QAV 807 — Half Year Havoc

QAV 807 Club Audio

[00:00:00] Cameron Reil­ly: Wel­come back to QAV, Tony. This is episode 807. We’re record­ing on the 18th of Feb­ru­ary. Hap­py Valen­tine’s Day for last week, Tony.

[00:00:17] Tony Kynas­ton: Oh, thank you, Cam. Jen­ny’s not a fan of Valen­tine’s Day, so he did­n’t cel­e­brate. Did you? Tell

[00:00:25] Cameron Reil­ly: nev­er cel­e­brat­ed Valen­tine’s Day. I mean, Chris­sy’s birth­day’s only sort of six days before it any­way, but we just decid­ed right at the begin­ning that Valen­tine’s Day is bull­frogs . So we just nev­er do it. Oh, sor­ry. Can’t swear. Some­body asked me to cut out the swear­ing on the pod­cast. So apolo­gies.

[00:00:43] Cameron Reil­ly: Well, I got­ta, I said it’s all Tony’s fault, but I’ll cut mine out too. I’ll, I’ll edit that out.

[00:00:50] Tony Kynas­ton: not to lis­ten to your oth­er pod­casts.

[00:00:52] Cameron Reil­ly: Oh yeah, they said there are kids in the car. I’m like, well, kids need to tough­en up. No, I did­n’t say

[00:00:59] Tony Kynas­ton: Play­ing, they’re play­ing QAV to their kids, that’s great.

[00:01:02] Cameron Reil­ly: Yes! And where are you today, Tony? Tell the lis­ten­ers where you are today.

[00:01:07] Tony Kynas­ton: I’m in Wag­ga Wag­ga, Rud­dy’s office, in Wag­ga Wag­ga. Up here to play a bit of golf, catch up with Rud­dy, haven’t seen him for a while.

[00:01:17] Cameron Reil­ly: Just for some­thing dif­fer­ent. You’re going to play some

[00:01:19] Tony Kynas­ton: Yeah. Yeah. Some­thing dif­fer­ent. But it’s um, uh, it’s been a pret­ty full on time mov­ing down to Cape Schanck, so it’s good to have a break.

[00:01:28] Cameron Reil­ly: That’s good.

[00:01:29] Tony Kynas­ton: Yeah. A

[00:01:30] Cameron Reil­ly: You sent me a video of a, uh, Hedge­hog? Anteater? No, what do we call them? Echid­na. That’s right, Echid­na. On the golf course? Uh, it was huge, too! Looked big! Wow. Eat­ing well at Cape Schanck, the echid­nas, appar­ent­ly.

[00:01:47] Tony Kynas­ton: Yes. Yeah, that was love­ly. I real­ly enjoyed going out at about six o’clock at night and play­ing golf before it gets dark. And often I encounter lots of kan­ga­roos, occa­sion­al echid­na, occa­sion­al fox, so yeah. said you liked the video.

[00:02:04] Cameron Reil­ly: Yeah, I’m jeal­ous. Uh, RBA due to meet today. Tony, what’s your call on what they’re going to do? See­ing as we know they’re ter­ri­fied of you, they avoid you in pub­lic places when they run into you.

[00:02:19] Tony Kynas­ton: well, the last RBA gov­er­nor did, and I’ve, I’ve read in the paper today that the cur­rent one dress­es in old clothes and puts a cap on when they go out in pub­lic so they’re not has­sled.

[00:02:30] Cameron Reil­ly: Wow.

[00:02:31] Tony Kynas­ton: It must’ve been part of the han­dover from the last guy to the new lady. Yeah.

[00:02:35] Cameron Reil­ly: Yeah, the dis­guise, the RBA Gov­er­nor dis­guise, they’ve got, they’ve got like a wardrobe in their, the, the chair­per­son­’s office, the Gov­er­nor’s office, yeah, fake mus­tach­es, yeah, yeah, fake noses, yeah.

[00:02:46] Tony Kynas­ton: Yeah. Yeah. Yeah. Uh, look, we’ll know in about five min­utes, I think, um, what the result is, but I think they’re going to cut. Um, and the bond mar­ket thinks they’re going to cut, although there’s been a lot of peo­ple say­ing it’s 50 50. Uh, which I, I would sub­scribe to based on the num­bers, because infla­tion’s now back in the desired range, but unem­ploy­ment is still quite low, so they gen­er­al­ly don’t cut unless infla­tion is, um, is above the range and, uh, unem­ploy­ment is strug­gling.

[00:03:27] Tony Kynas­ton: Uh, so I think on the num­bers, they, they would nor­mal­ly wait, but if they wait, they They’re going to be called up in the elec­tion, the fed­er­al elec­tion, which is, um, has to be held before some­time in May. And I very clear­ly remem­ber back when, um, John Howard lost the 2007 elec­tion, there was a rate rise dur­ing that elec­tion cam­paign and, uh, the RBA was round­ly crit­i­cized for doing some­thing which was seen to favor one side over the oth­er, to be a crit­i­cism of the eco­nom­ic man­age­ment of the.

[00:04:02] Tony Kynas­ton: Coali­tion. So, uh, they haven’t ever done a move­ment one way or the oth­er dur­ing an elec­tion since then. The prob­lem that we’re hav­ing now is that the fed­er­al elec­tion has­n’t been called. It’s like­ly that if infla­tion keeps fol­low­ing its trend, it’s going to be at the bot­tom of the range or even below it in the com­ing months.

[00:04:24] Tony Kynas­ton: And then they’re kind of hands are tied. They can’t cut dur­ing the elec­tion cycle. So I think they’re going to, I think their log­ic is going to be. If we think we need to cut in the next, say, three months, then we should cut now to avoid any polit­i­cal desta­bi­liza­tion. Because if they wait for three months and then cut, then they’ll be accused of not doing any­thing, which is a kind of polit­i­cal acri­mo­ny itself.

[00:04:49] Tony Kynas­ton: Um, yeah, so I don’t think they want to, Thanks to that tune, I think they’ll cut today. Even though it prob­a­bly isn’t, um, great­ly need­ed, at least it takes them out of the elec­tion, um, cycle. And, uh, you know, any, any sort of accu­sa­tion of bias.

[00:05:08] Cameron Reil­ly: And why do I care, how does it affect me either way, if they cut or they don’t cut?

[00:05:13] Tony Kynas­ton: Oh, you’re one of the lucky or unlucky Aus­tralians who does­n’t have a mort­gage, so it does­n’t affect you at all. Well, it does indi­rect­ly. I mean, your cred­it card bill will go down or it should. Um,

[00:05:23] Cameron Reil­ly: have a cred­it card bill.

[00:05:25] Tony Kynas­ton: Oh, there you go. Uh, and, um, inter­est rates should start to reduce costs in all sorts of ways. Um,

[00:05:35] Cameron Reil­ly: I meant

[00:05:35] Tony Kynas­ton: you deal with should be able to cut their prices.

[00:05:37] Tony Kynas­ton: The util­i­ties you deal with should be able to cut their prices if they, if it flows through quick­ly. But it’s prob­a­bly only going to be like a 25 basis point. Ah, so it’s almost sym­bol­ic, real­ly. It won’t have a big effect on the econ­o­my one way or the oth­er, I don’t think.

[00:05:51] Cameron Reil­ly: right, I meant specif­i­cal­ly from a QAV invest­ing per­spec­tive. Does it make any dif­fer­ence? Does the mar­ket, the mar­ket’s been going down today, I see. And yes­ter­day it was down as well. So, um, do you think the mar­ket will go up if the inter­est rates are cut? Or will it, is it already fac­tored it in?

[00:06:10] Tony Kynas­ton: yeah, well, like I said, I think the bond mar­ket is 85 per­cent sure it’s going to be a cut, so the mar­ket prob­a­bly has fac­tored it in. Um, I would have thought over time the mar­ket would go up. It may not. It might jump a lit­tle bit straight away. It might reverse the loss­es from today. Um, I think the loss­es in the last cou­ple of days have been on the back of some of the bank reports, um, which are a large part of the index.

[00:06:34] Tony Kynas­ton: And they’ve been sug­gest­ing their mar­gins have been erod­ed over the last six months.

