QAV Weekly Update 2023-12-27

QAV 651 Club
[00:00:00] Cameron: All right, wel­come back to the QAV.
[00:00:06] Cameron: Hap­py share mar­ket. Tony.
[00:00:08] Tony: Hap­py ASX Cam,
[00:00:10] Tony: and Mer­ry
[00:00:10] Tony: Christ­mas
[00:00:10] Tony: too. It’s com­ing up.
[00:00:12] Cameron: Mer­ry Christ­mas to you too. It’s, uh, it’s, it’s a mer­ry Christ­mas for the all ordi­nar­ies. Tony,
[00:00:18] Cameron: a look just before we went to air. It’s almost back at, its all time high. I think we’re about one and a half per­cent off the all time high, which hav­ing a quick look through my lit­tle chart on Yahoo Finance is about, I reck­on the end of August 2021, it hits 7826.
[00:00:40] Cameron: It’s cur­rent­ly at 7701 today, which is about one and a half per­cent below 7826.
[00:00:48] Cameron: So, that’s been a fun two and a half years.
[00:00:52] Tony: Well, we had a cou­ple of good years,
[00:00:54] Tony: and
[00:00:54] Tony: then we’ve had a cou­ple of side­ways
[00:00:55] Tony: years. So it’s it’s been the usu­al ride on the ASX, but it’d be a good [00:01:00] Christ­mas present if we got back to the, uh, the all
[00:01:02] Tony: time high.
[00:01:04] Cameron: Yeah,
[00:01:05] Tony: Yeah.
[00:01:06] Cameron: opened my notes. I was like, can we move on now? Are we done with that whole peri­od? Is that phase
[00:01:11] Tony: Well, I think the mar­ket thinks you can because I noticed that, uh, both STW and, um, AFI, the two sort of big mar­ket index­es, ETFs and LLCs, have both crossed over into buy line
[00:01:26] Tony: ter­ri­to­ry. So, uh, the trend is telling us that the, uh,
[00:01:31] Tony: yeah, it could be a hap­py Christ­mas and a good 2024, but we’ll see.
[00:01:34] Cameron: We’ll see. Uh, let me talk about our port­fo­lios while I’m on
[00:01:41] Cameron: the sub­ject of things in the mar­ket, et cetera. I did a week­ly report today for the Stock Doc­tor dum­my report.
[00:01:50] Cameron: It’s doing a lit­tle bit bet­ter than dou­ble mar­ket since incep­tion. I
[00:01:54] Cameron: think we’re up. just a lit­tle bit under 17 per­cent per annum over the
[00:01:59] Cameron: last,
[00:01:59] Cameron: [00:02:00] what­ev­er it is, four and a bit years. Um, ver­sus, uh, what did that say, 8, uh, for the STW, 8. 25.
[00:02:09] Tony: That’s pret­ty bloody good. 17. Per­cent per annum for the last
[00:02:13] Tony: four years. Let’s
[00:02:15] Cameron: that is pret­ty
[00:02:15] Cameron: bloody
[00:02:16] Tony: a moment and reflect on that. That’s pret­ty
[00:02:17] Tony: good. No,
[00:02:20] Cameron: I mean, and, you know, I’ve run it, I’ve run
[00:02:22] Cameron: it for, what, I guess, the last three years. I don’t think you’ve had much involve­ment in the deci­sions for the last three years. And I know
[00:02:28] Cameron: fuck­ing noth­ing about invest­ing. So, if I can, well, I did­n’t five years ago. So,
[00:02:36] Cameron: if, if lit­tle dum­my me can learn how to run this thing and get dou­ble mar­ket con­sis­tent­ly over the last, uh, four and a half, five years.
[00:02:45] Cameron: I mean, that’s,
[00:02:47] Cameron: I mean, I, I, I take it for grant­ed
[00:02:49] Cameron: now. That it’s doing that well. Like, it’s not, like, it’s not even a thing. Like, yeah, it’s doing a bad dou­ble mar­ket. Bor­ing, you know, you know, but it is, like, it’s real­ly insane. It’s [00:03:00] the, the, it’s, it’s, it’s all the sys­tem. Uh, for the finan­cial year, we’re doing 1.
[00:03:06] Cameron: 6 times bet­ter than the STW. We were up
[00:03:08] Cameron: as much as three times last
[00:03:10] Cameron: week, but we’ve slipped a lit­tle bit this week. Um And for the 30 days, we’re slight­ly below. We’re up about 4. 5 per­cent though, per annum for the last 30 days, STW is up about 5. 5%. But, one thing I want­ed to point out, we’ve talked about this a bit over the last cou­ple of years, uh, the, the break­down in our port­fo­lio per­for­mance between cap­i­tal gain and income return.
[00:03:33] Tony: yep,
[00:03:34] Cameron: for a long time there, income was dri­ving most of it. In fact, if I look at the all time Stats, cap­i­tal gain is worth about sev­en and a half per­cent of that 17. Uh, income returns about 10, 10 and a half per­cent
[00:03:51] Tony: right,
[00:03:53] Cameron: per annum. But if I look at the finan­cial year, cap­i­tal gains five and
[00:03:57] Cameron: a half, income returns 3.
[00:03:59] Cameron: 8.[00:04:00]
[00:04:00] Cameron: so cap­i­tal gain has been the major
[00:04:02] Cameron: dri­ver in our return so far in the last six months.
[00:04:06] Tony: yeah, div­i­dends tend to mean, are more mean­ing­ful
[00:04:10] Tony: over time. So, you know, you buy a
[00:04:12] Tony: stock and it’s 5%, that’s fine in the first year, but if you keep it for a cou­ple of
[00:04:17] Tony: years and that, you know, if it’s dou­bled in val­ue in four years time,
[00:04:20] Tony: the div­i­dend yields dou­bled in val­ue as well, so you’re kind of get­ting a guar­an­teed 10 per­cent
[00:04:24] Tony: straight away.
[00:04:25] Cameron: Yeah, right. Okay.
[00:04:26] Tony: Yeah.
[00:04:27] Cameron: In the last 30 days, our big per­form­ers have been DUR up 25 per­cent in the last 30 days per annum. Uh, MTO up just, you know, just slight­ly under 15 per­cent per annum, SUL up 12. 7, FPR up 12. 32. Oh! Got some­thing to say about FPR. So Alex F., Alex Franklin pinged me. And said he noticed that FPR was on this list as, as being one of the strong per­form­ers, but was­n’t on the buy [00:05:00] list and he did­n’t know why.
[00:05:02] Cameron: And I tried to fig­ure out why. I went back, I looked at my down­load, was­n’t in my down­load this week, was­n’t in Alex Kynas­ton’s down­load. And I was try­ing to fig­ure out why. I went back through a cou­ple of down­loads and it was­n’t show­ing up. I went to Stock Doc­tor and start­ed going through the num­bers and they report­ed on the 13th of Novem­ber and they report­ed neg­a­tive net oper­at­ing cash flow.
[00:05:29] Tony: Yeah, right. I can see
[00:05:30] Tony: that from the Sep­tem­ber num­bers. Yeah. Okay.
[00:05:32] Cameron: Yeah. So I’ve got, I actu­al­ly went to their web­site. Report their annu­al report in case it was a Stock Doc­tor mis­take, which would­n’t be the first time, but no, this is legit. Oper­at­ing cash flow, cus­tomer receipts 815 mil­lion for FY23, pay­ment to sup­pli­ers and employ­ees 413 mil­lion, income tax paid 10. 8 mil­lion, net inter­est paid 51.
[00:05:57] Cameron: 8 mil­lion. [00:06:00] Uh, but then they’ve got a pur­chase of oper­at­ing
[00:06:04] Cameron: finance lease vehi­cle 611. 3 mil­lion. Pro­ceeds from sale of oper­at­ing leased vehi­cles, 215. 1, leaves them with net oper­at­ing cash flow of 56. 8. so good. busi­ness, doing well, but it’s
[00:06:21] Cameron: the nature of their busi­ness, right? They’re out there buy­ing a lot of vehi­cles
[00:06:25] Cameron: and it puts them in a neg­a­tive.
[00:06:27] Cameron: So it does­n’t even show up in our down­load because what our fil­ter is You have to have Oper­at­ing Cash Flow greater than zero. So
[00:06:34] Cameron: it’s one of the few fil­ters that we have that actu­al­ly does fil­ter out com­pa­nies. Because most of them, most of our fil­ters say any, any, any, any,
[00:06:42] Cameron: any, but Net Oper­at­ing Cash Flow
[00:06:44] Cameron: is one that we actu­al­ly want them to have pos­i­tive.
[00:06:48] Tony: Yeah. And it’s, it’s been some­thing which I’ve noticed in the past that when some­thing goes from a string of pos­i­tive cash flow halves to a neg­a­tive one, it can be a lead­ing indi­ca­tor for a down­turn. Um, I haven’t [00:07:00] done the research on that, but it’s, it’s kind of on the list. But, um, it may not be the case for Fleet Part­ner, because as you say, if they’ve decid­ed to bulk up and buy all the cars that are going to be leased out, then It might be a short term occur­rence.
[00:07:17] Cameron: uh, just if peo­ple
[00:07:18] Cameron: are
[00:07:18] Tony: just just on that too, Cam.
[00:07:20] Cameron: was­n’t on the list, that’s why.
[00:07:21] Tony: Yeah, thanks. Just on that too, I, I spoke last week about, um, whether you were bet­ter off buy­ing all three list­ed fleet, uh, man­age­ment com­pa­nies, um, fleet part­ners and, uh, SIQ, Smart Group, and MMS Macmil­lan Shake­speare. And that was on the basis of Macmil­lan using, los­ing a con­tract and, It’s like you pick­ing it up.
[00:07:43] Tony: Um, yeah, so for this year it would have worked out well. It would have beat­en the index, um, but over five years it was under­per­form­ing the index and,
[00:07:54] Tony: um, I did a cou­ple of oth­er peri­ods in between and it still looks like you’re bet­ter off buy­ing the best one [00:08:00] out of the three at the time. So Fleet Part­ners has been that for us.
[00:08:04] Tony: It’s been on the buy list all year and it’s out­per­formed this year com­pared to its two cohort.
[00:08:09] Cameron: There you go. There you go. Well, that’s Good bit of analy­sis. Thank you. Just stay­ing on the reports, a cou­ple of things I want to men­tion. I, I have men­tioned on here over the last cou­ple of months that I’ve been work­ing on Stock­o­pe­dia ver­sion of the check­list and test­ing that out
[00:08:27] Cameron: both with an Aus­tralian dum­my port­fo­lio built
[00:08:30] Cameron: pure­ly from Stock­o­pe­dia and a US dum­my port­fo­lio.
[00:08:34] Cameron: And I thought start­ing this week I’ll report on how those are going and over Christ­mas one of my plans is to sort of clean up the stock­o­pe­dia ver­sion of the check­list so I can share it with peo­ple because I’ve had some peo­ple reach out and express inter­est in hav­ing a look at that. There’s a lot of met­rics that we use in our reg­u­lar check­list that we can’t get out of stock­o­pe­dia [00:09:00] because they don’t track things like Own a Founder or PE His­to­ry, things like that, at least not in a way that’s easy to get access to.
[00:09:10] Cameron: But, um, just by the by, the AU dum­my port­fo­lio that I’ve built, Using Stock­o­pe­dia. It’s per­form­ing about the same over the last 30 days as the Stock Doc­tor one.
[00:09:24] Cameron: It’s up about a lit­tle bit more than 4 per­cent ver­sus 5 point some­thing for the,
[00:09:29] Cameron: uh, STW. So it’s doing about the same. Um
[00:09:33] Cameron: And the US one, I have mia cul­pa, I did send out my report this morn­ing and said it was killing it, it was like four times as good, and I can’t, how many times do I have to do this mia cul­pa?
[00:09:46] Cameron: When some­thing looks bet­ter than it should be, You would think there would be part of my bra like, in every oth­er aspect of life,
[00:09:55] Tony: You’re a
[00:09:56] Cameron: it’s a polit­i­cal thing, I’m a skep­tic. I’m like, oh, hold on a cot­ton [00:10:00] pick­ing minute, that can’t pos­si­bly be right, but this, nah, my red alarm did­n’t go off. I went, oh, yeah, that’s leg­endary, because I did know that some of the stocks have been doing real­ly well.
[00:10:10] Tony: right.
[00:10:11] Cameron: Um, but then get­ting ready to do the show, I was drilling down on those stocks so I could talk about one of them, uh, I would talk about them and why they were doing so well. One of them, WLFC, Willis Lease Finance, I believe their catch­phrase is what you’re talk­ing about, Willis.
[00:10:27] Cameron: Um, I had screwed up the buy price when I was, uh, putting the trans­ac­tion into, uh, Stock­o­pe­dia
[00:10:36] Cameron: put it in at a quar­ter of what it real­ly
[00:10:38] Cameron: was, so that, uh, blew those gains away when I adjust­ed it.
[00:10:43] Cameron: But some are up real­ly well. Like A AMC net­works is up 24% since I bought it. Le Lands end is up 26% gas. Stealth gas, GASS, is up 34%. [00:11:00] Um, pret­ty sure I did­n’t screw that one up, but maybe I should look at that too.
[00:11:09] Tony: Land’s End, is that the direct mar­ket­ing cloth­ing com­pa­ny?
[00:11:13] Tony: Do you know?
[00:11:15] Cameron: Uh, uh, yes, yes it is.
[00:11:18] Tony: Oh, that’s fine. I used to sell Land’s End cloth­ing in Aus­tralia through MyerDi­rect. Yeah.
[00:11:25] Tony: When­ev­er that was, 20 years
[00:11:26] Tony: ago. Yeah.
[00:11:27] Cameron: Uh, I thought you meant like you were like going door to door.
[00:11:30] Tony: no, no, no, no, no,
[00:11:31] Cameron: you like to buy some
[00:11:32] Cameron: Land’s End cloth­ing?
[00:11:33] Tony: no, it was one of the brands that my direct, uh, Retailed in Aus­tralia. We had a deal with Land’s End in the U.
[00:11:38] Tony: S. In fact, I think it was the U. K. from, from mem­o­ry, but
[00:11:41] Tony: any­way. Um,
[00:11:43] Cameron: gas, the gas buy price is right. I just dou­ble checked it by the way. So that’s all good.
[00:11:48] Tony: AMC, isn’t that, was­n’t that one of
[00:11:50] Tony: the game stock to the moon?
[00:11:52] Cameron: It was! It
[00:11:53] Tony: So it’s come good, has it?
[00:11:55] Tony: Any­way.
[00:11:56] Cameron: Wow. I mean, it’s not up, you know, a thou­sand [00:12:00] per­cent, uh, like they thought it was going to be or what­ev­er, but it’s, it’s, you know, it’s doing okay from when I bought it. Um, yeah, I bought that at, uh, 15
[00:12:16] Cameron: and what is it now? 19. 37.
[00:12:21] Cameron: So yeah, it’s had a lit­tle bit of a
[00:12:22] Cameron: spike. Any­way, so I’ll keep report­ing those each week and you know, where, just to let peo­ple know where my head­’s at with all of this stuff is because we’re miss­ing a lot of data points and we don’t have the tools yet to sort of. Do large scale regres­sion test­ing with his­tor­i­cal data to see whether or not these data points are going to be long term impor­tant or not, or how impor­tant.
[00:12:50] Cameron: I’m sure they are impor­tant, but how impor­tant? Uh, so I’m just suck­ing this and see­ing it for a while, test­ing it out, run­ning it, see­ing how things seem to per­form. Um, [00:13:00] So far so good, but, you know, it’s only been a month or two, so, um, we need, obvi­ous­ly, more time than that. One oth­er thing I did want to men­tion about the report today is I have a my lit­tle cod­ing project this morn­ing was to col­late all of the com­mod­i­ty sta­tus his­to­ry, um, over the year or 18 months or so that we’ve been ad putting it in our buy list each week.
[00:13:30] Cameron: Into a sin­gle sheet. Which I’ll have in the buy list each week. It’ll be a sin­gle tab. I think it’ll prob­a­bly replace the exist­ing tab. So rather than the exist­ing tab in the buy sheet each week, which just has the com­mod­i­ty sta­tus for this week, it’ll be a, um, uh, uh, his­tor­i­cal view with the lat­est. This week will be the lat­est, uh, col­umn in the sheet.
[00:13:53] Cameron: Because I fig­ure it might be inter­est­ing, uh, in some of our analy­sis to go back and have a look at the com­mod­i­ty sta­tus. I know you [00:14:00] and I were talk­ing off air before about regres­sion test­ing and How do we get that data? We’re going to try and fig­ure that out, but I thought it might be inter­est­ing just to have a look at it and go, okay, well, when, at any point in time, so when did iron ore last become a buy?
[00:14:14] Cameron: When did it become a
[00:14:14] Tony: yeah, right. Yeah, good.
[00:14:16] Cameron: a look. So,
[00:14:17] Tony: That’s real­ly use­ful because what we found was using the four years worth of buy list was our own regres­sion data­base. Um, you don’t have to try and go from scratch to find source data. We’ve got it if we keep, you know, build­ing it in a, in a uni­form way over time. So that’s a good
[00:14:34] Tony: idea.
[00:14:35] Cameron: and as Gary knows, cause he said this on Face­book, it gets real­ly addic­tive when you real­ize you can sort of, I was sit­ting there like yes­ter­day, last night, I was think­ing, wow, I won­der if I can just write some script that will go through. 18 months worth of spread­sheets and just pull out all of the data I want and
[00:14:55] Tony: Wow.
[00:14:55] Cameron: it.
[00:14:56] Cameron: I went into GPT this morn­ing and said, Hey, can I, can you help me do that? Yeah, [00:15:00] absolute­ly. No prob­lem, mate. And, um, half an hour lat­er, it was done. A lit­tle bit of test­ing, lit­tle bit of back and forth debug­ging, all done. So yeah, it’s fan­tas­tic. I love it. Yeah. Um,
[00:15:14] Tony: the Stock­o­pe­dia port­fo­lio, the Aus­tralian one and our dum­my port­fo­lio, how sim­i­lar are they? How many stocks are in both?
[00:15:24] Cameron: Um, but I can, I can work it out.
[00:15:27] Tony: That’s all right.
[00:15:28] Cameron: just have a look. No, it’s let’s do that. You’re not going to be here for the next cou­ple of weeks. Tony’s tak­ing his Christ­mas vacay as a usu­al. I’m gonna, I’m going to do some real­ly, real­ly just, you won’t believe how good the things are
[00:15:44] Tony: can I put my hand up and say, don’t play all my bad pulled porks this time in the Christ­mas com­pen­dia.
[00:15:51] Cameron: What?
[00:15:52] Tony: Pick out the good ones.
[00:15:56] Cameron: Hey, that was for sci­ence. I was see­ing [00:16:00] how they went. Cause, cause they recov­er, like half the time they recov­er and it’s all good. Okay. So I’m look­ing, uh, I’ve got the two buy lists side by, uh, two, sor­ry, port­fo­lio side by side, look­ing for com­mon­al­i­ties. Um, ASG is on both. FPR is on both. LAU is on both, MTO is on both, now obvi­ous­ly these were start­ed at dif­fer­ent times, you know, so, the, the, the, Stock­o­pe­dia one’s far more recent, TRS, the reject shop is on both, and VVA, Viva Leisure, but, I’ll just, I’ll run through the, uh, sor­ry, the, the Stock­o­pe­dia one, so you, you can see the, the stocks that are on here, ABG, Aba­cus Group, ALD, Ampol,
