QAV Weekly Update 2024-03-05

QAV 709 Club

[00:00:00] Tony: One, two, three, go!

[00:00:10] Cameron: No.

[00:00:12] Tony: Bush line. that from Butch and Sun­dance? Uh, I think it was Richard Kiel, the guy who played Jaws in the Bond movies. If it was­n’t him, it was like anoth­er big, big bad guy. Chal­lenges New­man to a fight. New­man’s about half his size, and he goes Well, if we’re going to fight, some­one needs to say one, two, three, go.

[00:00:32] Tony: And Red­ford says, one, two, three, go, and New­man kicks him in the nuts straight away. That’s end of the fight.

[00:00:41] Cameron: That’s good. Wel­come back to the bull­shit. No, uh, QAV. Watch. Ray and I do that all the time. I’ll be sit­ting down. Wel­come to the, what are we doing? What shows this? It is the nev­er end­ing pod­cast. In fact, that’s, my son Hunter has been telling me for months, I should just com­bine all of my pod­casts into the Cameron Reil­ly show and just, and just do, it’s just all, you know, just me talk­ing about stuff.

[00:01:14] Tony (2): Right, and bring a co host on as a guest.

[00:01:17] Cameron: Well, basi­cal­ly, I have dif­fer­ent co hosts for dif­fer­ent top­ics, but it’s just, you know. He said, cause I don’t want to sub­scribe. He said, no one wants to sub­scribe to four or five dif­fer­ent shows. If they’re lis­ten­ing to you, it’s prob­a­bly cause they like you and they’re inter­est­ed in what you’re inter­est­ed in.

[00:01:29] Cameron: So just let them lis­ten to you and you talk about what­ev­er you’re talk­ing about and they’ll just go along for the ride.

[00:01:35] Tony (2): You could do what Kramer did. You could put the Merv Grif­fin set in your lounge room.

[00:01:40] Cameron: My God. I just watched that episode like two days ago. Yeah. I watched it on the week­end.

[00:01:45] Tony (2): That’s a great episode. Yeah,

[00:01:49] Cameron: was clean­ing up, doing dish­es or some­thing and I

[00:01:51] Cameron: was gonna, and it was in the thing. I said, Oh, this is a great one. Got to watch this. It is a great episode. Any­way, wel­come back to QAV, episode 709, 27th of Feb­ru­ary, 2024.

[00:02:06] Cameron: War­ren Buf­fet­t’s annu­al let­ter to share­hold­ers came out this week. Tony, it’s always, I mean, a lit­tle bit, a lit­tle bit bit­ter­sweet this time because he had to do the, We did­n’t have to, but he did the big trib­ute to Char­lie Munger.

[00:02:20] Tony (2): thought that was a nice touch.

[00:02:22] Cameron: It was love­ly, love­ly. And, um, I’ve got, I thought we’d start maybe with our high­lights from War­ren’s

[00:02:30] Cameron: let­ter.

[00:02:31] Tony (2): two hours, we can do the reg­u­lar pod­cast.

[00:02:37] Cameron: easy con­tent when War­ren writes a let­ter.

[00:02:40] Tony (2): It’s a late Christ­mas present, isn’t it?

[00:02:42] Cameron: it real­ly is. And it nev­er ceas­es to amaze me. Just. How much I enjoy it and how much good stuff there is. He’s so easy with the, you know, the wit and wis­dom. Um, so of course he opened with his, uh, trib­ute to Char­lie where he basi­cal­ly gives Char­lie all of the cred­it for Berk­shire Hath­away being what it is.

[00:03:06] Cameron: today, which is a news. He’s always done that, but he reaf­firmed that as Char­lie’s gone. Um, I think towards the end of his trib­ute, I’ve got this bit. He said, In the phys­i­cal world, great build­ings are linked to their archi­tect, while those who had poured the con­crete or installed the win­dows are soon for­got­ten.

[00:03:27] Cameron: Berk­shire has become a great com­pa­ny. Though I have long been in charge of the con­struc­tion crew, Char­lie should for­ev­er be cred­it­ed with being the archi­tect. Beau­ti­ful.

[00:03:36] Tony (2): Yeah, it’s a great sen­ti­ment, isn’t it? It’s typ­i­cal War­ren not tak­ing cred­it, call­ing him­self the win­dow installer, Char­lie the archi­tect. And if I can just chip in with mine too, from that same page, and, and, if, peo­ple have prob­a­bly read this or they’ve gone to the site, the, the, The nor­mal Berk­shire Hath­away let­ter starts after the homage to Char­lie and the homage to Char­lie is in bold font and larg­er font and it’s, it’s a real trib­ute.

[00:04:04] Tony (2): Um, my, my take on that was just before yours. Char­lie nev­er sought to take cred­it for his role as cre­ator. But instead, let me take the bows and receive the acco­lades. In a way, his rela­tion­ship with me was part old­er broth­er, part lov­ing father. Even when he knew he was right, he gave me the reins. And when I blun­dered, he nev­er, nev­er remind­ed me of my mis­take.

[00:04:28] Cameron: Such a sweet rela­tion­ship those guys had.

[00:04:31] Tony (2): Yeah. And, you

[00:04:33] Cameron: remem­ber

[00:04:34] Tony (2): sor­ry, well, they talk about nev­er fight­ing as well over what,

[00:04:37] Cameron: That’s what I was going to

[00:04:38] Tony (2): Yeah. All right. Yeah.

[00:04:40] Cameron: I think that was in, um, the last Wit and Wis­dom of Char­lie that I read, which, you know, War­ren’s been in that. He prob­a­bly wrote 20 years ago, but he was say­ing they’d nev­er had an argu­ment, nev­er had a fight in all the time that they’d worked togeth­er.

[00:04:53] Cameron: Dis­agreed on stuff, but nev­er had an argu­ment, nev­er had a fight. So yeah, real­ly spe­cial rela­tion­ship.

[00:04:59] Tony (2): Yeah. Well, I think we’ve had a fight, have we, Ken? In

[00:05:03] Cameron: No,

[00:05:04] Tony (2): 12 years?

[00:05:05] Cameron: no, but we don’t work as close­ly as they

[00:05:07] Tony (2): true. Yeah, in the high

[00:05:12] Cameron: yeah,

[00:05:12] Tony (2): world of being CEO of one of the biggest com­pa­nies in the world, yeah.

[00:05:18] Cameron: yeah. I mean, Ray and I have nev­er had a fight either. We’ve nev­er had a dis­agree­ment, nev­er had an argu­ment, nev­er had a fight in the 10 years that we’ve been record­ing shows togeth­er. It’s great. Like he’s,

[00:05:26] Tony (2): It’s just because Ray just always agrees with you.

[00:05:29] Cameron: Well, that’s, yeah, like you.

[00:05:33] Cameron: When I screw up

[00:05:34] Tony (2): this might be our first fight.

[00:05:39] Cameron: When I do some­thing stu­pid, you just, you just gig­gle and, you know, that’s about it. You know, you’re like my Sifu. I say that, it’s my Sifu. My Sifu walks up to me at Kung Fu and if I’m doing some­thing wrong, he just looks at me and he just chuck­les and walks away. And that’s how I know I’m doing some­thing wrong.

[00:05:56] Cameron: I’m like, what? What? He goes, uh You know, you can do it that way if you want. Come to think of it, the two of you have got a lot in com­mon.

[00:06:08] Cameron: You know, it’s, that’s, uh, my favorite kind of men­tor is the one that does­n’t sort of make me feel bad. Just chuck­les and walks away.

[00:06:17] Tony (2): Well, it’s a bit like rais­ing a child. I mean, I for­get now where I read it, but there’s two things. To suc­cess­ful­ly rais­ing a child, one was uncon­di­tion­al love, like the child’s got to know that what­ev­er they do, they’ll still be loved. And the sec­ond thing is oper­ant con­di­tion­ing. So if you do some­thing bad, it just gets ignored by the par­ent.

[00:06:36] Tony (2): But if you do some­thing good, you get ran­dom praise for it. And even­tu­al­ly the kid learns to seek ran­dom praise for doing good things and, and less and less bad things.

[00:06:48] Cameron: hard when they’re smash­ing every­thing in the house.

[00:06:52] Tony (2): Oh yeah, I mean, yeah. It is.

[00:06:56] Cameron: I read that in books. I’m like, yeah, come and look after Fox for a day and then get back to me.

[00:07:01] Tony (2): Well, I mean, yeah, I don’t know. Maybe there’s some­thing else behind that. Did­n’t you say there was a med­ical rea­son behind that?

[00:07:08] Cameron: Yeah. Yeah. One of many.

[00:07:10] Cameron: rea­sons behind that, I don’t know.

[00:07:13] Tony (2): Right. Well,

[00:07:14] Cameron: child.

[00:07:14] Cameron: That’s the

[00:07:15] Tony (2): oh, is that what it is?

[00:07:16] Cameron: Yeah, yeah.

[00:07:17] Tony (2): It’s her fault. Right.

[00:07:19] Cameron: Not false. I’m not cast­ing blame. I’m just say­ing. It’s DNA, man. It’s just genet­ics.

[00:07:26] Tony (2): Oh,

[00:07:26] Tony (2): you mean, I mean, he worked out his genet­ics and ever since he’s been throw­ing tantrums and break­ing things in the house.

[00:07:33] Cameron: Yeah, that’s it.

[00:07:34] Tony (2): Yeah.

[00:07:36] Cameron: Any­way, back to War­ren. Our goal at Berk­shire is sim­ple. We want to own either all or a por­tion of busi­ness­es that enjoy good eco­nom­ics that are fun­da­men­tal and endur­ing. With­in cap­i­tal­ism, some busi­ness­es will flour­ish for a very long time, while oth­ers will prove to be sink­holes.

[00:07:53] Cameron: It’s hard­er than you would think to pre­dict which will be the win­ners and the losers. And those who tell you they know the answer are usu­al­ly either self delu­sion­al or snake oil sales­men. I like that.

[00:08:07] Tony (2): I agree whole­heart­ed­ly.

[00:08:09] Cameron: We buy com­pa­nies because we think their fun­da­men­tals look good, and some­times they go south,

[00:08:14] Cameron: and

[00:08:14] Tony (2): Mm hmm.

[00:08:15] Cameron: just the way it is.

[00:08:17] Tony (2): Yeah, it’s, it’s, I think War­ren’s always said it’s a prob­a­bilis­tic exer­cise. You hope to get slight­ly more right than you get wrong, but it’s, it’s impos­si­ble to pre­dict.

[00:08:30] Cameron: Do you want to do one for one here? You

[00:08:32] Cameron: got some

[00:08:32] Tony (2): I hope you like it. Yeah, I do. I’ve got quite a lot to do. You were talk­ing before about War­ren’s abil­i­ty to dis­till things into good prose and one of the con­cepts I liked about this let­ter was he was talk­ing about his sis­ter Bertie and I guess using her as a proxy for One of the investors, long term investors in Berk­shire Hath­away.

[00:08:53] Tony (2): So his sis­ter Birdie’s been along as an investor for a very long time. And War­ren says in the let­ter, Birdie, like most of you, under­stands many account­ing terms, but she is not ready for a CPA exam. She fol­lows busi­ness news, read­ing four news­pa­pers dai­ly, but does­n’t con­sid­er her­self an eco­nom­ic expert.

[00:09:12] Tony (2): She is sen­si­ble, very sen­si­ble, instinc­tive­ly know­ing that pun­dits should always be ignored. After all, if she could reli­ably. Pre­dict tomor­row’s win­ners. Would she freely share her valu­able insights and there­by increase com­pet­i­tive buy­ing? That would be like find­ing gold and then hand­ing out a map to the neigh­bors show­ing its loca­tion.

[00:09:32] Cameron: Although that’s exact­ly what he’s been doing for 60

[00:09:35] Cameron: years.

[00:09:36] Tony (2): think he has. That’s, I think that’s the dis­tinc­tion. I think what he’s say­ing there is. Don’t trust a stock tip­per, but he’s say­ing, but he’s been teach­ing how you invest in the whole time and say­ing, you know, I’m not giv­ing you tips. He’s nev­er come out with a stock tip in his life, but he said, this is how I do it.

[00:09:53] Tony (2): I think that’s a bit dif­fer­ent.

[00:09:55] Cameron: Oh, that’s a fair dis­tinc­tion. Yeah. He’s teach­ing a method­ol­o­gy, but not giv­ing you tips.

[00:10:00] Tony (2): Yeah. And that was, look, when I start­ed QAV, I got so much feed­back from my friends and col­leagues say­ing, why are you giv­ing away your secrets or why are you, you know, and. Um, I think, you know, I came to the same con­clu­sion. I’m not giv­ing away my secrets. I’m teach­ing peo­ple how to invest for them­selves and it’s up to them what they buy and sell.

[00:10:23] Cameron: And now you’re start­ing to ques­tion.

[00:10:28] Tony (2): Well, yeah, we’ve had that dis­cus­sion in the sur­vey about whether we’re all buy­ing at the same time and sell­ing at the same time. It does­n’t appear to be the case, but we may have to look at that again in the future.

[00:10:38] Cameron: Keep an eye on it. In 1863, Hugh McCul­loch, the first Comp­trol­ler of the Unit­ed States, sent a let­ter to all nation­al banks. His instruc­tions includ­ed this warn­ing, Nev­er deal with a ras­cal under the expec­ta­tion that you can pre­vent him from cheat­ing you. like that. And then he goes on to say that, you know, he and Char­lie tried to fol­low that, uh, phi­los­o­phy, and they’ve, they’ve been tricked a cou­ple of times, because it’s hard to tell who the bull­shit artists are, but, uh, I like that.

[00:11:09] Cameron: Nev­er, just, if you know some­one’s a ras­cal though, don’t think you’re gonna, why, why, why walk into the lion’s den, like, you know, I say this to my boys all the time, like, they do busi­ness with some­one, and then get a sense that that per­son is not trust­wor­thy,

[00:11:29] Tony (2): Mm hmm.

[00:11:29] Cameron: a bit like real estate

[00:11:30] Cameron: agents,

[00:11:31] Tony (2): I had that same thought.

[00:11:35] Cameron: and if some­body tells you that they’re bull­shit­ting about some­thing to some­body else.

[00:11:39] Tony (2): Yeah.

[00:11:40] Cameron: As part of their stan­dard busi­ness prac­tice, why would you trust them to be hon­est with you?

[00:11:45] Tony (2): No, I agree. Why are you spe­cial?

[00:11:47] Tony (2): Yeah,

[00:11:49] Cameron: or a busi­ness part­ner slash boss years ago. Like, work­ing with him and see­ing him just lying and cheat­ing to sup­pli­ers and cus­tomers.

[00:11:58] Cameron: And then you go, okay, well, obvi­ous­ly you’re going to be doing that to me as well, right? That’s your char­ac­ter.

[00:12:05] Cameron: Yeah,

[00:12:05] Tony (2): I had the same, same thing with, issue with the boss once and came to the same con­clu­sion. It’s just not worth work­ing with them.

[00:12:12] Cameron: if you can,

[00:12:13] Cameron: you know,

[00:12:14] Tony (2): If you can, yeah. And, um, and Buf­fett in the past has said things like, you know, con­sid­er, con­sid­er the fact that what­ev­er you do today might be on the front page of the news­pa­per tomor­row.

[00:12:24] Tony (2): So. Rep­u­ta­tions take a life­time to gain and a day to lose.

[00:12:32] Cameron: Yeah, and I can, I mean, life’s just too short to deal with idiots

[00:12:37] Tony (2): Yeah.

[00:12:38] Cameron: arse­holes too, like, that’s why you and I got out of the cor­po­rate work­force in the first place, right?

[00:12:44] Tony (2): Well, that was a ques­tion I had too. I won­der how many banks out there, if they got rid of all the ras­cals. I won­der how big they’d be. I won­der who’s

[00:12:51] Tony (2): left. Would­n’t be a whole

[00:12:53] Tony (2): lot.

[00:12:54] Cameron: Gets back to the psy­chopath epi­dem­ic in a way, too.

[00:12:56] Tony (2): that’s right.

[00:12:58] Cameron: Alright, your turn.

[00:12:59] Tony (2): Uh, yeah, so I, I won’t go through it all, but they, War­ren does his usu­al, um, rant about, uh, gen­er­al account­ing prin­ci­ples and how what they pub­lish is their net income for the core, there isn’t real­ly a net income because it includes the unre­al­ized gains in their invest­ment.

[00:13:16] Tony (2): Invest­ments. Um, and he does this every year, but then he goes on to talk about his, what they call oper­at­ing earn­ings, so it’s their share of the prof­its, basi­cal­ly, based on their equi­ty hold­ings. And, you know, he says that in 2021, they made 27. 6 bil­lion, in 2022, 30. 9 bil­lion, and 37. 4 bil­lion last year, so it’s going up under his, under his ver­sion of the account­ing stan­dards.

[00:13:43] Tony (2): I think I’ve read this same dis­cus­sion in every let­ter that War­ren Buf­fet­t’s ever writ­ten, and giv­en that he is one of the wealth­i­est men in Amer­i­ca, and the CEO of one of the biggest com­pa­nies is not the biggest, why isn’t he lob­by­ing for the account­ing stan­dards to change? Why does he just keep row­ing against us every year?

[00:14:00] Tony (2): If he thinks he has to State his earn­ings in a dif­fer­ent way every year and his earn­ings are mis­stat­ed. Why not go to the SEC or who­ev­er looks after it and say, Hey guys, this isn’t work­ing. Even if you have to give me a carve out because I’m an invest­ment com­pa­ny, let’s, let’s get it, let’s get it right.