[00:06:39] Cameron Reil­ly: They just announced Tony, three min­utes ago, as we were talk­ing. They’ve cut it to 4. 1 per­cent as

[00:06:45] Tony Kynas­ton: There you go. Yeah. And what’s the mar­ket done? Well, we can’t, we don’t know. We’ve got 20 quid to learn on the mar­ket like

[00:06:53] Cameron Reil­ly: lag. Yeah. Heh

[00:06:56] Tony Kynas­ton: Well, there you go. That’s, you know, mark this in the cal­en­dar as pre­dic­tion one, Right for me in the last five years. You

[00:07:09] Cameron Reil­ly: says. The, uh, Wyatt Mat­ters. The cen­tral bank raised bor­row­ing costs 13 times since 2022. 2, but has since held the cash rate at 4. 35 per­cent for over a year as it wait­ed for infla­tion to tick back towards its 2 per­cent to 3 per­cent tar­get. There was a lot of mon­ey rid­ing on the deci­sion with the mar­ket pric­ing in a 91 per­cent chance of a rate cut.

[00:07:30] Cameron Reil­ly: What’s next? RBA Gov­er­nor Michelle Bul­lock will hold a media con­fer­ence at 3. 30pm out of her usu­al dis­guise, which is expect­ed to pro­vide more insights into the board­’s deci­sion mak­ing.

[00:07:42] Tony Kynas­ton: know, I turn up like Pre­ston’s the Ronald McDon­ald, the Ham­bur­glar or some­thing like that. I think the fol­low on is expect­ing the fed­er­al elec­tion to be called now for the mid­dle of April, would be my next pre­dic­tion.

[00:07:56] Cameron Reil­ly: Right.

[00:07:57] Tony Kynas­ton: That’ll hap­pen in the next day or two, I would think, because the gov­ern­ment will be cry­ing about how they’ve got cost of liv­ing under con­trol.

[00:08:04] Cameron Reil­ly: And you think, uh, you want to make a pre­dic­tion for that? Is Peter Trump­ton gonna be our next Prime Min­is­ter? My

[00:08:11] Tony Kynas­ton: I’ll pay the trib­ute. It’s a hard one too. I think

[00:08:15] Cameron Reil­ly: local mem­ber, Mr Pota­to Head, his

[00:08:17] Tony Kynas­ton: oh, is he real­ly a local

[00:08:19] Cameron Reil­ly: around the cor­ner. Yeah.

[00:08:20] Tony Kynas­ton: Yeah. Um, I saw some num­bers recent­ly. They’ve got to win an awful lot of seats to get back to a major­i­ty. I think, I think the coali­tion is down to some­where in the 50s and they need 75. seats to, or 76 to hold pow­er, which the Labor Par­ty only has one or two seats up its sleeve.

[00:08:43] Tony Kynas­ton: So, um, needs to be a big swing for Dut­ton to rule by him­self. So I’m pre­dict­ing a minor­i­ty gov­ern­ment and I would think most of the inde­pen­dents would prob­a­bly, or the major­i­ty of them would, would side with Labor rather than the Lib­er­als. So my tip is a minor­i­ty gov­ern­ment under Labor. I like

[00:09:02] Cameron Reil­ly: And at what point does Elon Musk get involved and start try­ing to Mur­doch his way into the coun­try?

[00:09:10] Tony Kynas­ton: his way. Well, I think you’ll start get­ting involved straight away on. Dex and, and uh, I guess the Rus­sians will a lit­tle bit too. There’ll be all sorts of, you know, con­spir­a­cy the­o­ries doing the rounds and,

[00:09:24] Cameron Reil­ly: Do you think the Rus­sians care? I don’t think the Rus­sians care. What’s Aus­tralia got to do with Rus­sia?

[00:09:29] Tony Kynas­ton: Yeah, there was, I think the more inter­est­ing thing was the pass­ing of leg­is­la­tion last week to lim­it dona­tions to minor­i­ty par­ties.

[00:09:38] Tony Kynas­ton: Um, so, Lib­er­al, uh, Coali­tion and Labor ganged up to, uh, make it hard­er for the Teals to get re elect­ed, or to get fund­ed to get re elect­ed, um, in the last, uh, week or so. So, like, I’m not sure if that comes in this elec­tion cycle or the fol­low­ing one. Uh, osten­si­bly it was to stop Clive Palmer from spend­ing hun­dreds of mil­lions of dol­lars, or tens of mil­lions of dol­lars to win a seat.

[00:10:04] Tony Kynas­ton: Uh, but real­ly it was aimed at the, um At the teals, to stop Cli­mate 200 from fund­ing them.

[00:10:11] Cameron Reil­ly: Right. Wow. Alright, what else have you got

[00:10:15] Tony Kynas­ton: know from our psy­chopath book, insti­tu­tions always pro­tect them­selves, don’t they?

[00:10:20] Cameron Reil­ly: Yes! And, you know, as I’ve quot­ed in the book and I’ve been remind­ed of recent­ly, the iron law of oli­garchy that

[00:10:29] Tony Kynas­ton: Yep, iron

[00:10:30] Cameron Reil­ly: philoso­pher wrote about in the 20s, Michels,

[00:10:32] Tony Kynas­ton: great say­ing, the iron law of oli­garchy.

[00:10:35] Cameron Reil­ly: All orga­ni­za­tions even­tu­al­ly move towards oli­garchy.

[00:10:40] Tony Kynas­ton: Mm hmm. Ha

[00:10:42] Cameron Reil­ly: And it’s sort of play­ing out in the U. S. as we speak. I think it’s gone beyond an oli­garchy there now to just a klep­toc­ra­cy, but uh, yeah.

[00:10:54] Tony Kynas­ton: Those are think­ing about how long Musk will, uh, will last.

[00:11:00] Cameron Reil­ly: Ah, well I, you know, when the elec­tion hap­pened, I did­n’t think he would last till the inau­gu­ra­tion. I, but uh, I, you know, he had his son in the Oval Office telling Trump to shut up last week and that was okay, so I think we’ve well and tru­ly estab­lished where the pow­er lies in that

[00:11:19] Tony Kynas­ton: Yeah,

[00:11:20] Cameron Reil­ly: right now.

[00:11:22] Tony Kynas­ton: I was lis­ten­ing to the, um, PEP pod­cast on the way up, but I, it’s, um, I think it start­ed like as a spin­off of Plan­et Amer­i­ca, the, the show on the A, B, C. But now it has to, uh, put a dis­claimer at the start of each episode say­ing it’s not asso­ci­at­ed with the Plan­et Amer­i­ca or the A, B, C, even though Chaz Lic­cia­rdel­lo does it from that show.

[00:11:44] Tony Kynas­ton: And it’s about Amer­i­can pol­i­tics, uh, because I think he got into trou­ble for, um, buy­ing, uh, merch. on the ABC web­site, which is not allowed to hap­pen. Any­way, um, he was, he’s, he’s firm­ly in the cams that, uh, Trump can’t afford to get rid of Musk now because Musk has twice as many Twit­ter fol­low­ers as Trump does.

[00:12:06] Tony Kynas­ton: And yeah, can’t afford to have those peo­ple attack­ing him if he gets rid of Musk.

[00:12:10] Cameron Reil­ly: And he just has Twit­ter, so he can

[00:12:13] Tony Kynas­ton: Yeah.

[00:12:13] Cameron Reil­ly: aim Twit­ter at what­ev­er he wants and, yeah,

[00:12:18] Tony Kynas­ton: great thing I picked up on that pod­cast was that, um, some bill passed through Con­gress about, uh, Green­land being bought or giv­en to the, the US. being acquired by the US and then one of Trump’s lack­eys hacked on a writer say­ing that after Green­land is acquired by the US the name is going to be changed to red white and blue land. I thought it was hilar­i­ous.

[00:12:47] Cameron Reil­ly: Any­way, what else have you got on your list of talk­ing points that’s not US pol­i­tics, Tony?

[00:12:52] Tony Kynas­ton: Uh, just before I came on, um, the air, I saw Chal­lenger, um, has released its result and CGF is on the buy list and unfor­tu­nate­ly they weren’t received well and it’s now a sell, so if any­one’s using an old buy list, just be aware of, um, to, to check Chal­lenger before you buy it. What else did I have? I had Fin­di, an arti­cle about Fin­di.

[00:13:17] Tony Kynas­ton: So, Fin­di shares are up 10 per­cent after their results, so they kind of had the reverse reac­tion to Chal­lenger. Uh, they, they came in on guid­ance. They did talk about some delay in rolling out ATMs in India, because this is an Indi­an ATM com­pa­ny. Uh, but they have, they report­ed they had secured, uh, 2, 000.

[00:13:44] Tony Kynas­ton: 300 rough­ly ATMs from, uh, with the State Bank of India, and they’ve actu­al­ly called out what they think their earn­ings will be over the next 10 years, which I thought was a brave call for any sort of com­pa­ny to make. But, um, they’re say­ing, they’re say­ing they’re going to earn between 125 mil­lion and 135 mil­lion over 10 years.