[00:16:50] Tony: That’s just off our buy list from mem­o­ry, or it was any­way, at
[00:16:53] Tony: the bot­tom.
[00:16:54] Cameron: Yeah, it just came on. I think I did one late. I think I put it in the light port­fo­lio [00:17:00] too late last week. I saw it turn up when I did one Thurs­day. After­noon, this is Stock­o­pe­dia, oh sor­ry, Stock Doc­tor, uh, buy list for light, ASG, ERD, Eroad, uh, Fleet Part­ners, JYC, Joyce, Lind­sey, McMa­hon, MAH, MTO, NAB, NZM, OML, AK, see, I feel like I’m read­ing the alpha­bet here, TRS, SSM, Ser­vice Stream, SKT, Sky Net­work, SXE, South­ern Cross Elec­tri­cal, Viva Leisure, and Vysan, V Y S.
[00:17:34] Cameron: So they’re all,
[00:17:35] Tony: NAB’s the only one that’s either not on our buy list or close to our buy
[00:17:39] Tony: list.
[00:17:40] Cameron: and I think I added that to light last week too, I think that
[00:17:43] Tony: Ah, okay,
[00:17:45] Cameron: week on, uh, my, let me just check that. I think, I think I did find that turn up when I did a buy list on Thurs­day.
[00:17:53] Tony: so they’re fair­ly sim­i­lar.
[00:17:55] Cameron: Oh no, it was­n’t NAB, I did­n’t add NAB. What was the big, there was a real­ly big one that I
[00:17:59] Tony: Yeah, [00:18:00] I added ANZ a cou­ple of weeks ago, so it could have been ANZ on the Stock Doc­tor
[00:18:04] Tony: buy list.
[00:18:06] Cameron: I do have A and Z and a cou­ple, um, oh, Blue Scope Steel, it might have been. When did I add that?
[00:18:14] Tony: No, Bluescope’s been on our buy list, but I think it’s been a com­mod­i­ty sell for a while, with steel.
[00:18:19] Cameron: uh, real­ly? Steel a com­mod­i­ty sell?
[00:18:23] Tony: Oh, I thought so. Well, it was when it was on the buy list, because I could­n’t buy
[00:18:25] Cameron: no, this is the one that I added, um, last week. It was BSL. That was, God, how could I have missed that? Steel’s a buy on our, uh, com­mod­i­ty sheet TK. Let
[00:18:39] Tony: well, I’m going back a month or so, so maybe it’s, uh, it’s just become a buy.
[00:18:44] Cameron: me just, uh,
[00:18:46] Tony: Well, maybe BlueScope was a three point.
[00:18:49] Tony: Any­way, last time I looked at try­ing to add BlueScope Steel, I could­n’t do it
[00:18:52] Tony: for some rea­son.
[00:18:54] Cameron: well, you know what I can do, Tony? Um, I can look at the com­mod­i­ty his­to­ry tab [00:19:00] that I just built and I can tell you now exact­ly when steel became a buy. It became a buy, Oh, quite a while ago. Um, 30th of Octo­ber, it became a buy.
[00:19:14] Tony: Yeah, okay. Well, that’s a cou­ple of months ago, which is prob­a­bly when I was look­ing at BlueScope Steel
[00:19:17] Tony: then. Okay.
[00:19:20] Cameron: for three, no, four report­ing peri­ods before that, then it was a buy in Sep­tem­ber, Josephine, buy. Last time it was a sell was, uh, late August, it has been a Josephine for a few report­ing peri­ods, a few weeks, sor­ry, I mean, there. Oh my god, this is so cool! sta­tus, his­to­ry, I knew I was gonna need that at some point.
[00:19:42] Cameron: God, I, I impress myself some­times, I tell you,
[00:19:44] Tony: Oh, that’s always a great way to be to impress your­self. Um, well, you keep impress­ing your­self. I’m just going to take a step away from the micro­phone for a minute and turn some fridges off, which I can hear whirring in the back­ground, which may impede the
[00:19:58] Tony: qual­i­ty. Hang on.
[00:19:59] Cameron: I’ll qui­et­ly go [00:20:00] and impress myself while you do that, yeah. Just kid­ding, folks. I don’t impress myself. I’m being face­tious. I’m nev­er impressed with myself. I’m strug­gling just to keep up and be half as smart as most peo­ple. I was at Kung Fu the oth­er day and my Sifu walked past and said, you got it? And I said, I’ve nev­er got it. You know I’ve nev­er got it. I don’t know what I’m doing.
[00:20:20] Tony: I don’t know. I saw you on the Face­book group list­ed as Kung Fu
[00:20:22] Tony: expert.
[00:20:24] Cameron: yeah, which I thought Face­book had worked out, uh, but then it turns out I must have done that myself at some point.
[00:20:31] Tony: Real­ly?
[00:20:32] Cameron: I think it, well, it, it, it gives you sug­ges­tions about what you can be an expert in. And I think I was like, sure, that’d be fine.
[00:20:38] Tony: How would Face­book even know you did
[00:20:40] Tony: Kung Fu?
[00:20:41] Cameron: I don’t know. I think you, you put in your inter­ests, what are your hob­bies? You know, that kind of stuff. I think I put that in. Hey, speak­ing of peo­ple that aren’t experts, we did that poll after last week’s show about PRN. And I asked peo­ple, you gave them four options in the poll. They sold it Mon­day when [00:21:00] it first became a three point trend­line sale, Tues­day, which was the next day, uh, the third option was I own it, but I haven’t sold it because I don’t fol­low the rules.
[00:21:09] Cameron: And the fourth option was I don’t own it. Uh, last time I looked at this was last night, 73 per­cent of peo­ple who respond­ed said they don’t own it, which is not real­ly a use­ful piece of infor­ma­tion, but okay, uh, the major­i­ty of peo­ple who own it did­n’t sell it, and uh,
[00:21:27] Tony: Yeah, but if you take out the 73 per­cent who did­n’t own it, about a third of the peo­ple who did own it sold it Mon­day, Tues­day.
[00:21:35] Cameron: Uh, well, yeah, maybe, because I’m not sure about that. Sold it Mon­day. Last time I looked at that, I think there was only one per­son. I think it was Daryl. I’m just bring­ing it up here. So yeah, only Daryl sold it on the Mon­day. three peo­ple, includ­ing me sold it on the Tues­day.
[00:21:56] Cameron: Eight peo­ple said they own it, but haven’t sold it. [00:22:00] So yeah, you’re right. There’s a third, even when I do it that way. A third of the peo­ple sold it Mon­day or Tues­day.
[00:22:06] Tony: Yeah, but I think you, you iden­ti­fied some­where else that the vol­ume was quite heavy on that day, so it would­n’t have been an issue, I don’t think.
[00:22:14] Cameron: No. And I feel bad for the peo­ple that haven’t sold it because at least when I checked last night, it had kept falling. see where it is today. Oh, it’s down again
[00:22:27] Tony: just shows that peo­ple aren’t good robots, they don’t fol­low the rules.
[00:22:32] Cameron: So I sold it at 1. 04, it’s cur­rent­ly at 0. 97.
[00:22:37] Tony: A good AI would have fol­lowed the rules, it would have sold
[00:22:41] Tony: straight away.
[00:22:42] Cameron: yes. So, well, I hope for the peo­ple that haven’t sold it, that, um, it turns around. But so far, uh, it does not look good for
[00:22:52] Cameron: them.
[00:22:54] Tony: Hmm.
[00:22:54] Cameron:
[00:22:54] Cameron: point­ed out in our Face­book chat that CCP’s been on an [00:23:00] absolute tear this week. We love CCP. I went and had a look and they have, they’ve been doing well since Looks like the mid­dle of
[00:23:09] Cameron: Octo­ber, but I RULE 1’d it back in Octo­ber when it plum­met­ed.
[00:23:15] Cameron: Remem­ber they came out with their results and just the bot­tom fell out of it? I RULE 1’d it at 17. 31. And today it’s at 15. 93, so glad I sold it when I did, but um, yeah, it’s had a, it’s had a good cou­ple of weeks, it’s gone from 12 bucks up to near­ly 16 bucks, but um, yeah, Rule 1 did me well in that instance.
[00:23:53] Tony: It did real­ly well and I remem­ber at the time com­ment­ing that this is, I’ve seen this before and Cred­it Corp are [00:24:00] real­ly cau­tious about their guid­ance and like to under promise and over deliv­er and I think the mar­ket’s work­ing out now that it prob­a­bly over­shot when it sold off that quick­ly. Well,
[00:24:14] Cameron: in the mar­ket are work­ing out some­thing that you’ve been telling me about CCP for five years. ’cause you, you always tell me that about CCP, even I know
[00:24:24] Cameron: that about c ccp. What are these high­ly paid pro­fes­sion­als doing?
[00:24:27] Tony: we see it every half that the stock price goes down after they release their results and it recov­ers ground steadi­ly and gets to new highs after they mar­ket digest
[00:24:38] Tony: what
[00:24:38] Cameron: So why don’t we sell it a week before their results or the day before the results are due out in future?
[00:24:44] Tony: And that’s, yeah,
[00:24:46] Cameron: or
[00:24:46] Tony: that’s a good idea. I don’t, I don’t think this, this big down­turn that hap­pened recent­ly was after their results. I think they came out with an announce­ment about, um, the U. S. [00:25:00] The US busi­ness not going as well as they
[00:25:02] Cameron: Uh, it was a con­fes­sion.
[00:25:04] Cameron: Hel­lo, Alex!
[00:25:06] Tony: Hi, Al. I just want­ed to say that we found out recent­ly that Alex grad­u­at­ed
[00:25:10] Tony: with her Mas­ter of Fine
[00:25:11] Tony: Arts and she’s on the
[00:25:12] Tony: Dean’s List,
[00:25:14] Tony: which means she did real­ly, real­ly well.
[00:25:16] Alex: Yeah. I still
[00:25:17] Alex: haven’t fig­ured out what it means exact­ly, con­sid­er­ing I did not attend my grad­u­a­tion.
[00:25:24] Tony: Why not?
[00:25:25] Alex: Uh, I don’t know. It’s a lot of effort. I, and I, um, it’s like six months out
[00:25:30] Alex: from me actu­al­ly fin­ish­ing my degree and a whole year after I did my grad show, so I did­n’t
[00:25:35] Alex: feel the par­tic­u­lar need to go to Mar­ble Sta­di­um
[00:25:38] Alex: and spend a
[00:25:38] Alex: cou­ple hun­dred dol­lars rent­ing a gown and a cap for
[00:25:41] Alex: a day,
[00:25:42] Tony: fair enough.
[00:25:43] Alex: minus, um,
[00:25:44] Cameron: I
[00:25:44] Alex: extra tick­et costs, but, oh well.
[00:25:46] Cameron: I
[00:25:47] Cameron: I knew, I
[00:25:47] Cameron: liked you, Alex. That’s exact­ly how I feel about things. I did­n’t, I did­n’t go to my high
[00:25:54] Cameron: school
[00:25:55] Cameron: prom. I was like, real­ly? Why would I want to do
[00:25:58] Cameron: that?
[00:25:58] Cameron: I’m going out to din­ner with my [00:26:00] girl­friend.
[00:26:01] Alex: I was prom queen, so what can I say?
[00:26:03] Cameron: Wow. Prom Queen. Wow. I bowed down. We’re not wor­thy. Wow.
[00:26:12] Alex: thank you.
[00:26:13] Cameron: Do we have pho­tos? Do we have pho­tos, of that? Do I have a pho­to of that some­where?
[00:26:19] Cameron: Have you ever sent me a pho­to?
[00:26:20] Tony: I will
[00:26:21] Alex: I’ve got
[00:26:21] Alex: pho­tos, yeah. I should say I was­n’t like some extreme­ly pop­u­lar per­son in high school. I just was in a steady rela­tion­ship. So every­one decid­ed to vote for us.
[00:26:30] Alex: It was the eas­i­est, least con­tro­ver­sial pick for
[00:26:34] Alex: prom queen and king.
[00:26:38] Tony: Yes, you were the com­pro­mise can­di­date. It’s always a good place to be in
[00:26:41] Alex: Yes.
[00:26:41] Cameron: The safe bet. Yeah.
[00:26:45] Cameron: Well, do you have a
[00:26:46] Cameron: ques­tion
[00:26:46] Tony: Any­way, so I seem to remem­ber from high school and uni­ver­si­ty in Toron­to,
[00:26:50] Tony: Dean’s List was
[00:26:51] Tony: the
[00:26:52] Tony: top 10%, I think, of grad­u­ates, was­n’t it?
[00:26:54] Alex: what it was
[00:26:55] Alex: when I was in
[00:26:55] Alex: high school. Um, some peo­ple have said it’s the top 1%, [00:27:00] I doubt that. Some peo­ple say it’s the top stu­dent from the grad­u­at­ing class, um, which could be true, I don’t
[00:27:06] Alex: know. Uh, but I’m hap­py about it, so that’s
[00:27:09] Tony: won­der how RMIT, I
[00:27:11] Tony: won­der how RMIT, feels when they call out who the top
[00:27:14] Tony: stu­dent was and she said, I
[00:27:15] Tony: can’t be
[00:27:16] Tony: bug­gered buy­ing a gown for 200 bucks
[00:27:18] Alex: I hope that they have some seri­ous reflec­tion, is what I hope they
[00:27:22] Cameron: and and she does­n’t even know what it means or care very much by
[00:27:25] Cameron: the sounds
[00:27:26] Cameron: of it. She’s like, yeah, so?
[00:27:28] Tony: Well, that’s
[00:27:28] Tony: good you did­n’t turn up,
[00:27:30] Tony: you prob­a­bly would find out what it means
[00:27:31] Tony: if
[00:27:31] Cameron: Yeah. If they, If they, they, stood up and said, and every­one wel­come Alex Kynas­ton to the stage. And they’re like,
[00:27:37] Cameron: Alex?
[00:27:39] Alex: You’re right. Next time I’ll send a proxy or some­thing. So at least some­one’s there
[00:27:43] Cameron: Like Mar­lon Bran­do
[00:27:45] Cameron: send­ing a lit­tle feath­er
[00:27:47] Cameron: to the Oscars.
[00:27:47] Alex: Yeah. absolute­ly. I rewatched that recent­ly. It’s great.
[00:27:50] Cameron: make a,
[00:27:51] Cameron: speech say­ing, uh, you know, protest­ing
[00:27:53] Cameron: some­thing, racism, yeah.
[00:27:58] Cameron: And she was­n’t even Native
[00:27:59] Cameron: [00:28:00] Amer­i­can, right? She was a fake Native Amer­i­can who got up and
[00:28:03] Cameron: protest­ed, uh, racism
[00:28:05] Cameron: and the treat­ment of the Native Amer­i­cans.
[00:28:08] Alex: Was she?
[00:28:09] Tony: And so next year they had a
[00:28:11] Tony: Indi­an Actress
[00:28:12] Tony: Award for best
[00:28:14] Tony: per­for­mance by a non Indige­nous per­son.
[00:28:18] Cameron: I think that’s the sto­ry. Don’t call me to that. All right. You got a
[00:28:22] Cameron: ques­tion
[00:28:22] Cameron: for us this week, okay?
[00:28:25] Alex: Yes. I was read­ing through Dav­e’s ques­tion and I decid­ed to leave
[00:28:28] Alex: that to you two. So I’m going to read Jim’s.
[00:28:31] Tony: Okay.
[00:28:32] Cameron: Right.
[00:28:32] Alex: Um, so Jim says, Hi Cameron, I hope
[00:28:35] Alex: You are well. Can I request to pull pork on two inter­est­ing com­pa­nies cur­rent­ly on the buy list, which are ERD, E Road Lim­it­ed, and CXO, Core Lithi­um Lim­it­ed.
[00:28:46] Alex: Not sure if mul­ti­ple requests are a good form. Um, would also love to hear Tony’s thoughts on. the poten­tial Wood­side and San­tos merg­er. In clos­ing, thank you both for cre­at­ing a won­der­ful plat­form, and I know it is ear­ly, but Mer­ry Christ­mas to and yours. Cheers, Jim.[00:29:00]
[00:29:00] Cameron: Thank you, Jim.
[00:29:01] Tony: Uh, well, I’ve got two pulled porks
[00:29:04] Tony: ready to go on those com­pa­nies.
[00:29:05] Tony: would, would you believe I spent like three hours
[00:29:08] Tony: doing pulled porks and I haven’t looked at the Wood­side
[00:29:10] Tony: San­tos Merg­ers? I can’t answer that
[00:29:13] Cameron: Okay, so just
[00:29:14] Cameron: Pulled
[00:29:14] Tony: ha ha ha. You just pulled pork. Sor­ry about that, Jim. I can hold it over until the new year and
[00:29:19] Tony: do it
[00:29:20] Cameron: Will it be rel­e­vant then? Prob­a­bly.
[00:29:23] Tony: Yeah, well, I don’t think the merg­er’s going ahead just yet,
[00:29:26] Tony: so it should still be rel­e­vant by then.
[00:29:27] Tony: So this, this was request­ed by Jim. It’s a pulled pork first. There’s two pulled porks, first of all, on Core Lithi­um and then on E Roads.
[00:29:35] Cameron: Actu­al­ly folks, Cameron, in the edit­ing booth here. Tony record­ed three pulled pork’s today. It seems like a lit­tle bit overkill to put them all in the one episode, par­tic­u­lar­ly when I’ve got to do a cou­ple of episodes with­out him over the next cou­ple of weeks we’ll do a Core lithi­um today and then I’ll save the oth­ers for the next cou­ple of weeks.
[00:29:55] Cameron: So you have some­thing to lis­ten to. Over Christ­mas.
[00:29:58] Tony: Um, and I [00:30:00] have to
[00:30:00] Tony: say Uh, they may have been on the buy list recent­ly, but they’re both just off the buy list at the moment. So bear that in mind if peo­ple are lis­ten­ing to this, they should do their own research.
[00:30:11] Tony: Start­ing with Core Lithi­um, which is a North­ern Ter­ri­to­ry Lithi­um explor­er and now min­er. They’ve start­ed to export mine into Chi­na. Uh, their, their biggest, well, their Their big project, which is just get­ting into oper­a­tional sta­tus now, is the Finis Lithi­um
[00:30:31] Tony: project, which is just south of Dar­win, about 88 kilo­me­ters south of Dar­win.
[00:30:36] Tony: So that’s a, that’s a bonus for them because they’re not run­ning an hour out­side of the
[00:30:41] Tony: port of Dar­win, which is where they need to export their stuff. So that’ll be a cost sav­ing for them rather than being in the mid­dle of the West­ern Aus­tralian
[00:30:49] Tony: desert or some­thing and hav­ing to build a rail link to the port.
[00:30:52] Tony: So that’s good. Um, They have already signed off take agree­ments with two large Chi­nese lithi­um com­pa­nies, [00:31:00] Sichuan Yahua and Gan­feng, Gan­feng Lithi­um, both of which I’ve nev­er heard of.
[00:31:07] Tony: But, um, it’s always good for a min­er to have an off take agree­ment, so it’s guar­an­teed sales. Uh, they’re also grow­ing because they, uh, Pro­gress­ing a sec­ond ten­e­ment area known as BP33, which may end up being big­ger than Finis.
[00:31:25] Tony: And that’s not too far away from hav­ing a go no go deci­sion on devel­op­ing a mine. So, they should, they should grow if that goes through, or they will grow if that goes through. And they’re going to grow any­way because they’re going to, this year, The lat­est fig­ures don’t have much in the way of sales, so as they ramp up the min­ing at their cur­rent ten­e­ment, their sales will increase as well.