[00:14:16] Tony (2): I

[00:14:16] Cameron: Why isn’t the SEC

[00:14:18] Tony (2): Yeah, yeah,

[00:14:26] Tony (2): exact­ly. Yeah, it’s just a strange cir­cum­stance, I think.

[00:14:30] Cameron: Well, maybe that ties in with this next quote I’ve got. He says, Berk­shire’s abil­i­ty to imme­di­ate­ly respond to mar­ket seizures with both huge sums and cer­tain­ty of per­for­mance may offer us an occa­sion­al large scale oppor­tu­ni­ty. Though the stock mar­ket is mas­sive­ly larg­er than it was in our ear­ly years, today’s active par­tic­i­pants are nei­ther more emo­tion­al­ly sta­ble nor bet­ter taught than when I was in school.

[00:14:55] Cameron: For what­ev­er rea­sons, mar­kets now exhib­it. far more casi­no like behav­ior than they did when I was young. The casi­no now resides in many homes and dai­ly tempts the occu­pants. One fact of finan­cial life should nev­er be for­got­ten. Wall Street, to use the term in its fig­u­ra­tive sense, would like its cus­tomers to make mon­ey.

[00:15:16] Cameron: But what tru­ly caus­es its denizens juices to flow is fever­ish activ­i­ty. At such times, what­ev­er fool­ish­ness can be mar­ket­ed, will be vig­or­ous­ly mar­ket­ed. Not by every­one, but always by some­one. Occa­sion­al­ly, the scene turns ugly. The politi­cians then become enraged. The most fla­grant per­pe­tra­tors of mis­deeds slip away.

[00:15:39] Cameron: Rich and unpun­ished, and your friend next door becomes bewil­dered, poor­er, and some­times venge­ful. Mon­ey, he learns, has trumped moral­i­ty. That always fas­ci­nates me when one of the rich­est guys and most suc­cess­ful investors in Amer­i­ca sounds like a Marx­ist. He sounds like a, he sounds like a lefty. Yep, the rich, the rich slip away unpun­ished, it’s all mar­ket­ing and no one knows what, you know, it’s more casi­no like behav­ior than ever.

[00:16:09] Cameron: You know, this is com­ing from War­ren

[00:16:12] Cameron: Buf­fett. I would­n’t be sur­prised if I read that on the Chom­sky sub­red­dit, you know,

[00:16:16] Tony (2): Right, yeah.

[00:16:17] Cameron: hmm.

[00:16:18] Tony (2): Yeah, that’s what I’ve always liked about him. And he’s always been fair­ly pro­gres­sive for a Repub­li­can. Um, but, but yeah, and he’s

[00:16:24] Tony (2): He’s

[00:16:24] Cameron: a Repub­li­can?

[00:16:25] Tony (2): Yeah, a mod­er­ate

[00:16:27] Cameron: a Demo­c­rat?

[00:16:28] Tony (2): No, I thought he was a mod­er­ate Repub­li­can because he was,

[00:16:31] Cameron: is a Demo­c­rat, I

[00:16:31] Cameron: think.

[00:16:32] Tony (2): yeah, okay, pos­si­bly, because he was, um, an advi­sor to Arnold Schwarzeneg­ger when he was Cal­i­for­nia State Gov­er­nor.

[00:16:38] Tony (2): on finan­cial issues. And his father was

[00:16:41] Cameron: to Oba­ma too,

[00:16:42] Cameron: though.

[00:16:42] Tony (2): oh, was he? Okay. And his father was a Repub­li­can Sen­a­tor.

[00:16:46] Cameron: Yeah, right.

[00:16:47] Tony (2): Yeah. So I’m pret­ty sure he’s Repub­li­can. Not that it mat­ters. He’s mod­er­ate, um, in many ways. Um, but yeah, I mean, he’s Deb Wright again, and that’s, he’s, he’s actu­al­ly mak­ing a real­ly inter­est­ing point. And that is that just like you and I, that the sort of what used to be The realm of invest­ment bankers and fund man­agers is now avail­able to house­holds to invest with a fair, fair degree of infor­ma­tion to back up their deci­sions.

[00:17:14] Tony (2): And so peo­ple still have to be care­ful and not be tempt­ed because they have access to the stock mar­ket much more eas­i­ly. They can do it online them­selves for a very cheap cost, not to treat it like a casi­no. And of course, we’ve seen that. We’ve spo­ken about it on the show dur­ing COVID when peo­ple had access to their SEPA and they drew it down and then spent it.

[00:17:35] Tony (2): Um, you know, gam­bling Bit­coin or what­ev­er and he, yeah, he did­n’t men­tion Bit­coin in that, in that com­men­tary, but it just flashed out to me that that’s one of the things he was talk­ing about.

[00:17:47] Cameron: And it’s, you know, it’s the same thing going on with the Mag­nif­i­cent Sev­en shares at the moment. Like, okay, I fun­da­men­tal­ly agree with the premise that AI is going to be rev­o­lu­tion­ary and that these com­pa­nies are prob­a­bly going to prof­it, uh, some of them any­way, out of the AI boom in the next few years.

[00:18:05] Cameron: But how do I, how do I val­ue a share of Nvidia? How do I val­ue a share of Google and decide that I’m buy­ing it at a good price based on, you know, some sort of sci­en­tif­ic val­u­a­tion apart from it’s going up and it was, it might go up in the future. I mean, at the end of the day, if I was going to buy one of those shares, that’d prob­a­bly be the only I could have for it is that, wow, it’s been going up and it might keep going up, which

[00:18:35] Cameron: is casi­no behav­ior.

[00:18:37] Cameron: It’s, it’s well, and that

[00:18:39] Cameron: too.

[00:18:39] Tony (2): Yeah. I can sell it to some­one for a high­er price. Yeah.

[00:18:42] Cameron: Yeah, there’s no, you know, log­ic, rea­son, real­ly, apart from, you can say AI and mum­ble off some buzz­words about, you know, this time it’s dif­fer­ent, but at the end of the day, if you’re gonna put your big boy or big girl pants on and say, no, no, I’m a ratio­nal investor who invests in good qual­i­ty com­pa­nies when I can buy them at a dis­count to their intrin­sic val­u­a­tion, then try and apply that to the Mag­nif­i­cent Sev­en.

[00:19:09] Cameron: Unless you know some­thing that I don’t know, it’s very, very hard to put your hand on your heart and say that’s what you’re doing, I

[00:19:14] Cameron: think.

[00:19:15] Tony (2): And I’ve had dis­cus­sions even with some of our lis­ten­ers in the past, um, at din­ners, et cetera, where they’ll say things like, Oh, I bought some Bit­coin yes­ter­day. Oh, real­ly? And they go, Oh, look, it was only 1 per­cent of my total port­fo­lio. I just want­ed to try it. I’m like, okay, well, it’s good to exper­i­ment.

[00:19:31] Tony (2): But would you put a hun­dred per­cent of your port­fo­lio in it? And if you don’t do that, if you’re not going to, if you go, Oh, no, it’s a bit risky. Well, I risk 1%. Yeah, it’s just strange how the human brain works. It’s like tak­ing, it’s like tak­ing a bit of mon­ey to the casi­no and hav­ing a splash rather than apply­ing all the prin­ci­ples you apply for 90, the oth­er 99 per­cent of your, um, yes, or the race­track.

[00:19:55] Tony (2): Exact­ly. I did­n’t tell you I had a good win on the week­end at the race­track.

[00:20:00] Cameron: Oh yeah?

[00:20:01] Tony (2): yeah?

[00:20:03] Tony (2): we own it. Steve Mabb and I own it. Oh, I’m. a large part of a horse and its sis­ter won the Blue Dia­mond, which is a big group one race in Mel­bourne on the week­end. So, um, we’re hop­ing for some of that luck to rub off on our horse, but I backed it in the one at 20 to one.

[00:20:19] Tony (2): So that was a great result.

[00:20:21] Cameron: And, and to be fair, when you play the hors­es, you have a sys­tem, you have some sort of a sci­en­tif­ic sys­tem.

[00:20:28] Cameron: Are you, is it net pos­i­tive?

[00:20:30] Tony (2): Uh, it’s prob­a­bly break even over the years, some years ago, some years ago. I, I treat­ed it as enter­tain­ment real­ly. So that pos­i­tive this year for sure.

[00:20:39] Cameron: And you could, could you, could you say the same about buy­ing Bit­coin? It’s just enter­tain­ment.

[00:20:43] Tony (2): I could, yeah. So I accept­ed the per­son that spent 1%. of their

[00:20:48] Cameron: It’s gam­bling,

[00:20:49] Tony (2): doing it, is gam­bling. Or, you know, they can say it’s exper­i­ment­ing, but it’s an exper­i­men­tal gam­ble. And it’s enter­tain­ing, so I don’t have a prob­lem with it, but I’m just say­ing it, you know, flip it on its head, would you put the oth­er 99 per­cent into Bit­coin?

[00:21:02] Tony (2): And if you don’t do that, then why put the one in?

[00:21:05] Cameron: And you should also spend 1 per­cent of your time smok­ing meth and, uh, you know, look­ing for a good time in all the wrong places.

[00:21:14] Tony (2): Just in case it works. Yeah,

[00:21:16] Cameron: Yeah, just in case it works, you know, you know, you know, works for some

[00:21:18] Cameron: peo­ple, might

[00:21:19] Tony (2): Hey, well, we don’t, we don’t know it does­n’t.

[00:21:21] Cameron: That’s what I’m

[00:21:22] Tony (2): I don’t. I don’t know? it does­n’t. No. Yeah.

[00:21:28] Cameron: turn is it? Yours?

[00:21:32] Tony (2): Um, he made a good point, which is often at the crux of what he talks about. He says, this is War­ren, at Berk­shire we par­tic­u­lar­ly favor the rare enter­prise that can deploy addi­tion­al cap­i­tal at high returns in the future. Own­ing only one of these com­pa­nies and sim­ply sit­ting tight can deliv­er wealth beyond, almost beyond mea­sure.

[00:21:53] Tony (2): So it’s this idea of a high return on equi­ty so you can, you can, and don’t pay any div­i­dends so you can rein­vest it at a good rate of return.

[00:22:01] Cameron: about tak­ing your prof­its off the table, War­ren, and rebal­anc­ing?

[00:22:06] Tony (2): Yeah. I think that’s the, that’s the argu­ment in favor of Michael Jor­dan.

[00:22:11] Cameron: Yes, the Michael Jor­dan argu­ment.

[00:22:13] Tony (2): Yeah.

[00:22:14] Cameron: Uh, your com­pa­ny also holds a cash and US Trea­sury Bill posi­tion far in excess of what con­ven­tion­al wis­dom deems nec­es­sary. Dur­ing the 2008 pan­ic, Berk­shire gen­er­at­ed cash from oper­a­tions and did not rely in any man­ner on com­mer­cial paper, bank lines, or debt mar­kets. We did not pre­dict the time of an eco­nom­ic paral­y­sis, but we were always pre­pared for one.

[00:22:38] Cameron: Extreme fis­cal con­ser­vatism is a cor­po­rate pledge we make to those who have joined us in own­er­ship of Berk­shire. In most years, indeed in most decades, our cau­tion will like­ly prove to be unneed­ed behav­iour, akin to an insur­ance pol­i­cy on a fortress like build­ing thought to be fire­proof. But Berk­shire does not want to inflict per­ma­nent finan­cial dam­age.

[00:23:01] Cameron: Quo­ta­tion­al shrink­age for extend­ed peri­ods can’t be avoid­ed on Bertie or any of the indi­vid­u­als who have trust­ed us with their sav­ings. Berk­shire is built to last. I like that.

[00:23:15] Tony (2): Yeah. And he’s, I think, you know, um, par­tic­u­lar­ly in the last few years, he’s changed his tune a bit in these let­ters from, Hey, we’ve out­per­formed twice the mar­ket over the last 50 or 60 years to, Hey, we’re not going to go broke. And, um, I was going to, I was going to read a sim­i­lar sort of quote. If you look at Berk­shire Hath­away, Because he always puts his per­for­mance ver­sus the S& P at the back.

[00:23:41] Tony (2): The last five years he’s under­per­formed. 2019, Berk­shire Hath­away, and again this is his account­ing, so it’s his oper­a­tional earn­ings. His oper­a­tional earn­ings were 11 per­cent increase, S& P 500 accu­mu­la­tion index 31. 5. So mas­sive under­per­for­mance. 2020, 2. 4 for Berk­shire, 18. 4 for S& P, 2021, pret­ty even, 29. 6 Berk­shire, 28.

[00:24:08] Tony (2): 7 S& P, 2022, 4 per­cent ver­sus minus 18, so they beat the mar­ket there, 2023, 15. 8 ver­sus 26. 3. So still run­ning a twice mar­ket since 1965, which is a huge achieve­ment. But, as, as he says, they’re a big, real­ly big com­pa­ny now. It’s hard to deploy that cash to move the nee­dle. So what he’s doing is, as a good mar­keter, he’s say­ing, but we’re not going to go broke.

[00:24:32] Tony (2): We’re, we’re here. Um, and, uh, you know, we’re, we’re a fortress with fire insur­ance as well, and we’re not going to burn down and all that kind of stuff. So, inter­est­ing change of tune, I think, for Berk­shire Hath­away.

[00:24:45] Cameron: Hmm. Well, I guess with Char­lie’s demise and War­ren’s, uh, time­line, investors want to know that, you know, what they’re invest­ing in is going to

[00:24:57] Tony (2): Yeah,

[00:24:58] Cameron: the two of them too.

[00:25:00] Tony (2): and I think that’s the, that’s always been the big ques­tion for me with Berk­shire Hath­away. Um, as you know, I’ve owned shares for a while, but then I sold them. I thought War­ren and Char­lie were get­ting quite old and, and I sus­pect that when, when War­ren final­ly does go and hope­ful­ly he’s around for a long time, that Berk­shire Hath­away may get tak­en over and bro­ken up.

[00:25:22] Tony (2): At least because They’re sit­ting on a heap of cash, so, you know, you get access to all that cash straight away if you’re a takeover mer­chant. Pays down all the debt to, um, to raise cap­i­tal to take over Berk­shire Hath­away. And then you can decide, well, I don’t want the rail­way busi­ness, it’s too cap­i­tal inten­sive, I’ll sell that one off.

[00:25:42] Tony (2): Um, but I do like the insur­ance busi­ness, so, you know, Berk­shire Hath­away could end up being 3 or 4 com­pa­nies in the next 10 years is my guess. I know that’s a pre­dic­tion. Yes, exact­ly. Yeah.

[00:25:54] Cameron: Tel­dar Paper.

[00:25:56] Tony (2): Yeah. What was I say­ing about the go to the phone box and ring this num­ber and tell them the, was it the blue ostrich says held our paper or some­thing like that?

[00:26:05] Tony (2): Yeah.

[00:26:06] Cameron: like that, yeah.

[00:26:08] Tony (2): Yeah. No, exact­ly. I mean, and it’s because War­ren runs the busi­ness dif­fer­ent­ly to how the rest of Wall Street run busi­ness­es.

[00:26:16] Cameron: That’s why I named, you know, Fox after Bud Fox. His real name is Bud Fox Riley.

[00:26:24] Tony (2): I’ll have to start call­ing him Bud.

[00:26:25] Cameron: Bud Fox, yeah. Okay, back to War­ren. Dur­ing 2023, we did not buy or sell a share of either Amex or Coke, extend­ing our own Rip Van Win­kle slum­ber that has now last­ed well over two decades. Both com­pa­nies again reward­ed our inac­tion last year by increas­ing their earn­ings and div­i­dends. Indeed, our share of Amex earn­ings in 2023 con­sid­er­ably exceed­ed the 1.

[00:26:51] Cameron: 3 bil­lion cost of our long ago pur­chase. The les­son from Coke and Amex, when you find a tru­ly won­der­ful busi­ness, stick with it. Patience pays and one won­der­ful busi­ness can off­set the many mediocre deci­sions that are inevitable. Again, back to the Michael Jor­dan

[00:27:09] Tony (2): Exact­ly. And, and the analy­sis that peo­ple have been telling us about their own port­fo­lios. You know, I bought 15 stocks and one of them account­ed for most of the per­for­mance. That’s how it goes often.

[00:27:21] Cameron: Inter­est­ing that he said his share of their share of Amex earn­ings exceed­ed the cost of the share pur­chase all those years ago. So imag­ine how many times that’s paid for itself.

[00:27:32] Tony (2): Yeah, well, I mean, I’ve had that hap­pen to me once in my invest­ing career, and, um, my div­i­dend. At the end was as much as what I was when I paid for the stock at the start. So the yield was about, you know, 4%. So it was a 25 dag­ger. So that’s prob­a­bly sim­i­lar to Amex and cake for these guys.

[00:27:55] Cameron: I’ve got one more. You got any­thing

[00:27:56] Cameron: else?

[00:27:57] Tony (2): Yeah, I’ve got a cou­ple. Yep. So talk­ing about Japan. Addi­tion­al­ly, Berk­shire con­tin­ues to hold its pas­sive and long term inter­est in five very large Japan­ese com­pa­nies, each of which oper­ates in a high­ly diver­si­fied man­ner, some­what sim­i­lar to the way Berk­shire itself is run. We increased our hold­ings in all five last year after Greg Abel and I made a trip to Tokyo to talk with their man­age­ment.

