QAV #705 — Base-Rate Neglect

QAV 705 Club

[00:00:00] Cameron: Wel­come back to QAV, Tony Kynas­ton. It’s episode 705. We’re record­ing this Tues­day the 30th of Jan­u­ary, 2024.

[00:00:22] Cameron: How are you, TK?

[00:00:23] Tony: Good. Cameroon, real­ly? Real­ly good.

[00:00:30] Tony: Have you done that thing? Like, I’ve been, uh, writ­ing mem­os and sign­ing things with last year’s date still. 24th of the 1st, 23. Took me a few

[00:00:41] Tony: days for the brain to click

[00:00:42] Tony: over that it actu­al­ly was 2024.

[00:00:45] Cameron: You know why I don’t do that? It’s because I nev­er actu­al­ly write the date. I have code. If I’m writ­ing some­thing, I just write date, and then an aster­isk, and it just inserts the date.

[00:00:59] Tony: Yeah, but some things you have to sign and put them

[00:01:01] Tony: date, right? Legal doc­u­ments.

[00:01:04] Cameron: legal doc­u­ments, like what legal doc­u­ments do you think I’m sign­ing?

[00:01:09] Tony: I had to sign a con­sent for surgery to gel the horse recent­ly, and I put 2023 in it. And I had to sign a proxy, because I don’t live at Cape Schanck, I had to sign a proxy for the AGM down there. I did­n’t have to, but I want­ed to, to give the, give the chair a vote, and got it sent back to me and said, uh, this is for last year,

[00:01:27] Tony: because I dat­ed at 23.

[00:01:30] Cameron: know. I don’t do any­thing apart from sit here and record pod­casts and go to Kung Fu. That’s my entire life.

[00:01:35] Tony: Ah, liv­ing the dream, liv­ing

[00:01:38] Tony: the dream.

[00:01:41] Cameron: Uh, well, speak­ing of liv­ing the dream, Tony, the mar­ket, you know, it’s, well, at the end of last year, the end of Decem­ber, it was like, going all guns. The begin­ning of this year, begin­ning of Jan­u­ary, it fell in a heap.

[00:01:57] Cameron: For the first cou­ple of weeks now, it’s back! With it all, all up since the, well, almost, since when, like, the 18th of Jan­u­ary. Just can’t get enough of it. Mar­kets just going gang­busters. One minute down, the next minute up.

[00:02:13] Tony: Pret­ty hard to pre­dict, isn’t it?

[00:02:16] Cameron: Pret­ty hard to care about too, real­ly. It’s like,

[00:02:19] Tony: Exact­ly, it’s noise.

[00:02:21] Cameron: you know the only rea­son I care is I, I read the Fin, I look at the Fin in the morn­ing. If it says the mar­ket’s going to be up, I’m like, all right, well, I don’t need to think about any­thing today. If it says it’s going to be a rough day, I think, uh, I may need to check the alerts more rig­or­ous­ly than I would oth­er­wise.

[00:02:36] Cameron: But gen­er­al­ly speak­ing, which I haven’t actu­al­ly even checked my alerts today, I prob­a­bly should do that. Um, but, uh, gen­er­al­ly speak­ing, it’s all been fair­ly smooth run­ning. For the last week, a cou­ple of the stocks in our port­fo­lios are close to their sell lines. I think MacMa­hon, MacMa­hon is strug­gling a lit­tle bit.

[00:02:57] Cameron: It’s around a three PTL and our rule one. And, um, what’s the oth­er one? There’s anoth­er one that’s been sort of hov­er­ing around there for the last cou­ple of days, but I’ve kind of just been let­ting them hov­er. You try­ing not to think too hard about it, see­ing where they go, because they’ve been doing it for like a, a week, you know, they’ll sort of hov­er around that line and they’ll dip below it, but then they’ll go back above it.

[00:03:21] Cameron: There seems to be like a, it’s a sup­port line in there for some­body. Um, what’s, oh, gem is the oth­er one that’s sort of hov­er­ing around a real one­self for us. But any­way.

[00:03:34] Tony: well the oth­er thing that’s hap­pen­ing too now is we’re get­ting, oh well, quar­ter­ly updates from the min­ing sec­tor, but um, you know, Wool­worths came out today for exam­ple and had to con­fess that they’re going to take a write down in their annu­al results, which they’ll present prob­a­bly next month. So there’s going to be some move­ments in stocks over the next six weeks or so.

[00:03:54] Tony: With annu­al results com­ing out. So report­ing sea­son starts in a cou­ple of days. Uh, so be aware of that. Um, and if I, I know I don’t like to pre­dict things, but I’m going to go out on a limb and say, Cred­it Corp will report ear­ly, and

[00:04:06] Tony: they’ll under promise, and the shares will go down.

[00:04:09] Cameron: Well, we talked about this six months ago, I seem to recall, or a lit­tle bit after their last results, and I asked the ques­tion, should we sell before they report next

[00:04:20] Tony: Yeah.

[00:04:22] Cameron: And you say, yeah, maybe we should, because yeah, I look

[00:04:24] Tony: a trade.

[00:04:26] Cameron: chart for the last year, wow, Sep­tem­ber was real­ly bad, Sep­tem­ber they real­ly plunged.

[00:04:32] Cameron: A lot. They dropped down to 12 bucks. They were trad­ing, like, at the begin­ning, mid­dle of Sep­tem­ber, they were trad­ing at 21 bucks. By the mid­dle of Octo­ber, they were down to 12. From 21 down to 12. They’re back up to near­ly 18 bucks, 17, 73, you know. Is it part of the QAV sys­tem to, uh, just go, well,

[00:04:57] Cameron: CCP’s gonna,

[00:04:58] Tony: That’s a side job. That’s a side deal. It’s a hus­tle. Yeah.

[00:05:02] Cameron: it’s,

[00:05:02] Cameron: a hus­tle.

[00:05:03] Cameron: It’s gonna take a hit. We might as well sell it now and buy it again in a month when every­one goes, Oh, they’re fine.

[00:05:09] Tony: Actu­al­ly, it was­n’t that bad. Yeah.

[00:05:12] Cameron: I’m seri­ous. Like, should we,

[00:05:14] Tony: Are you seri­ous?

[00:05:16] Cameron: I’m seri­ous. Hey, you’re

[00:05:18] Cameron: laugh­ing it off. You don’t think so?

[00:05:21] Tony: Wow. I mean, like I said, it’s a pre­dic­tion. So it might not

[00:05:23] Tony: hap­pen this year. Seems to hap­pen all the time.

[00:05:27] Cameron: We’ve been doing this show for five years and you tell me

[00:05:30] Cameron: every, you’ve been telling me for five years that’s what CCP does.

[00:05:33] Tony: Yeah. Oh, it

[00:05:35] Cameron: won’t, I won’t do it then. Um, Ever­grande, Tony, Ever­grande is being liq­ui­dat­ed. I remem­ber we talked about Ever­grande, wow, like a year ago, two years ago. remem­ber when that bad news about Ever­grande first start­ed pop­ping up.

[00:05:52] Cameron: For peo­ple that don’t know what we’re talk­ing about, this is this Chi­nese prop­er­ty devel­op­ment com­pa­ny, one of Chi­na’s biggest prop­er­ty devel­op­ers, it’s been forced to liq­ui­date by a judge after it was unable to reach a restruc­tur­ing deal with cred­i­tors over hun­dreds of bil­lions of dol­lars it owes.

[00:06:12] Cameron: Accord­ing to the ABC, the liq­ui­da­tion could have severe con­se­quences for the world’s sec­ond largest econ­o­my as the Chi­nese prop­er­ty sec­tor con­tin­ues to strug­gle to recov­er from the pan­dem­ic and Bei­jing grap­ples with an under­per­form­ing econ­o­my. So, you know, there’s always pre­dic­tions about Chi­na’s econ­o­my, we’ve talked about this before, this is a big deal though, there’s no deny­ing that, it’s a big deal,

[00:06:38] Tony: Ever­grande’s huge. I mean, when I think about Chi­nese prop­er­ty devel­op­ers, I think about peo­ple build­ing, you know, 10 or 12 high ris­es in the street, and that’s what this Ever­grande was doing. Huge prop­er­ty devel­op­er. it got the wob­bles a year or two ago and every­body said that’s the end of the Chi­nese econ­o­my and what’s the kind of what’s its impact going to be on Aus­tralia because I mean, some­where else in that arti­cle, it talks about iron ore tak­ing a hit.

[00:07:05] Tony: Because, uh, these prop­er­ty devel­op­ers use a fair bit of steel when they build these build­ings. Um, how­ev­er, again, I don’t want to pre­dict, but, um, fur­ther, in a dif­fer­ent arti­cle in the AFR, the head­line is, Citi, which is short for Citi Group, Citi tips Sinoor to reach 150 US on Chi­na hopes.

[00:07:29] Cameron: mm,

[00:07:30] Tony: And it goes on, Citi has dou­bled down on its call for iron ore prices to ral­ly to US$ 150 a ton and has upgrad­ed its cop­per fore­cast after Chi­na pledged fur­ther sup­port for its strug­gling econ­o­my and share mar­ket last week.

[00:07:45] Tony: Chi­na’s cen­tral bank announced that next month it will cut the amount of reserves that banks must main­tain. inject­ing about U. S. 140 bil­lion of liq­uid­i­ty into the finan­cial sys­tem. That coin­cid­ed with reports that Bei­jing is con­sid­er­ing a pack­age of mea­sures to sta­bi­lize the nation’s slump­ing share mar­ket.

[00:08:05] Tony: So, and then it goes on. The move sparked a ral­ly across base met­al mar­kets, lift­ing cop­per prices to a three week high above 8, 500 US a ton. Mean­while, iron ore futures trad­ed in Sin­ga­pore hit 136 US a ton.

[00:08:19] Cameron: mm.

[00:08:21] Tony: So you’ve always got to con­sid­er the sec­ondary effects, um,

[00:08:24] Tony: not just the head­line. But, uh,

[00:08:28] Cameron: So it’s either going to be real­ly bad for the

[00:08:29] Tony: All, yeah, all real­ly good.

[00:08:32] Cameron: good,

[00:08:32] Tony: Yeah.

[00:08:34] Cameron: take your pick.

[00:08:35] Tony: Yeah. And then there’s oth­er arti­cles about how the bud­get in Aus­tralia has been, is in sur­plus because of iron ore prices and now they’re going to drop and it’s going to affect the whole econ­o­my. And it’s like, I wish, I wish some­one would raise the price of ink so we could have less of this crap being writ­ten about what’s going to hap­pen because, uh, yeah, it’s on the one hand and then on the oth­er hand,

[00:08:57] Tony: um, who knows.

[00:08:59] Cameron: What’s that old, that old sto­ry about all I need is a good one hand­ed econ­o­mist? I think it

[00:09:08] Cameron: was a Tru­man, Tru­man quote. So, uh, when you read sto­ries like Ever­grande and you read the one side it’s gonna be bad, the oth­er side it’s gonna be good, I’m guess­ing you just do

[00:09:19] Tony: Tune it out.

[00:09:20] Tony: Yeah.

[00:09:20] Cameron: Tune it out.

[00:09:21] Tony: Yeah. It is a good les­son in the fact that it’s nev­er the pri­ma­ry effects that cause the prob­lem. It’s always the sec­ondary and ter­tiary effects that you’ve got to look at. And I think Char­lie Munger used to say that a lot. Look at the sec­ondary effects

[00:09:33] Tony: for any­thing that hap­pens. Um, eco­nom­i­cal­ly.

[00:09:37] Cameron: Well, that leads me into a sto­ry I was gonna say for lat­er, but I’ll do it now. This is in The Fin, uh, today. Uh, Fund Man­agers Reveal Their Big Invest­ment Mis­takes. Did you see that one?

[00:09:48] Tony: No, I did­n’t.

[00:09:50] Cameron: Uh, it starts off, Ben­jamin

[00:09:52] Cameron: Gra­ham, renowned US finance pro­fes­sor and author who men­tored War­ren Buf­fett, had said, The biggest mis­take many investors made was to pay too much atten­tion to what the stock mar­ket is doing cur­rent­ly.

[00:10:03] Cameron: That is, they get thrown off course by day to day noise. Gra­ham, who died in 1976, also warned that obvi­ous prospects for growth in a busi­ness did not always trans­late into prof­its for investors. To take a con­tem­po­rary exam­ple, investors should not assume that soar­ing demand for bat­ter­ies in elec­tric vehi­cles means lithi­um min­ers are a good invest­ment.