[00:14:07] Tony Kynas­ton: And they’ve announced that they’ve appoint­ed Roth­schild, the bank, to look at an IPO in India in 2026. So, um, some good news in that result

[00:14:19] Cameron Reil­ly: Hmm,

[00:14:20] Tony Kynas­ton: and, uh, that’s pret­ty much all I had except for Pulled Pork.

[00:14:24] Cameron Reil­ly: Their share price is back to where it was in Octo­ber last year, right about 5. 36, uh, as many of our mem­bers know because we hold it, they got up to near­ly 8 by the end of Novem­ber last year, and then came crash­ing down to, uh, 3. 50 going back, uh, begin­ning of Jan­u­ary, they’ve been creep­ing their way back up, so it’s been a bit of a tur­bu­lent ride for Fin­di.

[00:14:52] Cameron Reil­ly: For rea­sons that have nev­er exact­ly been clear to me.

[00:14:55] Tony Kynas­ton: No, me nei­ther, but they are up after the results, which is always good to see.

[00:15:01] Cameron Reil­ly: well before you get into the pulled pork, cou­ple of things. Uh, there were some oth­er announce­ments that came out in the last week. AMP announced their FY24 results. They’re down 15%. A mas­sive drop in net prof­it. Fell by 43 per­cent to 150 mil­lion. Um, some oth­er things, shrink­ing mar­gins and a MP bank net inter­est mar­gins dropped from 1.42% to 1.26%.

[00:15:27] Cameron Reil­ly: Under­ly­ing NPA fell 22.6% for a MP bank, uh, weak div­i­dend growth. Final div­i­dend was just 1 cent per share, 20% franked. Bring­ing the full year div­i­dend to three cents per share, um, so, yeah, not a great result from the com­pa­ny your wife used to help run.

[00:15:52] Tony Kynas­ton: Hmm. I’m not so sure about that, Cam. Is it an AI sum­ma­ry? Are the results?

[00:15:59] Cameron Reil­ly: It was! I, I, I gave the annu­al report to Chat­G­PT.

[00:16:05] Tony Kynas­ton: So this is the Stock Doc­tor sum­ma­ry I’m going to read out for the same

[00:16:08] Cameron Reil­ly: Okay.

[00:16:09] Tony Kynas­ton: Um, tell the rev­enue down 1. 1 per­cent with increase in plat­forms off­set by low­er net inter­est income in the bank reflect­ing pre­vi­ous­ly flagged mar­gin com­pres­sion and con­strained growth under­ly­ing impact up 15.

[00:16:24] Tony Kynas­ton: 1 per­cent to 236 mil­lion com­pared to FY 2023 205 mil­lion. Vari­able cost reduced 7.5% to two 94 mil­lion, uh, blah blah, blah. And low­er loan impair­ment expens­es in the bank under­ly­ing EPS top 25% reflect­ing improved earn­ings and the pos­i­tive impact of a share buy­back. So they’ve bought back all the shares.

[00:16:46] Tony Kynas­ton: Um, so that’s a very dif­fer­ent flavour, I think, to what you read out. Uh, and I think I would­n’t be sur­prised if the a and p share price recov­ers a fair bit. I think it’s an over­re­ac­tion. What, um, from the sort of research I’ve done, I think what the ana­lysts have focused on is the div­i­dend cut. Um, see what hap­pened at AMP is they sold busi­ness units in the last 12 months.

[00:17:09] Tony Kynas­ton: So they sold, uh, their advice busi­ness, parts of AMP cap­i­tal, and the busi­ness called Super Con­cepts, which does super­an­nu­a­tion audit­ing, audit­ing. Um, And they were all flagged, so that’s why the head­line num­bers are down, um, which is why it’s bet­ter off look­ing at like for like prof­it or under­ly­ing prof­it this year ver­sus last year, which is up, um, to look at what, um, how the busi­ness is going for­ward.

[00:17:37] Tony Kynas­ton: But I think we’re, I think what’s caused the big sell off in the share price was the cut in div­i­dends. And not so much the cut in div­i­dends as the, um, ANP came out and said the rea­son they’re cut­ting div­i­dends is they want­ed to keep more um, sur­plus prof­it on the bal­ance sheet, uh, rather than give it back in div­i­dends or buy­backs going for­ward and that’s what’s spooked me ana­lysts say­ing, you know, what, well, you know, what’s changed?

[00:18:02] Tony Kynas­ton: Why are you doing that? And AMP’s got a good answer for it, they’ve sold off busi­ness units which were con­tribut­ing to that sur­plus. So, they’re just being fis­cal­ly con­ser­v­a­tive. So, my gut feel is that the sale was over­done. The peo­ple saw the head­line num­bers, for­got about the fact that they’d flagged busi­ness divest­ments, and uh, yeah, I would­n’t mind bet­ting AMP starts to crawl high­er from here.

[00:18:26] Cameron Reil­ly: What do you mean they for­got? These are pro­fes­sion­als who do this for a liv­ing. They’re ana­lysts who analyse AMP. What do they, how did they for­get?

[00:18:32] Tony Kynas­ton: Oh, so is that, so is AI. You’ve got it

[00:18:35] Cameron Reil­ly: Well, what are you, uh, what, uh, what are you, uh, crit­i­ciz­ing about the AI sum­ma­ry? Which part of it do you think it got wrong? I don’t know. It said weak div­i­dend growth.

[00:18:44] Tony Kynas­ton: mas­sive drop in net prof­it. Yes, that’s, tech­ni­cal­ly that’s right, but the mas­sive drop was because they sold busi­ness units. So you’re, you’re not com­par­ing apples with apples and that’s the head­line. So it’s, it’s, it’s mis­lead­ing.

[00:19:00] Cameron Reil­ly: Oh, okay, you want­ed more con­text.

[00:19:05] Tony Kynas­ton: Yeah. Well, like I said, yeah, net prof­it is down a lot. All those met­rics are down because they sold busi­ness units in the last 12 months.

[00:19:14] Cameron Reil­ly: right,

[00:19:16] Tony Kynas­ton: Yeah,

[00:19:16] Cameron Reil­ly: okay, so the, the, the sum­ma­ry was cor­rect, you, I, I just did­n’t give you enough con­text on the sum­ma­ry.

[00:19:24] Tony Kynas­ton: well I guess so. Sum­ma­ry was cor­rect but not very use­ful. It was mis­lead­ing.

[00:19:31] Cameron Reil­ly: Well, either way, the share price is way down, and we hold it in a cou­ple of our port­fo­lios, so I want­ed to ask you, like, um, from a bad news per­spec­tive, this does­n’t real­ly rank, even though the share price dropped 15%, you know, we, uh, So, we still just con­tin­ue to hold on and

[00:19:50] Tony Kynas­ton: Yeah, I don’t think it’s bad news, myself. I don’t think it’s bad

[00:19:53] Cameron Reil­ly: Oh, right.

[00:19:54] Tony Kynas­ton: Yeah, I think under­ly­ing prof­it. Well, yeah, look at the met­rics under­ly­ing. So the ones that, um, are going for­ward after divesti­ture of those busi­ness­es, net prof­it up 15%. Um, Rev­enue is down 1. 1, that’s so flat, uh, Earn­ings Fish­ery up 25%, so I think it’s not, I think it’s good news rather than bad news.

[00:20:17] Tony Kynas­ton: Um, and if A& P Board are being con­ser­v­a­tive about their div­i­dend strat­e­gy, is that a bad thing as well?

[00:20:26] Cameron Reil­ly: I guess

[00:20:26] Tony Kynas­ton: I don’t think so, I don’t think it’s a red flag at all.

[00:20:30] Cameron Reil­ly: Okay. Well, it is close to its three point trend­line sell for us, uh, which is 1. 39. It’s cur­rent­ly 1. 41. So, uh, yeah.

[00:20:49] Tony Kynas­ton: okay, well the trend­line will sort it out for us, but I don’t think it’s a red flag myself. Ha

[00:20:55] Cameron Reil­ly: Well, I’m a lit­tle bit ner­vous about the next one because I also used AI to sum­ma­rize this annu­al report. We’ll see how you feel about this one.

[00:21:02] Cameron Reil­ly: CVL. CVL’s half year report came out. It dropped ini­tial­ly 12%, then down to 15%. I’m not even gonna read you my analy­sis on that one because you prob­a­bly should. Spit on it, so tell me, tell me about it.