[00:28:21] Tony (2): Berk­shire now owns about 9 per­cent of each of the five. Berk­shire has also pledged to each com­pa­ny that it will not pur­chase shares that will take our hold­ings beyond 9. 9%. Our cost of the five totals 1. 6 tril­lion yen, and the year end mar­ket val­ue of the five was 2. 9 tril­lion yen. How­ev­er, the yen has weak­ened in recent years, and our year end unre­al­ized gain in dol­lars was 61%, or 8 bil­lion.

[00:28:46] Tony (2): Uh.

[00:28:49] Tony (2): He goes on in cer­tain impor­tant ways, all five com­pa­nies. I hope I get the pro­nun­ci­a­tions right, it Chu moi Mit­subishi Mit­sui and Sum­it­o­mo fol­low share­hold­er friend­ly poli­cies that are much supe­ri­or to those cus­tom­ar­i­ly prac­ticed in the US since we began our Japan­ese pur­chas­es. Each of the five have reduced the num­ber of its shares out­stand­ing at attrac­tive prices.

[00:29:13] Tony (2): Mean­while, the man­age­ments of all five com­pa­nies have been far less aggres­sive with their own com­pen­sa­tion than is typ­i­cal in the Unit­ed States. Note as well that each of the five is apply­ing only about one third of its earn­ings to div­i­dends. The large sums the five retain are used both to build their many busi­ness­es and to a less­er degree to repur­chase shares.

[00:29:33] Tony (2): Like Berk­shire, the five com­pa­nies are reluc­tant to issue shares. So there’s been a lot made of Buf­fet­t’s buy­ing into Japan and A lot of peo­ple have fol­lowed him in and the mar­ket seems to be turn­ing around and lik­ing that in the last year or so, but I think he’d been buy­ing for a num­ber of years, but inter­est­ing to com­pare and con­trast the big com­pa­nies in Japan to the kind of prob­lems he was just call­ing out before in the U.

[00:29:59] Tony (2): S.

[00:30:00] Cameron: But how do they retain good tal­ent if they’re not over­pay­ing their CEOs, Tony?

[00:30:05] Tony (2): Yeah, well, who knows? I mean, um, poten­tial­ly it’s, there could be a Japan­ese lan­guage bar­ri­er. I mean, how many, how many Har­vard MBAs? Speak Japan­ese. Well, I dun­no, I’m just guess­ing. But yeah, you’re right. It’s that. That is the argu­ment, isn’t it? Why do you need to pay some­one a lot of mon­ey to run your com­pa­ny?

[00:30:25] Cameron: Hmm.

[00:30:26] Tony (2): I’m look­ing at, I’m look­ing at you, Elon

[00:30:32] Cameron: The last one I’ve got is he’s talk­ing about, um, Oma­ha and all of the, uh, suc­cess­ful investors that came out of Oma­ha, includ­ing him­self and Char­lie and I think some of the oth­er guys that are now run­ning the, the, the guy, uh, guys that are com­ing after them. I think they’re from Oma­ha orig­i­nal­ly too. He says, so what’s, what’s going on?

[00:30:54] Cameron: Is it Oma­ha’s water? Is it Oma­ha’s air? Is it some strange plan­e­tary phe­nom­e­non akin to that which has pro­duced Jamaica’s sprint­ers, Kenya’s marathon run­ners, or Rus­si­a’s chess experts? Must we wait until AI some­day yields the answer to this puz­zle? Keep an open mind. Come to Oma­ha in May. Inhale the air.

[00:31:14] Cameron: Drink the water. And say hi to Birdie and her good look­ing daugh­ters. Who knows? There is no down­side and in any event you’ll have a good time and meet a huge crowd of friend­ly peo­ple. To top things off we will have avail­able the new fourth edi­tion of Poor Char­lie’s Almanac. Pick up a copy. Char­lie’s wis­dom will improve your life as it has mine.

[00:31:34] Cameron: Giv­ing a plug for their upcom­ing annu­al meet­ing.

[00:31:37] Tony (2): You may, yeah, I guess. I guess birdie’s three daugh­ters would look. Bet­ter and bet­ter each year as the Berk­shire Hath­away shares go up. Yeah.

[00:31:47] Cameron: I imag­ine.

[00:31:50] Tony (2): Prob­a­bly about our age, Kent.

[00:31:52] Cameron: Yeah, uh, I don’t know. Yeah, maybe.

[00:31:56] Tony (2): Yeah, no, great. He was, he was, and he was say­ing it’s, now, he was say­ing that it was inter­est­ing how he and, how, he’d met Char­lie who’d grown up in Oma­ha but moved away, and then Ajit Jain who runs the insur­ance busi­ness, spent some time in Oma­ha as a kid, and then Greg Abel who is, actu­al­ly, Buf­fett, uh, Greg Abel, sor­ry, as Buf­fett, and Buf­fett came out and anoint­ed him as the the next Hath­away in this newslet­ter, which I think is the first time I’ve seen that hap­pen.

[00:32:25] Tony (2): He’s always said it’s going to be a con­tention and my wish­es are known. So he actu­al­ly named it. But Greg Abel, who’s Cana­di­an, also spent time in Oma­ha. So it’s either there’s some­thing in the water in Oma­ha or When­ev­er War­ren sees Oma­ha res­i­den­cy on the CV, he goes, must be a good bloke, I’ll hire them.

[00:32:43] Tony (2): Yeah.

[00:32:48] Cameron: or geo­graph­ic pro­fil­ing.

[00:32:51] Tony (2): Yeah, I’ve just got one or two more. Well, one more actu­al­ly, I’ll cut it back. Uh, he, War­ren says, Beyond that, we have learned, too often painful­ly, a good deal about what types of insur­ance busi­ness and what sort of peo­ple to avoid. The most impor­tant les­son is that our under­writ­ers Can be thin, fat, male, female, young, old, for­eign or domes­tic, but they can’t be opti­mists at the office, how­ev­er desir­able that qual­i­ty may gen­er­al­ly be in life.

[00:33:21] Cameron: Don’t want an opti­mist insur­ance pol­i­cy under­writer.

[00:33:23] Tony (2): Cor­rect. Yeah, which is a great, a great line, I think.

[00:33:28] Cameron: That is great. Well,

[00:33:30] Tony (2): it’s always inter­est­ing to com­pare and con­trast his insur­ance busi­ness­es to the ones that are list­ed in Aus­tralia. You know, he’s always talk­ing about you don’t write He does­n’t write busi­ness if it’s going to make a loss and be very con­ser­v­a­tive on the, you know, the pre­mi­ums.

[00:33:45] Tony (2): And I own shares in QBE and they’ve been, you know, pret­ty well man­aged recent­ly. But they still come out, all insur­ance com­pa­nies in Aus­tralia still come out from time to time and say, well, we did­n’t pro­vide enough for these cyclones in Queens­land this year or the hail­storms in wher­ev­er. Um, and you know, they use those as an excuse for some of their prof­it declines, but they nev­er come out and say, well, we were real­ly pes­simistic this year and we did­n’t write any busi­ness, which is what Berk­shire Hath­away has the lux­u­ry of doing, I guess.

[00:34:16] Cameron: we spent a lot of time on that, but we don’t know how many of these we have left. And, uh,

[00:34:21] Tony (2): good point.

[00:34:21] Cameron: want to make the most of War­ren’s wis­dom and humor when he’s Still with us.

[00:34:29] Tony (2): And hard­ly rec­om­mend if peo­ple haven’t gone back and read some of the past newslet­ters. And there are books out there which make com­pendi­ums of them. They’re real­ly, real­ly good reads.

[00:34:37] Cameron: And they’re all on the Berk­shire Hath­away web­site, too. They’re all avail­able, uh, acces­si­ble. Uh, mov­ing along, Tony, last week I men­tioned that I’d used Matt Walk­er’s regres­sion tool to run a regres­sion test start­ing from 15th of Feb­ru­ary 2022, which is when I start­ed the light port­fo­lios, and it returned a neg­a­tive 13.

[00:35:03] Cameron: 5 per­cent CAGR. You sug­gest­ed that I rerun it but with a 20 per­cent rule 1, which I did yes­ter­day, and this time it returned a neg­a­tive 12. 2 per­cent CAGR for the same peri­od. Slow, so slight­ly bet­ter. Then a 10 per­cent Rule 1, and you would also have less trad­ing costs. I actu­al­ly haven’t, uh, gone through yet and cal­cu­lat­ed how many trades there were in each of them.

[00:35:36] Cameron: I had planned to do that before we record­ed today. Did­n’t get to it, but, um, we would assume there would be less trad­ing, so you’d save a bit on that as well. But not a huge, not a huge dif­fer­ence. Um, not as huge as I might’ve expect­ed with chang­ing it from 10 per­cent to

[00:35:55] Tony (2): No, you and me both. And that was cer­tain­ly the research that the ana­lyst Ryan Reduce for me as well. Sim­i­lar sorts of CAGA, 10 or 20%, but much less trad­ing for the 20%. And I’ve been imple­ment­ing 20 per­cent in my own port­fo­lio as a tri­al. And, um, it’s get­ting sim­i­lar results. I think I, I think I’ve had three or four stocks that would have been 10 per­cent rule ones.

[00:36:18] Tony (2): Um, uh, I did­n’t sell them. And I think just recent­ly one of them became a 20 per­cent rule one, or yeah, 20%. The oth­er ones are being fluc­tu­at­ing. You know, above and below 10%. So it looks to be about the same result, but much less trad­ing. Emo­tion­al­ly, um, that might appeal to peo­ple who don’t like the idea of trad­ing a lot.

[00:36:41] Tony (2): So that’s cer­tain­ly some­thing the peo­ple who don’t like trad­ing a lot can con­sid­er. It is a real kick in the guts if you have to sell some­thing that’s gone down 20 per­cent on what you paid for it. 10 per­cent seems to be a lit­tle bit eas­i­er to stom­ach, but again, that’s just human behav­ior, I guess. So, yeah, I think it’s, um, my, it’s ear­ly days, but my gut feels it’s going to be about the same with less trad­ing.

[00:37:02] Cameron: And as you said to me in an email yes­ter­day, but you also, with the less trad­ing, you reduce your chance of find­ing your Michael Jor­dans.

[00:37:11] Tony (2): Cor­rect. Yeah, so that was the oth­er piece of analy­sis that Ryan did, um, was that, yeah, if you, if you say, I can’t remem­ber what the ratio of the trades were, but say you trade half at 20 per­cent and you do it 10%, um, that’s, you’ve got half the chance of find­ing the rock­et stock, which is going to be the one that real­ly dri­ves your port­fo­lio per­for­mance.

[00:37:31] Tony (2): Hav­ing said that, the CAGR was the same both ways. So even if you do find that rock­et stock more in a 10 per­cent port­fo­lio, you’ve got a lot more ones that weren’t as well. So it tends to even out.

[00:37:44] Cameron: Yeah, I was going to say that, well, there were no rock­et stocks that real­ly helped the 10 per­cent rule one in this instance over that two year peri­od. Um, but it, it has been a dif­fi­cult two year peri­od too. So, you know, if I played this out over five years or 10 years, which I can do with Mat­t’s tool, I can run this back over, I think his fun­da­men­tal data goes back to 2016, so I can run it over, what­ev­er that is, eight

[00:38:12] Cameron: years

[00:38:12] Tony (2): I can’t wait to get, get my hands on this. Is oth­er bugs fixed or they’re still

[00:38:18] Cameron: no, I haven’t heard from him, uh, recent­ly on this, so I’m not sure where he’s at with it, but, um, yeah, I mean, I can give it to you as is, it takes a lit­tle bit of Python knowl­edge, but, you know, you’re an old coder, you’ll be able to fig­ure it out. Any­way, very good stuff. Uh, report­ing sea­son news, Tony, uh, thank God we’re near­ly at the end of report­ing sea­son.

[00:38:45] Tony (2): It has been one where I think you said this to me a cou­ple of years ago. It seems like our port­fo­lio has changed the most in report­ing sea­son. I think it’s par­tic­u­lar­ly so with this half. Stocks are mov­ing around a lot.

[00:38:57] Cameron: I haven’t had to sell much out of the dum­my port­fo­lio, but, almost super real­ly, but just, you know, hav­ing the light, but light port­fo­lio has a, you know, sort of a big selec­tion of stocks across it, across all the dif­fer­ent port­fo­lios, but just some of the results, like, DSK, Dusk, their results came out the oth­er day and they dropped 12%.

[00:39:19] Cameron: In a day when the results came in, the results weren’t

[00:39:21] Cameron: bad, but not as good for­wards look­ing as the mar­ket want­ed. Adair’s came out yes­ter­day. And their results came out and they jumped 12%, but I saw them on the buy list, um, you know, when I did my analy­sis there on the buy list, I went and bought them and then only real­ized after I’d hit the buy but­ton that the share price was 10 per­cent high­er than it was in the buy list, which had come out like an hour ear­li­er.

[00:39:52] Cameron: And then I was like, what? What? Oh, okay. The results of it land­ed. Like, after the buy list came out yes­ter­day, the results land­ed, the share price blew up. I re ran the num­bers, um, and they were still good. There was still a buy and still would have been on the buy list. But it, you know, they spiked it with­in like a cou­ple of hours yes­ter­day morn­ing.

[00:40:14] Cameron: And I, I’d said to the light sub­scribers, you know, when we bought, when I bought DSK, which was only last week, I said, I know the results are about to come out and I’ve learned from expe­ri­ence, it can go either way. If you’re buy­ing just before results announce­ments, it can go up or it can go down, you don’t real­ly know.

[00:40:31] Cameron: DSK went against me, ADH also went against me because I bought it just after the results came out. It’s still gone up a cou­ple of points, but yeah, like there’s big shifts with these results announce­ments. Huge, in a day, shifts. It’s kind of like ice skat­ing. It’s like True Detec­tive sea­son four, walk­ing out into the ocean, like that kind of ter­ror, which we’ll talk about in after

[00:40:56] Tony (2): Yeah. That was so good.

[00:40:59] Cameron: Yeah.

[00:41:00] Tony (2): No, it is like that. Um, but you know, like I was think­ing about what do you do about that? But if you You know, one thought was, well, we should wait for new fig­ures to get into Stock Doc­tor. But then if it has gone up 12 per­cent when the results are announced, you’re not going to get the uplift.

[00:41:16] Tony (2): So,

[00:41:17] Cameron: not as much.

[00:41:17] Cameron: any­way. I’m hop­ing

[00:41:18] Tony (2): much.

[00:41:19] Cameron: will con­tin­ue to go up, but

[00:41:20] Tony (2): Yeah, yeah,

[00:41:21] Tony (2): But

[00:41:21] Cameron: if I bought Adair’s last week instead of, but I don’t think Adair’s had pos­i­tive sen­ti­ment last week, so it was­n’t on the buy list as far as I’m aware, but you know, if it had been and I’d bought it last week, it would have been hap­py days yes­ter­day.

[00:41:34] Tony (2): Yeah. So I don’t know. I mean, again, some­thing which could be regres­sion test­ed is we don’t buy. You know, on num­bers that are too old, like over six month olds or some­thing like that, and see if that makes a dif­fer­ence to the port­fo­lio per­for­mance. But it’s always been my expe­ri­ence to just use what you’ve got.

[00:41:50] Tony (2): Um, and gen­er­al­ly, like, because we’ve got to have a sen­ti­ment fil­ter as well, if a stock is going up into report­ing sea­son, chances are it’s, it, I have seen cas­es where they’ll report and then go down, but they often go up fur­ther, so some­thing’s leaked some­where.

[00:42:05] Cameron: yeah, that’s what I’m think­ing. If it’s sen­ti­men­t’s good before the results have come out, some­body who knows some­thing is buy­ing some­thing, you know. And I, yeah, my guess is that if it’s, if it’s If it’s on the buy list, it means it’s got a good track record. It’s already, it’s either got a good track record of finan­cial man­age­ment or it’s a turn, it’s a turn­around sit­u­a­tion already, which is the Dusk case.

[00:42:28] Cameron: I think it was a turn­around and you know, you expect a turn­around to keep turn­ing around, but some­times not turn­ing around enough. So they did do a good job. Again, the results were pret­ty good, but

[00:42:42] Tony (2): I just want to have a look at, I want to have a look at Dusk because I thought I read some­where that it was one of the most short­ed stocks on the share mar­ket, and if that’s the case

[00:42:53] Cameron: real­ly.

[00:42:53] Tony (2): You some­times see the shorts will start get­ting out, which will put the price up. And I’ve seen that hap­pen, um, this report­ing sea­son too.

[00:43:01] Tony (2): A cou­ple of stocks I bought before­hand, uh, went down when they report­ed, but then in the week that fol­lowed, start­ed to climb again, back to where they were before­hand. So, yeah, so, I don’t know. Stock Doc­tor reports Dusk has, nah, a fair­ly small amount of short­ing. I must be get­ting con­fused with some­one else, sor­ry.

[00:43:25] Tony (2): They did have a large short last year in 2022. It was about 3 per­cent of stock was short­ed.

[00:43:32] Cameron: Well, any­way, there you go. Some­times it goes in your favor, some­times it does­n’t go in

[00:43:37] Cameron: your favor.

[00:43:38] Tony (2): And if we could accu­rate­ly pre­dict it We’d be a lot rich­er than we are.