[00:10:27] Cameron: But then I go on to get, take some quotes for some fundies in Aus­tralia and, um, I thought a cou­ple of them real­ly res­onat­ed with me. Andrew Mitchell, co founder of Ofa Asset Man­age­ment, uh, recent­ly con­fessed on social media that his biggest mis­take was to spend too much time and ener­gy ana­lyz­ing one par­tic­u­lar stock.

[00:10:49] Cameron: Sure, as an investor I’ve made mis­takes and lost mon­ey on invest­ments I’ve made, he wrote, but what made this invest­ment so bad? was the time I put in for the return and the stress it caused. The stock was a tech com­pa­ny sell­ing to multi­na­tion­als. The knowl­edge required to ana­lyze the com­pa­ny took a lot of read­ing and talk­ing to experts.

[00:11:07] Cameron: In the end, Mitchell said he sold the stock because the sig­nif­i­cant research required to fol­low a com­plex busi­ness. Was­n’t worth his lim­it­ed time as a busy fund man­ag­er. I fell vic­tim to a com­mon mis­take I think many man­agers and deci­sion mak­ers and com­pa­nies make. He wrote, make a good call on risk ver­sus return, how­ev­er, fail to rec­og­nize the oppor­tu­ni­ty cost of the deci­sion in terms of the time it requires and the stress it caus­es.

[00:11:37] Cameron: What do you

[00:11:37] Tony: I think also too, if you, I think, just adding to that, if you do too much research into a com­pa­ny, I don’t know if you can do that, but if, I’ve seen cas­es where peo­ple switch from being, Hey, I’ve uncov­ered a great stock to buy, to being an apol­o­gist for the com­pa­ny. To, to, Hey, I know all this stuff about, about this indus­try and this com­pa­ny, it should be doing bet­ter.

[00:11:57] Tony: And

[00:11:58] Tony: it’s not. So it’s like, yeah, you got­ta be care­ful on that one.

[00:12:01] Cameron: You get a lit­tle bit too invest­ed.

[00:12:03] Tony: Yeah, you become emo­tion­al­ly invest­ed. But get­ting back to Ben Gra­ham’s com­ment there, I think that was, that’s a real­ly, real­ly insight­ful com­ment. And the, and the, the bit that struck me was he said some­thing about, uh, com­pa­nies don’t always have their growth prospects reflect­ed in the share price.

[00:12:20] Tony: Um, and you and I were sent a link to watch a doc­u­men­tary about the his­to­ry of index funds and how the mar­ket is. So, all that is told in one sen­tence, and it’s not com­plete­ly effi­cient and all infor­ma­tion is reflect­ed in the price. Well, I mean, does­n’t Ben Gra­ham just turn that in its head straight away?

[00:12:39] Tony: I’ve nev­er been a fan of the effi­cient mar­ket the­o­ry or effi­cient mar­ket hypoth­e­sis, even though Eugene Fama and his mates won. Nobel prizes for it. And it’s still, it’s still taught him busi­ness skills today as far as I know. But Buf­fett pulled it apart in his famous, um, his famous, uh, oh, I was gonna call the sto­ry, his famous arti­cle, the Super Investors of Gra­ham and Doddsville, which I hard­ly rec­om­mend.

[00:13:05] Tony: Um, and now Ben Gra­ham’s tear­ing it apart. The growth prospects of a com­pa­ny aren’t always reflect­ed in the share price. And that’s, I mean, that was his clas­sic say­ing that the share mar­ket in the short term is a vot­ing machine, in the long term, it’s a weigh­ing machine. So how do those two things, how does the fact that Gra­ham’s say­ing there’s some kind of There’s some­thing under the hood which even­tu­al­ly will reveal itself and the mar­ket will weigh it cor­rect­ly in time with Eugene Fama who says, no, no, no, no, every­thing’s always reflect­ed in the price because the mar­kets are com­plete­ly effi­cient.

[00:13:37] Tony: One of

[00:13:37] Cameron: I think the

[00:13:38] Tony: famous investors is wrong.

[00:13:40] Cameron: I think the Gra­ham quote though was say­ing some­thing dif­fer­ent in this arti­cle.

[00:13:44] Cameron: the quote is Obvi­ous prospects for growth in a busi­ness did not always trans­late into prof­its for investors. To take a con­tem­po­rary exam­ple, investors should not assume that soar­ing demand for bat­ter­ies in elec­tri­cal vehi­cles means lithi­um min­ers are a good invest­ment.

[00:14:00] Cameron: So isn’t he say­ing here that, you know, oppor­tu­ni­ties for growth don’t nec­es­sar­i­ly mean the share price is going to do well.

[00:14:08] Tony: Yeah, but like the flip side of that is, to take that bat­tery exam­ple again, is if the mar­ket is com­plete­ly effi­cient then, you know, at some stage it was inef­fi­cient because it assumed that lithi­um was going to be a boom met­al with a boom price for­ev­er because all the cars were going to be replaced by elec­tric vehi­cles and have bat­ter­ies that required to use it.

[00:14:27] Tony: But. You know, sec­ondary effects again, every­one who could, who could open the lithi­um mine when the price crashed. So it’s like, um, I can’t see that mar­kets are effi­cient. I think they’re any­thing but effi­cient. I think they’re wacky. And again, as Ben Gra­ham said, they’re, they’re, what do you say, they were a moody, a moody neigh­bor who came to you every day.

[00:14:49] Tony: Some days he was hap­py and offered you too much for your, your house and some day he was unhap­py and offered you

[00:14:54] Tony: not enough for it and you just had to ignore him.

[00:14:57] Cameron: man­ic depres­sive. Yeah, it’s well, the way I’ve. Thought about it is that the mar­ket is affect­ed by human emo­tion. Humans are greedy and fear­ful and, you know, gen­er­al­ly speak­ing, not effi­cient. You know, they, they get caught up in things and they’re moti­vat­ed by short term, short

[00:15:21] Cameron: ter­mism, short term bonus­es and prof­its and press releas­es.

[00:15:25] Cameron: And

[00:15:26] Tony: And eas­i­ly manip­u­lat­ed by

[00:15:27] Tony: fear and greed.

[00:15:29] Cameron: yeah.

[00:15:30] Tony: Yeah, amongst

[00:15:31] Cameron: the AIs are run­ning the mar­kets, maybe it will be effi­cient,

[00:15:33] Cameron: but

[00:15:34] Tony: We’ll have to pack up and go home. Ha, ha,

[00:15:35] Cameron: yeah. Well, and that’s what Buf­fett said at the last Berk­shire Hath­away AGM, when some­body asked him about AI, he said, yeah, it’s, you know, as long as humans are involved, greed and emo­tion is going to stop peo­ple from, there’ll still be oppor­tu­ni­ty in the mar­ket­place because peo­ple will still be greedy.

[00:15:55] Cameron: and emo­tion­al and fear­ful and all that kind of stuff, you

[00:15:57] Tony: Mm.

[00:15:58] Cameron: even if they have bet­ter tools,

[00:16:00] Tony: Yeah. That’s a good point.

[00:16:03] Cameron: unless you have a tool like QAV. Which teach­es you to remove the emo­tion, but even then, peo­ple go, Oh, you know, we’ve seen, we talked about this

[00:16:12] Tony: Nah, yeah, they capit­u­late.

[00:16:13] Cameron: the, the capit­u­la­tion, yeah. Even if you, when you have a

[00:16:16] Cameron: tool and a sys­tem that says, Ignore the noise, don’t be emo­tion­al, just stick to your guns and keep going, keep doing what you’re doing.

[00:16:24] Cameron: Give, just stick to your dis­ci­pline. Peo­ple go, nah, too hard. You know, for a whole bunch of rea­sons, you know.

[00:16:31] Cameron: Well, mov­ing on. Alu­mini­um and CAA, Tony. We’ve talked about this sev­er­al times over the years. Capral, Capral,

[00:16:41] Tony: Mm hmm.

[00:16:41] Cameron: want to pro­nounce it. Uh, one of our lis­ten­ers a few years ago did some good research and con­tact­ed Capral.

[00:16:48] Cameron: So my under­stand­ing, my rec­ol­lec­tion of the sto­ry is Capral, Pro­duce fin­ished goods for alu­mini­um and they sell those, so they’re not an alu­mini­um min­er or refin­er, or a baux­ite min­er, that they, uh, the last time one of our lis­ten­ers reached out to them about it, they were How they’re affect­ed by the alu­mini­um price, they seem to say that they, you know, they had cer­tain hedg­ing in place to mean that they were pass­ing those alu­mini­um price fluc­tu­a­tions on to their cus­tomers and they weren’t real­ly affect­ed by it, because, you know, the rea­son I ask this is, you know, alu­mini­um became a com­mod­i­ty sell for us.

[00:17:29] Cameron: Uh, last week. And I was look­ing at Capral again, because it was in one of our port­fo­lios, what we should do. When I com­pared the alu­mini­um price to the Capral price, I thought they kind of mapped fair­ly close­ly. And there’s a lit­tle bit of a lag. Between the com­mod­i­ty price and the Capral price. But gen­er­al­ly speak­ing, they seem to fol­low each oth­er over the last five years.

[00:17:56] Cameron: So I made it, I made a deci­sion to sell Capral out of our port­fo­lio last week, but a cou­ple of peo­ple in the forums. ques­tioned my, uh, genius brain. Um,

[00:18:10] Tony: How dare they? I hope you barred

[00:18:12] Cameron: show for too

[00:18:13] Tony: hope you barred them.

[00:18:17] Cameron: So I want­ed you to have a look at this, uh, and tell me what you think.

[00:18:21] Tony: Well, I was the one who orig­i­nal­ly said that we should be using alu­minum as the, um,

[00:18:26] Tony: as the graph for for cap­i­tal. And then

[00:18:30] Cameron: re you sort of reversed that posi­tion

[00:18:33] Cameron: last year.

[00:18:34] Tony: you know, I was swayed by the per­son who con­tact­ed cap­i­tal and said they had hedg­ing in place to, to, to look after it. But, um, I was­n’t sure if it was hedg­ing of the, of the under­ly­ing alu­minum price or whether it was like a esca­la­tor in the con­tracts for the goods they sold so they could raise prices when the.

[00:18:50] Tony: Alu­mini­um price went up. But it’s, um, yeah, I still lean towards using alu­mini­um as a com­mod­i­ty for cap­i­tal. Um, it’s a bit like Blue Scope Steel. It’s, these are, these are com­pa­nies that don’t mind the under­line, don’t mind the iron ore, don’t mind the alu­mini­um, but they do, but their price has to change with the ris­ing and falling of the under­ly­ing com­mod­i­ty price.

[00:19:16] Tony: Oth­er­wise they go broke.

[00:19:18] Cameron: Right. Well, I did sell it. Um, and let’s see, what did I sell it at? I sold it at 9. 61. It’s 9. 85 now, so it has gone up a lit­tle bit since I sold it,

[00:19:33] Tony: Yeah. But as you say, I’m look­ing at the graph of alu­mini­um phys­i­cal in Stock Doc­tor against CAA and they’re, they’re rea­son­ably sim­i­lar, track­ing up and down at the same time. There’s a bit of, bit of a demerg­er in the last six months. Cap­i­tal’s done bet­ter than the alu­mini­um price, but over­all,

[00:19:51] Tony: they’re pret­ty close.

[00:19:53] Cameron: Yeah, we’ll see how that plays out. Munger’s final port­fo­lio. I thought this was an inter­est­ing sto­ry in Busi­ness Insid­er. The late Char­lie Munger’s final stock port­fo­lio update is out, and it shows his icon­ic approach to invest­ing. Uh, says Char­lie Munger grew Dai­ly Jour­nal’s stock port­fo­lio from noth­ing to 300 mil­lion with­in 15 years.

[00:20:20] Cameron: The news­pa­per pub­lish­er just filed its final port­fo­lio update from the leg­endary investor’s time in charge, and it under­lines Munger’s excep­tion­al patience, dis­ci­pline, and con­vic­tion. Uh, it goes on to say, skim­ming through it, la dee da dee da, The first port­fo­lio fil­ing for Dai­ly Jour­nal dates back to the fourth quar­ter of 2013.

[00:20:43] Cameron: Like­ly because that’s when the Val­ley of its Hold­ings breached the 100 mil­lion report­ing thresh­old. The pub­lish­er and legal soft­ware provider dis­closed 2. 3 mil­lion shares of Bank of Amer­i­ca. Almost 1. 6 mil­lion shares of Wells Far­go, 140, 000 shares of U. S. Bank Corp., and 64, 600 shares of South Kore­an steel mak­er, POSCO.