[00:21:21] Tony Kynas­ton: I dun­no much about CVL. So with a MP it’s, it’s pret­ty, it’s, it’s wide­ly cov­ered. So it was, I was able to do a bit more, um, read­ing on it, but no-one cov­ers it, so I, I could­n’t, you know, see what the think­ing was around it. Some its report, and so I think you’ve got­ta take it at face val­ue, which you have. again, I’m, I mean, if I, I read through their results and that was, again, they were high­light­ing, they’ve got lots of work com­ing up and their pipelines full with orders and all that kind of stuff. So some­times with, uh, these kinds of con­trac­tors, it can be a tim­ing issue, but I don’t know Sid Meck well enough to know what the rea­sons were to dri­ve the prof­it down­grade that they had.

[00:22:07] Tony Kynas­ton: Uh, so yeah, take it on face val­ue, but, but again, I’m not going to re flag them either based on these num­bers.

[00:22:15] Cameron Reil­ly: Yeah, well, for the record, accord­ing to Chat­G­P­T’s sum­ma­ry of their annu­al report, uh, rev­enue increased slight­ly, but prof­it after tax dropped by 16. 9%, low­er earn­ings per share, EPS fell from 6. 2%. 29 cents to 5. 21 per­cent, uh, cents, a 17. 2 per­cent decline. Um, so, there you have it, and we hold CVL2, let me see where they are at, and so, Ah, well we hold it in two port­fo­lios, in the dum­my port­fo­lio we’ve held it since March of 2021.

[00:23:00] Cameron Reil­ly: When we bought it for 60 cents, it’s cur­rent­ly trad­ing at a buck, so it’s up 67% in that port­fo­lio. But I also added it to a light port­fo­lio in May of 24 at 97%, uh, 97 cents. So it’s up 3%, 3 cents since then, but it’s three point trend line is 70 cents, so it’s got quite a ways to go.

[00:23:24] Tony Kynas­ton: yeah,

[00:23:25] Cameron Reil­ly: And PPM was down 2 5 per­cent the oth­er day, uh, let’s see where that is now, um, it’s close to it’s 3pt trend­line sell too, it’s cur­rent­ly trad­ing at 1.

[00:23:39] Cameron Reil­ly: 44, the 3pt trend­line sell price is 1. 40, we hold that in a few port­fo­lios, but only bought it for 1. Late last year and ear­ly this year. So it has­n’t had much of a chance. Uh, and I could­n’t see any news about PPM,

[00:23:58] Tony Kynas­ton: yeah, so what,

[00:23:59] Cameron Reil­ly: down.

[00:24:01] Tony Kynas­ton: um, I think the rea­son why it might be down is because I just, again, I read through the results quick­ly and it’s a very com­pli­cat­ed pre­sen­ta­tion with lots of detail, but, um, if, if I had to focus on one thing, I would look at the Arias greater than 90 days graph. Um, which is a impor­tant thing for a finance com­pa­ny, how much mon­ey do you have to pro­vide for peo­ple who are slow at pay­ing or can’t pay?

[00:24:33] Tony Kynas­ton: That’s, that’s a big impact on the mar­gin for a finance com­pa­ny, and the arrears greater than 90 days is the sec­ond high­est, well it’s high­est since COVID, um, and the trend line is up, so I think that’s what, if it, if I had to ascribe a rea­son for the sell off, I’d say it’d be that.

[00:24:50] Cameron Reil­ly: Where did you get these results from?

[00:24:53] Tony Kynas­ton: Stock Doc­tor.

[00:24:56] Cameron Reil­ly: They haven’t, there are no results in Stock Doc­tor that I can see.

[00:25:01] Tony Kynas­ton: Let me have a look.

[00:25:02] Cameron Reil­ly: They got an invi­ta­tion to their full year results brief­ing, which is on the 27th of Feb­ru­ary. So it’s still

[00:25:11] Tony Kynas­ton: Oh, okay. I’m using the old ones, am I?

[00:25:14] Cameron Reil­ly: I think so, unless you’re see­ing some­thing I’m not see­ing.

[00:25:18] Tony Kynas­ton: No, no, I am. I’m using the ones from last year. You’re right.

[00:25:21] Cameron Reil­ly: And you’ve done a pulled pork on them since then, I think. That’s

[00:25:25] Tony Kynas­ton: Yeah, okay. I am, sor­ry. I’m look­ing at the old results

[00:25:29] Cameron Reil­ly: a

[00:25:29] Tony Kynas­ton: with the 90 days arrears increas­ing.

[00:25:33] Cameron Reil­ly: Yeah, right. So that was from August.

[00:25:35] Tony Kynas­ton: Yeah, sor­ry.

[00:25:36] Cameron Reil­ly: half, for some rea­son, their half year­ly results are in August, come out in August. And their full year comes out in, uh, Feb­ru­ary. Well, I think some­body’s Uh, I thought you must have been on the know because I think some­body’s seen their results and uh, and not telling us about them.

[00:25:58] Tony Kynas­ton: there’s cer­tain­ly no announce­ments then since that last half year results in August of last year or the full year results last year.

[00:26:06] Cameron Reil­ly: But some­body knows some­thing.

[00:26:08] Tony Kynas­ton: Mmm.

[00:26:09] Cameron Reil­ly: Share price is uh, down even fur­ther, uh, the last cou­ple of days. It’s been

[00:26:14] Tony Kynas­ton: Oh, real­ly?

[00:26:15] Cameron Reil­ly: con­sis­tent­ly for the last four or five days, so

[00:26:19] Tony Kynas­ton: It’s get­ting close to a sell too, isn’t

[00:26:22] Cameron Reil­ly: yeah, it’s very close to itself. He sends off. So, uh, some­body knows some­thing, but they’re not telling us. So if some­body thinks they know some­thing.

[00:26:32] Tony Kynas­ton: Yeah.

[00:26:34] Cameron Reil­ly: Last news item,

[00:26:35] Tony Kynas­ton: And sor­ry, sor­ry, just on that too, is that, um, They could be caught up in what’s dri­ving, um, decreas­es across the banks at the moment too. So, Indi­go Bank came out, uh, there was anoth­er one as well. It was in the AMP bank results as part of the AMP announce­ment. And West­pac came out yes­ter­day all say­ing that there’s a, um, com­pres­sion of mort­gage rate mar­gins due to, um, com­pe­ti­tion in the sec­tor.

[00:27:06] Tony Kynas­ton: So that could also be lead­ing to equi­ty mon­ey.

[00:27:10] Cameron Reil­ly: right.

[00:27:10] Tony Kynas­ton: going down.

[00:27:13] Cameron Reil­ly: Yeah, okay, so it could be that. The, the, like the fact that peo­ple were expect­ing inter­est rates to be cut that play into the banks

[00:27:21] Tony Kynas­ton: pos­si­bly. But peo­ple have been see­ing that for a while now and the bank shares have just gone down in the last day or so since results have start­ed com­ing through for the bank­ing sec­tor.

[00:27:29] Tony Kynas­ton: So

[00:27:30] Cameron Reil­ly: Right,

[00:27:31] Tony Kynas­ton: yeah, I think it’s more, it’s more West­pac’s report­ing yes­ter­day and Bendi­go Bank’s report­ing yes­ter­day as well. I think,

[00:27:37] Cameron Reil­ly: right. So gen­er­al anti bank sen­ti­ment right now, PPM I could be caught up in.

[00:27:42] Tony Kynas­ton: well, there’s always been an anti bank sen­ti­ment out there and in the com­mu­ni­ty, but, um, I think it’s, yeah, it’s West­pac’s results and Bendigo’s results are spook­ing the sec­tor. Yeah,

[00:27:54] Cameron Reil­ly: Well, speak­ing of sen­ti­ment, uh, the only oth­er sto­ry I had, well, I got two, as I saw in the finan­cial review today. Investors pile into Chi­na as DeepSeek unleash­es AI bulls. Chi­na’s equi­ty mar­kets have jumped about US$ 1. 2 bil­lion. 1. 3 tril­lion in val­ue over the past month, as hedge funds have piled in at the fastest clip in months, fueled by the promise of deep seek.

[00:28:19] Cameron Reil­ly: This has pushed the MSCI Chi­na into a bull mar­ket, ris­ing more than 20 per­cent from its cycli­cal low and rock­et­ed Hong Kong’s Hang Seng Index to be among the world’s hottest share mar­kets this year. Lots of doom and gloom sto­ries about Chi­na, um, and their econ­o­my that we’ve touched on over the last year.

[00:28:41] Cameron Reil­ly: Um, now, it’s bull

[00:28:44] Tony Kynas­ton: turns out they were wrong.

[00:28:49] Tony Kynas­ton: Jour­nal­ists love volatil­i­ty as much as an investor will love volatil­i­ty on the stock mar­ket.