[00:43:43] Cameron: I also want­ed to note that one that did go in my favor, not the results nec­es­sar­i­ly, but, um, BFL, BSP Finan­cial, that I hold in a port­fo­lio, uh, announced their div­i­dends, 36. 5 cent div­i­dend. So I was hap­py about that. Uh, that’s gonna, that’s like a, it’s a big div­i­dend. The shares are trad­ing at about 6. 75.

[00:44:10] Cameron: So

[00:44:11] Tony (2): Yeah, that’s good.

[00:44:12] Cameron: is a, is a huge div­i­dend, which would be nice when it lands.

[00:44:15] Cameron: I think it goes X in, uh, uh, what did it say? 20, uh, today, it goes X today.

[00:44:21] Tony (2): And that’s, that’s anoth­er thing to raise at this time of year too, is that be care­ful of ex div­i­dend dates for stocks.

[00:44:28] Cameron: Yes.

[00:44:28] Tony (2): yeah, because they can, there’s, uh, I think the one I’m talk­ing about goes ex div­i­dend tomor­row when I do a pulled pork.

[00:44:36] Cameron: Oh, yeah. Right.

[00:44:37] Tony (2): so yeah, so if you’re doing your research, just work out whether it’s ex div­i­dend or not before you make deci­sions.

[00:44:44] Cameron: Shares will nor­mal­ly take a bit of a hit when it goes

[00:44:47] Tony (2): Yeah, yep, and as we know, add the div­i­dend back, um, before decid­ing to sell some­thing if it’s dropped below its three point trend line because of the div­i­dend going X.

[00:44:59] Cameron: We made a call when we looked at the com­modi­ties yes­ter­day that LNG is now a sell, uh, which for me meant Wood­side became a sell, which I held in my super port­fo­lio because crude oil was already a sell

[00:45:14] Tony (2): Mm hmm.

[00:45:15] Cameron: gas became a sell. So I had to let that go, I think. I lost about 3 per­cent on that, but just an FYI for any­one that owns Wood­side or any oth­er major LNG think about the impact of LNG becom­ing a sell.

[00:45:32] Tony (2): Mm hmm. Did you check the div­i­dend date for Wood­side when you did that?

[00:45:36] Cameron: I did.

[00:45:36] Tony (2): you did that? Okay.

[00:45:38] Cameron: I did. And I think it was, uh, let me see. Uh, it goes X on the 15th of March, so

[00:45:48] Tony (2): okay. Yeah, still, yeah. And again, I’m not say­ing you should, if some­thing is a sell on the com­mod­i­ty chart, you should hold it for the div­i­dend because it’s, as you say, if you’re sell­ing it for a, you’re going to sell it for a low­er price after it goes ex div­i­dend, but you get the div­i­dend, so it’s kind of swings and round­abouts.

[00:46:04] Tony (2): Hmm.

[00:46:06] Cameron: it’s down 3 per­cent already, if the com­mod­i­ty’s, um, gonna con­tin­ue to fall, it’s share price will prob­a­bly fol­low. Or the gas could turn around tomor­row, and it could jump by 10%, who the hell knows.

[00:46:22] Cameron: Uh, I saw an arti­cle I saw an arti­cle about Cathie Wood’s ARC fund this week, which was scathing.

[00:46:31] Cameron: You know, we’ve talked about Cathie Wood on and off over the years. Data shows Cathie Wood’s ARC is one of the worst funds. A new analy­sis of Mama Cathie over the past decade isn’t very favor­able. Goes on to say that, uh, her flag­ship ARC inno­va­tion ETF With 7. 7 bil­lion of assets gen­er­at­ed, a return of 36 per­cent in 2019, a whop­ping 153 per­cent in 2020, and 68 per­cent in 2023, accord­ing to Morn­ingstar.

[00:47:04] Cameron: But oth­er years haven’t been so kind to Mama Kathy, as her acolytes call her. ARK Inno­va­tion returned a neg­a­tive 32 per­cent annu­al­ized for the past three years and a mere pos­i­tive 2 per­cent for the past five years. That’s not too impres­sive com­pared with the S& P 500, which post­ed pos­i­tive returns for 10 per­cent for three years and 50 per­cent for five years.

[00:47:27] Cameron: Wood’s goal is at least 15 per­cent annu­al­ized returns over five years. To be sure, ARK Inno­va­tion’s return pro­file looks bet­ter in the long term. It began trad­ing Octo­ber 31st, per­cent annu­al­ized from then through Decem­ber 31, 2023, accord­ing to ARK. For a slight­ly dif­fer­ent peri­od The 10 years through Decem­ber 31st, 2023, the S& P 500 returned about the same amount.

[00:47:54] Cameron: Of course, Wood was tak­ing a lot more risk than the S& P 500. Um, so, you know, 12 per­cent over a 10 year peri­od, not ter­ri­ble, but again, not great. And she’s sup­posed to be one of the. You know, show ponies of tech invest­ing, uh, high risk, high growth tech invest­ing. 12 per­cent aver­age return over 10 years, uh, dur­ing the last 10 years, which has been a lot of frothy, a lot of frothy stuff going on.

[00:48:26] Cameron: Um, I mean, I don’t know how she’s done in the last two months, uh, with the AI boom that’s been going on over there in the NASDAQ, but you know, we’ve, we, we, we have peo­ple talk to us a lot. on and off about how do we take advan­tage of the tech boom and how do we ana­lyze tech stocks and high growth stocks and you know you were talk­ing about your anti QAV strat­e­gy the oth­er day and I look at Kathy Wood who is sup­pos­ed­ly the best of the best of know­ing how to do this she’s the poster girl for high tech high growth stocks if all she can get is 12 per­cent Over a very, very frothy 10 years, I’m like, what are the chances that we’re going to do any bet­ter than Kathy Wood’s going to do at pick­ing the win­ners and the losers, uh, in the high tech stakes?

[00:49:20] Tony (2): Well, you make a good point, and of course it’s 12 per­cent after her fees, so she’s been mak­ing good mon­ey, as War­ren said, she loves, loves the trade, and, um, she’s clip­ping the tick­et, so she’s mak­ing mon­ey, um, but yeah, it’s a real­ly good point, and, and the arti­cle goes on to say, uh, the, the author isn’t enam­ored with Wood’s invest­ment style, in quotes, her reliance on her instincts to con­struct a port­fo­lio is a lia­bil­i­ty.

[00:49:48] Tony (2): Ring­gold said, It’s not an invest­ment 101 port­fo­lio. The strat­e­gy nar­row­ly invests in stocks with pal­try cur­rent earn­ings, ele­vat­ed val­u­a­tions and high­ly cor­re­lat­ed stock prices, Green­wald said. Their extreme volatil­i­ty under­scores their high­ly uncer­tain futures. So to me, it’s a trad­ing stock. You know, she’s had some good years in there and she’s had some bad years in there.

[00:50:10] Tony (2): So it’s more about tim­ing if you’re going to invest in the ARK ETF than it is about long term hold.

[00:50:17] Cameron: This is bru­tal. Amy Arnott, a port­fo­lio strate­gist for the invest­ment research firm Morn­ingstar, has put togeth­er a list of the 15 mutu­al funds slash ETS that have lost the most mon­ey for share­hold­ers over the past decade. She ranked ARK Inno­va­tion at num­ber 3 on her wealth destruc­tion hit list, esti­mat­ing it destroyed 7.

[00:50:38] Cameron: 1 bil­lion of share­hold­er wealth dur­ing the peri­od. Uh,

[00:50:45] Tony (2): jibe with me when she said that, you know, the oth­er guy says that ARK got 12 per­cent for ran­dom CAGR. So I’m not sure how the math is done on those two things.

[00:50:55] Cameron: Yeah, like, I don’t know either. I don’t know what peri­od she’s look­ing at either. I think it’s prob­a­bly the same peri­od that

[00:51:02] Cameron: Morn­ingstar’s look­ing at.

[00:51:03] Tony (2): last 10 years, you’d think.

[00:51:05] Cameron: Any­way, I mean, get­ting back to my point, like, if that, you know, if that’s the best, I mean, there may be peo­ple, there are prob­a­bly peo­ple run­ning small­er funds, and she may have issues with the size of

[00:51:18] Cameron: it, you know, it might be like Berk­shire, that the big­ger you get, the

[00:51:21] Tony (2): Mm hmm. Mm

[00:51:23] Cameron: or some­thing, all that kind of stuff.

[00:51:24] Cameron: But it’s, it’s sort of dis­con­cert­ing for me to see, you know, the poster child get­ting those sorts of returns over a 10 year peri­od. I mean, our W port­fo­lio has been run­ning for 5 years and it’s, I think, like 15. 5, 16 per­cent CAGR over that peri­od. Um, it’s not 10, but, you know, it’s, I have no rea­son to believe it’ll be any worse.

[00:51:50] Cameron: I, you know, I think it’s been a dif­fi­cult cou­ple of years for Our style of invest­ing, and we’re still doing dou­ble the

[00:51:56] Tony (2): Mm hmm. And beat­ing ARK Invest­ments too. Although I think in the last five years she would have done poten­tial­ly bet­ter than what we did, but that’s just the tim­ing of it, I think.

[00:52:06] Cameron: yeah. NVIDIA, speak­ing of tech, NVIDIA results! I mean, you know, whether or not we would invest in NVIDIA, you just got­ta shake your head at this, um, their quar­ter­ly rev­enue is up 265 per­cent from a year ago, 22. 1% Bil­lion, up 22 per­cent from Q3, and up 265 per­cent from a year ago. Record quar­ter­ly data cen­ter rev­enue of 18.

[00:52:39] Cameron: 4 bil­lion, up 27 per­cent from Q3, and up 409 per­cent from a year ago. Record full year rev­enue of 60. 9 bil­lion, up 126%. That’s like, I mean, I mean, and, and, I guess the point here is that Like, these com­pa­nies, like the Mag­nif­i­cent Sev­en, aren’t start ups, they’re not, they’re not your after pays, they’re not busi­ness­es with no rev­enue, these are busi­ness­es with huge rev­enue and they’re mak­ing huge prof­its and a lot of mon­ey.

[00:53:15] Cameron: But that kind of per­for­mance, that’s real­ly, real­ly incred­i­ble.

[00:53:20] Tony (2): it is. Um, and I actu­al­ly, I was unaware of NVIDI­A’s his­to­ry, so I read that in their results, which sur­prised me that they’d been around since the nineties and, um, had a lot to do with the growth in PC ga, the PC gam­ing indus­try in the late nineties as well. So I was­n’t aware of that,

[00:53:37] Tony (2): like, yeah.

[00:53:39] Cameron: their, that’s what they’re most known for is, you know, real­ly push­ing the graph­ics pro­cess­ing units for con­sole box­es and gam­ing PCs and there’s a great, um, ani­mat­ed graph I saw on some­where, read it prob­a­bly, of Nvidi­a’s rev­enue ver­sus Intel’s rev­enue. over that peri­od of time.

[00:53:57] Cameron: And Intel was mas­sive­ly high­er than Nvidi­a’s rev­enue up until a few years ago. And then Nvidi­a’s just shot the lights out because they just focused on this one thing that end­ed up becom­ing real­ly, real­ly impor­tant to a bunch of stuff. It was, it was ini­tial­ly before AI GPUs, I mean, out­side of gam­ing became real­ly big for Bit­coin min­ing.

[00:54:22] Cameron: So, cause they, you know, they can do a lot of pro­cess­ing. A lot of pro­cess­ing pow­er. So that was their first huge bump and then when the AI, when they worked out, when Ope­nAI worked out that, um, Elon’s been push­ing this pho­to recent­ly of when Jensen Huang, the CEO of NVIDIA, deliv­ered the first GPU to Ope­nAI when it was a start­up and they all had a lit­tle cer­e­mo­ny and he donat­ed one because it was a, you know, open source thing and they all signed it and And Elon’s been push­ing the fact that NVIDIA, NVIDIA donat­ed this to sup­port this open source start­up and now Sam Alt­man’s out there try­ing to raise sev­en tril­lion dol­lars to build a com­peti­tor to NVIDIA.

[00:55:13] Tony (2): Well, why, um, what’s so spe­cial about Nvidia that Intel can’t copy its chips?

[00:55:19] Cameron: Uh, I don’t know. I just think that they’ve, they’ve spent, you know, a decade and a half focus­ing pure­ly and sole­ly on build­ing GPUs and uh, tool­ing up for that. That’s, it’s a non triv­ial exer­cise, but any­way, yeah, I

[00:55:36] Cameron: mean.

[00:55:37] Tony (2): Yeah, I guess the ques­tion faced by any­one who is think­ing about invest­ing in NVIDIA is what hap­pens from here? It’s had a great year, can it con­tin­ue to do that? And um, I mean, I tried to use his­to­ry as a guide and went back and looked at the Bread O Lat­er for its last five years on the, uh, of Stock­Graph on its, on the, in the Bread O Lat­er.

[00:55:57] Tony (2): And you know, it’s, it’s, it’s the last cou­ple of years have been fan­tas­tic. They’re almost, um, You know, ver­ti­cal in terms of its graph, but um, before that, and it cer­tain­ly over the long term had grown from noth­ing. So it, but it has had drops. So in 2022, it dropped from 326 of the high down to 121. So it’s lost, it has lost two thirds of its val­ue in the last five years at some stage.

[00:56:23] Tony (2): Of course, it’s recov­ered. It’s now much, what’s the share price now? 790 bucks or some­thing. So it’s recov­ered, you know, by six times or sev­en times since that. All Off, so if you’re a long term hold­er, great. But, um, yeah, it’s going to be a bumpy ride. Um, when these things are priced to per­fec­tion, as soon as they don’t get it, the share price retreats heav­i­ly.

[00:56:44] Cameron: But as you know, your point about Intel catch­ing up to them or Sam Alt­man going out there try­ing to raise mon­ey to build his own, Microsoft are talk­ing about build­ing their own, Tes­la’s build­ing their own, Chi­na’s build­ing stuff. It is going to be a much more, I mean, Nvidia were there at the right time in the right place with the right prod­uct to pick up on the last 18 months of AI fren­zy.

[00:57:07] Cameron: But they’re not going to occu­py that posi­tion. That hege­mo­ny that they’ve enjoyed isn’t going to last for­ev­er. You would imag­ine. I mean, it’s very rare. In busi­ness his­to­ry and in tech his­to­ry that, you know, I mean, Face­book’s man­aged to pull it off for a long time. Google’s man­aged to pull it off, Apple, Microsoft, but very, very few com­pa­nies have ever man­aged to pull off mar­ket dom­i­nance and hege­mo­ny for.

[00:57:34] Cameron: Longer than, say, five years,

[00:57:36] Tony (2): No, you’re right. Um, I guess on the flip side of that is that NVIDIA are in a great posi­tion to be able to con­tin­ue what they’re doing, sup­ply­ing GPUs to busi­ness and find some­thing else, what the next thing is after, after that. Um, and poten­tial­ly even Dis­count the GPUs they’re cur­rent­ly pro­duc­ing. So what’s the next wave is the advan­tage NVIDIA has.

[00:57:56] Tony (2): So as Intel tries to catch up, it’s catch­ing up to the cur­rent wave.

[00:58:00] Cameron: the end of human civ­i­liza­tion is the next wave.

[00:58:03] Tony (2): Yeah, maybe.

[00:58:03] Cameron: to fig­ure out how to make prof­it.

[00:58:08] Tony (2): Well, I’ve got lots of resources to do it with. So good luck to them.

[00:58:12] Cameron: Uh, just quick­ly, W Port­fo­lio, as I said, still trad­ing at about dou­ble. Uh, last week has­n’t been great for us, though. For the cur­rent finan­cial year, we were well ahead, um, of the STW a week ago. We’ve dropped back down to par­i­ty with the STW in the last week. Cou­ple of big hits, DUR. Had a big drop. The TRS had a big drop.

[00:58:37] Cameron: RMC had a big drop with not a lot of big win­ners to bal­ance it out in the dum­my port­fo­lio this week. So, you know, we’re back down to, I mean, we’re still up 9, 9 per­cent for the finan­cial year. So it’s not bad, but we’re neck and neck with the STW again now. But it has been sort of this crazy week. I mean, DUR, as I said, dropped 10 or 11 per­cent the last week.

[00:59:03] Cameron: It’s still up like 150 per­cent from where we bought it. So I’m not com­plain­ing. There’s a lot of prof­it tak­ing going on. as peo­ple are rebal­anc­ing, good luck to them. But I’m going to hang in there with it. No, I had no trades in the last week though, with the dum­my port­fo­lio yet again. You know, it’s crazy.

[00:59:22] Cameron: There’s been so lit­tle trad­ing done in the dum­my port­fo­lio over the last cou­ple of years. It’s just, you know, seems to have estab­lished itself very well and the shares are all. You know, well above, not all of them, but most of them are, you know, well above their rule one, well above their three point trend lines.

[00:59:42] Cameron: You know, occa­sion­al­ly there will be com­mod­i­ty sales, I imag­ine, although look­ing through the list, I can’t see many, you know, CAAs on there. Can’t see many com­mod­i­ty stocks on the list these days. RMC. But MLX, there’s a cou­ple. But it’s, uh, it’s inter­est­ing just how lit­tle trad­ing I have to do in the dum­my port­fo­lio.

[01:00:05] Cameron: Even in fair­ly tur­bu­lent mar­kets, it’s just sta­bi­lized. It’s just real­ly sit and hold.