[00:21:07] Cameron: Remark­ably, Dai­ly Jour­nal held the exact same amount of Bank of Amer­i­ca, Wells Far­go, and U. S. Bank Corp. shares a decade lat­er. On Decem­ber 30th last year, while it slashed its POSCO posi­tion to 9, 745 shares in the fourth quar­ter of 2014, it did­n’t touch it again until the fourth quar­ter of 2022 when it exit­ed the hold­ing.

[00:21:33] Cameron: Munger made Only one oth­er big change to Dai­ly Jour­nal’s port­fo­lio. He bet on Aliba­ba at the start of 2021, quadru­pled his wager by the end of the year, then halved it the next quar­ter after sour­ing on the Chi­nese e com­merce titan and decid­ing he’d made a mis­take. Pos­si­bly when the Chi­nese gov­ern­ment made the founder of Aliba­ba dis­ap­pear, Jack Ma.

[00:22:00] Tony: those magi­cians, Abra­cadabra, Aliba­ba, whoop,

[00:22:09] Tony: dis­ap­peared, yeah,

[00:22:12] Cameron: Um, it’s worth not­ing that Munger’s hands off approach was­n’t a win­ner across the board. The val­ue of Dai­ly Jour­nal’s Wells Far­go and U. S. Ban­corp posi­tions rose by less than 10 per­cent in a decade, while the S& P 500 surged over 150%. 50 per­cent in the same time frame. The com­pa­ny’s Bank of Amer­i­ca stake did bet­ter, ris­ing by almost 120 per­cent in that peri­od.

[00:22:34] Cameron: Munger’s record appears to have been saved by an ear­ly bet on Chi­nese EV mak­er, BYD. The wager like­ly made up the lion’s share of Dai­ly Jour­nal’s 138 mil­lion in unre­al­ized gains on Sep­tem­ber 30, and allowed it to real­ize a 1, 15 fold return on a 3. 3 mil­lion wager in late 2021. Even so, Dai­ly Jour­nal’s fil­ings under­score Munger’s com­mit­ment to mak­ing con­cen­trat­ed bets, buy­ing for the long term, and only at a com­pelling price, rarely sell­ing, and resist­ing the urge to fid­dle or pan­ic.

[00:23:08] Cameron: What do you think about all that, TK?

[00:23:10] Tony: oh, I think, you know, I actu­al­ly got a tear in my eye when I read it because it’s just such a shame that Char­lie’s not longer with us to just learn from the mas­ter even more. But yeah, I mean, it’s a great sto­ry. I know that there were oth­ers oth­er sto­ries and peo­ple out there who said that they would pre­fer to go to the Dai­ly Mail AGM and lis­ten to Char­lie speak than the Berk­shire Hath­away AGM, because he just would sit there for eight hours and answer any ques­tions peo­ple threw at him, which I guess he did at the Berk­shire Hath­away AGM too, but there was less peo­ple at Dai­ly Mail.

[00:23:43] Tony: Um, yeah, so some­where else in the arti­cle he He said that the Dai­ly Mail had a max­i­mum num­ber of shares of eight, I think, at any one time. You would­n’t let the port­fo­lio get above eight. Um, and

[00:23:55] Cameron: Dai­ly Jour­nal, I think, Tony,

[00:23:56] Tony: Dai­ly Jour­nal, sor­ry, not Dai­ly Mail. I should get that right. Very dif­fer­ent. Dai­ly Jour­nal. Um, and, and I think as you read out, there’s prob­a­bly only real­ly about four or five.

[00:24:07] Tony: Long term in the port­fo­lio. Um, so it’s inter­est­ing that BYD was the one that real­ly saved the bacon. I mean, you take BYD out and the rest under­per­form the index. So that’s inter­est­ing in itself. And, uh, and Char­lie has spo­ken about why he bought BYD. He just saw so much upside poten­tial in it, but it’s hard­ly what you’d nor­mal­ly expect as a val­ue in.

[00:24:31] Tony: Invest­ment, or the kind of stock, a val­ue investor would buy. So that was an inter­est­ing one, I think.

[00:24:37] Tony: Um, Yeah,

[00:24:41] Cameron: Yeah, inter­est­ing that like it did­n’t real­ly, the rest of the port­fo­lio did­n’t per­form well. So even Char­lie with his great genius and tak­ing long term bets and stick­ing in there, you know, one out of the five there real­ly seemed to do well. All

[00:25:00] Tony: not unex­pect­ed. Is it? Real­ly? It’s just, that’s what nor­mal­ly hap­pens in the port­fo­lio. but it’s inter­est­ing. It’s, it’s a small, I think the learn­ings for me are, it’s a small con­cen­trat­ed port­fo­lio, he did­n’t tin­ker with it much. And I won­der whether his non tin­ker­ing was the fact that he had so many oth­er things to look at that, five shares in the.

[00:25:19] Tony: Dai­ly Jour­nal’s port­fo­lio did­n’t, you know, was­n’t top of mind for him very much. But, but he does­n’t prob­a­bly tin­ker with things any­way. Um, his the­o­ry was fine on the oth­er, oth­er four, uh, Bank of Amer­i­ca and, uh, Wells Far­go, et cetera. He bought those dur­ing the depth of the GFC. And they looked real­ly good in the ear­ly days because they all went up a lot and he pos­si­bly even hung on to them for too long because they’ve gone back to being below index over the last, what, 15 years since then?

[00:25:51] Tony: So, yeah, per­haps he made a mis­take, but it’s clas­sic Char­lie. He pret­ty much did every­thing right. And, um, even the Aliba­ba excur­sion, I mean, that’s inter­est­ing in itself as well, he got very bull­ish on Chi­na a cou­ple of years ago, bought Aliba­ba and then dou­bled down and then sold it again. So, um, he’s, he was, it’s kind of like some, you know.

[00:26:16] Tony: Some­times where I get to with QAV in the Aus­tralian mar­ket, that I can’t find things big enough to buy on our buy list. Um, and I think Char­lie prob­a­bly had that prob­lem as well. So they were look­ing over­seas. Um, and I think also too, as their, as their fame spread, they were get­ting lots of pitch­es from over­seas fund man­agers and investors and bro­kers to look at these com­pa­nies.

[00:26:37] Tony: So they were, they were exposed a lot more to them. Um, cause there’s a lot more over­seas com­pa­nies now in Berk­shire Hath­away than there was. 20 years ago, for exam­ple.

[00:26:52] Cameron: Mor­gan Housel, 101 Lit­tle Ideas. Did­n’t do one last week. This week, I’ve got two. They’re, uh, they’ll fit togeth­er though. The first one is Base Rates. The suc­cess rate of every­one who’s done what you’re about to try. Then, the next one is Base Rate Neglect. Assum­ing the suc­cess rate of every­one who’s done what you’re about to try does­n’t apply to you, caused by over­es­ti­mat­ing the extent to which you do things dif­fer­ent­ly than every­one else.

[00:27:20] Cameron: A

[00:27:21] Tony: That’s like the Dun­ning Kruger effect, isn’t it?

[00:27:24] Cameron: lit­tle bit. A lit­tle bit. Yeah,

[00:27:26] Tony: I, I mean, I, I come across this all the time and it, um, it’s why I always empha­sise if, you know, if you’re get­ting into the share mar­ket, um, work out what kind of investor you are, dip your toes in, um, have a paper port­fo­lio, have your frame­work set, and then, once you’ve tri­alled it for a while, then start to invest, don’t Don’t just jump in and lose mon­ey.

[00:27:47] Tony: That’s the worst thing you can do. But yeah, I mean, like, uh, you see it a lot with share investors. Oh, I bought Bit­coin 000. It’s, I’m a genius. It’s like, no, you were just lucky. You were just around with mon­ey in your pock­et at the right time. Um. You know, it’s, it’s, yeah, it’s a great, great, uh, con­cept, base rates and base rates neglect. And I also, I remem­ber in the dot com boom, like, we would sit around over cof­fee and bar­be­cues and things, me and my mates, and think, oh, we can’t miss out on this boom.

[00:28:18] Tony: How are we going to set up a dot com com­pa­ny? And we’d have all these great ideas. And then I’m like, do we real­ly know about this? How do we, how do we actu­al­ly add val­ue to this process? And they’d be like, oh, stop it. You’re just

[00:28:29] Tony: a bloody killjoy. Let’s get into it.

[00:28:32] Cameron: Hmm. Where­as I actu­al­ly did start a dot

[00:28:35] Cameron: com com­pa­ny twice,

[00:28:40] Cameron: think­ing that I would be smarter than the aver­age cook­ie. And you know, I know what, I know what busi­ness suc­cess rates are nor­mal­ly, even out­side of dot coms, you know, clas­si­cal­ly 50 per­cent of busi­ness­es that get start­ed don’t, small busi­ness­es don’t sur­vive the first year. And 90, 90 per­cent of those that do sur­vive the first year don’t sur­vive the next four years.

[00:29:02] Cameron: So five years, the fail­ure rate is extreme­ly high. Dot com busi­ness­es is prob­a­bly even high­er than that. But it reminds me of when Hunter, my son, said he want­ed to become an actor. And I was like, you know, you real­ize what the suc­cess rate of peo­ple who do that is? He goes, yeah, but you know, they’re all idiots, you know?

[00:29:23] Cameron: By the way though, he, you know, the boys are in LA at the moment. Hunter’s, Hunter’s going to New York. He got an invi­ta­tion to fly to New York. He’s being flown to New York, put up at a hotel and he’s going to the Tom­my Hil­figer event at Fash­ion Week in New York. He has to get there a day ear­ly because they have a styl­ist who’s going to fit him out with Tom­my Hil­figer gear for the sort of the red car­pet event because you have to be Style to be on the red car­pet, appar­ent­ly.

[00:29:52] Cameron: So I’m like, uh, dun­no, as long as you’re pre­pared to sleep with some­one there after­wards, it could be the big break for you, you know, who knows?

[00:30:00] Tony: Good. Good on him. Good luck.

[00:30:02] Cameron: Yeah. He could, you know, just stum­ble his way to suc­cess. But so, I mean, I, I think in all of those things, there’s a cer­tain amount of tal­ent involved in that indus­try, but 99. 9 per­cent of it is luck and tim­ing. I think,

[00:30:18] Tony: Luck and tim­ing. And

[00:30:19] Cameron: has to hap­pen to some­one.

[00:30:21] Tony: Oh no, absolute­ly. Yeah. But like, yeah, as we spoke about before, there’s a, there’s often in most indus­tries there’s a pyra­mid and we only hear about the peo­ple at the top. you look at the sport­ing salaries, same sort of thing. Some­one just made three mil­lion bucks win­ning the Aus­tralian Open last week.

[00:30:35] Tony: But, you know, there’s some­one, I remem­ber meet­ing, I think it was the last per­son, the last Aus­tralian to win the Aus­tralian Open. Had a few beers with him and real­ly enjoyed his com­pa­ny. And Mark Edmond­son. And, uh, this was going back in the mid 90s when I, um, was, I was, uh, at an IBM event, it was actu­al­ly the Aus­tralian Pro Am ten­nis and played ten­nis with him.

[00:30:59] Tony: And, um, and then I, like, after­wards we’re hav­ing a few beers and I said, um, so what are you up to these days? And he goes, oh, just fin­ished lay­ing the con­crete on a, on a ten­nis court. So he was reduced, like, this is the Aus­tralian Sport­ing Cham­pi­on, um, I think the last Aus­tralian to win the Aus­tralian Open.

[00:31:16] Tony: And he’s, 20 years ago, he’s, he’s lay­ing con­crete on ten­nis courts to make a liv­ing. It’s the life. Yeah.

[00:31:23] Tony: The pyra­mid has a very steep slip­pery slope, Wheat­ley,

[00:31:26] Cameron: It’s like the John­ny Farn­ham, John Farn­ham sto­ry, right? After his first splash of suc­cess in the late 60s, ear­ly 70s, by the time Glenn, what’s his face,

[00:31:39] Tony: Wheat­ley

[00:31:41] Cameron: Wheat­ley start­ed work­ing with him in the mid 80s, he was, yeah, build­ing hous­es. I think he was like a plas­ter­er or some­thing like that. He was, you know, a tradie on the tools, back before that was the quick way to get rich in Aus­tralia was being a tradie.

[00:31:55] Cameron: You know, he was just doing trade y stuff.