[00:28:55] Cameron Reil­ly: Um, I saw a pho­to in Red­dit today, one of the AI sub­red­dits that I fol­low, of the CEO of DeepSeek, Liang Wen­feng, meet­ing Xi Jin­ping for the first time. I think, uh, Jack Ma was there. There was a meet­ing of tech founders, the lead­ing tech com­pa­nies, meet­ing with, uh, Pres­i­dent Xi this week. Um, sort of inter­est­ing to see Jack Ma and Xi all friend­ly and shak­ing hands after how they rug pulled him a few years ago, but, um, Yeah,

[00:29:33] Tony Kynas­ton: to see Jack Ma still alive after that peri­od,

[00:29:38] Cameron Reil­ly: Xi Jin­ping does­n’t have peo­ple killed if he does­n’t like them. Tony,

[00:29:42] Tony Kynas­ton: is that

[00:29:42] Cameron Reil­ly: does­n’t, he does­n’t have to do that. He does­n’t want Jack Ma, he does­n’t want Jack Ma dead. He just wants him to know who’s boss. Which is one of the things that I love about Chi­na’s econ­o­my. Like, cap­i­tal­ists are allowed to do cer­tain things, but you get to a cer­tain point and you remem­ber, you know, who’s run­ning the coun­try. It’s not Elon Musk. You don’t get to run Chi­na if you’re Elon Musk. Eh, well, yeah, I don’t think so. BYD rug pulled Tes­la over there too, so, um, you know. Any­who, um, yeah, the whole, uh, AI, yeah, it’s f Hilar­i­ous to me because fol­low­ing the AI space, pre DeepSeek, the gen­er­al con­sen­sus in all of the AI sub­red­dits that I was fol­low­ing in the gen­er­al AI media was Chi­na’s got no chance of catch­ing up, You know, TSMC and NVIDIA have got a lock on the whole mar­ket, the US has got a lock on the mar­ket, the sanc­tions that they’ve applied towards Chi­na with the high­er end chipsets means that Chi­na can’t catch up, won’t catch up, it’s all over.

[00:30:58] Cameron Reil­ly: And my posi­tion has always been, eh. You know, I would­n’t count Chi­na out just yet, like, Chi­na’s very, very resource­ful when they decide they’re gonna do some­thing. They decide they want to build 20 new hos­pi­tals, they’ll build them in a week. Like, if Chi­na wants to get stuff done, they get stuff done, and, and, uh, here we are.

[00:31:19] Cameron Reil­ly: Oh, all of a sud­den, Chi­na’s the hot place for AI. Now every­one’s like, Woo! Chi­na’s a, you know, a play­er, again. Whether or not it lasts, whether or not it’s just a, you know, Bit of a hype cycle remains to be seen, but um, fas­ci­nat­ing to me how the, the sto­ries just flick between no hope for Chi­na, oh my god, Chi­na’s killing it, you know, take your, take your pick.

[00:31:49] Tony Kynas­ton: A cou­ple of things on that. So, I mean, DeepSeek is real­ly a clas­sic case of try­ing to reverse engi­neer­ing Chat­G­PT and oth­er AI. it’s just stag­ger­ing to me that any­one would think they would­n’t do that.

[00:32:07] Cameron Reil­ly: Well they did­n’t even reverse engi­neer Chat­G­PT, they just used Chat­G­PT to train their own. They just pig­gy­backed on it.

[00:32:18] Tony Kynas­ton: And I also saw an arti­cle in the last cou­ple of days on the Wall Street Jour­nal about some­one who works for Jensen Huang, who made a name for him­self with­in NVIDIA by sell­ing chips to the Chi­nese to get around the sanc­tions. And, uh, yeah, cap­i­tal­ism was thwart­ing reg­u­la­tion. And it was

[00:32:42] Cameron Reil­ly: Who would have thought? Who would have

[00:32:43] Tony Kynas­ton: exact­ly. Exact­ly. Yeah, no, it’s,

[00:32:48] Cameron Reil­ly: oh, the oth­er sto­ry that was,

[00:32:50] Tony Kynas­ton: it.

[00:32:51] Cameron Reil­ly: yeah,

[00:32:52] Tony Kynas­ton: it’s, as it’s done in the last 20 or 30 years. Be some­thing, make some­thing, do it cheap­er.

[00:33:00] Cameron Reil­ly: I would expect so. Um, the oth­er sto­ry that I know you would have prob­a­bly read and enjoyed is the Mur­dochs go to war through the

[00:33:09] Tony Kynas­ton: Yeah, I did.

[00:33:14] Cameron Reil­ly: Oh,

[00:33:14] Tony Kynas­ton: Oh, love­ly.

[00:33:16] Cameron Reil­ly: God. For peo­ple who haven’t seen it, that are inter­est­ed, James Mur­doch has lobbed a bomb at his father and broth­er and is prepar­ing to do worse. That’s the mes­sage Antipodean watch­ers of the Mur­doch fam­i­ly are tak­ing from the week­end’s unprece­dent­ed rev­e­la­tions into the inner work­ings of the Aus­tralian born but now glob­al media indus­try.

[00:33:37] Cameron Reil­ly: Prompt­ing the intrigue of two stun­ning fea­tures on the fam­i­ly, deliv­ered with­in hours of each oth­er and each cen­tred on Rupert Mur­doch’s auda­cious and so far unsuc­cess­ful attempt to write his rel­a­tive­ly lib­er­al mind­ed chil­dren, Eliz­a­beth, James and Pru­dence MacLeod, out of their even­tu­al major­i­ty con­trol of the fam­i­ly, trust to the advan­tage of favoured son and would be suc­ces­sor Lach­lan.

[00:34:00] Cameron Reil­ly: One sto­ry is a blow by blow of three thou­sand pages of legal tran­scripts leaked to the New York Times. A fas­ci­nat­ing, if rel­a­tive­ly neu­tral, account of pre­vi­ous­ly secret affairs, the oth­er, a large­ly sym­pa­thet­ic pro­file of trou­ble­some ben­e­fi­cia­ry James Mur­doch, that’s a divert­ed com­mas, in the Atlantic, is more point­ed and per­son­al.

[00:34:23] Cameron Reil­ly: Um, just like the irony. That the Mur­dochs who have used their media to trash, destroy, leak, you know, hack­ing peo­ple’s mobile phones in the UK and then using that to destroy rep­u­ta­tions of celebri­ties and politi­cians and roy­al fam­i­ly mem­bers, etc, etc. And then, you know, weasel out of it in court. Um, to be hav­ing to eat their own dog food, as we used to say in Microsoft, uh, is just deli­cious.

[00:34:58] Cameron Reil­ly: I mean, the, the Schaden­freude is, uh, just too deli­cious to ignore, real­ly.

[00:35:06] Tony Kynas­ton: Yeah, it does, does­n’t it? I mean, it’s also, It’s also becom­ing a botched busi­ness move by Mur­doch Senior too, isn’t it, real­ly? I mean, to me, the obvi­ous thing to do is to hive off Fox News, keep Lach­lan in charge of it, and make cut a deal with the oth­er three kids to take some mon­ey or some parts of News Corp and bug­ger off.

[00:35:27] Tony Kynas­ton: And let Lach­lan and Rupert keep run­ning Fox News. Because Rupert’s if you kin­da stop Fox News from being what it is now, it’s gonna go the way of MSNBC and CNN, which are declin­ing rapid­ly in mar­ket share and in view­er­ship. Um, so he’s right. If you want to keep mak­ing mon­ey as a, as a com­pa­ny, you’ve got to keep Fox News alive.

[00:35:51] Tony Kynas­ton: And Lachlan’s drunk that Kool Aid, and so has Rupert. Um, the oth­er three kids are say­ing, no, it’s a can­cer on soci­ety we want out. Just cut a deal. Stop tak­ing peo­ple to court and, you know, play­ing, play­ing god­fa­ther and try­ing to, you know, um, cut peo­ple out of things. Just cut a deal.

[00:36:12] Cameron Reil­ly: I imag­ine that’s prob­a­bly where it start­ed, though. I haven’t read all the tran­scripts of the whole kit and caboo­dle. I’ll wait till the, the book comes out. But, uh, you know, I, I imag­ine they prob­a­bly did try and cut a deal first.

[00:36:26] Tony Kynas­ton: Maybe, the way I read it, from my mem­o­ry, I think it, um, it was the falling out when James and Lach­lan were both run­ning News Corp, and James kept get­ting under­tak­ings that Fox News was­n’t going to be as right wing or out­ra­geous, and of course, that was lip ser­vice, and he got upset, and split, and now he’s using the media to try and, um, push his case.

[00:36:52] Tony Kynas­ton: But, uh, yeah, whether, whether there was a deal on the table or not, it’s how it’s going to end up, I would have thought.