[00:31:48] Tony: A cou­ple of things about Core Lithi­um. They’re a small com­pa­ny. They’ve adopt­ed an inter­est­ing style of min­ing, so they They talk about hav­ing a [00:32:00] lot of lit­tle mines in close prox­im­i­ty to each oth­er rather than one big mine. Um, that may or may not work out, but it’s a lit­tle bit dif­fer­ent to how we nor­mal­ly expect a mine to look.
[00:32:11] Tony: Um, they famous­ly turned down an off take agree­ment ear­ly on with Tes­la. So Elon Musk came knock­ing, uh, before these Chi­nese off take agree­ments were secured. Uh, and they talked for a long time. The mar­ket went crazy on the fact that You know, Tes­la were inter­est­ed in a small Aus­tralian com­pa­ny, which did­n’t even have a mine oper­a­tion, I don’t think, at that stage, or was in the stages of doing that.
[00:32:35] Tony: Um, but they could­n’t come to an agree­ment, and I think Tes­la’s had a bit of his­to­ry of going into start­up mines to do deals at low prices, and so it did­n’t come to an agree­ment. When that did­n’t hap­pen, the share price went down. There is a bit of a pre­mi­um if you can get a big cus­tomer like Tes­la on the books.
[00:32:59] Tony: All of the [00:33:00] ESG investors tend to look at you even more so, although they look at all lithi­um com­pa­nies. A cou­ple of oth­er things about this one. It’s one of the most heav­i­ly short­ed stocks on the ASX and it cur­rent­ly has 12 per­cent of its shares short­ed.
[00:33:14] Cameron: Hmm.
[00:33:15] Tony: The price for this com­pa­ny has dropped dra­mat­i­cal­ly.
[00:33:17] Tony: Since August 2022, which was its high point, it’s down from 1. 40 to 0. 31. Hav­ing said that, it still remains above its buy line, so that’s in its favour, even though it’s a falling knife. Um, this is prob­a­bly a chick­en or egg sit­u­a­tion, I’m not sure whether the share price is down because it’s being heav­i­ly short­ed, or because it’s down because the short­ers are pay­ing atten­tion to the lithi­um price, which is also down dra­mat­i­cal­ly in a sim­i­lar sort of peri­od.
[00:33:48] Tony: Its high was 600, 000 a tonne in Novem­ber 22, and the lithi­um price is now down to below 100, 000 today, around 97, 500. So um, It’s [00:34:00] down dra­mat­i­cal­ly as well. I sus­pect the min­ing com­pa­nies are fol­low­ing the com­mod­i­ty prices. They usu­al­ly do. So that’s why the price is down. Um, but one of the pos­i­tives for this com­pa­ny is that if the lithi­um price does look like improv­ing and turn­ing around and the short sell­ers will prob­a­bly All have to do what’s called a short cov­er, sell their stock and give it back, oth­er­wise they don’t lock in their prof­its, in case the core price takes off, but just that process of um, of get­ting out, because what they actu­al­ly have to do is buy the core stock to return it to the peo­ple they bor­rowed it from, because if you’re short­ing, you bor­row the stock, sell it, and then buy it back at the bot­tom and give it back to the per­son you’ve been You’ve rent­ed it from in the first place and that gen­er­al­ly cre­ates a bit of a price spike just just that process alone and and if 15 per­cent of the stock has to do that, we might
[00:34:53] Tony: see
[00:34:53] Tony: it turn around.
[00:34:55] Cameron: I think it’s known as a miniskirt, Tony.
[00:34:57] Cameron: Short cov­er. [00:35:00] Keep going.
[00:35:01] Cameron:
[00:35:01] Tony: yeah. Uh, so the num­bers for this pulled pork, um, This is a large ADT com­pa­ny of near­ly 6 mil­lion, so that’s a pos­i­tive. The share price when I did the analy­sis was 0. 305 per share, less than con­sen­sus tar­get, and almost IV2, 03, IV2 is 0.
[00:35:26] Tony: 29, so not quite. Below IV2, but fair­ly sim­i­lar. Does­n’t have a yield because as you’d expect with these sort of start­up min­ing com­pa­nies, all of their cash flow goes back into set­ting up the oper­a­tions and expand­ing. Stock Doc­tor give this com­pa­ny finan­cial health of strong and a trend of recov­er­ing, which we like to see.
[00:35:49] Tony: So it gets a good score for that. Uh, if we were scor­ing on PE alone, we’d get a bad score because the PE is 51 times, um, and there­fore it fails our test, [00:36:00] uh, for the last, uh, three years, but, um, that should turn around because it’s expect­ed to grow. Uh, the earn­ings are expect­ed to grow next year. Um, hav­ing said that though, price to oper­at­ing cash flow is 7, just over 7 times, 7.
[00:36:14] Tony: 23. So it’s just off the bot­tom of our buy list. But again, that could turn around with a, um, fluc­tu­a­tion in the share price, if that hap­pens. Net earn­ings per share is 16 cents, uh, so it does­n’t score. For us on that basis, book plus 30 share price is just over 0. 30, so we can’t score it based on its assets.
[00:36:38] Tony: Earn­ings per share fore­cast growth, how­ev­er, is 400 per­cent and that’s due to the mine ramp­ing up. So growth over P. E. is near­ly eight times, which is way above our thresh­old of 1. 5, so it scores well for that. Uh, inter­est­ing­ly enough, no own­er, founder, direc­tors hold 1 per­cent that I could see any­way. So I can’t score it for that.
[00:36:58] Tony: Some­times you do see that in [00:37:00] these small min­ing com­pa­nies, but not the case here. Uh, equi­ty is con­sis­tent­ly increas­ing. So it gets a tick for that. So all in all, the qual­i­ty score is 9 out of 14 or 64%. And the QAV score is 0. 09, which is just below our cut­off of 0. 1. Hav­ing said that, I mean, the 0. 1 is arbi­trary.
[00:37:21] Tony: So if some­one did like this com­pa­ny and want­ed to buy it they could look at it at 0. 09 I would have thought but it is a falling knife at the moment so I wait until sen­ti­ment turned. I sus­pect when sen­ti­ment turns it’s going to turn strong­ly because the short sell­ers will be buy­ing stock to give back to their lenders.
[00:37:38] Tony: And it’ll kick off quite nice­ly. So that’s a pos­i­tive for it when it does even­tu­al­ly turn. Neg­a­tives and, well, risks, I guess. Um, the lithi­um price is prob­a­bly the biggest risk. It’s still depressed and trend­ing down. And I’ve seen this before with, with, um, mines and com­modi­ties. Uh, it’s a com­mod­i­ty that a cou­ple of years ago was in high demand, large­ly [00:38:00] because of its role in elec­tric vehi­cles and oth­er elec­tric.
[00:38:03] Tony: Um, uses, elec­tri­fi­ca­tion uses, uh, so it meant the play­ers who are already in the field did real­ly well, but it also invit­ed lots of new mines to, or lots of min­ing com­pa­nies to explore for lithi­um. And so there is, um, uh, more lithi­um in the mar­ket now, so that’ll set­tle down to an equi­lib­ri­um that works out in the long term and is eco­nom­i­cal for, um, most par­ties.
[00:38:27] Tony: But at the moment it’s, um, it’s now in over­sup­ply. Oth­er risks, um, prob­a­bly the oth­er biggest risk I can think of is that there has been nois­es made, um, in Aus­tralia, but also in the U. S. about, uh, export­ing, um, cer­tain min­er­als to Chi­na, and, uh, the two off tank agree­ments this com­pa­ny is rely­ing on are both in Chi­na.
[00:38:53] Tony: Now, the gov­ern­ment has­n’t come out and said that they have a pol­i­cy against send­ing lithi­um to Chi­na. I think they have [00:39:00] called out some cer­tain min­er­als to Chi­na. To, um, reg­u­late exports over­seas, but I don’t think the the­me’s on that list yet, but it may hap­pen if they decide to expand their, their, um, reg­u­la­tions of, uh, of, uh, Pre­cious min­er­als too, or min­er­als that aren’t freely avail­able to Chi­na.
[00:39:20] Tony: So, um, yeah, it’s, I think it’s a watch. I’ll be watch­ing the lithi­um price before I bought into this one, but, um, longer term it prob­a­bly should do okay. So that’s core. And I mean, again, before I leave core lithi­um, it was only a cou­ple of, maybe even a year ago that, um, at least, at least one friend, cou­ple of friends approached me and said, You know, I’ve been told I should get into lithi­um.
[00:39:45] Tony: It’s the next best, biggest thing. And it was a boom and it was, the price was up dra­mat­i­cal­ly and com­pa­nies were, um, min­ing lithi­um and their share price had gone up four or five times. Um, and of course that was right about the time that lithi­um peaked [00:40:00] and start­ed to drop and it’s dropped, uh, five sixths of its, to five sixths of its price, so it’s dropped a long way down from that high.
[00:40:07] Tony: It’s the old clas­sic proverb, when the, when the tip hits the retail mar­ket, you hear it from peo­ple who don’t usu­al­ly. Buy stocks, it’s the time to get out.
[00:40:16] Tony: So, that held true in this boom, but lithi­um boom, it holds true in most booms.
[00:40:21] Cameron: yeah, I think my sis­ter was one of those peo­ple. One of my sis­ters said to me, Hey, uh, what do you think about invest­ing in lithi­um? I’ve heard lithi­um’s the place to be. Prob­a­bly from some­body at a church. I said, yeah, yeah, be care­ful with that.
[00:40:43] Tony: yeah, so it’ll prob­a­bly have its day again, but at the moment it’s, it’s depressed. So that’s Core Lithi­um.
[00:40:50] Cameron: Thank you TK.
[00:40:51] Tony:
[00:40:51] Cameron: Alright, that was real­ly good. Um, don’t own CXOs, I’m not wor­ried about the pulled pork curse on that,
[00:40:59] Cameron: [00:41:00] Uh, let’s Look at oth­er ques­tions. Dave from Newey. I got to apol­o­gize. Dave sent me this a cou­ple of weeks ago and it got lost in my emails.
[00:41:10] Cameron: Hi Cameron, hope you’re well. Was hop­ing I could ask for a pulled pork with a twist. My dad has been talk­ing about REITs for most of this year. It’s a qui­et morn­ing here in Newey, so I did a deep dive on the sec­tor. Gee. There is some val­ue start­ing to come through. A bunch of them have bounced off 5 year lows and are down 30 50 per­cent over 3 years.
[00:41:33] Cameron: The 11th of Decem­ber score­card is near­ly all of the REITs with a score between 0. 01 and 0. 07. URW is the only buy and it’s been on a stel­lar run the last lit­tle bit on big vol­ume. Dis­clo­sure, he owns it. Could Tony pull apart one of the REITs, e. g. CMW, ECF, COF, and use the num­bers to help under­stand the fol­low­ing.
[00:41:58] Cameron: What will it take to get a bas­ket of [00:42:00] REIT buys com­ing through on the QAV list? Price alone? Or is the qual­i­ty for­ev­er going to hold them back? Are REITs like banks? Rather than putting mon­ey into an REIT, would an investor be bet­ter off buy­ing the par­ent com­pa­ny, assum­ing list­ed, e. g. Char­ter Hall, CHC?
[00:42:19] Cameron: Stock Doc­tor has a good write up of risks on the CHC 9 Gold­en Rules page. In short, Occu­pan­cy ver­sus work from home the­mat­ic, bond yields ris­ing impact­ing com­pe­ti­tion for invest­ing dol­lars, costs of mon­ey for REITs with flow on impacts to yields. Any oth­er obvi­ous risks the finan­cial ana­lysts have missed?
[00:42:40] Cameron: I’ve been sniff­ing around com­mer­cial prop­er­ty here in Newy in the Hunter recent­ly. Prices have gone sig­nif­i­cant­ly high­er, so yields at present are below the norm. I don’t get why prices are high­er when inter­est rates are high­er. Maybe the smart mon­ey has moved from the low­er yields com­pared to inter­est rate expense in res­i­den­tial to com­mer­cial, there­fore dri­ving up [00:43:00] prices.
[00:43:00] Cameron: So how does this all play out in sen­ti­ment terms? 1. Inter­est rates peak and decline, so div­i­dends can rise and REIT prices start get­ting bid up again. 2. Com­mer­cial prop­er­ty prices cor­rect. which returns yields and div­i­dends back to nor­mal lev­els. There was a sharp jump in price in some of the REITs after the US Fed said last week that they were now fore­cast­ing rate cuts in 2024.
[00:43:24] Cameron: Seems a clas­sic con­trar­i­an oppor­tu­ni­ty com­ing up, but I’m con­fused as always. And would appre­ci­ate Tony’s per­spec­tive, as always. Off for a bat­tered QAV, Dave from Newey. A bat­tered QAV. I like that.
[00:43:39] Tony: A bat­tered QAV.
[00:43:41] Cameron: Uh, wow. All okay. All of
[00:43:43] Cameron: that’s
[00:43:43] Tony: Yeah. Gosh. I think, I think Dave, Dave may have exhaust­ed his num­ber of ques­tions for a lit­tle while too. We could prob­a­bly do a whole show on REITs, but I’ll I’ll go through and answer these. Um, [00:44:00] so answer­ing his ques­tions first, and then I’ll do the pulled pork. What does it, what will it take to get a bas­ket of REIT buys com­ing through on the QAV list?
[00:44:09] Tony: Well, I think it will be, um, rice, because I guess the busi­ness struc­ture of the REITs is there, so let me go back, let me explain what an REIT is, um, which is prob­a­bly a good way to start, um, it’s a real estate invest­ment trust, and they’re basi­cal­ly just a way of buy­ing into large chunks of of com­mer­cial prop­er­ty that indi­vid­ual investors, retail investors, prob­a­bly would­n’t have the funds to do by them­selves.
[00:44:45] Tony: So it’s a real estate invest­ment fund, basi­cal­ly. It’s a man­aged fund that invests in real estate, just like there are man­aged funds that invest in the ASX and oth­er com­modi­ties, etc. And it’s usu­al­ly a trust [00:45:00] struc­ture, which it does­n’t have to be, but it gen­er­al­ly is. And the ben­e­fit of a trust struc­ture is that If, uh, if a trust dis­trib­utes, um, more than, I think, 90 per­cent of its income or prof­it, then it does­n’t pay tax.
[00:45:13] Tony: The tax is paid by the recip­i­ent of the trust, just like a fam­i­ly trust. That’s how a fam­i­ly trust works. Um, you know, if you have shares that are, that are, um, invest­ed in the fam­i­ly trust, then the div­i­dends can be dis­trib­uted to, um, a mem­ber of the, a recip­i­ent of the trust, so some­one who’s in the trust, a mem­ber, but it can be divert­ed to the per­son with the low­est income.
[00:45:35] Tony: So like a, if, if you’re a, um, a cou­ple and one per­son­’s at work and one per­son­’s at home, you can dis­trib­ute the prof­its to the per­son who is at home and they pay tax based on their mar­gin­al tax rate, which is low­er than the per­son who’s at work usu­al­ly. So, um, that, that’s the ben­e­fit of a trust struc­ture.
[00:45:54] Tony: It does­n’t pay tax until it gets to the, um, the trust unit hold­ers, um, [00:46:00] hands and then they pay tax, uh, on that, which makes, makes it attrac­tive to SMSF. Uh, hold­ers, because super­an­nu­a­tion tax­a­tion is light com­pared to per­son­al tax­a­tion. So, if the trust does­n’t pay nor­mal cor­po­rate tax rates and the unit hold­er is pay­ing super­an­nu­a­tion tax rates, which are usu­al­ly 15 per­cent or zero after retire­ment, um, it could be a tax free income to some­one.
[00:46:26] Tony: So, REITs have tra­di­tion­al­ly been, um, pur­chased by peo­ple as a retire­ment income. Um, for that rea­son, it can be either low­ly taxed or tax free, but also because Uh, the yield on prop­er­ty, um, when it’s, you know, a well man­aged fund can be high. So some­times, you know, some of the, some of the names that Dave has talked about are pay­ing up to 10 per­cent yield and that’s tax free.
[00:46:55] Tony: Now, because it’s going through a trust struc­ture, there’s no frank­ing cred­it attached to it because there’s been no tax [00:47:00] paid on it. Um, uh, so it might be a 10 per­cent yield, but you’re not get­ting a frank­ing cred­it. How­ev­er, if you’re in a Retire­ment phase pen­sion in your super fund, then you’re not pay­ing any tax any­way, so it’s 10 per­cent you’re get­ting tax free and that’s attrac­tive both for the income side of things when you’re retired, but it’s also, if you think about it, um, you know, throw­ing a bit of cap­i­tal growth in the fund, which, you know, prop­er­ty prices Go up in the long term, you’re actu­al­ly beat­ing the mar­ket, being the, um, the ASX, which gen­er­al­ly gets about 10 per­cent over time.
[00:47:34] Tony: So it’s a good way to invest depend­ing on tax struc­tures and depend­ing on your need for yield or not. Even if you don’t need the yield, you’re pay­ing lit­tle tax, you can always rein­vest the yield back into the fund and, and buy more units or more shares and you’re still get­ting a Um, a pret­ty good return, uh, with expo­sure to com­mer­cial prop­er­ty, which goes, like I said, goes up in the long, in the long term.
[00:47:58] Tony: How­ev­er, it [00:48:00] does, it can still be a lit­tle bit volatile and, and the area that’s volatile at the moment and has been depressed has been office, um, Office real estate and office real estate front funds. And that, that’s maybe what Dave wants me to focus on because he men­tioned CMW, ECF and COF, and they’re all three office funds, um, which have been depressed late­ly because of the work from home trend fol­low­ing COVID.
[00:48:26] Tony: Um, that’s not the case across the REIT sec­tion, how­ev­er, I has­ten to add there are REITs, which, um, for exam­ple, own Data Cen­ters, and they’ve done spec­tac­u­lar­ly well in the last cou­ple of years because that’s a grow­ing area. There have been REITs that house, uh, that own ware­hous­es. Which I’ve also done well because of the trend, espe­cial­ly dur­ing and fol­low­ing COVID, to deliv­er­ies, home deliv­er­ies, so there’s more, um, elec­tron­ic or e tail­ing activ­i­ties going on, elec­tron­ic retail­ing activ­i­ties, and so those, those, [00:49:00] uh, REITs are doing well.
