’s Steak­house in Oma­ha. So, um, yeah, it’s just amaz­ing that they, they lived and I think, I think one of the rea­sons is though, I just did­n’t. I just did­n’t enter­tain any sort of bull­shit at all. Um, I remem­ber one of the answers that Char­lie gave at the AGM that I went to was, uh, some­one, um, you know, some­one who just [00:07:00] grad­u­at­ed from col­lege and stood up and said, uh, what kind of per­son are you look­ing for to employ at Berk­shire Hath­away?
[00:07:06] Tony: And War­ren gave a long wind­ed answer and he threw it to Char­lie and Char­lie said, some­one who sees it like it is. I just thought, yeah, that’s Char­lie. He sees it, tells it like it is and sees it like it is. That’s a no bull­shit approach to things. And, and I think that’s, um, you know, one of these, you know, um, bon mots that he just, he says so lit­tle, but you think about it for such a long time after­wards.
[00:07:29] Tony: Telling it like it is and see­ing it like it is is such a pow­er­ful con­cept. But, you know, he, he taught me so many things. Um, and that’s prob­a­bly the biggest thing I want to call, you know, out my indebt­ed­ness to Char­lie for is, is that they shared their wis­dom. They did­n’t, they did­n’t keep it qui­et. They could have.
[00:07:47] Tony: Poten­tial­ly made a lot more mon­ey if they just had to shut up and kept invest­ing them­selves. But they shared, they were hap­py to take peo­ple along, they were hap­py to talk to peo­ple. In the last cou­ple of weeks since his pass­ing, I’ve heard so many sto­ries of [00:08:00] peo­ple who said, you know, I first met Char­lie X many years ago and we sat down and spoke for four hours.
[00:08:05] Tony: Like it was just, he was always very gen­er­ous with his time with peo­ple. And I think that was part of his learn­ing as well. He was end­less­ly curi­ous, as he says. He says to peo­ple, be end­less­ly curi­ous and have a learn­ing. And that’s, that’s impor­tant too. Now, I think he was, and, um, you know, he’s remem­bered for not just for his invest­ing, but he’s remem­bered for his phil­an­thropy and he’s remem­bered for his, um, you know, he got involved in archi­tec­ture and design­ing,
[00:08:32] Tony: um, sci­ence labs that the uni­ver­si­ty used to go to and all sorts of dif­fer­ent things like that.
[00:08:37] Tony: And I think that’s also been a nice part about Char­lie as well as Char­lie. Died with a much small­er for­tune than Buf­fett. I think it was about two and a half bil­lion US or
[00:08:47] Tony: some­thing of that order, which is prob­a­bly, you know, many orders of mag­ni­tude less than what War­ren Buf­fet­t’s worth because War­ren famous­ly nev­er cashed in a Berk­shire Hath­away share, but Char­lie was hap­py to cash in and
[00:08:59] Tony: donate [00:09:00] or cash in and sup­port his uni­ver­si­ty or, or even just, you know, buy a boat,
[00:09:06] Tony: buy a bet­ter car, buy a bet­ter house.
[00:09:09] Cameron: Char­lie’s Fol­ly, and then what,
[00:09:11] Cameron: uh, War­ren called his boat,
[00:09:13] Tony: cor­rect. But War­ren was hap­py to go out
[00:09:15] Tony: on it.
[00:09:19] Cameron: One of the, one of the, um, uh, anec­dotes I used in the show last week was, uh, the, the law firm, MTO, I think that he set up before he, you know, went full time with War­ren that still retains his name. One of the pieces of advice he gave the law firm before he left was choose your clients like you would choose your friends.
[00:09:41] Cameron: I thought there was so much in that. Like, just, he strikes me as a guy, as does War­ren, who spent most of his life, uh, build­ing the life that he want­ed, um, as you said, like, no idiots, no dick­heads, they sort of had a no dick­head rule, no, no bull­shit, no stress, [00:10:00] um, they just built life, hap­pi­ly doing the things that they chose to do, you know?
[00:10:06] Cameron: hang­ing out with each oth­er, you know, War­ren, at least in the book, which the Poor Char­lie Almanac book, which was a few decades old by the time he passed away. But War­ren said, I think in that, that they’d been work­ing togeth­er for, I don’t know, 40 years and had nev­er had an argu­ment.
[00:10:24] Tony: Mm.
[00:10:25] Cameron: We’ve dis­agreed on things, but we’ve nev­er had an argu­ment, which says a lot.
[00:10:30] Tony: And they talk many times a day, accord­ing to War­ren and Char­lie too. So it must’ve been scope. And, and, and War­ren jokes about Char­lie being the abom­inable no man, because he would always say, War­ren was the ideas
[00:10:43] Tony: guy and Char­lie would just keep say­ing no.
[00:10:47] Cameron: The abom­inable no.
[00:10:48] Cameron: man. That’s great. Yeah.
[00:10:51] Tony: So what a life, but I real­ly, I mean, you know, hats off to Char­lie. Thank you, Char­lie and Valet Char­lie. It’s, it’s been a won­der­ful [00:11:00] expe­ri­ence grow­ing old with him.
[00:11:02] Cameron: Yeah, and I’m grate­ful that, uh, you know, since we’ve been doing this show, I had the oppor­tu­ni­ty to get to know who he was bet­ter and watch some of the last Berk­shire Hath­away AGMs that he got to do and to have the oppor­tu­ni­ty to see him live and in real well. Was I live? Like it was prob­a­bly the next few hours lat­er when I watched it, but uh, to see him deliv­er his insights and wit while he was still alive, I’m grate­ful for that.
[00:11:32] Cameron: That was a joy to behold.
[00:11:35] Tony: And he did­n’t hold back. He would, he would tell it like it is, you know, he, he held some very, um, strong views on, for exam­ple, Chi­na and its impor­tance in the world and, and its, um, you know, pos­si­bil­i­ties as an invest­ment des­ti­na­tion, which weren’t, which were kind of against the main­stream sort of thoughts on the
[00:11:52] Tony: coun­try at the time, and still are.
[00:11:54] Cameron: Yeah. And his views on Bit­coin
[00:11:57] Cameron: and gold and [00:12:00] EBITDA and we’ll remem­ber him. You know, that’s, I mean, what a life. Well lived. Like he con­tributed much. Um, in terms of wis­dom and humor and, um, inspi­ra­tion and all those, plus the mon­ey that he donat­ed, et
[00:12:15] Cameron: cetera, et cetera.
[00:12:17] Tony: but I also think too, there’s a cou­ple of oth­er points I want­ed to make. I mean, um, it’s one thing to say you, you see it like it is and tell it like it is, but it’s anoth­er thing to do it. And you can, you can see Char­lie’s fin­gers doing that all the time at Berk­shire Hath­away. Um, and I, and I, you know, I was think­ing about that this morn­ing.
[00:12:34] Tony: It was, you know, if you look at. Berk­shire Hath­away and the ear­ly days when, when Char­lie joined and they would have dis­cus­sions about how, you know, should the com­pa­ny have any debt? Should they be lever­ag­ing to bor­row? And they both agreed that they should­n’t and they should­n’t take on debt. So then the ques­tion is, well, if we, if we accept that as a guid­ing prin­ci­ple, how do we fund this damn busi­ness to grow?
[00:12:56] Tony: And they just kept look­ing around and look­ing around and then they found the, [00:13:00] I think it’s called the Green Green Stamps Trad­ing Com­pa­ny, I think it was called Green Stamps, Blue Stamps maybe, but it was basi­cal­ly a very ear­ly ver­sion of Fly­buys where in the, in the 60s and 70s, um, peo­ple would get stamps when they went and shopped some­where and then they could, they could lick them and put them on a sheet and send them into the head office and then get, redeem it for a prize or some goods or a dis­count or what­ev­er.
[00:13:23] Tony: And, and War­ren and Char­lie, bought that very ear­ly on dur­ing that, I think prob­a­bly just after they bought Berk­shire Hath­away, but very ear­ly on, um, they bought it because they worked out there was all this mon­ey sit­ting in head office that was unre­deemed from the trad­ing stamps that had­n’t been col­lect­ed and that was their fund­ing.
[00:13:41] Tony: So then when they did­n’t use that pool of funds to go and buy See’s Can­dy and they could do that because they worked out this way of fund­ing their busi­ness with­out break­ing their prin­ci­ple of going into debt. So it’s, it’s that kind of unre­lent­ing Prob­lem solv­ing that also is a part of see­ing it like it is and telling it like
[00:13:59] Tony: it is.
[00:13:59] Tony: [00:14:00] It’s all over Berk­shire Hath­away.
[00:14:02] Cameron: So one of the ques­tions I
[00:14:03] Cameron: had when I did the show last week is, uh, again, reread­ing Char­lie’s speech­es that are at the back of poor Char­lie’s Almanac. Um, uh, he talks about Check­lists, and pilots, and using a check­list, um, and I was, you know, try­ing to fig­ure out if you got the check­list idea from him first, or when you read the check­list man­i­festo, and in fact, if you read that because of some­thing Char­lie said, or you got it inde­pen­dent­ly,
[00:14:36] Tony: Yeah, it’s a good ques­tion. I don’t remem­ber get­ting it from Poor Char­lie’s Almanac. I got it from when I read the check­list
[00:14:41] Tony: man­i­festo. Um, so, which I think would have come out after Poor Char­lie’s Almanac. Pret­ty sure it did.
[00:14:49] Cameron: right,
[00:14:50] Tony: But yeah, I mean, there it was, that idea was lying in plain sight
[00:14:54] Cameron: yeah, yeah, yeah.
[00:14:55] Tony: check­list man­i­festo.
[00:14:56] Tony: So if I had­n’t been on the ball, I could have done it ear­li­er. But yeah, that just, and [00:15:00] again, that just shows how smart he is to have picked that up before the book about it
[00:15:03] Tony: was writ­ten.
[00:15:06] Cameron: Yeah, well, I guess we could talk about Char­lie till the cows come home. We should, we should move on, but, um,
[00:15:13] Tony: Well, the last thing I want­ed to say was, um, you know, he’s passed on a lit­tle bit about invest­ing in the, in the, his most recent years and has reflect­ed on how he does it as opposed to Berk­shire Hath­away. Because there are dif­fer­ences. Um, and he, the way he start­ed refer­ring to Berk­shire Hath­away in the end was one of his four stock port­fo­lio.
[00:15:34] Tony: And he talked about hav­ing a four stock port­fo­lio. He thought that was about the right sort of port­fo­lio to have, but you had to, you had to live through the volatil­i­ty and stom­ach it. But, um, he thought that was the best way to get returns. Uh, and, um, you know, he looked in the oth­er com­pa­nies he had in that port­fo­lio.
[00:15:49] Tony: He looked for com­pa­nies which obeyed his. He, I think he called it the 10 per­cent cap or 10 per­cent rule, but basi­cal­ly a com­pa­ny that could make more prof­its than 10%, but capped them [00:16:00] at 10 per­cent and gave the extra back in, in low­er prices to cus­tomers and in bet­ter, um, you know, bet­ter pay­ments to staff and, um, and I guess invest­ing in the busi­ness.
[00:16:13] Tony: So he saw that as the sort of per­fect busi­ness to invest in. Um, so there’s a bit of wis­dom there if peo­ple are out there. Try­ing to copy Char­lie. I’ve thought about which com­pa­nies might be like that in Aus­tralia, and I think ARB comes to mind. Um, I’ve nev­er heard them express that sen­ti­ment, but, um, look­ing at the com­pa­ny, I think they might be obey­ing that rule.
[00:16:35] Tony: So, yeah, so, um, I have been think­ing a lot about the way Char­lie invest­ed as
[00:16:39] Tony: well, um, which he revealed more of at the end.
[00:16:43] Cameron: I think he talked about that prin­ci­ple in one of his speech­es refer­ring to Sam Wal­ton and Wal­mart and why Wal­mart was able to, you know, defeat all of the com­pe­ti­tion.
[00:16:55] Tony: Yeah. Yeah. Keep prof­its low and keep giv­ing it back to [00:17:00] cus­tomers and staff. Yep. And I think also flow­ing from that too, um, Char­lie had a, anoth­er guid­ing prin­ci­ple for me, which was he always want­ed to only be around peo­ple who were, I guess I’ll call it rela­tion­ship dri­ven rather than trans­ac­tion­al dri­ven.
[00:17:14] Tony: So he had no time for peo­ple who had a win lose men­tal­i­ty when it came to Busi­ness trans­ac­tions. It always had to be a win win for both par­ties and a long term gain for both par­ties. And I think that’s a real­ly good prin­ci­ple. I mean, if I think about all the peo­ple who I don’t respect, they’re the ones who just try and screw every­one.
[00:17:31] Tony: They’re just to make more mon­ey. And I think that’s wrong too.
[00:17:33] Tony: So hats off to Char­lie for that one.
[00:17:36] Cameron: Yeah, I mean that’s one of the things
[00:17:38] Cameron: that I’ve always admired about Char­lie and War­ren is they do seem to con­duct them­selves with a high degree of integri­ty and they look for that in the peo­ple they work with and invest with, um, this high lev­el of morals and val­ues and integri­ty that’s the sort of com­pa­nies, the sort of peo­ple that they want­ed to [00:18:00] invest in.
[00:18:00] Cameron: Which, um, is a dying, um, val­ue sys­tem, I think, in cap­i­tal­ism.