[01:00:13] Tony (2): Yeah, and I found that, um, with my port­fo­lio, the trad­ing’s dropped off in the last six months. And that’s what hap­pens with port­fo­lios, as you say, they estab­lish them­selves and they get above all their sell lines and then they just, you sit and cruise with them, which is a nice place to be. Don’t,

[01:00:28] Cameron: But you know, you were say­ing with your own port­fo­lio, you had to do a lot of trad­ing over the last cou­ple of years. So I mean, and you’ve been run­ning that for 400 years. So what hap­pened there?

[01:00:44] Tony (2): tell any­one.

[01:00:46] Cameron: Well, is it a post COVID

[01:00:47] Cameron: thing? Like

[01:00:48] Tony (2): No, I think it’s an inter­est rate. It’s, I think it’s inter­est rates. I think the mar­ket was real­ly chop­py when inter­est rates were going up and they haven’t moved now for a num­ber of months and every­thing set­tled down a bit.

[01:00:59] Cameron: Well, I’m look­ing, I’m look­ing at the his­to­ry last 12 months on the WPort­fo­lio. So. I did two sales in Jan­u­ary, one sale in Decem­ber, one in Novem­ber, four, no, four, okay, five or six in Octo­ber, noth­ing in Sep­tem­ber, three in August, three or four in July, but yeah, it’s been real­ly, you know, a lot less than, you know, one a week on aver­age over the last six months. Um, very lit­tle trad­ing.

[01:01:40] Tony (2): Yeah. And I’m guess­ing Octo­ber may have been report­ing sea­son relat­ed too, which is usu­al­ly the heav­i­est time to trade stocks.

[01:01:46] Cameron: Right, yeah, could have been, don’t know, uh, let’s, let’s see what was Octo­ber, it was like, NHC, SUL, PRU, I think it was Com­mod­i­ty Stuff, actu­al­ly, oh no, they’re buy­ers, hold on, NHC, OML, OML, I’ve actu­al­ly, I was look­ing at that recent­ly, like, I’ve Bought and sold that a num­ber of times. I bought it again today. I think I had it to my super port­fo­lio today.

[01:02:08] Cameron: Um, and it’s one of those stocks that I’ve, I’ve got like a spot­ty his­to­ry with. I’ve bought it a num­ber of times and it has­n’t done well, but cur­rent­ly I hold it in a few port­fo­lios and it’s up. 20, 30 per­cent in some of those port­fo­lios. So it’s actu­al­ly, it’s one of those ones that, you know, I kind of groan when­ev­er I see it and I have to buy it.

[01:02:29] Cameron: Cause I’m like, uh, not you again. Oh Mel, my old friend. uh, this time it seems to have come good, you know? So, you know, it’s sta­bi­lized and the fun­da­men­tals kicked in and off it went. All right. What else you

[01:02:47] Cameron: got?

[01:02:48] Tony (2): I bet­ter pull pork.

[01:02:50] Cameron: Who are you pulling today, Tony?

[01:02:53] Tony (2): I’m look­ing at Vul­can Steel, VSL.

[01:02:57] Cameron: Nev­er heard of them.

[01:02:59] Tony (2): I won­der if they’d greet each oth­er in the morn­ings and go live long and pros­per.

[01:03:04] Cameron: you would always have to, that’d be part of the ini­ti­a­tion process,

[01:03:08] Tony (2): Yeah. Although it’s a Kiwi com­pa­ny so they might go, you know, live long and pros­per.

[01:03:16] Cameron: uh, have they, have they

[01:03:18] Tony (2): lis­ten­ers.

[01:03:20] Cameron: have they on the BI list?

[01:03:23] Tony (2): Yeah, they came on, they’re a new one this week, which is why I’m talk­ing about them, and they’re a rel­a­tive­ly large com­pa­ny, so they may suit a lot of lis­ten­ers. ADT is 351k per day, so it’s fair­ly large. They’re on the buy list, but I think they’re a Josephine, so they’re one to watch. And they’re also a good div­i­dend yield­er, and they’re going ex div­i­dend on the 29th of Feb­ru­ary tomor­row, so again, their price is going to be volatile after that.

[01:03:51] Cameron: And I’m look­ing back over my fan­cy his­tor­i­cal buy list sheet. This is the first time. They’ve been on the buy list at least since Sep­tem­ber 2021, which is when my his­tor­i­cal buy list start­ed, so Yeah, that’s why I’m not famil­iar with them. They’re

[01:04:07] Tony (2): Yeah, same.

[01:04:08] Cameron: the first time. Why are they show­ing up for the first time?

[01:04:11] Tony (2): Uh, well I think they’ve, uh They’ve only been list­ed for a cou­ple of years, so they’re list­ed

[01:04:16] Cameron: Ah,

[01:04:17] Cameron: okay.

[01:04:17] Tony (2): Octo­ber 22, I think. It’s a dual list­ing both in New Zealand and Aus­tralia, and they’re expand­ing pret­ty quick­ly, so they had a, they had a bad result, which is some­thing to take into account, except for oper­at­ing cash flow, which is why it’s, I think, prob­a­bly hit the buy list after their Decem­ber num­bers came through.

[01:04:38] Cameron: Did you say VSL?

[01:04:39] Tony (2): Yeah,

[01:04:41] Cameron: Not a Josephine right now, look­ing at the bread a lat­er. It’s, you know, look­ing

[01:04:46] Cameron: alright.

[01:04:47] Tony (2): Oh, okay. Sor­ry, the com­mod­i­ty, Chekap Steel, I think

[01:04:50] Cameron: Oh, sor­ry. Steel.

[01:04:52] Tony (2): my mis­take. Yep. Yeah. Yeah,

[01:04:56] Tony (2): so, yep. So, um, as I said, it’s a Kiwi com­pa­ny. It was found­ed, uh, quite a while ago, back in the 90s in Auck­land. Uh, What else can I say about it? It’s dual list­ed, um, list price two years ago was 7. 10, and the share price I’m using is 7.

[01:05:15] Tony (2): 58, so, anoth­er mate­r­i­al increase over the last two years, uh, how­ev­er since list­ing it has paid approx­i­mate­ly 2 per share in div­i­dends, so, um, the returns have been good from that side of things. Vulkan was found­ed in 1995 by a chap called Peter Wells in Auck­land. It oper­ates as a key, well they say it oper­ates as a key link in the steel val­ue chain between steel pro­duc­ers and end users.

[01:05:42] Tony (2): So basi­cal­ly they don’t smelt the stuff, they just buy it off the steel pro­duc­ers and then sell it to, uh, Build­ing sites and end users. They dis­trib­ute all kinds of steel prod­ucts, includ­ing car­bon steel, stain­less steel, engi­neer­ing steel, and recent­ly alu­mini­um as well. They dis­trib­ute steel beams to builders, they process steel plate to cus­tomer spec­i­fi­ca­tions, which involves cut­ting, fold­ing, and drilling in their fac­to­ries.

[01:06:10] Tony (2): They process steel coil, and they do the same for stain­less steel and alu­mini­um. Uh, at the time of list­ing, Vulkan oper­at­ed 29 sites across Aus­tralia and New Zealand. This is only two years ago. How­ev­er, today they oper­ate 69. So growth has been quick with a lot of acqui­si­tions. Uh, they haven’t gone so well recent­ly though.

[01:06:33] Tony (2): The Decem­ber half year results showed rev­enue was down 12 per­cent and net prof­it after tax was down a whop­ping 53%. Although oper­at­ing cash flow was up dra­mat­i­cal­ly. So I’m guess­ing there’s maybe some kind of write down in their num­bers. I haven’t had a chance to look in that much detail. To go through the num­bers though, using a share price of 7.

[01:06:56] Tony (2): 58, which is less than con­sen­sus tar­get, quite well above IV1 and IV2, which is IV1 is 2. 48, IV2 is 3. 40. We do have the cur­rent Decem­ber half results in our down­load. So that’s a good thing. Uh, div­i­dend yield. This, uh, at the moment is 4. 92%, which is prob­a­bly its low­est it’s been for a while, and the div­i­dend was down this half, I guess in line with the drop in net prof­it.

[01:07:23] Tony (2): Stock Doc­tor finan­cial health and trend is sat­is­fac­to­ry and recov­er­ing, so we like that. I don’t score ROE, but just high­light­ing the fact it’s very strong. It’s 39. 58 per­cent for this com­pa­ny, which is, which is quite amaz­ing for this type of com­pa­ny. PE is 15. 66 times, which is its high­est in the last three years, so we don’t score it on that.

[01:07:45] Tony (2): In fact, we give a neg­a­tive for that, I think, from mem­o­ry. NTA is 1. 01 per share, and net equi­ty per share is 1. 20. So I actu­al­ly thought there’d be a big­ger dif­fer­ence between NTA and net equi­ty per share, giv­en all the A lot of acqui­si­tions that they’ve made recent­ly. And, um, and there cer­tain­ly is a bit of a dif­fer­ence, but it’s not that big.

[01:08:05] Tony (2): But, um, with NEPs then it’s nowhere near the share price of 7. 58. And so we can’t score it for a stock trad­ing near­est book val­ue. Prop­Caf is good. It’s trad­ing at 4. 6 times. So that’s prob­a­bly why it’s on our buy list. Fore­cast earn­ings per share is neg­a­tive, neg­a­tive 27 per­cent So it los­es a point for that.

[01:08:27] Tony (2): And, I Again, I haven’t been able to get more than the sur­face look at what’s dri­ving that, uh, whether the ana­lysts are extrap­o­lat­ing from the poor half it’s had or whether this includes in their num­bers the poor half it’s just had, um, but it is a, it is a con­cern if they’re for, if the fore­cast is for, uh, a drop in earn­ings per share of that mag­ni­tude.

[01:08:48] Tony (2): Uh, the direc­tors hold 14 per­cent. So it scores for that. How­ev­er, the own­er founder, Peter Wells, retired from the board after it list­ed, so he retired in Octo­ber 2022. Um, how­ev­er, they have a very expe­ri­enced CEO who has been in this com­pa­ny for a long time, um, came up through the man­age­ment ranks, um, and has 40 years of expe­ri­ence in the steel indus­try over­all.

[01:09:16] Tony (2): And he owns 4 of the com­pa­ny. So, uh, and there is anoth­er board mem­ber who owns the same, so I’m going to score it as an own­er founder, even though the own­er founder has retired. Uh, sen­ti­ment, as you said before, is up, and it’s a recent, uh, three point trend line uptrend, so it scores for that. It does­n’t have con­sis­tent­ly increas­ing equi­ty, so no score for that.

[01:09:39] Tony (2): So all in all, the score, uh, for qual­i­ty is 9 out of 16, or 56%. And the QAV score is 0. 12. So, first time on the buy list, towards the bot­tom, but I just sort of high­light­ed it as being a new stock with a high ADT. Um, in my read­ings on, on review­ing this stock, I sort of formed the opin­ion that it did have a fair few risks around it, despite, um, it’s, it’s, you know, uh, good growth through acqui­si­tion recent­ly.

[01:10:07] Tony (2): Um, num­ber one risk was that the own­er founder retired, so that, even though there’s still a high amount of, um, Equi­ty amongst the direc­tors. It’s, it’s, uh, you know, we don’t have the own­er there any­more, or the founder there any­more. Uh, it’s some­thing like 60 per­cent of the steel it sells goes to the con­struc­tion indus­try.

[01:10:27] Tony (2): And you’d have to say that the con­struc­tion indus­try is slug­gish at the moment. Um, we’re see­ing low hous­ing starts. We’re see­ing Office build­ings under­uti­lized and there­fore their val­ue is drop­ping. So I don’t know if we’re going to see many sky­scrap­ers in the cities in the CBDs for a while. And we’ve seen, as we’ve high­light­ed in the last 12 months, builder bank­rupt­cies on the hous­ing front and con­struc­tion front.

[01:10:50] Tony (2): So there’s a bit of pain in the con­struc­tion indus­try. Um, that. Is pos­si­bly what’s flow­ing through to this com­pa­ny with its, um, decrease in sales last half. Uh, and also too, I have read some spec­u­la­tion that there might be a rise in inter­est rates in New Zealand next year. Their economies had, had, uh, a tough time, but it seems to be, um, doing okay at the moment and they might be putting the brakes on it again, so that would be a neg­a­tive.

[01:11:17] Tony (2): Uh, on the pos­i­tive side, um, it seems well run. It’s grow­ing quick­ly. Uh, I did think that maybe the nick­el price decreas­ing might work in its favor. So peo­ple would have read in the finan­cial press that Indone­si­a’s been flood­ing the mar­ket with cheap nick­el, which is hurt­ing the mines in Aus­tralia, but cer­tain­ly nick­el is an input into stain­less steel.

[01:11:38] Tony (2): So it may mean that there’s a, um, a mar­gin boost to this com­pa­ny. I’m not sure where nick­el fig­ures into there. Pric­ing, um, whether it goes to the smelter or whether they mix it them­selves, but um, it may low­er the price for stain­less steel, which should dri­ve sales for that com­pa­ny. So that’s Vul­can, uh, Vul­can Steel.

[01:11:58] Tony (2): I had­n’t heard of it before, but inter­est­ing to do a pull pork on it.

[01:12:03] Cameron: Thank you, Tony. Obvi­ous­ly named after Vul­canus, the Roman god of fire and vol­ca­noes. Vul­can. Vul­canos,

[01:12:18] Tony (2): I did look on the man­age­ment team pho­tos to see if any­one had pointy ears as well, but they did­n’t.

[01:12:27] Cameron: or Vul­can, the Roman god, uh, equat­ed with Hep­haes­tus, the Greek god of fire and black­smithing, who made Achilles armor. And I think, uh, from mem­o­ry, made Alexan­der the Great’s shield, some­how. I think he got passed down. Maybe he, I think he, when he went to, um, uh, Troy, he found Achilles shield, Achilles tomb in Troy.

[01:12:58] Cameron: And he said, I’ll take that and took it with him. And then he could throw it and it would come back to him. No, that’s Cap­tain Amer­i­ca. Con­fused.

[01:13:07] Tony (2): But maybe you swung by New Zealand and vis­it­ed Vul­can and said, I’d like a shield, can you roll me one off? Here are the dimen­sions.

[01:13:14] Cameron: I’d like, a shield, please. Vul­can Steel, alright, thank you for that. Uh, one ques­tion this week, this is from Geoff. Good morn­ing, Cam, I hope you’re doing well. I am, thank you, Geoff. If it’s not too late, I’d be very inter­est­ed to know TK’s per­spec­tive on los­ing too many stocks as per mar­ket index, is an arti­cle that he, uh, ref­er­enced.

[01:13:35] Cameron: He must have seen so many come and go over his invest­ing years. So this arti­cle Dat­ed 25th of Feb­ru­ary. We’re los­ing too many stocks, it says. The ASX has a prob­lem. We’ve seen an accel­er­a­tion in M& A on the ASX over the past cou­ple of weeks, many of which are cur­rent­ly a work in progress. And this year alone, we’ve seen, mar­ket cap in brack­ets, Cos­ta Group, 1.

[01:13:59] Cameron: 5 bil­lion acquired by Payne Schwartz Part­ners, Altium. Plans to accept the takeover bid from Rene­sas. CSR received a takeover bid from Saint Gob­ain. Bor­rel’s 6. Group, wants to buy all of the remain­ing shares it does not own. Adbury received a non bind­ing indica­tive takeover from CRH and Bar­row Group.

[01:14:25] Cameron: We’ve also seen some home­grown large caps merge to become even big­ger enti­ties, notably New­mont and New­crest, plus Lev­ent and Alchem. So is this a prob­lem? A few years ago, WAX, WiseTech, Xero was the acronym used to bun­dle our best and bright­est tech names. In recent years, After­pay was acquired by Block, Appen turned out to be a mas­sive turd, an appro­pri­ate adjec­tive for a stock that’s down 99 per­cent from all time highs.

[01:14:53] Cameron: And Altium is like­ly to depart the index in the com­ing months. Growth and qual­i­ty in the tech space have become increas­ing­ly scarce on the ASX. This lim­it­ed expo­sure leads the remain­ing names to trade at a sub­stan­tial pre­mi­um rel­a­tive to their off­shore peers. When it comes to build­ing stocks, there’s only a hand­ful of build­ing and con­struc­tion stocks to begin with.

[01:15:14] Cameron: If you take out CSR, Boral and Ard­bury, you’re effec­tive­ly left with either James Hardy or Brick­works. This isn’t great for investors. Our investable uni­verse con­tin­ues to shrink. And if this con­tin­ues, we might be left with either A, con­sid­er­ing ETFs, or B, con­sid­er­ing over­seas mar­kets. What do you think of that, Tony?

[01:15:35] Tony (2): Oh, I think it’s, it’s on the mon­ey. Um, the, the real issue, I mean, there’s always been takeovers and merg­ers. in any stock mar­ket as long as I’ve been around. The dif­fer­ence I think at the moment, and I guess it’s because of the ris­ing inter­est rates and chop­py mar­ket, is we haven’t had the IPOs to replace them.

[01:15:54] Tony (2): So it’s, you know, it’s, it’s a bit, there’s been churn in the mar­ket usu­al­ly, as these com­pa­nies get tak­en over and leave or merge. But we gen­er­al­ly have a whole pipeline of new stocks to replace them. And some of those will even­tu­al­ly grow to be big stocks. Like, you know, in the dot com boom, after that, the seeks and the carsales.

