QAV 721 — Dr No

QAV 721 Club

[00:00:00] Cameron: Wel­come to QAV episode 721. We’re record­ing this on the 21st of the 5th, fun­ni­ly enough, and uh, sit­ting beside me in my liv­ing room in Bris­bane, the great TK him­self, all the way up from Shid­ney. How was the trip up from Shid­ney, Tony?

[00:00:25] Tony: Good, good. I, um, broke it up with a three nights in Scone, for the Scone Cup.

[00:00:31] Tony: Stayed at a Tun­ga stud, which was, um, was won­der­ful­ly host­ed there. Checked out a few hors­es, um, went to a stal­lion parade at Yarra­man, which was love­ly. Um, had a sin­ga­long around a bar­beque pit after the races, went to the Mar­quis Fis­cone Cup with a thou­sand peo­ple in the Mar­quis. It’s kind of like the rac­ing indus­try lets their hair down after the autumn car­ni­val in Syd­ney, so that was good fun.

[00:00:56] Tony: Did you have a horse run­ning in? No. Oh, okay. I’ve got a horse run­ning this Sat­ur­day in Queens­land. in Bris­bane. Right. Yep. So I’ll stay. Which horse? Poi­fect. Poi­fect. And what’s it run­ning in? The Ros­es. A group three race. 2, 000 metres in, uh, this Sat­ur­day in Bris­bane. So yeah, that’s excit­ing. We’ll hang around to watch that.

[00:01:16] Tony: Um, Rud­dy comes down tomor­row. He’s up on the north coast of the par­ty and then we’ll dri­ve back to Syd­ney and play golf. Nice.

[00:01:24] Cameron: Yeah. Which will be fun. Well, I’m sor­ry to, um, make you. Talk about invest­ing on your hol­i­day. Work on my hol­i­day. Buss­man­’s hol­i­day. It’s invest­ing. It’s not work for you. This is what you do.

[00:01:38] Cameron: This is your pur­pose. This is fun. It is fun. Yeah. Well, you know, it’s not fun sell­ing FND on a rule one. And then Gary ping­ing me and say­ing, glad I did­n’t sell it because it bounced back up. Look at that. I sold it. And imme­di­ate­ly after I sold it, it Oh wow. Well, not imme­di­ate­ly. I don’t know what hap­pened between the 17th and the 21st, but it’s, uh, jumped back up.

[00:02:04] Cameron: I had to rule one it. Look. Look at this. Boom! Wow. Boom! So, any­way. Some­one’s prob­a­bly look­ing at our sales and I’m sure it’s us. Yeah. Any­way, mov­ing right along. Um, no, I know that’s Gary’s fault. Gary, when I sell some­thing, don’t tell me that it bounces back up. You broke my heart, Gary. Um, speak­ing of, uh, sell­ing stuff that’s, I seg­way into this.

[00:02:37] Cameron: Finan­cial Review, Tony, loss mak­ing com­pa­nies are surg­ing on the ASX, baf­fling ana­lysts. He’s baf­fled me for decades. Investors in the Aus­tralian share mar­ket are pil­ing into unprof­itable growth stocks this year, defy­ing the threat posed by high for longer inter­est rates that have bat­tered some com­pa­nies on Wall Street.

[00:02:58] Cameron: So this sto­ry goes on to say that, uh, yeah, Aus­tralians are just, uh, Buy­ing loss mak­ing stocks on the ASX. It’s a phe­nom­e­non which has per­plexed ana­lysts. The mar­ket’s infat­u­a­tion with the cohort of unprof­itable com­pa­nies in Aus­tralia has baf­fled invest­ment strate­gists for years, par­tic­u­lar­ly giv­en the poor returns they have con­sis­tent­ly post­ed.

[00:03:23] Cameron: These com­pa­nies typ­i­cal­ly pos­sess cash flows that are expect­ed to be gen­er­at­ed in the dis­tant future, which means they face larg­er head­winds from an increase in inter­est rates. So, my ques­tion for you as a sea­soned investor is, what’s dri­ving peo­ple to invest in, is it just, it’s punt­ing, it’s just greed, the belief that these, but some­body’s got to be telling them to do it.

[00:03:51] Tony: Yeah, well, it’s, it’s been inter­est­ing for me because one of my friends is start­ing out invest­ing and asked to like for rec­om­men­da­tions on what to read and what­ev­er. And so I start­ed giv­ing him, I, you know, he’s joined the ASA. I said, that’s a good place to start. And, um, I flinged him a, uh, a live wire email and said, have a look at this.

[00:04:11] Tony: And, uh, and then like, we’re chat­ting about it and he’s talk­ing about this, um, lis­ten­ing of a sil­ver min­er in Col­orado and it’s like he’s going how you know that sounds like a great sto­ry and I’m like no don’t even read those arti­cles they’re just sto­ries they just there’s there’s so much writ­ten about the next trans­ac­tion yeah that you just need to ignore

[00:04:36] Cameron: but peo­ple yeah I mean I know there’s a lot of Fin­Tech, things out there and, you know, Tik­Toks and YouTubes and pod­casts and what­ev­er, telling peo­ple, get into this, get into that.

[00:04:50] Cameron: But if the ana­lysts, accord­ing to the Fin are con­fused about it, like some­body’s got to be push­ing these things, um, and telling peo­ple to get in. Stock­bro­kers, Stock­bro­kers, usu­al­ly.

[00:05:04] Tony: Yeah. Right. Um, jour­nal­ist ana­lysts. Finan­cial jour­nal­ists, um, yeah, but, you know, it’s, it starts with the bankers who want you to list the com­pa­ny and then they can push it to that indus­try, they can push it to their cus­tomers, they can push it to the stock bro­kers who can push it to their cus­tomers.

[00:05:27] Tony: It’s all about them trans­act­ing so they get their fee. It’s almost irrel­e­vant how good the com­pa­ny is to them. They’re going to under­write it, they’ll get a fee for that, they’re going to, you know, arrange debt financ­ing, they’ll get a fee for that, um, the stock­bro­kers are going to get peo­ple to trans­act, they’ll get a fee for that, so that’s the impe­tus for them to keep putting trans­ac­tions in front of you, it’s up to you to work out the qual­i­ty of those trans­ac­tions, and I would have thought the start­ing point is, Are they mak­ing any mon­ey?

[00:05:57] Tony: Are they even get­ting any cash? I mean, you know, we’re now in the age of, well past dot coms, but, you know, star­tups that are doing work in the tech space. But for a long time it was always the spec­u­la­tive min­ing com­pa­ny was the That was the kind of grist for the mill for stock­bro­kers and ana­lysts to push.

[00:06:16] Tony: You know, some­one, some­one has a ten­e­ment besides a suc­cess­ful mind and they’re real­ly bull­ish about it. And here are some more sam­ples and et cetera, et cetera. The clas­sic one was a com­pa­ny called Cuti­co, which I can remem­ber back from, I think, the nineties. Um, and it, it went up, oh, I’m going to say a hun­dred times.

[00:06:38] Tony: Like from being like a one set stock to being a dol­lar stock And it kept going to like a four dol­lar stock and it’s crashed all the way back down and gone bro­ken being delist­ed But but that’s the clas­sic. Some­one’s got a sto­ry. They, you know, he’s found a He’s pegged out a ten­e­ment. He’s found a bit of gold on it um Sprooked it to peo­ple who then arranged the list­ing who then, you know, pushed it And it’s the greater fool, they’re sell­ing their shares to some­body else.

[00:07:05] Tony: It’s peo­ple who don’t know what they’re doing and some­one’s made mon­ey. So it’s sur­vivor bias, but you nev­er go back and say, Hey, that Cuti­co stock, did you sell out when it was 4? They prob­a­bly did­n’t.

[00:07:18] Cameron: They’ve got a graph on this thing of com­par­a­tive per­for­mance from, looks like, I don’t know, Sep­tem­ber 23 or some­thing like that.

[00:07:27] Cameron: Shows that they’ve got three lines on this chart. High growth with low or no prof­it, ASX 300 equal weight­ed, and high growth prof­itable. The high growth prof­itable stocks with the ASX 300 are both pret­ty much the same, 19 to 20 per­cent since the begin­ning of this chart. So as I said, like Sep­tem­ber, Octo­ber 23.

[00:07:52] Cameron: What’s that? Six months, rough­ly. Where­as the high growth low or no prof­it is up 64 per­cent over the same peri­od. So I’m won­der­ing these high growth low or no prof­it stocks, how much are they going to be impact­ing? The All Ords or the STW ver­sus, uh, you know, these ASX 300 high growth prof­itable stocks.

[00:08:14] Cameron: Like when we’re look­ing at the bench­mark for us, the STW, is it being impact­ed large­ly by these sort of high growth, unprof­itable stocks or is it lim­it­ed?

[00:08:24] Tony: It’s lim­it­ed. You can see it in the graph you just called out. The ASX 300 is up 20 per­cent over that nine month peri­od.

[00:08:30] Cameron: Which is still crazy.

[00:08:32] Tony: Yeah, it’s, it’s good.

[00:08:33] Tony: It’s been a good year. Um, where­as the high growth. Low or no prof­its up 64 per­cent But that’s prob­a­bly the answer to the whole ques­tion. Why are peo­ple buy­ing low or no prof­it stocks? It’s because they’ve been going up recent­ly And and there’s no rea­son for them to go up oth­er than they’re just cycling between old investors and new investors,

[00:08:54] Cameron: right?

[00:08:54] Tony: Yeah

[00:08:57] Cameron: Well bog­gles my mind Mov­ing along Sim­i­lar, um, Finan­cial Review, 10 Invest­ment Tips to Ride Out the New Nor­mal by Tom Richard­son. Fore­casts for inter­est rates and infla­tion to remain well above 3. 5 per­cent into finan­cial year 2025 means savers and investors face big chal­lenges to pro­tect and grow their wealth into the future.

[00:09:22] Cameron: So. Oh, there was one thing I want­ed to say in that last sto­ry. When you, when you look­ing at the high growth stocks in the US, when you’re look­ing at Nvidia or Apple or Meta or not Tes­la, but some of the oth­er ones, Ama­zon, these are now extreme­ly prof­itable com­pa­nies and Nvidia is just mak­ing mon­ey hands over fist.

[00:09:46] Cameron: That’s a dif­fer­ent ket­tle of fish, you know, to these unprof­itable com­pa­nies that aren’t mak­ing any mon­ey.

[00:09:52] Tony: It is. Um, the argu­ment would be that they start­ed off being unprof­itable.

[00:09:57] Cameron: Sure. As did all the ones that aren’t around any­more.