[00:18:08] Tony: Yeah. Well, it’s always been, it’s always been a part of cap­i­tal­ism, but it’s always, there’s always been the dark side as well. I think peo­ple who are just trans­ac­tion­al based and, you know, all you are to them is, is some­one to take mon­ey
[00:18:19] Tony: off rather than a part­ner. Yeah. Yeah. Mm
[00:18:23] Cameron: Speak­ing of tak­ing mon­ey off things Uh, Par­en­ti, Tony, uh, I went, I went long on Par­en­ti over the last month. Well, it was one of the, it was one of the only things,
[00:18:34] Tony: Yeah.
[00:18:35] Cameron: par­tic­u­lar­ly with a high ADT that was buyable for a cou­ple of weeks there. I had a cou­ple of trench­es of it in QAV Lite, I had it in my super.
[00:18:45] Cameron: Their guid­ance came out yes­ter­day, looked pret­ty good when I read it. Mar­ket did­n’t like it, share price crashed by 8 per­cent yes­ter­day, ini­tial­ly, then it recov­ered a lit­tle bit, [00:19:00] near­ly, by the end of day, end of busi­ness, it near­ly had come back above its 3 point sell line, but, so, by the close of busi­ness it was like, I think, 1 cent.
[00:19:13] Cameron: Under its, uh, uh, three point trend line, I think it was about a dol­lar five and I had the three point sell line at a dol­lar six. So I held it, uh, over to this morn­ing and to see what would hap­pen when the mar­ket opened and it went the wrong way. So,
[00:19:28] Tony: No. Okay.
[00:19:29] Cameron: and now it’s down to a dol­lar one. I think I got out of it at a dol­lar four this morn­ing, but, um, did you have a look at their, their guid­ance?
[00:19:39] Tony: Oh, look, I did. And I think this is always the case with those kinds of doc­u­ments. They gave us all the good news in the guid­ance, how, you know, and, and the lan­guage is impor­tant because they were talk­ing about EBIT in some cas­es, and then EBITDA and then EBITA, which I’ve nev­er heard of before as well. So they’re try­ing to paint the rosiest pic­ture.
[00:19:59] Tony: Um, I [00:20:00] did a Google search after you sent through the ques­tion and um, I did see the West Aus­tralian News was the only news arti­cle I could find not com­ment­ing on it and they said that the, the mar­ket was upset because the guid­ance update revealed high­er debt and low­er CapEx spend next year and that’s what the mar­ket was sell­ing their shares based on.
[00:20:22] Tony: But hav­ing said that, I went through it as well and the guid­ance was­n’t that bad and it looks like the um, If there is high­er debt and low­er capex, it’s not too dis­sim­i­lar to what they called out before.
[00:20:34] Cameron: Right. I thought they said their debt was steadi­ly decreas­ing when I went through the guid­ance.
[00:20:40] Tony: that’s what you would say if it was high­er than what you fore­cast, would­n’t you? You’d pick out the good news.
[00:20:46] Cameron: Right, a lit­tle bit of spin. Well, any­way, that’s the end of the PRN. We’ve had a cou­ple of cracks at PRN and DDH over the last six months. I
[00:20:57] Tony: Yeah, I think DDH was a, [00:21:00] DDH was a good com­pa­ny. I’m not, I mean, PRN’s not too bad either, but DDH was a good, real­ly good, sol­id, um, drilling com­pa­ny, and that’s why Par­en­ti bought it, to try and, um, try and add that kind of
[00:21:11] Tony: sta­bil­i­ty to their oth­er busi­ness­es.
[00:21:15] Cameron: Well, on the flip side of that news, when I had to offload PRN from the light port­fo­lios today, I replaced it with a cou­ple of things, but one of those things was ATP, Atlas
[00:21:27] Cameron: Pearls,
[00:21:28] Tony: yeah, good one.
[00:21:29] Cameron: very low ADT
[00:21:31] Cameron: stock, um, but I went through their news and saw that a day or two ago they’d announced
[00:21:36] Cameron: that they’d had a record price with some of their pearl sales,
[00:21:41] Cameron: but I thought, man, you know, the price had
[00:21:44] Cameron: spiked and I thought, well, you know, It is what it is.
[00:21:47] Cameron: Fun­da­men­tals are good. It’s up 12 per­cent today since I bought it. I hope, uh, some of the light peo­ple got in on it ear­ly when I sent the email out. But, um, so they’re [00:22:00] hav­ing a good day. It’s been a cou­ple of shares that have had good days recent­ly, but that’s a pret­ty good one.
[00:22:05] Tony: Well, you know, I had a look at Atlas Pearls because it’s hav­ing a good year. I had a look at Atlas Pearls prob­a­bly six months ago. It’s been, it was top of the buy list for a long time, but it was such a small ADT I could­n’t buy any. I
[00:22:20] Cameron: Yeah.
[00:22:20] Tony: say­ing to myself, how do I get into this with­out being trapped and get­ting out?
[00:22:25] Tony: Um, because I could see it was doing well and
[00:22:28] Tony: it’s prob­a­bly tripled its share price this year, I think.
[00:22:31] Cameron: A year ago it
[00:22:32] Cameron: was just under 3 cents and at the moment it’s just under 15 cents.
[00:22:38] Tony: Hmm.
[00:22:38] Cameron: five
[00:22:39] Cameron: times, five bag­ger.
[00:22:42] Cameron: Um, yeah, but very small. Like I
[00:22:44] Cameron: think the ADT is
[00:22:45] Cameron: 26, 000 or some­thing like that. So
[00:22:49] Cameron: yeah, you’d, you’d be just using change you found in the back of your lounge to to buy them. Um,
[00:22:56] Tony: mon­ey to buy that one.[00:23:00]
[00:23:01] Tony: Yeah.
[00:23:01] Cameron: Uh, what else have I got? Oh, the ADT sur­vey. Speak­ing of ADTs, so A few weeks ago we asked peo­ple to com­plete an ADT sur­vey to see what the num­bers came back like. The think­ing was we want­ed to fig­ure out if QAV mem­bers were get­ting into the mar­ket in such big num­bers that it could be affect­ing our buy and sell prices.
[00:23:26] Cameron: Um, only about 70 or so peo­ple com­plet­ed the sur­vey as of yes­ter­day and so we broke the sur­vey into brack­ets. Uh, under a thou­sand, a thou­sand to ten thou­sand, so we’ve, uh, got three peo­ple were under a thou­sand, twen­ty eight peo­ple, uh, so about, you know, rough­ly a third in the one to ten thou­sand brack­et, thir­ty five, rough­ly anoth­er third, um, ten to a hun­dred thou­sand, no that’s more than a third, it’s more than half, [00:24:00] about half is ten to a hun­dred thou­sand, then we’ve got three between a hun­dred and five hun­dred and only one between five hun­dred and a mil­lion and nobody was over a mil­lion.
[00:24:12] Cameron: So, uh, last time you and I talked about that off air a cou­ple of weeks ago, I think the num­bers were slight­ly low­er in terms of respons­es, but how do you think that fits into the dis­cus­sion about peo­ple being able to influ­ence the, uh,
[00:24:31] Tony: Yeah, well, it’s some­thing we thought long and hard about when we set up QAV, and we’ve been think­ing about it again since. Um, so first of all, thanks for fill­ing out the sur­vey. That’s very help­ful, even with the num­ber we’ve got. Um, and sec­ond­ly, I spoke to my stock­bro­ker, Alex Hay. I caught up with him before I came down here and had a cof­fee with him, and he thought we weren’t.
[00:24:53] Tony: QAV was­n’t mov­ing the mar­ket. Um, my thought was if, if every­one’s buy­ing a stock and it’s [00:25:00] 20 per­cent of the ADT, um, if there was six, if it hap­pened to be six peo­ple buy­ing a stock from QAV that day, then, you know, we’re tak­ing up all the vol­ume our­selves. And, um, if any­one else is in the mar­ket, com­bined with our push, we’re push­ing up the share price.
[00:25:15] Tony: And the risk is we’re push­ing it up. And then when we dis­ap­pear from the mar­ket, it drops again, and that sort of cre­ates a trend that might drop through a rule one bar­ri­er. Um, Alex Hay did­n’t think that was hap­pen­ing. Um, I, I, giv­en the small num­bers at the top end, I don’t think it’s hap­pen­ing at the top end.
[00:25:32] Tony: It’s pos­si­ble still hap­pen­ing in those, um, 1 to 10s and 10s to 100, because there were large num­bers there. But, but, you know, we haven’t seen any evi­dence to sup­port that. It’s only just that the per­for­mance has been weak for the last year or so, and I’m kind of try­ing to work out why that might be if QAV itself is affect­ing things, but I can’t see any evi­dence for it based on that.
[00:25:58] Cameron: Hmm. [00:26:00] Okay. Well, I guess that’s some­thing. Um,
[00:26:06] Tony: Well, what I would say is that, you know, we’ve always said, um, As soon as you’re ready to buy, buy. And if you see it cross a buy line, for exam­ple, buy. Um, I mean, it might be worth­while if peo­ple can go back through their own trades and look at how they per­form to see if it is, if they’re in those sort of small­er bands, if they’re, um, if they are see­ing the share price rise and then drop, and then maybe con­sid­er, you know, buy­ing small­er parcels over a num­ber of days, for exam­ple, it might solve the prob­lem or.
[00:26:38] Tony: Or not jump­ing too quick­ly into the mar­ket when it cross­es a line or some­thing. I know, I know that can be a prob­lem because some­times they cross the line and shoot up quick­ly. But, but yeah, just, I guess, be a lit­tle thought­ful about your trades. You know, and maybe go back over your past trades and see if you think there has been a lot of buy­ing around the time you’re buy­ing.
[00:26:59] Tony: It might be
[00:26:59] Tony: [00:27:00] oth­er QAV mem­bers in there as well.
[00:27:03] Cameron: yeah, I mean my the­o­ry when we start­ed QAV was that, you know, peo­ple would start build­ing their port­fo­lios via QAV at stag­gered times. Which means they’d prob­a­bly fill their 15 to 20 at stag­gered times and we would­n’t all be sell­ing and buy­ing the same stocks because a lot of us would have full port­fo­lios and a lot of peo­ple would still be build­ing theirs and we’d be all look­ing at dif­fer­ent stocks.
[00:27:35] Cameron: The, the, the chop­pi­ness of the mar­kets over the last cou­ple of years has prob­a­bly seen a lot of us go to cash. I know Um, Alex F post­ed a poll on our Face­book page last week ask­ing peo­ple how much cash they were sit­ting on. And it actu­al­ly turned out that most peo­ple weren’t sit­ting on much cash at all.
[00:27:59] Cameron: [00:28:00] Uh, but I’m pret­ty sure over the last 18 months or so, a lot of us have been, uh, sit­ting on quite a bit of cash at the same time, which means we’re, and then the things to buy have been rel­a­tive­ly lim­it­ed, so we’ve prob­a­bly been get­ting into the mar­ket right about the same time. That said, I did the, um, week­ly port­fo­lio report for the dum­my port­fo­lio this morn­ing.
[00:28:20] Cameron: The, um, Dum­my Port­fo­lio, since incep­tion, is still doing about dou­ble mar­ket, a bit bet­ter than dou­ble mar­ket. If I look at the last, this finan­cial year, Dum­my Port­fo­lio is up 7. 7 per­cent per annum ver­sus the STW up 2. 38 per­cent per annum. So we’re doing about Three times the STW for this finan­cial year, which is only halfway through, but still. Um, and in the last 30 days, we’re doing a lit­tle bit bet­ter. Uh, we’re doing about 4.3 ver­sus 3.8 or 3.9, I think for the STW. So the W [00:29:00] port­fo­lio con­tin­ues to. Do well. Um, you know, I think there was a peri­od there where it was­n’t, I think 2022. But, um, you know, the last six months or so it’s been doing well still, despite all of that, but I know it, it sort of deals in a broad­er range of ADT stocks than you, you do, you do, or my super
[00:29:23] Tony: well, my per­for­mance has­n’t been as good as the dum­my port­fo­lio or the mar­ket. So there’s, um, I’m try­ing to work out why, if I can improve, um, it could just be that it’s my turn to under­per­form, which hap­pens as well. So, um, but yeah, it’s, it’s also been very chop­py over the last 12 months. So that was my rea­son for won­der­ing whether.
[00:29:44] Tony: Peo­ple were buy­ing and sell­ing at the same time. It’d be inter­est­ing to know, going back to your dis­cus­sion about Par­en­ti, how many peo­ple sold it yes­ter­day, as soon as it crossed the 3pt trend sell line. Um, because as you said, it dropped 8 per­cent and it came back to almost zero on the same day. [00:30:00] So, um, whether that was a lot of fund man­agers sell­ing it, or whether it was a lot of QAV peo­ple sell­ing it as it went below its 3pt sell line, that’d be an inter­est­ing point to know as well.
[00:30:09] Tony: Mm
[00:30:09] Cameron: Hmm. But I mean, obvi­ous­ly the mar­ket dumped it before we found out about it. Then
[00:30:16] Cameron: some peo­ple jumped in, but yeah, it did cer­tain­ly turned around and went the wrong way again today.
[00:30:22] Tony: Okay.
[00:30:23] Cameron: Yeah. It would be good to know. Maybe we should do a poll on that. How many of, yeah, how many peo­ple sold Par­en­ti and when did you sell it?