[01:16:14] Tony (2): com and the realestate. coms, et cetera, have grown up to replace some of the big stocks which have left. That’s not hap­pen­ing at the moment. So Vul­can’s a good exam­ple, right? Vul­can list­ed two years ago. And it’s grown to be a rea­son­able size mar­ket cap. But there’s not been many in the last two years that have list­ed.

[01:16:33] Tony (2): So. One thought is to say, yes, it’s a prob­lem, um, and Steven Mayne’s been call­ing it out too, that the ASX is shrink­ing. But the oth­er ques­tion is how long before the tap gets turned back on for IPOs, and we start to see some IPOs replace some of the com­pa­nies that are, um, are leav­ing. And that’s, it’s, it could be a chick­en and egg thing if, if, uh, big investors aren’t able to par­tic­i­pate in new floats, and their only alter­na­tive, if they’ve got mon­ey to deploy, is to make takeover bids for exist­ing com­pa­nies.

[01:17:05] Tony (2): So there’s a bit of that. And I think there’s also a bit of, uh, the fact that there are some very large super funds out there, not with, and, and also the likes of the, um, Black­Rocks and Van­guards who are just index investors who now have large posi­tions in com­pa­nies. And if you’re a super fund, for exam­ple, um, To buy the Syd­ney Air­port and take it off the ASX is a, is a very attrac­tive to you because it fits the pro­file of a low volatile sort of infra­struc­ture type stock that has pre­dictable earn­ings, sol­id busi­ness, part­ly reg­u­lat­ed, all that kind of thing.

[01:17:44] Tony (2): So it becomes attrac­tive for even super funds to take these com­pa­nies pri­vate. So that’s the thing. Black­Rock and Van­guard in some of our largest com­pa­nies are now in the top share­hold­ers. Um, I don’t know how long it’ll be. I don’t know whether it’s, you know, com­ing up soon or in the next 10 years, but cer­tain­ly they will have to start say­ing, well, we can’t keep buy­ing big­ger and big­ger stakes in some of these large com­pa­nies with­out con­sid­er­ing the alter­na­tive of tak­ing them pri­vate and just run­ning them as a pri­vate­ly owned busi­ness and not wor­ry­ing about an ASX list­ing.

[01:18:18] Tony (2): So, it’s an issue, I agree, um, I’m not sure how it’s going to work out, in the short term it’s not great, but if the IPO mar­ket picks up, which I think it will, it may right the ship again going for­ward.

[01:18:31] Cameron: So how does this affect investors like QAV investors where, you know, we’re just look­ing for under­val­ued com­pa­nies in the mar­ket? Does it mean there are less under­val­ued com­pa­nies in the mar­ket if all the mon­ey has to go some­where and it ends up flood­ing the, the stocks that we would nor­mal­ly be buy­ing?

[01:18:50] Cameron: Or does it not real­ly affect us that much because there’s always unpop­u­lar stocks that have good fun­da­men­tals?

[01:18:56] Tony (2): well, the fun­ny thing is we often ben­e­fit from these takeovers because I’d say prob­a­bly once or twice a year a stock I own is bought by these cor­po­rate raters because of the same rea­son that we like it and buy it as a list­ed share. So you know, you usu­al­ly get a 30 or so per­cent bump in the takeover pre­mi­um and that’s great and you bank it and buy some­thing else.

[01:19:16] Tony (2): So it’s actu­al­ly been a ben­e­fit I think to me in QAV. Um, there’s still 2, 200 stocks on the ASX and if half a dozen had been a QAV loss this year or what­ev­er the num­ber is, a dozen to takeovers or merg­ers. There’s still plen­ty of oth­er ones out there for us to look at.

[01:19:33] Cameron: So it does­n’t real­ly have a huge net impact on us as investors.

[01:19:37] Cameron: All

[01:19:38] Tony (2): think so. I think, um, I think if it, if it’s the start of a trend and it gets worse, we might have to think about it, but at the moment, no.

[01:19:47] Cameron: right. Thanks for that. Thanks for the ques­tion, Jeff. Well, that’s the end of the main show. We’re in After Hours now, Tony. I watched that Quentin Taran­ti­no

[01:19:57] Tony (2): Yeah.

[01:19:59] Cameron: So

[01:20:00] Cameron: good.

[01:20:00] Tony (2): Isn’t it? Yeah.

[01:20:03] Cameron: of know it all and, you know, I’ve heard most of the sto­ries. Not all of them, but most of the sto­ries before. One of my favorite bits, though, was the bit about Sal­ly Menke.

[01:20:14] Cameron: his edi­tor until she passed away in some sort of trag­ic hik­ing acci­dent 10 years ago or so, but how, uh, for all of his films, he would get the cast to say hi, Sal­ly, at the end of a take, because he’s like, Sal­ly’s sit­ting by her­self in an edit­ing suite some­where. We’re all out here hav­ing fun. Uh, and he gave, at some awards cer­e­mo­ny, he said she was his only real col­lab­o­ra­tor because the edit­ing process was a big part of it.

[01:20:45] Cameron: So yeah, there was just this reel of all of these cast from the films going, Hi Sal­ly! One of Zoe Bell strapped to the front of, uh, what­ev­er that charg­er was from Death Proof. The car slams to a halt, she’s cling­ing on for din­ner, she turns to the cam­era and goes, Hi Sal­ly! That’s so great. That brought a tear to my eye.

[01:21:05] Tony (2): that was good.

[01:21:07] Cameron: But yeah, no, just great.

[01:21:09] Tony (2): just pulling apart, I mean, I still, I think Quentin Taran­ti­no’s open­ing mono­logues and dia­logues are always the best parts of the films, usu­al­ly. And just that, hav­ing this, and just sit­ting through that, you know, Shoshana scene from Inglou­ri­ous Bas­tards again with, um, what’s his name, the Aus­tri­an?

[01:21:27] Tony (2): Actor Christoph Waltz.

[01:21:29] Cameron: Mm.

[01:21:30] Tony (2): And talk­ing, I think from mem­o­ry it was that doc­u­men­tary where he talked about his process, like it was writ­ten on the page, but he had to imag­ine how to say it, and

[01:21:39] Cameron: Mm.

[01:21:40] Tony (2): to put a big smile on his face and read it kind of light heart­ed­ly, which is the reverse of how any­one else may have picked up that script of a Nazi Jew hunter and giv­en it life.

[01:21:51] Cameron: I like some­body, one of the talk­ing heads on the doc­u­men­tary was say­ing, you know, like, Quentin’s like, oh you think you know, you think you’ve seen a war movie? All right, hold my beer. Like this is my take on it. You think you’ve seen every pos­si­ble com­bi­na­tion of Nazi, World War II, war movies? All right, let me, let me show you what I’ve got.

[01:22:11] Cameron: Like he does, like it’s just, like, and the oth­er thing that always grits me is when you hear them talk, you hear the cast and the crew talk­ing about Quentin’s rule where you can’t take a mobile phone on set, you have to leave it at check­point Char­lie on your way in. I think it was Sam Jack­son say­ing, so you have to stand around and talk to peo­ple.

[01:22:29] Cameron: And Quentin’s always play­ing loud music in between takes. It’s a par­ty atmos­phere because mak­ing movies is. fun, uh, as far as he’s con­cerned. We’re here because we love it. This is, we can’t believe we get paid to do this, and it comes through in the films. Like there’s just this sense of joy that comes through, I think, in every Taran­ti­no film.

[01:22:51] Cameron: You just know that every­body is hav­ing the time of their life, except Uma Thur­man when she had a car acci­dent

[01:22:59] Tony (2): right, yeah,

[01:23:01] Cameron: which was ter­ri­ble.

[01:23:02] Cameron: Tragedy.

[01:23:03] Tony (2): they showed the film clip from that. It was pret­ty hor­rif­ic, was­n’t it?

[01:23:06] Cameron: I’d nev­er seen before. Yeah, it’s hor­ri­fy­ing. Uh, that was that and the Har­vey Wein­stein seg­ment, you know, kind of cou­ple of down points in the whole thing, but I’m glad they put it in there.

[01:23:17] Cameron: That’s the real deal. And Quentin’s cer­tain­ly not, um, you know, with­out hav­ing made mis­takes and flaws and that kind of stuff. I think those are the two big ones, but to which, to his cred­it, he’s tak­en on the chin and very, very pub­licly say­ing, yeah, I, those are the. Great­est, you know, tragedy, mis­takes of my life.

[01:23:38] Cameron: And, you know, I’ll nev­er, I’ll nev­er real­ly get over it. You know, that I let those things hap­pen any­way. Uh, yeah, that was great. And, uh, True Detec­tive Night Coun­try.

[01:23:52] Tony (2): Well, that was top of my list as well.

[01:23:54] Cameron: I haven’t seen the finale yet, which I think came out this week. You’ve seen the final episode? Uh, we’re, we’re up to the one before that.

[01:24:01] Cameron: Yeah.

[01:24:02] Tony (2): I think it might have come out last week because I watched it on the week­end.

[01:24:05] Cameron: Oh, okay. Well, we’re, we’re one behind then.

[01:24:08] Tony (2): Okay. Real­ly, real­ly, real­ly good. And a good end­ing. Great end­ing. Yep.

[01:24:16] Cameron: like the super­nat­ur­al aspect of it is kind of, I’m like, yeah, but I’m, I’m kind of going along with it like so far. It’s, it’s not too sort of woo woo y, it’s a lit­tle bit X Files y, but um,

[01:24:31] Cameron: Yeah, I’m

[01:24:31] Tony (2): a bit Twin Peaks y is how

[01:24:33] Cameron: Twin Peaks y?

[01:24:34] Cameron: Yeah,

[01:24:34] Tony (2): And just the whole set­ting, you know, like every sort of scene starts with day one of night time. Day two of night­time, day three of night­time. It just real­ly drags you into what it must be like to live in that place where it’s dark for months.

[01:24:50] Tony (2): You know, it’s, it’s cold, it’s, it’s snow­ing all the time. The lakes are frozen, the ocean’s frozen. If you walk too far, you’re gonna fall in all that stuff. Yeah.

[01:25:01] Cameron: Yeah, um, have I ever told you about my mate, the com­ic book artist who did 30 Days of Night,

[01:25:10] Cameron: the

[01:25:11] Tony (2): You have men­tioned it. Yeah.

[01:25:13] Cameron: He’s been on, I’ve had him on

[01:25:15] Tony (2): yeah.

[01:25:16] Cameron: from time to time, Ben Tem­ple Smith, he’s from Perth orig­i­nal­ly, lived in the US now for years, I’ve actu­al­ly the, I’ve got a big, um, com­mis­sioned art­work that he did for me for the Cae­sar show up on my wall in my office.

[01:25:29] Cameron: It’s Julius Cae­sar as a vam­pire, because we used to joke about how Cae­sar was a mor­tal. Uh, yeah, so he, the, the, the com­ic that he became famous for was set in Alas­ka. It was called 30 Days of Night. He just did the art for it. He did­n’t do the words, which got turned into a film at some point with

[01:25:45] Tony (2): Mm hmm.

[01:25:46] Cameron: in it, Melis­sa George, I think.

[01:25:49] Cameron: Um, but yeah, it real­ly cap­tured that as well. Just 30 days of pret­ty much con­stant dark­ness. Must be real­ly weird to live

[01:25:59] Cameron: through.

[01:25:59] Tony (2): Yeah. And the act­ing, it’s just bril­liant. Jodie Fos­ter, the Native Amer­i­cans, it’s, it’s just bril­liant. Every­thing’s so good about it.

[01:26:08] Cameron: yeah, just real­ly, real­ly well done. Uh, we fin­ished Far­go too this week, the lat­est sea­son of that, which we real­ly like with Juno Tem­ple and Jon Hamm,

[01:26:19] Tony (2): Yeah, I’ve got to watch

[01:26:20] Cameron: a few. Also real­ly good. As I think I said to you a cou­ple of weeks ago, I think best thing I’ve seen John Ham­mond since Mad Men. Just real­ly dark, vio­lent, um, misog­y­nis­tic, wife beat­er, fun­da­men­tal­ist, good old boy, um, who’s, you know, sort of lib­er­tar­i­an, repub­li­can, trumpian kind of dude on his ranch as the sher­iff run­ning things.

[01:26:52] Cameron: Just real­ly good. Um, Dark, real­ly dark.

[01:26:57] Tony (2): And is it, is it a bit like True Detec­tive? Can you watch the cur­rent series with­out going back to the start in series one?

[01:27:03] Cameron: Oh yeah, that’s the same with every sea­son of Far­go. They do exact­ly the same thing as True Detec­tives. So each sea­son is a stand alone mini

[01:27:11] Cameron: series, basi­cal­ly.

[01:27:13] Tony (2): Yeah. Uh, Jen and I watched Salt­burn on the week­end. Have you seen that?

[01:27:18] Cameron: I think I’ve heard of it, what is it?

[01:27:20] Tony (2): So it’s a movie. It’s a British movie. Stars, um, what’s his name? Kee­gan, the Irish actor who was in Ban­shees of Inniskir­ran. Inniskillin.

[01:27:30] Cameron: Kee­gan?

[01:27:31] Tony (2): Yes, Bar­ry Kee­gan. He’s a, he’s a great, great actor in it. It’s, um, you know, it’s a bit Brideshead. It’s, uh, like a Kings­ley Amis nov­el. So this sort of, you know, kid with, from a poor back­ground goes to Oxford or Cam­bridge or whichev­er uni­ver­si­ty on a schol­ar­ship.

[01:27:49] Tony (2): Her friends, one of the rich kids gets invit­ed back for the sum­mer break to stay at his cas­tle. And, yeah, it’s sort of, It’s good up to that point and then things just take dark turn after dark turn after dark turn after dark turn and you just go wow at the end, it’s like, it real­ly comes back to you and you think about it a lot after­wards, but, um, yeah, I found it real­ly good, good act­ing, Richard E.

[01:28:14] Tony (2): Grant’s in it, Rosamund Pike is in it, um,

[01:28:18] Cameron: Cary Mul­li­gan, too, I

[01:28:19] Cameron: see.

[01:28:20] Tony (2): yep, just the small part, but yeah, she was in it, so yeah, so I real­ly enjoyed it, it, um, yeah, very, very thought pro­vok­ing,

[01:28:28] Cameron: Rhys Shear­smith is in it, too. God, I haven’t seen him for years. Did you ever watch The League of Gen­tle­men?

[01:28:34] Tony (2): no,

[01:28:36] Cameron: Oh, man, that was one of my favorite shows, like ear­ly, ear­ly 2000s. It was him, uh, Mark Gad­dis, who end­ed up doing the Sher­lock series and he’s done, um, some Doc­tor Who stuff as well as a writer and an actor in Sher­lock.

[01:28:55] Cameron: He played, um, Sher­lock­’s broth­er, uh, as well as was one of the writ­ers and pro­duc­ers on Sher­lock. But it’s, it’s this, the League of Gen­tle­men is this series. There’s anoth­er guy too, Steve Penel­man. It’s these three guys basi­cal­ly. And they play a range of char­ac­ters, but it’s about this small lit­tle fic­tion­al town in North­ern Eng­land where they play all of the res­i­dents.

[01:29:14] Cameron: So they’re all these, you know, real­ly creepy char­ac­ters. And it’s about like tourists will come to this lit­tle town. and then dis­ap­pear and they’re meet­ing along the way all of these real­ly weird, inbred, uh, freaky, small town char­ac­ters and I think from mem­o­ry the tourists were end­ing up in the meat pies that the town was eat­ing and the butch­ers but It’s a local town for local peo­ple, kind of thing.

[01:29:46] Cameron: Any­way, he was one of those guys, real­ly good. He also played a char­ac­ter in one of the lat­er sea­sons who was a gyp­sy, who had a line that I use on Ray all of the time, I got the clip, he’s like, he was this trav­el­ing, like, gyp­sy guy that had a bunch of wives and he would, you know, sort of just invade some­body’s house and say to the wife, you’re my wife now.

[01:30:10] Cameron: And it was, yeah, he had to be there. Good show.

[01:30:13] Tony (2): Okay, I’ll check it

[01:30:13] Cameron: Real­ly, real­ly dark, dark, real­ly dark humour. I lis­tened to The Clash. I lis­tened to a lot of Paul Weller. I lis­tened to a lot of Clash this week. Um, real­ly enjoy­ing it. Was it Fat Pop?

[01:30:27] Cameron: Is that

[01:30:28] Tony (2): yep, that was the last Paul Weller album. Yeah. Good.

[01:30:32] Cameron: enjoy­ing that. And was the Clash album you told me about?

[01:30:38] Cameron: I lis­tened to, I lis­tened to San­din­ista. And there was anoth­er one too, that I lis­tened to

[01:30:43] Tony (2): Com­bat Rock.

[01:30:45] Cameron: Might’ve been. But real­ly, yeah, dug it all, like, whole new vis­tas of explo­ration oppor­tu­ni­ties for me and that, so I appre­ci­ate that. Real­ly

[01:30:54] Cameron: good.

[01:30:54] Tony (2): Oh, good. I’m glad. Yeah. The Mescaleros are good. Paul Weller’s about to release a new album called 66. It’s his first sin­gle dropped last night. I was lis­ten­ing to it last night.

[01:31:07] Cameron: Mmm, there you go.

[01:31:09] Tony (2): Yeah.

[01:31:10] Cameron: That was good. Um, I’ve been read­ing the Upan­ishads. You ever read the Upan­ishads,

[01:31:15] Cameron: Tony?

[01:31:16] Tony (2): I have not.