[00:49:04] Tony: So there are REITs for every­thing, and as Dave Um, called out, there is one on our buy list, which is URW, Uni­bail, Redam­co, West­field, which is the old inter­na­tion­al divi­sion of West­field, if you can think about all the shop­ping malls around the world that badge West­field. And I think Uni­bail and Redam­co also had some oth­er ones as well.
[00:49:22] Tony: So that’s a, um, a shop­ping cen­tre trust. And, um, it’s now doing well as we’ve come out of COVID and peo­ple going back to shop­ping malls, but for a while there it was doing poor­ly, which is why it came onto our buy list. And to get back to Dav­e’s answer, if you think about the struc­ture of these things, um, they’re, they’re, even if they’re yield­ing 10%, um, which, which means they’re, Uh, well, what am I try­ing to say?
[00:49:55] Tony: They don’t come on the buy list often because we have a price to oper­ate in cash flow thresh­old of [00:50:00] 7. So, which means I’ve got a, that the prop­er­ty has to, on a net basis, be return­ing 14 per­cent because 1 over 7. Is is rough­ly 14 bit over 14. Um, and that’s on a net basis. So not only do they have to find prop­er­ty, which is has rental yields above 14%, it’s also got­ta be after their costs, um, and bor­row­ings.
[00:50:23] Tony: And, um, these funds can con­tain bor­row­ing. So it, it does hap­pen that you get either price, depres­sion in the fund. Life hap­pened with URW, um. or you get some fan­tas­tic real estate which has gone up and is yield­ing say 15 to 20 per­cent and there­fore the Prop­Caf Com­pare to the share price can get above our sev­en times thresh­old, but gen­er­al­ly the REITs don’t, don’t do that.
[00:50:48] Tony: So they don’t appear on our buy list usu­al­ly. Um, so it’s gen­er­al­ly an extreme sit­u­a­tion. Now, a cou­ple of these that Dave talked about are get­ting up close to the buy list. And, um, [00:51:00] you know, the, uh, CMW, Cromwell Prop­er­ty is cur­rent­ly a score of 0. 08. And ECF, um, Eleono­ra. Com­mer­cial Eleanor office is now up at 0.
[00:51:11] Tony: 07. Um, so they are get­ting close and, and I think, um, it’s pos­si­ble that the man­u­al, man­u­al­ly entered data has­n’t been updat­ed for those for a while, so they could even be close to the buy list. Um, but gen­er­al­ly some of the oth­er ones I spoke about, so the big ones like Good­man, GMG, which um, is, is basi­cal­ly ware­hous­ing and has done well because of that.
[00:51:34] Tony: Uh, their QAV score is like 0. 01, but they are a buy on the, on the bread lat­er for sen­ti­ment. So, um, that’s the thing. Um, oth­er big ones, Dexus has a score of 0. 04. Um, it’s close to a buy on the bread loader, but the price is still below its sell, uh, price. Um, GOZ is 0. 03, Vicin­i­ty, which is a shop­ping cen­ter one, anoth­er [00:52:00] shop­ping cen­ter one, a local one, is 0.
[00:52:02] Tony: 03, Char­ter Hall, 0. 03. So that’s gen­er­al­ly about where they, they fall because of the fact that they can’t get above our Prop­Caf of, of, um, sev­en times or less than sev­en times. So I guess that’s some­thing to, to notice, um, to answer Dav­e’s ques­tion about why we don’t see many REITs. On the buy list, that’s the first thing.
[00:52:21] Tony: Um, he talked about, are REITs like the banks? Rather than putting mon­ey into a REIT, would an investor be bet­ter off buy­ing the par­ent com­pa­ny? Assum­ing it’s list­ed, Char­ter Hall being one of those. So gen­er­al­ly you’re bet­ter off buy­ing the par­ent com­pa­ny, the man­ag­er of these things, rather than buy­ing the fund.
[00:52:39] Tony: But it depends on your needs. So the funds suit peo­ple who want a retire­ment income or a high div­i­dend income and have a sit­u­a­tion where they’re not pay­ing much tax. Um, but for growth, you’re bet­ter off usu­al­ly buy­ing the man­ag­er, because their fees go up over time as these, these com­pa­nies or trusts grow.
[00:52:58] Tony: Um, I’m not [00:53:00] 100 per­cent sure Char­ter­hall is just a straight man­ag­er, but it could be. I’m not famil­iar with it. But that’s gen­er­al­ly what you need to do. So the yield on Char­ter­hall, for exam­ple, is much low­er than the yield on some of these oth­er list­ed REITs. Uh, to para­phrase Dave, he’s ask­ing about what are the risks of, um, of these REITs, includ­ing Occu­pan­cy ver­sus work from home, bond yields, cost of mon­ey, etc.
[00:53:27] Tony: The biggest risk that he did­n’t men­tion is is reval­u­a­tion risk and this is one that I think is is hurt­ing the office trust. It gen­er­al­ly works in favor of office funds. It’s often called out as an abnor­mal, but we real­ly should be tak­ing into an account the fact that, uh, prof­it is impact­ed by these funds revalu­ing their, their port­fo­lios every, usu­al­ly every half, I guess, but some­times annu­al­ly, um, or peri­od­i­cal­ly any­way.
[00:53:58] Tony: And so what they love [00:54:00] doing is to say that, look at us, the office build­ings or the ware­hous­es or the shop­ping cen­ters we’ve invest­ed in are now worth more than they were this time last year, and so we’re going to put that as a val­u­a­tion increase on the assets, but to do that we have to put it through the prof­it and loss account, and so that’s what His­tor­i­cal­ly sup­port­ed the P& L of these com­pa­nies, even though it’s often treat­ed as abnor­mal.
[00:54:24] Tony: That depends whether you look at, you know, stan­dard or, um, nor­mal­ized or abnor­mal, um, prof­it for these com­pa­nies. Uh, in the case of office funds at the moment, it’s, it’s, it’s hurt­ing them. for the same rea­son. So, you know, it’s, it’s now being called out as an abnor­mal or high­light­ed as an abnor­mal. It’s not usu­al­ly high­light­ed, um, when things are going up, uh, it’s just treat­ed as part of the prof­it.
[00:54:47] Tony: Um, but it’s me being cyn­i­cal, but yeah, so, uh, Office build­ings are gen­er­al­ly being writ­ten down because of the work from home trend, espe­cial­ly in the CBD. And [00:55:00] so that write down of asset val­u­a­tions is knock­ing out the prof­it of some of these com­pa­nies that, or some of these REITs that Dave spoke about.
[00:55:08] Tony: So that’s an issue that you should pay atten­tion to, I think. Can’t real­ly com­ment on Dav­e’s ques­tion about com­mer­cial prop­er­ty and New­cas­tle as to why it’s going up and I’m not sure whether when he refers to com­mer­cial prop­er­ty if he’s refer­ring to offices or fac­to­ries or some­thing else but cer­tain­ly every­thing oth­er than office build­ings have been going up and office build­ings in region­al areas haven’t been too bad because It’s real­ly the CBD offices that are being hurt by the work­ing from home trend.
[00:55:40] Tony: Um, per­haps they are in New­cas­tle, but it’s also prob­a­bly the case that peo­ple going into work at New­cas­tle don’t have the kind of com­mute that peo­ple going into the CBD office in Syd­ney from the out­skirts do, so it may not be as much of an issue. And cer­tain­ly one of the ones that I’m going to go through and for a pulled pork has called that out as being a a ben­e­fit of their [00:56:00] fund is that it has more, um, or less CBD office spaces than some of the oth­er funds.
[00:56:04] Tony: So that could be why. The com­mer­cial prices are going up in New­cas­tle. Uh, inter­est rates, you’re right Dave, inter­est rates will have an impact on these. Gen­er­al­ly, the trusts aren’t over­ly geared. Um, it’s usu­al­ly a rea­son­able amount of gear­ing, 20 to 30 per­cent per­haps, maybe 40 in some cas­es. So, they should be able to han­dle inter­est rate ris­es, but it’s going to be an issue.
[00:56:29] Tony: Um, you spoke about com­par­i­son to bond yields. That’s always an issue for these com­pa­nies because, um, REITs are often called a bond proxy, which I’ve spo­ken about before. They’re com­pa­nies which pay a yield, which, um, uh, peo­ple can get into eas­i­ly because they’re list­ed, um, and some­times eas­i­er than buy­ing a bond, which, um, often aren’t list­ed, but they are in, in the same mar­kets.
[00:56:52] Tony: Um, so they do try and, um, com­pare them­selves to bond yields. And if bond yields are going up, which they have [00:57:00] been, then the, the yields on these, the div­i­dend yields on these trusts have to as well. Um, He spoke about the REITs going up in val­ue after the U. S. Fed last week because we’re peo­ple are now fore­cast­ing rate cuts in 2024 and that cer­tain­ly, again, goes back to this theme of com­par­i­son to bond yields and inter­est rates being an issue.
[00:57:22] Tony: So, yeah, um. His last ques­tion, he talks about, uh, he asked a ques­tion about, um, look­ing at these things with­out using the buy list and, and so first of all, like, so how would you look at these REITs and decide which ones to buy and not to buy? Um, first of all, look at sen­ti­ment, so the bread loader will still apply to these, um, Trusts, even though they’re not on our buy list, it’s still, they still are sub­ject to sen­ti­ment.
[00:57:54] Tony: Um, and they’ve gen­er­al­ly been turn­ing up as Dave has high­light­ed, um, prob­a­bly because inter­est rates look like they may not [00:58:00] rise much fur­ther. Um, so the first thing I do in terms of buy­ing REITs is to still use the buy list. So UIW is the clear­ly stand, the stand­out one for me. Um, but anoth­er one which is tra­di­tion­al­ly used in this area is to buy them when they’re priced below their NTA.
[00:58:19] Tony: And so, uh, That’s the case with the office funds at the moment, and it’s both good and bad, but it’s still a buy­ing oppor­tu­ni­ty, so peo­ple are pay­ing less for these unit trust prices, the REIT prices for the office funds, because they think that the, the offices haven’t been writ­ten down far enough, so again, that’s always been an issue with these things, they’re, they’re The office build­ings are inde­pen­dent­ly val­ued, and there’s cer­tain­ly pro­fes­sion­al com­pa­nies who do that, um, but the ques­tion is always whether they’ve been writ­ten down far enough, um, and, and, you know, what kind of met­rics have been used to do that?
[00:58:59] Tony: [00:59:00] Because there weren’t many sales dur­ing COVID when the, when the, um, Office build­ings were emp­ty. And of course, because the office build­ings are depress­ing in price, the only sell­ers at the moment are four sell­ers. Peo­ple are tend­ing to hold on to them for longer. So it’s hard to get com­pa­ra­bles or enough com­pa­ra­bles to make a mean­ing­ful deci­sion.
[00:59:20] Tony: And there­fore, the investors in these REITs are ques­tion­ing whether the office build­ings have been writ­ten down far enough. And, but that’s a buy­ing oppor­tu­ni­ty because we can, um, Buy them below what the inde­pen­dent experts have priced those retail build­ings at. So we’re buy­ing them for less than NTA, which I think is anoth­er way to treat these.
[00:59:40] Tony: A bit like buy­ing LICs when they have a dis­count to their NTAs. So you’re pay­ing 80 cents in a dol­lar for um, For office build­ings, which is not a bad thing to do, because even­tu­al­ly I think they will, the sit­u­a­tion will ride itself. I don’t think the CBD build­ings are going to go to zero. Um, com­pa­nies are forc­ing [01:00:00] more peo­ple to come back to work and, you know, prob­a­bly through a leas­ing cycle.
[01:00:03] Tony: They’ll work out that they may or may not need less leas­ing space, but it will sort itself out as these trends often do. So that’s my com­ments on REITs.
[01:00:13] Tony: Dave, I hope that answers all your
[01:00:15] Tony: ques­tions.
[01:00:16] Cameron: Cameron in the edit­ing booth again, at this point, Tony did a pulled pork on COF Cen­turia office REI T. But again, I’m get­ting a, hold that back for some time over the next cou­ple of weeks. We, I seem to recall, we had some issues with buy­ing URW a while back. It’s, uh, a CDI out of France, and there was a French tax. Some bro­kers would­n’t let you buy it, some would. I think Dave said he got it via Self­Wealth with no issues. I think Steven Mabb bought it using one of the bro­kers, but some oth­er peo­ple had trou­bles.
[01:00:53] Cameron: I end­ed up just putting a note in my buy list that it was­n’t some­thing we could real­ly look at because it was too, [01:01:00] um, I don’t know, dif­fi­cult to get your hands on.
[01:01:05] Tony: Yeah, right. Which could also be depress­ing the price, which is why it’s on the
[01:01:09] Tony: buy list.
[01:01:10] Cameron: Um, uh, get­ting back to, well, talk­ing about this broad­er issue of work from home, I read Chan­ti­cleer’s arti­cle in The Fin this week. They did their sur­vey, their CEO sur­vey, and it was one of the big issues, and it seemed, I mean, their con­clu­sion was, uh, peo­ple, work from home is here to stay. It seems about half the week.
[01:01:30] Cameron: A lot of major com­pa­nies have sort of accept­ed some­where between two and a half to three days a week is where most com­pa­nies are land­ing. It’s where they think employ­ees are going to be. They seem to be try­ing to sell them on the fact that being in the office is good for career devel­op­ment. Um, don’t know.
[01:01:49] Cameron: I haven’t worked in an office for 20 years, so what do I know? But that sounds like bull­shit to me. Uh, but I’m try­ing to fig­ure out, like, when peo­ple are writ­ing down the val­ue of these offices, what do they [01:02:00] think’s going to hap­pen? That these cor­po­ra­tions are going to decide that they need less space because they’ve got less peo­ple in the office full time.
[01:02:08] Cameron: But the build­ings aren’t going to go emp­ty, right? There’s gonna Find oth­er uses for those build­ings you would expect. Is it just that the rev­enue might not be as high as sell­ing it to cor­po­rates for offices and, uh, their rev­enues would take a hit?
[01:02:25] Tony: Yeah, I must admit, I would have thought this would have played out more extreme­ly since COVID. That was my sort of hypoth­e­sis. Because if you think about it, I think you’re right. I think peo­ple are only going in maybe half time. Cer­tain­ly it’s dif­fer­ent across dif­fer­ent SME space, which Cen­turia seems to be ser­vic­ing, but I know the bank CEOs, for exam­ple, came out and said about half their staff are in the office, um, at one time, so you’d think that would mean they’d be get­ting rid of.
[01:02:56] Tony: Leas­ing space, um, or try­ing to sub­lease it. [01:03:00] So that to me says that when these leas­es come up for renew­al, they won’t renew. And they’ll manip­u­late their port­fo­lio over time to get out of spac­ing, get out of space. Whether that means the rents come down because there’s going to be less demand for, to, you know, when they go out to relist, when the REITs go out to relist, release these.
[01:03:22] Tony: Office spaces, or whether it means that peo­ple just aren’t build­ing new office build­ings, and that soaks up the lack of demand. I’m not sure, but yeah, it has­n’t worked. I mean, cer­tain­ly, um, these REITs have been doing ter­ri­bly. They’ve come down a lot, the office REITs, um, since COVID, so it’s played out in that respect.
[01:03:43] Tony: The val­u­a­tions haven’t been, I mean, they’ve been writ­ten down, but not like you saw with this one. It’s an office build­ing REIT, exclu­sive office build­ing REIT, and they only wrote down the val­u­a­tions 4 per­cent um, this year. So, you know, whether they have some kind of scope to smooth it over [01:04:00] time or, or whether the, um, expert val­uers.
[01:04:04] Tony: Don’t think it’s going to be as bad as what, you know, inex­pert bystanders like you and I think it might be. But I, I tend to agree with you and cer­tain­ly the buy­ers of the shares in these REITs do because they’re buy­ing shares at 30 per­cent less than NTA, which means I think the val­u­a­tion is going to come down.
[01:04:23] Tony: Um, but yeah, it’s when­ev­er you’re buy­ing some­thing below NTA, you’ve got to con­sid­er it because it’s, um, it’s nice to buy assets for less than what the, the experts think they’re
[01:04:34] Cameron: gov­ern­ments can buy up all of the, uh, free office space and use it to house the home­less peo­ple.
[01:04:39] Tony: Yeah, I remem­ber the last time com­mer­cial prop­er­ty, par­tic­u­lar­ly offices, had a big down­turn. I’d just moved to Mel­bourne. It was like late 80s after the share mar­ket crash and com­pa­nies were clos­ing and going bank­rupt, down­siz­ing dra­mat­i­cal­ly. And that kicked off a boom in con­vert­ing offices into apart­ments, which was a, you know, alter­na­tive use and suc­cess­ful alter­na­tive use.
[01:04:59] Tony: And I think the [01:05:00] BP build­ing became the Quay­side Apart­ments or Key West Apart­ments in Mel­bourne. The IBM build­ing in Mel­bourne was con­vert­ed into apart­ments. So yeah, it does­n’t mean just because peo­ple aren’t going to use the space for office work that they won’t be able to rent it out for some­thing
[01:05:14] Tony: in time.
[01:05:15] Cameron: Yeah, it’s inter­est­ing. I’ve been try­ing to get my head around it for a while, why peo­ple are so neg­a­tive on that whole space and what’s going to hap­pen with it, and also why com­pa­nies are try­ing to force peo­ple back into the office. Instead of just, like, this whole thing about, well, they net­work bet­ter and it’s bet­ter for career devel­op­ment.