[00:30:31] Cameron: It’s not a bad idea, actu­al­ly.
[00:30:34] Cameron: I’ll make a note to do that,
[00:30:36] Tony: Okay. Again, more data so
[00:30:39] Tony: we can see if we have a, have an issue we have to
[00:30:41] Tony: guide peo­ple around.
[00:30:44] Cameron: Yeah. Uh, alright. Well, that’s all I’ve got. What have you got on your talkie list?
[00:30:50] Tony: My talkie list. Um,
[00:30:51] Cameron: Hmm.
[00:30:52] Tony: I was pleased to see the RBA held rates last week
[00:30:55] Tony: on Tues­day when they met. Yeah. Yeah. I mean,
[00:30:59] Cameron: Christ­mas [00:31:00] from Michelle Bul­lock.
[00:31:01] Tony: Exact­ly. I think that was smart. Um, there’s been an awful lot of com­men­tary about, prob­a­bly more about the US mar­ket and whether they’re going to start cut­ting rates next year and whether, whether the share mar­ket’s already build­ing that in and whether it’s there for too soon and all that kind of stuff, but that’s all noise as far as I’m con­cerned.
[00:31:18] Tony: Um, I sus­pect if the US mar­ket, if the US Fed does start to cut rates, then we will too. So it’s, again, RBA is just a mon­key copy­ing. What over­seas mar­kets do? Why do we need to employ all these peo­ple? But any­way, that’s for anoth­er day. Um, the curse of the pulled pork struck again this week. Uh, Macmil­lan Shake­speare, which was the last one I did,
[00:31:42] Cameron: real­ly?
[00:31:43] Tony: came out, uh, a day or two ago say­ing that they’d lost the South Aus­tralian gov­ern­ment con­tract and the shares are down fol­low­ing that.
[00:31:50] Tony: So it was bad tim­ing on my part again to do a pulled pork and I still own MMS, so it’s hurt me as well. Um, I guess the. The [00:32:00] inter­est­ing thing about this whole sit­u­a­tion with Macmil­lan Shake­speare los­ing a con­tract and it going down is that the con­tract must have been picked up by some­one. So I went and had a look and it was picked up by SIQ, Smart Group, one of its list­ed com­peti­tors.
[00:32:14] Tony: So it’s almost, I’m almost think­ing that rather than buy one of these list­ed No Val­ued Lease Com­pa­nies. I should just buy all three. So there’s Fleet Part­ners, Macmil­lan, Shake­speare, and SIQ, which I think is Smart Group. But that’s, so MMS was down, Smart Group was up. It’s almost like hold­ing an index fund in this space.
[00:32:31] Tony: It does­n’t mat­ter who wins or los­es the con­tract. It just stays in the same cir­cle. And over time, they all win and lose enough for the whole lot to go up. So, um, I might sell some of my MMS and buy the oth­er two and just, uh,
[00:32:45] Cameron: set a, spread in horse rac­ing, set a fun spread. ha.
[00:32:49] Tony: diver­si­fy, hedge my risk.
[00:32:51] Cameron: ha ha ha ha ha.
[00:32:52] Tony: But I thought, yeah, I thought it was fun­ny.
[00:32:54] Tony: Like it was a big deal for Macmil­lan share­hold­ers, but then I thought, hang on, some­one’s got to have picked up the con­tract. And sure enough, Smart Group [00:33:00] had, and their shares are up. So
[00:33:01] Cameron: Are they on the buy list?
[00:33:03] Tony: no, Smart Group aren’t. They’ve had a very good run. So I sus­pect they’re, they’re high­ly priced now, but Fleet Part­ners and MMS are, they’re both on
[00:33:11] Tony: the buy list.
[00:33:12] Cameron: Yeah. But you would­n’t have, you would­n’t have come out of it on top if you had those two, unless FPS went up as well, for some rea­son.
[00:33:19] Tony: Fleet Part­ners, well, prob­a­bly Fleet Part­ners was unaf­fect­ed, because they did­n’t lose or win the con­tract. So, Macmil­lan Shake­speare went down, Smart Group goes up,
[00:33:28] Tony: right, because the con­tract just goes from one to the oth­er.
[00:33:31] Tony: And fleet part­ners? chugs along the same,
[00:33:34] Cameron: What’s fleet part­ners? Uh, FPR. Um, yeah, they, they went up on the 7th. They jumped from 2. 85 to three bucks. What
[00:33:48] Tony: Yeah, but I looked up,
[00:33:49] Cameron: go down? Oh, okay. Yeah.
[00:33:54] Tony: but I looked up Smart Group and Stock Doc­tor and sure enough, there’s an announce­ment say­ing they picked up the South Aus­tralian [00:34:00] gov­ern­ment con­tract for no vat­ed leas­es. And they’re up. A
[00:34:06] Cameron: Well, MMS actu­al­ly, MMS is weird. Like it was, it dropped, but then it seems to have recov­ered
[00:34:19] Tony: lit­tle bit. Yeah.
[00:34:20] Cameron: most­ly. Like I assume the announce­ment came out at the end of busi­ness on the 8th, cause it dropped a lot by the morn­ing of the 11th, yes­ter­day. But then, um, sort of picked up, oh no, it dropped ear­li­er than that, so it dropped back on the 4th.
[00:34:37] Cameron: Is that, was that when they announced it?
[00:34:40] Tony: I’m
[00:34:40] Cameron: it was 18? Yeah, okay, it was 18 on the
[00:34:43] Cameron: 4th and then it dropped down to 16. 17 and then kept drop­ping. But if you had FP, if you had FPR, you would have kind of even stevened it out. So,
[00:34:55] Tony: yeah,
[00:34:56] Tony: That’s my point, right? And if you had SIQ, you’d be up. So, you might as [00:35:00] well just buy all three.
[00:35:02] Tony: Does­n’t mat­ter who wins or los­es
[00:35:03] Tony: con­tracts.
[00:35:05] Cameron: okay, inter­est­ing. inter­est­ing. We’ll have to think about adding that to the strat­e­gy.
[00:35:10] Tony: Yeah. Any­way, um, so that’s I think all I have to say, and I’ve got a pulled pork ready to go on, uh, if I find my notes. Pulled pork on Ing­ham’s,
[00:35:22] Tony: Ing­ham’s Chick­ens, ING.
[00:35:24] Cameron: I tried to buy Ing­ham’s for my Super Port­fo­lio this morn­ing, uh, and could­n’t. Cuz they’re
[00:35:31] Tony: lucky because I’m doing a pulled pork.
[00:35:33] Cameron: Yeah, but they’re not they’re appar­ent­ly not top 300 not big
[00:35:37] Tony: Oh,
[00:35:38] Cameron: got them. Oh, yeah, they’re not and I think I’ve tried
[00:35:40] Cameron: And not been able to buy them before this is with Aus­tralian super. They’re not on the approved list But I I did my analy­sis on them this morn­ing and was going well, they’ve had a Nice lit­tle run,
[00:35:56] Tony: I had the same thought. So, pulled pork on Ing­ham’s. I’m sur­prised they’re not [00:36:00] on the ASX 300 though, because the ADT
[00:36:02] Tony: is near­ly 5 mil­lion per day.
[00:36:05] Cameron: yeah, I don’t know why,
[00:36:07] Cameron: don’t know why, um, OzSu­per does­n’t allow them. Any­way, maybe they’ve got a Beef With The Chick­en.
[00:36:14] Tony: A beef with the chick­en.
[00:36:15] Cameron: Yeah, you like that?
[00:36:16] Tony: I do.
[00:36:19] Cameron: It’s the title for the episode, Beef With The Chick­en.
[00:36:21] Tony: Beef with chick­en, yeah. Red and white meat.
[00:36:27] Tony: They’ve been on the buy list before, too. I remem­ber look­ing at them. I think I owned
[00:36:30] Tony: them about three or four years ago. So they’ve been around for a while, but they did suf­fer bad­ly.
[00:36:35] Cameron: on them before.
[00:36:36] Tony: Oh, have I? I was try­ing to find
[00:36:37] Tony: some­thing I
[00:36:37] Tony: had­n’t. If I had, it must have been a long time ago, I think.
[00:36:41] Cameron: Yeah.
[00:36:41] Cameron: Yeah. Yeah. I think like years ago,
[00:36:43] Tony: Yeah. Oh, sor­ry for repeat­ing myself. I was try­ing to find some­thing new. There was­n’t much I had­n’t done the pull the pork on. I was think­ing about that today, too. I do one a week and there’s. 50 odd stocks on the buy list. I sort of have to recy­cle them after a year.
[00:36:57] Cameron: 8, 8th of June, [00:37:00] 2021. Tony.
[00:37:01] Tony: Okay. It’s like two and a half years ago.
[00:37:03] Cameron: Yeah.
[00:37:05] Tony: Oh, well, you can just, just cut that and put it into
[00:37:07] Tony: this
[00:37:08] Cameron: Put it in.
[00:37:10] Tony: We can talk,
[00:37:11] Cameron: had a, uh, Well, the CEO
[00:37:14] Cameron: had only resigned a cou­ple of months ear­li­er and the share price dropped. You sold it at the
[00:37:19] Cameron: time, was­n’t pre­pared for a CEO, it was­n’t a pre­pared for CEO
[00:37:23] Cameron: change. You said there was a bit of a red flag, uh, you said that the new CEO could make big changes clear­ing the deck.
[00:37:31] Cameron: So now you’ll be able to get us up to date. What’s the new CEO done? This is good.
[00:37:35] Tony: he’s done well.
[00:37:36] Cameron: This is, uh. Ing­ham’s
[00:37:38] Cameron: part two.
[00:37:39] Tony: Yeah, it is. Yeah, okay. Well, yeah, it’s been on the buy list before. Uh, it, it real­ly suf­fered dur­ing COVID. So, it’s, this is a bit of a recov­ery stock at the moment. And, um,
[00:37:50] Tony: it’s just crossed this buy line again, so it’s back on the buy list.
[00:37:53] Cameron: Peo­ple, peo­ple weren’t eat­ing chick­en dur­ing COVID?
[00:37:56] Tony: No, well, yes and no. I mean, [00:38:00] um,
[00:38:02] Tony: they, they had sup­ply chain issues and con­straints because I,
[00:38:05] Cameron: yeah, right.
[00:38:06] Tony: I think some of the feed­stock to feed the chick­ens may have been com­ing from over­seas. So they’ve done a lot of work now on, on their own, on pro­duc­ing their own feed. They, they, one of the strengths of this com­pa­ny is they like to be ver­ti­cal­ly inte­grat­ed.
[00:38:18] Tony: So it’s, um, they own the process from hatch to dis­patch, as they say. Um, so they’ve got the, the, they hatch the chick­ens and farm the chick­ens and kill the chick­ens and pack the chick­ens and refrig­er­ate the chick­ens and
[00:38:31] Tony: send them off to the super­mar­kets or to KFC.
[00:38:33] Cameron: like, it’s not the human cen­tipede, it’s the chick­en cen­tipede. It’s just chick­ens inside of chick­ens. It’s like a Tadurkan, but with chick­ens.
[00:38:43] Tony: Well they do do turkeys as well, fun­ni­ly enough. I had a friend who worked for the gov­ern­ment depart­ment called Births,
[00:38:52] Tony: Deaths and Mar­riages and she used to call it Hatch, Match and Dis­patch.
[00:38:56] Cameron: Oh, that’s nice. That’s cute. Good. That’d be a good name [00:39:00] for a film. We should write that film. That’ll be our next, that can be our next film. I like that.
[00:39:05] Tony: All Wed­dings and Funer­als, Hatch, Match and Dis­patch. Yeah.
[00:39:08] Cameron: Whoa.
[00:39:12] Tony: yes, I, I’m not sure where they were con­strained dur­ing COVID. They, um, so they sell a lot through super­mar­kets, but they also sell a lot through, What they call, I think it’s um, QSR, which is the Quick Ser­vice Restau­rant, so Hun­gry Jacks and KFC and all those.
[00:39:31] Tony: So I think they may have also, um, suf­fered dur­ing the, dur­ing the Covid peri­od as well. But any­way, they’re, um, they’re get­ting back, um, back to busi­ness and back to where they were pre Covid at the moment. Uh, what else can I say about them? Biggest chick­en and Turkey breed­er and dis­trib­u­tor in Aus­tralia and New Zealand.
[00:39:49] Tony: Uh. They also now have a stock fee divi­sion, which is main­ly for their own use, but also they resell to oth­er pri­ma­ry pro­duc­ers like pig farms. [00:40:00] Ver­ti­cal­ly inte­grat­ed busi­ness, as I said. I guess some of the inter­est­ing things that they call out, which makes a lot of sense, is the poul­try mar­ket is grow­ing.
[00:40:10] Tony: Both for health rea­sons, as peo­ple are rec­om­mend­ed to eat less red meat, but also for price point rea­sons. So, um, chick­en has. is one of the cheap­er meats you can buy in the super­mar­ket. And it’s much cheap­er on a cost per kilo basis than red meat. So peo­ple are mov­ing to that and these kinds of times when infla­tion’s hit­ting and belts are being tight­ened.
