QAV #702 — Skill Compensation

QAV 702 Club
[00:00:00] Cameron: Wel­come
[00:00:09] Cameron: back, QAV, Episode 702, TK back in the booth in uh, sun­ny Syd­ney,
[00:00:19] Cameron: TK, how you doing?
[00:00:20] Tony: Good. You’ve had a great rest, thank you.
[00:00:24] Cameron: What have you been doing over the Christ­mas
[00:00:27] Cameron: New Year’s break, TK?
[00:00:29] Tony: Yeah, it’s been busy. I’ve been down to Cape
[00:00:31] Tony: Schanck, um, did Christ­mas down there, came back up here, uh, had rug­by up on the week­end, we played a cou­ple of rounds of golf. As you can
[00:00:42] Tony: prob­a­bly see,
[00:00:44] Tony: we’ve spent the last few days mov­ing fur­ni­ture around at
[00:00:47] Tony: our place because we’re get­ting ready to, um, to list the Sky Palace.
[00:00:51] Tony: We’re mov­ing on.
[00:00:53] Cameron: Wow, that’s big news! I mean, your mar­ket val­ue would be at an all time peak now because of the Sky Palace moniker that I cre­at­ed. So, uh,
[00:01:05] Cameron: I’ll be expect­ing my com­mis­sion when you sell it for com­ing up with the Sky Palace. Is that how your real estate agent is mar­ket­ed? Just the Sky
[00:01:11] Tony: No, no, no.
[00:01:14] Cameron: they don’t know a good thing when they hear
[00:01:16] Tony: I’ll talk to him about it.
[00:01:18] Cameron: Yeah, tell them I
[00:01:18] Tony: I’ll men­tion it. Right.
[00:01:20] Cameron: So you’re mov­ing
[00:01:21] Cameron: out of Syd­ney.
[00:01:23] Tony: That’s the plan. I mean, one step at
[00:01:25] Tony: a time. We, um, need to get a price here
[00:01:28] Tony: so that we can move to Mel­bourne,
[00:01:31] Tony: set­tle in down there,
[00:01:33] Tony: put our feet up. Pay the mort­gage down, off,
[00:01:37] Tony: that’s it.
[00:01:39] Cameron: Retire­ment in Mel­bourne.
[00:01:40] Tony: Yes, live off div­i­dends.
[00:01:44] Cameron: Well, that’s excit­ing. In Mel­bourne, obvi­ous­ly, because that’s where Alex
[00:01:48] Cameron: is, your daugh­ter.
[00:01:49] Tony: that’s right. They also tell me there’s a price dif­fer­en­tial between Syd­ney and Mel­bourne, so we’re
[00:01:54] Tony: hop­ing that
[00:01:54] Tony: we can buy some­thing, you know, there’s prob­a­bly, no, well, some­thing is
[00:02:01] Tony: good in Mel­bourne as we’re leav­ing here, but I think we’ll strug­gle to find some­thing equiv­a­lent
[00:02:06] Tony: to
[00:02:06] Cameron: You’re not gonna get that view.
[00:02:08] Tony: No, exact­ly.
[00:02:09] Tony: Yeah. But, um, yeah, so
[00:02:12] Tony: Time to move on. Jen­ny’s, you know, she’s on the board,
[00:02:15] Tony: um, which is bare­ly cov­er­ing
[00:02:19] Tony: the cost of stay­ing here in terms of body cor­po­rate fees and things like
[00:02:22] Tony: that. Uh, so yeah, no, it’s time to, to think about retire­ment.
[00:02:27] Cameron: And, uh, you lived in
[00:02:29] Cameron: Mel­bourne for how long, last time? I’d
[00:02:32] Tony: Uh, on and off over 20
[00:02:34] Tony: years.
[00:02:35] Cameron: say you’ve got deep roots in Mel­bourne, lots of friends.
[00:02:38] Tony: Mel­bourne feels like home to me, real­ly.
[00:02:39] Cameron: me too.
[00:02:40] Tony: Yeah. Well, move down.
[00:02:43] Cameron: I’m jeal­ous. I can’t, man. I can’t leave my Kung Fu school now. I’m screwed, you know.
[00:02:49] Cameron: Even the Grand­mas­ter’s down there, but he’s
[00:02:51] Tony: I was going to say, how about that? Bris­bane’s got the only, Kung Fu school in Aus­tralia.
[00:02:55] Cameron: Not the only, just the best! the best Kung Fu school, I could nev­er leave. Maybe when I get my black belt, we might be able to leave and go some­where.
[00:03:05] Cameron: Well, that’s big news, Tony. Um, big news in the mar­ket while you’ve been away. I don’t know if you were pay­ing Much atten­tion, but it had like a, it fin­ished the year 52 week high, give or take, depend­ing on whether you look at my num­bers or the finan­cial reviews num­bers, almost at an all time high by, by the end of Decem­ber.
[00:03:29] Cameron: And then I start­ed the new year by just going tits up, um,
[00:03:38] Tony: was a San­ta ral­ly and he just had a hang­over in Jan­u­ary.
[00:03:41] Cameron: San­ta ral­ly. Yeah. Um. I mean, as always, I can’t real­ly tell why it was going up and why it
[00:03:50] Cameron: was going down.
[00:03:51] Cameron: It does­n’t seem like much has changed. Peo­ple think rates are going to go up. They think they’re not going to go up. They think they’re going to go up, goes
[00:03:59] Cameron: back­wards and for­wards.
[00:04:01] Tony: Yeah. I mean, when the mar­ket does this, it’s a bit of a debate of opin­ion. It’s before Christ­mas, peo­ple were say­ing, Oh, that’s it for rate ris­es in the U. S. They’ll be cut­ting them soon. And bear in mind, peo­ple are look­ing gen­er­al­ly nine months ahead. And they make finan­cial deci­sions on the stock mar­ket, at least the big funds do.
[00:04:19] Tony: And then, um, so they start­ed to, to buy into the mar­ket
[00:04:24] Tony: and then after Christ­mas they went, oh,
[00:04:25] Tony: hang on, maybe it’s not going to,
[00:04:28] Tony: inter­est rates may not come down as quick­ly,
[00:04:31] Tony: as soon as we thought. So,
[00:04:32] Cameron: They sobered up,
[00:04:33] Tony: they slowed it up, exact­ly,
[00:04:34] Tony: yes,
[00:04:36] Cameron: Christ­mas lunch­es were all done and they sobered up and, You know, we’re like, oh shit, they start think­ing about. You know, who they
[00:04:43] Cameron: slept with at the Christ­mas par­ty, whether or not there
[00:04:46] Cameron: are pho­tos, should they have real­ly done it in
[00:04:49] Cameron: Par­lia­ment House, um,
[00:04:51] Tony: I’m just think­ing about our Christ­mas par­ty and it’s not a pleas­ant thought think­ing about who we’d sleep with,
[00:05:01] Cameron: and,
[00:05:02] Tony: wife.
[00:05:03] Cameron: Yeah. of course, of course, goes
[00:05:04] Tony: that’s very pleas­ant.
[00:05:06] Cameron: Um, and, you know,
[00:05:08] Tony: But also too, I think it’s, it’s also, um, it’s also a thing that there’s what they call win­dow dress­ing. So at the end of every, at the end of every year in par­tic­u­lar, but half and quar­ter, uh, fund man­agers buy and sell things to make their returns look bet­ter.
[00:05:23] Tony: So it’s not unusu­al for on the last cou­ple of days for there to be a ral­ly and then it pulls back. So like if they, if they own a shit­ty stock 24th of Decem­ber, or.
[00:05:35] Tony: 30th of Decem­ber, they sell it, their port­fo­lio goes up, mar­ket goes up, blah, blah, blah. And then, you know, next, next day, Jan­u­ary 1, they buy it back again.
[00:05:46] Cameron: real­ly, does that real­ly hap­pen? Yeah? You
[00:05:49] Tony: Oh, yeah. Win­dow dress­ing’s a thing. Absolute­ly. All that, well, I know the ques­tions are going to get asked, right? Like when they rule off their books and they go along to their ana­lyst meet­ings and the first thing the answer is going to say is, you know, why don’t you have Tes­la in your port­fo­lio? So they all buy Tes­la, right, before Christ­mas
[00:06:06] Tony: and the mar­ket ris­es.
[00:06:08] Cameron: Yeah.
[00:06:08] Tony: Yeah.
[00:06:10] Cameron: They prob­a­bly should have seen that
[00:06:11] Cameron: ques­tion com­ing and bought it a lit­tle bit ear­li­er.
[00:06:14] Tony: Oh, some do, I’m sure.
[00:06:16] Cameron: Yeah. Well, our port­fo­lio, when I did the report ear­li­er this week, since incep­tion, 2nd of Sep­tem­ber 2019, for peo­ple pay­ing
[00:06:27] Cameron: atten­tion, um, it, it’s doing a lit­tle bit It’s a lit­tle bit less than dou­ble mar­ket since incep­tion, actu­al­ly, I say since incep­tion, but now I’m using the all time thing for Navexa, which prob­a­bly goes back to when the first mon­ey was spent.
[00:06:41] Cameron: But we fig­ured out that Navexa is smart, uh, good enough to work out cash flows and insight, you know. Cash on hold and work it all out. Any­way, what­ev­er it is, it says, uh, yeah, we’re about just a lit­tle under, a lit­tle shy of 16 per­cent per annum over that peri­od, um, ver­sus the, um, STW, the SBDR200, which is about 8.
[00:07:06] Cameron: 8%,
[00:07:07] Cameron: a lit­tle bit under 9.
[00:07:09] Tony: And just on that, I mean, I hope I’m not telling tales out of school, but you were talk­ing about one of our lis­ten­ers
[00:07:14] Tony: who was skep­ti­cal of
[00:07:16] Tony: those returns and set up a regres­sion test, and what did they come back with after doing their test­ing?
[00:07:22] Cameron: Yeah.
[00:07:22] Cameron: I think you said it was about 18 19 per­cent a year, regres­sion test­ing it over like, I don’t know, 20 years or some­thing. So, um, yeah, I mean, seems to work, fun­ni­ly enough. For the finan­cial year, the dum­my port­fo­lio
[00:07:36] Cameron: is doing about 1.
[00:07:38] Tony: Fun­ni­ly enough. Seems to work fun­ni­ly enough.
[00:07:41] Cameron: enough, yeah, who would have thought?
[00:07:43] Tony: Put that on my tomb­stones. Huh. Seemed to work fun­ni­ly enough,
[00:07:47] Cameron: enough.
[00:07:50] Cameron: Hey, could
[00:07:51] Tony: Hey, yeah, how about that?
[00:07:52] Cameron: Yeah. Yeah.
[00:07:54] Tony: it.
[00:07:55] Cameron: Uh, every oth­er finan­cial year, the dum­my
[00:07:58] Cameron: port­fo­lio is doing about 1. 6 times bet­ter than the SPDR200. 30 day
[00:08:03] Cameron: report. Um, we were doing much bet­ter than the STW in the first week of Jan­u­ary. By the sec­ond week of Jan­u­ary, not so much. We’d slipped down. Um, a lot of stocks in the red in the last sev­en days.
[00:08:17] Cameron: That was when I did this yes­ter­day. So it’s yes­ter­day morn­ing’s prob­a­bly worse today. Uh, and in the last week, we had to sell White­haven Coal and we bought CAA. Now, just, just on that, it’s in the ques­tion lat­er on, but I men­tioned it, so I might as well bring it up now. I sold our hold­ings in WHC because Ther­mal Coal became a sell, I think on the 3rd of Jan­u­ary when we checked it, but it turned around.
[00:08:45] Cameron: On the same day, coal did, ther­mal coal did. If I look at the dailies, it’s back up. And even if I look at the month­ly, it’s kind of sort of, I think on or just slight­ly above the sell line. I haven’t crunched the num­bers, but just look­ing at the graph, that’s where it is. And White­haven Coal. Has kept going up, too.
[00:09:07] Cameron: Now, uh, one of our astute lis­ten­ers in the chat room sug­gest­ed it might be because the mar­ket is look­ing to when White­haven Coal moves to 60 per­cent
[00:09:17] Cameron: Met Coal with the BHP Mines acqui­si­tion.
[00:09:20] Tony: hmm. Mm hmm.
[00:09:22] Cameron: And I thought that was a rea­son­able sug­ges­tion, and The num­bers that we have at the moment in our spread­sheet sug­gest WHC is about 82 per­cent
[00:09:31] Cameron: ther­mal and 18
[00:09:33] Cameron: per­cent met­al­lur­gi­cal.
[00:09:36] Cameron: Um, if it takes on this BHP thing, it changes and, but, you know, when we’re doing a com­mod­i­ty analy­sis on a stock like that, do we look at where it’s com­mod­i­ty break­down is today or what it might
[00:09:51] Cameron: be? A year from now.
[00:09:54] Tony: Well, I mean, yeah, it’s a good ques­tion. I, I always like to use the hard data of today, but the mar­ket’s going to look ahead, as you say, um, and I mean, it’s also pos­si­ble that,
[00:10:08] Tony: you know, um,
[00:10:10] Tony: I looked at the call graph too. It’s kind of get­ting towards its lows. So
[00:10:14] Tony: it’s also pos­si­ble that. You know, com­modi­ties traders are say­ing, well, we think coal’s going to turn up from here, and they’re start­ing to place their bets
[00:10:21] Tony: accord­ing­ly.
[00:10:22] Tony: But I think you’re right, or the per­son in the chat room was right, because if you look at the graph of White­haven ver­sus the oth­er coal com­pa­nies, like Yan­coal and New Hope, White­haven, I think Yan­coal, I think New Hope has also been going up, but not as strong­ly as White­haven. And White­haven picked up after it announced that it had bought those, BHP assets.