[00:31:58] Tony: yeah. Well Tom Bak­er, when he heard

[00:32:01] Tony: he’d won the part for Doc­tor Who was on a build­ing site,

[00:32:04] Cameron: yeah. Yeah, yeah. But he had­n’t been suc­cess­ful

[00:32:06] Cameron: and then failed. He was still work­ing his way up. You know, Far­num had had suc­cess. He was like top of the pops, the king of top of the pops in

[00:32:15] Tony: Lady, the, clean­ing lady,

[00:32:17] Cameron: or some­thing? Yeah, that’s right.

[00:32:19] Cameron: Well, speak­ing about cryp­to, which you did, uh, anoth­er sto­ry I read this morn­ing in The Fin, I like this, Cryp­to may have become bor­ing, but it still isn’t legit.

[00:32:29] Cameron: So, I think we talked a week or two ago about the EFTs, uh, launch­es, but, uh, you scroll down in this arti­cle, it’s inter­est­ing, it says, the com­mis­sion’s approval, Fed­er­al Trade Com­mis­sion’s approval of the Bit­coin ETFs was not an endorse­ment of Bit­coin or cryp­to more wide­ly, but rather was the result of a court rul­ing.

[00:32:50] Cameron: that found the SEC’s long stand­ing oppo­si­tion to Bit­coin ETFs, on the grounds they could be sub­ject to fraud and manip­u­la­tion, was arbi­trary. In a state­ment, Gensler said that, though we’re mer­it neu­tral, I’d note that Bit­coin is pri­mar­i­ly a spec­u­la­tive, volatile asset that’s also used for illic­it activ­i­ty includ­ing ran­somware, mon­ey laun­der­ing, sanc­tion eva­sion, and ter­ror­ist financ­ing.

[00:33:16] Cameron: For con­text, some of the oth­er ETFs that have been approved by the SEC include the God Bless Amer­i­ca ETF, tick­er YALL, Y A L L, an anti woke invest­ment for God fear­ing, flag sav­ing con­ser­v­a­tives, The Inverse Kramer ETF, SJIK, that aims to invest in the oppo­site of what­ev­er TV per­son­al­i­ty Jim Kramer rec­om­mends.

[00:33:44] Cameron: a VICE ETF, tick­er code VICE, that invests in VICE relat­ed busi­ness activ­i­ties.

[00:33:53] Tony: So that one’s been around for a long time, has­n’t actu­al­ly, has­n’t out­per­formed the mar­ket. I thought it might. The sin one. I think it’s been called sin in the past. SIN

[00:34:01] Cameron: All right.

[00:34:03] Tony: only, only holds tobac­co and guns and gam­bling,

[00:34:06] Tony: those kinds of things.

[00:34:07] Cameron: Sounds like our port­fo­lios, real­ly. Every­thing that’s unpop­u­lar, coal min­ing,

[00:34:12] Tony: Yeah, that’s right. Uh,

[00:34:15] Cameron: Well, that’s my sto­ries for this week. I just, uh, I will be doing anoth­er free webi­nar on Tues­day, Feb­ru­ary the 6th at 8 PM Bris­bane time on Zoom. Look for the link in the newslet­ters and what­ev­er, but just an oppor­tu­ni­ty for peo­ple, whether they’re just free lis­ten­ers, QAV Lite, QAV Club, come along, ask me any­thing about any­thing, QAV, Kung Fu, Free Will, AI, the his­to­ry of Chris­tian­i­ty,

[00:34:47] Tony: ask about ai, don’t ask

[00:34:48] Tony: about Uh,

[00:34:51] Cameron: Cold War,

[00:34:52] Cameron: Uh, you know, Rus­sia, Ukraine, any­thing you want, but pri­mar­i­ly QAV.

[00:34:59] Cameron: Cause you don’t want to get me start­ed.

[00:35:01] Cameron: Right. Mov­ing right along. What have you got to talk about before we get into Q& A, Tony?

[00:35:05] Tony: Oh, I did­n’t have much at all. I say, be, uh, be aware that report­ing sea­son’s about to start. Things will get volatile. Shares will move quick­ly. Keep across your alerts. It’ll be a new month in a cou­ple of days. So reset your alerts. Um, yeah, I think that’s prob­a­bly it. That’s all I can say at the moment. Uh, I think it’s going to be an inter­est­ing one.

[00:35:25] Tony: Um, yeah, Wool­worths came out with a write down, I think there’ll be some oth­ers. Uh, it’s, there’s been, it’s hard to under­stand how the share mar­ket’s at an all time high. I think Aus­tralia just reached that kind of lev­el, um, in the last day or so. The US has been there for a while, um, when infla­tion is still, still out there, uh, least affect­ing the wal­lets that peo­ple are going to buy at these com­pa­nies.

[00:35:55] Tony: So, uh, it’ll

[00:35:56] Tony: be an inter­est­ing sort of com­pa­ny report­ing sea­son, I think.

[00:36:00] Cameron: Inter­est rates have been going up, you know, I see God­frey’s Vac­u­um Clean­ers just went bust today

[00:36:06] Tony: Oh, real­ly?

[00:36:07] Cameron: Yeah, they’ve been around since like 1931 or some­thing, they’re gonna have to shut­ter 50 stores, but I think that’s most­ly from com­pe­ti­tion from Kogan and JB Hi Fi and places like that. But, um, Yeah, like, you know, we’ve just heard all this doom and gloom about inter­est rates over the last year, and the impact that’s gonna have on the econ­o­my, and, uh, et cetera, et cetera, and yet the mar­ket’s at an all time high, so,

[00:36:31] Tony: Yeah, well, the share mar­ket’s look­ing for­ward to inter­est rate cuts, but it might get a bit of a rude awak­en­ing dur­ing this

[00:36:37] Tony: com­pa­ny report­ing sea­son. Might not, I’m not going to pre­dict, but yeah, pay atten­tion, peo­ple.

[00:36:41] Cameron: When’s the next RBA meet­ing?

[00:36:44] Tony: Uh, isn’t it the first Tues­day of every month? So it’ll be next week. I think they have Jan­u­ary off, so they can all go over­seas or some­thing.

[00:36:50] Tony: But, um, yeah, go ski­ing in Japan or what­ev­er they do.

[00:36:54] Cameron: Mm hmm, mm hmm.

[00:36:55] Tony: but uh, it should meet again in

[00:36:59] Tony: next Tues­day, I think.

[00:37:00] Cameron: Well, by the time we do this show next week, the mar­ket will

[00:37:03] Cameron: have come off by 10 per­cent again, and we’ll see.

[00:37:07] Tony: Yeah. I’ve got a pulled pork to do if you want­ed to do that now.

[00:37:10] Cameron: Oh, love­ly. Yes. Pulled pork. What are you doing? Is this the request?

[00:37:14] Tony: No, I’ll do that next week. Sor­ry, hang

[00:37:18] Tony: on. Can you hear that?

[00:37:20] Cameron: Yeah. No. What?

[00:37:22] Tony: Oh, I had a click­ing noise here. I think I may have just rest­ed some­thing on the key­board. Sor­ry

[00:37:26] Cameron: Oh no, I can’t hear

[00:37:27] Tony: you could­n’t hear it. Good. Um, yeah, so I’ll do the request next week. I did­n’t, I actu­al­ly got up this morn­ing and did this, pulled pork while I was wait­ing for the notes to come through.

[00:37:36] Tony: So, um, and I don’t nor­mal­ly. Look at the buy list when Alex down­loads it and say, Oh, I should look at that one in more detail because there’s very rarely some­thing new that has a large ADT. But, but this week Tel­stra came

[00:37:50] Tony: onto the buy list. So I’ll do a pulled pork on Tel­stra.

[00:37:53] Cameron: Wow. We haven’t done one of those, I think since the begin­ning of QAV. It

[00:37:57] Cameron: was one we did in like 2000 and what­ev­er it was.

[00:38:01] Tony: did we I did­n’t think I’d done Tel­stra.

[00:38:05] Cameron: Well, not, we weren’t doing pulled porks back then but back then when we start­ed, we were tak­ing a stock each week and break­ing it down and look­ing at its num­bers. And TLS was one of the first stocks that we ever real­ly ana­lyzed when I was build­ing my check­list based on try­ing to under­stand the gib­ber­ish that you were

[00:38:22] Tony: that’s,

[00:38:22] Cameron: about.

[00:38:23] Cameron: And so

[00:38:25] Tony: that’s

[00:38:25] Cameron: like episode, episode three or four, I think of the first sea­son we did TLS, you

[00:38:30] Tony: I,

[00:38:30] Tony: think we were using Tel­stra as an exam­ple of how to find Stock Doc­tor data man­u­al­ly, was­n’t it?

[00:38:35] Cameron: I think that was part of a, yeah, look­ing at Yahoo finance and doing all that kind of stuff. Hmm, alright.

[00:38:40] Tony: Any­way, so Tel­stra’s back on the buy list. It’s at the very bot­tom of the buy list, so it may not be there for long, so do your own research, uh, and, and look, I’ve got to say, I’m, Tel­stra is one of those com­pa­nies I’m very ambiva­lent towards, and I don’t mean indif­fer­ent, I mean the dic­tio­nary def­i­n­i­tion of ambiva­lence.

[00:38:57] Tony: I love it and I hate it, and, and doing this pulled pork just brought out all those emo­tions in me again, because Tel­stra’s real­ly two busi­ness­es and a cou­ple of years ago they actu­al­ly sep­a­rat­ed them into sep­a­rate com­pa­nies under a hold­ing com­pa­ny Tel­stra Group and the mar­ket got excit­ed because they thought they’re going to spin off the infra­struc­ture busi­ness.

[00:39:19] Tony: Tel­stra infra­struc­ture. And that’s the part I love. I mean, we’re sit­ting here talk­ing on Zoom and we’ll put out a pod­cast on peo­ple’s phones that they can lis­ten to. And it’s all done over the back­bone of all the tel­co infra­struc­ture in Aus­tralia that, you know, has been around for a long time. And Tel­stra pret­ty much owns and man­ages most of that, if not almost all of it.

[00:39:40] Tony: I mean, Voda­fone

[00:39:41] Tony: and Optus will have a bit, but nowhere near as much as Tel­stra has.

[00:39:45] Cameron: Isn’t it NBN? Isn’t it Kevin Rud­d’s, uh, home net­work?

[00:39:50] Tony: Yeah, well, NBN’s in there now too. I think, did­n’t it get sold back to Tel­stra a year or two ago, I think?

[00:39:56] Cameron: I don’t know, haven’t fol­lowed it.

[00:39:58] Tony: Yeah, so I’m not sure, but NBN aside, the rest, like the under­sea cables, some satel­lites, all the data senders, the switch­es, all that kind of stuff, it’s all Tel­stra. And that’s the side I love. That just gets on with doing it.

[00:40:15] Tony: There’s very rarely an out­age. Occa­sion­al­ly there’s an out­age, but we rely on it all the time. To me, that’s a good busi­ness. Then you’ve got the oth­er side, which is like the retail arm, which when­ev­er I engage in them, they are just the worst retail­ers ever. I think I spoke years ago about when I came back to Aus­tralia and tried to set up my home phone and my home phone at Cape Schanck and just spent days.

[00:40:39] Tony: in call cen­ter wait­ing queues to try and sort out the most basic of sit­u­a­tions. And don’t, don’t even, I don’t even know or try to guess what’s the best mobile ser­vice plan for me to be on. It’s just all too com­pli­cat­ed. So it’s, that’s the side of Tel­stra I hate. And inter­est­ing­ly, inter­est­ing­ly enough, in going through some of their more recent, uh, announce­ments, they, they want to make, Cus­tom, the cus­tomer expe­ri­ence part of their growth plans.

[00:41:07] Tony: And I, that would­n’t be hard to do cause they’re com­ing off a very low base, but they’ve got to do a lot bet­ter than what they, I mean, go to a Tel­stra store. The last time I went to a Tel­stra store, there was no one in it. And I got told to take a num­ber and come back in half an hour when

[00:41:22] Tony: it would be my turn.

[00:41:23] Tony: I’m like, there’s no one, there’s no one here.

[00:41:26] Cameron: Walk straight into the OptiSh­op. Yeah, that’s what I did.

[00:41:30] Tony: Yeah. Well, we actu­al­ly have TPG here now cause I got so pissed off with using, try­ing to get onto Tel­stra. So any­way, that’s the side I hate. Um, I mean Tel­stra has a great sto­ried his­to­ry. It’s, it’s, it’s basi­cal­ly a gov­ern­ment busi­ness that was float­ed under John Howard, um, in two trench­es. But before that, you know, it goes right back to the ear­ly 1900s, 1901, I think, when the tele­graph lines and telegrams were all put under the, the aus­pices of the Post­mas­ter Gen­er­al.

