QAV 713 — Highly Sensitive Stocks

QAV 713 Club

[00:00:00] Cameron: All right, give me a one, two, three in what­ev­er lan­guage you choose.

[00:00:15] Tony: 1, 2, 3.

[00:00:17] Cameron: Wel­come back to QAV,

[00:00:18] Cameron: Tony. This is episode 713, 26th of March, 2024. How you doing down

[00:00:26] Cameron: there in Syd­ney, Tony?

[00:00:28] Tony: Good. Well, yeah, it’s a love­ly day in Syd­ney. We seem to have got­ten past that real­ly

[00:00:34] Tony: high humid­i­ty phase of sum­mer, so that’s good.

[00:00:37] Cameron: It’s cold and rainy in Bris­bane at the moment, which is per­fect. I’m lov­ing it. Lov­ing it, Jer­ry. Lov­ing it.

[00:00:47] Tony: uh, you and Alex, she loves the cold bit weath­er too. Mm

[00:00:52] Cameron: I um, I start­ed read­ing this book over the week­end, um, some­thing about, High­ly sen­si­tive peo­ple. How to, how to, how to deal with high­ly sen­si­tive peo­ple, because Chris­sy keeps telling me that she’s a high­ly sen­si­tive per­son, and that Fox is a high­ly sen­si­tive per­son, and I did­n’t even under­stand what that meant.

[00:01:12] Cameron: I had to ask her a cou­ple of weeks ago, what does that even mean, real­ly? So any­way, I’ve got this book, and I start­ed read­ing it, and the begin­ning of the book is a check­list, like the psy­chopath check­list. It’s like, how to tell if some­body is a high­ly sen­si­tive per­son. So I did the check­list, think­ing I would score very low.

[00:01:27] Cameron: I scored real­ly high on it. And one of the ques­tions was, um, if you get, do you get real­ly irri­ta­ble when you’re either real­ly, real­ly hot or real­ly, real­ly cold? And man, you don’t want to be around me when it’s hot and humid. I get, I get real­ly irri­ta­ble, as Chris­sy will attest. Um, you know when your skin starts to get prick­ly?

[00:01:48] Cameron: And like, ahh­hh.

[00:01:50] Cameron: So that’s why I have to sit

[00:01:51] Tony: I hate it. I must be high­ly sen­si­tive too, ’cause I don’t like it.

[00:01:54] Tony: either. Oh,

[00:01:57] Cameron: like, oh, holy shit. Well, it’s like, do you have a, do you have a, do you, do you get very emo­tion­al over music and art and all these sorts of things? And I think I men­tioned to Chris, he goes, yeah, I know that. Your moth­er knows that your moth­er’s been telling me for­ev­er that you’re, you’re a high­ly sen­si­tive child, but you basi­cal­ly learned to damp­en it or con­trol it, you know, and, you know, mask it or what­ev­er.

[00:02:22] Cameron: So, cause I think most peo­ple who know me would not put me down as

[00:02:26] Cameron: being high­ly sen­si­tive, but that’s,

[00:02:28] Tony: Well, no, no, I would­n’t have done that. Send me, just hypo­thet­i­cal­ly, just send me the book so I can deal with it

[00:02:36] Tony: before next week.

[00:02:38] Cameron: I will. I will do that. Ah, Tony, speak­ing of high­ly sen­si­tive, Um, accord­ing to the Finan­cial Review, Chan­ti­cleer We should be high­ly sen­si­tive about exp well, not be high­ly sen­si­tive, I guess, about expen­sive stocks. Shana Clear arti­cle from March 22nd. Why ASX investors may need to get used to expen­sive stocks.

[00:02:59] Cameron: ASX list­ed stocks have nev­er been this high­ly val­ued. But one strate­gist says that’s because com­pa­nies have nev­er been this well run. At the end of every year, this col­umn pulls togeth­er a list of the good, bad, and ugly of cor­po­rate Aus­tralia. Maybe it’s the cyn­ic in me, but it’s always easy to find the stuff ups and mis­steps.

[00:03:18] Cameron: Exam­ples of real­ly great Aus­tralian man­age­ment often seem few and far between. But new research from UBS strate­gist Richard Shel­bach rais­es ques­tions about whether we judge Aus­trali­a’s cor­po­rate sec­tor too hard. He argues the fact that stocks have nev­er been as expen­sive as they are now in large part reflects the fact that cor­po­rates are pro­duc­ing high­er qual­i­ty earn­ings than they used to.

[00:03:41] Cameron: While Shel­bach says val­u­a­tions do not deserve to go high­er even when inter­est rate cuts arrive. He argues that local investors need to get used to val­u­a­tions set­tling high­er than they have in the past. Says the ASX200, exclud­ing resources, cur­rent­ly trades at 18. 5x for­ward earn­ings, which is 40 per­cent above its long term aver­age of 13.

[00:04:03] Cameron: 5x, but 12 per­cent above the pre­vi­ous peak in May 2007, just before the glob­al finan­cial cri­sis. So, uh, what do you think about that, Tony? Do we have to get used to more expen­sive stocks or is he just look­ing in the wrong part of the stock mar­ket?

[00:04:22] Tony: Well, I guess first of all, thanks for point­ing it out. And I did some research onto it once I saw your arti­cle. And I went to a site called Mar­ket Index. They have a whole lot of long-term aver­ages for the mar­ket and they graft them and one of them is PE ratio. I was­n’t able to tell whether it’s the for­ward PE ratio or the trail­ing PE ratio on mar­ket index ’cause it does dif­fer from the stats you read out there.

[00:04:49] Tony: Um, dif­fer in num­ber but not dif­fer in, dif­fer in trend. Um, and, and I’ve always thought the mar­ket aver­age PE ratio was 16 and that’s what. Mar­ket index is say­ing 2. So that could be the trail­ing PE ratio, but either way, yeah, the mar­ket’s pret­ty high at the moment. I think mar­ket index has got it at about 21, 22, which is very high as an aver­age PE for our Our stock mar­ket.

[00:05:16] Tony: Um, so a cou­ple of points. Yeah, I think you need to be a lit­tle bit wor­ried about the mar­ket when it gets to this kind of ter­ri­to­ry. I don’t think it’s, accord­ing to mar­ket index­es graph, the high­est, but it’s, it’s, you know, in prob­a­bly the top, it’s in the top brack­et of ISP ratios. But, you know, I’m always real­ly wary of regres­sion to the mean.

[00:05:36] Tony: And it, his­tor­i­cal­ly, the mar­ket does­n’t get much high­er than this before it starts to, I’m off. So it may go side­ways for a while. It may keep going up and then crash. It’s but it’s the risk of regres­sion to the mean always increas­es the high­er and low­er you are from that from that aver­age. So, yeah, I think it is a time of con­cern.

[00:05:58] Tony: But if I look at the Long term graph. This one goes back to 1980 and it’s avail­able on Mar­ket Index. Um, it can take years and years and years for that regres­sion to the mean to occur. Um, so some­times, like, for exam­ple, in the, uh, 80s, or the first half of the 80s, it took, um, It took at least six or sev­en years for the mar­ket to reach a high and then it crashed in 87.

[00:06:26] Tony: Sor­ry, to be come from less than the mar­ket aver­age to be more than the mar­ket aver­age and then it crashed and it took anoth­er, I’m just guess­ing here, about 10 years to get back into over­val­ued ter­ri­to­ry. So it can take a long time for these regres­sion to the mean events to take place. But yeah, sure­ly if you’re above the mar­ket aver­age, it’s not going to dou­ble from here.

[00:06:48] Tony: Um, that would be out­side of any­thing that’s hap­pened before, and it’s more like­ly to regress back to about 16. But whether that takes a long time, whether it hap­pens nat­u­ral­ly and the mar­ket goes side­ways for a

[00:06:57] Tony: while, does earn­ings improve, who knows?

[00:07:01] Cameron: Well, as Jonathan point­ed out in our Face­book group today, um, if the mar­ket is expen­sive, why are so many com­pa­nies appear­ing in the buy list? And, you know, some­body. I made the sug­ges­tion last year, mid­dle of last year, that I should start chart­ing in the week­ly buy list how many buys and sells and josephines, which I have been doing.

[00:07:23] Cameron: And, uh, you know, so I’ve been doing that since the begin­ning of Sep­tem­ber last year. And when I look at that, the trend line’s actu­al­ly going up for the num­ber of buys in our buy list. The trend line for sells and josephines is going down over that. There was a six month peri­od. Um, so. We’ve got more stocks appear­ing on the buy list now, which means, you know, to, to do that, they need to be rea­son­ably priced by our met­rics.

[00:07:56] Cameron: Um, uh, so how do you, how do you pass all of those

[00:08:00] Cameron: things togeth­er?

[00:08:02] Tony: Well, the buy list has always had stocks on it. Like, you know, I’ve nev­er, I’ve nev­er not been able to find a val­ue stock in a share mar­ket. So I think that’s the first thing to note. And it always tends to have sort of 50, 50 to 100 stocks on it. So, um, whether it’s a bull mar­ket or not, even dur­ing the GFC, there were plen­ty of things to buy.

[00:08:21] Tony: at a, at a cheap val­u­a­tion. Um, although sen­ti­ment was against them then, I guess. Uh, so yeah, that’s, that’s always going to hap­pen. Um, and I guess the point I should make is even if the mar­ket is over­val­ued or under­val­ued, I still, it’s just busi­ness as usu­al, as far as I’m con­cerned, because there are always val­ue stocks, just as there are always gross stocks in the mar­ket.

[00:08:43] Tony: So I’ve nev­er had a prob­lem not find­ing some­thing to buy. As for more buys now than sells, that’s, that’s a good thing. It cer­tain­ly bears out my. Port­fo­lio, cer­tain­ly had a lot less trades in the last 6 months, um, so the mar­ket is less volatile, uh, but I’m not sure whether that’s true. That has any sort of bear­ing on the val­u­a­tion of the mar­ket at all.

[00:09:06] Cameron: I, I made the point, um, when I was doing a blog post yes­ter­day, look­ing at our chart that It seems to me that we’re, we’re in a good peri­od, uh, for val­ue invest­ing. There’s more stocks appear­ing to be val­ue buys for us, um, than there have been in the last six months. So we seem to be mov­ing into a val­ue cycle is the way that I read that.

[00:09:30] Cameron: If there’s more val­ue avail­able than there was six months ago. But, so I, I guess when he says stocks are more expen­sive, it’s not across the board, right? They’re, uh, Still lots of val­ue appear­ing and they’re prob­a­bly the stocks that are unloved or not get­ting atten­tion or what­ev­er it is. As we know out of the two and a half thou­sand stocks on the ASX, not all of them get an

[00:09:58] Cameron: equal amount of atten­tion.

[00:10:00] Tony: No, cor­rect, and that could be the rea­son why there’s more val­ue stocks now, because if every­one’s buy­ing large cap stocks or, or, you know, momen­tum invest­ing and fol­low­ing tech stocks or what­ev­er that are doing well, then, uh, yeah, it’s, it’s gonna leave the val­ue stocks a bit more unloved.

[00:10:19] Cameron: Well,

[00:10:19] Tony: But I guess my point, and I guess the point is that val­ue invest­ing does­n’t change dur­ing the cycles, uh, but we’re still bound by the mar­ket.

[00:10:28] Tony: If the mar­ket crash­es tomor­row, val­ue stocks will go down. The dif­fer­ence in my expe­ri­ence is the high­ly val­ued stocks all fall by, you know, half to two thirds and the val­ue stocks will fall by 20

[00:10:40] Tony: per­cent type thing.

[00:10:42] Cameron: We hope,

[00:10:43] Tony: We hope, yeah. But that’s gen­er­al­ly what hap­pens.

[00:10:45] Cameron: hope­ful­ly not in a day,

[00:10:47] Cameron: like some have done.

[00:10:49] Tony: No, it could hap­pen.

[00:10:50] Cameron: Well, speak­ing of, uh, stocks doing well, Tony, I want­ed to talk about KSC. Uh, KSC is a stock I hold in one of the light port­fo­lios, and one day last week it just shot up out of nowhere. And I was try­ing to fig­ure out why there was noth­ing in the announce­ments, noth­ing I could see, you know, its results had already come out well before.

[00:11:17] Cameron: And the only thing I could see was that there was a div­i­dend. We hold it in the dum­my port­fo­lio, by the way, KNS Cor­po­ra­tion. I

[00:11:27] Cameron: think they’re a trans­port com­pa­ny from mem­o­ry,

[00:11:29] Tony: They are, yeah.

[00:11:30] Cameron: trans­porta­tion and logis­tics. Um, the only thing I could see that might’ve sort of explained this was they have a div­i­dend. Com­ing up.