[01:05:33] Cameron: Yeah, real­ly? I mean, can’t you just say, okay, we’ll sched­ule Zoom calls and Zoom meet­ings or cafe meet­ings or some­thing like that? I would have thought Com­ing out of COVID that offices would be jump­ing at the chance. Busi­ness­es would be jump­ing at the chance to have less peo­ple in at the
[01:05:49] Cameron: office. So they could, you
[01:05:50] Cameron: know,
[01:05:51] Tony: cor­rect. Let’s low­er our
[01:05:52] Cameron: low­er the over­heads.
[01:05:53] Cameron: Peo­ple want to cov­er their own costs by work­ing at home for their office. Like fan­tas­tic, you beau­ty, low­er fleet [01:06:00] costs, et cetera, et cetera.
[01:06:01] Cameron: Uh,
[01:06:09] Tony: you know, I’d say, sure, come in and I’d have secu­ri­ty meet them at the door and fire them on the spot for being lick ass­es and being absolute­ly unpro­duc­tive. And polit­i­cal for you to hang around with the CEO. Uh, you know, and that would also be a way of, um, sav­ing costs as well.
[01:06:28] Cameron: nice. Alright, well thanks for going over all of that. Real­ly, it is a real­ly inter­est­ing space, which I under­stand noth­ing about,
[01:06:35] Cameron: but I find it
[01:06:36] Tony: It is. Yeah, and it, like, because of the, these things, um, tend to be div­i­dend yield focused and not nec­es­sar­i­ly growth focused. They don’t pop up in our invest­ment talks much, but there is cer­tain­ly a mar­ket for peo­ple who are going into retire­ment to, to buy these REITs, um, and get a great yield.
[01:06:52] Tony: to live off.
[01:06:53] Cameron: Alright, well, last ques­tion for the year is from Kane. Hey [01:07:00] Cam, ques­tion for Tony today. Does he have any thoughts on why BFG is hav­ing a run? I’m up more than 30 per­cent over the last 5 weeks. Good for you, Kane. BFG, big
[01:07:13] Cameron: friend­ly
[01:07:14] Tony: Well, I
[01:07:14] Tony: Bell Finan­cial Group. Well, I’ve been on the buy list in the past. I don’t think they are at the moment because, again, they have neg­a­tive cash flow for this half as well. So they’ve fall­en off our fil­ter­ing. Um, so I haven’t paid atten­tion to them for a long while. Um, so I can’t, I can’t answer Kane’s ques­tion with any sort of defin­i­tive answer.
[01:07:35] Tony: All I can do is Tell you what my research uncov­ered, which may or may not be the case. Um, I think it looks like the share price start­ed increas­ing when, uh, the exec­u­tive chair retired, a guy called Alis­tair Provan. And I don’t think that in itself was enough to cause the share price to grow, but there was an arti­cle on the AFR.
[01:07:56] Tony: Which report­ed some rumors that, um, one of [01:08:00] the founders who passed away dur­ing the year and had a large stake in the com­pa­ny and the retire­ment of Alis­tair Provan may have been enough to kick off, um, a takeover offer for BFG, whether it would be up for sale or not. And the fact that Alis­tair Provan was quot­ed as Swat­ting away that rumor, men­tion­ing it dur­ing his retire­ment speech to staff and say­ing it def­i­nite­ly was­n’t the case.
[01:08:24] Tony: It was kind of unusu­al too, because you don’t sort of do that unless there is talk about, um, offers being made for the com­pa­ny. So all I can put it down to is per­haps there’s some takeover spec­u­la­tion for this com­pa­ny. Um, the alter­na­tive hypoth­e­sis I would have is that Bell Finan­cial Group is a basi­cal­ly a stock­broke, stock­broking.
[01:08:45] Tony: Com­pa­ny does have wealth man­age­ment and funds man­age­ment and super, um, annu­a­tion plat­forms and super man­age­ment. But giv­en that the mar­ket’s going up, you would, you would think that that would also, um, with a bit of a rock­et under the share price of [01:09:00] BFG and any oth­er stock­broking com­pa­nies as well. So that could be the case as well.
[01:09:05] Tony: But that’s all I’ve got. I can’t real­ly explain why. And it did have neg­a­tive cash flow, which could be for all sorts of rea­sons with a stock bro­ker. Uh, yeah, so I can’t say it’s, it’s gone up because of buy list rea­sons or QAV rea­sons, but yeah, it’s poten­tial­ly just a bit of hype on whether some­one’s going to Pounce on it.
[01:09:29] Tony: Uh, and it has­n’t been on the buy list in the past. So those, that does hap­pen to those kinds of stocks, or it could just be that the share mar­ket’s turn­ing around and peo­ple are start­ing to fac­tor that into their fore­cast for a stock break­ing com­pa­ny.
[01:09:43] Cameron: Try­ing to fig­ure out when I last owned it. It’s been a while.
[01:09:45] Cameron: Had a cou­ple of bites of BFG over the years, but yeah, they’re not on, not in any of my port­fo­lios right now.
[01:09:51] Cameron: Well, I, I, con­grat­u­la­tions to Kane if he’s still hold­ing it. Um, it looks like it’s doing well.
[01:09:59] Tony: Mmm. [01:10:00]
[01:10:00] Cameron: that is the Q& A for the year, Tony.
[01:10:03] Cameron: It has been a big year, been a, been a very, um, year full of tri­als and tribu­la­tions for investors in the mar­ket. It’s been a very tricky year for QAV. Uh, mem­bers too, I know a lot of peo­ple have Suf­fered and strug­gled, but you know, as I said at the begin­ning of the show, the mar­ket has been on a tear just recent­ly.
[01:10:27] Cameron: It’s near­ly back up to its all time high. So, you know, maybe it’s, you know, good. It’s going to be a good year. We’ll see. Who knows? We can’t pre­dict.
[01:10:39] Tony: Cor­rect. Yeah, it’d be nice to get a year off from all of the buy­ing and sell­ing we’ve done
[01:10:44] Tony: this year.
[01:10:45] Cameron: Well, let’s get into After Hours. Tony, what have you been into in your, uh, you know, hol­i­days down south?
[01:10:53] Tony: Yeah, hol­i­day­ing, play­ing golf. Um, Jen’s there with me now, which is love­ly. So we’ll be tak­ing a real hol­i­day from [01:11:00] tomor­row onwards. Yeah, the only thing I can report watch­ing, I can think of, is um, uh, a doc­u­men­tary on Shane McGowan, who was the lead singer from the Pogues, and I should say RIP Shane, he passed away a cou­ple of weeks ago, I think his funer­al may have been last week, and um, there was Clips on var­i­ous plat­forms of peo­ple singing at the funer­al.
[01:11:25] Tony: I think Nick Cave may have sung at the funer­al. Um, but I remem­ber going to the Pogues con­cert when they came to Mel­bourne in about 1987 or 88. It was a fan­tas­tic con­cert full of life. It was an amaz­ing con­cert. Um, and, and so yeah, this doc­u­men­tary came out, uh, very recent­ly made by Julianne Tem­ple, who, um, any­body who has my back­ground would know was the, the mak­er of the, um, Great rock and roll swin­dle back in the day.
[01:11:55] Tony: So he’s made one called Rock of Gold about Shane McGowan. And it’s, I thought [01:12:00] it was real­ly great. It’s not going to be every­one’s cup of tea because Shane is, um, a noto­ri­ous drinker and drug tak­er and, um, basi­cal­ly drunk and drugged him­self to death at a very young age. Or he’s like, he’s about my age actu­al­ly.
[01:12:14] Tony: Um, Rea­son­ably young age. Uh, but yeah, it’s great to go back and see old footage of him. Again, this whole theme of, you know, he was, the Sex Pis­tols took the stage and, you know, there was a small audi­ence there and all of them went off and formed bands soon after­wards. And he was one of them. Um, inter­est­ing guy.
[01:12:35] Tony: I mean, you know, an out and out out­cast and mis­fit and drunk and drug­gy and punk rock­er, but, um, very knowl­edge­able and very into the Irish polit­i­cal sit­u­a­tion, the Irish. Lit­er­a­ture Sit­u­a­tion was a big, big read­er of Joyce and, um, oth­er writ­ers, um, talks about Bren­dan Bean a lot, the Irish poet, um, in this [01:13:00] doc­u­men­tary and, and, you know, uses some of those poems, um, in his lyrics for the songs, um, so very knowl­edge­able about Irish lit­er­a­ture and there­fore want­i­ng to, to bring Irish music back into, um, into Vogue, which he did with the Pogues.
[01:13:14] Tony: So yeah, great, great rol­lick­ing doc­u­men­tary, um, they have footage from his 60th birth­day, which must have been fair­ly recent­ly, um, when peo­ple like Bono and Nick Cave and var­i­ous oth­er famous peo­ple got up on stage and sung some of his songs, um, and of course, you know, it’s Christ­mas time and the fairy tale of New York is always my favorite Christ­mas car­ol and comes.
[01:13:37] Tony: comes out this time of year, which I love. Um, and I saw a clip just recent­ly that the, because the line from the Fairy­tale of New York is the boys of the NYPD are singing Gal­way Bay. Um, the boys of the NYPD choir are singing Gal­way Bay. And of course, there isn’t an NYPD choir. They just made that up. But the NYPD got togeth­er this year and formed a choir and sung Gal­way Bay.
[01:13:59] Tony: [01:14:00] in recog­ni­tion of Shane’s pass­ing. So that was one of the clips I saw on YouTube recent­ly as well. But yeah, I real­ly enjoy it. The Crock of Gold comes from a, um, I think it’s a James Joyce sto­ry about the lep­rechaun who holds out the crock of gold as a, as a, um, to tempt peo­ple to To go after it and then of course it’s a mirage and dis­ap­pears and um, kind of an apt title for Shane McGowan’s life.
[01:14:23] Tony: But yep, great doc­u­men­tary if any­one’s into, into Irish music or Irish lit­er­a­ture or even just punk rock.
[01:14:31] Tony: Real­ly great.
[01:14:33] Cameron: Have you seen,
[01:14:34] Tony: Uh, no.
[01:14:37] Cameron: Oh, um, came out a few years ago now. We sort of, you know, I, I’m, I’m the Grinch. I hate Christ­mas, but, um, a cou­ple of things I like about it is watch­ing A Very Mur­ray Christ­mas. So, Sofia Cop­po­la direct­ed it, um,
[01:14:51] Tony: Ah.
[01:14:53] Cameron: five or six years ago, maybe, um, I think it’s on Net­flix. Bill Mur­ray. Uh, the basic [01:15:00] set­up is Bill Mur­ray’s sup­posed to be doing a show, um, like a stand up thing or some spe­cial per­for­mance and he gets snowed in at his hotel.
[01:15:12] Cameron: He can’t leave, he can’t go, so they try and do a live, um, event. And it’s just him, and he pulls togeth­er just who­ev­er hap­pens to be in the hotel, which is most­ly the wait staff, but it’s made up of, uh, Michael Ser­ra’s in it, um, David Johans­son from the New York Dolls is, uh, one of the staff, they do a song, Clooney’s in there, Miley Cyrus, uh, Paul Schae­fer, Jason Schwartz­man, Myer Rudolph, Chris Rock, Amy Poehler are all in it, but, um, They, yeah, they do.
[01:15:47] Cameron: He sings. Well, they all sing as the cast, but he sings Fairy­tale of New York as one of the
[01:15:51] Tony: Ah, fan­tas­tic.
[01:15:52] Cameron: it’s, great. it’s just, you know, Bill Mur­ray being him­self and, uh, just doing Christ­mas songs, a lit­tle bit of a [01:16:00] Christ­massy thing, but depressed, you know, sort of self dep­re­cat­ing over every­thing.
[01:16:06] Cameron: It’s real­ly, real­ly good fun. Check it out. You’ll love it. Um, I saw David Simon, the writer of The Wire and many oth­er shows, I saw him, uh, a Twit­ter thread he did, um, when Shane died, because he used a lot of Pogue songs in The Wire. Usu­al­ly for their Irish cop
[01:16:25] Cameron: funer­als, they’d always have a Pogue song at the pub when
[01:16:29] Cameron: one of the Irish cops died. And he talked about when he met Shane, uh, I think for the first and only time. He was sup­pos­ed­ly work­ing on a, he was work­ing on a book. David Simon was work­ing on a book about Shane’s lyrics. He’s been work­ing on it for years and has­n’t fin­ished it. But he talked about meet­ing Shane and sort of how ter­ri­fied he was.
[01:16:53] Cameron: Meet­ing Shane and what a, what a, what a, um, intim­i­dat­ing duty [01:17:00] was to meet and, uh, yeah, it was real­ly good. It was a good Twit­ter three. I won’t go into it, but it was good fun. That sounds like fun. I got­ta check track that down and check it out. I was a, I was a big fan of Uh, well, we’re near­ly fin­ished watch­ing DDLJ, Tony, the great­est Indi­an Bol­ly­wood film, prob­a­bly of all time. Dil­wale Dul­ha­nia Le Jayenge, I think is how it’s pro­nounced, prob­a­bly bad, I apol­o­gize to any Indi­an lis­ten­ers.
[01:17:33] Tony: I haven’t,
[01:17:33] Tony: no.
[01:17:35] Cameron: me tell you this, Tony, it was made in 1995. It is screened in a the­ater in Mum­bai every day since then. And since 1995, there are peo­ple that have been to see it hun­dreds and hun­dreds of times. It is, it has no com­par­i­son, I think. It’s, uh, I think Index to Infla­tion is the [01:18:00] sec­ond largest gross­ing Indi­an film of all time.
[01:18:04] Cameron: Insane­ly prof­itable, was direct­ed by a 24 year old, writ­ten and direct­ed, uh, was his first film, Adi Chopra, who’s now sort of prob­a­bly the most famous. Um, mod­ern Indi­an Hin­di film direc­tor. His father, Yash Chopra, was a very famous direc­tor, and Adi sort of invent­ed mod­ern Bol­ly­wood films with this thing.
[01:18:27] Cameron: It’s sort of the tem­plate for Bol­ly­wood films for the last, you know, 28 odd years. Stars Shah Rukh Khan and Kajol, who’ve made about 10 films togeth­er, I think. It’s the film that made them both mega stars in India. It goes for three hours. It’s bat­shit crazy. Com­plete­ly bonkers. Um. It’s this love sto­ry, com­e­dy, but it’s like total­ly insane, uh, and just so enjoy­able.
[01:18:59] Cameron: [01:19:00] Chris­sy and I have been try­ing to bite it off half an hour at a time over the last week when we have half an hour at night to sit down while we’re hav­ing some yogurt or some­thing after we get Fox to sleep. But yeah, for peo­ple that have nev­er seen, or peo­ple who have seen it, they’ll know what I mean.
[01:19:14] Cameron: It’s, it’s icon­ic. In India and um, final­ly got around to bit­ing it off, found it on the stream­ing. It’s on Prime Video I think. Lot of fun
[01:19:25] Tony: Yeah, right, I’ll check it
[01:19:27] Tony: out.
[01:19:28] Cameron: it’s absolute­ly, wow, I don’t know if you like it, it’s absolute­ly bonkers. Like, I can’t think of a, I can’t think of an ana­logue, it’s got, you know, singing and danc­ing and over the top sort of ridicu­lous com­e­dy and sort of a Romeo and Juli­et sto­ry but with a Twist and, um, yeah, but it’s like in India, it’s insane­ly, uh, famous, like insane­ly famous, mas­sive, just [01:20:00] enor­mous, I was try­ing to think last night, it’s like if you took the Rocky Hor­ror Pic­ture
[01:20:04] Tony: Hmm.
[01:20:05] Cameron: that lev­el of fame, but it also won every Acad­e­my Award in the year that it came out, like every award avail­able, it won, it cleaned up, And is still just beloved by Indi­ans of all ages today as being one of the defin­ing films of the last 30 years, defined a gen­er­a­tion.
[01:20:27] Cameron: It’s like you com­bine Star Wars with Rocky Hor­ror Pic­ture Show and maybe, I don’t know, some­thing else. What’s one of the most defin­ing films in the last 30 years in Hol­ly­wood that changed every­thing? Matrix, maybe? I don’t
[01:20:42] Tony: Pulp Fic­tion. Yep. Are
[01:20:44] Cameron: All Reser­voir Dogs or Pulp Fic­tion? Yeah, if you threw them all togeth­er. That’d be this film. Zany, it’s got also a zany com­e­dy. Any­way, been enjoy­ing that. And [01:21:00] I think that’s it for me, Tony, this week.
[01:21:04] Tony: head­ing away
[01:21:05] Tony: with the fam­i­ly?
[01:21:07] Cameron: No, my mum
[01:21:07] Cameron: had her eye surgery, uh, last week and she can’t dri­ve for a month. So, uh, we’re stick­ing around to look after her. And, uh, yeah, so that’s it. I’ll be here. Doing my thing, writ­ing code, push­ing out shows.
[01:21:31] Tony: Well, say hi to Jay David for
[01:21:33] Tony: me. It’s a
[01:21:35] Cameron: I already
[01:21:35] Tony: seen him. Yep. Thank
[01:21:37] Tony: you.
[01:21:37] Cameron: I already did last week. And you know, he miss­es you as I’ve already told you.
[01:21:41] Tony: Yeah. Yep. And well, enjoy watch­ing The God­fa­ther on Christ­mas Day, which I think is
[01:21:47] Tony: your Christ­mas rit­u­al.
[01:21:49] Cameron: The God­fa­ther and The Room. They’re my Christ­mas
[01:21:52] Tony: Right.
[01:21:52] Cameron: Yeah. And I think DDLJ, I’ve
[01:21:55] Cameron: just added to that. It’s going to be part of my Christ­mas tra­di­tion now. And you have a, you [01:22:00] have a great Christ­mas. Uh, Hap­py New Year. You’re going to be there for a Cape Schanck for all of that.
[01:22:04] Tony: No, we’re going to head back for New Year’s to
[01:22:06] Tony: Syd­ney. Watch the
[01:22:08] Tony: fire­works. Yeah.
[01:22:10] Cameron: And then come back
[01:22:10] Cameron: down.
[01:22:12] Tony: Uh, not imme­di­ate­ly, but at some stage
[01:22:14] Tony: prob­a­bly. Yeah.
[01:22:16] Cameron: All right. Well, you and I might do a show, um, some­time in ear­ly Jan­u­ary next then, eh?
[01:22:21] Tony: Yeah. Oh, sure. Uh, week after
[01:22:23] Tony: New Year’s.
[01:22:25] Tony: Yeah.
[01:22:25] Cameron: Okay. All right. Thank you for, thank you for anoth­er good year, Tony. Let’s hope that the next one is less, uh, trou­ble­some for investors.
[01:22:36] Tony: Yeah. Well, thank you too, Cam. All the hard work you put in. It’s great.
[01:22:39] Tony: All right.
[01:22:41] Cameron: Thanks, mate. Take care. Bye.
[01:22:43] Tony: All right, mate. Have a good Christ­mas. [01:23:00] [01:24:00]