[00:42:01] Tony: So for a long time, Tel­stra was called PMG. And then. Around about the time of World War II, Aus­tralia start­ed to realise it need­ed to have reli­able com­mu­ni­ca­tions with the rest of the world and dropped a few under­sea cables and that became, I think, OTC, Over­seas Telecom­mu­ni­ca­tions Com­pa­ny, and then a bit after that they were com­bined, became Tele­com, and then float­ed and became Tel­stra and then just recent­ly had this kind of inter­nal demerg­er and it’s now Tel­stra Group.

[00:42:35] Tony: So it’s been around for a long time, um, long, long his­to­ry. Like I said, one side, the infra­struc­ture side, um, is a good busi­ness and it’s grow­ing too because the use of data just keeps, keeps on grow­ing as things become more and more dig­i­tized. Um, I did have a laugh when they were talk­ing about, um, increas­ing their satel­lite busi­ness.

[00:43:00] Tony: And I thought about the fact that I could­n’t get that at Cape Schanck, which was the only place I need­ed it. So I got Elon Musk’s satel­lite instead. So they’ve still got a long way to go with their cus­tomer ser­vice. Um, what else can I say about them? Aus­trali­a’s largest tel­co, obvi­ous­ly. Uh, lat­est Investor Day update called out cus­tomer expe­ri­ence.

[00:43:23] Tony: 5G and satel­lite as their growth areas. And I just put a ques­tion mark against those three things, because I don’t think they do any of those things well. So, well, I should­n’t say they don’t do 5G well. It’s a grow­ing part of their busi­ness. But I remem­ber all the hype on around 5G when it came out. And we, I think we had it in Cana­da, slight­ly ahead of Aus­tralia.

[00:43:44] Tony: And I had a SIM card that could con­vert from 3G or 4G to 5G. And I’m like, there’s no dif­fer­ence. And I still, I still can’t Name any ben­e­fit from 5G, you know, that we, that we get com­pared to what we used to have, real­ly. It’s, it’s either all hap­pened seam­less­ly or, um, or it’s all been a lot of hype. But,

[00:44:07] Tony: um, but yeah, so not sure about 5G.

[00:44:10] Tony: Infra­co?

[00:44:12] Cameron: on 5G are mas­sive­ly high­er than 4G if you’re, if you’ve got a good sig­nal. Like, I get 200 megabits a sec­ond down­load on 5G, which I nev­er would have got on 4G, but Don’t know if you ever try and down­load or upload any­thing that big from your phone to care about it. It’s not like you’re not stream­ing video on your phone.

[00:44:33] Cameron: I mean things like if you’re tak­ing a Face­Time call or some­thing like that when you’re on a walk and you’re away from your Wi Fi in the house, that’s where 5G comes into play real­ly. But if you’re not doing that, if you’re just read­ing the ABC or the Fin Review on your phone, yeah, you don’t real­ly need the 5G.

[00:44:50] Cameron: It’s

[00:44:50] Tony: Don’t read them on my phone. I read them on my

[00:44:52] Tony: lap­top.

[00:44:53] Cameron: Yeah, so if you’re not using your phone for high band­width appli­ca­tions, but I think for, you know, peo­ple with jobs, uh, who are out and about, you know, doing stuff on their iPads and their iPhones and run­ning cor­po­rate apps, CRM apps, ERP apps, Sales­force, all that kind of stuff, you know, a lot of data prob­a­bly is a good thing.

[00:45:18] Tony: Okay.

[00:45:19] Cameron: I’m just here, like, I hate Tel­stra with a pas­sion, and I’ll tell you why at the end of this, but I get it, 5G’s good, I’m not gonna, I’m not gonna let you shit talk 5G on my watch.

[00:45:29] Tony: Well, I’m not shit talk­ing you. I just thought that was tremen­dous hype that I haven’t seen much ben­e­fit from, but I defer to your expe­ri­ence.

[00:45:38] Tony: Uh, okay. So,

[00:45:41] Cameron: that’ll be the only time that ever

[00:45:42] Cameron: hap­pens.

[00:45:45] Tony: yeah. What else can I say? So, some of the things which I found inter­est­ing, which were also in their Investor Day brief­ing, um, they are call­ing out, uh, growth areas being data cen­ters, which makes sense, um, growth in fiber, which might be NBN relat­ed, I’m not sure, and secu­ri­ty. So, uh, I think they prob­a­bly are legit­i­mate growths.

[00:46:09] Tony: You know, grow cen­ters for them. Um, prob­a­bly going back to your 5G com­ments, the mobile busi­ness is see­ing 30 per­cent growth in data usage. So, um, that’s year on year, which is, which is quite tremen­dous for them. Any­way, I think there’s no point going into Tel­stra in any more detail. Most peo­ple have. Use them or not use them or love them or being pissed off by them over the years.

[00:46:31] Tony: And it’s, yeah, the fun­ny thing is it’s not just Tel­stra. When I was in Cana­da, Rogers was the big tel­co play­er and every­one just hat­ed, loved to hate Rogers. I had a friend whose hus­band got a job work­ing for Rogers and she just said, before you say any­thing, it’s just a job.

[00:46:47] Cameron: Yeah,

[00:46:48] Tony: Yeah, she just had to keep defend­ing her­self. Um, any­way, look at the num­bers. And this is where it gets inter­est­ing because it’s a very large Com­pa­ny, I think it would be a dif­fi­cult com­pa­ny to run. It’s quite pos­si­ble that split­ting it and float­ing off infra­struc­ture, Tel­stra, Infra­co, would be a good thing.

[00:47:05] Tony: I think those, but Tel­stra nev­er came out and said they were doing that, and they’re cer­tain­ly not say­ing it now, but it might hap­pen in the future and things are being set up so it can hap­pen. But just the span of all, every­thing they do must be You know, hell on earth for a CEO to try and man­age all the, the fires and the risks and all those dif­fer­ent areas.

[00:47:24] Tony: Um, and maybe a bit of focus would come if that it was split up. But any­way, um, we don’t have to wor­ry about a DT ’cause it’s, uh, over, it’s near­ly $71 mil­lion a day, so it’s a very high­ly trad­ed stock. On the A SX I’m doing the analy­sis of the share price of $4, which is less than con­sen­sus. Tar­get the yield.

[00:47:43] Tony: Tel­stra. Tel­stra for a long time has been, um, con­sid­ered to be a. As I said once before, a bond proxy. So, uh, you know, some­thing that has bond like char­ac­ter­is­tics. It’s a very sta­ble share price. It’s prob­a­bly trad­ed in the 3 to 4 type range for the last five years. Um, and it pays a decent yield, but I think these days with inter­est rates high, um, the yield isn’t enough.

[00:48:06] Tony: So the yield at the moment is 4. 25%. Um, but it needs to have a yield of 6. 8 per­cent to score on our check­list. Uh, and I guess it begs the ques­tion, if this is the kind of bond, um, then if you can get those kinds of rates from putting your mon­ey in the bank, why do you take any sort of risk on and deal­ing with on, you know, Tel­stra stuff­ing things up and the share price going down.

[00:48:31] Tony: So I think that may lead to them rais­ing their inter­est rate, or their div­i­dends, sor­ry, yield at some stage. We’ll wait and see on that one. Stock Doc­tor actu­al­ly rate them as a star income stock, which we give half a point for in our check­list. But I think You know, if I was a retiree and I can get the same sort of yield with less risk, I don’t think I’d be buy­ing Tel­stra.

[00:48:53] Tony: I’d prob­a­bly just buy an index fund, which has a sim­i­lar sort of yield any­way. Um, Stock Doc­tor finan­cial health is strong and steady, so that’s all good. Uh, Prop­Caf for this is just under our cut­off of 7, it’s 6. 79 times. Um, ROE is okay, even though we don’t use it to score with, I’ll just call it out for lis­ten­ers, it’s 11.

[00:49:13] Tony: 3%, which is On the low side, I guess, but it is a big com­pa­ny with lots of assets. Uh, net equi­ty per share is 1. 54. Um, so share price at 4. We can’t buy this for any­thing like the book val­ue. Um, earn­ings per share growth is 10%, which again, isn’t bad for. Com­pa­ny the size of Tel­stra, but it does­n’t, it’s not enough to score for our earn­ings per share over P.

[00:49:38] Tony: E. score. Obvi­ous­ly no own­er founder, it’s been around for too long, and the cur­rent board does­n’t have any large share­hold­ers that we can score. P. E. is still pret­ty high, it’s 23. 95, but it is the low­est in the last six halves, so we do score it for that. So it is a It is still a rea­son­ably high­ly priced com­pa­ny.

[00:50:00] Tony: The good thing about Tel­stra is it’s throw­ing off so much oper­at­ing cash flow that we can score it on a Proc­Caf basis. It’s a rea­son­ably recent three point trend line upturn, so we score it for that. Just miss­es scor­ing for con­sis­tent­ly increas­ing equi­ty. There was one half when, um It dropped back­wards slight­ly, so we can’t give it a score for that.

[00:50:22] Tony: But all in all, qual­i­ty score of 10. 5 out of 16, or 66%, and a QAV score of 0. 1. So any­body who wants a large cap blue chip type of stock, this might be the time to buy

[00:50:38] Tony: it. So, but have a look and do your own research. Hmm. Hmm.

[00:50:42] Cameron: Thank you, Tony. You know, my, I’ve told you these sto­ries before, but when I was in my Microsoft days, I had a lot to do with Tel­stra. And, uh, this is like Frank Blunt was the CEO and then Sol Tru­jil­lo and then Zig­gy Swierkows­ki and like, there were, it was just like hor­ri­ble, hor­ri­ble, uh, just the, the cor­po­rate atti­tude of the com­pa­ny.

[00:51:09] Cameron: Then I go, like I took them, I remem­ber tak­ing all of the senior execs, like the gen­er­al man­ag­er, I think they called them GMs of all the divi­sions. Out to din­ner in New Orleans, flew them all over to the U. S. to meet with Bill Gates and all the execs, Frank Blunt and all the guys, took all the guys out for din­ner one night, and this is like 2000 and, no, 1998, 1998, and they’d, they’d been rolling cable out around the coun­try.

[00:51:41] Cameron: Bill Gates had made a big deal, you know, um, that they’d been rolling cable out, um, a cou­ple of years ear­li­er, did the joint ven­ture, uh, with them, but they weren’t mak­ing it avail­able. We had all of this cable in the ground, but they would­n’t make it, I mean, you could get it, but it was like for a thou­sand bucks a month if you want­ed high band­width inter­net access.

[00:52:02] Cameron: And I said to them, why, uh, why? Now, when are you going to make this stuff avail­able, the high band­width access to peo­ple? And they said, when we’re forced to. I said, what do you mean? They go, well, when we’re forced to by the gov­ern­ment, then we’ll do it. And I was like, well, why did you spend bil­lions of dol­lars rolling out cable if you weren’t going to make it avail­able?

[00:52:25] Cameron: And they said, it’s easy, just stop Optus. So if Optus laid cable in the ground, Tel­stra laid cable in the ground, it was just to stop Optus from get­ting, uh, foothold. I said, so you’re, you’re, you’re spend­ing bil­lions of dol­lars of tax­pay­ers mon­ey, because they had­n’t been com­plete­ly, I think they were like 30 per­cent or 60 per­cent float­ed at the time.

[00:52:48] Cameron: You’re spend­ing tax­pay­ers mon­ey to stop Aus­tralians from get­ting access to high band­width inter­net access. And they were like, yep. Because it’s, they were defend­ing their, defend­ing their moat, basi­cal­ly.

[00:53:03] Tony: Instead of work­ing out ways they could

[00:53:05] Tony: sell it for and what mar­gin And what ser­vices they could offer.

[00:53:09] Cameron: And if you were a pri­vate­ly owned com­pa­ny, fine, do what­ev­er you want with your mon­ey. But when they were still. Part­ly tax­pay­er owned, to spend tax­pay­er mon­ey to stop tax­pay­ers from get­ting access to inter­net just drove me nuts. And it’s their whole atti­tude, it was just like their lev­el of arro­gance out of all of the senior execs in these com­pa­nies.

[00:53:33] Cameron: About how dom­i­neer­ing they were and, and they were ter­ri­fied. You know, the longer I spent in there, I real­ized they had no idea what would hap­pen to tele­pho­ny rev­enues and they were right to be ter­ri­fied as well. Once peo­ple had access to VoIP, voice over IP, which is what we’re all talk­ing about back then, now we just call it Face­Time or Skype, but it was voice over IP, what that would hap­pen to their rev­enue stream, which was.