[00:11:43] Cameron: I, I, you know, I, I, I, let me go and see what this jump was. Yeah, it jumped from, it was trad­ing on the 14th, it was trad­ing about 3. 24, then it jumped to 3. 68 on the 18th of March. Went up to 3. On the 19th of March, it’s come back down to 375, but, um, sud­den jump, noth­ing real­ly to explain. It could be more going on, I guess, behind the scenes that we’re not aware about, but not aware of.

[00:12:11] Cameron: But have you ever seen some­thing jump like that? I mean, it’s, it’s a tasty div­i­dend. Let’s see, it goes X. Uh, Went ex on the 21st of March, and it’s pay­ing a, uh, 10 cent div­i­dend, 100 per­cent franked, trad­ing at, as I said, sort of 3 bucks, some­thing 20 at the time. Do you think a div­i­dend like that could cause the share price to go up that much that quick­ly or is it prob­a­bly

[00:12:37] Cameron: some­thing else going on?

[00:12:39] Tony: Oh, I think it’s some­thing else going on. The div­i­dend yield on this, on this stock isn’t that high. If, if some­one was buy­ing expect­ing a big pay­out, then,

[00:12:47] Tony: um, I think the div­i­dend yields like three or four per­cent,

[00:12:50] Cameron: Could be a takeover?

[00:12:51] Tony: price is up 20 or 30. Could be. The prob­lem with this stock, Cam, and stocks like it, is the 000.

[00:12:58] Tony: It’s not get­ting cov­ered by bro­kers because it’s so small. And, and, um, so it’s, it’s, It’s pret­ty hard to under­stand what’s going on, espe­cial­ly if they’re not mak­ing reg­u­lar dis­clo­sures to the mar­ket, which they’re not. So this could be any­thing. It could be a takeover, it could be, um, you know, some­one’s leaked that they’re going to have a good year, and not in any sort of devi­ous way.

[00:13:22] Tony: Some­one may, one of the truck dri­vers may have gone into a pub and said, geez, I’m work­ing hard this year, we’re hav­ing a good year, and that could be enough. So

[00:13:30] Tony: who knows?

[00:13:31] Cameron: peo­ple still go to Pubs Pubs

[00:13:33] Cameron: still exist like that?

[00:13:35] Tony: They do, espe­cial­ly for truck dri­vers, too.

[00:13:38] Cameron: I haven’t seen a pub for a long time. Yeah, there’s no pubs in Bris­bane where I live any­way. There’s like hotels where you go and have a fan­cy meal and catch

[00:13:48] Cameron: a band, but not pubs. Like

[00:13:51] Tony: You’ve got pubs with bands in your area?

[00:13:53] Cameron: yeah, it’s all

[00:13:54] Cameron: fan­cy, very fan­cy.

[00:13:55] Tony: Okay, that’s

[00:13:57] Tony: unusu­al. So it’s nor­mal­ly pok­er machines.

[00:14:00] Cameron: just on KSC, I added it to the port­fo­lio back in August, 2021 It’s up 134 per­cent since then.

[00:14:11] Cameron: So that’s, that’s been nice. It’s done well.

[00:14:14] Tony: Mmm. Mmm.

[00:14:16] Cameron: ADT must’ve been a bit high­er than 9, 000. It

[00:14:18] Cameron: would­n’t have passed a 15, 000

[00:14:20] Tony: Oh, real­ly? I may have got that wrong. Let me just check the ADT

[00:14:23] Cameron: be small­er now than it.

[00:14:24] Cameron: was back then too. I think it’s like a 90 day sort of, um,

[00:14:29] Cameron: win­dow Stock Doc­tor use.

[00:14:31] Tony: Yeah, they use a rolling aver­age. But, um, I’ll just have a quick look. I got that from the buy list. The

[00:14:37] Cameron: Yeah, it’s prob­a­bly right then.

[00:14:39] Tony: 000. Okay, Stock Doc­tor’s a bit slow. Yeah, 9, 086. 9, 086. So it’s pret­ty small.

[00:14:47] Cameron: Hmm.

[00:14:47] Cameron: Yeah.

[00:14:49] Tony: Yeah, look, they, um, so the results came out on the 21st of Feb­ru­ary. So that could just be some­one’s lik­ing what they saw in the results a month lat­er. And they’ve tak­en some time to build up stock in the com­pa­ny because it’s such a thin­ly trad­ed com­pa­ny.

[00:15:04] Tony: But yeah, I just can’t explain it.

[00:15:06] Cameron: Hmm.

[00:15:07] Tony: But like typ­i­cal­ly what hap­pens in this sit­u­a­tion is the ASX will issue what’s called a speed­ing tick­et and they’ll write to the com­pa­ny and say, Are you aware of any­thing that could have caused the share price increase or decrease when they had big moves like this?

[00:15:21] Tony: But that has­n’t hap­pened yet. So it may hap­pen, but it should have

[00:15:23] Tony: hap­pened by now.

[00:15:24] Cameron: Mm. Well, I was hap­py. It was nice. If it’s, I, I, hon­est­ly, I expect­ed it to fall back to worth like the next day, um, and it, and it has­n’t yet. So, yeah, it’s all good. Hey, speak­ing of stocks that I’m hap­py with, uh, I men­tioned last week that I had to sell a par­cel of SMR. Thought it was tied to the coke and coal and I said it had been up at 40% at some stage and it had become a rule one.

[00:15:50] Cameron: Um, what I neglect­ed to men­tion, ’cause I’d for­got­ten, is they actu­al­ly own two oth­er parcels of SMR that still are up 40%, um, that we bought a lot ear­li­er than the one I had to sell. So we’ve got two parcels of SMR, one of the dum­my port­fo­lio one and one of the light port­fo­lios that we bought back in Octo­ber 22.

[00:16:08] Cameron: They are both up still 40, 43%. So, uh. I’m not as cranky at

[00:16:14] Cameron: SMR as I was last week. I

[00:16:16] Tony: Not as sen­si­tive?

[00:16:17] Cameron: Yeah. Yeah, high­ly, I was high­ly sen­si­tive about SMR

[00:16:20] Cameron: last

[00:16:20] Cameron: week.

[00:16:22] Tony: Um, have you looked at the cok­ing coal graph recent­ly?

[00:16:26] Cameron: Uh, no, because, uh, Alex report­ed no

[00:16:29] Cameron: changes to our

[00:16:31] Tony: Okay, I just had a look at it when I saw your note on this, but um, it’s

[00:16:35] Tony: still a Josephine, but I think it’s get­ting pret­ty close to a sell, so you just

[00:16:39] Cameron: Oh,

[00:16:39] Tony: it. I

[00:16:41] Cameron: say that. Oh, yeah. Ooh.

[00:16:47] Cameron: Yeah. Not,

[00:16:47] Tony: think the graph might have a flat bot­tom, so that’s got to be tak­en into account when draw­ing the sell line.

[00:16:52] Cameron: Right.

[00:16:53] Tony: Yeah,

[00:16:55] Cameron: All right. Sure. Alex will keep an eye on that for us each week. Uh, some­body else who’s got a flat bot­tom, uh, the CEO of VM Corp. Um, I think that was his health

[00:17:07] Cameron: issue. No, I’m not sure. The CEO of ,

[00:17:10] Tony: we don’t know.

[00:17:12] Cameron: the, uh, CEO of Amcor, uh, resigned sud­den­ly. Last week, um, Ron Delia, Delia, oh Delia, was­n’t that a John­ny Cash song?

[00:17:25] Cameron: Oh yeah, Deli­a’s gone. Delia,

[00:17:28] Cameron: oh Delia, Delia all my life, If I had­n’t a shop, poor Delia, I’d have had her for my wife. Deli­a’s gone, one more round, Deli­a’s gone. I went up to Mem­phis, and I met Delia there, Found her in her par­lor, and I tied her to her chair. Deli­a’s gone, one more round, Deli­a’s gone.

[00:17:55] Cameron: First time I shot her, shot her in the side, Hard to watch her suf­fer, but with the sec­ond shot she died.

[00:18:07] Cameron: There you go. Any­way, that’s dif­fer­ent Delia. Uh, he said he’s, he informed the board of direc­tors, Ron Delia, that he was, uh, retir­ing from the com­pa­ny and step­ping down effec­tive April 15th. This notice came out on March 19th, uh, with­in a month for health rea­sons. Hmm. What do you, we don’t, we don’t own Amcor, so it’s not mate­r­i­al.

[00:18:32] Cameron: But, uh, if you did own Amcor and you saw that, what would be your gut reac­tion,

[00:18:38] Cameron: Tony?

[00:18:40] Tony: that’s a hard one Cam, um, and I, one of the rea­sons why we don’t own it is because it’s um, uh, well it has­n’t been on the buy list for a long time I don’t think, or if at all, uh, any­way, and this AMCOR is dual list­ed, it’s um, basi­cal­ly the, um, the AMCOR that I knew from when I used to um, fol­low it decades ago has split, and the Aus­tralian com­pa­ny is list­ed on the ASX and the over­seas com­pa­ny is list­ed.

[00:19:08] Tony: prob­a­bly on the MYSE, um, but over­seas any­way in Amer­i­ca, and it’s all the inter­na­tion­al Amcor busi­ness that, um, that ANCOR used to own when it was based here. Um, so I haven’t real­ly fol­lowed it for a long time, uh, but you’ll think you’re talk­ing about a gen­er­al case, what hap­pens when a CEO resigns quick­ly for health rea­sons, and, um, You nev­er know, that’s the prob­lem, and I won­der whether there should be full dis­clo­sure in these cas­es, whether they should have to dis­close what the health rea­son is, um, because it’s, you know, it’s a tus­sle between their right to pri­va­cy, Uh, and the mar­ket’s right to know whether this is a con­cern or, or whether it’s a legit­i­mate

[00:19:49] Cameron: does he have a flat bot­tom?

[00:19:51] Cameron: inquir­ing

[00:19:52] Tony: he have a flat bot­tom?

[00:19:53] Cameron: minds want to know. Last on the buy list, the only

[00:19:55] Cameron: time it’s been on the buy list since I’ve been track­ing the buy list was, uh, 22nd of August, 2022. So it has been a while.

[00:20:03] Tony: Okay. has been a

[00:20:04] Tony: while. Um, but the thing I did did see when I was, uh, research­ing this was that they reaf­firm guid­ance for the end of the year. So if there is, if there is a, a prof­it based prob­lem that this the CEO’s resign­ing and try­ing to avoid, then Amcor will get into trou­ble. In Aus­tralia, that would prob­a­bly prompt a class action if they reaf­firmed guid­ance and then did­n’t achieve it.

[00:20:30] Tony: Um, espe­cial­ly if there was some­thing going on the CEO knew about. Um, and cer­tain­ly in Amer­i­ca, it would too. It’s prob­a­bly even more liti­gious over there. So the fact I’ve come out and reaf­firmed guid­ance gives me hope that this is a true health issue for the CEO. But yeah, it’s a, it’s an inter­est­ing one.

[00:20:48] Tony: Um, they use two excus­es, fam­i­ly rea­sons or health rea­sons if they retire, retire or resign sud­den­ly. Um, but it would be bet­ter for mar­ket trans­paren­cy if they said I’m retir­ing for health rea­sons, and it’s true. You know, seri­ous health issues. Well, you know, it’s, it’s, it’s can­cer or it’s, um,

[00:21:10] Tony: or I’m look­ing after a very sick wife or what­ev­er, but, um, yeah, it is a bit strange when they just,

[00:21:15] Tony: and it’s inter­est­ing too, he said retire, like, um, that sug­gests he’s retir­ing in total from every­thing.

[00:21:21] Tony: So it may well be a seri­ous health issue as well.

[00:21:23] Cameron: Right. How

[00:21:24] Tony: So he can’t go and work

[00:21:25] Tony: on some­where else.

[00:21:26] Cameron: How old? is a Ron­delia? Oh,

[00:21:28] Cameron: he does­n’t look that old.

[00:21:31] Tony: It does­n’t does

[00:21:31] Tony: it?

[00:21:32] Cameron: Hmm. Well, any­way, best of luck to Ron Delia. Um, what else? Oh, MEA is being sold. Tony. It has­n’t been on our buy list since

[00:21:46] Cameron: Feb­ru­ary 2023. I looked it up, McGrath Real Estate, but it just gets back to that con­ver­sa­tion we’ve been hav­ing in recent weeks about the declin­ing num­ber of stocks.

[00:21:57] Cameron: On the ASX,

[00:21:58] Cameron: merg­ers and

[00:21:59] Tony: it’s been, been tak­en over and tak­en pri­vate by a real estate com­pa­ny. Yeah, I did see that and it’s, it’s, you know, it’s tak­en out of the, I think it was a 25 to 30 per­cent pre­mi­um, so that’s good if any­one was still hold­ing it.

[00:22:14] Tony: But it nev­er got back to its list­ing price, McGrath, um, so it’s been a, it kind of start­ed off as a, um, a gross stock because the idea was it was going to use a high PE to, to roll up oth­er real estate agents.