[00:10:00] Tony: Cor­rect. Those five stocks have hit the jack­pot, but there’s the oth­er 500 which we don’t hear about any­more.

[00:10:09] Cameron: So any­way, this oth­er arti­cle is talk­ing about how inter­est rates are going to stay high and they’re talk­ing to a bunch of, uh, investors, Antho­ny Sel­by from Finan­cial Spec­trum. They’re talk­ing about, you know, peo­ple putting mon­ey in longer dat­ed bonds and in sort of dif­fer­ent cash accounts where they can get good sav­ing rates.

[00:10:31] Cameron: Um, but then they’re also talk­ing about. Buy­ing U. S. tech stocks, Microsoft, Nvidia, those sorts of things, Net­flix. Um, but I real­ly want­ed to talk to you about this idea of the new nor­mal. This new nor­mal being, uh, just, uh, I don’t know, what’s the, what’s the new nor­mal here? How do you think about the new nor­mal?

[00:10:55] Cameron: Is it the old nor­mal? Is it this time it’s dif­fer­ent? Yep, I was going to say,

[00:10:59] Tony: play the quote, this time it’s dif­fer­ent. It’s not a new nor­mal, noth­ing’s, eco­nom­ics has­n’t sud­den­ly branched off and done some­thing dif­fer­ent. In the last hun­dred years, it’s still eco­nom­ics. Busi­ness­es still need cash. They still need, still got to man­age their costs.

[00:11:14] Tony: They’ve still got to find their cus­tomers. At the moment, the, the, you know, the Mag­nif­i­cent Sev­en is doing real­ly well in the US and it’s now up to like 30 per­cent of the index over there. Um, so you can say that’s the new nor­mal, but But if you go back to 2000, it was tech stocks were still a big part of the US index.

[00:11:34] Tony: And if you go back before that, like the nifty 50 was a huge part of the US index and there was a lot of com­pa­nies in there that did­n’t make any mon­ey, like I think orig­i­nal­ly IBM and Hewlett Packard. Um, so it’s not the new nor­mal. It’s nor­mal. Yeah. It’s nor­mal to have these bub­bles grow­ing in indus­tries.

[00:11:52] Cameron: If you take a long enough time hori­zon. These sorts of things have hap­pened before.

[00:11:57] Tony: Yeah. And invari­ably what’s also hap­pened is if they’re so expen­sive that the share price can’t sup­port itself, they’ll always crash back down to being, uh, the old nor­mal, like a busi­ness, which is judged on its prof­it rather than on its, um, hype.

[00:12:14] Cameron: Yeah. All right.

[00:12:15] Cameron: What else have I got here? Oh, one of your favorites. AFIC. Aus­tralian Foun­da­tion Invest­ment Com­pa­ny. I know that you’ve talked about AFIC quite a lot over the years. This arti­cle, Chan­ti­cleer says, While the LIC sec­tor is under pres­sure, the 98 year old Aus­tralian Foun­da­tion Invest­ment Com­pa­ny is stay­ing patient and hunt­ing for val­ue.

[00:12:39] Cameron: They talk about that, uh, a cou­ple of years ago, it was, uh, investors were pay­ing as much as 1. 22 for a dol­lar’s worth of shares. And I think I remem­ber you say­ing, talk­ing about this at the time, uh, it’s reversed now for some rea­son it’s trad­ing below its NTA. You can get, I think it’s a, yeah, 1 of assets.

[00:13:02] Cameron: For 90 cents. So how do you under­stand this? Like what’s going on with invest­ments in list­ed invest­ment com­pa­nies?

[00:13:11] Tony: Uh, so there’s a whole range of dif­fer­ent types of list­ed invest­ment com­pa­nies, but if we stick with AFIC, which is one of the biggest, It, it’s a qua­si index, so it does­n’t quite match the Aus­tralian index because they can hold dif­fer­ent weight­ings in, in shares as they choose, but it’s, it, for a long time it’s been a proxy for the Aus­tralian ASX index, um, it’s trad­ing at a dis­count at the moment because, for, for two rea­sons I think, um, it’s div­i­dend, or three, it’s div­i­dend’s a bit low­er than, uh, some of its com­peti­tors, And its main com­peti­tor these days is ETFs, so index ETFs like VAS, the Van­guard Index Fund, or ETF, which pays a slight­ly high­er div­i­dend and it has a slight­ly low­er man­age­ment fee.

[00:13:59] Tony: So ETFs have dri­ven the cost of run­ning funds down to very low num­bers, sort of sub 0. 1% AFIC is still run­ning, I think, at about 0. 15. So it’s still very, very cheap. And that num­ber means it’s called the man­age­ment expense ratio with an LIC. So it’s the cost of hir­ing some­one to trade the stocks and run the com­pa­ny.

[00:14:22] Tony: But it’s very, very cheap, um, cheap­ly run. But ETF route these days, large­ly because it’s being pushed, um, Well, the finan­cial plan­ners towards peo­ple have heard that you should be in an index fund as a cor­ner­stone invest­ment, which is fine advice. Um, The ques­tion is, do you go into a Van­guard, VAS type, or an STW type of ETF, or do you go into an LIC?

[00:14:51] Tony: At the moment, the ETFs are slight­ly cheap­er and have a bet­ter yield. Um, that isn’t always going to be the case. So that’s one of the rea­sons why this LIC, AFIC, trades below its NTA. Um, and then the NTA for an LIC is the val­ue of all the stocks that it holds. Uh, The oth­er thing is that there’s a lot of mon­ey fly­ing out of Aus­tralia into U.

[00:15:14] Tony: S. stocks. They’re chas­ing that, the, the Mag­nif­i­cent Sev­en over there. And so that’s just mon­ey exit­ing LICs and ETFs and going into U. S. ETFs or invest­ing in U. S. stocks direct­ly. So that’s anoth­er rea­son. Um, but the good thing about the LIC space is that If the mar­ket turns down, they don’t have to sell a stock.

[00:15:38] Tony: They don’t have to, um, redeem any of the stocks for peo­ple who sell the share. They can just wait until they, they think it’s time to buy and deploy cash again. Excuse me, where­as an ETF is always trad­ing. If BHP drops, they’ve got to sell BHP. Um, where­as if BHP’s in AFI and BHP shares dropped, they can decide to hold it for 20 years and not, not change their hold­ing, which has tra­di­tion­al­ly been a, an, an advan­tage that they have over ETFs.

[00:16:07] Cameron: All

[00:16:09] Tony: right. That was a good arti­cle though, because I, I enjoy it. It was a good arti­cle, I enjoy read­ing about what they buy, and these days, it’s not just AFIC, but they have 3 or 4 asso­ci­at­ed funds that they’ve spun off over the years and still have some links to, like Mirabu­ka and, what’s the oth­er one, Unit­ed I think?

[00:16:38] Tony: But they gen­er­al­ly, um, talk about all three. Jer­ry War­rer is anoth­er one. They talk about all three. And they all have their dif­fer­ent, um, strate­gies. Um, whether it’s high yield­ing, or whether it’s focused on being an index, or whether it’s going after small caps or what­ev­er. But they gen­er­al­ly have a bit of a val­ue bent to them as well, which is good.

[00:17:00] Cameron: Well, the next arti­cle is, uh, these stocks are prime for tec­ton­ic sized tail­winds. How big is a tec­ton­ic, Tony? Is it big?

[00:17:14] Tony: And how big’s the tail­wind?

[00:17:15] Cameron: Aren’t tec­ton­ics like plates? Yeah, they are. What’s a tec­ton­ic? Okay, any­way. Mar­kets are enam­ored with arti­fi­cial intel­li­gence and its impli­ca­tions. A con­flu­ence of fac­tors led to AI going from a fringe invest­ment idea into the main­stream in record time. Chat­G­PT, for instance, reached one mil­lion users in just five days.

[00:17:36] Cameron: How­ev­er, AI is a broad invest­ment theme with many. Oppor­tu­ni­ties. And this arti­cle is basi­cal­ly talk­ing about how does Aus­tralia, uh, take advan­tage of the AI boom see­ing as we don’t have real­ly any chip man­u­fac­tur­ers or major AI play­ers in this coun­try. And they talk­ing about the amount of elec­tric­i­ty that AI data cen­ters are going to require, but then say, Oh, it’s most­ly a region­al oper­a­tion.

[00:18:03] Cameron: Although I was think­ing. You know, we do pull a lot of coal out of the ground in this coun­try and ura­ni­um, which can be used to gen­er­ate elec­tric­i­ty. We may ben­e­fit from that, but, um, most­ly it’s, uh, talk­ing about the oppor­tu­ni­ty to, um, build sort of data cen­ters and, uh, the, uh, the oppor­tu­ni­ty for Aus­tralia to host some data cen­ters.

[00:18:30] Cameron: Thank you very much. Um, and the busi­ness oppor­tu­ni­ty there says Aus­tralia is already a top five glob­al data cen­ter hub and is fore­cast to grow from one gigawatts today to more than two and a half gigawatts dur­ing this time, which is, uh, through to 2030, I think they say we expect to see more than 30 gigawatts of data cen­ter capac­i­ty require­ment through to 2030 or over 15%.

[00:18:59] Cameron: We do have a ques­tion lat­er on about, um, indus­tries in Aus­tralia that might ben­e­fit from arti­fi­cial intel­li­gence as a poten­tial invest­ing oppor­tu­ni­ty. But, um, you know, I, I’ve been think­ing a lot over the last year about, you know, how to, um, prof­it from the AI boom and where the oppor­tu­ni­ties are and, you know, how to play a role in the AI boom.

[00:19:25] Cameron: From an invest­ing per­spec­tive. I know that you’re still a lit­tle bit scep­ti­cal about the role that AI is going to play, but you know, do you just treat this as a wait and see kind of thing as nor­mal, you know, wait to see how the num­bers roll out?

[00:19:41] Tony: Yeah, def­i­nite­ly. Um, I’m not scep­ti­cal about AI. It’s going to have an impact.

[00:19:45] Tony: It’s going to do good things. I’m just not buy­ing into the hype yet on AI, because num­ber one, every time I pick up a com­pa­ny report these days, it’s got AI in it. The sec­ond slide, it’s not going to work that way going for­ward. So it’s a lot of hype in the AI space, but this reminds me of the clas­sic say­ing about buy­ing picks and shov­els dur­ing a gold rush.