[00:54:00] Cameron: Tele­phone calls pri­mar­i­ly. They, they knew it was going to white ant their own rev­enue and they were deter­mined to stop that from hap­pen­ing as long as pos­si­ble. Even though doing that meant stop, stop Aus­tralians from get­ting access to, you know, band­width. And which is one of the rea­sons why Microsoft dumped Tel­stra as a part­ner and went with Pack­er.

[00:54:21] Cameron: Um, for online, um, ser­vices was because Tel­stra were just drag­ging their feet. They, they were deter­mined not to give Aus­tralians access to fast inter­net and fast inter­net enabled ser­vices until they absolute­ly had to. We could have been, Aus­tralia, one of the rea­sons Gates was excit­ed in 95 and, and did the joint ven­ture was Aus­tralia could have been the world leader.

[00:54:48] Cameron: in pro­vid­ing high inter­net access and ser­vices on top of that in the late 90s. But Tel­stra stopped us from being able to do that because they did­n’t know what it meant to their voice rev­enues and also their Fox­tel rev­enues, right? They had the Fox­tel JV around at that time, did­n’t know what it meant for that.

[00:55:09] Cameron: So them and Mur­doch just, you know, pre­vent­ed, made the NBN roll­out real­ly hard as well. All the pol­i­tics involved in the ear­ly days of the NBN roll­out and all of the FUD that was going on about, well, satel­lites ver­sus cable. And, you know, remem­ber Turn­bull. You know, and I’ll nev­er for­give Turn­bull for this, say­ing, Oh, cable, putting glass under the ground, that’s going to be out­dat­ed in six months.

[00:55:34] Cameron: There’ll all be satel­lites, it’ll all be like, you know, wire­less. Bull­shit, bull. And every­one in the indus­try knew it was bull­shit, but just stopped us again. The sec­ond time around, we could have had, you know, NBN 10 years faster than we had it, and all of the ser­vices that come from that, just. Any­who, that’s my rant over.

[00:55:57] Cameron: Mov­ing right along.

[00:55:59] Tony: so you’re not going to be putting Tel­stra into the dum­my port­fo­lio, I

[00:56:02] Cameron: Oh, I will buy it if I have to buy it. Yeah, them and

[00:56:06] Cameron: Atlas, bloody, what is it, Apol­lo,

[00:56:11] Tony: Apol­lo.

[00:56:11] Cameron: Tourism, you know, if they’re in the port­fo­lio, I’ll buy them. I hate them. I’ll do it with grit­ted teeth, but I’ll do it. Ques­tion time. John, can you please do a pulled pork on MTS?

[00:56:26] Tony: Yeah, no, I’d love to. John, I’ll do it next week.

[00:56:30] Cameron: Who are MTS?

[00:56:31] Tony: is Met­cash, the third force, maybe fourth force

[00:56:36] Tony: now, depend­ing on how big Aldi is in super­mar­kets in Aus­tralia.

[00:56:39] Cameron: I don’t think they’ve ever been on a buy list.

[00:56:42] Tony: No, I’d be sur­prised if they have been,

[00:56:44] Tony: but I can cer­tain­ly do a pulled pork on them.

[00:56:50] Cameron: Cam, hope all is well. Poten­tial ques­tion for the show, Durat­e­ch? Is my Michael Jor­dan at the moment. You’re not alone there, Dan­ny. It’s all of our Michael Jor­dans at the moment. And most of my very mod­est port­fo­lio gains are in that one share. It’s dropped around 15 per­cent over the last two weeks, down 5 6 per­cent again today.

[00:57:11] Cameron: And that was yes­ter­day, and it’s down again today, I think. I’d like to hold my win­ners, but his­tor­i­cal­ly, when I held on to win­ners, they did crash, and most of the gains were wiped out. I know Renko charts have been dis­cussed as a poten­tial indi­ca­tor, how­ev­er, I don’t know where I can find that chart, nor do I know how to inter­pret them.

[00:57:29] Cameron: I don’t have Stock Doc­tor. Any insights from you or Tony, thanks in advance, Dan­ny. I, um, did look at this in some detail today, Tony, because, um, I was look­ing at, um, the dum­my port­fo­lio this morn­ing, and Durat­e­ch is a star port­fo­lio, a star stock in our port­fo­lio, sor­ry, and Durat­e­ch is a star stock in our port­fo­lio, sor­ry, and Durat­e­ch Uh, you know, it has come back quite a bit, but again, as I always say, I can’t com­plain about it because it’s, uh, I think we’ve owned it for two years in the dum­my port­fo­lio and it’s gone up quite a lot in that time, up like 200 per­cent or some­thing ridicu­lous like that since we bought it.

[00:58:19] Cameron: But, um, yeah, it’s, it’s, it’s come back quite a long way. But as I was, I was writ­ing the week­ly update this morn­ing and I was look­ing at the, um, chart for, uh, Durat­e­ch over the last year or so, and it, it tends, it’s had a cou­ple of big dips if you go back over the last year or even. Last year, it’s had a cou­ple of big dips where it’s come back quite a long way.

[00:58:52] Cameron: If I go back, say April 23 was trad­ing at a dol­lar, then it dropped down to about 93 cents. It was almost 10 per­cent down. Then it went back up and by Sep­tem­ber 23, it was a dol­lar 43. Then it crashed down to a dol­lar 15, uh, over the sort of two weeks. Then it went back up. 1. 30 crashed down to a buck nine and then it went all the way up to a 1.

[00:59:22] Cameron: 70. Now it’s down to a 1. 38. So it has had a num­ber of peaks and troughs since we’ve held it and has recov­ered. But I mean, there’s always a last time when it’s not going to recov­er. No tree to the sky, as you’ve said before.

[00:59:37] Tony: Cor­rect. No tree grows to the sky. Yeah. Well, a cou­ple of, cou­ple of points I make. It’s a good ques­tion, Dan­ny, and we often get asked this one. Um, I think you make a good point, Cam. It’s nowhere near a sell using the bread lat­er and it could eas­i­ly keep going up because they, we have stocks that have pull­backs and then have sec­ond wins.

[00:59:59] Tony: That’s,

[01:00:00] Cameron: cents.

[01:00:01] Tony: yeah, so it’s got to come down sort of a lit­tle bit more than half. And where it is now for it to be a sell. Um, so a cou­ple of things. It just depends how com­fort­able Dan­ny is tak­ing the risk. You could draw what we’ve called in the past a HUD line. So Dan­ny, if you look at the bread lat­er and look at what is cur­rent­ly, I mean, if you look at the share in gen­er­al over the last five years, it’s only in the last, um, two years that it’s tak­en off.

[01:00:31] Tony: Which is why we have this prob­lem, because the L1 and L2 hap­pened before that take off peri­od, so we need­ed to retrace back to that pre take off sort of share price.

[01:00:44] Tony: So you can decide to draw your sell line using more recent data, maybe per­haps the last two years worth of data. And if you look at the bread lat­er, if you start­ed with what is now L2 and make that L1 and draw a line, then it’s get­ting pret­ty close to cross­ing a par­tic­u­lar sell line, a more recent sell line.

[01:01:05] Tony: You could do that. I’d has­ten to add that, you know, it’s, it’s entire­ly pos­si­ble giv­en the shape of this graph that it’ll, it’ll come back, but then take off again. So, it just depends whether you feel more com­fort­able miss­ing out than, than tak­ing a prof­it. Um, that’s the first point I’ll make. Uh, the sec­ond point I’ll make is you talked about Ren­co graphs and I’ve I can look at the Renko graph in Stock Doc­tor, and it has just turned red, which means it’s a sell.

[01:01:33] Tony: And bear­ing in mind that Renko graphs are a graph­ic way of look­ing at, um, trail­ing stop loss­es. Um, and so, it’s, it’s gone up, come back, gone up, come back. So it’s a Renko red at the moment, only just a red, it turned red, it’s now 1. 38 in share price, it turned red at 1. 42. So, um. Using Renko you could sell, but it real­ly comes down to what you’re try­ing to do here.

[01:02:00] Tony: It’s um, the oth­er thing to look at is, is whether there’s been some announce­ments which is affect­ing it and caus­ing the share price to go down because you could red flag it like this CFO’s left or some­thing like that, but I can’t see any recent announce­ments which would affect the share price to bring it off.

[01:02:18] Tony: So it’s entire­ly pos­si­ble it’s a peo­ple tak­ing prof­its just like Dan­ny’s con­sid­er­ing doing. Um, because it’s gone up a lot, uh, and they don’t want to lose those prof­its, they want to bank them, and, or B, that, uh, some­times com­ing into com­pa­ny report­ing sea­sons, the fund man­agers will say it’s not worth the risk of, of some­thing unusu­al com­ing out dur­ing the announce­ments and they’ll, they’ll bank it.

[01:02:42] Tony: Bank it for a bit to take a prof­it or take some prof­it. So long sto­ry short, John, it comes, uh, sor­ry, um, Dan­ny, it comes down to how com­fort­able you are. It’s if it was me, I don’t own Duratec, but if it was me, I’d still use the Bre­da lat­er and I would­n’t sell because it’s got a fair­ly, it’s got a rea­son­able.

[01:03:00] Tony: his­to­ry of going up and com­ing back and going up fur­ther after that. So this could be one of those times. Um, but if you are feel­ing like it’s keep­ing you awake at night, then by all means, it’s, it’s just turned Oren­co red. If you draw a more recent sell line, it’s get­ting close to a sell. So

[01:03:15] Tony: you could take some com­fort from either of those.

[01:03:18] Cameron: They did just change man­ag­ing direc­tor at the end of last year, actu­al­ly, um, Phil Har­court exit­ed and Chris Oates was effec­tive as of the 1st of Decem­ber as the new MD, but the share price went up 6. 91 per­cent as a reac­tion to that news, so mar­ket han­dled it well. Uh, you know, I was read­ing that Finan­cial Review arti­cle before about the biggest mis­takes fund man­agers have said they made.

[01:03:46] Tony: Sell­ing too ear­ly?

[01:03:47] Cameron: I, I, I, I saved a cou­ple. Um, one is from Emmanuel Datt, fund man­ag­er and the founder of Datt Cap­i­tal, says one of his biggest mis­takes was sell­ing mort­gage insur­ance busi­ness Gen­worth. Too ear­ly, speak­ing of GEM, Gen­worth was trad­ing at a frac­tion of net tan­gi­ble assets despite pos­i­tive long term macro trends and a plan to aggres­sive­ly return cap­i­tal to share­hold­ers, he said.

[01:04:12] Cameron: It has since returned 30 per­cent com­pound over three years in cap­i­tal growth and div­i­dends. How­ev­er, we cut our expo­sure too soon, so we did­n’t have the ben­e­fit we should have. We learned much from this mis­take, adjust­ing our invest­ment and port­fo­lio man­age­ment tech­niques to mit­i­gate this risk in the future.

[01:04:28] Cameron: And then it says, Sebas­t­ian Evans, the Chief Invest­ment Offi­cer and Small Cap Man­ag­er, NAOS Asset Man­age­ment, agrees that a com­mon mis­take is sell­ing too ear­ly, or put anoth­er way, fail­ing to rec­og­nize that great com­pa­nies with com­pet­i­tive advan­tages are worth hold­ing because they increase sales and prof­it mar­gins over the long term.

[01:04:48] Cameron: If you look at JB HiFi, Rees, Mon­del­fus, Mon­odel­fus, I know you loved Mon­odel­phus back in the day. These are busi­ness­es that many investors sold too ear­ly because they felt the mar­ket was sat­u­rat­ed, or they were too expen­sive, but over time their moat has allowed them to grow one way or anoth­er, and the prof­it mul­ti­ple has held or increased sig­nif­i­cant­ly over time, he says, sell­ing a win­ner.

[01:05:13] Cameron: Some­times referred to as tak­ing prof­its, is often a more expen­sive mis­take than buy­ing an under­per­form­ing busi­ness and sell­ing its stock at a loss. So, there you go. I thought I’d save those sto­ries for Dan­ny. Take it, take from it what you will. By the way, there’s anoth­er cou­ple of sto­ries here, uh, just fin­ish­ing these off, which are good.

[01:05:35] Cameron: Richard Galvin, the co founder of Cryp­to Asset Man­age­ment Group, Dig­i­tal Asset Cap­i­tal Man­age­ment, says a com­mon mis­take made by investors is believ­ing they’re too late to buy a busi­ness on the basis it has already risen strong­ly. And then Jesse Moores, a Co Port­fo­lio Man­ag­er and Direc­tor of Quan­ti­ta­tive Trad­ing House, Spatium Cap­i­tal, says spend­ing too much on bro­ker­age is a big mis­take.