[00:10:45] Tony:
[00:10:45] Cameron: Uh, well, any­way, so we sold WHC. I said in the chat room that it might be back on the buy list next week if the coal price keeps going
[00:10:54] Tony: Mm hmm. Mm
[00:10:56] Cameron: clever dog, I think it was Nick, said, uh, well, let me know if you buy it, so then I’ll know it’s at its peak and I’ll sell it, or some­thing along the line. Uh, thanks for that, Nick.
[00:11:05] Cameron: But, again, you know, some­times these sell trig­gers don’t work out in their favor, but as I point­ed out a few times, I ran some analy­sis on the sell trig­gers for the light port­fo­lios over the
[00:11:18] Cameron: last year and a half, two years, what­ev­er it was, and it came out about 50
[00:11:22] Cameron: 50. Fifty per­cent, and not fifty per­cent of the time, I want to be clear on that, did it work ver­sus not work.
[00:11:29] Cameron: I think it was the eco­nom­ic ben­e­fit, uh, or the eco­nom­ic impact. of our sell trig­gers was pret­ty much zero from what I could tell. I did­n’t look at the actu­al num­ber of instances where a share con­tin­ued to go down after we sold it and stayed down or rebound­ed and if so how long it took to rebound and the cost of mon­ey in that peri­od and all those sorts of things but just that you know we eco­nom­i­cal­ly we seem to be okay by.
[00:11:59] Cameron: Exe­cut­ing our var­i­ous sell trig­gers. So, but ratio­nal­ly speak­ing, rough­ly half of the time, it’ll work out in our favor. Rough­ly half of the time, it won’t work out in our favor. We just hope that it works out in our
[00:12:10] Cameron: favor a lit­tle bit more often than not, right?
[00:12:13] Tony: Six out of ten. Yeah. Mm
[00:12:15] Cameron: Yeah, at times.
[00:12:16] Tony: Mm
[00:12:19] Cameron: And also I want­ed to point out that the data set that I did that analy­sis on was pret­ty big. That was four port­fo­lios. So, I’m assess­ing the impact over, you know, 70 or 80 stocks over that peri­od, uh, sor­ry, 70, 80 stocks at any giv­en time, so hun­dreds and hun­dreds of stocks. If I did the analy­sis on just one port­fo­lio with a small­er data set, I’m won­der­ing if it would be any dif­fer­ent, or if the fact that we’re buy­ing and sell­ing all of those stocks based on the same rules, sta­tis­ti­cal­ly it should work out rough­ly the same as doing
[00:12:54] Cameron: it on a small data set, right?
[00:12:57] Tony: Oh, no. Not at all. You could, a small well, you’ve got the prob­lem with small sam­ple sizes. Why, you know, polling of elec­tion results can be crap because they don’t call enough peo­ple, right?
[00:13:09] Cameron: Right, but we’re using the same rules to decide what we buy and what we
[00:13:13] Cameron: sell and when we buy it and when we sell it. Whether it’s on 20 stocks or on 100 stocks or on 1, 000 stocks, if the same rules are being applied, um, you would expect that you would get a, an aver­age result across
[00:13:31] Cameron: what­ev­er size the set is.
[00:13:32] Cameron: Right.
[00:13:33] Tony: Yeah, but the small­er the sam­ple size, the more volatile and the more the stan­dard devi­a­tion from the aver­age
[00:13:38] Tony: result.
[00:13:39] Cameron: But if I looked at four port­fo­lios of a small­er data set, and
[00:13:45] Cameron: then aver­age them out.
[00:13:50] Tony: I think you’re right when you first said you had
[00:13:53] Tony: 80 stocks at any one time and you had a large sam­ple base, yeah.
[00:13:57] Tony: It sounds like it’s a sol­id result.
[00:13:59] Cameron: I start­ed read­ing Intro­duc­tion to Prob­a­bil­i­ty over the
[00:14:02] Tony: Ah, good.
[00:14:04] Cameron: I need to, I think I
[00:14:04] Cameron: need to read more. Keep read­ing.
[00:14:07] Tony: Yeah, don’t just read the intro­duc­tion. Read the first chap­ter at least.
[00:14:10] Cameron: Man, I had to use Chat­G­PT to explain every, every sen­tence in the
[00:14:14] Cameron: book. It was assum­ing a deep­er knowl­edge of data sets and ter­mi­nol­o­gy
[00:14:20] Cameron: than I
[00:14:20] Cameron: have. So,
[00:14:21] Cameron: had this idea,
[00:14:22] Cameron: Uh, dur­ing one of my, uh,
[00:14:24] Cameron: fill in shows. I came across this list, Mor­gan Housel. Steven Mab­b’s men­tioned him before in some of his books, but he has this web­site called 100 Lit­tle Ideas, and I’ve just been going through them one at a time and find­ing them quite inter­est­ing.
[00:14:37] Cameron: The first one I did a cou­ple of weeks ago was Depres­sive Real­ism. 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
[00:14:48] Cameron: unaware.
[00:14:50] Tony: Mm
[00:14:50] Cameron: I thought that was fun. This one is skill com­pen­sa­tion. Peo­ple who are excep­tion­al­ly good at one thing tend to be excep­tion­al­ly poor at anoth­er.
[00:15:01] Cameron: Can you, how do you feel about that?
[00:15:04] Tony: Oh, I think it’s absolute­ly true in my case. I’m good at invest­ing in crap at golf.
[00:15:09] Cameron: Thought you were good at golf did­n’t you just win a tour­na­ment?
[00:15:11] Tony: did, yeah. Well, luck­i­ly golf works on the hand­i­cap sys­tem, so it takes into account how good you are.
[00:15:17] Cameron: The trade off hypoth­e­sis. What oth­er things are you
[00:15:19] Tony: Well, I think, uh, let me count the ways.
[00:15:24] Cameron: Love­mak­ing, uh,
[00:15:26] Tony: how would you know?
[00:15:30] Cameron: peo­ple talk.
[00:15:31] Tony: Well, I think it, I think it’s a real­ly good point though. Like it’s like, you see it every day, right? Um, peo­ple think that some­body who’s a good ath­lete or good at sport
[00:15:41] Tony: is going to be good in every aspect of life. And there­fore they should be a role mod­el. It’s, they should be, they should have, I think every ath­lete should have tat­tooed on their fore­head.
[00:15:50] Tony: I am not a role mod­el. It’s just like, yeah.
[00:15:54] Cameron: Well, they’re a role mod­el if you want to be
[00:15:55] Cameron: good at the thing that they’re good at.
[00:15:58] Tony: Well, yeah, but like, they don’t role mod­el that, right? They keep it qui­et. They don’t, they don’t tell you, hey, I spent four hours in the gym, and then I spent two hours going for a run, and then I, you know, drank a dozen eggs this morn­ing for break­fast. You don’t hear about that. You just hear about the fact that they were
[00:16:12] Tony: drink­ing, drink­ing Coke, you know,
[00:16:15] Cameron: Yeah, well, that’s called
[00:16:16] Tony: not drink­ing, eat­ing, sniff­ing
[00:16:18] Tony: Coke,
[00:16:19] Cameron: Oh,
[00:16:19] Tony: at the, at the box­ing match or some­thing like
[00:16:21] Cameron: Oh Yeah. That’s spend­ing mon­ey, not mak­ing mon­ey. Yeah. No, I mean, yeah. I look, obvi­ous­ly to begin, to be real­ly good at
[00:16:29] Cameron: some­thing, you have to spend a lot of time and effort focus­ing
[00:16:33] Cameron: on it. And that’s going to mean you’re not going to be focus­ing on being good at oth­er things.
[00:16:40] Cameron: Um, and I think we all have like nat­ur­al, Neu­ro­log­i­cal strengths and weak­ness­es too.
[00:16:48] Tony: Yeah.
[00:16:49] Cameron: I’m real­ly good at some things and com­plete­ly use­less at oth­er things. And when it, when some­body points out the things that I’m bad at, I’m like, yeah, I’m
[00:16:58] Cameron: real­ly bad at that.
[00:17:00] Tony: And that’s impor­tant too, to acknowl­edge your weak­ness­es, right?
[00:17:03] Cameron: And also to go, and I, you know, I’m a big believ­er in, you know, not accept­ing your weak­ness­es either.
[00:17:09] Cameron: Say, okay, I’m not good at this. How can I get bet­ter at it?
[00:17:12] Cameron: If I’m not good at prob­a­bil­i­ty, all right, let me go read some books about it. Or I’m not good at Excel. Let
[00:17:18] Cameron: me do a course, you know, I’m
[00:17:20] Tony: No, that’s great. That’s a great way to
[00:17:22] Cameron: some books on time
[00:17:23] Cameron: man­age­ment. See if I can learn a few things that’ll help, you know,
[00:17:26] Tony: Yeah, but like,
[00:17:27] Cameron: I, I tend to find a lot of peo­ple that are like, Oh yeah, I’m bad at that.
[00:17:30] Cameron: And I’m nev­er going to get bet­ter
[00:17:32] Tony: Ah, okay.
[00:17:32] Cameron: approach, which
[00:17:33] Cameron: I think is.
[00:17:35] Cameron: Lazy.
[00:17:36] Tony: It is. Yeah. but
[00:17:37] Tony: it’s like, that’s why the term poly­math is so spar­ing­ly used because a lot of peo­ple aren’t experts in more than
[00:17:44] Tony: one field.
[00:17:45] Cameron: yes.
[00:17:47] Cameron: And a lot of peo­ple like me aren’t
[00:17:48] Cameron: experts in any fields, but we
[00:17:51] Tony: Well, com­pe­ten­cy. Let’s just say com­pe­ten­cy in one field.
[00:17:54] Cameron: Yeah. Uh,
[00:17:57] Tony: And look, and it’s impor­tant as an investor, right? There’s a
[00:17:59] Tony: red flag for me. If I see on the board of a com­pa­ny, espe­cial­ly a young com­pa­ny that’s maybe
[00:18:03] Tony: gonna float, that there’s a sports
[00:18:05] Tony: per­son or a celebri­ty on the board, it’s just like, no, no deal.
[00:18:09] Tony: For­get about it.
[00:18:10] Cameron: Yeah.
[00:18:11] Tony: And I’ve seen it hap­pen so many times. X foot­baller gets a spot on the board. No,
[00:18:15] Cameron: Well, but that’s just so you can get meet­ings with peo­ple, right? Oh, Wal­ly Lewis is gonna be at the meet­ing. He’s on our board. So, you know, peo­ple all take the meet­ing just so they can meet. The celebri­ty, right?
[00:18:26] Tony: Yeah.
[00:18:28] Cameron: Not that there aren’t celebri­ties, sport­ing celebri­ties that turn out to be, you got your Greg Nor­mans or who­ev­er, that turn out
[00:18:33] Cameron: to be good busi­ness­men.
[00:18:35] Cameron: I assume Greg Nor­mans
[00:18:36] Tony: Name anoth­er one.
[00:18:39] Cameron: Uh, Um,
[00:18:41] Tony: um, uh,
[00:18:43] Cameron: the guy who fought
[00:18:44] Cameron: Ali. George Fraz­er! He
[00:18:48] Tony: Okay.
[00:18:49] Cameron: was sell­ing, you know, he must’ve
[00:18:50] Cameron: sold mil­lions of those grills.
[00:18:53] Tony: So do you reck­on George Fras­er said, I’m done with box­ing, I got­ta get me A grill
[00:18:57] Cameron: Yeah. Yeah. I got to get the grill. Yeah. My box­ing is okay, but my real pas­sion, what I’ve always want­ed to do is come up with a
[00:19:05] Cameron: fat­less grill. Yeah. Okay. Like that, what I’m
[00:19:09] Cameron: say­ing is, look, there are excep­tions to the rule. There are sport­ing celebri­ties that are good at busi­ness, but more often than
[00:19:15] Cameron: you assume, not.
[00:19:17] Cameron: Same with movie stars
[00:19:18] Tony: Oh, well, you don’t assume any­thing. They may be good at busi­ness, right? They’ve still got to prove them­selves in that field as
[00:19:23] Tony: well. And if they spent 10, 000 hours becom­ing a good sport­ing per­son, it’s unlike­ly they’ve had band­width to do much else than, than that.
[00:19:32] Cameron: but, but, you know, get­ting back to, uh, what I said before, though, I do
[00:19:38] Cameron: think that if you’re excep­tion­al­ly poor at some­thing and you acknowl­edge
[00:19:41] Cameron: that, and it’s some­thing that you want to be bet­ter
[00:19:44] Cameron: at, we live in the gold­en age of Whether it’s watch a YouTube, take a course, lis­ten to a pod­cast, or you know, as you know, late­ly for me, I sucked at cod­ing and now I have
[00:19:56] Cameron: Chat­G­PT, then I can write.
[00:19:57] Tony: So you still suck at cod­ing, but Chat­G­PT, is real­ly good.
[00:20:02] Cameron: That’s true. Yeah, I took Fox, well Chris­sy actu­al­ly, and I took Fox to an Apple, work­shop at Apple Cherm­side a
[00:20:10] Cameron: cou­ple of
[00:20:11] Tony: Oh, they must have loved that.
[00:20:13] Cameron: They did.
[00:20:16] Cameron: Why do you say that?
[00:20:18] Tony: Hey, come on, fam­i­ly. We’re going to an Apple store for a work­shop.
[00:20:22] Cameron: Oh no, Fox did like a whole series of Apple work­shops. He does, over the hol­i­days, Lego work­shops and Apple work­shops.
[00:20:28] Cameron: And they were like, build your own emo­ji
[00:20:31] Cameron: and
[00:20:31] Tony: See, Well, I suck at that stuff. I got no idea.
[00:20:34] Cameron: they, It’s
[00:20:37] Tony: got no idea. I make fun of peo­ple who have an idea. That’s even worse.
[00:20:41] Cameron: ha Like peo­ple who
[00:20:43] Cameron: buy Bit­coin. Um,
[00:20:46] Tony: They’re gonna do well. Well, they have done well this year. It
[00:20:48] Cameron: yes.