[00:20:05] Tony: So, yeah, so I think you’re right. Data cen­ters are def­i­nite­ly an area to look at and ener­gy pro­duc­tion is def­i­nite­ly an area to look at, um, because we don’t have chip mak­ers here. There are a cou­ple of kind of stocks on the bor­ders of AI, um, LTM, which is a Cir­cuit board design­er, I think, from mem­o­ry, uh, and, um, UX, which I think is also some kind of large lan­guage mod­el proces­sor.

[00:20:34] Tony: But any­way, um, I don’t know much about them and they’re, they’re, they’re def­i­nite­ly low prof­it gross stocks that we talked about before. Um, so what are my thoughts? I, I don’t like the­mat­ic invest­ments. So the fact that peo­ple are try­ing to jump onto the AI. Theme is inter­est­ing and nice, but it gen­er­al­ly means that trades are going to become pret­ty crowd­ed.

[00:21:00] Tony: And cer­tain­ly the data cen­ter stocks like Good­man Group are pret­ty high­ly val­ued these days because they have grown a lot and they, uh, um, yeah, they’re attract­ing a lot of atten­tion and a lot of peo­ple are buy­ing into them. Now, whether the growth is going to slow down because they’ve already built a lot of data cen­ters or whether it’s going to keep going, it’s, it’s hard­er.

[00:21:24] Tony: It’s hard­er to go from where they are to dou­ble their size, than it was to go. Three or four years ago from where they start­ed to where they are now. And that’s always the case with the­mat­ic investors. You’re all by the time it reach­es the paper and it reach­es our ears. The themes are real­ly crowd­ed trades like lithi­um was last year, we talked about that and that that crashed.

[00:21:44] Tony: And um, so poten­tial­ly data cen­ters might too. Um, but the way that you just pro­tect about that is you wait for the num­bers to come out. At the moment, the num­bers are telling us to buy coal stocks, you know, that’s the ener­gy provider to pow­er the data cen­tres, um, and they’re on our buy list, so that would be the area I’d be focus­ing on if I was wor­ry­ing about that.

[00:22:03] Tony: The­mat­ics, but I’m not, I was gonna buy coal stocks regard­less of ai. So , um, yeah, it’s on the num­bers

[00:22:10] Cameron: by the way. Speak­ing of coal stocks, I want give a shout out to one of our new QAV light mem­bers. David, who called me this morn­ing, he works on a mine site in, uh, far north Queens­land that’s in its rehab phase.

[00:22:26] Cameron: And we were talk­ing about the rehab and the amount of mon­ey and effort that’s spent rehab­bing the land. Um, and it’s like a mas­sive, mas­sive project, basi­cal­ly tak­ing all the dirt and putting it back in the hole and flat­ten­ing it and grow­ing trees and stuff on there and hand­ing it back to the gov­ern­ment, I think he said, but it’s an aspect of the coal min­ing life cycle that I’d nev­er real­ly heard much about before the whole rehab process.

[00:22:57] Cameron: The role that the min­ing com­pa­nies play in that. So I found that real­ly inter­est­ing. Okay. So oppor­tu­ni­ties for AI in Aus­tralia, just wait to see how the num­bers play out. And we just play it by the num­bers as usu­al, huh?

[00:23:13] Tony: That’s how I’m going to do it. Um, unless, unless some­one out there is lis­ten­ing with very spe­cif­ic com­pa­ny knowl­edge or very spe­cif­ic indus­try knowl­edge, that’s all you can do.

[00:23:22] Cameron: Well, sort of some­what relat­ed to that. Um, I was, noticed when Alex sent us the check­list yes­ter­day that cop­per, Is a buy again, and I was try­ing to under­stand why I did a lit­tle bit of read­ing and, um, try­ing to get my head around the cop­per space, just because I’m curi­ous. There’s a sto­ry here that says that, um, the Chilean Cop­per Com­mis­sion, Co Chilco, which I like that, Co Chilco.

[00:23:58] Cameron: See, I would think that Chilean Cop­per Com­mis­sion could be Chilco­co. Co Chilco. But no, it’s Cochilco. Bar­ry and Stan did their work on that one. Now sees aver­age cop­per prices this year at 4. 30 a pound from 3. 85 a pound before. For next year, Cochilco, it could be like a music fes­ti­val. You’re going to Cochilco this year?

[00:24:21] Cameron: Esti­mates aver­age cop­per prices around 4. 25 a pound, up from 3. 90 a pound before. Although the high price of cop­per dis­cour­ages man­u­fac­tur­ers from stock­ing up inven­to­ry, demand remains strong. Then it goes on to say that some of the rea­sons, uh, it, the stop­page of First Quan­tum’s cop­per mine in Pana­ma, low pro­duc­tion expec­ta­tions in Chile and Peru, and expec­ta­tions that demand will out­pay sup­ply.

[00:24:49] Cameron: I’ve got anoth­er sto­ry though that says three rea­sons why buy­ing cop­per right now is the best trade one com­mod­i­ty expert has ever seen. This is a Mar­kets Insid­er. The analy­sis that he gave was, it’s in the throes of an unprece­dent­ed sup­ply demand imbal­ance. Bal­ance. And there are three rea­sons why this won’t be a pass­ing fad.

[00:25:13] Cameron: First, low­er income groups have long been the biggest con­sumers of com­modi­ties. There­fore, pol­i­cy that redis­trib­utes wealth to this cohort is a tail­wind for mate­ri­als such as cop­per. So he’s look­ing at the low unem­ploy­ment rate and now the low income groups are the biggest bene­fac­tor of that. So I assume they’re, they have mon­ey, they’re going to go out and buy stuff and that stuff’s going to have cop­per in it.

[00:25:36] Cameron: So elec­tron­ics, et cetera, it’s going to push that up through. Sec­ond, ris­ing envi­ron­men­tal pol­i­cy has set off an indus­try wide race for cop­per. The met­al which is used in every­thing from solar to EV bat­ter­ies is play­ing a cen­tral part of the world’s greeni­fi­ca­tion. And then third, de glob­al­iza­tion has become a way greater theme than ana­lysts ever imag­ined.

[00:25:56] Cameron: That’s trans­lat­ing into ris­ing mil­i­tary spend­ing with the U. S. decoat­ing 95 bil­lion on muni­tions. I don’t know what the word decod­ing means. You ever seen the word decod­ing? Where’s my dic­tio­nary? Look up decoat­ing, uh, decoy, decoy, no, no. Deploy­ing, deploy­ing, maybe it was sup­posed to be. Uh, how­ev­er, this is yet to pre­cip­i­tate into a sup­ply side boom.

[00:26:26] Cameron: Thin­ning inven­to­ries have had no help from min­ing out­put, which is stalled out amid polit­i­cal and finan­cial chal­lenges. And he talks about Pana­ma. Um, so I don’t know, got any thoughts on cop­per as an

[00:26:38] Tony: invest­ment? I think it’s a good invest­ment and it was a great invest­ment last year or the year before when Sam­phire Resources, a cop­per min­er, was about four bucks a share and it’s now more than dou­ble that.

[00:26:50] Tony: Um, but that was on our buy list. So, that’s the time to get into these things. I mean, again, of course, I made a lot of mon­ey out of a cop­per mine years ago when cop­per was 4, 000 a ton, and then it went up to 20, 000 a ton very quick­ly, um, and which sent the shares of Jubilee Mines through the roof. So, you can make a lot of mon­ey in cop­per, but again, it’s, um, are you late to the par­ty at this stage?

[00:27:16] Tony: That’s the ques­tion I’ve got. Um, the the­mat­ic is pret­ty accu­rate­ly out­lined in that.

[00:27:25] Tony: With com­modi­ties, there are lots of peo­ple who are work­ing out exact­ly what the sup­ply and demand is like­ly to be and exact­ly what the stor­age lev­els are around the world. And that’s prob­a­bly the biggest dri­ver of com­mod­i­ty pric­ing. Um, but there are, but there are big themes in cop­per. I’ve been called Dr.

[00:27:44] Tony: Cop­per and has often been trad­ed as a proxy for glob­al growth because cop­per’s in all the wiring that goes into tel­cos or elec­tric­i­ty com­pa­nies and their grids and as we build more hous­es and, um, bring more peo­ple out of pover­ty then, um, The cop­per price tends to go up because it becomes con­strained and that that was cer­tain­ly the case in Chi­na when it was start­ing to grow It’ll hap­pen again.

[00:28:13] Tony: It’s prob­a­bly India goes through a sim­i­lar sort of growth spurt De glob­al, the whole idea of decou­pling around the world will play into it if it ever gets to the stage where You know, gov­ern­ments won’t allow free trade of min­er­als across, across the globe. And also too, the EV theme is huge because, um, cop­per is used in all of those elec­tri­cal appli­ances like solar, uh, and EV cars.

[00:28:41] Tony: So there’s a lot of, lot of things to dri­ve cop­per at the moment. Um, whether that’s fac­tored in the price already, or whether it’s got more to run, I don’t know. So,

[00:28:51] Cameron: yeah, we don’t, We don’t change any­thing if we see these things com­ing up, we just, it’s real­ly bor­ing not chang­ing any­thing Tony, like, you’re just, you’re just Doc­tor

[00:29:06] Tony: No. You get to go to the races and you get to go play golf, yeah, that’s, yeah that’s the thing isn’t it? Like that. Invest­ing isn’t meant to be like work, where you clock on at 9 o’clock and stay busy so the boss thinks you’re worth­while to employ tomor­row, but it’s very dif­fer­ent.

[00:29:24] Tony: A great time is just to sit and do noth­ing.

[00:29:27] Cameron: Makes it hard for me to come up with any­thing inter­est­ing to talk about though. You’re just like, no. Noth­ing changes. Plat­inum. Plat­inum was also a buy, although all the arti­cles that I read say that Plat­inum sup­pli­ers dropped due to weak demand. Caus­ing rev­enue loss­es and job cuts in South Africa, the largest pro­duc­er.

[00:29:45] Cameron: What’s the out­look for glob­al plat­inum min­ing indus­try? But I don’t, you know, there’s no point even talk­ing about this. You’ll just go, no.

[00:29:53] Tony: I know, I noticed that Zim­plats is back on our buy list, so peo­ple can focus on that. Yeah, ZIM, but oth­er­wise I don’t take an inter­est. And, you know, I’m not an expert, so I’ve got no idea.

[00:30:04] Cameron: All right, mov­ing right along then. You know, I chart our buys, sells and Josephines every week. I’ve noticed that the buys, every­thing was going up for a while there, but for the last four con­sec­u­tive, well, no, the last three con­sec­u­tive weeks, I guess, they’ve been declin­ing. The num­ber of buys on our buy list has been declin­ing.