[01:05:59] Cameron: If you pay less on bro­ker­age, you get to keep more, and hope­ful­ly gen­er­ate out­per­for­mance for your account ver­sus your bro­ker’s account, he says. The big banks are pop­u­lar for retail traders, but are the most expen­sive, so shop around for an online bro­ker. As there are lots of dis­count ones and this is an easy way to improve returns.

[01:06:19] Cameron: And we talk about that quite a lot.

[01:06:21] Tony: Yeah. No, all good.

[01:06:23] Cameron: there you go.

[01:06:26] Tony: All good advice.

[01:06:28] Cameron: Is there any way out­side of Stock Doc­tor that Dan­ny can find Renko?

[01:06:31] Tony: Oh, it’s a good ques­tion. I don’t know off the top of my head. I don’t know if Google Finance or Yahoo Finance has it. But, um, yeah, I could­n’t say. Sor­ry.

[01:06:40] Cameron: Well, if any­one knows, let Dan­ny know in the Face­book group or wher­ev­er. Well, that’s the Q& A, Tony. After hours. Let’s talk about True Detec­tive.

[01:06:51] Tony: Oh, yeah. The twin peaks of our times. Fan­tas­tic show. Look, I watched prob­a­bly half of the first sea­son and it was good qual­i­ty dra­ma, did­n’t quite get into it, but sea­son 4, wow, with Jodie Fos­ter, um, play­ing a pret­ty griz­zled detec­tive in the Arc­tic North, and every like episode starts with Day three of the longest night, day four of the long night.

[01:07:18] Tony: They’re just like, they’re going into their nev­er end­ing night­time peri­od when the woo woo hap­pens and you see things out of the cor­ner of your eye scut­tling across the snow and the ice. And it’s, it’s this great mix of Indi­an mys­ti­cism with a very grue­some mur­der in the, in the ice. But I’m lov­ing it. I can’t wait every

[01:07:39] Tony: week for a new episode to drop.

[01:07:41] Cameron: Yeah, I haven’t seen the lat­est episode, but we’ve watched the first two and it was great. Like, yeah, real­ly, real­ly good. Great to see Jodie Fos­ter at her age. I think she’s, I don’t know, 60, some­thing like that. Uh, 65. Uh, you know, with a grit­ty role like this, it remind­ed me a bit of, um, What’s Her Face from Kate Winslet, in that show a cou­ple of years ago, where she was a grit­ty cop, out in some small

[01:08:09] Tony: May­or of East, May­or of East town,

[01:08:11] Cameron: May­or of East­town, yeah.

[01:08:12] Cameron: Like, uh, these roles of these old­er actress­es doing grit­ty cops, mid­dle age, late mid­dle age actress­es, what­ev­er, I like that.

[01:08:20] Tony: Mm.

[01:08:21] Cameron: And Christo­pher Eccle­ston got a bit of a role in this as well, the

[01:08:24] Tony: Yeah, it has­n’t come back after

[01:08:25] Tony: that lit­tle cameo. Not much any­way. Yeah. And has

[01:08:30] Cameron: loved every

[01:08:30] Tony: I did­n’t like it.

[01:08:32] Tony: Christo­pher

[01:08:33] Cameron: You did­n’t like?

[01:08:34] Tony: I did­n’t like his accent. Like,

[01:08:35] Cameron: Yeah. Yeah.

[01:08:37] Tony: So, Amer­i­can cops can’t be born in the

[01:08:40] Tony: UK or be raised in the UK with a British accent? Seri­ous­ly?

[01:08:44] Cameron: Yeah. The Amer­i­can, the British going in and doing Amer­i­can accents is hit and miss some­times. I’ve loved every sea­son of True

[01:08:53] Tony: Oh, okay.

[01:08:54] Cameron: Two, which copped a lot of crap. It had Vince Vaughn and um, Col­in Far­rell

[01:09:00] Tony: Mm hmm.

[01:09:01] Cameron: and I can’t remem­ber the actress, Rachel some­thing, the actress, but I, it got a lot of shit, but we real­ly liked it.

[01:09:07] Cameron: I, I, Vince Vaughn doing a dra­mat­ic role I thought was great.

[01:09:11] Cameron: Col­in Far­rel­l’s always great. I’m a big fan of his when he does seri­ous stuff and he’s done some Hol­ly­wood shit over the years, but he’s uh, you know, a very tal­ent­ed guy. I liked it. Copped a lot of crap, but I thought it was good.

[01:09:24] Tony: I don’t know why, but I start­ed watch­ing Alexan­der the Great with Col­in

[01:09:28] Tony: Far­rell play­ing Alexan­der. I could­n’t, I could­n’t last.

[01:09:32] Cameron: It was Oliv­er Stone, yeah, we’re not, not one of his great, yeah, no, um, Val Kilmer is Philip and, uh, Angeli­na Jolie is, uh, his moth­er,

[01:09:44] Tony: I did­n’t get, did­n’t get that far.

[01:09:45] Cameron: Olympia. Oh, yeah, no, ter­ri­ble. I mean,

[01:09:49] Cameron: I pull out the bat­tle scene. So the, the, the sav­ing grace for that film is the Bat­tle of Gor­gomela, which I pulled, I pulled it out and showed Fox recent­ly, but you know, if I ever need to show any­body any­thing about Alexan­der, like if any­one ever asked me about why Alexan­der the Great was the, deserves the epi­thet, the great, I talk about the Bat­tle of Gor­gomela.

[01:10:10] Cameron: Do you know any­thing about that? You ever lis­ten to my Alexan­der series? No?

[01:10:14] Tony: Oh, I did a lit­tle bit.

[01:10:16] Cameron: Yeah, a lit­tle bit. This is like,

[01:10:18] Cameron: it’s absolute­ly, prob­a­bly the most epic bat­tle of all time. Alexan­der, he’s gone into Per­sia to take revenge to the Per­sians for their inva­sion of Greece gen­er­a­tions ear­li­er. The, the, the, um, you know, what was the, the The 500 or what­ev­er it was, the Spar­tans.

[01:10:41] Tony: the 300, Yeah.

[01:10:42] Cameron: Yeah. And, um,

[01:10:45] Cameron: he, you know, he, he, he’s got a, it’s a rea­son­able size army, but when we don’t know num­bers, but from mem­o­ry, he’s got some­thing like 20, 30, 000 guys. And he goes up against, uh, I think it’s King Dar­ius of Per­sia, who, It’s fac­ing him with, again, the ancient sources say some­thing like a hun­dred thou­sand troops.

[01:11:08] Cameron: He’s, Alexan­der’s mas­sive­ly out­num­bered and the Per­sians have bat­tle ele­phants and they’ve just got every­thing. Like these, this is the dom­i­nant, this is like going up against the US mil­i­tary. It’s like, I don’t know, Iraq going up against the US mil­i­tary. And. All of Alexan­der’s gen­er­als are freak­ing out the night before, and he’s freak­ing out the night before, and then he just goes to sleep, and then he has this idea, and he wakes up late the next morn­ing, they’re all freak­ing out, he’s not com­ing out of his tent, he comes in and he goes I’ve got a plan.

[01:11:45] Cameron: It’s all going to be good. So he goes out and they’ve got this mas­sive Per­sian army lined up in the bat­tle­field. His army’s lined up in front of it. And as soon as sort of day­light hits, Alexan­der is, um, on his right flank. He’s com­mand­ing his right flank. Some­body else is com­mand­ing the left flank. As soon as the bat­tle starts, he and his right flank Just go 90 degrees to the bat­tle­field and just look like they’re run­ning away off the bat­tle­field.

[01:12:18] Cameron: King Dar­ius is in the mid­dle of his army, uh, on his bat­tle ele­phant, arro­gant, and thinks Alexan­der’s pan­ick­ing and run­ning away. So he sends his left flank to chase down Alexan­der. Alexan­der Expects this, and they’re on this desert bat­tle­field, a lot of dirt, right, so all this dirt and dust is thrown up, no one can real­ly see what’s going on.

[01:12:43] Cameron: His right flank, he judges it until there’s a gap between Dar­ius in the cen­ter and Dar­ius’s left flank. When he judges there’s a big enough gap, he just piv­ots and goes straight for Dar­ius and his right flank comes with him and blocks Dar­ius’s left flank from get­ting back there. And Alexan­der him­self just rides straight for Dar­ius.

[01:13:10] Cameron: Gets up and by the time Dar­ius can see what’s going on, he freaks the hell out. Alexan­der, accord­ing to the sources, you know, how much of this real­ly hap­pened. Prob­a­bly, we don’t know, but he throws his spear at Dar­ius, it just goes past Dar­ius, and kills his rid­er of his ele­phant, Dar­ius freaks out, turns around, and runs in the oppo­site direc­tion off the bat­tle­field, Alexan­der gives chase Does­n’t catch him on that par­tic­u­lar day, has to turn around and help his left flank, which had anoth­er whole thing to deal with the bat­tle ele­phants, which is bril­liant.

[01:13:48] Cameron: The bat­tle, they had this, the for­ma­tion of squares, they, when the bat­tle ele­phants These bat­tle ele­phants too had like mas­sive spikes on their wheels. I mean, they’d run towards Alexan­der’s armies. His guys would just sep­a­rate like the Red Sea, let the ele­phant run through, and then they’d just close around them and kill them with their spears.

[01:14:06] Cameron: So he just killed all of their ele­phants. Any­way, it was all over. It was all over with­in a few hours. He crushed them because as soon as they saw the Per­sian king, Dar­ius, run off the bat­tle­field, you know, their morale crum­bled, Alexan­der wiped them out. And then a cou­ple of Dar­ius’s own guys killed him a cou­ple of days lat­er and Alexan­der hunt­ed them down, but it’s just this bril­liant, one of the great, you know, tac­tics of all time just to make him think he’s run­ning away and then just turn and go straight towards him.

[01:14:35] Cameron: And, and, and, and Oliv­er did a great job of cap­tur­ing that, you know, it’s cin­e­mat­i­cal­ly mar­velous to watch. The rest of the film’s shit.

[01:14:46] Tony: Sounds very cin­e­mat­ic with ele­phant fights going on.

[01:14:49] Cameron: Yeah, yeah, and all that kind of stuff, it’s great. Any­who, what else do you want to talk about? What else are you even into?

[01:14:56] Tony: Um, I’m gonna, I’m gonna talk about anoth­er Net­flix series called Oblit­er­a­tion. I don’t know if you’ve, have you seen this one yet?

[01:15:03] Cameron: No. Yeah. Oh,

[01:15:05] Tony: it and I, I real­ly liked it and then rec­om­mend­ed it to Jen­ny and I said, you may not like this, but watch it. And she real­ly liked it. But we both said it’s a guilty plea­sure.

[01:15:14] Tony: It’s, it’s a, it’s a, You start to watch and you think this is just the lamest thing you’d ever want to see, it’s, it’s, but you real­ize it’s either like a send up or a homage to 80s action movies. And real­ly sim­ple plot, you know, Russ­ian nuclear goes miss­ing, ter­ror­ists are Killing each oth­er to buy it and all this.

[01:15:35] Tony: Las Vegas is going to be oblit­er­at­ed. And these five sort of mis­fits get togeth­er and get formed into a team and, you know, spend the week­end get­ting high as a kite and drunk and then try­ing to fight the Rus­sians off. And it’s, it’s hilar­i­ous. It’s real­ly good, but a very guilty plea­sure. And they play up the 80s nature of it.

[01:15:53] Tony: It’s all, it’s all so un PC. There’s, there’s bare chest. There’s guys with Um, no pants on with just, like, you can tell the dicks are stuck on, just like these huge don­key dicks, it’s just, it’s hilar­i­ous, it’s, I can’t real­ly describe it, but it’s the best part of all the 80s action movies, and they even ref­er­ence Ram­bo in movies like that dur­ing the show, but, um, yeah, I enjoyed it, very,

[01:16:18] Cameron: Oblit­er­at­ed.

[01:16:19] Tony: very guilty, oblit­er­at­ed, is it,

[01:16:21] Tony: okay, a very

[01:16:23] Cameron: I have, actu­al­ly, I have heard of this. I did read a review of it recent­ly that said exact­ly what you’re say­ing. And I think the guys behind it, Hur­witz, Schloss­berg, and Josh Heald, are the guys behind Um, Cobra Kai. Yeah, they are. So it’s the same pro­duc­tion team behind Harold and Kumar, but also, um, Cobra Kai, which, you know, you’ve watched Cobra Kai, right?