[00:40:39] Tony: And the last, I guess, poten­tial Tail­wind for this com­pa­ny is that the car­bon foot­print on farm­ing chick­ens is five times low­er than for red meat. So, because of all the methane the cat­tle pro­duce. So, there is a cer­tain seg­ment of the mar­ket who are inter­est­ed in eat­ing white meat for that rea­son as well.[00:41:00]
[00:41:01] Tony: I think one of the good things about, uh, one of the, uh, one of the points the com­pa­ny’s called out in their lat­est results is, uh, they’ve been able to increase their prices to reflect the cost input infla­tion that they’re hav­ing. So, which is always a good thing to see. So as their, as their costs have gone up because of sup­ply chain increas­es, they’ve been able to pass it on to the super­mar­kets and the, and the QSR restau­rants, the quick ser­vice restau­rants.
[00:41:26] Tony: So that’s a good thing. Um, I think, look, it’s a pret­ty stock stan­dard basic busi­ness, so I can go through the pros and cons at the end, and the risks and pos­i­tives, but to get to the num­bers, because they’re pret­ty good, um, as we said, large ADT stock, 5 mil­lion a day trad­ed, plen­ty of liq­uid­i­ty, uh, share price is 3.
[00:41:47] Tony: 90 when I did this analy­sis, um, That’s less than the con­sen­sus tar­get, but it is greater than IV1 and IV2. Um, the yield on this com­pa­ny is 3. [00:42:00] 79%, so it’s not high enough to score for us, but it’s still rea­son­able. Uh, Stock Doc­tor finan­cial health was, is strong, but the trend, they, they list the trend as dete­ri­o­rat­ing, which we give a minus one to in the check­list, but when I had a look, I could­n’t see why.
[00:42:16] Tony: So if you look at Stock Doc­tor for ING and look at its finan­cial health, It’s been strong for­ev­er. It has­n’t changed and there was a fore­cast to go down. So I’m a lit­tle bit sur­prised at that. That may be an error. But any­way, it’s still on the buy list regard­less. For peo­ple who are inter­est­ed, it’s a high ROE com­pa­ny, 39%, which is very high.
[00:42:37] Tony: Unfor­tu­nate­ly, so is the PE, 20. 4 times. But it’s not the high­est or the low­est over the last three years. So we don’t score it neg­a­tive­ly for that. But it is kind of high. Giv­en that it’s on our buy list, uh, and also too, because the Prop­Caf, the price to oper­ate in cash­flow for this com­pa­ny is only four times.
[00:42:56] Tony: So I guess there’s a lot, um, a lot of costs to soak [00:43:00] up, uh, from the cash­flow that’s com­ing in, but it scores well from a Prop­Caf mea­sure for us. Net equi­ty per share is only 54 cents. So we can’t score it, um, for. Being avail­able to buy at book val­ue or book val­ue plus 30, because the price is 3. 90. The oth­er inter­est­ing thing about this com­pa­ny, which I think is prob­a­bly dri­ving its share price, is that earn­ings per share fore­cast growth is 72%, which is huge.
[00:43:25] Tony: And I guess, I guess, again, reflect­ing this, um, return from COVID for the busi­ness. But growth over P is 3. 5 times, which is way over what we want to see in a busi­ness, and we score it well for that. Uh, Mr. Ring­ham isn’t around any­more in the busi­ness, so we can’t give it an own­er founder. He was a, um, a big race­horse own­er and breed­er.
[00:43:44] Tony: So, um, any­one who fol­lows the, the mags will know about the Ing­ham fam­i­ly and he’s, I think it’s his daugh­ter, it might be his grand­daugh­ter, was an own­er of Winx, um, one of the big, most suc­cess­ful race­hors­es going around in the recent times, um, the [00:44:00] com­pa­ny. Does­n’t have con­sis­tent­ly increas­ing equi­ty, and that’s large­ly for the COVID years.
[00:44:04] Tony: Oth­er­wise, it has been going up con­sis­tent­ly, but we don’t score it. Uh, it’s a new 3 point trend­line buy since the last result, so we score it for that. So all in all, it’s 8 for qual­i­ty, which is 50%. And as I said, I think Stock Doc­tor may have made a mis­take. Call­ing it a dete­ri­o­rat­ing finan­cial stock because I think it’s actu­al­ly going to improve if not stay where it is at least.
[00:44:29] Tony: Um, so I think the qual­i­ty score is under­cook­ing it a lit­tle bit. Uh, QAV score is 0. 12, um, again, because of that low prop cap. So that’s good. In terms of the risks for this com­pa­ny, um, I think you’ve got to call out with any sort of pri­ma­ry pro­duc­er com­pa­ny, there’s always, you know, agri­cul­tur­al based risks, um, so typ­i­cal­ly if the weath­er turns or if, you know, we go into a.
[00:44:52] Tony: Um, you know, very hot El Nino or there’s bush­fires or there’s floods that can affect pri­ma­ry pro­duc­tion. Prob­a­bly chick­ens less than [00:45:00] most because they’re, um, I think they would be con­tained a lot to fac­to­ries. Um, so that would help. Um, but it’s, it’s still, pri­ma­ry pro­duc­tion is always a, um, a cycli­cal busi­ness because of the weath­er.
[00:45:11] Tony: Uh, to some, to some extent any­way. Um, and there are also, you know, with these busi­ness­es, biose­cu­ri­ty risks, it would­n’t take a whole lot, um, for some kind of chick­en dis­ease. Avian bird flu or some­thing to get loose in Aus­tralia and dec­i­mate the indus­try. Not that it has, and they do take strin­gent secu­ri­ty, you know, pro­to­cols to stop that.
[00:45:36] Tony: But you just have to look at, say, the bee indus­try recent­ly, which was hurt by a, um, An out­break of a par­tic­u­lar dis­ease from New­cas­tle that spread quick­ly through Aus­tralia to look at how bad these things can affect an indus­try. Um, the weath­er, of course, is a risk for their feed­stock and they’ve got their own feed­stock busi­ness now.
[00:45:54] Tony: So that could be a risk if the, even if the chick­ens aren’t hurt by bad weath­er or fire or flood, that [00:46:00] it’s poten­tial­ly Um, it’s more the grain side of their busi­ness. The feed­stock side of their busi­ness is more prone to that. And that might be an issue. Um, of course, COVID hurt them bad­ly. So any oth­er sort of pan­dem­ic or some­thing sim­i­lar, um, which clos­es sup­ply chains would be an issue.
[00:46:16] Tony: Um, and the last risk I’ve got down here is growth because if you take out COVID. from its results. This com­pa­ny has­n’t trad­ed out of a sort of a range of around three bucks, you know, three to four dol­lars for a long time. Um, I guess if you take COVID out of it, it went down then. Uh, and I think that’s an indi­ca­tion of the fact that they pret­ty much own the mar­ket in Aus­tralia and New Zealand.
[00:46:39] Tony: And, um, it’s, it’s, that’s a good thing because it gives them pric­ing pow­er and it gives them sta­bil­i­ty. Um, in the, in the hard times, but with these kinds of com­pa­nies, growth is always an option. And you’ve got to be care­ful of that, that some­one comes in and says, I know what to do to grow this busi­ness.
[00:46:55] Tony: I’m going to go and inquire some­thing, which isn’t as attrac­tive, or I’m going to try and [00:47:00] expand over­seas, which has had a check­ered result for Aus­tralia. So it’ll be inter­est­ing to see what they do, but they’ve def­i­nite­ly been focused on recov­er­ing from COVID. So that’s a good thing. And they’ve, um, uh, fixed up some of the prob­lems that COVID iden­ti­fied in their sup­ply chains and oper­a­tional issues.
[00:47:16] Tony: So that’s a good thing too. Um, but the, the pos­i­tives that go with this busi­ness is I think the, the tail­winds com­ing with the trend towards white meats for the var­i­ous rea­sons. And I think also too, with this par­tic­u­lar com­pa­ny, the ver­ti­cal inte­gra­tion. So, um. It’s some­times in pri­ma­ry pro­duc­tion indus­tries, you get mar­gins on mar­gins as, you know, some­one, some­one fat­tens the cow, some­one kills the cow, some­one takes the milk, process­es the milk, some­one, um, you know, cuts the cow up and refrig­er­ates it and sends it, some­one else sends it out to the, the super­mar­ket.
[00:47:47] Tony: So there’s usu­al­ly. You know, four or five mar­gins in this val­ue chain. So to take those out of the equa­tion or to give them all to the one com­pa­ny is actu­al­ly a very strong pos­i­tive for, for Ingem. So I see that as a strength [00:48:00] too. So yeah, so take a look, it’s, it’s back on the buy list and it’s trend­ing up and it’s, um, it’s not a bad busi­ness.
[00:48:05] Cameron: They need­ed to tur­duck­en their busi­ness mod­el,
[00:48:09] Cameron: just
[00:48:10] Tony: Tur­duck­en.
[00:48:11] Cameron: Tur­duck­en their busi­ness mod­el, like,
[00:48:13] Cameron: you know, ver­ti­cal inte­gra­tion, stick it all, yeah.
[00:48:16] Tony: Yeah, well, that’s, I mean, that’s the thing. When does a new CEO come in and say, we should be buy­ing stuff­ing? That’s our
[00:48:23] Tony: next acqui­si­tion. We don’t own the stuff­ing mar­ket.
[00:48:26] Cameron: Well, you kind of, you, you hint­ed at it ear­li­er though, um, the, the COP28, uh, con­fab that’s going on at the moment, I saw in the ABC this morn­ing, they’re say­ing we need to move away, the world needs to move away from red meat towards chick­en. So, you know, if we all cut out eat­ing red meat in Aus­tralia, there’s a whole new mar­ket for them
[00:48:48] Tony: cor­rect. Yeah.
[00:48:49] Cameron: there, gob­ble up, yeah, with the turkey.
[00:48:52] Cameron: That’s the turkey and the chick­en part of the
[00:48:53] Cameron: busi­ness, they
[00:48:54] Tony: Yeah. Eat one for QAV.
[00:48:59] Cameron: Real­ly? [00:49:00] Is that our new slo­gan? Eat one for QAV? Yeah. Hel­lo, Alex!
[00:49:07] Cameron: Uh, how are you? How are you, Alex? Hi, Darl. I’m going
[00:49:11] Cameron: to just call you Darl, so Hi, Darl.
[00:49:13] Alex: Sure. Hi. Good. Thank you. How are You We had an epic day yes­ter­day. My mates live in St Kil­da and Luna Park gave out free tick­ets to just the res­i­dents of St Kil­da. So we took Well, I was includ­ed in a group of six of us just going and spend­ing the after­noon. It was great.
[00:49:36] Cameron: I’m good.
[00:49:37] Tony: Park, did you go on any rides?
[00:49:39] Alex: Yeah, Scenic Rail­way was off, unfor­tu­nate­ly, because it was kind of a weird, mug­gy, rainy
[00:49:46] Alex: day, but per­fect for Luna Park. So I went on the Spi­der, went on every­thing, but the Scenic Rail­way. And the Ghost Train. It
[00:49:56] Alex: does­n’t mat­ter how many tod­dlers I
[00:49:57] Alex: see on it, I still can’t con­vince
[00:49:59] Alex: [00:50:00] myself to get on the Ghost Train.
[00:50:02] Cameron: I have nev­er been on a ride at Luna Park and I don’t think I ever will. I’d be more
[00:50:08] Cameron: inclined to go on the
[00:50:10] Cameron: one
[00:50:10] Cameron: at Dream­world
[00:50:12] Cameron: where every­one got crushed to death a few years ago than go for a ride at
[00:50:15] Cameron: Luna Park. Luna Park just looks scary and rick­ety as
[00:50:18] Cameron: hell. Looks like it was made out of reclaimed tim­ber 250 years ago from a ghost house.
[00:50:26] Cameron: So every time I’m down that way, I’m look­ing at it like, who are these peo­ple? Tak­ing their lives into their hands going
[00:50:31] Cameron: on these rides. That’s more pow­er to any­one who’s brave enough to do that.
[00:50:37] Cameron: So you sur­vived Luna Park.
[00:50:41] Cameron: Hope­ful­ly you got a t shirt
[00:50:43] Cameron: for that. Do you have a ques­tion for
[00:50:45] Cameron: us,
[00:50:45] Cameron: AK?
[00:50:47] Alex: I have a ques­tion. Yep. No t shirt, but a ques­tion. Um, from Phil. So he asks, if QAV scores don’t dif­fer­en­ti­ate returns, And he says on the last pod­cast, you talked about how the cut­off of [00:51:00] 0. 2 is poten­tial­ly no dif­fer­ent to a 0. 1 per­cent 0. 1
[00:51:03] Alex: cut­off. Does that sug­gest that the sys­tem is actu­al­ly more based on momen­tum and min­i­miz­ing loss­es?
[00:51:09] Alex: Easy
[00:51:10] Tony: a great ques­tion, Phil. Um,
[00:51:13] Tony: I think, I think, poten­tial­ly at the moment, yes. Um, but over the long
[00:51:17] Tony: term, no. So, uh, I think this is one of the issues I’ve been call­ing out about research and these things is that we’re usu­al­ly At the moment, fair­ly small time­frames to research them, and it’s been a, it’s been a chop­py mar­ket, so, um, I think that might be fac­tor­ing into the QAV cut­off score, because orig­i­nal­ly, we looked at this again, because Dylan, a few years back, looked at it over 10 years and found out there was a big dif­fer­ence between the QAV score of 0.