[00:22:28] Tony: It would pay them in script and, um, that’s it. A cheap­er way of doing it than pay­ing them in cash because the script is high­ly val­ued. Uh, but, but then, um, it fair­ly quick­ly issued prof­it down­grades and the PE evap­o­rat­ed. So it’s been a val­ue stock for a while

[00:22:43] Tony: too.

[00:22:44] Cameron: Although not on our buy list, uh, since, well, Feb­ru­ary last year. Um, you, you, you have to won­der again whether the real estate mar­ket being so frothy, real estate busi­ness­es would be doing

[00:22:59] Cameron: gang­busters.

[00:23:02] Tony: Yeah, and McGrath I think has gone up this year. Um, I read an arti­cle today say­ing the CEO, or the founder, Mr. McGrath, was say­ing that he did­n’t think in ret­ro­spect tak­ing a real estate com­pa­ny to the ASX boards was the right thing to do because the mar­kets are so cycli­cal. And he got smashed when the mar­ket turned down, but yeah, it has been a, you would think a good real estate mar­ket, mov­ing slow­ly to sell our apart­ments, so I’m not sure if that’s just hype, but, but, um, yeah, should have been good times for the, for the com­pa­ny.

[00:23:33] Cameron: You look back at just pre COVID, um, so it was trad­ing Jan­u­ary, 2020 at, uh, 34 cents by, uh, April, 2021, it was trad­ing at 67 and a half cents. So it kind of. You know, went down dur­ing COVID, but then was back to like dou­ble where it was pre COVID, um, after that 2021 boom. Dropped a bit, was up by sort of Novem­ber 2021, was up to 67 and a half again, and then sort of has been declin­ing up a bit in the last cou­ple of weeks, which is prob­a­bly the acqui­si­tion going on, but it’s sort of been hov­er­ing around 30.

[00:24:10] Cameron: Three to 40 cents for the last cou­ple of years. So yeah, inter­est­ing, you know, frothy real estate

[00:24:16] Cameron: mar­ket.

[00:24:18] Tony: Yeah,

[00:24:19] Cameron: speak­ing of frothy, uh, Mac­quar­ie’s new FOMO meter flash­es red, points to these eight stocks. This would be fear of miss­ing out FOMO, not for­mer Mor­mon FOMO, like my wife is a FOMO. Um, when she refers to FOMOs, it’s for­mer Mor­mons, Exmos or FOMOs, they are.

[00:24:40] Cameron: This arti­cle, again, Chan­ti­cleer, Mac­quar­ie’s new mea­sure of investor sen­ti­ment should be a warn­ing sign for those chas­ing this impres­sive ral­ly. A bet­ter than expect­ed report­ing sea­son, a near uni­ver­sal belief in a soft land­ing, the ASX 200 seem­ing­ly cruis­ing towards 8, 000 points after hit­ting a series of record highs, What’s not to love for local investors?

[00:25:00] Cameron: Plen­ty. Accord­ing to Mac­quar­ie strate­gists Matthew Brooks and Sophie Bolton, they have just con­struct­ed a new FOMO, Fear of Miss­ing Out, meter that seeks to mea­sure whether investor sen­ti­ment has become over­heat­ed. The ver­dict? Be wary, brace for below aver­age returns, and get defen­sive. We con­tin­ue to believe that sen­ti­ment needs to cool a lit­tle and that investors should wait for a cor­rec­tion.

[00:25:24] Cameron: Before rotat­ing more to risk, the pair say. The FOMO meter is built on sev­en indi­ca­tors, all of which tell an inter­est­ing sto­ry. Um, so on one hand, we’ve got Chan­ti­cleer telling us that we should get used to pay­ing high­er prices because com­pa­nies are per­form­ing so well. On the oth­er hand, Chan­ti­cleer is telling us that, uh, we should wait for the mar­ket to cor­rect before we take any risk and invest more.

[00:25:49] Cameron: Which one

[00:25:50] Cameron: is it, Tony? We’re,

[00:25:52] Tony: Well, I think they’re, I think they’re both say­ing the same thing. If you read the Chan­ti­cleer arti­cle, even though it says get used to pay­ing for more, I think they’re basi­cal­ly say­ing the mar­ket’s too high and should regress back to the mean. And I think Mac­quar­ie Group is say­ing the same thing, but with a dif­fer­ent method­ol­o­gy.

[00:26:06] Tony: They’re talk­ing about the VIX indi­ca­tor being up and a few oth­er things like that. Um, but it’s the same thing. It’s, it’s the mar­ket’s expen­sive and be care­ful.

[00:26:16] Tony: And I think that’s cor­rect.

[00:26:19] Cameron: we know that. When inter­est rates start to come off, uh, in the U. S., which they’re sug­gest­ing, and then even­tu­al­ly here, chances are the mar­ket’s not gonna come back when inter­est

[00:26:32] Cameron: rates drop. It’s gonna go through anoth­er

[00:26:34] Tony: No, but it’s the ques­tion is will I go up because I think that the inter­est rate drops already fac­tored into the

[00:26:40] Cameron: then.

[00:26:41] Tony: Yeah, and that’s why it’s high.

[00:26:44] Cameron: assum­ing, the mar­ket’s that smart, Tony.

[00:26:48] Tony: Or dumb. Why would you fac­tor in inter­est rate ris­es that haven’t hap­pened yet? That’s like

[00:26:54] Tony: It cuts both ways with that one. But um Yeah, but like they’re both say­ing the same thing that be care­ful the mar­ket’s up.

[00:27:00] Tony: Um, and you know, par­tic­u­lar­ly finan­cial advi­sors love this kind of arti­cle, like the Mac­quar­ie Bank one, because it involves trans­act­ing. It’s right, it’s like it’s, it’s, it’s time now to go into the fences, and start trad­ing. If peo­ple don’t know what defen­sive stocks are, they tend to be ones that ride through the cycles, like your super­mar­kets, pubs, that kind of thing.

[00:27:23] Tony: So, um, they don’t do near­ly as well as the rest of the mar­ket when times are boom­ing because they’re steady as you go type busi­ness­es. Coles and Wool­worths, usu­al­ly grow at about CPI or, or GDP growth. So they’re kind of sin­gle dig­it growth com­pa­nies. Um, and, but they’re favored because if the down­turn comes again, they will go down when the mar­ket turns down, but not as much as Com­mon­wealth Bank on a very high PE, for exam­ple, but it’s, you know, this kind of arti­cle.

[00:27:53] Tony: I would­n’t say it was gen­er­at­ed to ser­vice the finan­cial advis­ing indus­try, but it’s used by them a lot to ring up all their clients and say, Hey, have you seen this bit of research from Mac­quar­ie? I think it’s time for you to sell Com­Bank and buy

[00:28:05] Tony: Wool­worths. Um, and stock­bro­kers love it

[00:28:07] Cameron: Leonar­do DiCaprio got his, his guys hit­ting the phones in Wolf of Wall Street. You know,

[00:28:15] Cameron: yeah, cause they,

[00:28:17] Tony: that’s what it

[00:28:18] Cameron: live on trans­ac­tion fees, right? More trans­ac­tions their clients

[00:28:21] Cameron: do, the bet­ter for them.

[00:28:24] Tony: Well, yeah, well, finan­cial advi­sors, maybe not so much, but stock­bro­kers do, for sure. But finan­cial advi­sors live or die about, um, keep­ing their cus­tomers hap­py. So it’s, if they get an arti­cle like this, they can’t afford to ignore it or go to the, the cus­tomer and say, look at, yeah, it’s, I said to you, buy an ETF and the mar­kets kind of go up and down.

[00:28:43] Tony: If we try and time it any more than that, we’ll be in trou­ble. Um, that’s what a good advi­sor should be say­ing, but a bad one will be say­ing, you know, it’s time to rotate your stocks. And I remem­ber. Years ago, uh, a guy I played golf with We were sit­ting down hav­ing a drink after­wards, and we were talk­ing about the stock mar­ket, and he said, I’ve just told all my, all my clients to rotate out of Aus­tralia into inter­na­tion­al shares.

[00:29:08] Tony: And I’m like, oh, okay, why? And he pulled out all this research from dif­fer­ent glob­al banks about it. And of course, next year the share mar­ket in Aus­tralia went up tremen­dous­ly and the US mar­ket pulled back. So it was the wrong thing to do, but, but this whole idea of rotat­ing between sec­tors is, I think.

[00:29:24] Tony: Fun­da­men­tal­ly wrong. You either have, you either have a frame­work

[00:29:29] Cameron: hmm.

[00:29:30] Tony: and maybe this Mac­quar­ie, you know, uh, traf­fic light is a good frame­work to use. But you stick to it. You don’t, you don’t sort of pull out a new arti­cle. This is the first time I’ve heard of it. You don’t sort of pull it out new as a way of try­ing to get peo­ple to tran­sect.

[00:29:47] Tony: You either say, I’m in an ETF, I’m in an index fund, or I’m, you know, I’m going to take a punt on some growth stocks, or I’m going to take the long term approach on day use stocks, but you stick to that, and you have a frame­work for it. You don’t just keep rotat­ing because some­one thinks it’s time to

[00:30:03] Tony: buy defen­sives, or gold, or Bit­coin, or over­seas.

[00:30:07] Cameron: their frame­work

[00:30:08] Cameron: to rotate in and out of things

[00:30:10] Tony: Yeah, exact­ly. That’s the stock­bro­ker’s

[00:30:12] Tony: frame­work.

[00:30:13] Cameron: and time it. Yeah. Um. Look, Yeah,

[00:30:18] Cameron: if, if, if I’ve learned any­thing from lis­ten­ing to you over the last five years is that one of the big, uh, secrets to suc­cess at this is just to have a frame­work that’s been proven and just stick to it, like glue.

[00:30:35] Tony: just grind it

[00:30:36] Cameron: Yeah, grind it out. Yeah. And, uh, uh, it does­n’t mat­ter if the mar­ket’s up or the mar­ket’s down, or you know, what’s going on with inter­est rates, et cetera. You just keep try­ing to do what you do, which is, as I say, find com­pa­nies with a good track record of gen­er­at­ing cash and buy them when you can get them at a dis­count and then hold them until they breach one of the sell trig­gers.

[00:30:59] Cameron: Then rinse and repeat. It’s that

[00:31:01] Tony: yeah, exact­ly. And some of our com­pa­nies will have high PEs, but we score com­pa­nies for hav­ing a low PE. So, um, not too many of them will have a high PE. We’re look­ing for stocks with low PEs. And one of the rea­sons for that is regres­sion to the mean. We want them to, we want them to, rewrite back up to a PE which is above the mar­ket aver­age now any­way so it’s even

[00:31:24] Tony: a bet­ter propo­si­tion for us to buy a cheap PE stock.

[00:31:27] Cameron: I was think­ing about this

[00:31:28] Cameron: dri­ving around the oth­er day, just about the the­sis. What’s the the­sis behind your invest­ing? And, you know, I was think­ing about the Mag7 stocks and, you know, as we’ve talked about on and off, you know, I, I love what these com­pa­nies are doing. I don’t know. Did you pay any atten­tion to Nvidi­a’s, uh, announce­ments

[00:31:47] Cameron: sort of last week?

[00:31:50] Tony: The only

[00:31:50] Tony: thing I paid atten­tion to was their new

[00:31:51] Tony: chip which yeah

[00:31:53] Cameron: Not a chip, Jensen Huang says. It’s a frame­work. It’s a plat­form. The Black­well plat­form. But this sort of stuff they’re doing is real­ly incred­i­ble and they also announced their robot­ics plat­form. They’re rolling out a robot­ics plat­form that robot man­u­fac­tur­ers can build on top of. They’re going to pro­vide the intel­li­gence and the chipset and every­thing and you can just plug it into your robot bod­ies and they’ve got an LLM built into it and all this kind of stuff.

[00:32:19] Cameron: They’re doing amaz­ing stuff. But in terms of invest­ing In Nvidia shares, I’d have to have a the­sis that, you know, explained why I’m invest­ing in this, apart from the greater fool the­o­ry, which is, I think it’ll be worth, some­body will be will­ing to pay more for it a year from now than they are today. Why?

[00:32:39] Cameron: Just because it’s going up. Like, it would be incred­i­bly dif­fi­cult for me, maybe oth­er peo­ple are smarter and could do it, but to look at any one of those Mag 7 com­pa­nies and, Pro­vide a ratio­nal, log­i­cal, sci­en­tif­ic the­sis for why it’s going to be worth more, uh, five years from now than it is now, apart from, well, it seems to be going well right now.

[00:33:05] Cameron: Right?

[00:33:06] Cameron: Hmm. Hmm.

[00:33:09] Tony: look I agree with you and look there are tech investors out there who have frame­works for this stuff um and met­rics for it and check­lists for it. You know, more pow­er to them. But, you know, what I’ve found is that if, if things are expen­sive and they regress to the mean, then these stocks are going to fall hard­er because they’ve risen hard­er.