[00:37:00] Cameron Reil­ly: well the finan­cial review says, um, The solu­tion, a buy­out of the trou­bling sib­lings on more agree­able terms than the 60 per­cent of mar­ket val­ue they had been offered.

[00:37:12] Tony Kynas­ton: Oh, there you go. Okay, sor­ry.

[00:37:14] Cameron Reil­ly: As Prue James and Liz told the Times, we are refer­ring from com­ment at this moment because most of the lit­i­ga­tion is still under seal.

[00:37:22] Cameron Reil­ly: Key­words, at this moment. Um, yeah, so I think there was an offer. They did­n’t like the offer. Rupert and Lach­lan tried to go the nuclear route and, uh, change the trust and that failed. So, yeah, but, um,

[00:37:42] Tony Kynas­ton: Because don’t they get a quar­ter each?

[00:37:45] Cameron Reil­ly: Uh, yeah, I think

[00:37:46] Tony Kynas­ton: they will. I think there’s some mon­ey put aside for Wendy Ding’s kids, but, um, the, I mean, 60 per­cent isn’t, it was an under­bid, so they’ve got to try and lever­age it up to 70, 75 per­cent before they’ll accept, I guess.

[00:38:01] Cameron Reil­ly: To me, it’s just fight­ing over chairs in the Titan­ic though. Like, um, the whole U. S. econ­o­my, AI in the next cou­ple of years is going to evis­cer­ate the news busi­ness and I don’t think any of them are going to be worth any­thing in a few years, but we’ll see.

[00:38:18] Tony Kynas­ton: Well, I mean, News­corp now, a lot of its mon­ey is com­ing from real estate Aus­tralia, the REA com­pa­ny, um, which ASX and News­corp owns a big shar­ing. Uh, so I don’t know if that’s going to be dis­rupt­ed by AI, they’ll prob­a­bly use AI to help pro­duc­tiv­i­ty when it comes to sell­ing hous­es. Um, Fox News, there’ll always be some ver­sion of Fox News around, whether it’s, you know, Run by News Corp or AI or X or Elon or what­ev­er.

[00:38:50] Tony Kynas­ton: So

[00:38:50] Cameron Reil­ly: Well, X will be the new Fox News. I think that’s rapid­ly becom­ing true, right? And he’s launch­ing Grok 3 sup­pos­ed­ly today, which he reck­ons is the smartest AI on the plan­et and is going to

[00:39:04] Tony Kynas­ton: Yeah. But

[00:39:08] Cameron Reil­ly: Um, no, I think AI will dis­rupt real estate, uh, bro­ker­age sites. I think it’s going to dis­rupt all retail mar­ket­ing, uh, because I won’t go to a web­site to look for some­thing.

[00:39:22] Cameron Reil­ly: I think it’s going to dis­rupt Ama­zon and all of those sorts of places too. As soon as AI is ful­ly inte­grat­ed into my devices and is read­ing my emails, my text mes­sages, my search his­to­ry, I’m talk­ing to it all day every day about what’s going on in my life. It’s lis­ten­ing to my phone calls. It’s look­ing at my cal­en­dar.

[00:39:45] Cameron Reil­ly: It’s read­ing my notes. It knows every­thing about me, right? It will be my, it’s my assis­tant. It’s my Alfred. It’s my Jarvis from Iron Man, right? And I will say to it, hey, uh, uh, you know, or it’ll say to me, hey, I know you want to buy a new house. Um, do you want me to find some­thing for you? And I go, yeah, that’d be great.

[00:40:07] Cameron Reil­ly: And it’ll go out and do the research. This is Ope­nAI is already touch­ing on this with their

[00:40:12] Tony Kynas­ton: that’s what,

[00:40:13] Cameron Reil­ly: research on it.

[00:40:14] Tony Kynas­ton: it does­n’t mean realestate. com. au goes away. It’s still going to have to be a repos­i­to­ry that Java search­es.

[00:40:20] Cameron Reil­ly: Right, but it does­n’t have, there’s no val­ue in a sin­gle repos­i­to­ry. The val­ue of a sin­gle repos­i­to­ry like that right now is it has a brand, peo­ple know the brand because they’ve spent bil­lions of dol­lars mar­ket­ing it, whether it’s Seek or realestate. com or what­ev­er it is, so peo­ple go to that to find the stuff that they want to buy.

[00:40:40] Cameron Reil­ly: I won’t go to stuff to find, you know, What to buy? I’ll just ask my AI, go find me some­thing. It can look at a thou­sand web­sites, ten thou­sand, a hun­dred thou­sand web­sites that have some­thing to sell, can eval­u­ate all of the offers and get down into the details of, you know, the qual­i­ty and the price and all that kind of stuff and come back to me with rec­om­men­da­tions.

[00:41:04] Cameron Reil­ly: It does­n’t need to go to one web­site that’s a por­tal. That’s all these sites are, they’re fan­cy por­tals from the 90s, right? It’s a, it’s a basic por­tal busi­ness mod­el. The val­ue propo­si­tion of a por­tal busi­ness mod­el is there can only be two or three that peo­ple remem­ber and you go to one and you know the one and that’s the one that you go to it.

[00:41:24] Cameron Reil­ly: If they estab­lish that kind of brand aware­ness, it’s just easy for humans to find you. You Google real estate, you see, Oh, I’ve heard of those guys and you go to it. AIs don’t have to wor­ry about brand aware­ness. They, they search the entire web in a sec­ond and know every­thing about every­thing and can eval­u­ate.

[00:41:40] Cameron Reil­ly: The minu­ti­ae, um, so all of those, the val­ue propo­si­tion, I think of all of those brands, it gets gut­ted in the next few years. And when AI is ful­ly trust­wor­thy, that’s the first thing that we have

[00:41:55] Tony Kynas­ton: Yeah. That’s a big road­block too, I think.

[00:41:58] Cameron Reil­ly: No, easy. That’s, that’s done. That’s all they’ve

[00:42:00] Tony Kynas­ton: No, I think

[00:42:01] Cameron Reil­ly: Seri­ous­ly, they’ve already fig­ured that out.

[00:42:03] Tony Kynas­ton: being seri­ous too. I mean, Jarvis is a glo­ri­fied Alexa and I would­n’t touch Alexa with dirty rags.

[00:42:11] Cameron Reil­ly: There will be, there will

[00:42:12] Tony Kynas­ton: with Siri.

[00:42:13] Cameron Reil­ly: yeah, there will be, um, there’ll be a bell curve of skep­ti­cism, but, um, I guar­an­tee it, the vast major­i­ty of peo­ple will trust AIs with­in,

[00:42:27] Tony Kynas­ton: You heard it first.

[00:42:28] Cameron Reil­ly: yeah, yeah. With­in the next 12 months, I’d say, at the lat­est 24 months. Thanks.

[00:42:36] Tony Kynas­ton: wow. I

[00:42:38] Cameron Reil­ly: It’s already,

[00:42:39] Tony Kynas­ton: road­blocks to stop the trust­wor­thy fac­tor. Not the least of which being the hal­lu­ci­na­tions that the AI gets it wrong.

[00:42:46] Cameron Reil­ly: yeah, but they’re fix­ing that. They’ve already said, all the engi­neers are like, yeah, we know how to fix it. They’ve, it’s, it’s, they’ve cod­ed it in, they’ve fig­ured it out. It’s just got to imple­ment it now.

[00:42:57] Tony Kynas­ton: if I out­source my, um, Stock Doc­tor, Invest­ments to Jarvis. And he said, Oh, AMP’s red flag, he’d be wrong. I’m

[00:43:05] Cameron Reil­ly: Yeah, I

[00:43:06] Tony Kynas­ton: not say­ing humans can be, are always right, but I think there’s a huge, huge gap to cross and look, you’re prob­a­bly right in the long term, whether it’s 12 months, two years, five years, I’m not sure. Um, but the val­ue propo­si­tion has got to be real­ly strong. And at the moment I’m not see­ing it.

[00:43:24] Cameron Reil­ly: yeah, but it’s, trust me, it’s done. It’s just a mat­ter of imple­men­ta­tion now, scal­ing up data

[00:43:30] Tony Kynas­ton: We’ve had a guar­an­tee and a trust me, that’s,

[00:43:33] Cameron Reil­ly: Yeah, yeah, yeah, or don’t, you know, but we’ll see. Um, so any­way, I, deck chairs of the Titan­ic, that’s my take on all of this. Um,

[00:43:48] Tony Kynas­ton: so, so in which case lock ones. Going down, Rupert’s going down if he lives. And the three kids, if they can lever­age a deal now, will walk away the win­ners.