[00:20:49] Tony: has been a good trade because they’re about to
[00:20:52] Tony: approve all these ETFs in the
[00:20:54] Tony: US.
[00:20:55] Cameron: You think that’s going to work out?
[00:20:57] Tony: well, I think so because
[00:20:58] Tony: like, it’s a bit, bit like when a, a stock goes into the index, all the, all the funds have to buy. Yeah. Any­way.
[00:21:05] Cameron: Until some­body works out that? they should­n’t be and
[00:21:08] Cameron: then they’ll dump them all. In a heart­beat. Right.
[00:21:12] Tony: Well, yeah. I mean, if, if I was ever gonna buy Bit­coin, I’d buy it this month and then sell it in Feb­ru­ary
[00:21:18] Tony: when the, all the, all the ETFs come on the mar­ket
[00:21:20] Tony: and And
[00:21:21] Cameron: are you going to do that? Are
[00:21:22] Tony: No, I would­n’t even know how to buy
[00:21:24] Tony: Bit­coin ‚uh, any­way.
[00:21:28] Cameron: was in the mid­dle of a sto­ry then,
[00:21:29] Tony: You were, we were at, you were at Charm. I’ll set the, I’ll set the scene for you.
[00:21:33] Tony: You’re at
[00:21:33] Cameron: Apple cod­ing.
[00:21:34] Tony: can’t to the Apple store.
[00:21:36] Cameron: So what are the, they give the kids iPads and it crazi­ly like
[00:21:41] Cameron: near­ly all of them that Fox went
[00:21:42] Cameron: to, it was just him
[00:21:43] Cameron: and one oth­er kid. It’s like a free. Apple work­shop
[00:21:47] Cameron: for kids. There’s usu­al­ly, it’s Fox and one oth­er kid and the oth­er kid’s always one of Fox’s friends. Chris­sy’s got two tick­ets and they’ve gone to this thing and there’s no oth­er kids.
[00:21:57] Tony: Real­ly? I’m Surp. I’m shocked.
[00:22:00] Cameron: no, what? Oh, any­way, the last one that he did that I, that I was sit­ting next to him was a cod­ing work­shop. How to write code for, you know, Fox’s nine and they’re teach­ing him how to use
[00:22:11] Cameron: Apple, um. Cod­ing tech­nol­o­gy to write code.
[00:22:14] Cameron: And they’ve got these like cod­ing things for kids. And, and it was super excit­ing for me because I was say­ing to the guy tak­ing the course, Hey, uh, I write code these days. Yeah. Yeah. I write code. He goes, real­ly? I go, yeah, yeah. I go, but Chat­G­PT does all the work. I mean, I just, you know, any­way, you can get good at things or you can get an AI to be good at them for you
[00:22:35] Tony: Actu­al­ly, I reck­on one of the Semi­al moments in my life is, was when I was at school about grade 11, the school bought a Apple two pc. Like one of the first apples that came out and the teacher, um, one of the teach­ers set up a com­put­er club which I went along to and they had, I think they had the three books, the three apple twos, they had the three books on how to pro­gram in BASIC on an apple and like even­tu­al­ly it got to be my turn to take it home and I just sat up like all night just amazed, oh that’s how you write code to make a cur­sor go around the screen and that’s and like.
[00:23:14] Tony: I think by the end of the sum­mer hol­i­days, I’d writ­ten all these
[00:23:16] Tony: com­put­er pro­grams for video games and stuff in BASIC. It was just like, such an, as you were talk­ing about before about, you know, how your eyes open up when you can do things with
[00:23:25] Tony: code. That was just bril­liant.
[00:23:28] Cameron: Yeah. I was always jeal­ous in the 80s of the guys whose fam­i­lies could afford com­put­ers or that had access to com­put­ers. A friend of mine who lived across the road, um, you know, I remem­ber going
[00:23:39] Cameron: over his house like 83 or some­thing and he showed me they had a modem
[00:23:43] Cameron: cou­pler for the phone. He’d stick the old Bake­lite
[00:23:45] Tony: Ah, ha ha ha
[00:23:46] Cameron: cou­pler.
[00:23:47] Cameron: I was prob­a­bly Plas­tic, but, and you know, the dial in modem and the thing and show­ing me the basic pro­grams. And I was so jeal­ous of those guys
[00:23:57] Cameron: You know, we, I don’t think we even had a TV at that
[00:23:59] Cameron: stage and these guys had com­put­ers and they were doing stuff.
[00:24:02] Tony: you would­n’t have been jeal­ous of the com­put­er club in 1979 or what­ev­er it was at
[00:24:07] Tony: school. There was, there was, there was me, the cross eyed albi­no, the tall
[00:24:13] Tony: pim­ply kid who looks like Moss from the IT depart­ment. It was like, there was like four of us.
[00:24:20] Cameron: yeah, no, I, I am jeal­ous. Uh, those, those would have been great times any­way.
[00:24:25] Cameron: Um, there you go. Let’s move on from the
[00:24:27] Tony: Oh, one more thing. So what your talk about
[00:24:30] Tony: these, um, hun­dred lit­tle ideas reminds me of some­thing I read in the book about, um, Pad­dy Pow­er, the gam­bling. com­pa­ny. Uh, and it stuck with me for a long time. And, and, uh, the CEO there said he always tried to hire, or he always looked for under­con­fi­dent over­achiev­ers.
[00:24:50] Tony: And I think that’s a great,
[00:24:51] Tony: a great sum­ma­ry of, uh, of, uh, you know, some­one who’s real­ly use­ful, but does­n’t
[00:24:56] Tony: have the pro­file or the per­son­al­i­ty to get ahead, but is real­ly doing all the heavy lift­ing in the com­pa­ny.
[00:25:03] Cameron: Yeah. Well, I think like the under con­fi­dence bit to me sug­gests a real­is­tic aware­ness of their strengths and weak­ness­es. You know, they’re
[00:25:13] Cameron: not full of them­selves. So they work hard, they’re smart, but they don’t. You
[00:25:17] Cameron: know, over­es­ti­mate their own abil­i­ties.
[00:25:21] Tony: or the abil­i­ties of what they’re doing, right? So, how many times have, like, when I was work­ing in cor­po­rate, you’d be work­ing on a project, the CEO would come along and go, Wow, that’s fan­tas­tic! Hey guys, have you seen this? Let’s roll
[00:25:33] Tony: it out! And I’m like, uh, yeah, this is just like a pro­to­type. You can’t do that yet.
[00:25:40] Cameron: No.
[00:25:40] Tony: I know all the risks and they know, they just see all
[00:25:42] Tony: the upside.
[00:25:43] Cameron: Yeah. Mov­ing right along. Dogs of the Dow, Tony, Steven Mabb. Uh, name check­ing him
[00:25:51] Cameron: again on
[00:25:51] Tony: Mm hmm.
[00:25:52] Cameron: Sent me an email this
[00:25:53] Cameron: morn­ing. Dogs of the ASX win again in 2003, 8th of Jan­u­ary, 2024. Hugh Dive. Huge dive? Huge dive. Atlas, Atlas Funds Man­age­ment. The last 12 months have been sur­pris­ing­ly good for equi­ty investors, with the ASX200 up 7.
[00:26:09] Cameron: 8 per­cent or 12. 4 per­cent includ­ing div­i­dends, though this was admirably aid­ed by one of the bet­ter San­ta Claus ral­lies in recent years. Indeed, at the end of Octo­ber 2023, the ASX200 was under­wa­ter by 3. 6 per­cent for the year. Wow. When writ­ing this dog’s piece in Jan­u­ary 2023, like many, Atlas had a very cau­tious out­look for 2023.
[00:26:34] Cameron: 12 months ago, we’d seen a 3 per­cent rise in the cash rate and loom­ing fixed inter­est rate cliff that was expect­ed to see retail sales crater and house prices plum­met. In Novem­ber 2022, at their results, West­pac’s fore­cast of a 3. 85 per­cent cash rate result­ed in their eco­nom­ic mod­els pre­dict­ing unem­ploy­ment to rise by 4.
[00:26:55] Cameron: 5%, a 16 per­cent fall in house prices nation­al­ly, and a spike in
[00:27:00] Cameron: bad debts. In 2023,
[00:27:04] Tony: why do, why do econ­o­mists, why do econ­o­mists still hold jobs, Ken? Like, seri­ous­ly.
[00:27:10] Cameron: I was out to lunch with, uh, a guy yes­ter­day who paint­ed my por­trait, you know, my god­fa­ther por­trait, I
[00:27:16] Cameron: final­ly took deliv­ery of that yes­ter­day, he’s been offer­ing it to me for years and he sub­mit­ted it to the Archibald and it did­n’t get in, but I even­tu­al­ly caught up with him and took it off him. Any­way, we were talk­ing about, uh, Econ­o­mists pre­dict­ing stuff and this and that.
[00:27:30] Cameron: And I, I quot­ed, I said, you know, Tony said, Tony always says, show me a rich econ­o­mist. If econ­o­mists knew what they were talk­ing about, they’d all be rich. I
[00:27:38] Tony: I would­n’t be work­ing for
[00:27:39] Cameron: econ­o­mist.
[00:27:40] Tony: Exact­ly. Yeah.
[00:27:41] Cameron: I said the same as with finance jour­nal­ists as well. Show me a rich finance jour­nal­ist. Um, any­way, he goes on to say in 2023, con­sumer dis­cre­tion is one of the strongest
[00:27:51] Cameron: sec­tors on the ASX gain­ing 22.
[00:27:53] Cameron: As always, at this time of the year, investors will be pick­ing through the mar­ket’s trash of 2022 to find some trea­sure to dri­ve port­fo­lio returns over the com­ing year. Invari­ably, sev­er­al bot­tom per­form­ing stocks will con­found mar­ket expec­ta­tions and stage remark­able come­backs as we saw in 2023. Any­way, he says the, uh, 2023 dogs had a stel­lar year up 26 per­cent, it’s best year since 2016.
[00:28:21] Cameron: Peo­ple want to know who they were. Star Enter­tain­ment. Uh, uh, actu­al­ly was one of the dogs, he’s still a dog, down 65
[00:28:29] Cameron: per­cent in 2023. James
[00:28:33] Tony: dog. It’s a pit bull now.
[00:28:34] Tony: It’s a big dog.
[00:28:35] Cameron: James Hardy, was down 52 per­cent in 2022, up 104 per­cent in
[00:28:40] Cameron: 2023. Reliance World­wide, down 51 per­cent in 2022, up
[00:28:45] Cameron: 50 per­cent in 2023. Xero, down 50 up 51 per­cent in 2023.
[00:28:53] Cameron: ARB up 34, Reese up 56, Domi­no Piz­za down 13, Char­ter­hall Group down 1, Seek up 26%, Down­er EDI up 20%. So it says the ASX 200 was up 12 per­cent for the year. And the, um, aver­age of the dogs was 26%. So, con­tin­ues to do well, the dogs. But you’ve done some regres­sion
[00:29:20] Cameron: test­ing on the dogs, uh, in the past,
[00:29:21] Tony: Well, I, yeah, I did­n’t need to. Well, this time I did­n’t need to do regres­sion test­ing. I just Googled how, how, how down the dog’s gone long term.
[00:29:31] Cameron: Yeah.
[00:29:32] Tony: you’ll see it’s, uh, it’s like. 1 per­cent under­per­formed the index over the long term. So, um, to be fair, like last time I had a detailed look at this was about 15 years ago, and it was slight­ly out­per­form­ing the last 10 years.
[00:29:45] Tony: For exam­ple, um, this is the US mar­ket. Um, Google’s telling me that the. Dow Jones was up 11. 48 per­cent and the dogs were up 10. 02%. So it’s, you know, that kind of, it seems to, it seems to be index hug­ging, I guess is my point.
[00:30:05] Tony: I actu­al­ly like the con­cept because it’s a nat­ur­al
[00:30:08] Tony: con­trar­i­an sys­tem. Um, so I like all, all that about it, but it just, it just does­n’t out­per­form.
[00:30:16] Tony: That much over time.
[00:30:18] Cameron: Yeah. Oh, fun­ny, I went to search my notes to see when the last time was, we talked about it, and the first note that came up
[00:30:24] Cameron: was thing I took in July of last year. If you’d fol­lowed the strat­e­gy since 2009, you’d have beat­en the Dow Jones in 6 out of those 10 years. That’s not bad at all for such a sim­ple strat­e­gy, though the num­ber falls to 5 out of 10 when you com­pare it to per­for­mance of the broad­er S& P 500 index.
[00:30:43] Cameron: Goes through good patch­es and bad patch­es, etc, etc. So, yeah, it under­per­forms, uh, the two indices slight­ly more than half the time,
[00:30:53] Cameron: which, you know, not good, but peo­ple.
[00:30:56] Tony: toss. Well, it’s a coin toss. And, um,
[00:30:58] Tony: yeah, I mean, it’s, it’s entire­ly pos­si­ble if some­one starts out with the dogs is down and does some more research that they could out­per­form the mar­ket. Um, and I think that’s what the arti­cle was say­ing is that this guy from Atlas, Hugh Dive, does­n’t just buy the whole 10 stocks.
[00:31:13] Tony: They buy the ones they like or think will out­per­form.
[00:31:16] Cameron: Right.
[00:31:17] Tony: So it’s a good start­ing list. Um, but yeah, I mean I’ve always liked the idea of it, it’s just nev­er per­formed. And I guess that’s the learn­ing for me is when­ev­er you get these arti­cles, espe­cial­ly in the finan­cial press, where they talk about some­thing which is up 25
[00:31:30] Tony: per­cent over the last 12 months, what­ev­er it is, just Google long term per­for­mance of this or that, and uh, and see if it’s worth your while going any fur­ther.
[00:31:39] Cameron: Yeah. All right. Well, that’s all my notes, TK.
[00:31:45] Cameron: What do you got?