[01:31:17] Cameron: You should read the Upan­ishads. It’s good stuff. Prob­a­bly, they reck­on they were writ­ten sort of between, I don’t know, 1500 and 800 BCE. Um, depend­ing on which one’s a col­lec­tion of, of Uh, writ­ings, but sort of the, uh, some of the old­est, uh, philo­soph­i­cal writ­ings around and sort of the basis of non dual­i­ty phi­los­o­phy that end­ed up becom­ing Advai­ta Vedan­ta, and then Chan and Zen, and they all go back to the Upan­ishads.

[01:31:49] Cameron: So they were writ­ing about, uh. non dual­i­ty stuff, you know, 3, 000 years ago and it sur­vived. It’s also the basis of sort of Hin­duism, the move from the Vedic reli­gion to the Hin­du reli­gion sort of start­ed with the Upan­ishads, but it’s good stuff. Yeah. Some of it’s, some of it’s wonky, but a lot of it’s, uh.

[01:32:10] Cameron: Real­ly, real­ly good stuff. I real­ly enjoyed it. Just talk­ing about all the stuff that I talk about in Three Illu­sions, you know,

[01:32:17] Tony (2): Yeah.

[01:32:18] Cameron: the, the one­ness of all things and all that kind of stuff is good. Yeah,

[01:32:24] Tony (2): I mean, I’ve been think­ing about that since we spoke about it last week and it’s, sci­ence is com­ing to those, or has come to those con­clu­sions as well. So, was there some­thing sci­en­tif­ic at the start of all this? Before the Indo Pan­ish ads were writ­ten, or what­ev­er, that some­one had an inkling of?

[01:32:42] Tony (2): How did they come up with the idea to write this stuff down and start believ­ing it and pass­ing it down?

[01:32:50] Cameron: that’s, that’s a great ques­tion. And I think, you know, when I learned about this stuff. Um, from Bob, Sailor Bob, when I was 19 or 20, there was no sci­ence in his approach to it. He had learned it from his guru, Nis­ar­ga­dat­ta Maharaj in India in the 70s. Nis­ar­ga­dat­ta comes from a long line of, you know, Advai­ta sort of gurus who passed it on.

[01:33:16] Cameron: And which I guess is exact­ly the same approach that had been hand­ed down for thou­sands of years, which was an approach of, you know, I guess a med­i­ta­tion. approach. Um, you know, the way that I learned it from Bob was, he said, just ask your­self the ques­tion, what am I? And just stick with that. Just keep ask­ing your­self, what am I?

[01:33:41] Cameron: And so I spent pret­ty much every spare minute for a year ask­ing myself, well, what am I? Am I This body? Well, if I lose a fin­ger, am I not me? No. If I lost a leg, would I be not me? No. If I lost both legs and both arms, would I be not me? No. My body changes all the time too, and yet I still feel like I’m me, so Maybe I’m my brain, but my brain changes.

[01:34:10] Cameron: Am I still me? Am I the same per­son? Do I feel like I was the same per­son I was 10 years ago? Yeah, although I’ve grown and devel­oped a lit­tle bit, but I’m still inher­ent­ly me. So what is this thing that I think is me? Is it my thoughts? Is it my mem­o­ries? Well, I lose mem­o­ries and I get new mem­o­ries, but I still feel like I’m inher­ent­ly me.

[01:34:32] Cameron: So, you know, what is it that I think? is me. What can I point at and say, this is me. And after spend­ing a year doing that, I could­n’t come up with an answer. could­n’t, I could­n’t find

[01:34:48] Cameron: any­thing that was unchange­able that I thought I could say was defin­i­tive­ly me. So if I can’t fig­ure out what I am, and yet I exist, what.

[01:35:04] Cameron: Am I? Is this idea of me as a sep­a­rate enti­ty just a con­cept, just a con­struct? And if so, how flu­id is that con­struct and what does that mean? And then I sort of, you start to real­ize that, well the thoughts just appear in my con­scious­ness. Like I don’t think I’m gonna think a thought, the thoughts just appear in my aware­ness.

[01:35:30] Cameron: But then every­thing just appears in my aware­ness. The walls, the doors, the table. How are they intrin­si­cal­ly dif­fer­ent from my thoughts? How are they intrin­si­cal­ly dif­fer­ent from my dream state? When I dream there are peo­ple and walls and build­ings and cars and they seem real and, you know, sol­id and I move about and the peo­ple talk to me and events hap­pen and I have hap­py moments that scare me.

[01:35:57] Cameron: So how is that intrin­si­cal­ly dif­fer­ent from the wak­ing state? And you just start to Unpick it and unrav­el it. And grad­u­al­ly I came to the con I came to the con­clu­sion that it’s all just a men­tal con­struct. Every­thing is a men­tal con­struct, includ­ing the idea of a men­tal con­struct and a brain hav­ing a

[01:36:16] Tony (2): ha ha. Yeah,

[01:36:17] Cameron: exists in the men­tal con­struct.

[01:36:20] Cameron: And then being the kind of, you know, grow­ing up with Carl Sagan, I was­n’t con­tent with that. I was like, well, it appears to me that this is just all a sen­so­ry illu­sion and cre­ation of my brain. What does sci­ence have to say? So then I just start­ed read­ing books on quan­tum physics, and physics, and And then real­ized over 10 or 20 years of read­ing sci­ence that these guys seem to be say­ing pret­ty much the same thing.

[01:36:53] Cameron: Every­thing is just a wave. And it’s a prob­a­bil­i­ty, and real­ly, there is no such thing as mate­r­i­al real­i­ty, that is a con­struc­tion of my sens­es, you know, it’s an illu­sion that my brain is cre­at­ing based on the lim­it­ed data set that my sens­es can per­ceive, but under­neath that, there’s this whole oth­er thing going on that we can see with instru­ments, and we can tell from sci­ence and math­e­mat­ics, but our human sens­es Unaware of that, and I was like, oh shit, look at that, the sci­en­tists are say­ing the same thing that I worked out with my brain just by ded­i­cat­ing myself to break­ing it apart and analysing it over the course of a year or two, so.

[01:37:39] Cameron: I assume these guys, well that’s, and that’s in fact what they say in the Upan­ishads is, you know, you get to this real­i­sa­tion by hav­ing a teacher who can point you in the right direc­tion, a good teacher, and then through med­i­ta­tion and enquiry. You know, that’s always been the basis of it. And I guess the human expe­ri­ence on this thing has­n’t changed much in 3000 years.

[01:37:58] Cameron: If you real­ly start to like, uh, one of the Upan­ishads says there are four lev­els or stages of con­scious­ness. The one is where you just look­ing out­wards. The first is where you’re look­ing out­wards and you take every­thing as being

[01:38:14] Cameron: real.

[01:38:15] Tony (2): Mm hmm.

[01:38:16] Cameron: The sec­ond is the dream state. Where, you know, you are look­ing inwards, every­thing is hap­pen­ing inside your dream.

[01:38:24] Cameron: The third is deep sleep, where there is no dream and no exter­nal real­i­ty, and yet you still exist, you’re still con­scious at some lev­el. And the fourth is where you inte­grate the three. Um, where you start to, you know, I guess decon­struct what’s going on in those three and reach your own con­clu­sions about what’s real­ly hap­pen­ing.

[01:38:51] Cameron: So they kind of knew that 3, 000 years ago when they were teach­ing that and writ­ing it down and um, and then you go and read the same thing in Chan Bud­dhism and you read the same thing in Sto­icism and Epi­cure­anism and,

[01:39:04] Tony (2): Well, that’s what I was going to say. You read about it in West­ern phi­los­o­phy as well, that I think there­fore I am, and they can’t. And, and, you know, philoso­phers for a while thought the, the mind lived in the heart and it lived in the liv­er and the spleen and all dif­fer­ent parts on the body. And, and, uh, and then, you know, I don’t know, when it was the mid­dle of last cen­tu­ry, there was a thing called the mind brain schism in phi­los­o­phy, where some Aus­tralians said, you know, we may think we are, But actu­al­ly we have this thing called the brain and it’s very, it’s very dif­fer­ent to the mind and one’s not the oth­er.

[01:39:40] Tony (2): And so yeah, your mind may not reside any­where. So yeah, it’s, and it’s, and then there’s also the sci­en­tif­ic approach to it. So it’s inter­est­ing how those three ways of think­ing about things fol­low­ing, I guess, an inquir­ing method­ol­o­gy. Get to the same result.

[01:39:59] Cameron: Yeah. I mean, because at the end of the day, there is only one result. If you, if you do a seri­ous lev­el of inquiry into it, you’re going to come to the same con­clu­sion that, um, you know, the way that Bob taught, sort of told me the sto­ry when I first got around him, he said, you know, when you’re about to When we’re about 18 months or two years of age, and our brain starts com­ing online, you get told, you’re a lit­tle boy, your name is Cameron, you can con­trol what you do, you’re in con­trol of your behav­ior, you’re in con­trol of your actions, you are sep­a­rate from every­thing else.

[01:40:34] Cameron: This is Con­di­tioned on you, imprint­ed on you from 18 months, 2 years of age, and then for the rest of your life, you just build on top of that, you just believe that to be true, and you spend the rest of your life build­ing con­structs with that as the basis, the basic con­struct is that I am sep­a­rate, I am inde­pen­dent, and you nev­er ques­tion it until you come up against some­body like Bob who goes, Are you though?

[01:41:02] Cameron: Have you ever real­ly, have you ever real­ly looked at that? Have you ever real­ly exam­ined that? And ini­tial­ly when some­body says it to you, you’re like, well of course I’m me, of course I’m, you know, that’s a stu­pid ques­tion, that’s ridicu­lous. And, you know, in my case, I was just real­ly, real­ly mis­er­able and depressed and, you know, full of anger and resent­ment and anx­i­ety and, uh, new­ly sober and had noth­ing to lose by Tak­ing it seri­ous­ly and look­ing at it, you know, I fig­ured, well, he seems to think he knows what he’s talk­ing about.

[01:41:40] Cameron: Oh, I guess I’ll go and check this out for a while. And, but yeah, I think for most peo­ple, you know, they nev­er real­ly have rea­son to

[01:41:50] Tony (2): No, I was just gonna,

[01:41:51] Cameron: think

[01:41:51] Cameron: about it, you know?

[01:41:52] Tony (2): well, I was gonna make that point. It’s, it does seem to be a com­mon fact that some­times peo­ple only con­sid­er these things when they’re going through a hard time. And they’re ques­tion­ing every­thing. So

[01:42:02] Cameron: Oth­er­wise, why would you both­er?

[01:42:04] Tony (2): evo­lu­tion­ar­i­ly, the illu­sions are there for a rea­son, right? To let you cruise through life and not wor­ry about them.

[01:42:09] Tony (2): Yeah.

[01:42:10] Cameron: Yeah, exact­ly. Yeah, and, and, but the flip side is, you know, I, I think that the illu­sion cre­ates most of peo­ple’s unhap­pi­ness. You know, we live in a world where peo­ple are suf­fer­ing from very high rates of anx­i­ety and depres­sion and fear and resent­ment and anger and wor­ry and lone­li­ness and all that kind of stuff.

[01:42:30] Cameron: We’re like this epi­dem­ic, if you lis­ten to psy­chol­o­gists and psy­chi­a­trists out there in the West­ern world in par­tic­u­lar. And I think it is the illu­sion that is the root cause of all of those things.

[01:42:43] Tony (2): I am unhap­py. I am sad. I am griev­ing. I am lost. Yeah.

[01:42:48] Cameron: And I did this and I have guilt or some­body did this to me and they hurt me, you know, or I’m wor­ried about what will hap­pen tomor­row and what will hap­pen if Trump becomes pres­i­dent and what will hap­pen if I lose my job and what will hap­pen if this or that. You, you build all of these con­structs around the idea that you are a sep­a­rate enti­ty from the rest of the uni­verse.

[01:43:13] Cameron: Where­as, if you go and read Ein­stein and he says the future and the past are all, uh, already hap­pened, you know. The, so if the future’s already hap­pened, what’s the point in wor­ry­ing about it? Like, it’s already hap­pened accord­ing to Ein­stein, so, you know,

[01:43:31] Cameron: it Is Is

[01:43:34] Tony (2): Will hap­pen. Yeah, it’s, yeah.

[01:43:36] Cameron: So as soon

[01:43:36] Tony (2): was, that was a turn­ing, that was a turn­ing point for me read­ing Ein­stein. As soon as I, as soon as that sunk in, it did­n’t sink in straight away, but as soon as that thought sunk in, it’s like, what’s the wor­ry? It’s, there’s no use in me wor­ry­ing.

[01:43:54] Cameron: wor­ry if you

[01:43:55] Cameron: want,

[01:43:55] Tony (2): Yeah. actu­al­ly hin­ders does­n’t make it bet­ter.

[01:43:59] Cameron: well, it’s not as enjoy­able way of liv­ing, like the, for me any­way, the more enjoy­able way of liv­ing is just. Enjoy­ing the moment for as it presents itself. And if some­thing bad hap­pens tomor­row, I’ll deal with it when it hap­pens tomor­row. But again, you know, bad is a sub­jec­tive judg­ment, right? I always talk about, you know, with friends, I talk about extreme accep­tance, patho­log­i­cal lev­els, lev­els of accep­tance.

[01:44:25] Cameron: Like Shake­speare said, noth­ing is good or bad, but think­ing makes it so, you know, Hor­a­tio, or I think it was to Ham­let actu­al­ly. Um, so. Yeah, you know, we put a label, we put a judge­ment on things, you know what I always tell peo­ple is that the biggest cause of most peo­ple’s unhap­pi­ness is the dif­fer­en­tial between the way things are and the way things peo­ple think they should be.

[01:44:51] Tony (2): ooh. Frus­tra­tion.

[01:44:52] Cameron: I think it, I think you should have done some­thing dif­fer­ent than what you did, there­fore I’m unhap­py, angry, what­ev­er it is, rather than things hap­pen exact­ly the way that they hap­pen because the laws of physics are play­ing out on the lev­el of atoms, so, it’s point­less, like being angry at the weath­er for rain­ing, like, okay,

[01:45:12] Tony (2): I, I, which I do,

[01:45:13] Cameron: it, but, I get angry at the heat and

[01:45:17] Cameron: the

[01:45:17] Tony (2): Yeah. To you. But Yeah. But no, you’re right. I mean, I, I pull myself up because I go, oh, that, you know, that fuck­ing friend of mine? What, what are the fuck are they doing that for? And I have to, and I get all worked up. And it’s like they don’t have to real­ize that they can do what they like. It’s like, it’s, it’s up to them.

[01:45:33] Tony (2): It’s not up to me. And, and my, it’s my frus­tra­tion that’s get­ting upset because I want to have good friends who, you know, reach a cer­tain stan­dard, but that’s my prob­lem. It’s not their prob­lem.

[01:45:43] Cameron: It’s just, are you talk­ing about me here?

[01:45:45] Cameron: It’s

[01:45:45] Tony (2): I am not. No, no, I’m talk­ing about the par­tic­u­lar prob­lem I’m hav­ing with a par­tic­u­lar friend at the moment. And, you know, from their point of view, there’s no prob­lem.

[01:45:53] Tony (2): It’s, it’s only me going, why are you doing that?

[01:45:56] Tony (2): Yeah.

[01:45:56] Cameron: but it’s also like, if, if, if Chris­sy does some­thing that I’m not hap­py with, or, or anoth­er per­son or some­one I’m in, you know, a sales rep or, you know, some­one I’m doing busi­ness with, real­iz­ing that they have no con­trol over what they do either. So if all of their. Actions based on thoughts and they have no con­trol over the thoughts because it’s just chem­istry play­ing out in their brain.

[01:46:20] Cameron: They’re doing the only thing that they can pos­si­bly do, so what’s the point of being angry that they did that thing? That was the only thing that they could Pos­si­bly do in that moment. So being angry about it or unhap­py about it or resent­ful about it is kind of just like there’s no log­i­cal frame­work for anger, resent­ment, guilt, anx­i­ety, when you stop believ­ing in sep­a­rate enti­ties that have free will.

[01:46:48] Cameron: I mean, the con­struct dis­ap­pears and those things just, I mean,

[01:46:55] Tony (2): Well, the

[01:46:55] Cameron: angry at San­ta for some­thing. Like, if you don’t believe in San­ta, you can’t real­ly be angry at San­ta for not bring­ing you the present that you want­ed, right? It makes no sense.

[01:47:04] Tony (2): Right. Yeah, the oth­er eye open­er for me was Break­fast of Cham­pi­ons, the Kurt Von­negut book, where he just inces­sant­ly goes, Kil­go­re, Kil­go­re Trout is a, is just the mass of the chem­i­cals in his brains. And he decid­ed, the chem­i­cals in his brains decid­ed to take a walk today. And just the whole book is that from that kind of per­spec­tive.

[01:47:24] Tony (2): Yeah.

[01:47:24] Cameron: I’ve nev­er real­ly read about Bon­negut’s phi­los­o­phy, but he must have got this

[01:47:28] Cameron: stuff because

[01:47:28] Tony (2): Oh,

[01:47:29] Cameron: it into the book. It was very, very delib­er­ate­ly part of the phi­los­o­phy of the char­ac­ter,

[01:47:35] Cameron: right?