[00:51:46] Tony: 2 and 0. 1, um, so, that’s, that’s why I could­n’t be very defin­i­tive with the cur­rent research, um, and decid­ed to set up my own tri­al port­fo­lio
[00:51:55] Tony: to see. Um, and I’ll, you know, I need to pull that togeth­er [00:52:00] and present it at
[00:52:00] Tony: some stage. It’s been going for a while now. Um,
[00:52:04] Tony: but yeah, I think, I think you could, you could be right, Phil, for the moment.
[00:52:08] Tony: Um, I think tra­di­tion­al­ly in the past though, we have seen the oth­er met­rics on the QAV check­list had a big
[00:52:14] Tony: impact, um, on the, on the scores.
[00:52:17] Tony: Uh, might just be the sort of
[00:52:18] Tony: mar­ket we’re in at the moment that they’re being played down a bit.
[00:52:23] Cameron: Well, my ques­tion when I read this, Tony,
[00:52:27] Cameron: was that, let me start again. I, the way I thought about it was that, well, the, the QAV score, Sure­ly does have a lev­el of impor­tance. Like if we, if we took away the cut­off and we were buy­ing things with a neg­a­tive QAV score, sure­ly that would make a dif­fer­ence in the­o­ry to the per­for­mance.
[00:52:54] Cameron: I mean, I know that you came up with 0. 1 as a cut­off orig­i­nal­ly, just [00:53:00] because, you know, you, you, you felt like that was giv­ing you enough. that you need­ed to play with was sort of an arbi­trary cut­off.
[00:53:07] Tony: hmm.
[00:53:08] Cameron: The QAV score is based in part on the qual­i­ty score and the qual­i­ty score is mea­sur­ing the com­pa­ny’s qual­i­ty in a whole bunch of met­rics that we look at.
[00:53:20] Cameron: So the low­er the qual­i­ty score, the low­er the QAV score. The low­er the QAV score, the less good, it’s my Bund­aberg edu­ca­tion com­ing through there, the less suc­cess­ful the busi­ness is in terms of its abil­i­ty to gen­er­ate cash and its per­for­mance over time and all of those met­rics that we eval­u­at­ed at.
[00:53:45] Cameron: I would say that the QAV score does dif­fer­en­ti­ate returns.
[00:53:51] Cameron: What your report that we cov­ered last week was look­ing at was whether or not there’s a big dif­fer­ence between a 0. 1 cut­off and a 0. 2 cut­off, but [00:54:00] that does­n’t say to me that the QAV scores don’t mat­ter. I
[00:54:04] Cameron: think they do mat­ter, it’s just the cut­off
[00:54:07] Cameron: that is a lit­tle bit arbi­trary.
[00:54:09] Tony: Yes. I agree whole­heart­ed­ly with that assess­ment. Um, the risk, the research we did recent­ly was to see whether you were more suc­cess­ful from buy­ing from the bot­tom of the buy list than the top of the buy list, which was, um, it was­n’t even a test of whether 1 was a bet­ter score. It was just that. Uh, and, and it did­n’t have a big dif­fer­ence in those results.
[00:54:29] Tony: And that’s been my expe­ri­ence too over time, but you’re right. Um, Inter­est­ing­ly, and look, there’s research that backs up the fact that val­ue invest­ing works bet­ter than growth invest­ing and oth­er types of invest­ing. I think we had, um, the Stock­o­pe­dia guy on who said some­thing sim­i­lar, but there were only three things that they’d found that out­per­formed.
[00:54:47] Tony: One was growth, one was momen­tum, and one was qual­i­ty, which is the three stool, three legs to the QAV stool. So, um, that’s cer­tain­ly been my expe­ri­ence as well. How­ev­er, hav­ing said that, if [00:55:00] you, if you took, if you look at the QAV Lists that we pro­duce and we have stocks. That go well below the QAB cut­off on the list.
[00:55:08] Tony: You can still find stocks that do well with a poor score, and that’s because you know, they’re growth stocks and peo­ple are buy­ing into them based on the sto­ry or their prospects or what­ev­er else they wan­na get into. So it’s not like you should buy the high­est thing on the QAV, buy a list and short the low­est thing they both can win.
[00:55:26] Tony: But over time, and I did this, remem­ber we talked about this ear­ly on in QAB, I did a, a reverse QAB port­fo­lio and put togeth­er a, a port­fo­lio based on. Very, um, low and neg­a­tive QAV scores, so the way at the bot­tom of our down­load, um, and they per­formed well for a time, but as soon as inter­est rates start­ed to rise, they crashed, um, because they were gross stocks, right?
[00:55:49] Tony: And they were all, they were all based on peo­ple being able to have access to easy mon­ey to invest in a spec­u­la­tive stock. So, and that’s been my expe­ri­ence. Some­times growth out­per­forms val­ue, but val­ue in the [00:56:00] long run does bet­ter than growth. And if you accept that, then you’ve got to try and quan­ti­fy that.
[00:56:06] Tony: And that’s the oth­er. The thing I like about QAV is I don’t have to go through and per­son­al­ly ana­lyze the busi­ness prospects for every stock on the ASX, I can fil­ter it and then put a score against things and then, and then stack rank it and look at the, look at the ones at the top of our list. So, yeah, so, um, I think, I think Phil’s right and I think you’re
[00:56:27] Tony: right.
[00:56:27] Tony: We are bet­ter off buy­ing from the buy list end of the QAV rank­ing, but whether it’s 0. 1 or 0. 2 does­n’t seem to
[00:56:34] Tony: make a whole lot of
[00:56:35] Tony: dif­fer­ence. But I think it does to be a val­ue
[00:56:37] Tony: investor over
[00:56:38] Tony: time.
[00:56:41] Cameron: Because it’s help­ing us iden­ti­fy the com­pa­nies that have got a, what we would call a sol­id busi­ness in a,
[00:56:49] Cameron: tra­di­tion­al sense.
[00:56:51] Tony: that’s tra­di­tion­al­ly,
[00:56:52] Tony: that’s what hap­pens in the stock mar­ket. The bor­ing busi­ness­es get over­looked until there’s a reces­sion or a crunch and then sud­den­ly they’re [00:57:00] like
[00:57:00] Tony: gold. Any­one that’s mak­ing mon­ey is then high­ly sought after and then they, every­one rush­es to
[00:57:05] Tony: them. So If you buy them when they’re out of favour and wait for them to get into
[00:57:09] Tony: favour, it’s
[00:57:10] Tony: a
[00:57:10] Tony: good way
[00:57:10] Tony: to make mon­ey.
[00:57:12] Cameron: Yeah. Like you’ve said, and I quote this all the time when I’m try­ing to explain QAV to peo­ple. Basi­cal­ly all the sys­tem does is it iden­ti­fies the com­pa­ny, they’ve got a good track record of being well run, but also tells us when we can buy them at a dis­count.
[00:57:27] Cameron: An intrin­sic val­u­a­tion mea­sure­ment,
[00:57:29] Tony: Yeah, cor­rect.
[00:57:31] Cameron: and then it tells us when to sell.
[00:57:33] Tony: Yeah, which is impor­tant
[00:57:35] Cameron: part of it. Yeah,
[00:57:36] Tony: Most, most peo­ple who
[00:57:37] Tony: offer any sort of finan­cial advice tell you when to buy, but don’t say a thing
[00:57:41] Tony: about
[00:57:41] Tony: sell­ing.
[00:57:43] Cameron: Yes. Yeah, that’s sort of the, the oth­er key part of it.
[00:57:47] Tony: Yeah, or they
[00:57:48] Tony: adopt rebal­anc­ing
[00:57:49] Tony: strate­gies, which I’m not a fan of either.
[00:57:52] Cameron: Mm. Um, thank you
[00:57:56] Tony: Thank you, Phil.
[00:57:57] Cameron: DJG­Phil. [00:58:00] Um, and to the, the love­ly Alex
[00:58:03] Cameron: for read­ing the ques­tion,
[00:58:06] Cameron: how’s my paint­ing com­ing along? Alex, where’s it at?
[00:58:09] Alex: peasy.
[00:58:09] Cameron: Gimme a per­cent­age. What per­cent­age?
[00:58:12] Alex: 70%.
[00:58:15] Cameron: Okay. Do I have to, if I applied the
[00:58:17] Cameron: QAV check­list over it, what score to get? Is it qual­i­ty
[00:58:23] Cameron: and am I get­ting it at a good price?
[00:58:26] Alex: It’s qual­i­ty And val­ue.
[00:58:29] Tony: In about 10 years time when
[00:58:31] Cameron: when you are, when you are
[00:58:32] Tony: for a mil­lion dol­lars, Yeah,
[00:58:33] Cameron: Yeah. Yeah, yeah. Love­ly.
[00:58:37] Alex: We’ll
[00:58:38] Cameron: All right. Thank you, Alex. Thanks. Have a great week.
[00:58:42] Alex: No
[00:58:43] Tony: Bye, Al.
[00:58:43] Alex: See ya.
[00:58:45] Cameron: Don’t for­get to drop that file in the, uh, file thing for me when you can.
[00:58:50] Cameron: It’s episode
[00:58:51] Alex: Yep. Easy.
[00:58:52] Cameron: it’s in the, uh, Google Dri­ve fold­er, so you can do it when­ev­er you’re ready.
[00:58:56] Cameron: Thank you.
[00:58:57] Cameron: Bye.
[00:58:59] Alex: Thank you.[00:59:00]
[00:59:02] Cameron: All right. Well, let’s get into ques­tion
[00:59:06] Cameron: time.
[00:59:07] Tony: Good ones this week.
[00:59:10] Cameron: Next ques­tion is from Matt. Uh, it’s not real­ly a ques­tion, Matt, but it’s an arti­cle. I thought to share this arti­cle as poten­tial mate­r­i­al for an upcom­ing pod.
[00:59:22] Cameron: This is an arti­cle from Livewire. 23 ASX200 stocks trade at sin­gle dig­it PEs, but only six are pro­ject­ed to grow earn­ings. This is dat­ed the 28th of Novem­ber.
[00:59:35] Cameron: Since the last update, the
[00:59:36] Cameron: list of sin­gle dig­it PE stocks has shrunk from 26 to 23, this is by Hans Lee. He says, there is a pat­tern devel­op­ing in our ongo­ing series look­ing at con­stituents of the ASX200, which have trail­ing price to earn­ings ratios of under 10, while the ASX bare­ly moved in the two months since the last update.
[00:59:56] Cameron: date, it was up 0. 1%. [01:00:00] Four stocks have seen their respec­tive PEs move into dou­ble dig­its, all of them for var­i­ous rea­sons. And if you thought pure­ly invest­ing in the index has been dis­ap­point­ing this year, the one year share price per­for­mance of the stocks on this list may trump even that. Of the 23 names on the list, just three have record­ed gains over the past 12 months.
[01:00:22] Cameron: Not this is, not that this has deterred the sell side com­mu­ni­ty from con­tin­u­ing to price in sig­nif­i­cant upside for some of these stocks head­ed, head­ing into 2024 and beyond. In this piece, we’ll look at the cur­rent sin­gle dig­it PE list and uncov­er some inter­est­ing insights about what’s in it. And
[01:00:37] Cameron: in some cas­es, what isn’t in it.
[01:00:39] Cameron: Did you have a look through this list, Tony, and some famil­iar names on this
[01:00:43] Tony: Yeah, well some of
[01:00:44] Tony: the names on the list are on our buy list and that makes sense giv­en that they’re low PE
[01:00:47] Tony: stocks. Look, it’s, it’s an inter­est­ing arti­cle and good food for thought. If I go through some of the Some of the names on this list that are on our buy list, or have been on our buy list, Cred­it Corp is [01:01:00] there, and their fore­cast earn­ings per share growth is neg­a­tive 6%, Blue Scope Steel is on this list, their fore­cast earn­ings per share growth is minus 18%, San­tos is minus 18%.
[01:01:12] Tony: Beach Ener­gy is plus 1%, Coro­n­a­do Glob­al minus 32%, Grain Corp minus 53%, etc, etc, etc. So I think the trend is pret­ty clear that these stocks are prob­a­bly trad­ing on low PE ratios, which means their share prices are depressed because their fore­cast earn­ings growth isn’t great. Um, what does that mean for us?
[01:01:36] Tony: Um, yeah, poten­tial­ly I’d have to do a lot of research on this, but poten­tial­ly we should be putting more weight on the fore­cast. Earn­ings per share growth met­ric that we use, the growth over P. E. one, um, because a lot of these stocks. Uh, are ones that I’ve owned and they haven’t done well, so that could be a dri­ving force for it.
[01:01:55] Tony: Um, I guess my expe­ri­ence to date has been that it’s one of, it’s only been [01:02:00] one of the things in the mix, and that if the mar­ket is, is depress­ing a stock because of its, um, It’s earn­ings per share fore­cast not being great, that makes it cheap­er for us to buy, and if it scores well on all the oth­er met­rics and there’s still a bit of momen­tum for it, then it’s worth buy­ing.
[01:02:16] Tony: Um, I think that still prob­a­bly holds, because some of these stocks I’ve read out have neg­a­tive sen­ti­ments, so we’re not going to buy them any­way, so we’re kind of, we’re kind of pro­tect­ed against that. Um, sort of, um, mis­take, if you will, uh, buy that. The oth­er thing, oth­er com­ment I’d make is that fore­cast­ing earn­ings per share is nev­er an exact sci­ence.