[00:30:24] Cameron: Uh, I’m not smart enough to fig­ure out if that’s impor­tant. Is there, should we read any­thing? Should we have a three point trend line for the num­ber of buys on our buy list. Is it telling us any­thing about the mar­ket that’s impor­tant? No. All right, move it

[00:30:43] Tony: right along. Dr. No? I don’t, I don’t know. Um, it’s the first time I’ve ever looked at it like this.

[00:30:49] Tony: I saw the graph you made, which was good, uh, and was try­ing to, I mean, if I see a graph like this and try and extrap­o­late from the data, I look at the low points and the high points and the dates of those. So, um, I think we need to look at all of those things and try and work out whether there was some cor­re­la­tion between a low point in the mar­ket or a high point in the mar­ket.

[00:31:07] Tony: And I can’t real­ly see one on this graph, so insuf­fi­cient data I think is the answer. Um, it could mean, if we have less buys on the buy list now, it could mean that the qual­i­ty of the stocks is going down, so like, you know, maybe we’re eco­nom­i­cal­ly being chal­lenged and the com­pa­nies aren’t mak­ing as much mon­ey.

[00:31:26] Tony: Mon­ey, um, but it could also mean that a lot of com­pa­nies are doing well and they’re com­ing off our buy list because their share price is going up.

[00:31:34] Cameron: Well, the share price is going up. Whether or not they’re doing well, they could be unprof­itable. No, they won’t make it on our buy list if they’re unprof­itable any­way.

[00:31:42] Cameron: So yeah, the share prices are going up, so they’re Um, get­ting fil­tered out on our Prop­Caf, um, met­ric. And so, yeah, no peo­ple, I, I, I don’t exact­ly remem­ber why I start­ed chart­ing this, but some­body asked us if we could pro­vide some num­bers around it and we’ve been doing it, but no one’s ever told me that it’s use­ful or inter­est­ing.

[00:32:05] Cameron: And, uh, yeah. So if any­one has any, uh, uh, jus­ti­fi­ca­tions for why I’m spend­ing time doing this chart each week, Remind me what it is, because, um, it’s one less thing I have to do if it’s not use­ful. Well that’s all of the, uh, sto­ries or ideas I had, apart from some ques­tions. What have you got to talk about, TK?

[00:32:29] Cameron: I have a pulled pork on a

[00:32:30] Tony: com­pa­ny called Serv­Corp, which I can do now. So Serv­Corp is SRV, that’s the code. It’s a com­pa­ny that pro­vides, well, his­tor­i­cal­ly ser­viced offices. It now pro­vides shared office accom­mo­da­tion and vir­tu­al offices as well. I’ll high­light at the start, this is a low ADT stock. It only has 56, 000 trad­ed on aver­age per day, even though it has a mar­ket cap of around 400 mil­lion.

[00:33:02] Tony: Um, the rea­son why It does­n’t trade much is because prob­a­bly a lit­tle bit over half of the stock is owned by the founder, a guy called Alf Mouf­frage, if I pro­nounced that right, Mouf­frage. And he’s been the, he’s owned half the stock now for 40 odd years, for a long time. It was found­ed, the com­pa­ny was found­ed in 1978 in Syd­ney.

[00:33:30] Tony: It’s very quick­ly went to expand over­seas, list­ed on the ASX, they pio­neered the vir­tu­al office con­cept, and I’ll just read a quote from their own web­site about how it all began. So, in 1976, the Entre­pre­neur­ial Mr Alf Muf­fridge was about to embark on a new ven­ture. First he acquired an office space, recep­tion­ist and sec­re­tar­i­al sup­port.

[00:33:55] Tony: Soon he realised these costs were eat­ing into his prof­its and the team and space were not used 100%. So he looked to share these to reduce his over­heads. In 1978 from a cor­ner office in the MLC Cen­tre, Syd­ney, Aus­tralia, Mr Alf Muf­fridge took a piece of chalk and divid­ed up the space and Serv­Corp was born.

[00:34:13] Tony: The idea took hold and even­tu­al­ly, sor­ry, and evolved organ­i­cal­ly. And in just 12 months, a full two floors with­in the MLC cen­ter were occu­pied, along with one loca­tion in Mel­bourne. Growth steadi­ly con­tin­ued, pio­neer­ing the vir­tu­al office con­cept in 1980. And expan­sion into oth­er coun­tries and Serv­Corp was pub­licly list­ed on the ASX in 1999.

[00:34:36] Tony: Yeah. So inter­est­ing thing along the way, uh, they, uh, they, uh, It real­ly was a shared ser­vice office con­cept. And then com­pa­nies like WeWork came along, which was all about the bro, co, work­ing, share a beer and ping pong while you’re at work, sort of ser­viced office spaces. And they, and that was a bit dif­fer­ent to what Serv­Corp did and peo­ple were fore­cast­ing the demise of Serv­Corp, but they’re still here and WeWork isn’t.

[00:35:05] Tony: And they cer­tain­ly adopt­ed some of the ideas from WeWork. And there was anoth­er, anoth­er, um, round of. Com­pe­ti­tion from oth­er star­tups. Um, I think it was called one in par­tic­u­lar was called vicin­i­ty. I think from mem­o­ry but again They that com­pa­ny is an admin­is­tra­tion and serve corpse still here. So they’ve adapt­ed and sur­vived for a long time one of the things that they pro­vid­ed and pio­neered was Not just pro­vid­ing you the space, but also pro­vid­ing you sec­re­tar­i­al sup­port, IT sup­port, a voice­mail mes­sag­ing sys­tem you could log into.

[00:35:42] Tony: So you could go and rent the office space from them, but you also had the abil­i­ty to push star one on your phone and get IT help with what­ev­er you need­ed, um, from, from that office. So there was a, and there was a fair bit of, sup­port they put into there. Their cowork­ing spaces, which was­n’t there with some of their com­peti­tors.

[00:36:02] Tony: So that was some­thing they worked out pret­ty ear­ly on. Has and has worked well for them. The shares are up a lot, um, this year. And I think that’s for two rea­sons, so they had a good year prof­it wise, and their prof­it was up some­thing like 25 per­cent and a half, so that’s good year on year, but they also released what the head­line calls a Mid­dle East update.

[00:36:26] Tony: So, I’ll read from their announce­ment on that. Fol­low­ing our pre­vi­ous update to the mar­ket on the 17th of Novem­ber, 2023, the restruc­tur­ing of the Mid­dle East oper­a­tions con­tin­ues. And sor­ry, I should­n’t drop that and say that they now oper­ate around the globe in 22 coun­tries. 44 cities and 150 loca­tions.

[00:36:45] Tony: So it’s, it’s a glob­al com­pa­ny these days. Uh, get­ting back to what they’re say­ing. We con­firmed that the Mid­dle East reor­ga­ni­za­tion was com­plet­ed pri­or to 31 Decem­ber, 2023, includ­ing the incor­po­ra­tion of a new hold­ing com­pa­ny for this region called New­Co. Serv­Corp has been Grant­ed the region­al head­quar­ter license issued by the Sau­di Min­istry of Invest­ment, the first for­eign cor­po­ra­tion in the shared work­space sec­tor to obtain this.

[00:37:13] Tony: This ensures Serv­Corp receives full sup­port in its inter­na­tion­al endeav­ors con­trolled by its Sau­di enti­ty and receives sup­port from the Min­istry of Invest­ment in Sau­di. This achieves two of the key require­ments for Serv­Corp to con­tin­ue with the planned list­ing of its Mid­dle East­ern Euro­pean oper­a­tions in the first or sec­ond quar­ter of cal­en­dar year.

[00:37:32] Tony: 2025 Serv­corp Lim­it­ed intends to hold our Europe and Mid­dle East­ern oper­a­tions in New­Co with Serv­corp Lim­it­ed retain­ing a 55% hold­ing in the list­ed enti­ty. Prof­it pro­jec­tions and rev­enue for the cal­en­dar year 2024 for these oper­a­tions are being com­fort­ably met. And four new loca­tions are being built in the area to meet strong demand.

[00:37:53] Tony: Based on cur­rent mul­ti­ples being achieved in the Sau­di mar­ket for growth busi­ness­es, we could expect to see a sig­nif­i­cant val­ue uplift for our share­hold­ers should the trans­ac­tion be suc­cess­ful­ly com­plet­ed. Serv­Corp, in addi­tion to own­ing 55 per­cent of New­Co, will retain 100 per­cent own­er­ship of its loca­tions in Aus­tralia, New Zealand, South East Asia, North Asia, and Aus­tralia.

[00:38:12] Tony: Unit­ed King­dom, USA plus some Mid­dle East­ern oper­a­tions incor­po­rat­ing over 80 busi­ness cen­tres. A sub­stan­tial cash injec­tion should flow into Serv­Corp and our view­ers prof­its will remain con­stant. So this is a small com­pa­ny with­out much cov­er­age from the ana­lysts because it’s a low ADT stock. I was­n’t able to find much in the finan­cial press about New­co and what’s going on, but it does look like they’re either list­ing their Mid­dle East busi­ness and Euro­pean oper­a­tions in Sau­di Ara­bia and receiv­ing a cash injec­tion from the list­ing, or poten­tial­ly the gov­ern­men­t’s tak­ing a stake in it.

[00:38:52] Tony: But either way, there’s a lot of cash flow­ing in and a lot of. Tail­winds for this busi­ness in the Mid­dle East sec­tion of their busi­ness. So the share price has gone from 2. 87 up to 4. 11 where it sits today in the last few months because of that. So the num­bers for share, uh, for Serv­Corp, it scores quite well on our buy list.

[00:39:15] Tony: It’s up quite high. Um, doing the analy­sis, uh, at a share price of 4. 11. which is near­ly 25 per­cent below its con­sen­sus tar­get, um, and around about its IV2 of 443. IV1 is 162, so it’s not a deep val­ue at this price, but it’s fair­ly val­ued in my opin­ion. Uh, com­pa­ny yields 5. 84%, um, so not quite enough to score on yield, but cer­tain­ly a decent yield.

[00:39:44] Tony: Stock Doc­tor finan­cial health and trend are strong and steady, so it scores well for those. If any­one’s inter­est­ed, the ROE is 15%, which isn’t bad. Prop­Caf is 2. 5 times, so we’re buy­ing this com­pa­ny, which sounds like it’s going to Go through a growth spurt in the Mid­dle East for 2. 5 times its exist­ing cash flows, which is very cheap.

[00:40:06] Tony: Net equi­ty per share is 1. 99, so it’s rough­ly twice its book val­ue, so it’s not going to score for us on that met­ric. Fore­cast earn­ings per share growth is cur­rent­ly 45%, which is quite high, and its PE is only 12 times, so Growth over P. E. is near­ly 3. 5 times and we, you know, our thresh­old is 1. 5 before we score it.