[01:47:36] Tony (2): yeah, no, exact­ly, yeah,

[01:47:38] Cameron: in fact, the anal­o­gy I’ve used for decades before I even knew you was about adop­tion. Like, because peo­ple would say to me when I I, I, I, I see what you’re say­ing and I, and I can’t dis­agree, but then I for­get and I would like, well, if you real­ly take it on board, it’s like fig­ur­ing, it’s like dis­cov­er­ing that you’re adopt­ed or dis­cov­er­ing that you’re gay.

[01:48:00] Cameron: I don’t think you for­get. Uh, when, when there’s a mas­sive fun­da­men­tal shift in how you iden­ti­fy your­self,

[01:48:09] Tony (2): hmm,

[01:48:10] Cameron: that does­n’t, I can imag­ine, I mean, nei­ther of those things has hap­pened to me, yet, um, I, I, I’m still adamant that I’m not relat­ed to my father, but my moth­er denies it, but, you know, I don’t think I’m relat­ed to her either, but she denies that as well.

[01:48:25] Cameron: Um, she says the fact that you look exact­ly like your father should be a tip

[01:48:30] Tony (2): ha, ha, ha,

[01:48:33] Cameron: Um, but you know, it’s, once I real­ly real­ized that I could not pos­si­bly exist in the way that I’ve pre­vi­ous­ly thought I did, and that free will can’t pos­si­bly exist based on my under­stand­ing of physics and sci­ence, then I can’t for­get that.

[01:48:52] Cameron: Like, not, you know, in the moment I might get angry or I might react to some­thing that Chris­sy does or Fox does or some­body does, But, you know, very, very quick­ly, I remem­ber, well, they just did that because they had to do it, like, move on, you know? What’s next? As, uh, Pres­i­dent Bartlett would

[01:49:10] Cameron: say. That’s

[01:49:11] Tony (2): yes, ha, ha,

[01:49:12] Cameron: Right, what’s next?

[01:49:14] Tony (2): yeah, yeah, I agree, no, you’re right,

[01:49:18] Cameron: Uh, we’re going to see Fleet Fox­es in the Nation­al tomor­row night. Um, nei­ther band I’m inter­est­ed in at all, but, uh, they’re two of Chris­sy’s favorite

[01:49:25] Cameron: bands, so

[01:49:26] Tony (2): I love the nation­al,

[01:49:28] Cameron: 2U!

[01:49:28] Tony (2): oh, yeah.

[01:49:30] Cameron: I’m wor­ried about how I’m going to stay awake dur­ing the whole thing because I, I, when I bought tick­ets for Chris­sy’s birth­day, I start­ed lis­ten­ing to the music and it’s all this real­ly kind of drone y, David Lynch y sound­track kind of, which is love­ly.

[01:49:47] Cameron: Yeah, but I don’t think I’m going to stay awake for two and a half hours at River­stage. I’m going to take a pil­low.

[01:49:54] Tony (2): saw them in Toron­to and I real­ly enjoyed it, but yeah, they’re not, they’re not an enter­tain­ing band. I think the lead singer spent the whole time look­ing at his shoes, but, um, and, but, oh, yeah, I love, I love their

[01:50:05] Tony (2): music. Yeah.

[01:50:06] Cameron: Yeah,

[01:50:07] Cameron: there you go.

[01:50:08] Tony (2): Blood, Blood Buzz Ohio is one of my favorite tracks.

[01:50:12] Cameron: Don’t

[01:50:12] Tony (2): One of

[01:50:12] Tony (2): theirs.

[01:50:13] Cameron: my head. I tried lis­ten­ing to it, I just could­n’t. Stay awake. Um,

[01:50:19] Cameron: but,

[01:50:19] Tony (2): taste any­way. Oh,

[01:50:22] Cameron: for us to go see Slater Kin­ney again. Do you know Sleater Kin­ney?

[01:50:26] Tony (2): no, I’ve heard the name.

[01:50:30] Cameron: All girl Seat­tle grunge band out of the

[01:50:33] Tony (2): Ah, okay.

[01:50:34] Cameron: Um, the Car­rie Brown­stein was one of the founders. Do you ever watch Port­landia?

[01:50:39] Tony (2): No.

[01:50:41] Cameron: Oh, okay. Her and Fred Armisen did Port­landia, which was a very fun­ny, um, sketch com­e­dy series, but she’s one of the singer, lead gui­tarist, and is the singer for the band. And they reformed a few years ago.

[01:50:52] Cameron: We saw them here in Bris­bane about. Uh, I don’t know, six, sev­en, eight years ago. And I think the best con­cert I’ve ever seen. Just, yeah,

[01:51:03] Cameron: like

[01:51:04] Tony (2): I’ll look them up.

[01:51:05] Cameron: punk, girl, girl punk. Um, Car­rie Brown­stein’s a phe­nom­e­nal gui­tarist. Like every­thing she plays sounds like it should­n’t work. It’s just like weird. A lot of aton­al lit­tle riffs and stuff and two like sort of scream­ing women.

[01:51:24] Cameron: Um, but yeah, we just loved it and they’re com­ing back for the first time. We’re so pumped. Uh, real­ly just dif­fer­ent, you know, girl punk, some­thing about Chicks and punk, man, that’s just works. Angry women. I like angry women bands.

[01:51:44] Tony (2): Yeah,

[01:51:45] Cameron: tomor­row night I’m, uh, mod­er­at­ing the Q& A at a pre­view screen­ing of Torsten’s new film, pro­duc­er from our Mar­ket­ing the Mes­si­ah doc­u­men­tary, now has two chil­dren under the age of two, uh, remar­ried, liv­ing in Lon­don, I think.

[01:52:02] Cameron: But he’s got a new film called For­ti­tude. It’s about space.

[01:52:06] Tony (2): Right.

[01:52:07] Cameron: He went and inter­viewed all of the peo­ple that are on the cut­ting edge of space trav­el that aren’t Elon Musk or Jeff Bezos. His thing is these guys, those guys in Bran­son get all of the head­lines, but real­ly there’s this huge indus­try of peo­ple that are push­ing for­ward the whole space pri­va­ti­za­tion of space that don’t get, uh, the head­lines.

[01:52:31] Cameron: So he’s done a doc­u­men­tary inter­view­ing them. And, uh, he’s asked me to sort of do the Q and A for it tomor­row night. So I’m going to go check that out.

[01:52:41] Tony (2): Yeah, it was inter­est­ing. I mean, there was anoth­er land­ing on the moon from a, uh, a pri­vate indus­try oper­a­tor and I thought, oh, I was sur­prised it was­n’t Bezos or it was­n’t SpaceX. It was some­body else I had­n’t heard of.

[01:52:54] Cameron: Hired by NASA, but, um, yeah, pri­vate, and it fell over, they think, it’s on its side.

[01:53:00] Cameron: So it’s not real­ly broad­cast­ing very well, but, uh, yeah. And then you and I did a bull­shit fil­ter last week.

[01:53:08] Tony (2): We did, which was a high­light for me last week. I real­ly enjoyed that. Talk­ing about

[01:53:12] Cameron: bitched, you bitched about all the work you had to do to

[01:53:14] Cameron: pre­pare

[01:53:15] Tony (2): Well, you know, yeah, it was, I devote all of Tues­day to QAV usu­al­ly. And, um, it was also all of Thurs­day to the bull­shit fil­ter. But no, I enjoyed

[01:53:27] Tony (2): it.

[01:53:27] Cameron: I redid the num­bers on that, I think I could prob­a­bly flip you a cou­ple of hun­dred bucks for your

[01:53:31] Cameron: time,

[01:53:32] Tony (2): Oh, bril­liant. That’d be great. Thank you.

[01:53:34] Cameron: yeah, that’ll help out.

[01:53:35] Cameron: This week.

[01:53:37] Cameron: It’ll cov­er, cov­er one piece of fur­ni­ture that

[01:53:39] Cameron: you’re

[01:53:40] Tony (2): Oh, yeah. Don’t talk about that.

[01:53:43] Cameron: Um, yeah, I enjoyed it too. It was real­ly good to be able to talk about, uh, pol­i­tics with you for a cou­ple of hours. Um,

[01:53:50] Tony (2): Yeah, inter­est­ing top­ic, and peo­ple should lis­ten to it too, because we go on for about an hour and a half. At least.

[01:53:58] Cameron: talk­ing about Tuck­er Carl­son and Vladimir Putin.

[01:54:01] Tony (2): Ooh.

[01:54:01] Cameron: Yeah,

[01:54:02] Tony (2): the, and the BBC and the CBC and the New York Times.

[01:54:06] Cameron: Well, I, I’ve start­ed prep­ping for the next one. I’ve been col­lect­ing arti­cles today. Um, I read, Five arti­cles say­ing that Chi­na’s econ­o­my is in, like, dras­tic mode, and then oth­er arti­cles, par­tic­u­lar­ly com­ing out of Chi­na, say­ing that it’s boom­ing, it’s doing great. So, it’s the, the,

[01:54:26] Tony (2): Well, and like,

[01:54:26] Cameron: econ­o­my

[01:54:27] Tony (2): yeah, right. And then you get the arti­cle say­ing Chi­na’s not doing great, which is real­ly good because the Chi­nese gov­ern­men­t’s about to drop inter­est rates to boost the econ­o­my. So that’s great. So that’s, yeah. It’s like dif­fer­ent lev­els of effect on the take on the Chi­nese econ­o­my.

[01:54:43] Cameron: Yeah. And I don’t know what the truth is, um, and I don’t know how to get to the truth. It’s one of those clas­sic things that I don’t know what the truth is. And I don’t know whether Xi Jin­ping and his team are going, Okay, we need to take a cou­ple of steps back­wards in order to take a step for­ward. You know, we need to strip away, like that’s what they’ve been say­ing with Ali Bar­ber and Jack Ma and those things.

[01:55:07] Cameron: These guys got too big for their boots. We need to cut out the cor­rup­tion. We need to cut out the fat. We need to cut out the real estate spec­u­la­tion. Like it’s fun­ny. I read one arti­cle bitch­ing about real estate spec­u­la­tion in Aus­tralia, dri­ving up prices and no one can afford, no one under the age of 50 can afford to buy a house.

[01:55:26] Cameron: But. Xi Jin­ping is tak­ing an axe to real estate spec­u­la­tion in Chi­na and that’s a bad thing.

[01:55:32] Tony (2): Yeah,

[01:55:33] Tony (2): right.

[01:55:35] Cameron: I don’t know, man. Same with the COVID lock­downs, right? Chi­na, when they start­ed doing COVID lock­downs, it was like, you know, in ear­ly 2020, it was, see, this is what hap­pens when com­mu­nists run

[01:55:48] Tony (2): Mmm. Yeah,

[01:55:51] Cameron: fine.

[01:55:53] Tony (2): we get, we get images from Chi­na of peo­ple being weld­ed into their apart­ment build­ings.

[01:55:57] Cameron: Yeah,

[01:55:58] Tony (2): Yeah,

[01:55:59] Tony (2): whether they do or not, who knows. But no, it’s an inter­est­ing top­ic. I agree. And I’m always remind­ed of what, when I try and sort the media out, I’m always remind­ed of what Chom­sky said. He says, you can’t trust it.

[01:56:11] Tony (2): In the West at least, but if you do need to find some­thing to at least have a lit­tle bit of faith in, go to the finan­cial press, because peo­ple are mak­ing big invest­ment deci­sions on that, and if it’s not accu­rate, it gets boot­ed, so. And I found that, I actu­al­ly did­n’t men­tion it dur­ing the bull­shit fil­ter, con­ver­sa­tion but the AFR report­ed on the Tuck­er Carl­son inter­view and just did it quite fac­tu­al­ly.

[01:56:36] Tony (2): There was this inter­view, this is what hap­pened, this is what was said, rather than, oh, Putin just ram­bled on for 30 min­utes and just bull­shit­ted about his­to­ry and yeah, all the oth­er stuff that oth­er media out­lets were say­ing.

[01:56:49] Cameron: Look, I real­ly hope that AI is going to buy Ohio. You’re going? Are you leav­ing? Oh, okay. I real­ly hope that, uh, we will have AI tools soon that will be able to scan all of the world’s media for me. If I pick a top­ic and

[01:57:12] Cameron: scan, you know, World Eco­nom­ic Forum stuff and scan, you know, World Bank’s analy­sis on Chi­na’s econ­o­my and just do a break­down of, okay, this is, this is the pro­pa­gan­da.

[01:57:24] Cameron: This is the stuff that real­ly mat­ters. You need to pay atten­tion to. When we can get to that point where we can feed it that kind of data and have it do the analy­sis for us, um, it’s not there yet, but hope­ful­ly in the next year or two, we will get there.

[01:57:41] Tony (2): Then just add one more step and tell us where to invest and where to buy and sell. Based on that eco­nom­ic analy­sis,

[01:57:49] Cameron: Well, yeah, but as War­ren Buf­fett said at the last annu­al meet­ing, AI is just going to enable peo­ple to make. Lots more bad

[01:57:57] Cameron: deci­sions,

[01:57:58] Tony (2): big­ger mess­es,

[01:58:00] Cameron: Well, yeah, greed and casi­no and all of that kind of stuff will still go on, but you will be able to use it for, you know, uh, analy­sis. It just depends on what kind of analy­sis you ask it to do, I guess.

[01:58:12] Cameron: And what kind of your risk pro­file and what kind of returns you’re try­ing to get and all that kind of

[01:58:16] Cameron: stuff. But I do think we’ll be using it for invest­ing.

[01:58:19] Tony (2): Yeah, that was a very illu­mi­nat­ing piece of work you did for the bull­shit fil­ter where you took Putin’s account of his­to­ry, which seemed to be the biggest cri­tique of the Carl­son inter­view, and ran it through Chat­G­PT and just said, if I said this about this time in his­to­ry, would I be right or wrong?

[01:58:36] Tony (2): Every­thing was, you know, with a caveat of it’s all sub­ject to inter­pre­ta­tion, every­thing was fac­tu­al.

[01:58:43] Cameron: Your facts are right. Yeah, it’s open to inter­pre­ta­tion what this means, but, um, there’s no prob­lem with the facts. And if I can do

[01:58:50] Cameron: that.

[01:58:51] Tony (2): Mmm.

[01:58:52] Cameron: What’s stop­ping the rest of the world’s West­ern media from doing that?

[01:58:56] Cameron: You know,

[01:58:57] Tony (2): maybe that’s what the bull­shit fil­ter should be from now on. Here’s what Gigi Ping says about the Chi­nese econ­o­my. Here’s what the New York Times says about the Chi­nese econ­o­my. Tell me what the fact is.

[01:59:06] Cameron: mm, yeah, it’s good. As a mat­ter of mind, Chris Saad, I men­tioned before, um, ex Uber devel­op­er guy, head of devel­op­ment at Uber, Bris­bane boy, he built a tool that I’ve plugged on bull­shit fil­ter a cou­ple of times that he sent to me. It’s a, it’s a plu­g­in for Chrome that uses GPT. And when you go to a news site and read any news sto­ry, this lit­tle side­bar comes up and it, it, um, breaks down, uh, the news sto­ry, tells you about any bias that’s in the news sto­ry based on the lan­guage that’s being used, gives you a back­ground on the sto­ry, what the his­to­ry is, the his­tor­i­cal con­text of it, tells you who all the major play­ers are, the men­tion, like a mini bio on all the peo­ple that are quot­ed.

[01:59:52] Cameron: In the sto­ry tells you, uh, you know, oth­er things you can go read if you want more back­ground. And that’s the begin­ning of using AI to. Um, run a bull­shit analy­sis

[02:00:04] Tony (2): Yeah, right.

[02:00:05] Cameron: a lot of media cov­er­age. I think we’ll have more and more tools like that in the next cou­ple of years. That will be real­ly inter­est­ing.

[02:00:12] Cameron: And par­tic­u­lar­ly, like it’s not just for pol­i­tics, like for CEOs, like you, you lis­ten to a CEO speech and have your AI just run a bull­shit fil­ter over the top of it, and it’ll tell you, okay, well, he’s putting this, but what he did­n’t tell you, here are the five things he did­n’t tell

[02:00:29] Cameron: you about their finan­cial results, right?

[02:00:32] Tony (2): Yeah. Because it’s often what’s not said that’s impor­tant too, isn’t it?

[02:00:35] Cameron: Yeah, what’s left out? And that’s, you know, I’m increas­ing­ly think­ing, you know, like with the psy­chopath book that the tools that we’re going to have avail­able to us hope­ful­ly in the next few years will enable us to do an end run around a lot of the real­ly sophis­ti­cat­ed pro­pa­gan­da mech­a­nisms that have been erect­ed over the last 50 years.

[02:00:55] Cameron: By hav­ing tools that can decon­struct the pro­pa­gan­da, can decon­struct the PR, can decon­struct the tools of manip­u­la­tion that are used in busi­ness and pol­i­tics and reli­gion and what­ev­er gov­ern­ment to pro­vide us with the sto­ry that’s not being told by, you know, just doing a lot of data

[02:01:17] Cameron: analy­sis and

[02:01:17] Tony (2): Which is what we said jour­nal­ism should be doing, but it’s been hauled out by, um The inter­net.

[02:01:23] Cameron: Yeah,

[02:01:24] Tony (2): Yeah,

[02:01:26] Cameron: we should

[02:01:26] Tony (2): that’d be good. Yeah, it’s been a long time. That was good though. Great dis­cus­sion. Thank you.

[02:01:32] Cameron: Good to chat. TK, have a great week, every­body. QAV a good week. Hap­py share mar­ket.

[02:01:38] Tony (2): Yeah. Hap­py ASX. See you, mate.