[01:02:36] Tony: And then I’ve seen plen­ty of cas­es where, you know, at the first sign of an inter­est rate cut, or the first sign of the econ­o­my improv­ing or infla­tion drop­ping, some of these com­pa­nies will sud­den­ly have pos­i­tive fore­cast earn­ings. So that’s going to be an issue too. And if we haven’t bought them by then, we miss out on the jump.
[01:02:51] Tony: So that’s anoth­er issue, but yeah, look, I think it’s worth­while per­haps me tak­ing this offline and doing a bit more research into fore­cast earn­ings per share [01:03:00] and whether we’re giv­ing it enough rate in the
[01:03:01] Tony: check­list, um, enough rate, enough of a rat­ing or enough
[01:03:04] Tony: weight
[01:03:05] Tony: in the check­list because of that so I think it’s good
[01:03:07] Tony: insight.
[01:03:09] Cameron: Is that a met­ric that any of the interns have looked at in their analy­sis over the last
[01:03:14] Tony: Yeah, Dylan did. He tried to look at all of the met­rics and see what the weight­ing should be. And he thought the two biggest dri­vers for share per­for­mance, or the two biggest cor­re­la­tors to share per­for­mance was Prop­Caf and con­sis­tent­ly increas­ing equi­ty. So, but I think, I think what I need to do is to take a few of them like those two and per­haps this one as well and just cre­ate port­fo­lios to go for­ward with and see how a port­fo­lio of stocks that has a good fore­cast earn­ings per share or the top 10 or 20 shares with the high­est fore­cast earn­ings per share on the buy list, how they com­pare to The dum­my port­fo­lio and the STW, um, going for­ward and for a cou­ple of the oth­er met­rics as well.
[01:03:58] Tony: And just, you know, [01:04:00] see if we can rebal­ance the scor­ing to reflect that if we need to. I mean, it’s always been the case that, that, um, tra­di­tion­al­ly share mar­ket investors, and I’m talk­ing about the fund, big fund man­agers here, focus on the future, focus on the
[01:04:14] Tony: fore­cast earn­ings. They want com­pa­nies that are grow­ing their earn­ings because they’ll be worth more in the future.
[01:04:21] Tony: For sure, that’s why, that’s why growth stocks are a thing. That’s why, um, peo­ple do that, but it’s always been such a hard thing to do to fore­cast earn­ings. And we speak about this a lot, that there’s no crys­tal ball in invest­ing and all it takes is for, um, an inter­est rate change to affect the econ­o­my before all the fore­casts are almost worth­less.
[01:04:39] Tony: So it is a hard thing to do. And I think that’s why I’ve always favored, as you said before, buy­ing
[01:04:44] Tony: qual­i­ty com­pa­nies at a decent
[01:04:46] Tony: price, let the fore­cast, you know, work itself out over time.
[01:04:50] Cameron: Hmm. I mean, we do score it, but it’s
[01:04:53] Cameron: only one out of 20
[01:04:56] Tony: Yeah. Well, it’s actu­al­ly two. I think if you
[01:04:58] Tony: get a, if you’re above the 1. [01:05:00] 5, I think it’s a, it’s a dou­ble
[01:05:01] Tony: score, but
[01:05:02] Tony: yeah,
[01:05:03] Cameron: Well, I mean, it’s just, it’s one
[01:05:05] Tony: one met­ric. Yeah. Yeah.
[01:05:06] Tony: Cor­rect.
[01:05:08] Cameron: We don’t like ignore it, but we
[01:05:11] Cameron: don’t
[01:05:12] Tony: Hmm.
[01:05:13] Cameron: give it a huge amount of weight
[01:05:15] Tony: Yeah. And look, it’s what it’s been on the list for a long time to get some­one to research it for me, but I think I’m after going through. Hir­ing researchers, as good as they are, I’ve done it twice now, the, the find­ings aren’t that con­clu­sive. And so I think, um, anoth­er way of doing it is to set up paper port­fo­lios and see and try and iso­late a par­tic­u­lar fac­tor and see how they go going for­ward and adjust the weight­ings in the, um, in the,
[01:05:41] Tony: in the score, the check­list to, um, to
[01:05:43] Tony: accom­mo­date what we find.
[01:05:45] Cameron: Hmm. All right. Good, uh, good, um, sug­ges­tion, Matt. Thank you for, uh, that con­tri­bu­tion. The only oth­er ques­tion I’ve got this week is from Jor­dan. He [01:06:00] says, uh, he’s got a ques­tion about direc­tor loans. I’ve owned Vysan, V Y S, Vysan, Vysan, don’t know how that’s pro­nounced, for near­ly a year now. It’s tripled in price, basi­cal­ly the only rea­son I’m break­ing even.
[01:06:15] Cameron: I noticed in their lat­est AGM it was approved to give the man­ag­ing direc­tor an inter­est free 750, 000 loan. to exer­cise 10 mil­lion stock incen­tive options, option price 7. 5 cents ver­sus today’s 26 cents of the shares. Visan is say­ing that it is ben­e­fi­cial and aligns the man­ag­ing direc­tor’s inter­ests with that of the com­pa­ny.
[01:06:41] Cameron: Oh, I bet it does. But it is tak­ing the 750, 000 out of the busi­ness until the loan is repaid and dilut­ing the oth­er share­hold­ers by an aggre­gate. of 2.
[01:06:52] Cameron: 4%. I was just won­der­ing what Tony’s thoughts are on sit­u­a­tions like this. Thanks Jor­dan.
[01:06:59] Tony: Yeah, thanks, Jor­dan. [01:07:00] I’m not famil­iar with
[01:07:00] Tony: BISAN or this par­tic­u­lar issue at BISAN,
[01:07:04] Tony: so I guess I’ll lim­it my com­ments to sort of gen­er­al­i­ties on this, but I’m not a fan of lend­ing man­age­ment mon­ey to exer­cise options, um, that, that, can cre­ate long term prob­lems and the best exam­ple of those long term prob­lems is prob­a­bly what I can think of is Mag­el­lan Finan­cial, who loaned a lot of staff, um, mon­ey to, um, to punt the shares.
[01:07:28] Tony: And then when the share price tanked, uh, the staff were very demo­ti­vat­ed because they fin­ished up, uh, hav­ing no lit­tle asset, but owing the com­pa­ny a lot of loan repay­ment and prob­a­bly could­n’t even repay it. So, um, even­tu­al­ly Mag­el­lan’s worked out a deal where they’re basi­cal­ly fore­go­ing the loans. And, um, I think that’s always the risk in these sit­u­a­tions and poten­tial­ly is a risk com­ing in the future for Vysant, but, um.
[01:07:55] Tony: I mean, first, the first ques­tion I’ve got is if the per­son has options, why can’t they [01:08:00] exer­cise them, sell what they need to and keep the rest? I mean, it’s, it’s been an issue with, with options that there’s a tax lia­bil­i­ty attached to them. So you often see CEOs of a com­pa­ny, um, sell shares. Um, at the appro­pri­ate time, usu­al­ly around AGM sea­son, and, uh, and they get asked, why did you sell shares in the com­pa­ny?
[01:08:19] Tony: If you, don’t you val­ue it, or don’t you think it’s got good, good prospects? And invari­ably it’s to pay their tax bills because the options have, have worked out well for them. They’ve gone up in vol­ume and they’ve got a tax bill for it, but they, so they can’t hold onto the shares. Um, Or, or, or they can’t fund a tax bill from their nor­mal incomes or oth­er incomes.
[01:08:38] Tony: So they invari­ably sell some of the, the exer­cise the options, con­vert them into shares, sell some of the shares to pay the tax off, and then keep the rest. And I can’t see why that would­n’t be the case if it’s good enough for the, you know, see the Cap­tains of indus­try and the big A SX top 20 com­pa­nies to do it that way.
[01:08:54] Tony: I can’t see why the CEO of <INAUDIBLE> can’t do it that way. And addi­tion­al­ly, the way that com­pa­nies, you [01:09:00] know, usu­al­ly sort this prob­lem out is, is they, um. The CEO, um, exer­cis­es his options or her options, sells what­ev­er shares they need to to cov­er their lia­bil­i­ties from a tax point of view, keeps the rest, and then gets anoth­er option, um, pack­age from the com­pa­ny going for­ward.
[01:09:18] Tony: So they still have an incen­tive for those options to do well and their, and their, their, um, behav­ior is aligned with the ben­e­fits of the com­pa­ny. So this is a very strange case, I think. Um, good for Jor­dan to call it out. I don’t like it myself. Um, and would vote against the REM report if I own the shares or sell them.
[01:09:39] Tony: Because I very, very rarely get to the stage of vot­ing at the AGM. I’ve
[01:09:42] Tony: usu­al­ly made
[01:09:43] Tony: my mind up before then and got­ten out. Yeah.
[01:09:48] Cameron: All right. Thank you, Tony. Thank you, Jor­dan. By the way, I did post a poll on our Face­book group about PRN, a cou­ple of peo­ple have respond­ed, but most of them have respond­ed say­ing they don’t own it.
[01:09:59] Tony: Okay. [01:10:00]
[01:10:00] Cameron: One per­son said that they, uh, owned it, but haven’t sold it because they don’t fol­low the rules.
[01:10:08] Cameron: Well, that was the way I phrased the ques­tion.
[01:10:11] Cameron: Uh, the options are, I sold it Mon­day, I sold it Tues­day, I own it but haven’t sold it because I don’t fol­low the rules, and I don’t own it. Most peo­ple who vot­ed don’t own it. One per­son said they haven’t sold it yet, and one per­son said they sold it on Tues­day, which was me.
[01:10:28] Tony: Oh, okay. There you
[01:10:28] Tony: go.
[01:10:29] Cameron: that’s it, that’s all we’ve got so far, but go up to,
[01:10:33] Cameron: so this is a post on Tues­day,
[01:10:35] Cameron: I’ll pin it actu­al­ly to the top of the QAV Club group on Face­book if you would­n’t mind fill­ing that out, most­ly if you’re a PRN.
[01:10:46] Cameron: Own­er,
[01:10:46] Cameron: um,
[01:10:47] Cameron: it’s not real­ly that rel­e­vant. Actu­al­ly got two votes now for own­er, but haven’t sold it because I don’t fol­low the rules.
[01:10:52] Cameron: So
[01:10:53] Tony: Is that right? Well, there you go. See,
[01:10:55] Tony: we’re, we’re try­ing to
[01:10:56] Tony: frame our, our deci­sions based on peo­ple fol­low­ing the rules, and we should­n’t know [01:11:00] bet­ter about human nature, should­n’t we?
[01:11:02] Cameron: Should know bet­ter than QAV club mem­bers. They’re like, ah, rules
[01:11:05] Cameron: are for pussies. Rules schmools and fol­low the rules. Well, good for you. Um, I hope it, I hope it works out well for you. Let’s see. Where’s PRN
[01:11:18] Cameron: right now? Uh, down to a dol­lar two. That’s bet­ter than a Dol­lar.
[01:11:24] Tony: there’ll be a ques­tion in six months time. What do you
[01:11:26] Tony: do if you hold
[01:11:26] Tony: on to a com­pa­ny that’s
[01:11:27] Tony: gone past its three point trend sell line? Should I sell it now
[01:11:31] Tony: or buy, buy more?
[01:11:33] Cameron: Well, actu­al­ly, uh, Nick, one
[01:11:35] Cameron: of our club mem­bers did,
[01:11:38] Cameron: uh, leave a com­ment on this. He said GRR tanked a day or so after the three point Trend­line, sell point the oth­er week, and saw an unusu­al­ly high sell vol­ume. I did­n’t sell, because I don’t fol­low the rules. I saw the out­sized sell vol­umes, com­mod­i­ty price was still okay, and I was already down, so decid­ed to hold and see [01:12:00] if it recov­ered, so far it is.
[01:12:02] Tony: Okay.
[01:12:03] Cameron: But, um, I don’t know when he, when he’s look­ing at because, uh, you know, a month ago it was trad­ing at 52 cents and now it’s trad­ing at 39 and a half cents. So not exact­ly sure what peri­od, maybe it was on the 6th of Decem­ber, it was down as low as 38 and a half. Then it crept back up to 42, but now it’s down to 39.
[01:12:27] Cameron: So when did I sell it? Uh, let me see, sold it on the 6th. No, that’s when I bought it. Uh, when did I sell it?
[01:12:42] Cameron: Like trades.
[01:12:48] Cameron: Yeah. G
[01:12:54] Cameron: uh, sold it on the 27th of Novem­ber, [01:13:00] so that was just like a week or so ago. 27th of Novem­ber. 27th of Novem­ber was trad­ing, uh, down at 42 cents, rough­ly when I sold it. It’s now down at 39. So I’m glad I got out of it when I did, but who knows. Yeah. And I, and I did that study, um, a few weeks ago where I went through all the light cells over 18 months
[01:13:22] Cameron: and sell­ing it as not ben­e­fit us, but has­n’t hurt
[01:13:27] Cameron: us
[01:13:29] Tony: So it’s an insur­ance pol­i­cy. Yeah. Well, the oth­er one too that I was look­ing at over the
[01:13:35] Tony: last cou­ple of days is CCP, which is still below its Sell price, but it has been kick­ing up late­ly. So I kind of sus­pect­ed it would. It’s, it’s done this before where it gets sold, sold down heav­i­ly based on them always under promis­ing and over deliv­er­ing.