[00:43:58] Cameron Reil­ly: maybe, depends on how you define win­ner. Um,

[00:44:02] Tony Kynas­ton: Or they’ll walk away with a stack of assets or mon­ey that’s not going to be caught up with AI deval­u­a­tion.

[00:44:11] Cameron Reil­ly: yeah. Well, it depends on what they invest that mon­ey in.

[00:44:15] Tony Kynas­ton: Yeah, true.

[00:44:16] Cameron Reil­ly: Bit­coin, Tony! It’s all Bit­coin. That’s the future. It’s all Bit­coin. Hey, do you wan­na

[00:44:22] Tony Kynas­ton: Not

[00:44:22] Cameron Reil­ly: Yeah, Doge­coin. Yeah, yeah, yeah. I haven’t looked at Trump­Coin this week. I won­der what’s going on there. Uh, hey, do you wan­na do your pulled pork or do you wan­na do the ques­tions from Mark or the ques­tion from Mark first?

[00:44:35] Tony Kynas­ton: Does­n’t wor­ry me, which one do you want to do first?

[00:44:38] Cameron Reil­ly: Let’s do Mark, and then you can do the pulled pork, and then we’ll get out and do after hours. Um, so, Mark says, Hi Cam, how’s things? Good, thanks, Mark. Can you refer to me, do any wis­dom on the web­site where TK has talked about bor­row­ing to buy shares? I’m inter­est­ed in what is a suit­able per­cent­age of the port­fo­lio to bor­row against, when to bor­row?

[00:44:58] Cameron Reil­ly: i. e. maybe best after a cor­rec­tion, best sources of funds, has TK done it and what did he do? That’s the ques­tion for the ages. Has TK done it and what did he do? We all, you know, I’ve got a t shirt that says, yeah, TK did it. Um, I point­ed Mark to Sea­son 3, Episode 62, where you did talk about using a mort­gage to tur­bocharge your invest­ing

[00:45:29] Tony Kynas­ton: Yeah.

[00:45:31] Cameron Reil­ly: But, it’s always good to touch on it again. So, do you want to

[00:45:35] Tony Kynas­ton: sure. Yep.

[00:45:36] Cameron Reil­ly: your 10 cents on that.

[00:45:39] Tony Kynas­ton: Yeah. So to address his ques­tion specif­i­cal­ly to start off with, um, in terms of when to do it, I mean, the best time to invest is today. So go ahead and do it now. Uh, what will I found in the mar­ket? And I, the way I did it was to invest in shares which had high enough div­i­dend yields to meet my inter­est repay­ments.

[00:46:05] Tony Kynas­ton: And gen­er­al­ly what hap­pens in the share mar­ket is if inter­est rates go up, The div­i­dend yields fol­low as well. So, um, it does­n’t real­ly mat­ter from that per­spec­tive when you invest. Um, but you know, if, if you say I’m going to wait for a crash, the share mar­ket could go up a hun­dred per­cent and come back 30 or 40.

[00:46:25] Tony Kynas­ton: So you’re actu­al­ly, it’s cost­ly wait­ing. So as soon as you’re ready to go, I’d be con­fi­dent in going. Um, you don’t have to draw down every­thing at once or use it all at once. You can, you know, take your time get­ting into the mar­ket if you’re wor­ried about it. Being over­val­ued, which it prob­a­bly is a lit­tle bit at the moment.

[00:46:42] Tony Kynas­ton: So there’s that per­spec­tive. Um, how much would I bor­row? Well, I tried to keep lever­age to about 3, 000. A third, so prob­a­bly no more than 50%. So I don’t want to be over­ly lever­aged, a bit like when you’re invest­ing in, inves­ti­gat­ing a com­pa­ny. Um, I would­n’t like to invest in a busi­ness which is too over­ly lever­aged because as soon as it has a down­turn or a prof­it down­grade, it’ll start to strug­gle to pay its oblig­a­tions.

[00:47:13] Tony Kynas­ton: So I like to, to keep it, uh, With­in about, um, some­where between 30 and 50%, 50 per­cent would be the high side, debt to equi­ty. In oth­er words, if you’re, if you cur­rent­ly have say a port­fo­lio of 100, 000 of shares, and you go and bor­row 33, 000, then your debt to equi­ties, um, 100, your equi­ty less your debt, your total assets is 133, 000 and your equi­ties 100, 000 and your debts 33, 000.

[00:47:44] Tony Kynas­ton: So it’s about 33 per­cent debt to equi­ty, which is what I am for. So it’s real­ly, I guess, a way of improv­ing the returns with­out tak­ing on over­ly an extra risk. How I did it, um, I did it for a long time until prob­a­bly the last five years when I came back from Cana­da. I did it using an over­draft facil­i­ty, so an inter­est only loan in the bank, um, secured against our, our prop­er­ty.

[00:48:13] Tony Kynas­ton: And, um, that was good because I was­n’t on the hook every month for a, or a pay­ment. Uh, I could pay off the loan in, in large chunks at dif­fer­ent times when­ev­er it suit­ed me, like if I sold a share, for exam­ple, and back when I was work­ing, I could pay it off if I got a bonus, an annu­al bonus, for exam­ple, so a lump sum pay­ment, I could pay down the debt if I want­ed to, or if I need­ed to, um, where­as now I have a, um, an off­set account against the prin­ci­pal and inter­est loan, which is prob­a­bly me.

[00:48:47] Tony Kynas­ton: The sec­ond best option. The banks have been told to tight­en up how much they lend out as inter­est only loans, um, by the reg­u­la­tors, uh, because, uh, the bank­ing reg­u­la­tors see it as being a bit risky if the banks have lots of inter­est only loans out there, um, because they’re, um, they’re seen as being riski­er than a month­ly repay­ment loan, a prin­ci­pal on inter­est loan.

[00:49:12] Tony Kynas­ton: I don’t, I mean, I don’t share that view, but that’s how the reg­u­la­tor sees it. I guess I’ve got data to back that up. But they’re still avail­able. The risk reward for it is you get lots of ben­e­fits from using it, but you pay 1 per­cent more gen­er­al­ly in inter­est pay­ments, so it’ll cost you more, but you have the flex­i­bil­i­ty of being able to not repay this month, not repay next month, and then repay as it suits you when you’ve sold some­thing or when you’ve got some kind of wind­fall income.

[00:49:42] Tony Kynas­ton: into the, into the house­hold. Uh, the oth­er option, which I have only done briefly and, and would­n’t rec­om­mend nec­es­sar­i­ly, is tak­ing out a mar­gin loan, which is to use the share port­fo­lio to gear your bor­row­ings. Um, those inter­est rates are much high­er. So I did look up the cur­rent mar­gin loan from the Comm­Bank, which is around 8.

[00:50:03] Tony Kynas­ton: 64%. Um, which is quite high com­pared to their inter­est only loan, which was 1 per­cent high­er than the cur­rent bank loan, so I think it’s around 6%. Five and a half, some­thing like that. Um, six and a half, maybe. So, um, yeah, it’s, it’s, uh, at least 200 basis points high­er, two per­cent­age points, or two per­cent high­er, um, which makes it a bit more dif­fi­cult to, uh, find high yield­ing stocks.

[00:50:33] Tony Kynas­ton: It nar­rows the uni­verse on what to invest in to cov­er the, the inter­est pay­ments. And it car­ries the extra risk of a mar­gin call, so the bank can, um, just like at this time of year, we’re see­ing now stocks drop­ping by 15 per­cent on bad results. If that drop caus­es the share price to fall, or the amount you own as equi­ty in your share to fall below what’s called the LBR, Which is the Loan Val­u­a­tion Ratio, then um, you’re forced to either put more mon­ey in or sell the stock to pay the bank back.

[00:51:08] Tony Kynas­ton: So, um, you can see what those LVRs are. Again, I’ll use Comm­Bank to go to their web­site or Google what’s the LVR. Um, list for stocks on the ASX for, um, say Comm­Bank, you’ll get a list. Gen­er­al­ly the LVR ratios are between, or CommBank’s were between 40 and 80%. So, obvi­ous­ly Comm­Bank was pre­pared to lend you up to 80 per­cent of the val­ue of a Com­mon­wealth Bank share.

[00:51:35] Tony Kynas­ton: Um, and was also loan­ing up to 80 per­cent of the val­u­a­tion of shares like, um, AFI, so, or, um, very large ETFs, index fund type ETFs. So they saw those as being less volatile and less risky, but, even so, it would­n’t be that dif­fi­cult for the Comm­Bank price to drop 20%, giv­en it’s in a very high PE ratio at the moment.