[00:31:47] Tony: I’ve got a pulled pork on, uh, Actu­al­ly, I’ve got two things. I’m sor­ry. I’ll do the pulled pork next. I’ve got a ques­tion that was asked last time I was on the show, three weeks ago, uh, from Jim, who was want­i­ng to know about my thoughts on the Wood­side San­tos merg­er. So I’ll answer that first, and then I’ll do a pulled pork on Res­i­mac RMC after that.
[00:32:14] Cameron: Okay.
[00:32:15] Tony: Okay, so Wood­side San­tos merg­er, uh, announced a month or so ago, um, it’s been, the merg­er was pro­posed by Wood­side. So Wood­side and San­tos are two big oil and gas play­ers on the Aus­tralian mar­ket, in the Aus­tralian mar­ket. Um, Wood­side had pro­posed a merg­er. Um, at this stage there’s no fur­ther details on that.
[00:32:36] Tony: There’s no let’s do a merg­er at this price or how many shares do the San­tos share­hold­ers get or what­ev­er. So we still don’t have all the infor­ma­tion yet. But the idea is that, uh, the merg­er would cre­ate the sixth largest LNG play­er, nat­ur­al gas play­er in the world. Uh, and I guess it makes sense to do one now, apart from all the ben­e­fits of merg­ing these two large com­pa­nies, which would give them, you know, economies of scale and some syn­er­gies.
[00:33:04] Tony: Uh, it would give them a bet­ter seat at the table when they’re nego­ti­at­ing con­tracts with their Asian buy­ers. Cause it’s not one com­pa­ny being played off against the oth­er. It’s one, one com­pa­ny deal­ing with their, their buy­er. So it strength­ens their hand. But the oth­er, the oth­er issue is in the back­ground, of course, is a lot of merg­ers and acqui­si­tions are hap­pen­ing in this space around the world.
[00:33:27] Tony: Uh, so for exam­ple, Exxon and Chevron in the last 12 months, both took over large. US LNG providers. So there’s con­sol­i­da­tion going on in the indus­try. It’s, it’s hap­pens in indus­tries. This is kind of the big get big or get out stage of the growth cycle. Um, and it’s, so it’s time to, to merge. I sus­pect what’s also You know, dri­ving this is that Wood­side are pick­ing, uh, not pick­ing San­tos, not just because they’re also in Aus­tralia and, and they actu­al­ly own already some, they co joint­ly own some oil and gas fields already in Aus­tralia.
[00:34:02] Tony: Um, if Wood­side joins San­tos, they get access to Papua New Guinea, which is an emerg­ing mar­ket, um, in this, in this space. But I think what must also be in the back. of the minds of both Wood­side and San­tos is, hey, if there’s a lot of M& A going on and we’re a small fry, we’re a small fish in this pond, how long until we get tak­en out?
[00:34:25] Tony: So, by becom­ing the sixth play­er, that lessens that hap­pen­ing. Does­n’t say it won’t hap­pen, but it does lessen it. Um, but there’s an awful lot to watch out for because none of the details about how the merg­er will work have been released yet. Uh, the obvi­ous one is, you know, watch this space. Some­one could actu­al­ly lob a bid for San­tos before this.
[00:34:46] Tony: Um, goes much fur­ther and just takes San­tos off the table because Wood­side are try­ing to do this as some kind of merg­er of equals, um, with­out pay­ing a pre­mi­um. And that’s one of the prob­lems. I think they’ll have to pay some kind of pre­mi­um to merge with San­tos. Oth­er­wise, why would the San­tos share­hold­ers do it?
[00:35:02] Tony: They’re going along rea­son­ably nice­ly now. Um, some­thing else to watch for is that San­tos haven’t agreed to any­thing yet. And why should they, with­out know­ing a deal? So they may decide that they don’t want to merge and they might start doing. What’s called defen­sive plays. So they might, um, either take on more debt and buy some­thing or the reverse sell, start sell­ing assets, um, into the mar­ket.
[00:35:24] Tony: Sort of the, um, the idea being that, uh, if they have assets, which the mar­ket isn’t valu­ing with­in San­tos, and if they, if they flick them out and demerge them, they get the full val­ue for it, which bulks up the ben­e­fit to San­tos. Uh, oth­er things which we should take into account, Wood­side has just com­plet­ed the pur­chase of BHP.
[00:35:44] Tony: Um, Oil Assets, uh, in the last sort of 12 to 18 months. So they’re real­ly on a, on a bit of an M& A spree at the moment. And so if they do get this deal away, that’s two very large deals in two years. And I think there might be some, some stom­ach upset going for­ward after hav­ing those two bites so quick­ly.
[00:36:06] Tony: Um, so that’s an issue that peo­ple need to think about. Um, So basi­cal­ly I don’t have an opin­ion yet because, like the San­tos board, we don’t know what the deal is. But if I look at the num­bers in the buy list, uh, San­tos isn’t on the buy list, it was in the past. And it’s tech­ni­cal­ly a hole at the moment, it’s below its QAV score has dropped to 05 because it has been doing rea­son­ably well.
[00:36:33] Tony: It’s mar­ket cap is 22 bil­lion, so it’s the small­er of these two play­ers if they merge. And that’s got to be an issue, like, San­tos man­age­ment and direc­tors have to be say­ing to them­selves, well, If we get dealt into this merg­er, we’re going to be work­ing for Wood­side because they’re three times as big as we are.
[00:36:51] Tony: Um, so ego comes into this and human, human sort of self inter­est comes into this. And so they might, you know, do a few twists and turns to try and either improve the deal or to get out of it and save their jobs. So you can’t dis­count that. Wood­side is on our buy list. There’s a QAV score of 0. 14. Uh, how­ev­er, it’s all most­ly Josephine.
[00:37:13] Tony: So You may not want to buy it just yet. And, you know, I’ve got to say, with all this much going on, you may want to wait and see if they do announce a takeover and what the deal is there as well before you buy. So, um, my opin­ion on this? I have no opin­ion at this stage. We’ve got to wait and see what the deal is.
[00:37:32] Tony: If I owned either of these and I don’t, I’d hold them. Um, I think, I think there’s a small chance both or either could be a takeover tar­get, which would see the price go up. I think, I, I, my gut says it would, uh, there won’t be a merg­er of equals or a nil pre­mi­um merg­er that Wood­side’s going to have to pay up for San­tos.
[00:37:52] Tony: So, that might tip the
[00:37:54] Tony: scales in San­tos favour to own San­tos. How­ev­er, As I said, it’s, it’s now off our buy list and Wood­side’s
[00:38:01] Tony: on. So, um, yeah, that’s my take on the merg­er.
[00:38:05] Cameron: Thanks. I’m just, uh, mak­ing a note in my, um, buy list notes tab about that. So if either of them pops up on my buy list, I can remem­ber to,
[00:38:17] Cameron: uh, take anoth­er look at it.
[00:38:20] Tony: Yeah, we’ll just, I mean,
[00:38:23] Tony: Wood­side is almost a Josephine, so chances are by the end of today, it won’t be a buy. Um, if it was, I’d be hap­py buy­ing it. Um,
[00:38:31] Tony: but it is going to be a sit­u­a­tion where we don’t have all the infor­ma­tion yet.
[00:38:35] Cameron: Right.
[00:38:35] Tony: Yeah. And San­tos is a QAV score of 0. 05. So it’ll take a while for it to come back on the buy list.
[00:38:41] Cameron: Yeah, I
[00:38:43] Cameron: like to have notes in there though, just cause I’ll for­get 10
[00:38:46] Tony: Yeah, well,
[00:38:48] Cameron: that we ever talked about.
[00:38:49] Tony: the oth­er thing on Wood­side too is it, um, it has bogged up the oil side of its busi­ness and the oil price is going
[00:38:54] Tony: down. So I don’t
[00:38:57] Tony: think oil, I think it’s still a major­i­ty LNG. So we’re scor­ing it based on that. But
[00:39:01] Tony: um, yeah, it’s being dragged down a bit by the oil price
[00:39:04] Tony: declin­ing.
[00:39:05] Cameron: Right. Thank you, Tony. Um, you want to do your pulled pork on Res­i­mac?
[00:39:12] Tony: I do
[00:39:14] Cameron: check to see if it’s, uh, in the buy list. What’s the
[00:39:18] Cameron: code?
[00:39:19] Tony: RMC. It’s num­ber one on the buy list of the one
[00:39:21] Cameron: I mean, I mean in my alerts list. Uh,
[00:39:25] Cameron: yeah, no, it’s okay.
[00:39:27] Cameron: You can, you can talk about this one. Go, go for your life.
[00:39:29] Tony: I thought, I thought you’d have it in the light port­fo­lios already because it’s, It’s top of the buy list
[00:39:34] Cameron: It’s in the pos­si­ble port­fo­lios, the one I fill up when we don’t have actu­al­ly any cash left to buy any­thing, or we’ve got two
[00:39:42] Cameron: parcels of some­thing, but I still want to give light
[00:39:45] Cameron: peo­ple an option. So yeah, we’ve held it since the 29th of Decem­ber, and it’s up 8 per­cent since then in the pos­si­ble port­fo­lio.
[00:39:53] Tony: Okay. Well, you know, give peo­ple warn­ing. I’m going to be a hold it. It’s, uh, I’m about to do a pulled pork on it.
[00:40:00] Cameron: Yeah, you saw the one that hap­pened when you were
[00:40:03] Cameron: away, right?
[00:40:06] Tony: I’ll call lithi­um.
[00:40:07] Cameron: yeah,
[00:40:08] Tony: I did. But in my defense, I said,
[00:40:11] Tony: Don’t buy it till the price improves. Yeah.
[00:40:15] Cameron: then it crashed.
[00:40:17] Tony: Yeah.
[00:40:17] Cameron: ha ha ha ha ha
[00:40:20] Cameron: Any­way, off you go with
[00:40:22] Tony: Pull Pork Res­i­mac, RMC. So, it’s a non bank mort­gage lender. So, what that means is that it does­n’t take deposits. So, in Aus­tralia, to be legal­ly called a bank, you’ve got to get approval to take deposits, become an autho­rized depos­i­to­ry. I think it’s deposit receiv­ing com­pa­ny. Any­way, you’ve got to be autho­rized to take deposits and fol­low all the rules and reg­u­la­tions for that.
[00:40:47] Tony: But this com­pa­ny does­n’t, but it still lends, still loans mort­gages and per­son­al loans and busi­ness loans to peo­ple. Which means that it tends to play in the In the part of the mar­ket where peo­ple can’t get loans from the big banks for what­ev­er rea­son, like they’re a con­trac­tor or they’re a small busi­ness own­er, or they’re cred­it impaired.
[00:41:08] Tony: They’ve had some cred­it prob­lems. So this com­pa­ny basi­cal­ly uses bro­kers to sell their mort­gages. It also has an online. Busi­ness, which it uses to, um, to also mar­ket their secu­ri­ties or the, sor­ry, their loans. And then what it does is it, it pulls all the mort­gage loans over a peri­od, uh, rolls them all up, gets them rat­ed, and then puts out what’s called an, um, a mort­gage backed secu­ri­ty.
[00:41:37] Tony: It’s a bit like a bond. To the mar­ket. So peo­ple who want a guar­an­teed income will go into the mar­ket and buy these secu­ri­ties and I’ll get a guar­an­teed coupon val­ue from RMC, which will be less than what the mort­gage is. Mort­gagee has to pay them for the mort­gage loan that they’ve linked up, and then RMC takes the gap, the mar­gin between those two num­bers.
[00:42:04] Tony: So that’s, that’s their busi­ness mod­el, and I’ll come back to it in a lit­tle while. Now, the com­pa­ny’s been around for a long time, and they claim they’ve issued 45 bil­lion worth of mort­gage backed secu­ri­ties since 1987. They claim More than 50, 000 cus­tomers and 13 bil­lion in home loans at the moment. Uh, so, as I said, they, they lend to peo­ple who find it dif­fi­cult to get loans from the major banks.
[00:42:33] Tony: They do, from time to time, actu­al­ly also lend to com­pete with the major banks. That’s called prime lend­ing. But their bread and but­ter is the self employed. And they charge a high­er rate to those cus­tomers to take into account the big­ger chance of default. Uh, but they, they, you know, bor­row for less than that in the, um, in the mort­gage backed secu­ri­ties mar­ket.
[00:42:57] Tony: So they get a mar­gin. Uh, they oper­ate in New Zealand as well as Aus­tralia. Um, and they also oper­ate a cou­ple of dif­fer­ent brands. So Res­i­max is their main one, but they also have home­loans. com. au, which sells online. They also have an asset finance busi­ness offer­ing busi­ness loans, car loans, per­son­al loans, and equip­ment financ­ing.
[00:43:16] Tony: So think of it, think of it being a bank in the tra­di­tion­al sense, but does­n’t have deposits. Um, the secu­ri­ti­za­tion mod­el though, I think is inter­est­ing and I should, should call it out. Uh, Because, you know, if we go back to GFC times, uh, even though they’re not issu­ing the type of CDOs, the col­lat­er­al­ized debt oblig­a­tion that, that caused the prob­lems with the GFC, they are issu­ing some­thing sim­i­lar, which is to roll up mort­gages, get them rat­ed, and then issue them into the, into that same sort of mar­ket.
[00:43:51] Tony: Not say­ing there’s any­thing wrong with what they do. It’s worked for them for a long time, so I have con­fi­dence in what they do. How­ev­er, if that mar­ket dries up for what­ev­er rea­son, um, because of some­thing oth­er, some­thing else that’s going on, or there’s anoth­er, you know, GFC Mark 2 in that mar­ket com­ing along, um, then they’ll have dif­fi­cul­ty rais­ing funds to be able to issue mort­gages.
[00:44:15] Tony: They, they did come through the GFC, they did come through Covid. So they, they do know how to han­dle these kinds of, uh, mar­kets in, in dif­fi­cult times. But their share prices did take a hit in both, both those kinds of, uh, uh, the, both those times. So there will be issues for them, um, get­ting to the num­bers.