QAV 652 Club

[00:00:00] Cameron: Alright, let’s do this. Cam by him­self. Cam Solo. That’s my new name. Cam Solo. Episode 652 of QAV. My annu­al tra­di­tion, doing Christ­massy episodes with­out Tony. He’s chillax­ing, play­ing golf down at his Cape Schanck prop­er­ty. Give him a cou­ple of weeks off to de stress, uh, a lot of stress when you’re Tony, just being rich.

[00:00:43] Cameron: It’s very stress­ful, I’m sure. I’m, uh, gonna do some­thing a lit­tle bit dif­fer­ent this time. Uh, in pre­vi­ous years, I’ve done com­pi­la­tions of things that I thought were inter­est­ing top­ics over the pre­vi­ous 12 months. This time, instead of me choos­ing the most inter­est­ing points, I’ve asked my new best friend, Chat­G­PT.

[00:01:07] Cameron: Chat­G­PT. com To come up with a list of the most inter­est­ing top­ics that we’ve dis­cussed this year. How did I do that? You might ask. Well, I’ll explain a lit­tle bit lat­er on. Also, in this episode and next week’s episode, we’ve got Pulled Porks from Tony that we pre record­ed last week. This week’s will be on ERoad, E R D.

[00:01:31] Cameron: That’s com­ing up soon. But, before I get into that, let’s talk about what’s hap­pened in the mar­ket, uh, since our last episode. Now, I’m record­ing this on Box­ing Day, Tues­day the 26th of Decem­ber, 2023. While my fam­i­ly is out doing fam­i­ly type things, I’ve tak­en the oppor­tu­ni­ty in a qui­et lit­tle house. Mer­ry Christ­mas, by the way.

[00:01:55] Cameron: Hap­py Fes­tivus for the rest of us. Uh, hope you had a safe Christ­mas. Did­n’t get caught up in the storms that hit the East Coast of Aus­tralia. Um, but the mar­ket’s closed. It was closed yes­ter­day, obvi­ous­ly, Christ­mas Day. It’s closed today. So there’s noth­ing real­ly to talk about. In terms of what’s hap­pen­ing this week yet, but last week we had a cou­ple of, uh, real­ly sort of seri­ous declines from stock.

[00:02:22] Cameron: Some that we own, some that we don’t keep­ing in trend. Tony asked me not to make fun of his, uh, pulled. Pork curs­es, but I got to men­tion Call Lithi­um, uh, because he said not to buy it, you know, because lithi­um was down, but not long after we put out the Call Lithi­um Pull Pork last week, it plunged 22 per­cent in a day after the com­pa­ny announced it was review­ing its busi­ness strat­e­gy with the lithi­um price tum­bling.

[00:02:49] Cameron: So Tony did say on the episode he would­n’t be buy­ing it right now, wait until the lithi­um price recov­ered. But there were some oth­er stocks that we do own that took a mas­sive hit last week when they men­tioned prof­it guid­ance. First one I’ll talk about is CLX. CTI Logis­tics. It said on the 21st of Decem­ber That it’s prof­it before tax for the half year to 31st of Decem­ber, 2023 is expect­ed to be approx­i­mate­ly 30 per­cent low­er when com­pared to the pre­vi­ous cor­re­spond­ing peri­od for the half year to the 31st of Decem­ber, 2022, quot­ing here from their let­ter.

[00:03:32] Cameron: As report­ed, the result for the pre­vi­ous cor­re­spond­ing peri­od ben­e­fit­ed from increased demand for pre­mi­um freight ser­vices due to sup­ply chain dis­rup­tions and nat­ur­al dis­as­ters, as well as cus­tomers incur­ring addi­tion­al trans­port and ware­house stor­age costs to ensure their prod­uct was clos­er to the point of sale.

[00:03:51] Cameron: The cur­rent half year report­ing peri­od has seen a nor­mal­iza­tion of cus­tomer sup­ply chains con­sis­tent with the half year to 30th of June 2023. With few­er sup­ply chain dis­rup­tions and less con­se­quent demand for pre­mi­um freight ser­vices. Which all sounds quite rea­son­able, I guess, but the share mar­ket did­n’t think so.

[00:04:14] Cameron: Share price took about a 7 per­cent hit the next day. Dropped from 1. 54 down to 1. 41, recov­ered a lit­tle bit to 1. 43 when it closed on Fri­day. We do hold it in the dum­my port­fo­lio and I near­ly had to sell it, but I think it’s a three point trend line is a 1. 36. Did­n’t quite go down that far. When it recov­ered, it’s now at a 4 per­cent prof­it for us.

[00:04:44] Cameron: We’ve held it since Novem­ber, 2022 in the dum­my port­fo­lio. It had been doing rather well. Now, not so well. We’ll see what hap­pens. One that I did have to sell was MTO, Motor­cy­cle Hold­ings. Same day, 21st of Decem­ber. They came out with under­ly­ing EBITDA guid­ance. Motor­cy­cle Hold­ings Lim­it­ed, one of Aus­trali­a’s lead­ing retail­ers, blah, blah, blah.

[00:05:07] Cameron: Today pro­vides an update in rela­tion to expect­ed earn­ings before inter­est, tax depre­ci­a­tion, and amor­ti­za­tion. For the six months end­ing the 31st of Decem­ber, 2023. They said they expect­ed to report an under­ly­ing EBITDA of between 14 mil­lion and 16 mil­lion for the six months. The whole­sale sales of farm vehi­cles are slow­ing with increased com­pe­ti­tion as stock lev­els for all dis­trib­u­tors nor­mal­ize.

[00:05:36] Cameron: The com­pet­i­tive envi­ron­ment is putting pres­sure on mar­gins. While retail unit sales of new motor­cy­cles remain strong. Wider eco­nom­ic con­di­tions are dri­ving mar­gin pres­sures affect­ing all areas of the busi­ness. It fell 28 per­cent when that news hit, recov­ered a lit­tle bit, but not enough to save it. We owned it in a cou­ple of port­fo­lios and I took a, between a 14 and a 16 per­cent loss by the time I woke up to how much it had fall­en.

[00:06:10] Cameron: Blew through our rule ones in all of those cas­es. The third instance last week was ASG. Not exact­ly sure what hap­pened to this one. Jonathan in the club chat men­tioned some­one in the mar­ket was sell­ing two large batch­es, 100, 000 shares and 200, 000 shares. Uh, but it, you know, on the 20th, it was trad­ing at 2.

[00:06:34] Cameron: 30. Before closed out rough­ly, it opened at 2. 23 and then con­tin­ued to 20 before recov­er­ing on the 22nd, Fri­day, fin­ished up about 2. 32, not far below where it was on Wednes­day, but we man­aged to avoid hav­ing to sell that one. We hold it in a num­ber of port­fo­lios. It’s up 6, 7, 8%, 9 per­cent across those port­fo­lios.

[00:07:01] Cameron: We bought around 2, some­where between 2. 18, depend­ing on the port­fo­lio back, uh, well, one of them actu­al­ly, since August 22, we bought it at 2. 15. So the oth­ers we bought ear­ly 2023, but it just goes to show you how quick­ly some of these stocks can change, par­tic­u­lar­ly when prof­it guid­ance comes along at the end of the year.

[00:07:23] Cameron: And some­times you just take a hit on them, but as my analy­sis showed when I did it a month or so ago, our rule ones and our three point trend line, uh, sell trig­gers tend to save us from any dis­as­ters. Some­times they go up after we sell them, uh, quick­ly. Some­times they go down even fur­ther after we sell them.

[00:07:46] Cameron: Like, um, well, I can’t think of any exam­ples recent­ly, but there’s been a few. Any­way, we will see how that pans out. One oth­er idea I had that I’m going to pur­sue over the course of 2024, but I’m going to start it today. There’s a, there’s an author, Mor­gan Housel, H O U S E L, that We’ve talked about a few times on the show, Steven Mabb, Chair­man Mabb, has, uh, men­tioned to, uh, men­tioned him to me a num­ber of times, a cou­ple of his books, that, uh, Steven’s a big fan of, Mor­gan is a part­ner at some­thing called the Col­lab­o­ra­tive Fund, for­mer colum­nist at the Mot­ley Fool and the Wall Street Jour­nal, And he’s writ­ten a num­ber of, uh, pop­u­lar books like The Psy­chol­o­gy of Mon­ey.

[00:08:34] Cameron: But I found, um, a blog post of his that I thought was kind of cool. 100 Lit­tle Ideas. This is a post from Feb­ru­ary 2020. He says, a list of ideas in no par­tic­u­lar order and from dif­fer­ent fields that help explain how the world works. Now, I thought this was inter­est­ing build­ing on top of the Char­lie Munger quotes that I had, uh, you know, Char­lie was a big fan of mod­els for under­stand­ing the world.

[00:09:00] Cameron: Per­haps coin­ci­den­tal­ly, he said that there was about a hun­dred mod­els that you need­ed to under­stand. I’m not sure if they’re the same hun­dred as Mor­gan’s hun­dred, but I thought each week I’d take one of these over the course of, well, I guess it’ll take me a cou­ple of years to get through them and we can just talk about one of them.

[00:09:16] Cameron: I’ll do it with TK when he’s on the show, but I found these inter­est­ing and I think you will too. So the first one. Is Depres­sive Real­ism. He says depressed peo­ple have a more accu­rate view of the world because they’re more real­is­tic about how risky and frag­ile life is. The oppo­site of bliss­ful­ly unaware.

[00:09:40] Cameron: Now, um, I don’t con­sid­er myself a depres­sive real­ist or a depressed per­son. I’m the oppo­site of that, very upbeat per­son, but I do con­sid­er myself a real­ist hav­ing had sev­er­al failed star­tups and mar­riages over the course of my life. I’m very real­is­tic about the chances of suc­cess for most things, but, um, I’m going to com­bine this with my lat­est par­ty trick.

[00:10:07] Cameron: I pulled this out at par­ties. I pulled it out for Tony when we caught up for a Christ­mas lunch with his fam­i­ly a few weeks ago when they were in Bris­bane. Um, it’s Demon­strat­ing Chat­G­PT 4 V. This is the ver­sion of Chat­G­PT 4 that you can get on your phone or your iPad. The V stands for Vision and or Voice.

[00:10:29] Cameron: This is the ver­sion that came out a few months ago where you can take pho­tos of things and it will tell you what’s in the pho­to. But you can also talk to it. And one of the things I’ve dis­cov­ered just around, you know, going to par­ties, Christ­mas time, that kind of stuff, sub­ject of AI, inevitably comes up because I intro­duce it into every con­ver­sa­tion.

[00:10:47] Cameron: Um, oh, that’s an inter­est­ing field of work you’re in. How’s AI going to impact that this year, do you think? And peo­ple usu­al­ly say the exact same thing, which, oh, it’s not going to have any impact at all. And which I laugh, and then I laugh and, uh, and say, real­ly? Wow. Okay. That’s, uh, very con­fi­dent of you.

[00:11:06] Cameron: You need a lit­tle bit more depres­sive real­ism, per­haps. Um, and I asked them if they’ve heard the lat­est ver­sion of it talk­ing to you. And, uh, inevitably they say they haven’t, and so I pull my phone out of my pock­et and I say, check this out. So, um, I’m going to start a con­ver­sa­tion with Chat­G­PT about Depres­sive Real­ism and let’s see what it has to say.

[00:11:28] Cameron: Tell me a lit­tle bit about the con­cept of Depres­sive Real­ism.

[00:11:32] Chat­G­PT: Depres­sive Real­ism is a fas­ci­nat­ing con­cept. It chal­lenges the com­mon belief that opti­mism equates to a more accu­rate view of real­i­ty. Essen­tial­ly. It sug­gests that peo­ple with mild to mod­er­ate depres­sion often have a more real­is­tic per­cep­tion of their abil­i­ties, out­comes, and con­trol over events, com­pared to non depressed indi­vid­u­als.

[00:11:52] Chat­G­PT: This idea was intro­duced in the late 1970s by psy­chol­o­gists Lau­ren Alloy and Lynn Yvonne Abram­son. They found that those with depres­sion made more accu­rate pre­dic­tions about their influ­ence in events, while non depressed indi­vid­u­als tend­ed to over­es­ti­mate their con­trol. It flips the script on how we usu­al­ly think about men­tal health and per­cep­tion.

[00:12:14] Chat­G­PT: Instead of assum­ing that depres­sion skews real­i­ty neg­a­tive­ly, it pro­pos­es that maybe depres­sion strips away the rose col­ored glass­es, reveal­ing the world more truth­ful­ly. But remem­ber, this does­n’t mean depres­sion is good or desir­able. It’s a com­plex and mul­ti­fac­eted con­di­tion, and depres­sive real­ism is just one

[00:12:33] Cameron: intrigu­ing aspect of it.

[00:12:35] Cameron: So for those of us that aren’t depressed, how might we apply the learn­ings of depres­sive real­ism in our every­day lives? Apply­ing the

[00:12:44] Chat­G­PT: prin­ci­ples of depres­sive real­ism in every­day life, espe­cial­ly for those who aren’t depressed, involves a care­ful bal­ance. You’re not look­ing to become pes­simistic, but rather to cul­ti­vate a more real­is­tic and per­haps slight­ly more skep­ti­cal view of the world.

[00:13:00] Chat­G­PT: Here’s how you might do it. One, ques­tion opti­mism bias. We often have an innate opti­mism bias, think­ing things will work out bet­ter for us than for oth­ers. Chal­lenge this by con­sid­er­ing real­is­tic out­comes and prepar­ing for them. Two, embrace uncer­tain­ty. Depres­sive real­ism sug­gests a bet­ter grasp of uncer­tain­ty.

[00:13:19] Chat­G­PT: Acknowl­edge that you can’t con­trol every­thing and be open to var­i­ous out­comes. Three, Reflect on self assess­ment. Some­times we over­es­ti­mate our abil­i­ties or influ­ence. Reflect on your strengths and weak­ness­es hon­est­ly, with­out the usu­al self enhance­ment bias. 4. Seek diverse per­spec­tives. Engage with view­points dif­fer­ent from your own, espe­cial­ly from peo­ple who might see the world less opti­misti­cal­ly.

[00:13:43] Chat­G­PT: This can pro­vide a more bal­anced per­spec­tive. 5. Mind­ful opti­mism. Main­tain a pos­i­tive out­look, but ground it in real­i­ty. It’s about hop­ing for the best while being pre­pared for less favor­able out­comes. Six, avoid extremes. Nei­ther extreme pes­simism nor extreme opti­mism is desir­able. Aim for a mid­dle ground where you’re hope­ful yet real­is­tic.

[00:14:05] Chat­G­PT: Remem­ber, the goal isn’t to adopt a depres­sive mind­set, but to incor­po­rate a more bal­anced, real­is­tic view of life’s uncer­tain­ties and our own capa­bil­i­ties. It’s about enhanc­ing deci­sion mak­ing and per­cep­tion with­out los­ing the ben­e­fits of a pos­i­tive

[00:14:20] Cameron: out­look. So there you go. Maybe I will call my mind­set bliss­ful real­ism as opposed to depressed real­ism.

[00:14:30] Cameron: Uh, I don’t know what you thought about that audio demon­stra­tion. There’s about half a dozen voic­es that you can pick with Chat­G­PTV. But the key thing is they all sound extreme­ly real­is­tic with paus­es, ums, and ahs. Those of you that lis­tened when I, the last time I used Chat­G­PT to do a fill in episode, which I think was about six months ago, I had to cre­ate my own text to speech gen­er­a­tor answers that were nowhere near as real­is­tic as the one that Ope­nAI came out with using their own tech a month or two ago.

[00:15:05] Cameron: So if that’s how good it is now, imag­ine how good it’s going to be a year from now. And it makes me laugh now when­ev­er I watch a sci­ence fic­tion film. When you hear robots talk­ing to peo­ple, and they all sound like this, how quick­ly, with the advent of AI, we’ve gone from that to uh, extreme­ly real­is­tic sound­ing, uh, voice inter­ac­tions.

[00:15:28] Cameron: Imag­ine that, uh, a year or two from now, in terms of tech sup­port. You do tele­phone tech sup­port, or web based tech sup­port, you’ll be able to have nat­ur­al lan­guage con­ver­sa­tions. With the web­site of the busi­ness that you’re try­ing to get sup­port from, it’ll be com­plete­ly plugged into all of their infor­ma­tion, all of your cus­tomer infor­ma­tion, every­thing about their side of the busi­ness, and it’ll be able to talk to you in just nat­ur­al lan­guage about what your need or require­ment is and what they can do to help you.

[00:15:58] Cameron: It’s going to be, I think, an amaz­ing­ly enhanced cus­tomer ser­vice expe­ri­ence across the board. Okay, well, let me throw to Tony now with his pulled pork on ERD. And then when I come back, I’ll do a cou­ple of high­lights from 2023 as select­ed by Chat­G­PT.

[00:16:16] Tony: Anoth­er request from Jim I can do now is E Road. This is a com­pa­ny I’m not famil­iar with.

[00:16:21] Tony: It does­n’t get much cov­er­age. Um, it’s a New Zealand com­pa­ny, so it does­n’t have real­ly have much of a pro­file in the Aus­tralian. Um, Ana­lyst Com­mu­ni­ty or Press, Finan­cial Press, inter­est­ing com­pa­ny though, and, and, um, was great fun to research. It’s a, I guess you could sum it up as being a trans­porta­tion tech­nol­o­gy com­pa­ny, um, or, or a fleet man­age­ment telem­at­ics com­pa­ny, but basi­cal­ly does a cou­ple of things, but one of the, one of the main ones, which seems to be get­ting legs in New Zealand and in roads into Aus­tralia and impor­tant­ly, North Amer­i­ca is they, they put, um, A lit­tle device in a truck or a car that’s part of a com­pa­ny’s fleet that trans­mits data back to soft­ware and the fleet man­ag­er can, you know, look at whether the fleet’s being opti­mized prop­er­ly and save on fuel usage and oth­er.

[00:17:16] Tony: Uti­liza­tion costs. So, inter­est­ing sort of com­pa­ny. I think this tech­nol­o­gy may have been pio­neered by the insur­ance com­pa­nies, because I know when I was in Cana­da, our insur­ance com­pa­ny sent me such a device to put in the car, and it was meant to send data back to the insur­ance com­pa­ny who would then decide whether, you know, they would risk based price my insur­ance based on how care­ful­ly I dri­ve or, or, Or not.

[00:17:41] Tony: So I put my price up if I was a red­head and put it down if I was safe. Um, we did­n’t stay in Cana­da long enough to get any data from that, but that was an inter­est­ing con­cept. Sim­i­lar one being used in, um, by this com­pa­ny. Looks like it may have had a his­to­ry in, uh, A par­tic­u­lar thing that hap­pens in New Zealand called road user charg­ing, which hap­pens in Aus­tralia too, but every­one pays for it through the BOWS or through the petrol price, which they do in New Zealand as well, but once the car, once the truck reach­es above a cer­tain ton­nage, which I think is about the 3.