[00:33:28] Tony: Um, you can see that in his­to­ry in the dot com crash is the obvi­ous one, but, um, yeah, they’re, they’re high­ly volatile. Uh, but again, if you’ve got a frame­work, which tells you how to get in and out of them, good luck to you.

[00:33:39] Tony: I just haven’t found one.

[00:33:42] Cameron: I want­ed to talk about, uh, the buy list just briefly for club mem­bers. There, uh, I think it was Daryl picked up that, uh, uh, two Josephine cal­cu­la­tions were the same cal­cu­la­tion and also raised the issue, which had been in the back of my head for a long time, but I had­n’t, Giv­en enough time is why do we have two Josephine cal­cu­la­tions?

[00:34:02] Cameron: Why are we look­ing at the closed price and also the cur­rent price? I think it’s an evo­lu­tion­ary thing. I think we had the closed price and then even­tu­al­ly we fig­ured out how to use, some­body fig­ured out how to use, uh, stock his­to­ry to do the cur­rent price. And we just tacked it on. Uh, we prob­a­bly don’t need it.

[00:34:19] Cameron: You agree that it’s the cur­rent price that we real­ly want to look at. So we’ll prob­a­bly

[00:34:22] Tony: Yeah. Cor­rect.

[00:34:23] Cameron: buy list. Start­ing next week, and thank you to Daryl for pick­ing up that the cur­rent price one was not look­ing at the cur­rent price at all. What, but, you know, and I do use that to fil­ter things when I’m look­ing at buy­ing stocks, but I always go and dou­ble check every­thing that I do these days before I buy any­thing.

[00:34:41] Cameron: I check that it’s hav­ing an update, I check that it’s good from a Josephine sta­tus, because I’ve learned from past mis­takes that, uh, you

[00:34:51] Cameron: can’t trust soft­ware.

[00:34:53] Tony: Yeah.

[00:34:53] Cameron: It can guide you, but don’t, don’t

[00:34:55] Cameron: rely on

[00:34:56] Tony: Ha. Ha.

[00:34:57] Cameron: Uh, Jor­dan also want­ed to point out that looks like Stock Doc­tor may still have an issue with shares on issue for URW.

[00:35:10] Cameron: He said using ASX or Yahoo Finance val­ue for shares on issue drops the score down to 0. 11. But I think URW is one of those things that we fig­ured out a while ago is dif­fi­cult to buy any­way, right? It’s the one that’s list­ed in Paris

[00:35:25] Cameron: or some­thing.

[00:35:28] Tony: Yeah, well, they have, they have CDIs for it here, but, um, I’m not sure if it’s dif­fi­cult to buy or not. I think you had prob­lems buy­ing it in your Super­fund,

[00:35:35] Cameron: Some peo­ple have had,

[00:35:36] Tony: some of our lis­ten­ers have

[00:35:37] Cameron: Some peo­ple have bought it. Oth­er peo­ple have strug­gled

[00:35:39] Cameron: to buy it just as a gen­er­al rule. I don’t touch it any­more because it seems dif­fi­cult, but, uh, yeah, any­way, but in case any­one is look­ing at URW, thank you, Jor­dan, for point­ing that out. I’ll let Stock Doc­tor know. And a cou­ple of months from now, they will prob­a­bly do some­thing about it.

[00:35:55] Cameron: Uh, Tony, what do you have

[00:35:57] Tony: Ha. Ha. Ha.

[00:35:58] Cameron: your things to

[00:35:59] Cameron: talk about list for today?

[00:36:01] Tony: Well, I want­ed to, to drill down into some arti­cles about Aussie broad­band, con­sid­er­ing how we talked about it recent­ly, and were won­der­ing why it dropped so much. Um There’s a cou­ple of arti­cles in the Fin Review which cov­ered it, uh, last week, I’m just gonna, um, quote one of them, uh, and the, the title is Exquis­ite Tim­ing of Aussie Share Rate.

[00:36:25] Tony: Um, in the, in the Fin Review last week, uh, they talk about the m and a fight between Phil Brit­t’s, Aussie Broad­band, and fel­low Tel­co Min­now Super­loop. Found­ed and for­mal­ly owned by Bevin Slat­tery, the sea­son War­riors. Slugged it out last year over soft­ware provider Sym­bio, which Aussie won with a $262 mil­lion offer.

[00:36:45] Tony: Aussie has since turned its atten­tion to gob­bling up Super­loop Lob­bing an Allscript $466 mil­lion offer on Feb­ru­ary 26. Super Loop’s board. Uh. Led by X. A. Amaysom, I was going to have to say that qui­et­ly, guys, slow­ly, because I think it’s Amaysing, but it’s Amaysom, Boss Peter O’Con­nell told Britain­Code to jog on.

[00:37:08] Tony: But Aussie had already bought a 19. 9 per­cent stake to take things hos­tile if need­ed. Two days lat­er, Aussie set­tled its trade and lodged its sub­stan­tial notice. Aussie has some expen­sive tal­ent in its cor­ner, Gold­man Sachs is work­ing the finan­cials and guid­ance for legal advice. Mak­ing it all the stranger that nobody seems to have read Super­loop’s con­sti­tu­tion before writ­ing the reg­istry.

[00:37:30] Tony: It’s not a hard doc­u­ment to find, it includes a cru­cial pas­sage which says no share­hold­er can acquire a more than 12 per­cent stake with­out advance approval from Sin­ga­pore­an reg­u­la­tors due to its busi­ness in the city state. The mat­ter has now land­ed in court after Super­loop demand­ed Aussie reduce its stake.

[00:37:45] Tony: Aussie, which says it became aware of the clause only on March 3, has since applied to reg­u­la­tors for per­mis­sion to keep its stake and labelled Super­loop’s sell order oppres­sive. It’s a right mess. That’s before even exam­in­ing the tim­ing of Aussie’s share reg­istry raid. Aussie once held a valu­able con­tract to pro­vide white label broad­band ser­vices to Ori­gin Ener­gy’s cus­tomers.

[00:38:08] Tony: We say once because last week it lost the con­tract to dot dot dot Super­loop, which expects it to boost earn­ings by more than 19 mil­lion dol­lars. So when did Aussie find out the com­pa­ny would lose out on the Ori­gin con­tract? to its pri­ma­ry rival. Aussie picked up its stake in Super­loop for about 95 cents per share, its sub­stan­tial share­hold­er notice says.

[00:38:28] Tony: That was a stag­ger­ing dis­count to the 1. 31 that the stock jumped to just two weeks lat­er after Super­loop announced the Ori­gin con­tract. Did Aussie have an inkling it was about to lose Ori­gins busi­ness to Super­loop? The world of white label tel­co providers in this coun­try is a small pond. But appar­ent­ly not.

[00:38:44] Tony: The col­umn put ques­tions to Aussie yes­ter­day about when it became aware it was being over­looked for Super­loop. Aussie put out an ASX state­ment that cat­e­gor­i­cal­ly denies any foul play. And the state­ment reads, as As Aussie Broad­band stat­ed in its pre­vi­ous announce­ment on March 14, relat­ing to the ter­mi­na­tion of the agree­ment, the notice received from Ori­gin was unex­pect­ed.

[00:39:03] Tony: It said, in fact, ABB, that’s Aussie Broad­band, was engaged in nego­ti­a­tions with Ori­gin towards the renew­al of the agree­ment, right up to the time the ter­mi­na­tion notice was received by ABB. The mat­ter returns to the court on Wednes­day. we talked about it. We knew that ABB had lost the Ori­gin con­tract and we thought that might have been behind the drop.

[00:39:25] Tony: But, uh, it now appears that they’ve launched a bid for Super­loop and that bid’s being tied up and looks a bit ama­teur­ish, um, based on what’s hap­pen­ing and could leave them in hot water if they actu­al­ly did know that they had lost the con­tract and Aussie and Super­loop gained the con­tract. And that hap­pened before they

[00:39:45] Tony: launched their raid on Super­loop. we’ll wait and

[00:39:48] Cameron: Why is that a, why is

[00:39:49] Cameron: that a prob­lem? I

[00:39:50] Cameron: mean, I

[00:39:52] Tony: Insid­er trad­ing. It’s, it’d be like any­body in the pub­lic find­ing out that, that Aussie Broad­band was going to lose its ori­gin con­tract, and it was going to Super­loop, and before it was announced to the mar­ket they, they buy a stake in Super­loop. So it’s crit­i­cal to, to, for that charts to be proved, it’s crit­i­cal to know when Aussie Broad­band first became aware that the con­tract was going to Super­loop and whether they act­ed after that and before the gen­er­al announce­ment to buy shares in Super­loop.

[00:40:20] Cameron: mm mm. The, the whole thing about, uh, need­ing reg­u­la­to­ry approval from the Sin­ga­pore­an gov­ern­ment, not, not pick­ing that up, seems.

[00:40:33] Cameron: Very ama­teur­ish, does­n’t it?

[00:40:34] Tony: it does. Um, I actu­al­ly, to be fair to Aussie Broad­band, I haven’t, I’ve nev­er heard of a com­pa­ny con­sti­tu­tion play­ing a crit­i­cal role in a takeover bat­tle like this. Like just because the com­pa­ny cor­po­ra­tion, the com­pa­ny con­sti­tu­tion says you can’t do it, does­n’t mean you can’t do it. Right, because that would be an obvi­ous takeover defence to any­one who has been tak­en over.

[00:40:57] Tony: I’ll just change my con­sti­tu­tion to pro­hib­it it. But that does­n’t hap­pen. But I think the point here is the con­sti­tu­tion would have alert­ed the takeover com­pa­ny, Aussie Broad­band, that there was this prob­lem with the

[00:41:10] Tony: Sin­ga­pore gov­ern­ment need­ing to give approvals.

[00:41:14] Cameron: Why would the Sin­ga­pore­an

[00:41:15] Cameron: gov­ern­ment need to do that though? I mean, it’s, I’m assum­ing it’s not like Super­loop has any par­tic­u­lar­ly fan­cy IP that, uh, the Sin­ga­pore­an gov­ern­ment does­n’t want to pro­vide an export license to, as you know, we talked about on the bull­shit fil­ter last week, Chi­na and ByteDance and Tik­Tok, the Chi­nese gov­ern­ment appar­ent­ly are going to be very reluc­tant to, uh, Allow the sale of that to an Amer­i­can com­pa­ny. Um, I can’t under­stand what suit, what kind of IP Super­loop would have that would make it

[00:41:47] Cameron: a sen­si­tive export. But

[00:41:51] Tony: my guess was some­thing sim­i­lar, that Sin­ga­pore has a prob­lem with a broad­band provider, again this idea of Data mov­ing, uh, being con­trolled and mov­ing around in Sin­ga­pore by a for­eign own­er. Uh, and they have put this clause into the con­tract to pre­vent, say, a Chi­nese com­pa­ny from buy­ing Super­loop and then hav­ing access to the data that goes across the broad­band in Sin­ga­pore.

[00:42:14] Tony: That’s all I can think of, but I don’t have any

[00:42:17] Tony: evi­dence for that.

[00:42:19] Cameron: Super­loop was found­ed by an Aus­tralian, Bevan Slat­tery

[00:42:24] Tony: Yeah,

[00:42:24] Cameron: from

[00:42:24] Cameron: Rocky. So

[00:42:27] Tony: it’s been very suc­cess­ful at these kinds of things too.

[00:42:29] Cameron: what, that has to do with, uh, the Sin­ga­pore­an gov­ern­ment, I don’t know. how does

[00:42:38] Cameron: that, how does that work? Let’s

[00:42:40] Tony: Well, they might just have a gen­er­al, they might just have a gen­er­al, um, law about com­pa­nies, you know, not, um, not chang­ing con­trol once they’ve, you know, done due dili­gence on a com­pa­ny to say, yes, we don’t mind that you oper­ate in our, in our, uh, city, um, state and, uh, pro­vide us with infra­struc­ture, but we want to make sure you don’t change con­trol on that and

[00:43:02] Tony: give us a prob­lem.

[00:43:02] Tony: Well, if, if

[00:43:05] Cameron: Wikipedia says in Octo­ber 2021, Super­loop announced it would sell its Hong Kong sub­sidiary and cer­tain assets in Sin­ga­pore to Colum­bia Cap­i­tal and Dig­i­tal Bridge Invest­ment Man­age­ment for 140 in April 2022. But there’s no men­tion about how it’s deeply con­nect­ed with the Sin­ga­pore­an gov­ern­ment here.

[00:43:32] Cameron: It’s

[00:43:33] Tony: Super­loop have sold their Sin­ga­pore­an busi­ness, then that must be just a hang­over in their con­sti­tu­tion. I would­n’t have thought the Sin­ga­pore gov­ern­ment gives two hoots about an Aus­tralian com­pa­ny that does­n’t do busi­ness in Sin­ga­pore any­more.

[00:43:46] Cameron: very strange.

[00:43:48] Tony: Hmm.

[00:43:49] Cameron: Hmm.