[00:40:30] Tony: So it’s get­ting a very good score of 2 in our check­list for being so high, uh, and fore­cast­ing growth. Um, direc­tors hold 53 per­cent of the, of the com­pa­ny and Alf Mufrage is still around and he’s an own­er founder, so it scores for that. It’s only in the last month or two it’s become a 3 point trend­line buy for us, so it’s um, scor­ing as a new upturn.

[00:40:51] Tony: Uh, not scor­ing on, um, hav­ing a low PE, it’s not the low­est in the last, uh, three years, and it’s not scor­ing on con­sis­tent­ly increas­ing equi­ty, so, uh, can’t score it on those. Over­all though, qual­i­ty score is 12 out of 15, or 80%, and the QAV score is 0. 31, which is quite high up. A bit of an, bit of analy­sis, uh, what are my thoughts on it, um, the pros are very much the fact that it’s, uh, the own­er, uh, The founder still is an own­er.

[00:41:21] Tony: Um, but the, I guess on the con side of the table is he’s get­ting pret­ty old now. He’s in his mid sev­en­ties. So what hap­pens to suc­ces­sion is, I think I read in one of the, uh, Arti­cles I was read­ing that he had two sons who were work­ing in the busi­ness, but I think they both exit­ed. So suc­ces­sion, uh, unless I’ve missed some­thing, does­n’t, isn’t quite clear at the moment.

[00:41:46] Tony: Um, but that’s some­thing I’m sure they’ll man­age. Uh, the Back to the pros, they weath­ered the WeWorks com­pe­ti­tion and the Vic­to­ry Offi­cers com­pe­ti­tion and came out on top. So they’re cer­tain­ly well expe­ri­enced in this mar­ket and can adapt. They’ve adopt­ed some of the WeWork inno­va­tions like what’s called Colo in the indus­try, co locat­ed shared work­spaces.

[00:42:11] Tony: And I think the infra­struc­ture seems good. There were num­bers in there. in their analy­sis that they have about three times the sup­port staff for IT and sec­re­tar­i­al sup­port involved with each co locat­ed work­space and each ser­viced office that they lease com­pared to their com­peti­tors. So they’re cer­tain­ly pro­vid­ing good ser­vices to peo­ple.

[00:42:36] Tony: So yeah, so Serv­Corp scores well, does­n’t have a high ADT, But, and, and it’s going to have some kind of, uh, like­ly tail­wind through this Mid­dle East New­Co list­ing. Um, so peo­ple can have a look for that.

[00:42:51] Cameron: I won­der what, uh, how they sur­vived COVID. Yeah. I’m just look­ing up some sto­ries, uh, from around about that time.

[00:42:58] Cameron: But, um, that must have been tough for busi­ness­es like this. The, um, with the, the Mid­dle East expan­sion and the sup­port from the Saud­is, do you think it’s because Tran­scribed They just need more places to chop up bod­ies, um, bath­tubs, and is that part of the ser­vice pro­vi­sion? I don’t think so. No? No,

[00:43:21] Tony: I don’t think so.

[00:43:22] Tony: Yeah, um, yeah. You can

[00:43:23] Cameron: nev­er have enough places to chop up bod­ies of jour­nal­ists. That’s what I’ve always said. No, no, I don’t think it’s that at all. Oh, it’s just me then. Um, I’m look­ing at their 1H24 pre­sen­ta­tion and the choice of the, the, um, art that they’ve got for this. I looked it up, like this, uh, stock shot of some girl dream­i­ly, Danc­ing in a corn­field or some­thing.

[00:43:55] Cameron: Yeah. Like what? What’s that got to do with office rental spaces? It’s a bizarre choice. Any­way, it sounds like a good busi­ness. Sounds like they’re doing well. Thanks for that. We do hold them in a light port­fo­lio and the dum­my port­fo­lio bought them on the 19th of April. And they’re up once 1 per­cent since then.

[00:44:17] Cameron: So not a. Not a huge, uh, per­for­mance in the last cou­ple of months, but, uh, hope­ful­ly things go, con­tin­ue to go well. All right. Any­thing else? We’ll get into ques­tions. A cou­ple of ques­tions this week. Thank you to every­one who sent in ques­tions. Nick, many indus­tries are going to ben­e­fit great­ly in a num­ber of ways with AI.

[00:44:39] Cameron: Med­ical test­ing and diag­nos­tics are a clear stand­out. The mar­ket has reward­ed the chip mak­ers and data cen­ters, but has­n’t yet moved to the next order of bene­fac­tors. Now is prob­a­bly a great time to pre­emp­tive­ly buy into some of these com­pa­nies, even in a small way. Is there a way QAV could iden­ti­fy or weed out some poten­tial can­di­dates?

[00:45:00] Cameron: I said to him, Yeah, I think I know what Tony’s going to say. Uh, that was even before the Dr. No episode. Then he said, maybe an expert in addi­tion to your­self could help or per­suade our Tony, any­one out there you think might come on for a chat. I think these are excit­ing times and agree with you that it is going to move faster than a lot of peo­ple antic­i­pate.

[00:45:20] Cameron: And I said, yeah, the prob­lem is find­ing any­one who can pre­dict the future. Like we, if we’ve learned any­thing from not just the tech indus­try, but invest­ing Over the years, it’s that no one real­ly can pre­dict shit. That’s why we have a ret­ro­spec­tive view on invest­ing, right?

[00:45:38] Tony: Yeah. Yeah, no, exact­ly. I mean, that’s, that’s.

[00:45:42] Tony: That’s, yeah, well said, um, maybe AI will help us with that and can pre­dict the future bet­ter than we can. That would be a great boon to invest­ment, but, uh, yeah, try­ing to iden­ti­fy next year’s win­ners is real­ly hard to do. Bet­ter off hav­ing a frame­work and try­ing to look at com­pa­nies which are good now, which will get bet­ter.

[00:46:05] Cameron: Yeah, well, I was talk­ing, I caught up with, um, one of our lis­ten­ers for a cof­fee, uh, last week and just, just, just, you Talk­ing about the qual­i­ty of man­age­ment, you know, I think look­ing at, um, uh, con­sis­tent­ly increas­ing equi­ty. One of the things that we look at, like to me, what that is telling me when I, when I find a com­pa­ny with con­sis­tent­ly increas­ing equi­ty, it’s that the man­age­ment are com­pe­tent.

[00:46:36] Cameron: It’s com­pe­tent man­age­ment. They know how to grow their busi­ness year or peri­od after peri­od. We’re only look­ing at three years, but in recent times, they’ve been able to han­dle the swings and round­abouts of the mar­ket­place and grow their busi­ness. And if, if any busi­ness is going to man­age this tran­si­tion into an AI future, well, it’s pos­si­bly going to be one of the busi­ness­es that, uh, has demon­strat­ed that they’re com­pe­tent.

[00:47:04] Cameron: Cause we know that. The vast major­i­ty of pub­licly list­ed com­pa­nies aren’t com­pe­tent. They don’t, we were talk­ing, we did a sto­ry on this a lit­tle while ago, right? They’re not very well run. Um, but that said, han­dling the tran­si­tion to any major tech­no­log­i­cal dis­rup­tion his­to­ry has shown us Is inher­ent­ly dif­fi­cult.

[00:47:33] Cameron: Like just look­ing at the way that the inter­net dis­rupt­ed com­pa­nies, uh, over the last 20 years, there were a lot of the world’s lead­ing, most suc­cess­ful prof­it, I think about jour­nal­ism, uh, you know, media com­pa­nies, a lot of media com­pa­nies at 20, 25 years ago, you would have said were very well run. Had a good track record, you know, knew what they were doing.

[00:47:55] Cameron: Tech­nol­o­gy, the inter­net came along and just dis­rupt­ed their busi­ness mod­el. And very few of them sur­vived. Most of them, uh, if they’re sur­viv­ing at all today, it’s on hand­outs from Face­book and Google who, you know, Gov­ern­ments have forced to pay these com­pa­nies mon­ey because they’re run­ning their sto­ries and they’ve been, you know, basi­cal­ly forced into it.

[00:48:17] Cameron: Like the Aus­tralian gov­ern­ment has been forc­ing big tech com­pa­nies to give media com­pa­nies a life­line hand­out because they’re not mak­ing mon­ey any­more because peo­ple go to the tech­nol­o­gy, go to, go to Face­book and Google to get their news and all of the adver­tis­ing dis­ap­peared and went to realestate.

[00:48:35] Cameron: com. au or, Seek. com. au and all that kind of stuff. So even well run busi­ness­es, uh, can real­ly, real­ly strug­gle to han­dle dis­rup­tive tech­nol­o­gy and, and how you iden­ti­fy in advance the ones that are going to sur­vive that trend. And this tran­si­tion, I believe is going to be. The biggest and most dis­rup­tive tran­si­tion we’ve ever seen.

[00:48:59] Cameron: And Nick, I agree with Nick, like in med­i­cine is going to be phe­nom­e­nal. The impact that AI is going to have in the next decade, when we have AI sys­tems that can ana­lyze, not only ana­lyze all of the research that’s being done, but can also run up vir­tu­al mil­lions and mil­lions of vir­tu­al exper­i­ments that Uh, to see how they play out and then have the equiv­a­lent intel­li­gence of mil­lions of, uh, research PhDs that can ana­lyze those results and then spit out a short list to human researchers to test in the lab.

[00:49:38] Cameron: Here’s the com­bi­na­tion of fac­tors that you real­ly want to be look­ing at to cure can­cer or to cure Alzheimer’s or to do life exten­sion to telom­ere exten­sion, what­ev­er it is. Um, and then, uh, Uh, it’s going to be an incred­i­bly fas­ci­nat­ing time to live, but there will be com­pa­nies that don’t exist today that will be the Mod­e­na, um, 10 years from now that’ll come up with MRNA vac­cine tech­nol­o­gy and find an oppor­tu­ni­ty to exploit it.

[00:50:06] Cameron: Any­way, I’m ram­bling, but I just don’t think there’s any way of, of being able to fore­cast who’s going to sur­vive this and who’s going to prof­it from it and who isn’t.

[00:50:15] Tony: Yeah, look, I, I agree. I think, um, I was try­ing to think, apart from what we spoke about before, about going into ener­gy stocks to pow­er AI, to pow­er the data cen­tres that AI runs on, or data cen­tre com­pa­nies, but that tends to be a crowd­ed trade these days.