[00:18:14] Tony: 5 tonnes, then, you know, they’re deemed to be a heavy user of the road, and some­times they’re seen as being a cause of pot­holes and more dam­age to the roads and small­er vehi­cles, and so they have to get a license called a road user charge, and um, You So it’s a cost per 1, 000 kilo­me­ters and they sort of buy them based on what they think they’ll need.

[00:18:37] Tony: Uh, and it’s all up in the, his­tor­i­cal­ly it’s been a man­u­al sys­tem. You go in and apply for a license based on what you think you’ll need. Pay a cost, stick a license on your win­dow and it can be mon­i­tored by, um, You know, trans­port author­i­ties, I guess, at Wey­bridges or some­thing like that to see, you know, what you’ve, how much you’ve trav­eled and, and if you paid the right license.

[00:18:57] Tony: Very man­u­al process and prob­a­bly not that effec­tive, I would­n’t have thought, um, but this com­pa­ny, uh, has been able to elect, elec­tron­i­cal­ly, um, improve that process of road user charg­ing and there are oth­er uses, so there are oth­er coun­tries in the world that do this and there are oth­er coun­tries that do things like You know, in the City of Lon­don, you pay a charge if you dri­ve your car into the CBD, that kind of thing.

[00:19:21] Tony: So there is oth­er appli­ca­tions for road user, elec­tron­ic road user charg­ing and tolling than just in Auck­land or in New Zealand. So this could be export­ed. But it seems like the main part of the busi­ness is in this fleet man­age­ment telem­at­ics, which is very inter­est­ing. Um, the com­pa­ny can report on things for a fleet man­ag­er as, for exam­ple, as to whether, or how often the vehi­cles go over, um, go over speed lim­its.

[00:19:50] Tony: Um, which is not just about avoid­ing fines, but if you think about it, that’s a heavy use of fuel if a truck is revving up to go over. Um, the speed lim­it and, and there’s been reports and case stud­ies show­ing that, uh, the fleet can save 20 per­cent in fuel costs by keep­ing the vehi­cles under the speed lim­it.

[00:20:07] Tony: Just get­ting infor­ma­tion about that. But also things like, um, whether the cold chain stor­age is being opti­mized, um, whether. You’re bet­ter load­ing trucks with the stuff already refrig­er­at­ed or pay­ing the cost to refrig­er­ate them by run­ning the motor heav­ier in the truck, that kind of thing. Um, and also to just uti­liza­tion.

[00:20:27] Tony: So are the dri­vers tak­ing the most, the opti­mal, um, direc­tions to their deliv­er­ies or, or not? So, yeah, I can see the ben­e­fit of this. Um, it’s start­ing to get some high pro­file users. So I think they list Bor­rell in Aus­tralia as one of their, um, One of the com­pa­nies that use it may have a fleet of cement trucks, anoth­er com­pa­ny in Aus­tralia called Pro­gram, which I think used to be called Pro­gram Main­te­nance and may have been list­ed on the ASX.

[00:20:54] Tony: They have a com­pa­ny called Cis­co in the U. S., which S Y S C O, not the router com­pa­ny, but the com­pa­ny that deliv­ers, um, Whole­sale food and, and equip­ment to restau­rants, which has a big fleet of vehi­cles in the U. S. So it’s, it’s gain­ing some trac­tion and grow­ing. They recent­ly did a cap­i­tal raise to, um, put them on a bit of finan­cial foot­ing, but also to help fund expan­sion.

[00:21:16] Tony: So, um, that may hap­pen again because, um, they’re, they’re pret­ty much run­ning at, uh, lease and, um, Break even, I guess. A lot of the costs in this com­pa­ny are in R& D to improve their telem­at­ics and their, they’ve recent­ly signed a part­ner­ship deal with Microsoft to use AI to troll through the data and give them oth­er insights that they can pass on to their fleet man­agers.

[00:21:40] Tony: So, cur­rent­ly, I think R& D was run­ning at about, um, 12 per­cent I think of sales. Uh, it’s, it’s, it’s high, but it’s shrink­ing as a per­cent­age of sales, um, which makes sense. And it looks like that’s where they’ve been putting their. Prof­its into, which also makes sense for a grow­ing com­pa­ny. So yeah, inter­est­ing com­pa­ny, inter­est­ing, um, what they’re doing.

[00:22:04] Tony: Uh, you can see def­i­nite uses, um, for it. Um, how­ev­er, still a small New Zealand com­pa­ny. I think it’s mar­ket caps around 180 mil­lion. ADT for this com­pa­ny is, is small. Um, just try and find that.

[00:22:22] Tony: ADT is 50, 748, so it’s not going to suit every­one, it’s a small com­pa­ny. It’s recent­ly gone across its 3PTL buy, so that’s a good thing. And what else can I say about the num­bers? It’s just the share price for the analy­sis is 97. 5 cents, which is just above con­sen­sus tar­get, um, and it does­n’t have an IV1 and IV2 because the cur­rent earn­ings per share was neg­a­tive, so we can’t cal­cu­late, does­n’t have a yield because every­thing’s going back into R& D.

[00:22:57] Tony: Um, Stock Doc­tor Finan­cial Health Haz­ard is ear­ly warn­ing and steady. Um, that makes sense, I guess, if it’s a grow­ing com­pa­ny and plow­ing mon­ey into its growth, it’s not going to have a strong finan­cial posi­tion. Um, I guess that’s reflect­ed in the cur­rent PE, which is 4, 000 times, and we can’t real­ly score it on that.

[00:23:16] Tony: Um, but how­ev­er, the Prop­Caf is 5. 7 times, so that sug­gests it’s, it is get­ting a lot of sales. They’re com­ing in but going back into grow­ing the busi­ness or R& D research. Net equi­ty per share, 1. 43, which is below its share price, so that’s good. NTA though, how­ev­er, is only 21 cents per share, so that usu­al­ly means that there’s a fair amount of good­will on the bal­ance sheet.

[00:23:44] Tony: And that’s prob­a­bly the case because I know this com­pa­ny has acquired a num­ber of com­pa­nies along the way and put them togeth­er into this sort of data man­age­ment, um, fleet man­age­ment com­pa­ny. So that, uh, even though we score it for being below net equi­ty per share, it is above net tan­gi­ble assets with its share price.

[00:24:04] Tony: Um, We don’t have a fore­cast growth avail­able, so I can’t score it on that, but man­age­ment are call­ing out growth. Obvi­ous­ly, they’re in growth mode, so I’d expect that to be the case, but we can’t, can’t score it. So our scor­ing is per­haps a lit­tle low. Um, Direc­tors only hold 2%, which I thought was inter­est­ing.

[00:24:23] Tony: Again, I would have thought to be an own­er founder in a com­pa­ny like this, but we’re not see­ing it, so we can’t score it for that. It’s a recent buy on the buy list, so we score it for that. Uh, it almost had con­sis­tent­ly increas­ing equi­ty, but I think there was one half where it went down slight­ly, so we can’t score it for that, but it was pret­ty close.

[00:24:40] Tony: So, all in all, qual­i­ty is 7 out of 15 or 47%. Um, but as I said, there could be a dif­fer­ence. A cou­ple of scores we could add back to that in time. QAV score is 0. 08. Uh, so just below again our cut­off of 0. 1, but um, would­n’t take much of a share price, you know, decline by a cent or two to bring it back onto the buy list, or you just wait for fur­ther results in the future.

[00:25:03] Tony: Um, Risks for this one, I think, you know, you’ve got to call out the fact that it’s a small com­pa­ny based in New Zealand and it’s grow­ing, so it’s going to find, it’s going to have all the nor­mal risks you have buy­ing these kinds of stocks, um, they may do anoth­er cap­i­tal raise for an acqui­si­tion or to fund work­ing cap­i­tal or what­ev­er, um, so that’s, that’s always on the card with these com­pa­nies, uh, it does seem like though that that’s been paid back because the share price is up, Since the raise was done, um, I think prob­a­bly the biggest risk that I can see for a com­pa­ny like this is bar­ri­er to entry.

[00:25:38] Tony: So, like I said, those, those vehi­cle mon­i­tor­ing units were being used by the insur­ance com­pa­nies in Cana­da and North Amer­i­ca. Uh, looks like it’s a sim­i­lar type unit that they’re sell­ing. So, if the units are read­i­ly avail­able, then it’s real­ly comes down to how good is their, um, fleet man­age­ment intel, I think.

[00:25:59] Tony: It does do oth­er things, like it does sell dash­board cams and allow, um, you know, inci­dent review. If there’s been an inci­dent, they can review the video record­ed from the dash­board cam. But again, they’re also read­i­ly avail­able in the mar­ket. So I think the real IP for this com­pa­ny is on how good its, um, fleet man­age­ment intel is.

[00:26:18] Tony: And, you know, you won­der how long it would take a U. S. com­pa­ny to reverse engi­neer that. Um, and go after that mar­ket as well. So that, I think that’s prob­a­bly the biggest risk for this com­pa­ny. Um, you know, if they are well estab­lished in the mar­ket and they are, they seem to be that they’re get­ting like a 90 per­cent plus, uh, re sign up from com­pa­nies that use their ser­vice.

[00:26:39] Tony: So that’s a good thing. But you won­der how long it would take for some­one else to come into the mar­ket with sim­i­lar sort of soft­ware, um, using units they can prob­a­bly buy cheap­ly and send out to cars and, uh, and fleet man­agers for their, for their cars and trucks. Uh, and then start to devel­op their own fleet man­age­ment Intel as well, per­haps using AI.

[00:26:58] Tony: So yeah, it’s cer­tain­ly worth look­ing at, but it has all the usu­al sort of small com­pa­ny risks asso­ci­at­ed with a grow­ing com­pa­ny like this. So that’s E Road.

[00:27:10] Cameron: How big their moat is, in oth­er words. Yeah, that’s right. How big is their moat? Thank you, Tony. Yeah, they’re, uh, been a good per­former, um, in my port­fo­lios.

[00:27:21] Cameron: I added them to one of the light port­fo­lios just on the 22nd of Novem­ber and it’s up 36%. Since then, a lit­tle bit less than a month, added them to anoth­er port­fo­lio on the 7th of, uh, Decem­ber. One of the Stock­o­pe­dia port­fo­lios, up 7 per­cent since then, but, um, yeah, yeah.

[00:27:41] Tony: And that’s why they’re prob­a­bly off the bot­tom of the buy list now, because the price has had a run.

[00:27:46] Cameron: Okay, back to me in the booth. And now I’m going to get into the best of clips from this year, as select­ed by my best friend, Chat­G­PT. This first clip is from ear­ly in the year, episode 604, and it’s me hav­ing a con­ver­sa­tion with Tony recap­ping his view on eth­i­cal invest­ing. It’s some­thing that comes up in the ques­tions or the com­ments at least once a year.

[00:28:10] Cameron: So let’s have anoth­er look at Tony’s view on eth­i­cal invest­ing. And for new lis­ten­ers, maybe we should just recap your per­son­al view on eth­i­cal invest­ing. We obvi­ous­ly talk about. Coal com­pa­nies, a lot on this show, we invest in a lot of coal com­pa­nies. I know that per­son­al­ly, you would be hap­py to see us move away from fos­sil fuels to a ful­ly green, sus­tain­able, you’re, you’re a, you’re a Labor vot­er, you’re an old lefty.

[00:28:41] Tony: I’m a swing vot­er, but yeah.

[00:28:43] Cameron: Are you? Do you swing? Yeah. Okay. Well, did­n’t you used to be, uh, should­n’t you used to be a union, uh, union leader, stu­dent union leader,

[00:28:52] Tony: Tony? I was. A stu­dent union leader, yeah. But I could­n’t bring myself to vote for some­one like Bill Short­en, so I vot­ed for the oth­er guys. But, um, yeah, I swing.

[00:29:00] Cameron: Okay, Tony’s the swinger, ladies and gen­tle­men, you have to

[00:29:03] Tony: go first. Around the cen­tre, I’m def­i­nite­ly, my pol­i­tics are def­i­nite­ly in the cen­tre. I make my mon­ey out of, out of being a cap­i­tal­ist and I try and do all I can for the, for uh, cer­tain caus­es, but um, but yeah, that’s my pol­i­tics. But

[00:29:18] Cameron: you invest in coal, explain for the new lis­ten­ers, if you would­n’t mind, just your, your moral eval­u­a­tion

[00:29:25] Tony: there.

[00:29:26] Tony: Yeah, well, my argu­ment on hold­ing coal shares is that, you know, if some­one can tell me how it ben­e­fits the envi­ron­ment for me not buy­ing coal shares, I could be swayed, but no one’s ever been able to pros­e­cute that argu­ment suc­cess­ful­ly with me. And chances are I’m buy­ing those, those shares from some­one who wants to sell them because they are per­suad­ed it’s uneth­i­cal.

[00:29:48] Tony: But it makes no damn dif­fer­ence to the envi­ron­ment whether we hold the shares or not. Because, uh, hold­ing the shares is mon­ey chang­ing hands between share­hold­ers. It’s not the mon­ey going to the com­pa­ny. Now, it’s dif­fer­ent if they did a rights issue and, and, you know, whether we took it up and helped them to buy a coal mine.

[00:30:03] Tony: You know, I might think twice about that. Prob­a­bly would. But yeah, I mean, I think cli­mate change, if we just focus on that par­tic­u­lar eth­i­cal issue, cli­mate change has to be a top down imposed solu­tion, a gov­ern­ment reg­u­lat­ed solu­tion, because it’s not going to be sold by the mar­ket. It’s a tragedy of the com­mons type issue where, you know, that clas­si­cal­ly was peo­ple over­graz­ing their sheep on the com­mon vil­lage land and the farm­ers were nev­er going to stop doing that, even though every year one less sheep could graze because they were eat­ing up all the grass and killing it.

[00:30:35] Tony: It had to be the, the Lord May­or came along and said, nah, nah. Enough time out, you know, there’s only going to be 50 sheep on this com­mon lawn from now on, um, we’ll decide who goes. So that’s how I think that plays out. But every­one has their own per­son­al ethics as well. Like I, I’m hap­py invest­ing in gam­bling com­pa­nies, even though I know that there are peo­ple who, you know, whose lives can be affect­ed by it, but, um, I gam­ble.

[00:30:59] Tony: So I’d, I’d feel a bit hyp­o­crit­i­cal not doing that. Um, so every­one’s got their own per­son­al eth­i­cal red lines. For me, that red line, I’d be. I would­n’t want to invest in a cig­a­rette com­pa­ny, for exam­ple, but I know that Buf­fett did at some stage and there are strong eco­nom­ic rea­sons for it. So I see my role as an investor, first of all, to pro­vide for my fam­i­ly’s future finan­cial needs.

[00:31:22] Tony: And even though I do think about the impacts of that and the ethics of it. It does­n’t stop me from buy­ing shares in coal com­pa­nies, for exam­ple, or oil com­pa­nies.

[00:31:33] Cameron: Because when the ocean lev­els rise by a cou­ple of meters, your fam­i­ly will need, uh, bunkers in New Zealand to go and hide in when the, uh, glob­al apoc­a­lypse hap­pens and, uh, with all the oth­er Davos peo­ple going and liv­ing in New

[00:31:47] Tony: Zealand.

[00:31:48] Tony: I found some bunkers in Tas­ma­nia when I was play­ing golf down there. Did you? Yeah, there you go. Good. Yeah, if the ocean ris­es, we’re up 38 floors here, so it’s not gonna be too bad. Yeah, you,

[00:31:58] Cameron: you won’t be able to get to your restau­rants to have din­ner, but they’ll be under­wa­ter unless they’re also on the 38th floor or some­thing.

[00:32:05] Cameron: Maybe you can just get the chefs to move in to the spare bed­room, cook

[00:32:08] Tony: for you. Yeah, but like, like I said, hav­ing said all that and joked about it, and I, and I agree with it, how does me not own­ing shares in White­haven Coal Stop it. Because the

[00:32:18] Cameron: shares, I mean, the mon­ey’s already been raised through the share issuance.

[00:32:22] Cameron: The shares are already being trad­ed in the mar­ket­place. If you buy a share, they don’t, the com­pa­ny does­n’t get any of that mon­ey. It’s the peo­ple, the indi­vid­ual or the fund or who­ev­er who’s sell­ing the share that you’re buy­ing it from that gets your mon­ey. Uh, the com­pa­ny does­n’t, the coal com­pa­ny does­n’t get your mon­ey to build new coal mines, et cetera, et cetera.

[00:32:42] Cameron: So

[00:32:43] Tony: That’s right. And you could make the argu­ment I’m liv­ing off the pro­ceeds of an uneth­i­cal com­pa­ny because I get div­i­dends from them and I accept that. Maybe I’ll put those div­i­dends and don’t give them Donate ’em to GRE to Thun­berg or some­thing. But that’s a dif­fer­ent argu­ment. Liv­ing off the pro­ceed is dif­fer­ent.

[00:32:57] Cameron: We’ve talked before about, well, if you wan­na real­ly drill into the ethics of every com­pa­ny, cor­rect. And you look at the amount of petrol that their trucks or their fleets of cars or their ships use and. The dam­age that the amount of elec­tric­i­ty that they use to run their build­ings and the tele­phones that they use that are built in sweat­shops and Chi­na.

[00:33:17] Cameron: And it’s a rab­bit hole once you get into that, which we did when we were writ­ing the book, you start to pick at these eth­i­cal issues and it’s, you know, it’s very, very, it’s going to be very, very hard to find any­thing that gets a clean bill of health that you can invest in. So then you need to start mak­ing deci­sions about, well, where’s the line.

[00:33:34] Cameron: What uneth­i­cal behav­iors am I will­ing to invest in ver­sus which ones am I not? And it’s a whole mine­field to get into. Not that peo­ple should­n’t do it if they feel mine­field.

[00:33:46] Tony: It is a whole mine­field. Yeah. I’m not, I’m not forc­ing any­body to do what I do. I’m out there try­ing to help peo­ple do it, you know, invest bet­ter in my opin­ion, or do it my way, but I’m not, not forc­ing them to do it.

[00:33:59] Tony: And yeah, I mean, like the kind of flip side of it is don’t invest because most com­pa­nies are going to have a, you know, some­thing out there, which is going to be a neg­a­tive in terms of the ethics of them, like you said. And so what do you do? Become a farmer. And then if your kids grow up and don’t get the edu­ca­tion or oppor­tu­ni­ties that they deserve, then is that uneth­i­cal?

[00:34:19] Tony: So there’s a real fine bal­ance here in how you, how you think about things and how you put them into prac­tice. Well,

[00:34:25] Cameron: you can’t be a farmer because your cows are fart­ing methane into the atmos­phere, which is bad. And then you should actu­al­ly be plant­i­ng trees on that land and not crops because the trees are absorb­ing the car­bon in the atmos­phere.

[00:34:37] Cameron: And so, you know, you can’t do that either. You just have to live on air, become one of those air peo­ple.