[00:43:50] Tony: Any­way, I think the point of the Rear Win­dow arti­cle is that, um, Aussie Broad­band should have done bet­ter due dili­gence, and Gold­man Sachs and Gadens who are work­ing for Aussie Broad­band should have done bet­ter

[00:43:59] Tony: due dili­gence on all of this.

[00:44:01] Cameron: Hmm. But Aus­tralian busi­ness­es are so well run, uh, accord­ing to Chan­ti­cleer.

[00:44:09] Cameron: Oh, who­ev­er Chan­ti­cleer was quot­ing.

[00:44:10] Tony: Yes, because their earn­ings are get­ting bet­ter and they’re worth pay­ing more

[00:44:13] Tony: for.

[00:44:15] Cameron: All right.

[00:44:16] Cameron: You got a pulled pork for us now?

[00:44:18] Tony: I do. I have a pulled pork on child­care com­pa­ny G8. So the code for this one is GEM. They’re recent­ly on the buy list this week. So it’s a new one. Or even though it’s down towards the bot­tom.

[00:44:34] Tony: But I thought they were large enough to be of inter­est

[00:44:37] Tony: to peo­ple.

[00:44:37] Cameron: Not that new.

[00:44:38] Tony: Speak­ing of class

[00:44:39] Cameron: We, hold it We hold it in

[00:44:41] Cameron: a port­fo­lio. It might actu­al­ly be in my

[00:44:43] Cameron: super. So, it’s been

[00:44:45] Cameron: around for a while.

[00:44:48] Tony: you can delay the pub­li­ca­tion of

[00:44:50] Tony: this pod­cast while you sell it from your super if you’re wor­ried about the curse of the pulled

[00:44:53] Cameron: I added it to my super and also to one of the live port­fo­lios, uh, towards the end of Feb­ru­ary, about a month ago. So it’s up 1%, down 2%, depend­ing on the port­fo­lio. So yeah. Okay. Be care­ful.

[00:45:06] Cameron: Be care­ful what you say, Tony. Okay.

[00:45:08] Tony: Actu­al­ly, I thought it was new on the buy list this week, so apolo­gies if it’s been there recent­ly. It was flagged as a new one this week, so maybe it came off and came back on. Any­way, um, it’s a Josephine, so be aware of that. It’s not, uh, it’s not for buy­ing today, but it’s not that much of a Josephine that it can’t be a buy, um, in the next cou­ple of days or in the next few weeks.

[00:45:30] Tony: Um, in research­ing it today, the first thing that jumped out was that they have set­tled a class action, um, tak­en against them for, uh, rais­ing funds after pro­vid­ing prof­it guid­ance that, um, did­n’t turn out to be accu­rate. So, just what we were talk­ing about before, um, and I actu­al­ly, I did think that might have been behind recent share price moves, but, um, I think the price is actu­al­ly about the same or down today, so, maybe not.

[00:45:58] Tony: Um, the good thing about the class action that was set, and I’ll, I’ll, actu­al­ly I’ll read a bit about the class action just to, um, round this out. Uh, this comes from the finan­cial review today. G8 Edu­ca­tion has set­tled a class action law­suit for 46. 5 mil­lion just weeks before a tri­al was due to start over the child­care giant hav­ing alleged­ly botched earn­ings fore­casts.

[00:46:19] Tony: The set­tle­ment for Gold Coast based G8, which has 430 cen­tres under brands includ­ing Pen­guin Child­care and G8 Edu­ca­tion, Casabran­ca, I think it’s pro­nounced, will hit share­hold­ers despite the com­pa­ny hav­ing insur­ance. The net cash flow after tax and insur­ance would be 24. 5 mil­lion, G8 said. Still, the com­pa­ny had ear­ly pro­vid­ed for such a pay­out, with the AFR last month high­light­ing it as much in their pay­out.

[00:46:43] Tony: Pro­vi­sions. The pro­vi­sions plus insur­ance meant that no fur­ther hits to prof­it were expect­ed for this cal­en­dar year. The com­pa­ny said Slater and Gor­don had kicked off the case in Novem­ber, 2020 in Vic­to­ri­a’s Supreme Court with a tri­al due next month. The action cen­tered on whether G eight breach con­tin­u­ous dis­clo­sure oblig­a­tions in May.

[00:47:02] Tony: 2017, when hav­ing raised 100 mil­lion, pre­dict­ed 2017’s cal­en­dar year earn­ings before inter­est and tax would be 170 mil­lion. The pre­dic­tion fell short, with G8’s final under­ly­ing EBIT fig­ure hit­ting 156 mil­lion, and only in Decem­ber that year did warned fore­casts would be missed, part­ly due to a glut of cen­ters and new staff break reg­u­la­tions result­ing in a shred­ding of the share price.

[00:47:27] Tony: So Get­ting back to what I said about Amcor before, they’ve reaf­firmed their prof­it guid­ance, even though the CEO’s resigned, so com­pa­nies don’t do it light­ly, giv­en that. But giv­en the fact that they’ve set­tled the class action, so it’s no longer hang­ing over the share price, and it’s been set­tled for the amount they pro­vid­ed, plus the insur­ance claim, I think that it’s actu­al­ly a bit of a good news sto­ry for G8, on that front any­way.

[00:47:51] Tony: So peo­ple will have realised from that lit­tle snip­pet there that G8 is a child­care com­pa­ny. Uh, provider around Aus­tralia, um, some­thing like 430 cen­tres in Aus­tralia, 45, 000 chil­dren are looked after per week by this com­pa­ny, and they employ, uh, over 10, 000 team mem­bers. So it’s quite a large. Employ­er and quite a large com­pa­ny in the sec­tor. A cou­ple of things that have hap­pened in the last few years, being a child­care oper­a­tor was hit pret­ty hard dur­ing the COVID out­break with cen­tres not being able to oper­ate and dif­fi­cul­ty get­ting staff in when they were able to oper­ate. So, uh, for exam­ple, their oper­at­ing cash flow went from 189 mil­lion to 2.

[00:48:35] Tony: 5 mil­lion. In Decem­ber, 2020 down to 75 and June 22, and then it’s now back up to $201 mil­lion in its lat­est half year results. So the, it did get hit pret­ty hard. The share price dropped from $2 80 down to 88 cents. Um, so of, in that covid time. So it took a big hit for that and it’s now work­ing its way back.

[00:48:57] Tony: Uh. ADT for this com­pa­ny is 671 mil­lion, so it’s, it’s pret­ty large for any­one who’s inter­est­ed in buy­ing it. Um, it has just post­ed good results that could also be behind the increase in the share price in the last few months. Rev­enue was up 9%, net prof­it after tax was up, uh, 53 per­cent in fact, and, um, they increased their div­i­dend by 50%.

[00:49:21] Tony: So, uh, They’re basi­cal­ly call­ing out the worst of the COVID times is over. And last year they did call out they were hav­ing prob­lems because of the cost of liv­ing issues, so fam­i­lies were drop­ping out from tak­ing their kids to kindy, espe­cial­ly in hard hit areas, find­ing it hard to get staff, there’s a bit COVID I guess, and their sup­ply chain costs were increas­ing.

[00:49:49] Tony: But they seem to be cop­ing with that. They did put their fees up. last year, so that’s to take into account those things. And the oth­er thing they did in the last lit­tle while was to hire a new CEO, and I’ll come back to him a bit lat­er. As I said before, this com­pa­ny runs Lots of dif­fer­ent brands. Looks like as they acquire a child­care cen­ter or net­work, they keep the brand­ing in place.

[00:50:15] Tony: So there’s no, does­n’t appear to be any G8 brand­ing. It’s var­i­ous brands like Pel­i­cans, Jel­ly Beans, Bug­gles, sort of names you expect for child­care cen­ters. And there’s lots of them. So, what do the num­bers tell us? Uh, I’m using a share price of 1. 25, which is less than con­sen­sus tar­get, but above IV1 of 0.

[00:50:39] Tony: of 0. 86. The yield on this com­pa­ny is 3. 6%, so even though it’s gone up, it’s still not meet­ing our check­list cut­off, so we can’t score it for that. Stock Doc­tor finan­cial health and trend is strong and steady, which are both good. Uh, I’ll high­light the peo­ple who are inter­est­ed. The com­pa­ny has a low ROE of 6.

[00:50:58] Tony: 7%. Not that we score it for that, but it’s a thing. PE for this com­pa­ny is rea­son­ably high, 16. 81, which is not the low­est, um, because dur­ing the pan­dem­ic the PE dropped to 12 times, so we can’t score it for that. Um, how­ev­er, Prop­Caf is, is five times, so plen­ty of cash being gen­er­at­ed by the com­pa­ny, but it does have a rea­son­ably high cost struc­ture, which is why the PE is a lit­tle bit on the high side.

[00:51:26] Tony: Uh, net equi­ty per share for this com­pa­ny, um, Scores for us when we add 30 per­cent to it. So, uh, Neps plus 30 per­cent is 1. 45, share price is 1. 25. So we can score it for that. Inter­est­ing thing is, um, is, uh, that’s net equi­ty per share plus 30 per­cent 1. 45. Net tan­gi­ble assets is slight­ly neg­a­tive at 18 cents, neg­a­tive 18 cents.

[00:51:49] Tony: So the his­to­ry of this com­pa­ny is that it’s been a roll up. They have acquired all these var­i­ous, uh, assets. Net­works of child­care cen­ters and indi­vid­ual child­care cen­ters over time. Uh, and it’s One of those things I’ve warned peo­ple about with roll ups is that they go from being a growth stock to being a, in this case, a val­ue stock to being like an oper­a­tional based stock or oper­a­tional­ly focused stock, which seems to be the case now.

[00:52:17] Tony: They’ve just employed a new CEO, has a quite a good career in retail, so man­ag­ing large teams, man­ag­ing remote loca­tions and indi­vid­ual site out­lets, that kind of thing. Uh, the, uh, throw­ing off lots of oper­at­ing cash flow, they’ve been pay­ing down debt, which is good, um, they’ve increased the div­i­dends, so they, they don’t, I haven’t, there was noth­ing in any­thing I read about the com­pa­ny that sug­gest­ed they were about to take over anoth­er net­work of child­care cen­tres, and in fact they’ve been divest­ing their poor per­form­ing ones, so, uh, they, they plan to get rid of, um, I think it’s 31 cen­tres this year.

[00:52:55] Tony: So it looks like this has tran­si­tioned from a growth stock to a, um, a sort of busi­ness as usu­al stock with a focus on oper­a­tional per­for­mance, which then brings it, I guess, more square­ly into the sights of val­ue investors rather than those look­ing for a hit to rev­enue by acqui­si­tion. But it does de risk it for us because it prob­a­bly means they won’t be rais­ing cap­i­tal and we have to put in more mon­ey.

[00:53:19] Tony: Down the track, which often hap­pens with rollups. And it also means that, you know, we get a bet­ter, I guess, from my point of view, we’re get­ting a bet­ter look at the oper­a­tions of the busi­ness because we’re not, we’re not hav­ing to decide whether the growth is com­ing from the sites that they’ve just bought or whether the costs are being, you know, hurt because of the inte­gra­tion of new cen­ters, all that kind of thing.

[00:53:41] Tony: Um, so, uh, that appears to be tak­ing place. They haven’t actu­al­ly, I did­n’t actu­al­ly read any­thing to say that’s what they were doing, but I, I also haven’t seen any evi­dence to sug­gest they’re still rolling up child care cen­ters. Uh, back to the num­bers. Um, earn­ings per share growth is fore­cast at 20%, which is good, but growth over PE is only 1.

[00:54:02] Tony: 17, and I like to look for 1. 5 times, so we can’t score it for that. Com­pa­ny has no own­er founder. It has in the past, but they’ve lost. They’ve gone, so we can’t count it for that. Uh, so all in all, qual­i­ty score is 8 out of 15, or 53%, and the QAV score is 0. 11. So it’s down towards the bot­tom of the buy list.

[00:54:22] Tony: Um, but it is a large ADT stock. Uh, a lot of things to like, I thought, about this stock. The re the real­ly the only sort of risk I could see, apart from the fact that they may change their mind and try and raise mon­ey and buy anoth­er net­work of, of, um, of cen­tres, uh, is that, um, There’s a lot of focus on the indus­try and in par­tic­u­lar, uh, from, from two ways, is the gov­ern­ment fund­ing of child­care spaces enough?

[00:54:48] Tony: And, uh, sec­on­dar­i­ly, are the work­ers in the area being paid enough, care work­ers in the area being paid enough? So, um, there’s a Pro­duc­tiv­i­ty Com­mis­sion inquiry. There was an ACCC inquiry. There’s, there’s var­i­ous oth­er state lev­el gov­ern­ment inquiries going on. Um, G8 say they’re being, um, proac­tive in engag­ing with all of these inquiries, but it could come out as a good thing or a bad thing.