[00:44:36] Tony: The ADT for this stock is only 48, 000, so it’s not large, it’ll suit peo­ple who have small­er port­fo­lios. The price I’m doing the analy­sis at is 1. 15, which is greater than con­sen­sus tar­get. We don’t often see that, but it is in this case, so scores a zero, or gets a cross for us on that, scores a zero. Yield on the com­pa­ny is rather good, 6.
[00:45:01] Tony: 96, which is above the aver­age for mort­gages, so, uh, gets a Click for that. Inter­est­ing­ly enough, Stock Doc­tor finan­cial health is unknown. So Stock Doc­tor, their finan­cial health mod­el can have Dif­fi­cul­ties with some kinds of finance com­pa­nies, espe­cial­ly ones that oper­ate in this kind of mar­ket, because it does­n’t have the nor­mal sort of busi­ness mod­el that they’re used to rat­ing, does­n’t have a sort of cof­fee shop mod­el, if you, if you like, and, and I think That will become appar­ent when I go a bit fur­ther into the num­bers.
[00:45:34] Tony: So, uh, can’t score it for finan­cial health. ROE is pret­ty good, 16. 75. PE is 98, but not the low­est. So we can’t score it for that. Now we get to oper­at­ing cash­flow. So the Prop­Caf that we cal­cu­late for this com­pa­ny is 0. 23. So the price to oper­at­ing cash­flow is 0. 23 times. Um, but in this case, oper­at­ing cash­flow is a bit more like sales.
[00:46:00] Tony: So it’s more like. Basi­cal­ly, oper­at­ing cash flow for this com­pa­ny is the income from loan­ing peo­ple mort­gages, which is fine, which is only one side of the equa­tion, though, because the financ­ing cash flows has the coupons that they have to pay the peo­ple who take out these retail mort­gage asset backed secu­ri­ties.
[00:46:21] Tony: So, um, Prop­Caf on an oper­at­ing cash flow basis for the com­pa­ny is 0. 23 times, but if I add back or I sub­tract the financ­ing cash flows, uh, the Prop­Caf goes up to three times. So it’s still real­ly low, but, you know, it just high­lights that the sort of account­ing stan­dards for a com­pa­ny like this are a lit­tle bit dif­fer­ent to, um, a nor­mal indus­tri­al type com­pa­ny.
[00:46:46] Tony: Uh, Price, as I said, was 1. 15. It’s greater than IV1, which is 0. 85. Less than IV2, which is 1. 21. So scores 1 for that. Um, net equi­ty per share is 1. 04, so its share price is above that, but book plus 35, so share price is below that. So on our sort of heat map val­u­a­tion, it’s get­ting a 2 out of 4, which is not bad.
[00:47:14] Tony: Um, Inter­est­ing­ly enough, the fore­cast growth for this com­pa­ny is minus 24 per­cent for EPS. So we’re giv­ing it a minus one for that. Uh, I’m sort of cov­er­ing some of the risks now for this com­pa­ny now rather than at the end, but they did call out in their annu­al report that this year has been tough for them.
[00:47:34] Tony: 2023 has been tough for them, uh, for two rea­sons. Um, one, because hous­ing starts have been low. All the sort of COVID prob­lems that we had with sup­ply chain, et cetera, and the lack of immi­grants for a cou­ple of years there dur­ing COVID, you know, slowed down the hous­ing com­mence­ments, which means less mort­gages, which has hurt this busi­ness.
[00:48:00] Tony: But also what’s going on is there’s been a mort­gage war. Amongst the major banks in the last 12 months and ever since the Hayne Roy­al Com­mis­sion, the major banks are basi­cal­ly just mort­gage banks now, or do they take deposits, but they’ve all sold off their insur­ance busi­ness­es and their wealth man­age­ment arms and so they’re left basi­cal­ly just with lend­ing peo­ple mon­ey for hous­ing.
[00:48:22] Tony: There’s some per­son­al loans and cred­it cards, etc. But that’s basi­cal­ly the bread and but­ter of Res­i­mac. So I expect, you know, that Res­i­mac may face some stiffer com­pe­ti­tion. Um, I don’t know how long it’ll be before these big, you know, Goliaths in the mar­ket, you know, I think Res­i­mac has about a 450 mil­lion mar­ket cap and what’s come back now over, get­ting up towards 100 bil­lion.
[00:48:47] Tony: So there’s a huge dis­par­i­ty there. Um, might be 75. Bil­lion from mem­o­ry. Um, so one of two things is going to hap­pen. Either the banks will pro­gres­sive­ly move up the risk lad­der and say, okay, we’ll start lend­ing mon­ey to peo­ple who are self employed or, um, you know, haven’t been able to get our prime tier loans, or what may hap­pen is one of the banks will just go, hey, That’s it.
[00:49:13] Tony: Let’s not build, let’s buy it, and they buy Res­i­mac, um, and bolt that on to their own busi­ness. Sub­ject to ACCC say­ing it’s, um, does­n’t, you know, um, does­n’t, uh, reduce com­pe­ti­tion in the mar­ket, but I think it’s a watch­less space, and I think it’s fair to say that Res­i­mac may find, may get stiffer com­pe­ti­tion for, um, from, um, from, uh, the major banks going for­ward.
[00:49:39] Tony: Um, Going through the num­bers fur­ther, uh, there’s, there’s no own­er founder. How­ev­er, a guy called Dun­can Sav­ille owns 63. 5 per­cent of the com­pa­ny. So, and I’m not sure whether it’s him direct­ly or through his fund. He chairs a com­pa­ny called ICM, which is a, a large fund man­ag­er. Uh, so as we’ve said before with, with com­pa­nies that have this sit­u­a­tion, we still score them because there’s some­one on the, on the, on the.
[00:50:06] Tony: The board with huge invest­ment expe­ri­ence, but it’s not the own­er founder. So it swings and round­abouts, I guess. I think it is ben­e­fi­cial to a com­pa­ny to have some­one with this kind of skin in the game who was also, you know, real­ly expe­ri­enced at invest­ing around the world. So I’m hap­py to have it as a one in the check­list for that.
[00:50:26] Tony: Um, it’s a new three point trend line up to instance, the last result. So it scores for that. And it has been increas­ing equi­ty con­sis­tent­ly. And as I said before, um, you know, that would prob­a­bly cov­er, if not the COVID peri­od, the imme­di­ate past COVID peri­od, imme­di­ate post COVID peri­od. And so, um, it’s good that the com­pa­ny can grow equi­ty dur­ing those kinds of down times as well.
[00:50:48] Tony: Um, even though peo­ple, you know, uh, even though it may have had prob­lems. with fund­ing dur­ing that time. Any­way, all up qual­i­ty score is 67%. The QAV score is 2. 92, which pops it on the top of our list. But if I rather than use Prop­Caf, if I use, uh, oper­at­ing cash­flow, less financ­ing cash­flow, uh, it drops the score.
[00:51:11] Tony: The QAV score drops down to 0. 22, which is still high on our list, but not the top of the list. So I’m just high­light­ing that. To peo­ple that some­times, you know, the Prop­Caf isn’t the, isn’t the, uh, uni­ver­sal mea­sure and we need to just dig a bit deep­er, but it still scores well for us. Um, in terms of oth­er risks, uh, you know, I spoke about the, the major banks.
[00:51:35] Tony: Um, the, the Mort­gage War could con­tin­ue. I mean, the Mort­gage War this year has been caused by two things. One, main­ly because a NZ, um, have been going after mar­ket share because they’re still try­ing to con­vince the a c that they should buy the Sun­corp bank­ing arm. And their key argu­ment is that, uh, the mar­ket will be steeply com­pet­i­tive.
[00:51:57] Tony: If they soak up Sun­corp as it is now, so it’s try­ing to prove that the big banks can be com­pet­i­tive, um, which has meant under­cut­ting the oth­er, under­cut­ting the rates in the mar­ket. But the sec­ond thing, which is also there, of course, is that peo­ple are com­ing off their 2 per­cent fixed loans tak­en out dur­ing COVID.
[00:52:14] Tony: And, um, You know, the banks have been fight­ing each oth­er to rewrite those loans at high­er rates. So it’s been a very com­pet­i­tive mar­ket. Um, both of those two things will prob­a­bly fin­ish in 2024 if they haven’t already. So the mort­gage rates might nor­mal­ize or the mort­gage mar­ket might nor­mal­ize, but there’s no, there’s no, um, nec­es­sary rea­son for that to hap­pen.
[00:52:38] Tony: Um, so Res­i­mac may find stiff com­pe­ti­tion and they call that in the annu­al report that they did­n’t write much in the way of prime loans. last year because the banks were so com­pet­i­tive. But when the banks are fat and lazy and the mar­ket set­tles down, then Res­i­mac do go into that prime mar­ket as well and com­pete with them.
[00:52:58] Tony: So that’s going to be chop­py for them. Uh, what else can I say? Uh, yeah, no, I think that’s prob­a­bly it. The busi­ness mod­el I think is, is always going to have issues. Um, it, look, they’ve been man­ag­ing it for a long time and it’s work­ing for them, but should there be a A tight­en­ing or a con­straint in that, uh, asset backed secu­ri­ties mar­ket, then that that will crimp their abil­i­ty to orig­i­nate new mort­gages, which will crimp their growth.
[00:53:25] Tony: Um, the last point I made was that the fore­cast, uh, EPS, um, neg­a­tive growth of 24 per­cent may already, I think it prob­a­bly is already priced into the stock price. It’s come down a lot in the last 12 months. Uh, and that might actu­al­ly, um, Turnout to be ful­ly priced at least, or we might see it get
[00:53:45] Tony: writ­ten back if the mort­gage walls abate a bit.
[00:53:49] Tony: And I think the mar­ket’s kind of work­ing that out because the stair price has gone for a run over the last month
[00:53:55] Tony: or so.
[00:53:58] Cameron: it’s been drop­ping, look­ing at their chart for quite a long time, sort of peaked in Feb­ru­ary 2021. Um, that’s well
[00:54:08] Cameron: before inter­est rates start­ed to go up, right?
[00:54:11] Tony: Yeah, but that’s when, was that when hous­ing starts may have start­ed to come off because of COVID?
[00:54:17] Cameron: No idea. I’m won­der­ing if
[00:54:18] Cameron: you picked up any­thing in your read­ing on it about
[00:54:21] Tony: no, it did­n’t.
[00:54:22] Cameron: com­ing off since then?
[00:54:23] Tony: I did­n’t. All I picked up was the last 12 months in the annu­al report. They, they men­tioned that mort­gage, mort­gage, um, com­pe­ti­tion was real­ly
[00:54:29] Tony: strong
[00:54:30] Cameron: Right.
[00:54:31] Tony: and that hous­ing starts were down. So it’s kind of like a per­fect
[00:54:34] Tony: storm for their busi­ness, but they still did rea­son­ably well, but the share price has
[00:54:37] Tony: come down for sure.
[00:54:39] Cameron: Yeah, quite a lot. Alright. Thank you, Tony. There you go, RMC.
[00:54:45] Mark­er
[00:54:45] Cameron: Um, hi
[00:54:47] Cameron: Alex!
[00:54:48] Alex: Hel­lo, for the third time.
[00:54:52] Cameron: Hey! Hey, they
[00:54:53] Cameron: don’t know that. Wel­come! Hap­py New
[00:54:55] Tony: Now we can’t use that intro, Alex.
[00:55:02] Cameron: Oh, the mag­ic of mak­ing the
[00:55:04] Cameron: sausage is gone. Um,
[00:55:07] Cameron: what news do
[00:55:08] Cameron: you have
[00:55:08] Cameron: for us in 2024,
[00:55:09] Cameron: Alex?
[00:55:10] Alex: News, um, found a new house, which is good So we’re mov­ing next week.
[00:55:18] Cameron: Oh, fan­tas­tic!
[00:55:20] Alex: Yep. It’s
[00:55:20] Alex: lit­er­al­ly two blocks down the road. And I said, I want­ed to move to St Kil­da, but we made it two blocks South. So, you know, we’re going in the right direc­tion. Maybe in
[00:55:28] Alex: a cou­ple of years we’ll make it South of the hour. Yeah.
[00:55:32] Cameron: Yeah. Yeah, yeah, Oh, well, that’s, that’s excit­ing for
[00:55:35] Alex: Yep. I’ve got a full
[00:55:37] Alex: upstairs. Um, it’s kind of like a loft kind of upstairs that will be the stu­dio.
[00:55:41] Alex: So I’m pret­ty excit­ed
[00:55:42] Cameron: Oh, nice. Fan­tas­tic.
[00:55:45] Alex: Yeah.
[00:55:46] Cameron: Well, good luck with all of that.
[00:55:48] Cameron: Do you have a ques­tion for the lis­ten­ers today?
[00:55:51] Alex: Yeah. I thought I’d read Angus’s ques­tion if that sounds good.
[00:55:55] Cameron: Yes.
[00:55:55] Alex: so Angus says, Hi Cam and TK. There was a long run­ning thread on the ASA forum, I believe titled, Fol­low This Trade, spear­head­ed by investor Bill Dodd. He had a sys­tem with some sim­i­lar­i­ties to QAV.
[00:56:08] Alex: He would fil­ter stocks by some fun­da­men­tals, then use tech­ni­cals for entry and exit. I’ve, so he’s attached one of the doc­u­ments to out­line the sys­tem. Um, he had a five stock port­fo­lio and was run­ning it as a paper port­fo­lio with claims of sim­i­lar returns to QAV in back­test­ing. I think the
[00:56:24] Alex: forum thread was get­ting too hot for the ASA and they asked him to shut it down
[00:56:27] Alex: due to fears of peo­ple tak­ing it as invest­ment advice. I know we have a few options float­ing around regard­ing adjust­ments to Rule 1, but I was won­der­ing if TK has
[00:56:36] Alex: ever come across or tri­aled an ATR stop loss. I’ve attached the
[00:56:40] Alex: doc­u­ments for full details of how DOD imple­ment­ed this. Cheers, Angus.