[00:50:32] Tony: I mean, I, uh, I would think lawyers. Um, health, uh, like, uh, med­ical imag­ing com­pa­nies or pathol­o­gy com­pa­nies, com­pa­nies that have lots of data that is cur­rent­ly processed man­u­al­ly, um, will get sped up. I don’t know if that’s, I was try­ing to think, is that a good thing for those com­pa­nies or is it a dis­rup­tive thing for those com­pa­nies?

[00:50:55] Tony: lawyers? Yeah.

[00:50:56] Cameron: Lawyers are going to be out of busi­ness.

[00:50:57] Tony: Well, there you go, but, but if the lawyers, but, but will a legal com­pa­ny know that and take up AI and put their lawyers out of busi­ness and sur­vive or will it just be dis­rupt­ed away? Who knows?

[00:51:10] Cameron: Yeah. So it’s hard. It’s hard. My guess is that lawyers are, uh, dead.

[00:51:14] Cameron: I mean, some, some will sur­vive, right? You still want some­body in court argu­ing your case, et cetera, et cetera. But. Um, the, the back­ground work that needs to be done to pre­pare for a case, or just day to day legal stuff, there will be just AI lawyers out of the box, your AI lawyer, I guar­an­tee you, Chat­G­PT prob­a­bly has a bet­ter han­dle on most Aus­tralian law today than most lawyers.

[00:51:41] Cameron: It will have, you know, the, the ver­sions of it that we will have in the next year or two will have read, All of the case work, all of the law, inside and out, and we’ll be able to pro­vide free Uh, excel­lent legal advice for peo­ple and busi­ness­es. Not today, there’s still too many hal­lu­ci­na­tion type issues where you would­n’t, you would­n’t trust it today, but you know, if you believe Sam Alt­man and peo­ple like that, those, all those prob­lems are going to go away in the next ver­sion of Chat­G­PT based on where they’re at today.

[00:52:17] Tony: Yeah. Well, if you look at the his­to­ry of dis­rup­tion and it’s not, Not just relat­ing to AI, but, uh, busi­ness­es and indus­tries go through the sig­moid curve. So they, it’s like, if you think of an S on its side, so they grow, um, the val­ue is cre­at­ed, the share price goes up and then they get dis­rupt­ed and then they come down and they come down to a point where their val­ue again, And so they might be investable at that stage on the, on the way up.

[00:52:45] Tony: Um, and that’s been the case all, all the way through his­to­ry. So like we have, you’re talk­ing about media stocks, but we have media stocks on our buy list now because, you know, 20 years ago, these stocks were very, very expen­sive because they were house­hold names and now they’re very, very cheap, but they’re still in busi­ness.

[00:53:03] Tony: So it, and the clas­sic exam­ple of that is Berk­shire Hath­away. Um, So the com­pa­ny Berk­shire Hath­away, um, before it became a hold­ing com­pa­ny for War­ren’s invest­ments, was a cot­ton mill in the north­east of the U. S. And it was a clas­sic cig­ar butt invest­ment because cot­ton mills were shut­ting down. And War­ren could buy it cheap­ly, and then Char­lie tried to talk him out of it, but War­ren went ahead and bought it cheap­ly because cot­ton milling in the U.

[00:53:33] Tony: S. was being dis­rupt­ed. Um, but it’s how, it’s how man­age­ment address­es that, so War­ren was able to say, well it’s still throw­ing off cash, and I can invest that bet­ter out­side of putting it back into sup­port­ing the cot­ton mill. And those invest­ments paid off. Then became the core busi­ness. So it’s, it’s how nim­ble and adap­tive man­age­ment is.

[00:53:53] Tony: That’s impor­tant as well. Not just the indus­try they’re in.

[00:53:56] Cameron: Any­way, the bot­tom line, Nick is, yeah, like it’s a fas­ci­nat­ing area and I’d love to get some­one on to talk it through. Maybe some­body who is in the, um, med­ical analy­sis, uh, field and we can talk about what they see com­ing down the pipeline. But, uh, yeah, again, my.

[00:54:16] Cameron: Hav­ing spent 30 years in and on the fringes of the tech­nol­o­gy indus­try, I just know from expe­ri­ence that no one has any idea what’s going on, you know.

[00:54:27] Tony: Yeah, I think, um, med­ical imag­ing is the one, is prob­a­bly the area that’s being iden­ti­fied at the moment, which is going to have a big ben­e­fit from being able to process data, uh, quick­ly.

[00:54:38] Tony: Quick­er, um, to pick up prob­lems quick­er and to make the life of radi­ol­o­gists, for exam­ple, bet­ter and more, and more pro­duc­tive. Um, and I guess the anal­o­gy is a com­pa­ny like ProMedicus, um, which isn’t an AI com­pa­ny, although they prob­a­bly are. They prob­a­bly have some­where in their slide decks that they are, but any­way, and that’s an anti QAV stock, it trades on like a hun­dred times oper­at­ing cash flow.

[00:55:01] Tony: But it’s done very, very well as an invest­ment, um, grow­ing a lot. Uh, and the anal­o­gy is that, you know, it’s, it’s all about, um, med­ical imag­ing and get­ting, um, high­er qual­i­ty res­o­lu­tion med­ical imag­ing, um, to med­ical staff in a, in a quick­er way, enabling them to, um, To, uh, process remote­ly and to process more data than they have been able to tra­di­tion­al­ly.

[00:55:25] Tony: And that’s been a huge boon to sur­geons and to med­ical staff. And that same sort of a thing is going to hap­pen when AI can, you know, um, go through, uh, a mil­lion breast can­cer x rays and mam­mo­grams and screen for breast can­cer. Breast can­cer quick­er than it’s done now and to be able to catch that can­cer in a time­li­er way than it’s done now.

[00:55:46] Tony: So yeah, I think med­ical imag­ing is a huge area for AI.

[00:55:51] Cameron: I cov­ered this sto­ry on Futur­is­tic last week with Steve. Google’s Gem­i­ni mod­els have been Uh, they’ve got a, they’ve got a ver­sion of it called MedGem­i­ni. And basi­cal­ly what they’ve been doing is work­ing with doc­tors, um, to use this to do exact­ly that.

[00:56:15] Cameron: Basi­cal­ly using it to help doc­tors get faster and bet­ter analy­sis of peo­ple’s results.

[00:56:27] Cameron: There’s a bunch of exam­ples here where they take a pho­to of a skin lesion, a lump, and the, it says, The mod­el asked appro­pri­ate fol­low up ques­tions and cor­rect­ly diag­nosed the rare lesion, rec­om­mend­ing what the user should do next. There was anoth­er exam­ple, MedGem­i­ni was asked to inter­pret a chest x ray for a physi­cian while they were wait­ing for a for­mal radi­ol­o­gist’s report and for­mu­late a plain Eng­lish ver­sion of the report that could be pro­vid­ed to the patient.

[00:56:56] Cameron: basi­cal­ly it had knock­out results, look­ing at scans, look­ing at feed­back.

[00:57:01] Cameron: Pho­tos being able to, um, pro­vide analy­sis for the doc­tors. So like, I’m guess­ing we are not far away from, you know, you’ll just, you, you have, you’ll, you’ll go for an X‑ray and it’ll just, you know, the X‑ray com­pa­ny will just feed. Your x ray through an AI, and it’ll give you the results. And that’ll be it for the, for the major­i­ty of things.

[00:57:30] Cameron: Um, it’ll, it’ll do the analy­sis. You might then go and see your GP for rec­om­men­da­tions for fur­ther treat­ment if it’s required, but the AI will be doing the analy­sis. The vast major­i­ty of the back­ground work for the GP, which is good. It means it takes a load off GPs. GPs can see more peo­ple. A lot of peo­ple won’t need to see a GP because the AI will be your GP.

[00:57:52] Cameron: You’ll only need to see a human in, you know, spe­cif­ic cas­es where there’s some­thing that requires human inter­ven­tion.

[00:57:59] Tony: And unless there’s a par­tic­u­lar med­ical AI com­pa­ny that you can invest in, it’s, you’re going to have to large­ly invest in the things we’ve talked about, the Mag­nif­i­cent Sev­en and who’s pro­vid­ing that.

[00:58:11] Tony: Gen­er­al AI. I sus­pect that there might be a spe­cial­ist AI for med­ical imag­ing and that might be a com­pa­ny that launch­es that you can invest in. But if that’s the case, just as it’s the case now with the Mag­nif­i­cent Sev­en, I don’t think they’ll ever appear on our buy list as a val­ue invest­ment at all.

[00:58:30] Cameron: The way I think it’s going to play out, and this is, you know, spec­u­la­tive and I’m pulling this out of my arse obvi­ous­ly, but I think you will have your AI assis­tant that’ll be on your phone, prob­a­bly pro­vid­ed by Apple in col­lab­o­ra­tion with Google or GPT or who­ev­er. The dom­i­nant com­pa­ny is in the future and if it needs spe­cif­ic, um, exper­tise, AI exper­tise, it’ll call out like an API call to MedGem­i­ni.

[00:59:02] Cameron: And it’ll tell you, look, I need to, I need to, I’ve got your scan from the x ray com­pa­ny. I need to run this through a spe­cial AI. It’s going to cost. Five bucks for me to make that API call. Are you hap­py to approve that? Yep. It’ll send the data to the spe­cial­ized AI sys­tem, which will do the analy­sis and then feed that back to your agent.

[00:59:22] Cameron: So you’ll have your agent on your phone. That’ll be your per­son­al. AI assis­tant that knows every­thing about you and your pref­er­ences and you trust it to man­age your affairs for you. And then it’ll, it’ll do a whole bunch of stuff in the back­ground on your behalf, call out to dif­fer­ent sys­tems and do your shop­ping and do your bank­ing and your invest­ing and what­ev­er on your behalf.

[00:59:44] Cameron: Um, so there’ll be a whole bunch of, uh, dif­fer­ent mod­u­lar sys­tems out there that it’ll be able to call upon, but there won’t be that many real­ly. It’ll be, Google’s will run some and Meta will run some and Apple will run some and, you know, and there might be some small­er ones, but the amount of com­pute. I was lis­ten­ing to an inter­view this morn­ing with Yann LeCun, who’s the head of AI at Meta.

[01:00:10] Cameron: And they’ve, based on the num­ber of NVIDIA GPUs they now have run­ning their stuff, the guy who was inter­view­ing them esti­mat­ed that they’ve spent 30 bil­lion on build­ing their AI data cen­ter to run all of the stuff in the back­ground, because they’ve got like a mil­lion NVIDIA GPUs. I heard Zucker­berg say a while ago they’d have a mil­lion by the end of this year.