[01:13:53] Tony: And it sort of then slow­ly works its way up, but it’s still a fair way below a buy, but,
[01:13:58] Tony: um, I have been
[01:13:59] Tony: watch­ing
[01:13:59] Tony: it late­ly. [01:14:00] It’s been doing well.
[01:14:01] Cameron: Yeah, It’s very cycli­cal. I know when I’ve looked at it before, it seems to be a very cycli­cal stock.
[01:14:08] Cameron: Well, let’s get into After Hours, TK. Tell us more about your char­i­ty day.
[01:14:12] Tony: Yeah, it was, it was a golf­ing trip. So last Mon­day, Tues­day, Wednes­day, we went to Penin­su­la Kingswood, which, um, so the his­to­ry behind it, it was two sep­a­rate golf cours­es. I played Penin­su­la maybe 20 years ago. It was a nice course at the bot­tom of the sand­belt, um, 36 holes. Very tra­di­tion­al course, lots of trees, um, but they merged with Kingswood, sold off the golf course to a land devel­op­er and pock­et­ed a large sum of mon­ey and have done up King, uh, Penin­su­la.
[01:14:41] Tony: So it’s got 36 holes, top, top rate, top rat­ed golf cours­es now, um, fan­tas­tic facil­i­ties, good accom­mo­da­tion, restau­rants, all the rest of it. So we had a good two days there, tough golf cours­es though, so I did­n’t play that well. Um, great cou­ple of days there and then we [01:15:00] go to, uh. Wood­lands for the third day, which we do every year.
[01:15:04] Tony: We gen­er­al­ly pay, you know, two of the top rat­ed cours­es Mon­day, Tues­day, and then go to Wood­lands, which is also a very good course, and play there Thurs­day and this mod­i­fied Ambrose scram­ble and raise mon­ey for char­i­ty. So, um, we haven’t done well in the past for that, but we man­aged to win it this year.
[01:15:19] Tony: So that was good. We, you know, it’s a char­i­ty. So we got, I think we got back­packs as a prize and three golf balls. It was­n’t, we did­n’t win much, but we do get to play in the final next year, which is an event that I won with a mate a cou­ple of years ago and we flew to Fiji as our prize. So, um, if only it could be as good as that next year in Novem­ber, when we go and play in
[01:15:39] Tony: the char­i­ty chal­lenge final, but it was good fun.
[01:15:43] Tony: Good
[01:15:43] Tony: day. Good peo­ple.
[01:15:45] Cameron: So I’ve been wait­ing to talk to you to ask you who John Rahm is and why it
[01:15:51] Cameron: mat­ters that he’s joined LIV.
[01:15:54] Tony: Yeah, so, um, this is, this is like, what’s hap­pen­ing in golf is like what hap­pened when Ker­ry [01:16:00] Pack­er start­ed up World Series Crick­et. So there’s a break­away group being fund­ed by lots of,
[01:16:05] Tony: um, mon­ey entice­ments to golfers from the tra­di­tion­al PGA tours to come across and
[01:16:10] Tony: play
[01:16:10] Tony: live, which is backed by the Sau­di, yep, Sau­di
[01:16:14] Tony: mon­ey.
[01:16:15] Cameron: We’ve talked about it before, I think,
[01:16:16] Tony: yeah.
[01:16:16] Tony: and so, uh,
[01:16:19] Tony: I guess maybe six months or so ago, uh, any­way, a lit­tle while ago, right. Um, It looked like Liv and the PGA signed, well Liv and the PGA signed an MOU about work­ing togeth­er in the future because it was, um, it was hurt­ing the PGA, it was cost­ing them lots of mon­ey to, um, in lawyers fees because they were, they were suing Liv and Liv was suing them and some of the play­ers were suing.
[01:16:42] Tony: PGA. And it was get­ting expen­sive. Plus, as lots of good play­ers were enticed across to live with lots of, which with very high mon­ey con­tracts. And we’re talk­ing, I think, Cameron Smith, who’s an Aus­tralian golfer who won the British Open. Uh, he was paid 120 or 140 mil­lion or some­thing sim­i­lar to go across [01:17:00] to live.
[01:17:01] Tony: And live’s attrac­tive any­way, because they play, they play a low­er num­ber of tour­na­ments per year, and they play 54 holes, which is why they called it LIV, which is Roman for LIV, 54, rather than the four day 72 hole tour­na­ments that the PGA plays. And there’s been snip­ing at each oth­er for a long time. We all thought it was going to end, and they’re all going to sit down at the end of this year and work out a way of Um, liv­ing togeth­er, going for­ward, and then lo and behold, I think world num­ber two, John Rahm, has just been poached for reput­ed­ly 500 mil­lion to join the Live Tour from the PGA Tour.
[01:17:39] Tony: So, um, it looks like Live are, um, back with their mon­ey poach­ing peo­ple, and it’s got to be a tip­ping point soon. Um, there’s rumors going around that there are anoth­er three or four or five play­ers who are Being enticed with large sums to play for live. The PGA is going to find it dif­fi­cult to con­tin­ue with less, uh, less qual­i­ty play­ers, [01:18:00] uh, and they’re also try­ing to charge their spon­sors more mon­ey to com­bat the amount that lives pain.
[01:18:05] Tony: Uh, it’s called a break­down at some stage. So it’s, it’s very inter­est­ing to watch and, um. Yeah, end­less­ly fas­ci­nat­ing as to who’s going to win, but it’s exact­ly like World Series Crick­et. And if peo­ple remem­ber back to that, if they’re as old as me, the Aus­tralian team or the Aus­tralian crick­et­ing, um, tra­di­tion­al, uh, um, orga­ni­za­tion did­n’t fare very well.
[01:18:28] Tony: And World Series Crick­et went from strength to strength. And when they even­tu­al­ly got back togeth­er, it was basi­cal­ly on WSC terms, not the, um, not the Aus­tralian crick­et terms, even though. Yeah, there was some mend­ing of bridges, but they still had to allow one day tour­na­ments
[01:18:42] Tony: and colour­ful, um, out­fits and all that
[01:18:46] Tony: kind of stuff that Ker­ry Packard
[01:18:47] Tony: pio­neered.
[01:18:50] Cameron: I see there’s, um, the 10 year old, uh, minis­eries about that is, uh, stream­ing on Net­flix at the moment. How’s that? [01:19:00] The, uh, Ker­ry, Ker­ry Pack­er’s War. I’ve nev­er seen it, but it’s got a rea­son­ably good rat­ing on IMDB. I was think­ing about, uh, giv­ing it a look at some point if I run out of things to watch,
[01:19:11] Cameron: because I know, I remem­ber a lit­tle bit about the sto­ry, but I haven’t
[01:19:14] Cameron: you know, I haven’t revis­it­ed it for a long time.
[01:19:17] Cameron: Cameron Smith, by the way.
[01:19:18] Cameron: Yeah, go.
[01:19:20] Tony: was going to say it’s a great sto­ry, Ker­ry Pack­er worked out that it was cheap­er to
[01:19:23] Tony: tele­vise live sport than it was to pay Hol­ly­wood for sit­coms or movies. The sort of cost per broad­cast hour was way high­er for a pack­aged, um, prod­uct that was bought from Hol­ly­wood than to put a van, a cou­ple of cam­era­men at a crick­et ground.
[01:19:40] Tony: And that’s why he pio­neered, um, the, uh, you know, tele­vis­ing out­side broad­cast from crick­et. Um, and, uh, when he could­n’t get his own way to do every­thing he want­ed, he just, he sent plays into the dress­ing rooms with. brown paper bags full of mon­ey and tap peo­ple on the shoul­ders and said come and play for me and on [01:20:00] one day they all defect­ed and went across and played crick­et for Ker­ry and it was called a paja­ma game because he tried to jazz it up by putting dif­fer­ent coun­tries in dif­fer­ent col­ored uni­forms where­as tra­di­tion­al­ly they always always been in white and he pio­neered day night match­es which had­n’t been a thing before that and he pio­neered one day crick­et which is still around so um Yeah, uh, he got what he want basi­cal­ly in the end.
[01:20:22] Tony: The Aus­tralian crick­et board was on its knees. They tried to field sides, um, with­out the Wall Street crick­et play­ers, which were always the best play­ers. Uh, and they, they lost test match after test match after test match and, and, uh, even­tu­al­ly had to, um, capit­u­late and try and bro­ker a
[01:20:39] Tony: deal. Because they always start off real­ly haughty, you know, we’re the tra­di­tion­al game and And the Wall Street Crick­eters won’t be able to play in the Ash­es Test for Eng­land, and the WSC play­ers all cried until their beer.
[01:20:50] Tony: They just loved it. They were
[01:20:51] Tony: get­ting paid so much, they did­n’t care. They had to work one day rather than five
[01:20:55] Tony: days, so they loved it.
[01:20:57] Cameron: Yeah.
[01:20:58] Tony: Exact­ly the same as Lib. [01:21:00] And Lib’s head­ed up by Greg Nor­man,
[01:21:01] Tony: so he knows exact­ly what the Ker­ry Pack­er
[01:21:03] Tony: play­book is, because they were good
[01:21:04] Tony: mates.
[01:21:06] Cameron: Yeah. Right. Uh, Cameron Smith, I was just going to point out that we, he’s, the course that he grew up on, Won­ti­ma course is just up the road from our place. We dri­ve
[01:21:18] Cameron: past it on the way to Kung Fu every day. They’ve got a big sign still up, you know, con­grat­u­la­tions,
[01:21:25] Cameron: Cam Smith, Cameron Smith, what­ev­er. But yeah, appar­ent­ly he start­ed play­ing there when he was two years old.
[01:21:32] Tony: Wow.
[01:21:33] Cameron: So there you go, his dad was the, uh, uh, club cap­tain
[01:21:37] Tony: Mm hmm. Okay.
[01:21:40] Cameron: Well, what else have you got?
[01:21:43] Tony: No, that’s
[01:21:44] Cameron: watched any­thing?
[01:21:45] Cameron: that’s you?
[01:21:46] Tony: no,
[01:21:47] Tony: I don’t think so. We’ve just been, um,
[01:21:49] Tony: we’ve been play­ing golf
[01:21:50] Tony: and going to din­ner
[01:21:51] Tony: most nights and then trav­el­ing.
[01:21:53] Cameron: Yes.
[01:21:54] Tony: noth­ing
[01:21:54] Tony: new. Mm
[01:21:56] Cameron: Well, I have got some stuff. Uh, I’ve been [01:22:00] watch­ing The Roman­tics
[01:22:01] Cameron: on Net­flix. It’s a Net­flix, uh, doc­u­men­tary series on Bol­ly­wood.
[01:22:09] Cameron: Par­tic­u­lar­ly, uh, a father son direc­tor team, direc­tor pro­duc­er team, um, uh, Yash Chopra and his son Aditya Chopra, who, uh, sort of invent­ed mod­ern Bol­ly­wood. And uh, it’s full of Bol­ly­wood stars, and they’re going through the his­to­ry of Bol­ly­wood and Indi­an cin­e­ma, and how it, um, real­ly took off in the ear­ly 90s.
[01:22:36] Cameron: Uh, when there was this open­ing up of the Indi­an econ­o­my and they became more west­ern­ized and yeah, it’s fas­ci­nat­ing. You’re like, and I see Let­ter­man on his Net­flix series, uh, the late, my next guest, his lat­est guest is Shah Rukh Khan, who,
[01:22:52] Cameron: He’s basi­cal­ly, as, as he says, he’s often gets called the Tom Cruise of India.
[01:22:56] Cameron: Like he’s, uh, the biggest movie star, prob­a­bly [01:23:00] one of the biggest movie stars in the world, right? He and Jack­ie Chan are prob­a­bly the two actu­al biggest movie stars in the world. Any­way, it’s good.
[01:23:08] Cameron: Tony’s wav­ing to you. I don’t know if he can see you.
[01:23:10] Tony: Hi.
[01:23:12] Cameron: That’s fine.
[01:23:14] Tony: It’s Tues­day night already, is
[01:23:15] Tony: it? Is that the Scram­ble. posi­tion? Yeah.
[01:23:22] Cameron: else? Oh, well, um, I’m talk­ing to Markham tomor­row. Markham and I are doing a Napoleon show tomor­row. It’s our first pod­cast in,
[01:23:33] Cameron: well,
[01:23:34] Cameron: many years. I don’t know.
[01:23:37] Cameron: No, I’m still work­ing. You can’t just come in here. Get out.
[01:23:44] Cameron: Um.
[01:23:46] Cameron: Yeah, our first pod­cast in, I don’t know, 10 years. So that should be, that should be
[01:23:51] Cameron: fun.
[01:23:51] Tony: Yeah, well, say
[01:23:52] Tony: hi from me and from Jen­ny.
[01:23:54] Cameron: I will. He still is, um, bemoan­ing the fact that, [01:24:00] uh, you left Toron­to. Says he should have nev­er have let you go.
[01:24:03] Tony: Oh, I’m remind­ing it too. I love Toron­to. I would have stayed there
[01:24:06] Tony: end­less­ly. It’s a great
[01:24:07] Tony: place.
[01:24:08] Cameron: Yeah?
[01:24:09] Tony: Had good friends and every­thing there. Yeah.
[01:24:11] Cameron: I’ll let him know.
[01:24:12] Tony: Mm. Yeah.