[00:55:12] Tony: So it could come out rec­om­mend­ing the gov­ern­ment has to pay more in fund­ing to keep child care viable, or it could come out as a bad thing that the child care So, I saw that as a risk, but it may go either way. On the pos­i­tive side, one of the things that the com­pa­ny calls out in its report­ing is the per­cent­age of wom­en’s par­tic­i­pa­tion in the work­force.

[00:55:38] Tony: And I know from Jen­ny’s engage­ment with, uh, Chief Exec­u­tive Women over the years that they see child­care as a key, a key way to get women to, uh, increase their, their hours in the work­force, and that makes sense to me. And this com­pa­ny sees it as well, and, and they’ve called out the fact that that, uh, par­tic­i­pa­tion by females is still increas­ing, and that’s a, a bit of a tail­wind for this busi­ness.

[00:56:01] Tony: Um. They also say the same thing about net migra­tion, that, uh, that boosts their enroll­ments too. And, and, um, enroll­ments, but also the, uh, uh, what’s the word I’m look­ing for? The capac­i­ty, well, the capac­i­ty used, uti­liza­tion rate is the term for the, for child care cen­ters, because again, you can have child care cen­ters, but if they’re not run­ning at a high uti­liza­tion rate, there are costs.

[00:56:25] Tony: So that’s some­thing else they focus on. But, but, um, Work­force par­tic­i­pa­tion by females and net migra­tion are both going up and they both help to sup­port enroll­ments for this com­pa­ny. Um, what else can I say about it? I want­ed to just talk quick­ly about the CEO. He start­ed, I think, at the end of last year.

[00:56:46] Tony: His name is Pedge­man Okho­vat, O K H O V A T, um, and he’s the ex MD of Big W, um, has before been the CEO of the Ware­house Group in New Zealand, a big New Zealand sort of Kmart like, uh, or Wal­mart like, um, uh, retail­er, and had a career in the UK at M& S, Marks Spencer, Marks and Sparks, Marks and Spencers, Sains­bury’s, and Asda Wal­mart.

[00:57:11] Tony: So they’ve, they’ve picked an oper­a­tional, a very expe­ri­enced oper­a­tional retail­er to run this com­pa­ny. Not, not some­one with child care expe­ri­ence, I grant, but some­body used to, um, you know, work­ing with slim mar­gins and uti­liza­tion rates and all that kind of thing. So it does make me think that they’re, I’m going to be more oper­a­tional­ly focused going on.

[00:57:33] Tony: Uh, yeah, so they’re all the pos­i­tives about the com­pa­ny, um, and it scores well for us, so I think it’s worth peo­ple hav­ing a look

[00:57:40] Tony: at, uh, G8 Edu­ca­tion.

[00:57:43] Cameron: There you go, Jim. Just wait until it has its pulled pork curse, gets through

[00:57:50] Cameron: that and, uh, come out the oth­er side, buy it on the dip, buy it on the pulled

[00:57:54] Cameron: pork.

[00:57:56] Tony: to refer you to the sen­si­tive train­ing book that you’ve got. And I also point out, I think I did a pull up walk on

[00:58:02] Tony: KSC a num­ber of years ago too, which has done

[00:58:06] Cameron: Yeah, but it’s, it’s

[00:58:07] Cameron: gone through the dip and come back out

[00:58:08] Cameron: the oth­er side, you know,

[00:58:09] Tony: Oh, I had­n’t. Okay. Right. Ha

[00:58:12] Cameron: on, sell on the pulled

[00:58:12] Cameron: pork.

[00:58:13] Tony: Mmm. Mmm.

[00:58:16] Cameron: Thank you for that, Tony. You talk about oth­er acqui­si­tions. I feel like the child­care cen­ter indus­try has been going through roll ups for, for a long time. 15 years. Is there any­thing, any­thing left to roll up?

[00:58:28] Cameron: Haven’t they all been rolled

[00:58:29] Cameron: up?

[00:58:30] Tony: Quite pos­si­bly,

[00:58:31] Cameron: Was­n’t it Eddie, Eddie some­body or

[00:58:34] Tony: Eddie Groves.

[00:58:35] Cameron: Kroves, yeah. That was years

[00:58:37] Cameron: ago.

[00:58:38] Tony: Yes. Had one of the best mul­lets

[00:58:41] Tony: Eddie Groves. The bogan from Bris­bane, he was dubbed.

[00:58:44] Cameron: What’s he up to these days I won­der?

[00:58:46] Tony: Oh, I don’t know. Um, I imag­ine he’s not in, um, in the Bahamas or any­thing like that because he, he went bank­rupt back then.

[00:58:53] Cameron: Uh, it’s the best place to be.

[00:58:55] Cameron: You go bank­rupt. Yeah,

[00:58:57] Tony: In Bris­bane.

[00:58:58] Cameron: Yeah, it just feels like one of those things that, uh, I’ve been hear­ing about child­care cen­ter roll ups

[00:59:04] Cameron: for­ev­er.

[00:59:07] Tony: And quite pos­si­bly this com­pa­ny’s not doing any more rollers because there’s no more to roll up. So that’s

[00:59:11] Tony: Entire­ly

[00:59:12] Cameron: All been rolled.

[00:59:14] Tony: You’ll be enrolled, that’s

[00:59:15] Cameron: So it could be merg­ers, I guess, with oth­er

[00:59:17] Cameron: big net­works. All

[00:59:20] Tony: Well, I think from mem­o­ry, there’s only two now. There’s G8, that I know of any­way, there could be some more. And there was one that bought Eddie Grove’s com­pa­ny out of admin­is­tra­tion, but it was set up by a con­sor­tium of char­i­ties. I think Evan Thorn­ley was involved, um, and, uh, poten­tial­ly some of the unions for the work­ers in the sec­tor.

[00:59:40] Tony: And I think they’ve, they’ve been rea­son­ably suc­cess­ful as well since then, but they’re not

[00:59:44] Tony: list­ed.

[00:59:44] Cameron: right. Thank you for doing that. We’ve only got one ques­tion. It’s from Trent. Hypo­thet­i­cal­ly, if I was a rule break­er and held VUK on Takeover News, what would one do now? I like this. I’m going to ask the guys who set the rules what to do if I break the rules. Uh, as it

[01:00:08] Tony: Oh dear. Yeah. it’s

[01:00:08] Cameron: Do what­ev­er the hell you want, Trent.

[01:00:10] Tony: Scot­tish play in the the­atre. Yeah, that’s right. Yeah.

[01:00:13] Cameron: You’re the one break­ing the rules.

[01:00:14] Cameron: Like just, he’s like, what are the rules for rule break­ers?

[01:00:21] Tony: Well, the only rule is don’t come cry­ing to Mum. I told you not to

[01:00:24] Tony: do it.

[01:00:24] Cameron: I told you not to jump off the roof. As it has a set price, seems a done deal, so share price will only now move based on cur­ren­cy. There­fore, best to move on and rein­vest to some­thing else on buy list ver­sus AWC takeover by Alcoa, which will move with price of Alcoa, so assume trade is a 3PTL. Do you have any thoughts on rules for rule break­ers, Tony?

[01:00:49] Tony: Well, it’s. They are two sep­a­rate indi­vid­ual cas­es, VUK and AWC. My sort of gen­er­al rule is that once some­thing gets to the stage that VUK’s at, where the board­’s accept­ed, the share price is re rat­ed back up to the takeover offer price, you’ve got a lit­tle bit of time before the trans­ac­tion goes through, so you might hold it for a lit­tle bit, wait to see if anoth­er offer comes along, but if it does­n’t, you’ve Um, I would­n’t wait for the trans­ac­tion to fin­ish.

[01:01:18] Tony: I would sell and move on. That’s, that’s I think the case in VUK. Because there is a risk that the acquir­er takes the bid or with­draws the bid and goes away. And there was an arti­cle in the Fin Review last week about this par­tic­u­lar takeover say­ing that, uh, I think it’s a co op or a build­ing soci­ety co op in the UK that’s, um, merg­ing with VUK or tak­ing over VUK.

[01:01:42] Tony: And, uh, There’s some undis­crun­tled mem­bers of the co op who want the whole thing to be put to a vote of the mem­bers. And the man­age­ment of the co op was say­ing, no, we don’t need to. So the infer­ence in the arti­cle was if it does go to a vote, it may not get up and the whole thing could crum­ble. So that’s always a risk.

[01:02:03] Tony: If you wait too long, the bid­der walks away. Is it pos­si­ble some­body else will come out of the wood­work and bid for VUK? Well it’s pos­si­ble but as time goes on it’s less like­ly. So I’m inclined. Would I feel bad basi­cal­ly if, if, if the bid­der walked away and VUK dropped 30%? Yes. Would I feel bad if anoth­er bid came and I sold it and I missed out on an increase but I bought some­thing else which was going up?

[01:02:31] Tony: No, so that’s why I tend to, you know, once, once the bid price is in the share price, which some­times it’s not because some­times the mar­ket is skep­ti­cal about the takeover going ahead. Once the bid price is near the share price, the share price is near the bid price, the board have accept­ed, there’s been a fair val­u­a­tion report done, which also endors­es the bid.

[01:02:52] Tony: That’s usu­al­ly, I might wait a week or two, but that’s usu­al­ly good enough for me. And I’ll move on. The same thing applies in AWC’s case. Um, I’m not sure whether AWC has been on our buy list, but it may have been. Um, and the rea­son why I’m skep­ti­cal it’s been on their buy list is they made a 229 mil­lion loss last year.

[01:03:09] Tony: So, it’s unlike­ly they would have

[01:03:11] Tony: been on our buy list recent­ly any­way, since the results came out.

[01:03:15] Cameron: Haven’t been

[01:03:15] Tony: a lit­tle bit dif­fer­ent.

[01:03:16] Cameron: for the last cou­ple of years, if I go back to Sep­tem­ber 2021, haven’t been on it

[01:03:21] Cameron: since then.

[01:03:22] Tony: okay, and it’s a, it’s an alu­mini­um smelter and baux­ite min­er, so I’m not sure where alu­mini­um is in terms of a com­mod­i­ty sale, uh, but that would be anoth­er, um, fac­tor to take into account, uh, so again, I, um, The only nat­ur­al buy­er for AWC is Alcoa, which is the US alu­mini­um giant. And the rea­son why I say that is because the only assets that AWC hold is a 40 per­cent joint ven­ture with Alcoa in the Aus­tralian smelters and refin­ers and bulk site mines.

[01:03:54] Tony: So it’s, I can’t see a case where some­body else could come in and lob an offer for AWC. to take out a 40 per­cent of the JV. Um, and that, that being sat­is­fac­to­ry to Alcoa, because it’s prob­a­bly going to be a com­peti­tor. So, and Alcoa holds the major­i­ty stake in the JV. So it’s unlike­ly some­one else is going to bid for this com­pa­ny and take on that bat­tle.

[01:04:15] Tony: Um, so, you know, I think, I think it’s also fair to say that, um, it’s been sort of stock mar­ket law for a long time that this bid would come. I think it’s prob­a­bly com­ing at the right time for Alcoa rather than AWC. AWC is los­ing mon­ey. Uh, the. Well, the alu­mini­um price is prob­a­bly down. Um, com­pared to its highs.

[01:04:35] Tony: So Alcoa aren’t going to be dumb about when they take over this com­pa­ny, they’ll be smart, but you do have the option if you, if you take that view to, to accept the share offer from Alcoa and take their shares in, um, in the U S and that’s, that’s what, uh, One of these share­hold­ers is doing a check by the name of Simon Mar­wi­ni, who’s a big share­hold­er through his fund in, in AWC.

[01:04:57] Tony: He’s hap­py to take the share offer and, and take a stake in Alcoa because he thinks Alcoa is get­ting this, um, com­pa­ny for a steal. And that when the alu­mini­um prices turns up, then all these assets will make mon­ey. And the oth­er thing is that with the joint ven­ture struc­ture the way it is, both part­ners have to agree on, um, on things like tak­ing on debt, on acqui­si­tions, all that kind of thing.

[01:05:21] Tony: And AWC’s Being the poor part of, the poor cousin of the rela­tion­ship, has­n’t been keen to do that. So if Alcoa con­trols all of these assets, I would expect to see a fresh round of a cap­i­tal project start­ed by then, which would be good for Alcoa. So, yeah, um, if Trent feels that way as well, and he can do his own research, then hap­pi­ly accept it.

[01:05:42] Tony: Um, if he does­n’t feel that way, then again, I would be a sell­er on, um, on mar­ket of this and move on to some­thing else. As he points out, this is a script offer, so as Alcoa’s price goes up, the share, the takeover becomes more, um, attrac­tive, and the AWC price will go up too, but what goes up can come down, so it’s the risk you take.

[01:06:02] Tony: Um, you know, it’s not, it’s not a straight risk on the upside for this one either.