[00:56:45] Tony: Yeah, well thanks Angus and Alex. Uh, I have because ATR is, stands for Aver­age True Range and that’s what most of the Ren­co cal­cu­la­tors use to cre­ate the blocks in a Ren­co graph.
[00:57:03] Tony: They use the Aver­age True Range to, to give the volatil­i­ty of a stock and that range is one block, whether it’s red or green.
[00:57:11] Tony: For buy or sell. So yeah, so, um, I haven’t, I haven’t par­tic­u­lar­ly just done an ATR stop loss tri­al, but I had been inter­est­ed in Ren­co for quite a while, uh, and I guess it real­ly is a, it real­ly is an ATR stop loss sys­tem because when the block goes from green to red you meant to sell so And it uses ATR to cal­cu­late the block size But but just quick­ly if any­one wants to know about aver­age true range I mean by all my all means google it in investo­pe­dia or what­ev­er It’ll have a much bet­ter def­i­n­i­tion of what I can give it is a bit calc it is a bit Um math­e­mat­i­cal so I can’t give a like a for­mu­la out over the Pod­casts, it’d be too hard, but basi­cal­ly it’s look­ing at volatil­i­ty and range.
[00:57:56] Tony: So it takes a peri­od of time and it says the stock has gone between these ranges, um, and it adjusts all the time and it adjusts for volatil­i­ty as well as just the max and min. So runs all that through a math­e­mat­i­cal for­mu­la and comes up with an aver­age true range. And as long as the stock trades with­in that range, it’s a.
[00:58:18] Tony: Green in the Renko chart for changes, if it goes above that range, it’s still green, it’s a new block, it gets start­ed. If it goes below that range, it’s a red block and you’re meant to sell. So that’s what an aver­age true range is. It’s a way of mea­sur­ing the volatil­i­ty and the peri­od, I guess, of the, of the stock over, over a cer­tain peri­od of time.
[00:58:37] Tony: Um, just an update on that Renko tri­al. So I’ve done, I’ve start­ed two port­fo­lios back in April of last year. One, which sim­ply added. The Renko graph to the cur­rent QAV process. So if you like, it was anoth­er step. Don’t buy a stock if it’s Renko red and buy it when it’s green, but sell it when it’s red as well as all the oth­er sells on com­mod­i­ty and three point trend lines and rule ones, etc.
[00:59:05] Tony: I’ve stopped that now because it’s under­per­formed. Um, last time I looked at, I think I stopped it. It was about minus 10 per­cent com­pared to the SDW over that time peri­od, which is up about 4 or 5%, I think. So, it was­n’t worth con­tin­u­ing. It was a headache to do because it was an extra step in the process.
[00:59:23] Tony: And I was always get­ting alerts from Stock Doc­tor to say, this thing’s rule one, or it’s a three point trend line sell, or it’s a Renko red. Um, plus it was dif­fi­cult to actu­al­ly set up alerts for Renko. There’s no alert in Stock Doc­tor for it. You’ve got to just say, at, you’ve got to sort of eye­ball it and say, at this price, I think it’ll go back to being a Ren­co Red, and then put a stock alert in for that.
[00:59:46] Tony: So, you might get an alert to say it’s Ren­co Red, you uncheck the graph, and it was­n’t, because the peri­od­ic­i­ty, the ATR had changed the The val­ue on the block. So, um, yeah, any­way, I’ve stopped doing that. I have con­tin­ued with the Renko only tri­al. So I did anoth­er tri­al port­fo­lio, which replaced our sells and, um, sen­ti­ment buys.
[01:00:12] Tony: So not using three point trend line charts, not using com­mod­i­ty charts and not using rule ones, but just Renko charts. And that’s doing. Still not beat­ing the STW, but it’s clos­er. So it’s cur­rent­ly sit­ting at minus 4 per­cent since April last year and ver­sus the STW, which I’ve got down here in my notes is 2%, but it might be a lit­tle bit more than that.
[01:00:32] Tony: Now, since last time I checked, um, so I’ll per­sist with that and see, but, uh, you know, just with all of these kinds of momen­tum indi­ca­tors, uh, I’m not going to dis­miss them because I think there’s a lot of mer­it in them. I think there’s always mer­it in check­ing sen­ti­ment when you’re buy­ing and sell­ing. Um, but I had found with mov­ing aver­ages in par­tic­u­lar, that the three point trend lines gave me a crisper ear­li­er.
[01:00:59] Tony: Buy and sell sig­nal than these things, which, which, um, tend to take, they take a time peri­od before they estab­lish whether it’s a buy or sell, and that can slow down the process a lit­tle bit. So, yeah, that’s, that’s my sum­ma­ry, Angus. I’ll keep tri­al­ing Ren­co. Um, it isn’t work­ing at the moment, and Ren­co uses ATR,
[01:01:17] Tony: so I don’t think it’s going to be a replace­ment for what we do.
[01:01:22] Cameron: Do you know any­thing about the guy who came up with
[01:01:24] Cameron: ATR?
[01:01:27] Tony: Uh, no. Do you?
[01:01:30] Cameron: Yeah, I do. His name was Wells Wilder, Jr. John Wells Wilder, Jr. He was an Amer­i­can real estate devel­op­er, engi­neer, and is called the father of tech­ni­cal analy­sis, or some­thing like that, or for cer­tain tech­ni­cal indi­ca­tors. Any­way, only died a cou­ple of years ago, 2021, aged 85, in Christchurch, New Zealand, where he and his wife had moved to.
[01:01:55] Cameron: But I read up a lit­tle bit. Uh, on him when I was learn­ing about ATF and got these quotes from him, which I thought I’d read out. Good quotes. Let­ting your emo­tions over­ride your plan or
[01:02:07] Cameron: sys­tem is the biggest cause of fail­ure.
[01:02:09] Tony: Mm hmm.
[01:02:11] Cameron: Sec­ond one was some traders are born with an innate dis­ci­pline. Most have to learn it the hard way.
[01:02:17] Tony: Yep. That’s true.
[01:02:20] Cameron: And the third was, if you can’t deal with emo­tion, get out of trad­ing.
[01:02:25] Tony: Three great quotes.
[01:02:27] Cameron: Aren’t they great?
[01:02:28] Tony: Yeah. 100 per­cent
[01:02:29] Tony: agree.
[01:02:30] Cameron: Yeah. Although, I mean, I don’t know. I think the sys­tem,
[01:02:35] Cameron: um, helps deal with emo­tions. Like,
[01:02:37] Tony: Yeah. that’s the
[01:02:38] Tony: point.
[01:02:38] Cameron: a sys­tem.
[01:02:39] Tony: Yeah. Yeah. So yeah, so I’m not dis­miss­ing Ren­ka, I’m not dis­miss­ing
[01:02:43] Tony: ATR, um, just does­n’t seem to per­form as well as what we do now.
[01:02:48] Cameron: Bill Dodd, the guy he was talk­ing about. You ever heard of Bill Dodd
[01:02:52] Tony: I have not. No.
[01:02:54] Cameron: Not relat­ed to, uh, David Dodd
[01:02:57] Cameron: as far as I can tell of Gra­ham and Doddsville.
[01:03:00] Tony: Yeah, okay.
[01:03:01] Cameron: I, when I first saw the email, I was like, have we heard of Bill Dodd? And he is got a sim­i­lar sim­i­lar­i­ties to QAV. Well, duh. And
[01:03:10] Cameron: then I found out not the same guy.
[01:03:13] Tony: Yeah, and look, I think that’s a great, if peo­ple want to fol­low Bill Dodd, look into it, by all means. Um, I think, I think all these sys­tems Um, that have been back test­ed, that are fair­ly rig­or­ous
[01:03:23] Tony: and pro­vide you a way of trad­ing and emo­tion­al­ly are worth inves­ti­gat­ing. For sure. Yeah.
[01:03:29] Cameron: And let us know, uh, what you find.
[01:03:32] Tony: Or even just take bits and pieces from it, let
[01:03:33] Tony: us know.
[01:03:36] Cameron: So a lot of math­e­mat­ics you said in, um, ATF, ATR, Tony, is that
[01:03:43] Cameron: ATR, is that some­thing we should get Alex to com­ment on?
[01:03:45] Tony: Ha ha. Ha ha. ha. Ha
[01:03:48] Cameron: You want to explain it to us? Uh,
[01:03:50] Tony: ha. Ha ha. No, I was, I was, I was invit­ing Alex to talk about her. Was it your grade 12? Prob­a­bil­i­ties, Maths, Project we worked on?
[01:04:04] Alex: Yeah,
[01:04:04] Tony: Al, it was a grade 11, I can’t remem­ber.
[01:04:06] Alex: uh, I think it was 12, but it was IB, so it was over two
[01:04:09] Alex: years. So it was over two years. I still don’t remem­ber any­thing about it
[01:04:15] Alex: or how the maths worked, but
[01:04:17] Alex: um, I remem­ber enjoy­ing talk­ing with you about it. That’s the
[01:04:22] Tony: Well, yeah, well, we, um, we down­loaded a lot of, um, horse form, did­n’t we? And worked out the prob­a­bil­i­ties of dif­fer­ent things pre­dict­ing the result.
[01:04:32] Alex: First for­ay into Excel as well.
[01:04:36] Alex: Who would have known?
[01:04:36] Tony: we looked at things like, um, the strike rate per­cent­age, if
[01:04:39] Tony: I recall, and tried to work out whether a horse with the best strike rate per­cent­age in a
[01:04:43] Tony: race would win more often than the aver­age. That’s
[01:04:47] Cameron: has spent every week­end down at the
[01:04:48] Cameron: track.
[01:04:51] Tony: Amaz­ing­ly, she has­n’t, but her father has.
[01:04:54] Cameron: That’s why she has to move. The book­ies are chas­ing her, she’s on the lam, she’s hav­ing
[01:04:59] Cameron: to run from her, uh, gam­bling debts.
[01:05:02] Alex: Keep­ing a low pro­file.
[01:05:06] Tony: She’s mov­ing house again because of it.
[01:05:08] Cameron: Gave up a, yes, that’s what I just said. Gave up a career in math­e­mat­ics, uh, to pur­sue art, just to change her
[01:05:14] Cameron: iden­ti­ty, so she could­n’t be traced.
[01:05:16] Tony: Yeah,
[01:05:17] Cameron: Any fol­low up ques­tions on, uh, ATR, Alex, or J. Wells Wilder Jr.? J W W J, yeah, J W W J, like, what a great name, right?
[01:05:29] Alex: Pret­ty
[01:05:30] Cameron: Not
[01:05:30] Cameron: relat­ed to Gene Wilder either, as far as I can tell.
[01:05:33] Tony: all to our horse, which is now called Wilder. We have a new two year old horse called Wilder.
[01:05:38] Cameron: There you go. What are
[01:05:38] Cameron: its tech­ni­cal indi­ca­tors like? Good.
[01:05:41] Tony: Uh, no, pret­ty crap­py. Aver­age for our horse. Regress to the mean for our horse. Ha ha ha ha ha ha.
[01:05:48] Cameron: What’s your rule one on a horse like
[01:05:49] Cameron: that?
[01:05:50] Tony: Dog meat. ha. Ha ha
[01:05:52] Cameron: Los­es 10
[01:05:53] Tony: ha ha ha ha ha. Yeah, go on.
[01:05:56] Tony: Yeah, no, there are rules
[01:05:57] Tony: to get out. you got­ta give them one or two preps and then out. They cost too much. Yeah.
[01:06:01] Cameron: like that with my wives. Uh, Alex, uh, have a good week, Alex.
[01:06:08] Cameron: Thanks for com­ing on. Talk to you next
[01:06:10] Cameron: week.
[01:06:10] Alex: See you lat­er. Bye, See
[01:06:13] Tony: hon­ey.
[01:06:13] Cameron: Well, what’s next on the ques­tion list? Jor­dan. Oh, you love these ques­tions about, uh, scor­ing things in the buy list, Tony. I know they’re your favourite sorts of ques­tions.
[01:06:24] Tony: next.
[01:06:25] Cameron: I said to Jor­dan,
[01:06:27] Cameron: I’ll ask, but he’s gonna yell at me. But
[01:06:29] Tony: I’m not going to yet. Okay. so,
[01:06:31] Cameron: bul­let.
[01:06:33] Tony: so,
[01:06:34] Cameron: So here’s the ques­tion. Jor­dan, being eagle eyes, uh, says that, um, there’s a bit of
[01:06:42] Cameron: dif­fer­ence between how we’re scor­ing things in the buy list each week and
[01:06:46] Cameron: what it says in the Bible. Um, and he’s talk­ing about health, sta­ble or increas­ing. He says, the Bible says that increas­ing is a two, sta­ble’s a one, dete­ri­o­rat­ing is a neg­a­tive one.
[01:06:58] Cameron: Any­thing else is zero. Um, I looked in the Bible, does seem to say that, um, but he said in our, well, I said in our check sheet. We’re scor­ing it dif­fer­ent­ly. We’re doing Dad­dy 1, Recov­er­ing 2, Dete­ri­o­rat­ing, Minus 1, and NA noth­ing, like, like, uh, zero score. We’re not penal­iz­ing it for some­thing else. So, and I went back and looked at the book that we’ve been work­ing on and it says zero as well,
[01:07:32] Cameron: um, but not a noth­ing, so I’m con­fused.
[01:07:35] Tony: Okay, so can I just con­firm, we’re talk­ing about whether, so the Bible says any­thing else
[01:07:42] Tony: is a zero, but the cod­ing in the Excel check­list says any­thing else is a blank. Okay. Two, two sets of clubs.
[01:07:50] Cameron: to. Hey, you know, Chris­tians fought about
[01:07:56] Cameron: non stuff like this for cen­turies, Tony.