[00:34:43] Tony: Yeah, I would take the David Markham point of view that we should­n’t be hav­ing kids because mankind’s, man’s bad for the plan­et, which is, you know, there’s some sym­pa­thy for it, but I’m not gonna abide to it.

[00:34:54] Cameron: He seems to fly around the world a lot on planes that, uh, get start­ed on our friend David Markham. Alright, well the next clip that GPT select­ed is from episode 644. This is one that we record­ed, uh, the 31st of Octo­ber. So, only a cou­ple of months ago, and this is Tony’s pulled pork on DTL Data 3. Chat­G­PT said, this is an insight­ful idea with the explo­ration of the mer­its and risks asso­ci­at­ed with tech­nol­o­gy com­pa­nies, par­tic­u­lar­ly IT com­pa­nies in the invest­ment land­scape.

[00:35:34] Cameron: This top­ic is addressed through an in depth analy­sis of Data3 Lim­it­ed, a Bris­bane based IT com­pa­ny. The dis­cus­sion high­lights the unique chal­lenges and oppor­tu­ni­ties that IT com­pa­nies present for investors, such as high return on equi­ty, poten­tial growth in areas like AI and con­cerns over high pay­out ratios and the reli­a­bil­i­ty of oper­at­ing cash­flow as a met­ric in tech­nol­o­gy com­pa­nies.

[00:35:58] Cameron: So let’s jump to that and see what Tony had to say.

[00:36:02] Tony: So the pull pork today is on a com­pa­ny called. Data3, DTL, and it’s an inter­est­ing one. We don’t often get tech­nol­o­gy com­pa­nies on the buy list. Yeah. So that’s one of the rea­sons why it caught my eye, but it is a large ADT stock. It’s a Bris­bane based IT com­pa­ny that’s been around for a very long time.

[00:36:24] Tony: I think it was found­ed in 1977, list­ed on the ASX 20 years lat­er in 1997. And it’s one of the larg­er home­grown IT com­pa­nies. I mean, um, There’s a fair bit of it work being done by the big account­ing firms, the, um, PWCs, et cetera. But, uh, this is a ded­i­cat­ed large IT firm. Um, it cross­es the whole, um, water­front on it.

[00:36:49] Tony: It’s, uh, it, uh. offers cloud host­ing, uh, helps out com­pa­nies with IT secu­ri­ty and it does a lot of work on IT solu­tions. So con­sult­ing and sales, trans­for­ma­tion projects, uh, ser­vices, data ana­lyt­ics, et cetera, et cetera. Um, it’s a, it’s a large IDT, ADT stock. So it trades about, um, where’s my num­bers? 2. 49 mil­lion per day.

[00:37:17] Tony: So it’ll suit a lot of peo­ple. It’s not quite. Over at sec­ond buy line. So it’s a, it’s a tech­ni­cal­ly a Josephine at the moment, but it’s get­ting close to a buy. Um, and it’s way above it’s, uh, it’s buy. Uh, but it’s, it’s inter­est­ing. So I was kind of intrigued by it. Um, I have a IT back­ground, so it caught my atten­tion.

[00:37:39] Tony: Uh, Real­ly good num­bers. When I went to do some analy­sis on this, the FY23 results saw that the rev­enue was up 17%, gross prof­it was up 15%, MPAT was up 22%. Um, there’s lots of recur­ring rev­enue, so 65 per­cent of rev­enue is recur­ring. So that’s all real­ly good, and look­ing back over the last sort of, I think they put 6 years in their, in their, uh, infor­ma­tion, in their pack, uh, the growth has been con­sis­tent for the last 6 years, and the com­pa­ny claims to have, uh, increased rev­enue by 15.

[00:38:18] Tony: 3 per­cent CAGR over the last 6 years, so it’s, it’s, been a growth com­pa­ny, so it’s kind of sur­pris­ing to see it on the buy list because we don’t nor­mal­ly get this kind of com­pa­ny on the buy list. Um, going through the num­bers, it’s, uh, share price I did the analy­sis out of 6. 94, which is just slight­ly less than con­sen­sus tar­get.

[00:38:42] Tony: If peo­ple are inter­est­ed, the ROE on this com­pa­ny is 57%, so return on equi­ty is very, very high, which sug­gests that it’s main­ly a cap­i­tal light busi­ness, as a lot of IT com­pa­nies are. Often­times, they’re Biggest cost is peo­ple and there’s some 1, 400 staff work­ing for this com­pa­ny as well. Now, I, I was intrigued by the pay­out ratio on this com­pa­ny, which is, uh, 90, 91%, so most of the prof­its are being paid out in div­i­dends.

[00:39:10] Tony: How­ev­er, the yield is only a lit­tle over 3%, so we can’t score it for beat­ing the, the bank debt rate, um, or the mort­gage rate on that basis. Uh, And I’ll come, I might cir­cle back and come back to why that’s an inter­est­ing stat in itself. Uh, but it did, uh, did catch my eye. So I can’t score it for high yield, but I will talk about the pay­out ratio in a minute.

[00:39:32] Tony: Um, the PE is very high. It’s 29 times, which is, you know, way above what we nor­mal­ly see on the buy list. How­ev­er, it is the low­est PE for this com­pa­ny in three years. So it scores for that. Um, Stock Doc­tor Finan­cial Health is sat­is­fac­to­ry and recov­er­ing. So it gives, uh, Um, points for those two things.

[00:39:53] Tony: Recov­er­ing espe­cial­ly I like. Uh, but the Prop­Caf, sor­ry, the Prop­Caf for this com­pa­ny is 3. 69 times, which is a bit sur­pris­ing giv­en the PE is 29 times, but um, cer­tain­ly throw­ing off all the Prop­Caf, and I’ll come back to that one in a minute too. IV1 and IV2 are way below the share price. So IV1 is 1. 22, IV2 is 2.

[00:40:16] Tony: 67, and the share price is 6. 94. And like­wise, so is net equi­ty per share. It’s um, 0. 44, so it’s nowhere near the share price. So we can’t give it a score for that or for book plus 30%. Earn­ings per share growth fore­cast is 13 per­cent which I thought might be a bit con­ser­v­a­tive giv­en the growth the com­pa­ny’s been get­ting over the last five or six years but that’s what the ana­lysts are say­ing.

[00:40:42] Tony: But growth over P does­n’t meet our 1. 5 thresh­old so we can’t score it for that because the P is too high. I did think this might be an own­er founder com­pa­ny but it’s not. How­ev­er, direc­tors hold 3 per­cent which isn’t too bad. Inter­est­ing, um, inter­est­ing his­to­ry. Looks like the founders are out, um, they’re prob­a­bly going back to 77 when they found­ed the com­pa­ny.

[00:41:02] Tony: Just as an aside, it’s the his­to­ry of the com­pa­ny is it’s, um, uh, one of the orig­i­nal, I think, IBM resellers in Aus­tralia and it merged with a, I think, a type­writer. Vend­ing Com­pa­ny, so per­haps an IBM type­writer vend­ing com­pa­ny back in the 70s, and formed this com­pa­ny, and then they decid­ed to, uh, jazz up the name, because I think it was called PCA orig­i­nal­ly, or PCA Part­ners orig­i­nal­ly, and they called it Data Hash 3.

[00:41:32] Tony: Because, uh, that was the year, when they changed the name, that was the year that IBM released per­son­al com­put­ers that had a hash above the 3, so you pressed shift 3 and got a hash, and they thought that was the, a great, you know, great move for­ward in tech­nol­o­gy, and they’d show them­selves to be, uh, Uh, on the cut­ting edge of trends in the IT indus­try, and so they call them­selves Data3.

[00:41:55] Tony: Uh, yeah, inter­est­ing sto­ry. Any­way, um, in terms of man­u­al­ly entered data, it’s not a recent upturn. It’s been, been trav­el­ing quite nice­ly, as you’d expect with that sort of growth pat­tern over the last five years. It gets a zero for con­sis­tent­ly increas­ing equi­ty, although it was pret­ty close to, to six halves of increas­ing equi­ty, just slight­ly missed out on one.

[00:42:16] Tony: Um, all in all, qual­i­ty score is 10 over 15, so 67%. QAV score of 0. 18. How­ev­er, let me just run through some of the inter­est­ing parts and I put this in the risk sec­tion. The div­i­dend pay­out ratio is 91. 4 per­cent and I’m, it’s not on the check­list as a met­ric or it’s not a red flag, but it is a risk I think when a com­pa­ny’s pay­ing out such a high amount of prof­it as a div­i­dend, uh, I guess you can read it as a pos­i­tive or neg­a­tive, I tend to see it as a neg­a­tive because if they have a down­turn, if there is like a reces­sion next year and the prof­its go down, the div­i­dend goes down and if peo­ple are hold­ing the stock to obtain a div­i­dend, then they’ll sell it, which will depress the stock price even fur­ther.

[00:43:05] Tony: So, yeah. I think it’s an issue when a com­pa­ny pays out that much of its prof­it as div­i­dends. I guess they’re doing it because they don’t need to invest that much in the busi­ness. Some­times com­pa­nies in this sit­u­a­tion keep more on their books and then they look for M& A acqui­si­tions, so that’s Some­thing they per­haps could con­sid­er, but yeah, it’s, it’s a risk.

[00:43:28] Tony: And, and I’m remind­ed of the time many decades ago when Tel­stra was a blue chip com­pa­ny, or still is, I sup­pose, but was a, was a dar­ling because it was pay­ing a, uh, an above mar­ket div­i­dend yield, ful­ly frank, and peo­ple were buy­ing Tel­stra stock when they retired and liv­ing off the div­i­dends for years and years, not real­ly car­ing what hap­pened to the share price or who was run­ning the com­pa­ny or what it was get­ting into, um, but rely­ing on that div­i­dend.

[00:43:52] Tony: And even­tu­al­ly years. Tel­stra’s prof­it became more chal­lenged. The div­i­dend pay­out ratio had to keep climb­ing because prof­its were decreas­ing a lit­tle bit. Pay­out ratio was increas­ing to attract peo­ple to keep the share price up to buy the stock. Uh, and even­tu­al­ly it got into the com­i­cal sit­u­a­tion where Tel­stra was bor­row­ing mon­ey to pay their div­i­dend.

[00:44:12] Tony: So the prof­it was­n’t cov­er­ing the div­i­dend and obvi­ous­ly you can’t keep Doing that for­ev­er and even­tu­al­ly it all came to an unhap­py end and a bit of a mess. So when­ev­er I see a pay­out ratio so high, I’m a lit­tle bit skep­ti­cal and call it out as a risk. Um, the oth­er inter­est­ing thing about this com­pa­ny, and I guess, you know, my brain was picked by the fact that it’s a high PE com­pa­ny, um, but it’s com­ing up as good price to oper­ate in cash flow.

[00:44:40] Tony: Uh, And it’s, it’s fail­ing on the oth­er val­u­a­tion met­rics like IV1, IV2 and, and Net Equi­ty Per Share. So, some­thing was going on there and I did a bit of dig­ging. It looks like, in this case, oper­at­ing cash flows is often affect­ed quite a lot by sup­pli­er pay­ments. So, this com­pa­ny, I think, does about 2. 5 bil­lion worth of sales.

[00:45:05] Tony: I’ve done some back of the enve­lope analy­sis on some num­bers, so they may be out. But they’re sort of direc­tion­al­ly right. Looks like about two bil­lion of that comes from hard­ware. So they’re buy­ing equip­ment from IBM, et cetera, and then installing it and sell­ing it to com­pa­nies that they’re doing IT con­sult­ing work for, or oth­er IT work for.

[00:45:26] Tony: And so they’re mak­ing a very thin mar­gin on that. But depend­ing on the trad­ing terms, when they get the mon­ey from the client and to how long it takes for them to have to pay IBM, Uh, that can come look like oper­at­ing cash flow because it’s receipts from clients but it has­n’t been paid out to a sup­pli­er and I think that’s inflat­ing the oper­at­ing cash flow this par­tic­u­lar half because last, last half it was neg­a­tive 22 mil­lion dol­lars so, um, some, I’m not sure this is a QAV stock, I’m not sure we can rely, I don’t think we can rely on oper­at­ing cash flow in this case, uh, I’m not say­ing it’s a bad com­pa­ny or I’m not say­ing it’s um, it should­n’t be bored if peo­ple are inter­est­ed in a growth com­pa­ny.

[00:46:07] Tony: It’s got a rea­son­able qual­i­ty score but I think the oper­at­ing cash flow here is, is not what we intend it to be. In oth­er words, a good indi­ca­tion of how, how um, you know, cash gen­er­a­tive this busi­ness is. And dig­ging down a lit­tle bit fur­ther, it’s kind of two busi­ness­es and man­age­ment do call this out in their pre­sen­ta­tions and the busi­ness split is impor­tant how­ev­er the account­ing does­n’t.

[00:46:28] Tony: Split things into busi­ness units. It just oper­ates at the com­pa­ny lev­el. So, well, the statu­to­ry account­ing does any­way. It looks like, uh, like, like I said before, about 2 bil­lion of the 2. 5 bil­lion in sales is IT hard­ware. And they’re mak­ing about, you know, sort of a very low mar­gin on that, maybe 1 to 2%. Um, but the rest of the busi­ness, the oth­er, uh, sort of 350 to 500 mil­lion in sales, maybe 350, I think was the num­ber I pulled out of their fig­ures.

[00:46:55] Tony: Uh, looks like it’s. The peo­ple busi­ness. So the sort of busi­ness that, um, we like to see with IT com­pa­nies where, uh, there’s a low invest­ment, low cap­i­tal, um, high ROE and great mar­gins. And so, you know, if you try and split that up and take the prop calf from the con­sult­ing busi­ness and the, and the oth­er parts of the busi­ness, which aren’t it sales hard­ware, sales.

[00:47:20] Tony: And then the Prop­Caf blows out to be more like the PE, so I, again, I haven’t done the detailed num­ber crunch­ing, I would guess it’s going to be sort of in the 20 to 30 times ratio, sort of equiv­a­lent to what the PE is, which is 29. 4, so yeah, I don’t know. Look, I’m not going to say don’t buy this com­pa­ny.

[00:47:39] Tony: I’m not going to say buy it, which I nev­er do any­way. But this is one case where the Prop­Caf isn’t giv­ing us the whole pic­ture. Looks like it’s a good com­pa­ny. It’s had at least six years of con­stant growth. You’d be hap­py to know, Cam, that they’ve high­light­ed AI as being a par­tic­u­lar area of growth for them.

[00:47:58] Tony: And all of their clients are ask­ing them how can they use AI in their busi­ness in every sort of aspect. Secu­ri­ty, um, uh, net­work. Rout­ing, um, all sorts of dif­fer­ent things. So, uh, trans­for­ma­tion, busi­ness, um, busi­ness process flow, all that kind of thing. So, uh, I’ve got no rea­son to think the growth won’t con­tin­ue, but I’m just going to cau­tion peo­ple to, um, do a, do some research them­selves.

[00:48:24] Tony: I don’t think Prop­Caf is a good mea­sure for this com­pa­ny.

[00:48:29] Cameron: DTL. Thanks Tony. A friend of mine, a busi­ness part­ner of mine was like the mar­ket­ing direc­tor there for quite a few years. Okay. Yeah. They’re, they’re think­ing, cause I think they’re based up here, based in Bris­bane. They are. Yeah. Based

[00:48:46] Tony: in Toowong.

[00:48:47] Tony: Yeah.

[00:48:50] Cameron: Good stuff. Yeah. Well, I think, um, AI is going to have a dra­mat­ic impact on IT. Busi­ness­es and how clients use IT in par­tic­u­lar in the next few years, already start­ing to see that flow through. There was an arti­cle in the Finan­cial Review last week that I ref­er­enced in my Futur­is­tic Pod­cast on Fri­day, basi­cal­ly say­ing that it’s, uh, that AI and the impact of AI is one of the top three con­cerns in every board­room in Aus­tralia right now.

[00:49:21] Cameron: It’s what every CEO is think­ing about and talk­ing about. How do they nav­i­gate this? What this, what is the impact going to be on their busi­ness, et

[00:49:30] Tony: cetera, et cetera. Yeah, I think that’s impor­tant, but I take it with a grain of salt as well, because every year they pub­lish that kind of sur­vey, and what are the top three things that CEOs are think­ing about, and you know, one year it’s ESG, one year it’s Inter­net of Things, one year it’s After­pay, it’s like, buy­ing our pay­laters, there’s always some kind of fad they’re focused on.

[00:49:50] Tony:

[00:50:19] Tony: Um, mov­ing from the main­frame to small­er com­put­ers and, um, the appli­ca­tions were eas­i­er to code and main­tain and things. And we start­ed to see less cler­i­cal staff, for exam­ple. That was a, you know, kind of a, I guess an indi­ca­tor that it was actu­al­ly hav­ing an impact on busi­ness. Hmm.

[00:50:37] Cameron: Yeah, one of the things that every­one is pre­dict­ing as being one of the first casu­al­ties will actu­al­ly be devel­op­ers.

[00:50:45] Cameron: The abil­i­ty for Chat­G­PT and BARD to write code now is pret­ty impres­sive. It can write Mas­sive chunks of code, and you know, I’ve spent a lot of time get­ting it to write code for me over the last cou­ple of months. Um, it’s not per­fect, uh, and there’s a lot of debug­ging to be done and that kind of stuff, but I think it’s going to get bet­ter at those sorts of things.

[00:51:08] Cameron: I think its abil­i­ty to replace, uh, a lot of the work that coders do, whether or not it replaces coders, is anoth­er sto­ry, you know.

[00:51:19] Tony: Yeah. Yeah, I think that’s, it’s going to be a great pro­duc­tiv­i­ty tool, if noth­ing else, I think. Hmm.

[00:51:24] Cameron: Hmm. Hmm. And Tony will be hap­py for me to report that since he did that rec­om­men­da­tion, I, uh, did buy DTL, uh, a cou­ple of pack­ages, actu­al­ly.

[00:51:37] Cameron: First was at the begin­ning of, uh, Novem­ber, 8th of Novem­ber, sec­ond, uh, was in, uh, 27th of Novem­ber, and the third was on the 12th of Decem­ber. Any­way, the first one is up about 12 per­cent since we bought it at the begin­ning of Novem­ber. So, uh, yeah, DTL has turned out post pulled pork to do quite well, no com­plaints there.

[00:51:58] Cameron: Well, that is episode, what­ev­er this is, 652, I think, and, uh, I hope you enjoyed that. I’ll be back next week, first week of Jan­u­ary, with anoth­er best of episode, anoth­er pulled pork in there as well. I hope you all have a safe and hap­py New Year’s Eve. Stay out of the storms, don’t drink too much, don’t do your liv­er too much dam­age, and let’s hope that 2024 is a bet­ter year on the mar­kets than 2023 has been.

[00:52:30] Cameron: Take care, guys.

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