[01:06:08] Cameron: What goes up must come down, ba ba da ba, spin­ning wheel. Do you ever go see this band in Mel­bourne 25 years ago? Um, not the Melody Lords. We did

[01:06:22] Cameron: talk about them last week and I sent you a clip. Did you watch that

[01:06:24] Tony: Yes, come up and see

[01:06:26] Cameron: Yeah, how great was that

[01:06:27] Cameron: clip?

[01:06:28] Tony: good. Yeah.

[01:06:29] Cameron: there was anoth­er band I used to go see at the Con­ti­nen­tal. And it had a girl’s, it was a guy lead singer, but he had a girl’s name and I can’t remem­ber what it was now. But it was a sim­i­lar sort of, not, not, not glam, but sort of anoth­er sort of raunchy com­e­dy rock per­for­mance. Um, he used to go down and hit on every­one in the audi­ence. Um, and they used to do that song.

[01:06:52] Cameron: He had like a brass sec­tion. I can’t remem­ber. Was­n’t Cap­tain Spauld­ing, who I used to go watch a lot

[01:06:58] Tony: Right.

[01:06:59] Cameron: Can’t remem­ber the name of the band, but

[01:07:01] Tony: There was a band with horns I used to see called, I think they were called the Kick Ass Horns.

[01:07:05] Cameron: no, it’s not

[01:07:06] Tony: Some­thing

[01:07:06] Tony: like that. but it does­n’t sound like them.

[01:07:09] Cameron: but they used to do

[01:07:10] Cameron: that, you know, what­ev­er, that spin­ning wheel. And then Bryce said, it was great.

[01:07:16] Cameron: Fan­tas­tic. Good times.

[01:07:18] Tony: I love brass.

[01:07:20] Cameron: Um, Well, uh, oh, alu­mini­um is a buy by the way, and CAA is on our buy list at the moment. It’s the one alu­mini­um stock that we nor­mal­ly see come and go when alu­mini­um is a buy.

[01:07:32] Cameron: Alu­mini­um’s been a buy for the last month or so. There was a

[01:07:35] Cameron: Josephine in the sale before that.

[01:07:37] Tony: so good tim­ing for Alcoa to take this

[01:07:39] Tony: com­pa­ny out of the ASX.

[01:07:41] Cameron: Hmm. Uh, we had one last request for next week or a future week from Sim­mo. Um, he’d like a pulled pork on ASB, Austal, the uh, ship­ping com­pa­ny. ASB at

[01:07:55] Cameron: some point.

[01:07:57] Tony: I’m hap­py to do it. I think I’ve already done it though. So maybe just check how long ago

[01:08:01] Tony: that was. Might help Simone

[01:08:03] Cameron: Oh, I’ve been try­ing to fig­ure out how to come up with a list of all the

[01:08:07] Cameron: pulled books.

[01:08:09] Tony: Yeah.

[01:08:10] Cameron: ASB.

[01:08:10] Tony: had one,

[01:08:11] Cameron: No, let’s see, uh,

[01:08:15] Cameron: I could prob­a­bly do one

[01:08:17] Tony: I can do it, but I’m fair­ly sure I’ve

[01:08:19] Tony: done it over the last cou­ple of years.

[01:08:21] Cameron: Well, it’s about that time where you need to start

[01:08:23] Cameron: recy­cling these, Tony.

[01:08:25] Tony: Here it is, isn’t

[01:08:26] Cameron: Now, I can’t see any in my

[01:08:27] Cameron: notes for ASB.

[01:08:30] Tony: well, hap­py to do it.

[01:08:32] Cameron: Hos­tile. No, noth­ing. All right, see how you go. After hours, Tony. Tell me about the three body prob­lem. Tony, I still haven’t had a

[01:08:43] Cameron: chance to watch it.

[01:08:45] Tony: no, I’ve watched it one and a half times already. It’s so good.

[01:08:51] Tony: No, I watched it when it, when it was released and then Jen­ny and I, Jen­ny had­n’t,

[01:08:55] Tony: so I went back And start­ed watch­ing it? with her again last night.

[01:08:59] Cameron: And what did she

[01:08:59] Cameron: think of it? Because she has­n’t read the books, right? So what did she

[01:09:02] Tony: No, she’s lik­ing it. She, I mean, she’s, um, her feed­back was it’s real­ly good pro­duc­tion val­ues, it’s, you know, high bud­get thing, and, uh, yeah, um, she’s lik­ing it. It’s great. It’s so good. It’s, it’s, it’s made by the pro­duc­ers of Game of Thrones, so you’d expect it to be a qual­i­ty pro­duc­tion.

[01:09:22] Cameron: Well, except,

[01:09:23] Tony: I know you don’t like the end­ing of Game of Thrones, but the first

[01:09:26] Tony: five sea­sons were

[01:09:27] Cameron: yes.

[01:09:28] Tony: Yeah.

[01:09:29] Cameron: Ah, yeah.

[01:09:32] Tony: and watch­ing it a sec­ond time, like, there’s so much fore­shad­ow­ing in it you don’t pick up until you re watch

[01:09:37] Cameron: Right.

[01:09:38] Tony: Um, yeah, one of the, just, I’m not going to give any away, but one of the things that hap­pens in, in, dur­ing the movie is that the aliens, um, Let the humans know that they’re there by chang­ing all the mes­sages at Times Square and across the world on TV screens, etc.

[01:09:55] Tony: and says, you are bugs. And that’s all it says. And I did­n’t real­ize it, but the very open­ing, open­ing line of the, of the series is, you’re a bug! Because it’s said in the, said in the com­mu­nist rev­o­lu­tion when they’re harangu­ing the sci­en­tists in Chi­na in the 60s.

[01:10:17] Cameron: not the com­mu­nist rev­o­lu­tion. It’s the, um,

[01:10:20] Cameron: what did they call that part of it? That was

[01:10:22] Tony: a great leap for­ward.

[01:10:24] Cameron: Yeah. Yeah.

[01:10:24] Tony: not the rev­o­lu­tion. You’re right. Yeah.

[01:10:28] Tony: Yeah. Oh, it’s so good. And it’s, it sends chills. Just, uh, you know, that, that scene when the Chi­nese sci­en­tist who’s been, who’s dis­af­fect­ed with the whole sit­u­a­tion replies. I won’t say to whom or to what and what she

[01:10:43] Tony: says, but it’s just like, Oh my God.

[01:10:47] Cameron: Yeah, if you’ve read the books and you know what’s com­ing, like,

[01:10:49] Cameron: yeah.

[01:10:50] Tony: yeah, but then just see­ing

[01:10:53] Tony: it it’s, it’s just, yeah,

[01:10:55] Cameron: And are they just doing the first book with

[01:10:56] Cameron: this or is it the tril­o­gy?

[01:10:59] Tony: Well, that’s the crit­i­cism I’ve got. It’s eight episodes and it just stops. So it’s prob­a­bly halfway through book two from

[01:11:06] Tony: my rec­ol­lec­tion of where the books are. But it does­n’t come to any

[01:11:09] Cameron: So you’ve watched the whole thing? Wow! That’s, that a busy

[01:11:13] Tony: oh yeah, yeah. I loved it. It’s so good. It’s a, it’s a, it’s a slow bird. It’s like, it’s because it’s British.

[01:11:21] Tony: It’s more like, Jen­ny said the same thing. It reminds us of Doc­tor Who. It’s, um, a lot of it’s set in Lon­don, um, or in Eng­land. And, uh, it’s got that Doc­tor Who Feel about it. So it’s not like an, if it was an Amer­i­can adap­ta­tion, I’m sure it would’ve start­ed with a alien inva­sion, like in the open­ing scenes, big space cruis­es or some­thing on the, on the screen.

[01:11:41] Tony: But it does­n’t, it takes a long time to get into the char­ac­ters, to get into the back­sto­ry,

[01:11:46] Tony: um, to set, to set the whole scene of what’s gonna hap­pen.

[01:11:49] Cameron: And that’s, you know, one

[01:11:50] Cameron: of the great thing about the first book is, yeah, and, and actu­al­ly the first time I tried to read it years ago when you first rec­om­mend­ed it to me, like, I found it very, the book was very slow going. It’s all this stuff hap­pen­ing and you don’t know why or what or what’s going on and, you know, you have to sort of hang in there with it to get to the end of the first book to find out what’s actu­al­ly going

[01:12:09] Cameron: on real­ly.

[01:12:11] Tony: Yeah. And I think it’s pret­ty true to the book. Cer­tain­ly all the sto­ry beats are there, but, um, I mean, I’ve done a cou­ple of short­cuts. I, from my, I haven’t read the book in 10 years, but from my mem­o­ry, the, in the first book that the, the aliens get the humans to play a com­put­er game to try and solve the three body prob­lem.

[01:12:29] Tony: And that’s done in a room above a shop with a com­put­er. But in

[01:12:34] Tony: this ver­sion of it, they put on a VR head­set.

[01:12:37] Cameron: Oh no,

[01:12:37] Cameron: that was in the book too. That was in the book too, the

[01:12:39] Tony: Oh, was it? Okay. Yeah. All right. Yeah.

[01:12:43] Tony: So, but yeah, so good.

[01:12:45] Cameron: It was more than a

[01:12:46] Cameron: VR head­set. It was like a full body, uh, thing that you put on too. So you, you felt all of the sen­sa­tions of the burn­ing plan­et and all of that kind of stuff when the sun, the three suns were, uh, in uni­ty or what­ev­er

[01:13:00] Cameron: they called it there.

[01:13:03] Tony: Yeah. No, there’s no, there’s no hap­tic suit. It’s just, just a, like peo­ple call it the bike hel­met. It’s just looked like a bike hel­met, like a, like an Ocu­lus Rift type thing that goes, but it’s a very space agey

[01:13:14] Tony: ver­sion of it.

[01:13:15] Cameron: Yeah.

[01:13:15] Cameron: I’ve seen a pho­to of it.

[01:13:17] Tony: Yeah. Okay.

[01:13:18] Cameron: yeah, it’s one of the, like, Chris­sy and I have had no time to watch much TV this week­end. It’s just been, Chris­sy and Fox were sick all week­end. They had some tum­my bug and so, you know, was­n’t a lot of TV watch­ing going on. Just throw­ing up and

[01:13:31] Cameron: late nights, that kind of stuff.

[01:13:34] Cameron: But yeah, it’s, it’s one of those things that like, Chris­sy and I did sit down to watch some­thing like 1030 last night was the first time. And I’m like, ah, it’s too late to start, you know, three body prob­lem thing. So, but we have watched a cou­ple of episodes of the gen­tle­men in the last week. Um,

[01:13:52] Cameron: yeah, which I’m enjoy­ing still.

[01:13:54] Tony: Yeah. I enjoyed that too.

[01:13:55] Cameron: It’s, it’s sil­ly, but it’s,

[01:13:57] Cameron: uh, it’s fun. I real­ly liked the girl in it who, uh, runs the Weed Lab. I’ve nev­er seen her before, but I thought her per­for­mance is great. And I saw the episode with Ray Win­ston. That was good. You know,

[01:14:10] Cameron: he, he always does a good job.

[01:14:13] Tony: Yeah. Him and Vin­nie Jones. It’s great to

[01:14:14] Tony: see them

[01:14:15] Cameron: Vin­nie Jones’s char­ac­ter is very dif­fer­ent from a usu­al Vin­nie Jones char­ac­ter, though, in a Guy

[01:14:19] Cameron: Ritchie thing. He’s quite, quite dif­fer­ent.

[01:14:22] Tony: Play­ing the old

[01:14:22] Cameron: Yeah, qui­et, calm, tough, but

[01:14:25] Cameron: he’s obvi­ous­ly got a, he’s got a his­to­ry. Um,

[01:14:29] Cameron: yeah, but I like it.

[01:14:31] Tony: And he’s, yeah. And I love when he goes,

[01:14:35] Tony: the main char­ac­ter goes to him for

[01:14:36] Tony: advice and he’s just like, mat­ter of fact,

[01:14:40] Cameron: They’re very seri­ous peo­ple. Um, did you watch sea­son two of White

[01:14:45] Cameron: Lotus?

[01:14:47] Tony: I haven’t watched sea­son one of White

[01:14:48] Cameron: Oh, you nev­er watched it. I thought you final­ly

[01:14:50] Cameron: did. Um, okay. So

[01:14:52] Tony: the first episode and did­n’t like it.

[01:14:53] Cameron: the guy who’s the new

[01:14:54] Cameron: Duke. in this, uh, was a com­plete douchebag in the sec­ond sea­son of White Lotus. He was like one of the rich, douchey, scum­bag slime­balls in, uh, that sea­son.

[01:15:11] Cameron: So it’s inter­est­ing to see him in this where he’s the good guy, basi­cal­ly. He’s, he’s, he’s the sen­si­ble, calm, ratio­nal, good guy. I’m used to see­ing him as a com­plete slime­ball douchebag,

[01:15:22] Cameron: so. Yeah.

[01:15:24] Tony: as opposed to his old­er broth­er,

[01:15:26] Cameron: Yes.