[01:24:13] Tony: Mm
[01:24:14] Cameron: Uh, what else? Well, read­ing Char­lie got me into read­ing a book on prob­a­bil­i­ty. Like Char­lie, in one of his speech­es says there’s about a hun­dred mod­els that you need to under­stand to know how the world works. And the first one he talks about is prob­a­bil­i­ty the­o­ry. Need to under­stand prob­a­bil­i­ty the­o­ry.
[01:24:29] Cameron: And I was like, yeah, prob­a­bly don’t know as much
[01:24:32] Cameron: about that as I should. So I down­loaded a book called Intro­duc­tion to Prob­a­bil­i­ty that I’ve start­ed read­ing, which is fas­ci­nat­ing.
[01:24:38] Cameron: It’s one of those things that I’ve always want­ed to know more
[01:24:40] Cameron: about, you know, and it’s, um, and, and he actu­al­ly says in his speech, it’s
[01:24:45] Cameron: coun­ter­in­tu­itive. It’s one of those things that you don’t, you know, the way our brain, our brains don’t han­dle prob­a­bil­i­ty the­o­ry very well. And, uh, it’s, it’s good to have a, you know, a basic under­stand­ing of how to think about [01:25:00] those sorts of prob­lems. So I’m enjoy­ing that. I’m read­ing Agatha Christie’s first nov­el. The mys­te­ri­ous inci­dent at Stiles.
[01:25:09] Cameron: I’d real­ized I was talk­ing to my mum
[01:25:11] Cameron: about Agatha Christie’s dis­ap­pear­ance. You ever heard about the sto­ry where she dis­ap­peared for a cou­ple of weeks?
[01:25:17] Tony: Yeah, there’s either a movie or a
[01:25:19] Tony: series I
[01:25:19] Tony: watched last year about it.
[01:25:22] Cameron: Oh, real­ly? Oh, is it
[01:25:23] Cameron: good?
[01:25:23] Tony: Yeah, it was­n’t bad. Yeah, it
[01:25:24] Tony: was fine.
[01:25:27] Cameron: Well, we got, we got talk­ing about that and then I real­ized I’ve nev­er read an Agatha
[01:25:30] Cameron: Christie book in my life. So, um, yeah, I down­loaded her first one
[01:25:37] Cameron: and. I think it was writ­ten in like 1921 or some­thing like that.
[01:25:42] Cameron: And it holds up real­ly well. Like The Mys­te­ri­ous Affair at Stiles, released in 1920. It’s a real­ly riv­et­ing
[01:25:52] Cameron: read.
[01:25:52] Cameron: I’m, I’m like shocked. It’s near­ly a hun­dred. Well, it is over a
[01:25:55] Cameron: hun­dred years old
[01:25:57] Cameron: and it’s very
[01:25:59] Cameron: good.
[01:25:59] Cameron: I’m real­ly enjoy­ing [01:26:00] it. You ever read
[01:26:00] Cameron: any of her books?
[01:26:01] Tony: I can’t say I have.
[01:26:03] Cameron: Yeah, there you go.
[01:26:04] Tony: I’ll check it out. Yeah, good. I do like going back to those old clas­sics. I read a cou­ple of the, um, uh, George Sem­i­nay ones, the French detec­tive,
[01:26:14] Tony: um, Mar­guerite. Which were real­ly good, too. Again,
[01:26:17] Tony: very old, but well writ­ten. Yeah,
[01:26:21] Tony: yeah.
[01:26:21] Cameron: I’ve got Simonese in my back­ground. Maybe I’m relat­ed to him.
[01:26:25] Tony: Well, that reminds me, too, I think I guess the Christie’s dis­ap­pear­ance was a
[01:26:27] Tony: part of a Doc­tor Who episode as well, from mem­o­ry. They tried to tie it in that she went trav­el­ing with Doc­tor Who when she dis­ap­peared. And that’s what I have watched. We
[01:26:36] Tony: watched episode two
[01:26:36] Tony: and three of the lat­est series.
[01:26:39] Tony: Watched three last
[01:26:40] Tony: night. So
[01:26:41] Cameron: was­n’t, that was, it was crazy. It was absolute­ly bonkers. Bonkers
[01:26:46] Cameron: crazy. I love Shooty,
[01:26:48] Tony: too.
[01:26:49] Cameron: oh yeah, Neil Patrick Har­ris was just fan­tas­tic. He
[01:26:52] Cameron: was,
[01:26:53] Cameron: what a great role for him. But the whole bi gen­er­a­tion and Shooty Gat­wood com­ing out and Tenet fly­ing off in [01:27:00] his own TARDIS. I was like, what? What? That’s crazy, but
[01:27:05] Tony: they’re
[01:27:05] Tony: hav­ing fun.
[01:27:07] Cameron: I thought Shooty Gat­wood was, it was a good entrance. He’s, he’s He brings a dif­fer­ent
[01:27:11] Cameron: ener­gy
[01:27:12] Cameron: to the whole thing.
[01:27:14] Cameron: So, look­ing for­ward to see what they do with him, uh, come Christ­mas, Christ­mas Day.
[01:27:21] Tony: Yeah. That was good. I thought that was a bit sop­py at the end­ing when David
[01:27:24] Tony: Ten­nant, you know, found his
[01:27:25] Tony: fam­i­ly and this is what he’d been run­ning for for all his life and all this.
[01:27:29] Tony: But it was fun.
[01:27:31] Cameron: Yeah, I mean, how many David Ten­nants are there now with their own lives? Like, there was one that split off and he’s in an alter­nate
[01:27:37] Cameron: uni­verse with Rose and her fam­i­ly, this one’s in this uni­verse with Don­na and her fam­i­ly, and
[01:27:43] Cameron: then,
[01:27:44] Tony: of a nod to all those oth­er
[01:27:45] Tony: ones, was­n’t It
[01:27:47] Cameron: yeah, I don’t know, it’s a bit sop­py, but hey. It was fun and scary. Fox got a bit
[01:27:53] Tony: yeah,
[01:27:54] Tony: The start
[01:27:55] Tony: was very scary, was­n’t it? The chuck­les.
[01:27:57] Cameron: Stook­ie Bills, yeah, and all that [01:28:00] kind of stuff.
[01:28:03] Cameron: and
[01:28:03] Cameron: then some­body
[01:28:04] Tony: that’s clas­sic Doc­tor Who, that’s how I remem­ber it as a kid, being scared at the
[01:28:08] Tony: start of Doc­tor Who like that,
[01:28:10] Cameron: Yeah. yeah.
[01:28:11] Cameron: You should be scared. It should be scary. Rompy fun, I think, for kids. Yeah. Yeah.
[01:28:17] Cameron: Um, uh, what else? Oh, um, yeah, so Ray and I did our first show, Cae­sar show in a year last week where we, we stopped doing the Cae­sar show about a year ago. Last week was the 10 year anniver­sary of our first.
[01:28:36] Cameron: Cae­sar show.
[01:28:37] Cameron: So Ray and I have been doing shows pret­ty much every week for 10 years now. And, uh, we decid­ed to pick up the Rome sto­ry. Um, so we’d fin­ished a year ago with the death of Nero and we picked it up with the year of the four emper­ors last week, um, which is
[01:28:57] Cameron: A, uh, a rol­lick­ing good sto­ry. So it’s been a [01:29:00] lit­tle bit fun for me to slide back into ancient Rome and after tak­ing a break for a year to clear my head.
[01:29:08] Cameron: So
[01:29:08] Cameron: yeah. So that’s been fun.
[01:29:11] Cameron: Uh, uh, what else? Yeah. That’s enough. I’ve, I’ve had a
[01:29:15] Cameron: busy, busy, week of read­ing and watch­ing and, and, uh, my mum’s here.
[01:29:22] Cameron: She’s hav­ing a big surgery on
[01:29:24] Tony: Oh, Yeah, Good luck to
[01:29:25] Tony: that.
[01:29:26] Cameron: Be fun. Yeah. Thanks. Your eyes are doing
[01:29:28] Tony: they are. They’re real­ly good Thank you. Yep.
[01:29:33] Tony: All, All,
[01:29:34] Tony: good here.
[01:29:36] Cameron: that’s good. That’s the show. Nice to have you back, TK. Have a good week.
[01:29:41] Cameron: every­one.
[01:29:41] Cameron: Hap­py share mar­ket,
[01:29:42] Cameron: Tony.
[01:29:43] Tony: Yes, hap­py ASX and thanks for
[01:29:44] Tony: look­ing after the fort last week. I haven’t
[01:29:48] Tony: got­ten around
[01:29:48] Tony: to lis­ten­ing to it yet, but I will.
[01:29:50] Cameron: Well, thank Char­lie for his time­ly pass­ing, so I had some­thing to talk about.
[01:29:57] Tony: Yeah, well, valet Char­lie. what a life, what
[01:29:59] Tony: [01:30:00] a great
[01:30:00] Cameron: RIP, Char­lie. Yeah. Thank you,
[01:30:02] Cameron: Char­lie, for every­thing. Oh, well, we did­n’t talk about this, but no, sor­ry. What, like, what do you think is going to hap­pen? Some­body, uh, Brent, I think, uh, on the QAV club Face­book group in the chat room was like, maybe we should all go to the AGM next year.
[01:30:16] Cameron: We should do like a QAV par­ty bus trip. I’m like, what’s it going to be like, do you think, with­out Char­lie there. And sec­ond­ly, I mean, like you hear about all these old mar­ried cou­ples where one goes and then the oth­er goes weeks lat­er,
[01:30:34] Cameron: like, do you know, is either of them going to
[01:30:37] Cameron: be around by the time the next AGM comes
[01:30:40] Tony: Well, War­ren’s what, six years younger, so he’s got six more years, but I sus­pect it’ll be like COVID when Char­lie could­n’t turn up to the meet­ing and they had
[01:30:49] Tony: Greg,
[01:30:50] Tony: what’s his name, Greg some­body and, or Ajit Jain
[01:30:53] Tony: has a big­ger role to play in it.
[01:30:55] Cameron: Yeah, but It’s not
[01:30:56] Cameron: the
[01:30:57] Tony: It’s not the
[01:30:57] Tony: same. No, it won’t
[01:30:58] Cameron: those guys who [01:31:00] I’m sure they’re
[01:31:00] Cameron: very smart and capa­ble
[01:31:02] Cameron: man­agers, but they’re not
[01:31:04] Cameron: Char­lie.
[01:31:05] Tony: No.
[01:31:06] Cameron: Char­lie and War­ren are irre­place­able
[01:31:08] Cameron: in terms of their, their humor and wis­dom and all that kind of stuff. So yeah, I don’t know.
[01:31:14] Tony: I mean, that’s one of the rea­sons why I sold my Berk­shire Hath­away shares after I
[01:31:17] Tony: went to the AGM, because they, like, they, they were pret­ty old then, like, and you could see it, um, and I won­dered whether Berk­shire Hath­away
[01:31:24] Tony: would take a dive, that
[01:31:26] Tony: SharePrice would take a dive after they passed, but it has­n’t seemed to
[01:31:29] Tony: with Char­lie
[01:31:29] Tony: going.
[01:31:30] Tony: Um, maybe
[01:31:31] Cameron: Oh, I haven’t even looked.
[01:31:34] Cameron: Yeah, how’s the share price done since you sold it?
[01:31:37] Tony: Oh, one of the worst deci­sions of my life, I
[01:31:39] Tony: think.
[01:31:42] Cameron: What’s the, is it BSK their share price? Their share code? BRK.
[01:31:47] Cameron: Berk­shire
[01:31:50] Tony: Or BRKA,
[01:31:50] Cameron: BRKA. oof. What did you
[01:31:55] Cameron: sell it at?
[01:31:57] Tony: I’m gonna say some­where in the low
[01:31:58] Tony: 200s, 220 or [01:32:00] 230 US. Thou­sand? Hun­dred thou­sand?
[01:32:04] Cameron: 547, 000.
[01:32:07] Tony: Yeah.
[01:32:08] Tony: Yep, and that’s US dol­lars, so
[01:32:11] Tony: you can add, add 40 per­cent to that, con­vert­ing it back to Aus­tralian. Yeah. And I thought I’d done well, because I did, I’d made sort of 80
[01:32:19] Tony: per­cent or some­thing on
[01:32:21] Tony: the time I owned it.
[01:32:22] Tony: So that was about three
[01:32:23] Tony: years I think I owned
[01:32:24] Tony: it
[01:32:24] Tony: for.
[01:32:24] Tony: Yeah.
[01:32:26] Cameron: The share price has gone up since Char­lie died. I mean, it
[01:32:31] Cameron: went down for about a week. I think every­one was in mourn­ing and spiked back up today for
[01:32:37] Tony: Yeah, well, that’s the kind of reverse sit­u­a­tion is there’s there’s always been spec­u­la­tion when War­ren and Char­lie go
[01:32:43] Tony: that Berk­shire will get tak­en over and bro­ken up, it’s worth more as the sum of its parts are worth more than the whole. So, um, well, the sum of the parts is worth more than the whole.
[01:32:54] Tony: So that’s
[01:32:56] Tony: poten­tial­ly peo­ple are start­ing to posi­tion them­selves for that.
[01:32:58] Tony: I’m not sure. All
[01:32:59] Tony: [01:33:00] right.
[01:33:02] Cameron: Well, we’ll see. All right, TK, I’ll let you go. I know it’s hot there. You can see the sweat drip­ping off
[01:33:07] Cameron: you. No, I’m kid­ding.
[01:33:09] Tony: All right. Thanks, Cam. You too. Bye.