[01:07:59] Tony: And Excel will treat a zero
[01:08:01] Cameron: slan­ty
[01:08:03] Cameron: brown hair? Like, nations went to war for cen­turies over these things. Don’t joke. This is seri­ous
[01:08:09] Cameron: stuff. This could This
[01:08:11] Cameron: could have a 0. 00002
[01:08:15] Cameron: impact on the QAV score.
[01:08:17] Tony: I don’t think it’ll have any
[01:08:18] Tony: impact, because does­n’t Excel treat a zero on the blank the same way? It’s just going to add zero
[01:08:22] Tony: to the score.
[01:08:24] Cameron: Is it? No! No, because No, no, no, no, but Well, no, because when we’re sum­ming up our scores to get the qual­i­ty score from which the QAV score is derived, um, if there’s a blank, it’ll look like
[01:08:43] Cameron: it’s not sum­ma­ble. So, if you
[01:08:46] Tony: I see. Okay.
[01:08:47] Cameron: Five scores and
[01:08:48] Cameron: one’s a blank, it’ll say four out of four instead of four
[01:08:50] Cameron: out of five, which will
[01:08:53] Tony: I had­n’t thought of that.
[01:08:54] Tony: No, you’re right. Yep. I don’t care. Which way do you want to go? I don’t care. Look, I, I think, I think start a war. I’ll get the pop­corn
[01:09:02] Tony: and we’ll let the strongest decide whether it’s going to be a zero or a
[01:09:05] Tony: blank. Okay.
[01:09:06] Cameron: out well for Alexan­der the
[01:09:07] Cameron: Great’s gen­er­als. Yeah,
[01:09:10] Tony: Tell me what to do. I don’t mind. Change the Bible. Yeah. Leave
[01:09:14] Cameron: Change the, Bible.
[01:09:15] Tony: Excel’s going to be hard­er to change. Yeah.
[01:09:18] Cameron: Good pick up, Jor­dan. Thanks for start­ing a war. You can put that on your, uh, CV. Start­ed a war. I bet­ter make a note to do that before I for­get. Uh, do do do do do, Jim. Uh, just want­ed to tell us about a good book that he read. What I Learned About Invest­ing From Dar­win by Pulak Prasad. He said, uh, many of the thoughts expressed align with TKs. You ever come across
[01:09:46] Cameron: Pulak Prasad, Tony?
[01:09:48] Tony: I have not, no. I’ll get a copy and have a read.
[01:09:52] Cameron: There you
[01:09:52] Tony: I looked it up when I got this, when I got your notes this morn­ing, and I haven’t read it, um, and I, at first when I saw it, I thought he may have been talk­ing about evo­lu­tion­ary growth algo­rithms, which were a thing 20 years ago or so. But he’s not, he’s talk­ing about, you know, lessons from biol­o­gy and evo­lu­tion, which is prob­a­bly just as pow­er­ful.
[01:10:15] Tony: But yeah, I went down the rab­bit hole on EGAs, on evo­lu­tion­ary growth algo­rithms when they came out 15 or so years ago. Um, could­n’t adapt it to my invest­ing though. Tried to, so, I mean, basi­cal­ly EGAs, um, ran­dom­ly pick a sam­ple of stocks. So in this case, we’re talk­ing about share invest­ing. You can apply it to almost any­thing.
[01:10:36] Tony: And there were, there were plen­ty of exam­ples like in engi­neer­ing where. And the evo­lu­tion­ary growth algo­rithm would solve a design prob­lem or fix a, you know, why did the plane crash? It would find the rea­son for it. And basi­cal­ly what you do is you take a data set, pick a sam­ple, does that sam­ple get you clos­er or fur­ther from what you’re try­ing to achieve?
[01:10:54] Tony: And then you, you know, replace parts of the sam­ple, pick anoth­er sam­ple and it just keeps iter­at­ing until you get there. So I tried to adapt that to invest­ing, you know, pick a sam­ple from the ASX that had char­ac­ter­is­tics which you were look­ing for. If, you know, the sam­ple did­n’t get you close enough to it.
[01:11:10] Tony: Ditch it, get anoth­er one, etc. But I could nev­er get the right cod­ing to make it work. And as far as I know, I haven’t heard of any­one who has, so I’m not alone in that. But it’s an inter­est­ing, you know, again, inter­est­ing area of math to have a look at. And was a big thing, you know, sort of 15 years ago.
[01:11:29] Tony: Every­one was build­ing Data­bas­es and data algo­rithms to use, uh, neur­al net­work, neur­al net­work­ing and evo­lu­tion­ary growth algo­rithms. But I could just nev­er
[01:11:39] Tony: get them to make mon­ey for me.
[01:11:41] Cameron: And that’s exact­ly how gen­er­a­tive AI apps are trained, like Ope­nAI, right? It’s through, uh, com­ing up with, uh, iter­a­tive mod­els on its abil­i­ty to pick the right next word, and then it gets reward­ed if it gets clos­er to the right word, and pun­ished if it’s
[01:11:59] Cameron: off, and it just runs through mil­lions of mod­els
[01:12:02] Tony: Yeah. It can do it quick­ly. Yeah.
[01:12:04] Cameron: it can do it.
[01:12:05] Cameron: Speak­ing, I don’t know if you’ve seen this, but I post­ed this on Face­book the oth­er day. Um, a com­pa­ny in the US, Future AI, about 24, 48 hours ago, released a
[01:12:15] Cameron: video of their anthro­po­mor­phic robot, android y robot. It had learnt how to make a cup of cof­fee using a pod machine from watch­ing a human do
[01:12:29] Cameron: it. And that’s it.
[01:12:31] Tony: I saw that. Yeah.
[01:12:33] Cameron: cod­ing. Yeah, right. So just a hun­dred per­cent AI neur­al net­work, self cor­rect­ing. It spent 10 hours then try­ing to mim­ic the human, uh, or get, get the same out­come
[01:12:44] Cameron: as the human, fig­ured out how to do it. And of course, once the com­put­er, once the, the AI has fig­ured out how to, what the per­fect mod­el is, it can then down­load that to
[01:12:53] Cameron: an infi­nite num­ber of, of robots
[01:12:56] Tony: Can’t, can’t wait to take it to the gun range.
[01:13:00] Cameron: Or golf, you can buy one to
[01:13:02] Cameron: play golf for you.
[01:13:03] Tony: Yeah, right, then I’ll become a cad­dy pro­fes­sion­al­ly.
[01:13:08] Cameron: But that’s amaz­ing. Like when we can just get a robot to watch a human do some­thing and then. It goes,
[01:13:14] Cameron: it goes in the back room for
[01:13:15] Cameron: half a day, comes back out and goes, all right, now how to do it. What’s next? And then it, you know, you down­load that mod­el into a mil­lion work­er robots in peo­ple’s homes, you know, and they just go around
[01:13:27] Cameron: and kill us all.
[01:13:29] Tony: Yeah. Like dri­ver­less cars.
[01:13:32] Cameron: I saw the arti­cle I was read­ing said, uh, I know it was some­thing else, but they were like Cyber­dyne Sys­tems and then it was crossed out and put the name of the com­pa­ny. I just worked out how to. Pulak Prasad, by the way, is the founder of Nalan­da Cap­i­tal, a Sin­ga­pore based firm that invests in list­ed Indi­an equi­ties and man­ages about 5 bil­lion. And, um, accord­ing to the Colum­bia Busi­ness School blurb on the book, who pub­lished it, the invest­ment pro­fes­sion is in a state of cri­sis. The vast major­i­ty of equi­ty fund man­agers are a bunch of idiots. No, sor­ry, that was me. Are unable to beat the mar­ket over the long term, which has led to mas­sive out­flows from active funds to pas­sive funds.
[01:14:11] Cameron: Where should investors turn in search of a new approach? Pulak Prasad offers a phi­los­o­phy of patient long term invest­ing based on an unex­pect­ed source, evo­lu­tion­ary biol­o­gy. He draws key lessons from core Dar­win­ian con­cepts, mix­ing vivid exam­ples from the nat­ur­al world with com­pelling sto­ries of good and bad invest­ing deci­sions, includ­ing his own.
[01:14:32] Cameron: How can bum­ble­bees sur­vival strate­gies help us accept that we might miss out on Tes­la, etc. etc. So, um, there you go. He pro­vides three mantras of invest­ing. Avoid big risks, buy high qual­i­ty at a fair price, and don’t be
[01:14:49] Cameron: lazy. Be very lazy.
[01:14:52] Tony: Oh, per­fect. I love the guy already and I don’t need to read the book now, thank you, that’s great.
[01:15:01] Cameron: You sure this isn’t your broth­er from anoth­er moth­er in a
[01:15:05] Cameron: Sin­ga­pore, Tony?
[01:15:07] Cameron: We should reach out to
[01:15:08] Cameron: Pulak Prasad and get him on the show.
[01:15:10] Tony: yeah, except we’re too lazy. Or aren’t you?
[01:15:14] Cameron: You are, but I’m not.
[01:15:16] Tony: No, no, you, are not. You are,
[01:15:17] Cameron: That’s Char­lie work,
[01:15:19] Tony: You’re very
[01:15:20] Tony: active.
[01:15:21] Cameron: as they say, and it’s always sun­ny in Philadel­phia. That’s Char­lie
[01:15:23] Tony: Ah, okay. I thought you, I thought you?
[01:15:25] Tony: were call­ing your­self Char­lie Munger
[01:15:27] Cameron: Oh, no, the
[01:15:28] Cameron: oth­er Char­lie. No, no, The one that eats cat food.
[01:15:34] Cameron: I grew up in India. Poor luck. That’s prob­a­bly why I
[01:15:36] Cameron: invest in Indi­an com­pa­nies. Alright, I will. I’m going to
[01:15:38] Cameron: reach out to him. Thanks for the tip off, Jim. That’s the show. Uh, just after hours now, Tony.
[01:15:44] Cameron: You’ve been on hol­i­days for a few weeks. What have you done?
[01:15:46] Cameron: What have you
[01:15:47] Tony: A lot. Yeah, yeah, a fair bit. So, uh, a cou­ple of good things. I watched Stranger Things sea­son one, which you’ve been get­ting me to watch for a long time. No,
[01:15:57] Cameron: How have you avoid­ed
[01:15:58] Cameron: that this long, man?
[01:15:59] Tony: Yeah, I know, well, I’m lazy.
[01:16:02] Tony: I got round to watch­ing it, yeah. It was good, I did.
[01:16:05] Cameron: It’s fun.
[01:16:05] Tony: I’ll get round to watch­ing Sea­son 2 in the next few years.
[01:16:09] Cameron: Yeah, well, it declines after
[01:16:11] Tony: Oh, it does­n’t? Okay,
[01:16:13] Cameron: the next cou­ple of sea­sons aren’t bad, but the last
[01:16:15] Cameron: sea­son was ter­ri­ble.
[01:16:16] Tony: Okay. A cou­ple of oth­er things, Jen­ny and I watched The Silo. I don’t know if you’ve seen that. Uh, Sci Fi, it’s a, it’s, it’s like, it’s, I don’t know how to describe it, like it’s, the premise is so skin­ny, it’s like you, if I tell you what it is, you’ll go, ah, it’s not worth, it’s, it’s about a civ­i­liza­tion of like, I think it’s 10, 000 peo­ple or 20, 000 peo­ple who live in the silo.
[01:16:41] Cameron: Mm hmm.
[01:16:42] Tony: you know, they’re told not to go out­side. They have to stay inside. Um, any­way, and, um, so it’s a real­ly thin premise, but gee, it was addic­tive. It’s a real­ly well made, great cast. Tim Rob­bins is in it. Um, and, uh, like the, it just. Espe­cial­ly the first two episodes just suck you in and we just had to watch it more and more and more.
[01:17:05] Tony: Um, flags a bit in the mid­dle and it gets good at the end. But, because there’s like this mys­tery the whole way through, like, so if you do some­thing wrong in the silo, or you choose to, you say, I want to go out­side. And there’s this whole judi­cial process about those words and and they send you out­side, right, of the silo and every­body watch­es out­side and the only view they have out­side is this sort of bar­ren post apoc­a­lyp­tic world and you’re called a clean­er if you go out­side.
[01:17:33] Tony: And they put you into this haz­mat suit, sort of tape you in, and then they give you a, uh, a rag, and then they say to you, we’re going to send you out­side, but all you have to do is clean the lens, which gives us our view, our feed, from out­side, because it keeps get­ting dirty, you know, from all the post apoc­a­lyp­tic stuff.
[01:17:55] Tony: And so peo­ple go out­side, even peo­ple who say, You know, fuck you, I’m gonna go out­side, I’m not gonna clean. They always end up turn­ing around and clean­ing the lens.
[01:18:04] Tony: And so that’s the mys­tery of the show. What hap­pens
[01:18:07] Tony: when they go out­side? It takes a sea­son to get
[01:18:09] Tony: there. But it’s, it’s addic­tive. It’s real­ly good.
[01:18:12] Cameron: Inter­est­ing premise.
[01:18:14] Tony: Yeah, so that’s the silo.
[01:18:15] Cameron: run­ny. Writ­ten by Graeme Yost, I see. Or he’s the head of the series who I remem­ber from being the writer of Speed. The orig­i­nal
[01:18:24] Tony: Oh, real­ly?
[01:18:26] Cameron: Which, you got­ta Hand it to speed. Like it, A, it turned Keanu Reeves into an action star and B, Den­nis Hop­per at his all time
[01:18:36] Cameron: best. I loved him at that.
[01:18:38] Cameron: Yeah.
[01:18:39] Tony: Yeah. Good. So there was that and Book­ie. Have you seen Book­ie yet?
[01:18:45] Cameron: No. What’s book­ie?
[01:18:46] Tony: It’s a series. It’s on Fox­tel, I think. So I don’t know what stream­ing ser­vice it’s on. Real­ly short. Writ­ten by Chuck Lorre, who did Two and a Half Men.
[01:18:56] Cameron: Oh, I’m already out.