[01:00:35] Cameron: I mean, it’s just an insane amount of mon­ey. They’re like 250, 000 a pop. So unless they’re get­ting some sort of spe­cial deal, and I don’t think NVIDI­A’s giv­en spe­cial deals because, you know, their prod­uct line is sold like two, three years in advance right now. Um, It’s like, there’s not that many com­pa­nies that can spend 30 bil­lion on build­ing AI data cen­ters.

[01:00:57] Cameron: You know, crazy.

[01:01:00] Tony: It is. But again, it’s, it’s real­ly hard to iden­ti­fy where to invest, whether we can invest, whether you invest in Apple, whether you invest in Google, all those kinds of things right now. Yeah.

[01:01:11] Cameron: All right. Mov­ing right along, Matt, uh, poten­tial ques­tion. Uh, I’ve been lis­ten­ing to a bit from Aswath Damodaran, And he believes that a good val­u­a­tion should be the com­bi­na­tion of a sto­ry and the num­bers.

[01:01:26] Cameron: For Tony, how often is he mak­ing pur­chas­es, or not mak­ing pur­chas­es, based on fac­tors out­side the num­bers? Well, I think we all know the answer to this ques­tion, par­tic­u­lar­ly after today’s episode, but, uh, I’ll Let Tony give the answer.

[01:01:42] Tony: Well, the answer is very rarely. I mean, we have some red flags, which is out­side the num­bers.

[01:01:47] Tony: But, um, but no, very rarely. That’s been beat­en out of me. I mean, I have from time to time over 25 or 30 years been swayed by a par­tic­u­lar sto­ry and been to a pre­sen­ta­tion and thought that was fan­tas­tic and bought the stock only to watch it crash. So, um, yeah, I, I hate CEO sto­ries. Very rarely go along to any sort of pre­sen­ta­tions any­more, um, they’re always good, they’re always upbeat, they’re always going to change the world, um, and they nev­er do, very rarely do, so, no, I stick to the num­bers.

[01:02:18] Tony: Look, that does­n’t mean I don’t play around with things like, um, well we talked about Licks trad­ing below their NTAs before and how, you know, I had invest­ed in, in that, um, way back at the start of my invest­ing career, and that’s a legit­i­mate part of it. Um, thing to do. Um, and I’m always tri­alling new ideas like the anti QAV stocks.

[01:02:38] Tony: Um, see how that goes. Um, play­ing with regres­sion test­ing to see if we can improve QAV, all those kinds of things. So from time to time I will buy a stock that inter­ests me after all that kind of test­ing. But, um, yeah, I’ve had, I’ve had I’ve had, through bit­ter expe­ri­ence, um, buy­ing shares on sto­ries beat­en out of me.

[01:02:59] Cameron: And I’ve, I’ve looked at, uh, Damodaran’s stuff before, he’s got a huge online fol­low­ing. He’s, uh, pro­fes­sor at Stern School of Busi­ness in New York, pro­fes­sor of finance, teach­es cor­po­rate finance and equi­ty val­u­a­tion. Um, and I, I looked a lit­tle bit of this video that Matt sent through and he’s got a check­list and a spread­sheet, um, not dis­sim­i­lar to yours.

[01:03:25] Cameron: And then he takes, from what I gath­ered, the quick look I had, he lis­tens to the nar­ra­tive or the sto­ry that the busi­ness has and then he tries to jus­ti­fy it with num­bers. You know, he tries to work out. Can I make sense of this look­ing at the num­bers or not? Do the num­bers back up this sto­ry or not? But, um, you don’t even lis­ten to sto­ries most of the time, right?

[01:03:49] Cameron: You just let the num­bers tell you the sto­ry that you want to hear, which is this com­pa­ny’s mak­ing mon­ey and it’s under­val­ued.

[01:03:56] Tony: Yeah, that’s, that, that’s the only sto­ry I want to read about. Um, and look, I under­stand, uh, what, uh, I’m not that famil­iar with this per­son, but I under­stand what they’re doing, Aswath Damodaran.

[01:04:09] Tony: Um, but yeah, I mean, it’s, it’s, there are all dif­fer­ent ways to val­ue com­pa­nies. And, uh, from the sort of link that I was sent, it looks like he’s just look­ing at longer term trends. in the num­bers, like how are sales going and how’s prof­it going over a longer peri­od of time and you know, there are peo­ple who take what the CEO said over the last five years and see if that’s if that’s actu­al­ly hap­pened as a way of judg­ing the qual­i­ty of man­age­ment.

[01:04:38] Tony: There are peo­ple who well even War­ren Buf­fett and Char­lie Munger talk about the num­bers only being part of the The whole val­u­a­tion, they look, try and look for­ward as well. How long is this busi­ness going to con­tin­ue to be prof­itable and, and, you know, pay, pay us back for our invest­ments? Uh, so there’s an ele­ment of that, but I’ve just found that all of that stuff is, unless I’m an insid­er in the indus­try, it’s, it’s becomes, um, fore­cast­ing, which is real­ly hard to do.

[01:05:08] Tony: Uh, crys­tal ball gaz­ing. The only thing we can rely on is what the com­pa­nies. Put into its num­bers that we can build a mod­el about its qual­i­ty and its val­ue.

[01:05:19] Cameron: And we’ve talked about this before, like Char­lie and War­ren did spend all day, every day, you know, going deep and devel­op­ing a real­ly deep under­stand­ing of a busi­ness or the sec­tor that the busi­ness was in so they moat it had.

[01:05:37] Cameron: And, you know, they, that’s what they loved. That was their pas­sion. They ded­i­cat­ed decades. To being very, very com­pe­tent. War­ren would talk about his cir­cle of com­pe­tence and he would, uh, devel­op very deep comp, com­pe­tence in under­stand­ing a busi­ness in the sec­tor it was in and the num­bers behind it and all that kind of stuff.

[01:05:56] Cameron: That’s how he got his kicks. And if that’s what peo­ple want to do, if they want to ded­i­cate and they can afford the time to ded­i­cate their lives to hav­ing a deep, under­stand­ing of an indus­try or a sec­tor, then they could prob­a­bly, you know, prof­it well from that, but that’s not how you want to spend your life, right?

[01:06:16] Tony: No, it’s, it’s not. And, um, You know, it’s prof­itable for them, so it drew them in to doing that. But, yeah, you’ve made a good point. They do base their cal­cu­la­tions on num­bers. But, you know, famous­ly, War­ren lives in Oma­ha, because he did­n’t want to be swayed by the sto­ries of Wall Street. And even though, you know, There’s a cer­tain amount of truth in that sto­ry, but on the oth­er hand, he did spend a lot of time net­work­ing with, um, famous peo­ple to under­stand their indus­tries, like Bill Gates or, um, uh, what’s his name, Kathy Gra­ham, who ran the Wash­ing­ton Post.

[01:06:56] Tony: So he did gain knowl­edge about those indus­tries through, through them. He, he liked the fact that he could pick up an annu­al report and read about the com­pa­ny and the num­bers there, and not be swayed by what Wall Street thought about those com­pa­nies. Hmm.

[01:07:09] Cameron: Alright, last ques­tion is from our old mate Kane.

[01:07:13] Cameron: Uh, Kane says the CFO of PRN just resigned, but it is stat­ed he is left to take a job as CFO at Perth Air­port. Does Tony think this would still count as a sell or as a res­ig­na­tion with rea­son fair? I had a look, uh, so the announce­ment came out at the begin­ning of the day yes­ter­day. And the share price went up con­sid­er­ably over the course of the day, which I always think must be depress­ing.

[01:07:42] Cameron: It came back a lit­tle bit today, but, uh, is still quite a ways above where it was at the begin­ning of the mar­ket yes­ter­day. I think it, it opened, um, Uh, yes­ter­day, I don’t know, I ran about 98 and a half cents by the looks of it, went up to over a dol­lar one, came back down to sort of round about 99 and a half cents, close to a buck today.

[01:08:06] Cameron: Um, I read, uh, The com­pa­ny state­ment, it says, Par­en­ti advis­es the Chief Finan­cial Chief Finan­cial Offi­cer, Mr. Peter Bryant, has resigned to accept the CFO posi­tion at Perth Air­port. Mr. Bryant will con­tin­ue to serve a CFO dur­ing a six month notice peri­od and will assist in the search and tran­si­tion process to a new CFO.

[01:08:30] Cameron: Now, red flags for us are nor­mal­ly. Uh, sud­den res­ig­na­tions, uh, yeah, uh, Stal­in esque purges of peo­ple. He’s been tak­en out to a labor camp some­where and shot sud­den­ly. Um, this does seem to be a legit­i­mate, uh, tran­si­tion with a tran­si­tion peri­od and a good excuse. I don’t see any rea­son for pan­ic. Do you?

[01:08:58] Tony: No, not at all.

[01:08:58] Tony: Um, I think the fact that he’s hang­ing around to help peo­ple The tran­si­tion’s good. Uh, and, um, yeah, look, red flags are real­ly just, as you said, Cameron, if some­one resigns unex­pect­ed­ly and does­n’t give a rea­son, it usu­al­ly Fam­i­ly issues. Fam­i­ly issues. Health issues. Yes, spend­ing more time with my fam­i­ly, that kind of thing.

[01:09:19] Tony: That’s the red flag for me, espe­cial­ly a CFO. No, this is, this all looks fine. Par­en­ti is, um, back on the buy list, and it’s a recent 3. 2. Trend­line Upturn. So I think it’s all fine. All

[01:09:31] Cameron: right. Well, that is the show for today. Apart from After Hours, Tony, unless you’ve got any­thing else. All right. After Hours.

[01:09:41] Cameron: Wow. I went to a gig. We went to a gig Fri­day night. One of the rare times we actu­al­ly are allowed to leave the house. I went to see Slater Kin­ney, who we last saw about eight years ago. Old girl. Punk band from Seat­tle, Port­land, Pacif­ic North­west. Um, they’re in their mid for­ties now, the girls that sort of broke in the mid nineties, um, sort of part of the riot girl move­ment, which was the angry all girl punk move­ment out of the Pacif­ic North­west.

[01:10:17] Cameron: And they rocked hard. It was fan­tas­tic. And the open­ing act was an all girl punk band from Syd­ney called Body Type. And, uh, we loved it. It was just, it was a lit­tle, lit­tle club in the city, the Trif­fid. And, um, not that many peo­ple, cou­ple of hun­dred peo­ple, maybe, but yeah, both bands just rocked real­ly hard.