[01:15:26] Tony: thought was hilar­i­ous,

[01:15:28] Cameron: He’s old­er broth­ers. Yeah. Yeah. That was fun. Um, that’s about all. I’ve watched a cou­ple of episodes of that.

[01:15:38] Cameron: Um, been read­ing stuff about high­ly sen­si­tive peo­ple. Um, still try­ing to find a good book on math­e­mat­ics. I down­loaded the Prince­ton com­pendi­um to math­e­mat­ics over the week­end and tried to read that. And I was like, nah, I need to go back. I got Cal­cu­lus for Dum­mies, I’m going to try that next, but I’m still, I’ve got this, like, I want to go back to, back to uni, I want to go to uni, and, and study math­e­mat­ics.

[01:16:06] Cameron: I just feel like there’s this whole world of stuff that I don’t under­stand that is bug­ging me. And I can go, like, if I’m inter­est­ed in physics or some­thing like that, there’s a lot of pop­u­lar books on things like that you can go read and get a sense for what’s going on. I need to find some­thing sim­i­lar for, uh, Basics of pure math­e­mat­ics and, you know, maybe applied math­e­mat­ics as well.

[01:16:30] Cameron: But some­thing that gives me a bet­ter, deep­er, rich­er appre­ci­a­tion of math­e­mat­ics. That’s what I’m look­ing for. I haven’t

[01:16:37] Cameron: found it yet.

[01:16:40] Tony: yeah, I’ve only must admit my I’m just try­ing to think the books I’ve read are all usu­al­ly around invest­ing or prob­a­bil­i­ty. So, the his­to­ry of risk is a good one against the gods, which is, which deals with Fibonac­ci sequence and etc, etc, etc. So there’s a fair bit of maths in that, um, but that’s what they tend to be.

[01:17:00] Tony: They tend to focus on one thing or the oth­er, not the broad, but there’ll be some­thing out there. I’ll put my mind to it

[01:17:07] Tony: and think of some­thing.

[01:17:08] Cameron: Inter­est­ing, the Prince­ton com­pendi­um thing I was read­ing last night was say­ing it, you know, tends to sur­prise non math­e­mati­cians to learn that math­e­mat­ics is now such a spe­cial­ized field that you can have peo­ple that are world experts in one area of math­e­mat­ics that can read a paper by a close­ly, you know, by anoth­er pro­fes­sor in a close­ly con­nect­ed realm of math­e­mat­ics and not be able to under­stand any­thing that they’re read­ing.

[01:17:33] Cameron: It’s just so spe­cial­ized

[01:17:36] Cameron: and deep now that,

[01:17:38] Tony: Yeah, it’s not just that though, but I think maths has done itself a dis­ser­vice by its lan­guage. I think it’s, I think for me, once you can decode a math­e­mat­i­cal paper, you know, take away all the Greek sym­bols, under­stand what they mean. And it’s all short­hand. It makes a lot more sense.

[01:17:54] Tony: It’s much, it’s much, much sim­pler than it looks.

[01:17:58] Cameron: Well, that’s the prob­lem I’ve been hav­ing as I start to read books. So I was try­ing to read books on prob­a­bil­i­ties, you know, and I was like, okay, I don’t under­stand. I’m, this is going way too fast. I’m way out of my depth already. I’m only on page two. I need to go back a step. You know, it’s, it’s assum­ing a lev­el of a pri­ori knowl­edge that I don’t have because I did­n’t, you know, I did­n’t go to uni, it’s been 30 years since I was in high school.

[01:18:19] Cameron: I did­n’t real­ly pay much atten­tion to, I did maths one and maths two, but I did­n’t real­ly, you know, I think I failed maths too, and I was chas­ing, chas­ing girls and singing in rock bands. I was­n’t that inter­est­ed in

[01:18:31] Cameron: math­e­mat­ics at the time, so.

[01:18:34] Tony: Well, you had a bet­ter time than I did because I did real­ly well in maths too and went on to do a pure

[01:18:37] Tony: maths major at uni.

[01:18:41] Cameron: Hey, that reminds me, I’ve been mean­ing to ask you for weeks, as I’ve been try­ing to learn stuff and recall it and remem­ber it, your mem­o­ry, you obvi­ous­ly have a very good mem­o­ry for facts and details. Do you have a method­ol­o­gy for learn­ing stuff? Do you have a process, or is it just

[01:19:04] Cameron: gift of the

[01:19:04] Tony: No, just if it’s of inter­est to me, it just sticks.

[01:19:07] Cameron: Yeah, right.

[01:19:10] Tony: I mean, there are, there are tricks. I mean, when I was at uni­ver­si­ty, if I had an exam the next day, I’d just cram, read over all my notes for the year and put that into short term mem­o­ry, but it would­n’t stick. I could­n’t tell you much about the pure maths I learned at uni­ver­si­ty, oth­er than that was very high­ly spe­cialised.

[01:19:25] Tony: How to take one set and add it to anoth­er set, or mul­ti­ply by sets, all that kind of stuff. Um, yeah. But I mean, things like, I know that if I lis­ten to some­thing, and then walk, and go for a walk, if I go for a walk on that same route again, I’ll remem­ber every­thing I lis­tened to. Last time. Um, yeah, but no, I think it’s just hav­ing an inter­est in things and, and yeah, hav­ing almost like an emo­tion­al con­nec­tion to

[01:19:49] Cameron: hmm. Hmm.

[01:19:52] Tony: them.

[01:19:55] Cameron: Okay. Well, that’s no help

[01:19:57] Tony: Yeah. I don’t know. Maybe I’m just built

[01:19:58] Tony: dif­fer­ent­ly.

[01:19:59] Cameron: How are your hors­es going?

[01:20:01] Tony: Slow. Actu­al­ly, before we leave, um, math, anoth­er book that, that, again, it’s not on just math. It’s called For­tune’s For­mu­la. One of my favorite books on infor­ma­tion

[01:20:13] Cameron: Mm hmm. Mm

[01:20:14] Tony: Yep, and, um, by, uh, about a guy called Claude Shan­non, so that’s worth read­ing too, I think, as a bit of a math­e­mat­i­cal­ly based good sto­ry.

[01:20:23] Tony: Uh, hors­es are going slow, so we had one that was meant to race on Sun­day, but it was scratched at the bar­ri­ers, it sat down in the

[01:20:30] Tony: gates, so we sent it all the way to Orange and brought it all the way

[01:20:33] Cameron: What, what, how does that

[01:20:34] Cameron: hap­pen? What hap­pens? Like why was it scratched?

[01:20:37] Tony: I think in Orange they did­n’t have enough bar­ri­er atten­dance, so the horse went in, took a long time to load all the oth­er hors­es, and it got rest­less, and they You know, you can’t tell from the TV what hap­pened.

[01:20:50] Tony: Jock­ey said it reared and then sat down. So per­haps it would­n’t have hap­pened if there were more bar­ri­er ten­dons, but you know, they pulled it out and

[01:20:56] Cameron: a bar­ri­er, what’s a bar­ri­er

[01:20:58] Cameron: atten­dant do?

[01:21:00] Tony: uh, load the

[01:21:01] Tony: hors­es and look after them in the, in the gates, try and set­tle them down.

[01:21:04] Cameron: Oh, right. It’s not

[01:21:05] Tony: So the idea is you try,

[01:21:08] Tony: no, the jock­ey usu­al­ly sits on board and guides the horse, but it nor­mal­ly takes one or two atten­dants to go with

[01:21:13] Cameron: Oh, right.

[01:21:14] Tony: Um, open the gates, push it in some­times, close the gates, set­tle it down. Some­times they jump in and pat the horse, that kind of thing. But gen­er­al­ly, like on a big race day, on the week­end, there’ll be, you know, eight, eight to ten, Bar­ri­er atten­dance, so there’s lots of peo­ple work­ing all at once, so the hors­es get loaded quick­ly.

[01:21:31] Tony: So, you don’t want a horse sit­ting in the bar­ri­ers for too long,

[01:21:34] Tony: they start to get a bit flighty, um, if they’re a ner­vous

[01:21:37] Cameron: Cause they’re high­ly

[01:21:38] Tony: Uh, yeah, but that hap­pened to us, yeah, sen­si­tive hors­es. That hap­pened to us on the week­end, so we had a scratch­ing, and we’ve got one run­ning tomor­row, um, called I Nev­er Dreamed.

[01:21:48] Tony: Uh, but it may get scratched as well and race on Thurs­day, but it’ll race some­time this week.

[01:21:52] Cameron: Hmm.

[01:21:53] Cameron: Well, good luck with that. Mm

[01:21:55] Tony: Yeah, well, it’s inter­est­ing. There’s a lot of hors­es com­ing back into work, so I can’t wait to get some prize mon­ey in because it’s, you pay for all the train­ing fees in the months before they run, um, but you need the

[01:22:05] Tony: prize mon­ey to, um, to off­set that. So that’ll be good.

[01:22:08] Cameron: And how’s your

[01:22:09] Cameron: golf going?

[01:22:11] Tony: Uh, pret­ty ordi­nary. I actu­al­ly went and had a les­son last week cause I was that far from where I thought I should be and, and I, I was right, but, um, I’m hop­ing it’s only going to take one les­son to, to right the ship but he point­ed out a cou­ple of flaws in my swing bad habits that it

[01:22:25] Cameron: Mm hmm.

[01:22:26] Tony: so i need to go it won’t hap­pen overnight i’ve got to go and grind that out on the dri­ving range to get my swing back to where it should be but um at least i’m a bit more opti­mistic it was it was depress­ing going and play­ing golf over the last cou­ple of weeks and just con­tin­u­ous­ly hit­ting a weak

[01:22:40] Tony: fade which is not good

[01:22:42] Cameron: That’s inter­est­ing, isn’t it? How, like lit­tle weak­ness­es creep in

[01:22:46] Cameron: over time.

[01:22:48] Tony: Yeah, I think my prob­lem is, um, like every­one’s, if you, if you’re not hit­ting the ball well, you try and hit it hard­er.

[01:22:54] Cameron: Mm hmm.

[01:22:54] Tony: And, and what I was doing was rolling my wrist too much on the back­swing. So I was kind of exert­ing to put as much force as I could behind the ball. And that was caus­ing my wrist to roll over, which then could­n’t get back to where they should be at impact.

[01:23:07] Tony: But, um, all it took was the golf instruc­tor to take a video of me and said, here’s what you’re doing. And like, we sort of

[01:23:14] Tony: fixed it up in half an hour. So that was

[01:23:15] Cameron: Mm.

[01:23:17] Tony: Yeah.

[01:23:17] Cameron: sim­i­lar to Kung Fu. Like,

[01:23:19] Tony: Is it? Yeah,

[01:23:20] Cameron: if your tech­nique’s not right, you try and if you’re a

[01:23:23] Cameron: large per­son like me, you try and com­pen­sate with strength and force. And, you know, my Sifus are always telling me, you know, stop using your strength. It’s not about strength. Strength won’t get you through, you know, it’s about.

[01:23:38] Cameron: Tech­nique, it’s about form, it’s about hav­ing your foot at the right angle, your elbow tucked in, you know, it’s all about tech­nique and form. And lit­tle things creep in over time. We did a pri­vate les­son with one of our Sifus a month or so ago and he stopped me straight away because my feet were at the wrong angle in this posi­tion.

[01:23:58] Cameron: Some­thing I knew, but over a few years, you know, it had just grad­u­al­ly got­ten out of thing. And I was like, Oh yeah, right. You don’t, you, you’re pay­ing, you’re focus­ing on one thing and you, you, you, you, you, the oth­er thing falls out and then

[01:24:11] Cameron: you need to come

[01:24:13] Tony: Yeah. and, that’s exact­ly the same as golf, because like, you know, when I was­n’t play­ing well, peo­ple would give me dif­fer­ent tips, and so I changed, I’d focus on that and change that, which would cause anoth­er prob­lem, and anoth­er prob­lem, and in the end, I’m tying myself up in knots, so I need to just go and have a pro­fes­sion­al

[01:24:27] Tony: have a look at it and Put me back on the straight and nar­row.

[01:24:30] Cameron: It’s one of, golf is one of those things I think like Kung Fu where there’s so much, you’re try­ing to get your body to do some­thing that is not nat­ur­al. And so you, there’s like 20 dif­fer­ent things that need to work right for it to look seam­less and to train your body to do that, uh, is, takes a long time, right?

[01:24:51] Tony: it does, yeah, it does, it real­ly does. Any­way, so I’m opti­mistic now, I’m look­ing for­ward to play­ing again, but not per­haps this week, I’ll just go back to the range and make sure I’m groov­ing the right things in and not gonna play poor­ly and piss myself off and try and hit

[01:25:06] Tony: it too hard, so. Okay, Cam, hap­py

[01:25:11] Cameron: that’s the show. QAV a good week, every­one. Thank you, Tony.