[01:16:50] Tony: I haven’t, no. You’ve rec­om­mend­ed it, but I haven’t watched it.

[01:16:53] Cameron: oh my God, dude, dude. Dude, Cobra Kai is exact­ly that. Like, it’s an, it’s, it’s a lov­ing homage to the 80s, but also mak­ing fun of the 80s at the same time. And they’ve, they absolute­ly walk the line, in my opin­ion, per­fect­ly. Like, there’s a lot of 80s stuff in it, but then it’s the younger gen­er­a­tion look­ing at the char­ac­ters from the 80s going, What are you two on about?

[01:17:20] Cameron: Like, seri­ous­ly, like, pull your heads out of your ass­es. Uh, and their wives. It’s the great thing is, is Daniel LaRus­so’s wife. She’s like, why do you have to turn every­thing into karate? Like, just ignore this guy. He’s an idiot. Why are you get­ting so emo­tion­al­ly involved in what some douchebag says about you?

[01:17:41] Cameron: No, no, I have to defend my hon­or.

[01:17:43] Tony: yeah, yeah,

[01:17:45] Cameron: Any­way. Yeah, good. I did want to watch that.

[01:17:48] Tony: yeah, so that’s good. And the last thing I want to men­tion was, um, I’ve just fin­ished Going Infi­nite, the Michael Lewis book on Sam Bankman Fried, and I want­ed to just raise one thing, which is just like, I just read it and went, holy shit, because, um, so, I mean, Sam Bankman Fried’s on the spec­trum, he’s always kind of sit­ting there and think­ing, yeah, How he can, you know, ben­e­fit from a par­tic­u­lar sit­u­a­tion.

[01:18:17] Tony: And one of the things he tried a long time to do was to get the US Secu­ri­ties Com­mis­sion to sanc­tion Bit­coin or Bit­coin. exchange in the States, and they nev­er did, which is what you were talk­ing before about with the ETFs. Um, and so he start­ed to work out, how’s, what’s the best way I can get that to change?

[01:18:39] Tony: And he real­ized that it was eas­i­er to influ­ence politi­cians who were stand­ing for elec­tion than it was to try and pay them off when they were elect­ed, right? So he’s, he was throw­ing a lot of cash around at, at, um, at races for seats. And, um, he came across Trump in a kind of a fun­ny sto­ry because there were two can­di­dates run­ning in a par­tic­u­lar elec­torate and they were both, they were both had the first name Eric.

[01:19:04] Tony: And, um, he thought, so one was a con­ser­v­a­tive, one was a lib­er­al. And he thought, oh, Trump’s going to get behind a con­ser­v­a­tive guy. And if he does that, we’re stuffed, we’re screwed because he was sup­port­ing the Demo­c­rat. So he said, If I can get word to Trump, he won’t, he won’t give a shit about this race, but if I can tell him he endors­es Eric, then peo­ple will be con­fused and it’ll be a, it’ll be a wipe, it won’t mat­ter.

[01:19:32] Tony: So, they did get word to the Trump camp he should endorse Eric, and Trump came out and said he endorsed Eric, and the Demo­c­rat won, because he was called Eric, just like the Repub­li­can was. So then, Bankman Freed said, okay, so Trump can sway elec­torates. How do, how do I use that to my advan­tage? And he thought that if Trump got into pow­er that he would­n’t be in favor of licens­ing a Bit­coin exchange.

[01:19:57] Tony: So he was try­ing to stop him. But rather than take him on front on, he said, I won­der how much, Trump’s a busi­ness­man, I won­der how much he would like to be paid not to run. And so they got word back through their con­tacts into the Trump camp, and Trump come back and said 5 bil­lion. And they did­n’t pay because that was basi­cal­ly more than the mar­ket cap of.

[01:20:20] Cameron: Right.

[01:20:21] Tony: think we should start a GoFundMe page, right? And raise 5 mil­lion before the elec­tions in

[01:20:27] Tony: Novem­ber and, uh, and buy Trump off Not to Run.

[01:20:31] Cameron: Well, that was his price then. That was his price, what­ev­er it was, eight years ago, you know, price might have gone up since then.

[01:20:40] Tony: But what a con­cept. I mean, first of all, to come up with the idea of he’s a busi­ness­man, let’s go and ask him how much he wants to go

[01:20:45] Tony: away. And then Trump actu­al­ly nam­ing a price.

[01:20:49] Cameron: Yeah, but I don’t think that’s unusu­al in the US. I think peo­ple, uh, uh, Paid to throw fights. They’re paid to throw elec­tions. They’re paid to throw any­thing. Every­one’s got a price, right? Now, there’s, I’m sure it hap­pens in elec­tions all the time over there. You know, how much do you need to get paid not to run?

[01:21:10] Cameron: What about Ron DeSan­tis, man? Just fold­ing after the first pri­ma­ry too, like,

[01:21:18] Cameron: It’s gold, just, nah, alright. He, a few months ago, he was say­ing that he was cho­sen by God to be Pres­i­dent of the Unit­ed States. It’s like, lis­ten, God’s, God’s a busy guy. Like, uh, he can’t han­dle too many things at once. He, uh, yes, he chose me to run, but, uh, he was­n’t think­ing clear­ly, maybe on the day, I don’t know.

[01:21:40] Cameron: Maybe he chose me to run and he chose Trump to run, who knows what he was think­ing. Pathet­ic. Well, my rec­om­men­da­tions for this week, I’ve been read­ing Venus in Furs, Leopold von Sach­er Mas­sach. You ever read that?

[01:21:57] Tony: I can’t even pro­nounce it. I know there’s a Vel­vet Under­ground song Venus Infers, I guess it’s named after the book.

[01:22:05] Tony: But one of my favourite Vel­vet Under­ground songs though.

[01:22:08] Cameron: oh, well, it’s

[01:22:09] Cameron: one of my favorites. Um, and you know, yeah, yeah. It’s, it’s a clas­sic, um, Vel­vet Under­ground song. Like clas­sic in that it, it, I think it’s a good song, but also when they came out with it, like I think it was on their first album. So 66, um, it’s a song about, Um, sado­masochism in a rock and roll song in 1966.

[01:22:32] Cameron: You did­n’t talk about sado­masochism, right? That was like, still the Bea­t­les were doing stuff and you know, I want to hold your hand. There’s only a cou­ple of years after I want to hold your hand. Right. And the Vel­vet Sky, we can do more with this. But the book is from the mid, ear­ly to mid. 19th cen­tu­ry is by this Aus­tri­an writer and his name, Masoch, is where we get the word masochism from, you know, sadism comes from Mar­quis de Sade, masochism comes from Masoch, I think it was Freud who put them togeth­er as sado­masochism in the first place.

[01:23:03] Cameron: But it’s basi­cal­ly the sto­ry about a guy who falls in love with this woman Rich, a lit­tle bit old­er than him and um, he wants her to mar­ry him and she goes, no, I don’t want to mar­ry you, she’s a wid­ow, she’s rich, she’s very, she was liv­ing a very um, free, sex­u­al­ly lib­er­at­ed lifestyle where she would just have sex with any man that she want­ed to, it was pret­ty racy to write this in the ear­ly 19th cen­tu­ry, I think um, um, um, Napoleon, actu­al­ly it was prob­a­bly writ­ten much ear­li­er, because I think Napoleon had this guy arrest­ed, or had this book banned actu­al­ly in France, I think it was.

[01:23:42] Cameron: May have had him arrest­ed in Aus­tria at some point too. Any­way, um, she says, but you can be my slave. And so he goes, yeah, I’ll take it. I’ll be your slave and you can do what­ev­er you want for me. And actu­al­ly, inter­est­ing thing is, Sacha Makok, Sacha Makok, Masok, um, actu­al­ly lived this lifestyle. Like this is based on his real rela­tion­ship he had with a woman and in his

[01:24:07] Tony: Sak­ka macaque.

[01:24:11] Cameron: Oh, there goes our clean rat­ing on iTunes. I, uh, he, uh, actu­al­ly had this rela­tion­ship with his mis­tress­es and his wives, like he want­ed to be treat­ed, you know, rough­ly want to be treat­ed as a slave. He was into it. So yeah, that’s where we get masochism from is from this book. And it’s, it’s kind of an inter­est­ing read.

[01:24:29] Cameron: Uh, film wise, Chris­sy and I final­ly got through Dawn. 2006, Bol­ly­wood, um, com­plete­ly bonkers, sort of a mix between Mis­sion Impos­si­ble and The Depart­ed, um, absolute­ly just ludi­crous­ly bonkers. I think it was the biggest box office film in India in 2006 when it came out, and it’s, uh, it was hilar­i­ous. We loved it, just com­plete­ly ludi­crous.

[01:24:58] Cameron: And music wise, I dis­cov­ered that Peter Capal­di came out with an album. A year or two ago, called St. Christo­pher, um, and it’s, uh, inter­est­ing, yeah, uh, well I’d say it’s great, there’s a cou­ple of tracks that are quite gaudy, does a, it’s like a spo­ken intro to the first track on the album, and, uh, well, I’m sort of a fan of Capal­di, more from, you know, his, uh, what­ev­er the TV show was, The Thick of It, um, and, Less so for the doc­tor, but that was­n’t his fault.

[01:25:31] Cameron: I thought he would have been a great doc­tor, but I thought the writ­ing kind of sucked, but, um, any­way, yeah, it’s inter­est­ing to lis­ten to his, uh, music. And I know he was a musi­cian way back in the day with, um, Fer­gu­son, Craig Fer­gu­son. Yeah,

[01:25:47] Tony: What style? Because they were in a punk band back in the

[01:25:50] Cameron: Yeah, no, it’s kind of, I’d say a cross between Nick Cave and, um, I don’t know, some­thing like that. It’s sort of moody. You know, sort of moody, eso­teric, uh, yeah. Not punk, no, very, very, very, um, volup­tuous kind of sound, very pro­duced, uh, but you know, a bit of, bit of rock in there, bit of drum and bass, uh, yeah, it’s all over the place.

[01:26:24] Cameron: Um, any­way, it’s, I’ve kind of enjoyed lis­ten­ing to that, check­ing it out.

[01:26:29] Tony: And any rea­son why it was called St. Christo­pher?

[01:26:32] Cameron: It’s a song, he talks about a song, yeah, yeah. There’s a lot of stuff about, you know, lost rela­tion­ships and, you know, live, you know, um, songs about life deci­sions gone wrong and all that kind of stuff. But I looked up his thing. He’s been, um, mar­ried to the same woman since, um, I think the. 80s, late 80s, ear­ly 90s, very long term rela­tion­ship with anoth­er actress that he met back in his ear­ly days.

[01:27:02] Cameron: I think they were in a, they were on stage togeth­er or in an ear­ly film or some­thing togeth­er. They’ve been togeth­er a long time. Hmm. Very suc­cess­ful rela­tion­ship by the sounds of it.

[01:27:13] Tony: Yeah. And Capal­di was in

[01:27:14] Tony: Local Hero. Whoops. Way, way back.

[01:27:17] Cameron: I think she might’ve been in that as well.

[01:27:21] Cameron: Yeah, I think so.

[01:27:24] Cameron: So any­who, that is all I have for you this week, TK. Um, thank you for the oblit­er­at­ed ref­er­ence, um, Gonna try and watch that. Prob­a­bly not with Chris­sy. I think that’s just a me movie. That’s a me thing.

[01:27:39] Tony: No, well, Jen­ny liked it. It is a guilty plea­sure. She

[01:27:42] Tony: might. Yeah.

[01:27:43] Cameron: Oh, Chris­sy loves Cobra Kai.

[01:27:44] Tony: Well, there you go.

[01:27:45] Cameron: guess I’ll sell her on that basis. All right, mate. Um, what are you up to this week? Any­thing excit­ing?

[01:27:53] Tony: talk­ing to Alex tomor­row, she was talk­ing about com­ing up, so I’m not sure if she’s com­ing up or not for the week­end. Sean’s up ear­ly next week for work, stay­ing with us. And my sis­ter’s down. She’s stay­ing with us on Sun­day. So

[01:28:05] Tony: yeah, just a few vis­its, hope­ful­ly.

[01:28:07] Cameron: Love­ly. Well, have a good week and I’ll talk to you next week, if not before.

[01:28:12] Tony: Alright, thanks mate.

[01:28:13] Cameron: Ciao, mate.