[01:10:37] Cameron: And there’s some­thing about girls play­ing Punk, angry Punk, that, uh, I just love and the, the. Par­tic­u­lar­ly the girls at Slater Kin­ney, Car­rie and Corin, they dress like they’re, um, exec­u­tives in a cor­po­ra­tion, like they don’t dress like punks, they just have nice frocks on, and then they get up there and they just scream and play loud gui­tar and, you know, It’s just, it’s real­ly, I don’t know, I just dig it.

[01:11:08] Cameron: I loved it. We, we had a real­ly great night. It was a real­ly fun gig. Any­way, that was sort of the high­light of our week.

[01:11:17] Tony: That sounds good.

[01:11:18] Cameron: It was great. Yeah.

[01:11:20] Tony: Yeah. So, well, you’ve already talked about my trip to the Scone Cup, which was bril­liant. Um, and the races there and stay­ing on the farm, which was love­ly.

[01:11:30] Tony: Check­ing out my hors­es there. Uh, and then. Com­ing up here, I’ll be here prob­a­bly until Sun­day because Poy­fect will run on Sat­ur­day and then I’ll work my way down the east coast back to Syd­ney play­ing some golf which will be great. Nice. Yeah.

[01:11:46] Cameron: Have you watched any­thing good? Oh, I’ve Except for horse races, I haven’t watched the thing.

[01:11:52] Cameron: I made it about half an hour into Oppen­heimer and then I gave up. I was just so bored. I mean, it was beau­ti­ful­ly shot, um, parts of it. Like there’s all this sort of, I don’t know, you see lots of atoms and like, very lynchy kind of inter­sti­tial things when Oppen­heimer’s think­ing about physics. You see swirly things and that’s all love­ly, what­ev­er.

[01:12:16] Cameron: And I think, you know, the cast did a great job. It was more about, at least the half hour, you know, it’s more about who he’s sleep­ing with and his dif­fer­ent wives and his, you know, involve­ment in the com­mu­nist par­ty and that kind of stuff. And I just, I just got bored real­ly quick­ly with it. I was like, eh, I’m not going to both­er.

[01:12:34] Cameron: It’s anoth­er two hours to go on this. I can’t, but I, what I did watch and real­ly enjoyed was the last sea­son of Sein­feld. Again, I rewatched sea­son nine of Sein­feld. And I had­n’t watched sea­son nine since it came out, like in what­ev­er that was, 2000 and some­thing. And, uh, 99, 2000. I’m not sure. So it’s been 20 odd years since I saw it.

[01:12:58] Cameron: And some of the episodes were real­ly good. Like some of the best episodes were in that last sea­son. I was sur­prised. The finale was­n’t as bad as I remem­bered it, but still kind of fell flat. Did you watch the Curb Your Enthu­si­asm finale? No. Have we talked about it? No. Oh, man. The Sein­feld remake? No, well, they, no, no, well, kind of, yes.

[01:13:25] Cameron: So he, famous­ly, every­one hat­ed the final episode of Sein­feld, which Lar­ry came back to write. Which was bad. And it was­n’t great, and every­one’s crit­i­cized it for 20 years. And so, For the finale episode of Curb Your Enthu­si­asm, he pret­ty much did the exact same thing. And it was, the episode was called like, um, Noth­ing Learned or some­thing like that.

[01:13:53] Cameron: He basi­cal­ly, it’s the same thing, sim­i­lar, sim­i­lar, but dif­fer­ent. In the Sein­feld finale, they, they get arrest­ed and they go to tri­al and all of the peo­ple that they’ve offend­ed over the course of the series are brought in as wit­ness­es. Well, Lar­ry did the same thing. He’s on tri­al, All of the peo­ple that he’s offend­ed over the course of his show came on to bear wit­ness.

[01:14:13] Cameron: And it was, and Jer­ry, Jer­ry was in it as well. And, um, so Jer­ry, so like in the Sein­feld episode, Lar­ry, I’m going to spoil it for you. So spoil­er alert for any­one, Lar­ry los­es the court case. He goes to jail. He’s sit­ting in the jail cell, just like the Sein­feld crew. And the way the Sein­feld episode fin­ished is Jer­ry and George start­ed talk­ing about whether or not you do up the top but­ton of your shirt, which was the first Scene from the first episode of Sein­feld, Lar­ry starts talk­ing with anoth­er pris­on­er about his pants tent, which was a call­back to the very first episode of Curb Your Enthu­si­asm.

[01:14:54] Cameron: So he did exact­ly the same thing, but then Jer­ry comes in and goes, you’re free. And Jer­ry had found a loop­hole and got him out. And they’re walk­ing out of the jail cell and Jer­ry’s going, you know what? We should have done this in the last episode of Sein­feld. We should have, and he goes, Oh, why did­n’t I think of that?

[01:15:14] Cameron: That would have saved the whole thing. So any­way, I just love the fact that. Lar­ry, like it’s the, it’s the per­fect sort of fuck you from Lar­ry. The thing that peo­ple have crit­i­cized for the last 25 years. He just did it again, fol­lowed the same thing and called the episode Noth­ing Learned or some­thing like that.

[01:15:31] Cameron: Time of your life play­ing in the back­ground. No, no, but, uh, it was great any­way. So any­way, Sein­feld. Yeah, that was good. I just real­ly enjoyed watch­ing it. It was, uh, real­ly fun, real­ly good. But that’s it. I’m still read­ing the Fitzroy McLean book and he’s, the chap­ter that I’m read­ing at the moment is all about the purges, Stal­in’s purges.

[01:15:54] Cameron: He was in the court­room for the whole, uh, not for all the purges, but for some of the big ones like Bukhar and Yugo­da, the guy who was the for­mer head of the NKVD, who had been run­ning the purges. And then he got purged him­self and it’s fas­ci­nat­ing to get a first­hand account by, uh. Scots­man sit­ting through all these court cas­es about how these peo­ple were act­ing and how the whole thing played out.

[01:16:21] Cameron: Um, yeah, real­ly, real­ly inter­est­ing to try and fig­ure out the mechan­ics, um, of Stal­in’s purges and why he was doing it and who he was doing it to and all that kind of stuff. That’s it any­way. Yeah. Good. Yeah. Got noth­ing. Dr. No has noth­ing. All right. It’s a good book. Good movie. Uh, yeah. Yeah. It holds up. Yeah.

[01:16:46] Cameron: It’s like kind of quaint. We talked about that last week. Con­nery. Oh, bye. Con­nery. Yeah. Good look­ing, but not that good look­ing. Uh, you know, spit, but charis­mat­ic.

[01:17:00] Tony: Yeah. Very charis­mat­ic. Oh,

[01:17:03] Cameron: did you watch the last cou­ple of Doc­tor Who episodes?

[01:17:05] Tony: No, I’m still on Space Babies.

[01:17:07] Cameron: Oh, man. The Bea­t­les one, is it good?

[01:17:09] Cameron: The next one, the Bea­t­les one, is the most bonkers episode of Doc­tor Who I think I’ve ever seen. Okay. Not nec­es­sar­i­ly say­ing it’s good, but com­plete­ly bonkers. And I watched it twice, once with Fox and then once with Chris­sy. They both loved it. I think I loved it, but it’s com­plete­ly. bonkers next lev­el com­plete­ly bonkers and then the next one was not too bad too it was writ­ten by Steven Mof­fat the next one he came back and wrote this the fourth one yeah any­way I heard that yeah yeah has Alex watched them no no no dr.

[01:17:48] Cameron: no dr. no dr. no was­n’t Christo­pher Lee dr. no was

[01:17:54] Tony: he dr. no

[01:17:56] Cameron: Yes, yes. No, no. He was, uh, the man with the gold­en gun.

[01:18:00] Tony: Oh, that’s right.

[01:18:01] Cameron: Scar. Who was Dr. No, db.

[01:18:03] Tony: Yeah, it

[01:18:06] Cameron: was res, it

[01:18:07] Tony: was no , but that was the clas­sic scene. And the I real­ly, Joseph

[01:18:12] Cameron: Wise­man.

[01:18:13] Tony: Oh, okay. I real­ly enjoyed the, um, I real­ly enjoyed the book, Dr. Nye, because I remem­ber read­ing it and. What’s the off­sider’s name? Cor­rell, I think it is, the black guy. So Bond goes to an island in the Caribbean, which is where Ursu­la Andress comes out of the water, and he’s got a friend there, Cor­rell, who’s helped him before.

[01:18:34] Tony: Not Felix, not Felix. No, no, no, this is like a local guy. Right. Um, but the book goes into their train­ing regime, how, you know, Bond is feel­ing a bit flab­by and out of shape, and Cor­rell and him go run­ning on the beach and get back into shape before the mis­sion, which I thought was real­ly cool. Real­ly good because like, we watch all these action movies and no one ever goes to a gym or goes for a walk.

[01:18:56] Tony: They just have amaz­ing bod­ies. Yeah, that’s right. Yeah, yeah.

[01:18:59] Cameron: It was the first, was it the first one, Doc­tor No, the first nov­el?

[01:19:02] Tony: First book. No, Casi­no Royale was the first. Sor­ry, Doc­tor No was the first movie. The movie. Casi­no Royale was the first book. Yeah, that’s right. Yeah.

[01:19:11] Tony: Love the James Bond books. They were so well writ­ten.

[01:19:14] Cameron: Yes. I read them all like, I don’t know, 30 years ago and real­ly enjoyed them. Yeah.

[01:19:21] Tony: Yeah. I bought them all sec­ond­hand from a sec­ond­hand book­shop in Carl­ton and just devoured them. They were so good.

[01:19:28] Cameron: Yeah, I think I bought them from the same book­store in Carl­ton.

[01:19:32] Cameron: Yeah, real­ly? Yeah, I used to go to that book­store if it’s what I’m think­ing of. Yeah, the Paragon Cafe. Yes. Yes. Yeah, I used to go there all the time. I lived around the cor­ner of it.

[01:19:40] Tony: Oh, nice. Yeah. Yeah, it was a great book­store. So you went through all the Flem­ings, the Von­neguts, the Hem­ing­ways. And I just had them all there.

[01:19:50] Tony: It was great.

[01:19:50] Cameron: Yeah. I think I’ve got a cou­ple down­stairs in my book­shelf. Oh, real­ly? They’re prob­a­bly, yeah. Oh, wow. Yeah, they were good. Great books. I think I also bought, um, The Self­ish Gene there as well. Oh, one of my favorites. I think it’s an ear­ly, um, uh, print of that. Mm hmm. Um, yeah. Yeah. Great book. Major book.

[01:20:13] Cameron: Yeah. Yeah. Alright, thank you Doc­tor No.