[01:18:58] Tony: Char­lie Sheen makes a cou­ple of cameos in it. It is, it is the black­est com­e­dy.
[01:19:04] Tony: It’s fan­tas­tic. It’s only half an hour an episode. It’s about a book­ie, right, in LA. And he’s an ex pro foot­ball enforcer, and all the trou­ble I get into, and it’s hilar­i­ous and it’s so well done. Sebas­t­ian Man­alaro, Man­alas­co, is the come­di­an who plays the,
[01:19:25] Tony: yeah, plays the lead.
[01:19:27] Cameron: Right.
[01:19:28] Tony: Can’t rec­om­mend it high­ly enough, it’s so fun­ny.
[01:19:31] Tony: Yeah.
[01:19:32] Cameron: I like Chuck Lorre is, uh, Like a swear word in my house, like all, all
[01:19:38] Cameron: of those shows he’s done in the past, like the,
[01:19:40] Tony: So, well, watch the first episode.
[01:19:42] Cameron: year of TV. Okay.
[01:19:44] Tony: It’s like Mr. Inbe­tween, but it’s fun­ny. With less vio­lence. Yeah.
[01:19:49] Cameron: Mr. Inbe­tween, still one of my all time favourite shows and
[01:19:53] Tony: I agree.
[01:19:54] Cameron: great­est last, one of the great­est last scenes in, uh, any, of any,
[01:19:58] Cameron: tele­vi­sion series, you know. The con­clu­sion of it, I thought, was just beau­ti­ful­ly done. Just, you know. It’ll be one of those ones like Vic Mack­ey grab­bing his gun and walk­ing out of the office that I’ll, I think I’ll remem­ber, it’ll stay with me for­ev­er,
[01:20:10] Cameron: yeah.
[01:20:12] Cameron: Alright, what else?
[01:20:13] Tony: Uh, so I’ve got a horse run­ning on Sat­ur­day in Indu­bitably, very hard to pro­nounce, indu­bitably
[01:20:20] Cameron: Yeah,
[01:20:21] Tony: Rac­ing and Race two on the Gold Coast. I’m still try­ing to track down the email. I send it out to peo­ple and put it on Face­book. Uh, yeah. Mag­ic Mil­lions Day. This, this is Strange Race. It’s a, it’s, this is an unraced horse, but they have a $500,000 race.
[01:20:35] Tony: on Sat­ur­day as part of the Mag­ic Mil­lions Day for unraced hors­es based on their bar­ri­er tri­als. So we got in on the bar­ri­er tri­al and, um, fin­gers crossed, be good to kick in the pants to Jan­u­ary if we can earn some prize mon­ey.
[01:20:49] Tony: Uh, and the last thing I want to talk about is I lis­tened to the Acquired pod­cast, which is, um, you prob­a­bly know about it.
[01:20:56] Tony: It used to be IT based. Now it’s more gen­er­al­ly invest­ment based. Um, but they had an inter­view with Char­lie Munger, which I
[01:21:02] Tony: lis­tened to And, that sort of. Maybe lis­ten to a cou­ple of oth­er
[01:21:05] Tony: ones. So worth check­ing out if you haven’t checked it out.
[01:21:09] Cameron: one of his last inter­views, I think,
[01:21:10] Tony: it, was, yeah.
[01:21:11] Cameron: like not long before he died?
[01:21:14] Tony: Cor­rect.
[01:21:15] Cameron: And, uh, the, the hosts are investors,
[01:21:18] Cameron: are they? Are they active guys?
[01:21:20] Tony: Yeah, I don’t, I don’t know if they have a fund man­age­ment busi­ness, but they are active guys. Um, and as I said, they move from just, they, they tend to pick out a few com­pa­nies a year and do a deep dive or a series on them, like Nike or, um, Wal­mart
[01:21:36] Tony: or Cost­co, that kind of thing. Yeah. Um, what’s the, what’s the big, um, pre­mi­um brand com­pa­ny?
[01:21:43] Tony: LVMH, I think it is. Yeah. That’s all the stuff.
[01:21:46] Cameron: Vuit­ton. Yep.
[01:21:47] Tony: Louis Vuit­ton, yeah. So yeah, worth
[01:21:50] Tony: lis­ten­ing.
[01:21:50] Cameron: on Novem­ber, uh, 6th, 2023. They had him on. There you go.
[01:21:58] Tony: yeah, so that’s what I’ve been doing.
[01:22:01] Cameron: Oh, sounds busy, man. Well, uh, Chris­sy and I have been obsessed with Bol­ly­wood, uh, still. Like, most of our TV watch­ing has been Bol­ly­wood films.
[01:22:12] Cameron: Um. Hav­ing so much fun watch­ing all of these Shah Rukh Khan films from the 90s. They’re all absolute­ly bonkers mad, um, but fun, fun, fan­tom­ly enter­tain­ment. Lots of singing, lots of danc­ing, lots of corny sto­ry­lines that make no sense.
[01:22:29] Cameron: Lots of emo­tion, um, just, we just sit there with big grins on our faces. Like, these films are so ridicu­lous­ly bonkers. Um, you have to go, what? Why? How is this guy? It’s like Tom­my Wiseau film, but with song and dances, songs and dances
[01:22:49] Cameron: every 10 min­utes thrown in. Good stuff.
[01:22:52] Tony: So, so I was watch­ing a movie last night called The Ersk­ineville Kings, a very old Aus­tralian movie from the 90s.
[01:22:58] Cameron: mm,
[01:22:59] Tony: One of, well, an ear­ly Hugh Jack­man film, but also with Joel Edger­ton in it too. Joel Edger­ton in the open­ing scenes made me think of you because he’s run­ning a video
[01:23:08] Tony: store
[01:23:08] Cameron: mm.
[01:23:09] Tony: he loves Bol­ly­wood.
[01:23:10] Tony: So he goes home and he’s got like about, he’s writ­ten about six Bol­ly­wood Videos and the posters roll up and he said, just what you did.
[01:23:17] Tony: This is bonkers. It’s crazy. You got­ta get into it.
[01:23:19] Cameron: And it real­ly is, like the more, we’ve become obsessed with it, um, like, just, it’s, it’s bonkers, it real­ly is. Like if, if a Hol­ly­wood film tried to get away with one frac­tion of what an aver­age Bol­ly­wood film, I’d just turn it off, I’d go, well this is stu­pid. But for some rea­son
[01:23:41] Cameron: They just get to sell it. I don’t know if it’s a cul­tur­al thing or if it’s just like, they’re just hav­ing such a good time
[01:23:48] Cameron: that you’re like, Alright, I’m along for the
[01:23:50] Tony: I’m island
[01:23:51] Cameron: Yeah. We just love it so much. Fox loves it. We play the music in the car. We dri­ve around, and it’s, apart from Sparks being our just per­ma­nent playlist in the car. Um, Bol­ly­wood
[01:24:04] Cameron: sound­tracks. We lis­ten, we’re all lis­ten, we can all sing along to Bol­ly­wood sound­tracks in Hin­di. You know, it’s, it’s, it’s, uh, it’s real­ly nuts.
[01:24:13] Cameron: It’s so much fun. Uh, anoth­er thing that’s fun is Pete David­son’s TV
[01:24:18] Cameron: show, Bup­kus. Have you caught any of that?
[01:24:21] Tony: I haven’t, I saw it I should check it out.
[01:24:24] Cameron: Like Pete David­son when he was on SNL, I thought he was quirky, but nev­er real­ly struck me as fun­ny, or that fun­ny, he always looked real­ly uncom­fort­able. In the film that he
[01:24:33] Cameron: made a few years ago, um,
[01:24:36] Cameron: and this TV series,
[01:24:38] Tony: King of Long Island, was­n’t it.
[01:24:39] Tony: Some­thing.
[01:24:40] Cameron: Stat­en Island. I think, King of Stat­en Island, yeah. Where he played, he played a loose Loose ver­sion of him­self.
[01:24:47] Cameron: And in this TV show, he plays a ver­sion of him­self,
[01:24:50] Cameron: but it’s got Edie
[01:24:51] Cameron: Fal­co as his moth­er, Joe Pesci as his grand­fa­ther, Bob­by Can­navali is his uncle. It’s just stacked with every­body wants to be part of this pro­duced by Lorne Michaels, but it’s just. It’s, I mean, man, Joe Pesci as his grand­fa­ther is worth the price of admis­sion.
[01:25:13] Cameron: But Edie Fal­co as well, it’s just, just great. And he plays this, you know, he plays him­self basi­cal­ly, like a rich guy with his his­to­ry of drugs and tat­toos and flame out celebri­ty rela­tion­ships and he’s just Try­ing to fig­ure out his life and fix it. And he’s get­ting his tat­toos tak­en off. Cause he, he, Joe Pesci asks him why he’s get­ting his tat­toos removed.
[01:25:38] Cameron: He goes, Oh, you know, I just fig­ure I’m 30 now. I want peo­ple to start tak­ing me seri­ous­ly. Pesci’s like. Lis­ten, you dumb fuck, tat­toos aren’t why peo­ple don’t take you seri­ous­ly. He’s just always chain smok­ing and telling him how it is, you know, Joe Pesci style. I mean, I can’t believe like it took De Niro and Scors­ese like five years to get Pesci to.
[01:26:01] Cameron: Be will­ing to make the Irish­man, but he’s now doing this TV show for Pete David­son. I mean, it’s amaz­ing to me and prob­a­bly the last thing Peshy will ever do, and you know, that’s sad to think about, but he’s, um, he’s been one of the great dra­mat­ic and comedic actors. Like we watched Home Alone one and
[01:26:22] Cameron: two again with Over Christ­mas with Fox
[01:26:24] Tony: Lethal Weapon
[01:26:25] Cameron: Lethal Weapon films that he did.
[01:26:29] Cameron: Leo Goetz. I mean, just, like, sur­pris­ing­ly good. Guy’s got no act­ing expe­ri­ence.
[01:26:35] Tony: No, he start­ed off as a singer, was­n’t he? He was in
[01:26:37] Cameron: He was a singer with, with, no, not a boy band, it was like a night­club act, with
[01:26:42] Cameron: him and the guy from The Sopra­nos who had Tony Sopra­no waxed.
[01:26:47] Cameron: Um,
[01:26:49] Tony: yeah.
[01:26:50] Cameron: uh, began with a V,
[01:26:53] Tony: I know who you mean.
[01:26:55] Cameron: blonde, short sil­ver
[01:26:57] Tony: Mmm.
[01:26:58] Cameron: Um,
[01:26:59] Cameron: I got­ta look it up now. Who had Tony Sopra­no whacked?
[01:27:01] Cameron: Frank Vin­cent played Phil Leo­tar­do.
[01:27:06] Tony: Okay.
[01:27:07] Cameron: So, yeah, Joe Pesci and Phil Leo­tar­do had, like, this night­club act, and then they both end­ed up in ear­ly Scors­ese films. Uh, well, Frank Vin­cent was in, um, Good­fel­las, and, you know, Joe goes back
[01:27:21] Cameron: with him years before that, but they both just start­ed doing, like, low bud­get, you know, Ital­ian New York films, and any­way, yeah.
[01:27:29] Cameron: So Pesci, love Pesci. And then I’ve been read­ing Mar­cus Aure­lius a lot. Um, first time I’ve pulled out med­i­ta­tion since I was in my ear­ly 20s prob­a­bly, and I’m just blown away by how great a recipe for liv­ing a hap­py life it is. It aligns with my own, you know, phi­los­o­phy over the last 30 years. Um, just, it should be.
[01:27:55] Cameron: Man­dat­ed read­ing, I think, for every­one who hits 18, should be like,
[01:28:01] Cameron: Alright, before you can go out into the world, you need
[01:28:03] Tony: Yeah. This is how you grow up.
[01:28:05] Cameron: read Mar­cus Aure­lius five times, you know, and you should be test­ed on your under­stand­ing of Mar­cus Aure­lius ver­sion of Sto­icism. Like, impres­sive, impres­sive
[01:28:15] Cameron: book for any­one to write at any time, let alone guy writ­ing it while he was the emper­or of the Roman Empire.
[01:28:24] Tony: Mm hmm.
[01:28:24] Cameron: And be Writ­ing it for him­self and, and his last, in his last will and tes­ta­ment, he want­ed it to be burned. Uh, he did­n’t, it was nev­er meant for pub­lic con­sump­tion. It was for, it was his med­i­ta­tions to him­self to, to, um, remind him­self how to be a good emper­or. Every day, a good
[01:28:43] Tony: Right. Wow.
[01:28:45] Cameron: was to, hey, think about this dum­my, you know, and he beats up on him­self a lot and he’s like crit­i­cal of him­self and remind­ing him­self how to live a hap­py,
[01:28:55] Cameron: pro­duc­tive, you know, uh, life as a, as any­one, let alone being an emper­or.
[01:29:01] Cameron: Um, yeah, just
[01:29:03] Cameron: can­not rec­om­mend it enough. Real­ly great book.
[01:29:05] Tony: Yeah, I read a book last year called The Obsta­cle Is The Way, which was a mod­ern retelling of med­i­ta­tions. That’s Real­ly good too.
[01:29:13] Cameron: Oh,
[01:29:14] Cameron: yeah. You men­tioned that, I think, at some point. I’ll have to dig that up.
[01:29:18] Tony: hmm.
[01:29:19] Cameron: That’s it. I got­ta go to
[01:29:20] Cameron: Kung Fu.
[01:29:21] Tony: All right.
[01:29:22] Cameron: Thank you,
[01:29:23] Tony: Good to chat again. It’s been a
[01:29:24] Tony: while.
[01:29:25] Cameron: Yeah. nice to see your face, man. I’ve missed you. Wel­come back to the show.
[01:29:31] Tony: Thank You
[01:29:32] Cameron: Have a good week.
[01:29:33] Tony: too. Bye.
[01:29:34] Cameron: Have a good week,
[01:29:34] Cameron: every­body.
[01:29:36] Tony: Hap­py ASX.