[00:51:58] Tony Kynas­ton: Um, it has pulled back after its results, so you could still face a, um, a mar­gin call. Using those num­bers, uh, stocks like a cred­it corp, which has been on their buy list before, they’re down at 40 per­cent LVR. So that kind of fits in my frame­work of say­ing bor­row, you know, between 30 and 50 of, uh, of the val­u­a­tion of the port­fo­lio, um, to, to de risk it.

[00:52:23] Tony Kynas­ton: And, uh, Um, that’s sort of borne out with, uh, the kind of, um, small cap end of the mar­ket in terms of what the bank will lend to. So, I think that’s prob­a­bly all of the points I’d raise. Um, I only took out a mar­gin loan once when I was jug­gling my, Uh, I had a large, um, hold­ing of, uh, Coles Myer shares when the takeover was going on and I was leav­ing Coles Myer, and so I fund­ed them using a mar­gin loan, but I sold them rea­son­ably quick­ly after, um, uh, the buy­out went through, um, when Wes­farm­ers took over Coles Myer.

[00:53:06] Tony Kynas­ton: Oth­er­wise, I would­n’t, I per­son­al­ly would­n’t use, um, mar­gin lend­ing, um, to buy shares and per­son­al­ly have used an inter­est only loan, which I think is the best option. Um, but cur­rent­ly I have a prin­ci­pal on inter­est loan with a mort­gage off­set account so I can reduce the amount of inter­est I pay each month.

[00:53:27] Tony Kynas­ton: Um, but I still have to pay the prin­ci­pal, so that’s some­thing to take into account, is that, you know, over a peri­od of 25 years, you’ve still got to pay the loan back in month­ly instal­ments, so you do have to have some cash flow com­ing in, and if you’re fund­ing your invest­ments via the div­i­dends, You’ve got to have a lot of, um, extra mar­gin there to pay six months worth of prin­ci­pal as well as the inter­est from the div­i­dends.

[00:53:52] Tony Kynas­ton: So it’s a bit trick­i­er. Um, or you fund it from some oth­er method like you pay or your salary, and then as the div­i­dends come back, you reim­burse your­self. So it’s, it can still be done, but, but yeah, per­son­al­ly, I rec­om­mend, um, inves­ti­gat­ing inter­est only loan. I’m not giv­ing per­son­al advice here. I don’t know the cir­cum­stances, for the ques­tion­er.

[00:54:13] Tony Kynas­ton: Um, but that’s what I did.

[00:54:15] Cameron Reil­ly: All right. I hope that helps, Mark. Tony’s thoughts on it.

[00:54:23] Cameron Reil­ly: Before we go to the pulled pork, I just want­ed to do a quick port­fo­lio update too, because I haven’t done one for a while. The dum­my port­fo­lio for this finan­cial year is up around about 16%. Uh, 15. 76 per­cent to be spe­cif­ic, ver­sus the STW up about 12%, so it’s, uh, they’re both doing well, good years, um, we’re a lit­tle bit bet­ter.

[00:54:54] Cameron Reil­ly: Um, Stock­o­pe­dia US port­fo­lio, for peo­ple that are inter­est­ed in that, uh, look­ing at the all time result, which is, uh, Sep­tem­ber 23.

[00:55:11] Cameron Reil­ly: It’s up about 83 per­cent ver­sus the S& P 500 up about 37%, so still doing well. Um, if I look at, uh, the one year chart on that, uh, we’re up about 73 per­cent ver­sus 22 per­cent for the S& P 500. So, uh, buy, All met­rics, uh, except for the last three months, we’re down 3 per­cent ver­sus the S& P up 4%, but we had a very dra­mat­ic climb before that.

[00:55:51] Cameron Reil­ly: We’re up over 100 per­cent if you recall, back around Novem­ber, so it’s come back a lit­tle bit. But yes, that’s doing well, and I’m not track­ing the SIP Aus­tralian one any­more, but, uh, all the port­fo­lios, uh, Doing well. I think my super port­fo­lio is up about 10 per­cent for the finan­cial year so far. Lit­tle bit behind the bench­mark, but, um, doing okay.

[00:56:15] Tony Kynas­ton: Very good.

[00:56:16] Cameron Reil­ly: All

[00:56:16] Tony Kynas­ton: Good to know.

[00:56:18] Cameron Reil­ly: you want to get into

[00:56:18] Tony Kynas­ton: Keat­ing used to say, a pleas­ing set of num­bers.

[00:56:21] Cameron Reil­ly: oh, thank you, Paul. Do you want to get into your Fonter­ra, Paul Pork?

[00:56:28] Tony Kynas­ton: I do. Um, and this is going to sound strange to peo­ple. I, I, um, researched on Ter­ra, um, which is a small ADT stock, so it’s not going to suit every­one. But, um, in the kind of dig­ging down into the weeds and the minu­ti­ae, I came across, uh, an announce­ment say­ing that they’re about to delist from the ASX, so.

[00:56:49] Cameron Reil­ly: Oh.

[00:56:51] Tony Kynas­ton: I will go through and do the pulled pork.

[00:56:53] Tony Kynas­ton: Rea­son num­ber one is I haven’t had time to find anoth­er com­pa­ny to do it on because I did­n’t come across that announce­ment straight away. Rea­son num­ber two is it’s been on the buy list for a while so there pos­si­bly are peo­ple who are share­hold­ers. And with­in a cou­ple of days, I think it’s, um, the 25th of Feb­ru­ary, it’s about a week.

[00:57:13] Tony Kynas­ton: Uh, 26th of Feb­ru­ary, they have to, um, no, 25th of Feb­ru­ary, they have to decide whether they’re going to, uh, move across to the NZX, because the Fonter­ra Share­hold­ers Fund will still con­tin­ue, but it’s cur­rent­ly dual list­ed, and, uh, Most of the share­hold­ers are in New Zealand and so the fund wants to stop pay­ing ASX fees and migrate across to New Zealand.

[00:57:39] Tony Kynas­ton: So if you are a share­hold­er and you’re not aware of that, you’ve got to decide what to do. If it were me, again, not per­son­al advice, I’d keep it sim­ple and sell the shares and invest in some­thing else. But it has a good track record. It’s been doing well of late. And, uh, some peo­ple might have cap­i­tal gains tax issues if they sold or might want to hold on.

[00:58:03] Tony Kynas­ton: Then, um, if you do noth­ing with­in a, uh, a week to 10 days, you’re going to be, um, list­ed on the NZX. And that’ll have, um, some oth­er issues for you, not the least of which will be cur­ren­cy risk that you’ll have to, um, think about. Uh, for your invest­ments. But any­way, um, I will go through it. Uh, inter­est­ing com­pa­ny. So it’s, it’s a small ADT stock, 54, 000 trad­ed on the ASX, a lot more than that trad­ed on the New Zealand Stock Exchange. So there are some ben­e­fits to going back to New Zealand. Um, you know, 54, 000K will only shoot small port­fo­lios, um, for QAV lis­ten­ers here, sort of around the, 150, 000 to 200, 000 mark, I would have thought.

[00:58:45] Tony Kynas­ton: Um, but when it goes to the New Zealand Stock Exchange, I did­n’t pull out what their ADT is, but giv­en the ratio of ASX share­hold­ers to NZ share­hold­ers, I think it’ll be a lot larg­er than that. So peo­ple might want to take advan­tage of that. Uh, so it’s an inter­est­ing sit­u­a­tion. Fonter­ra is the dairy co op in New Zealand.

[00:59:11] Tony Kynas­ton: It’s, um, It’s one of the largest ones in the world and, uh, it’s the largest, I’ll call it, um, largest list­ed busi­ness in New Zealand, if not the largest busi­ness full stop, although the list­ing in New Zealand is a bit strange and it’s, it’s, um, when I say it’s strange, it’s basi­cal­ly list­ed to enable the farm­ers who, if they want to sell Milk to the Co op, they have to buy shares in the Co op and it facil­i­tates that sort of trans­ac­tion process by list­ing on the NZ Stock Exchange.

[00:59:45] Tony Kynas­ton: I’m not sure what the mech­a­nism is, but as an out­side investor, I don’t think you can buy shares in the Fonter­ra com­pa­ny itself, in the co op itself. So it’s basi­cal­ly allow­ing farmer to farmer trans­ac­tions and allow­ing new farm­ers who want to sell their milk to Fonter­ra to be able to get the shares to do that. Uh, oh, Over the course of its his­to­ry, Fonter­ra realised that, um, oth­er peo­ple might like to invest in the busi­ness, because it’s more than just buy­ing the milk from farm­ers and, and pulling it and sell­ing it for the best price, it’s, it’s now a whole range of, of brands, includ­ing ones in Aus­tralia. Um, and so they set up the Fonter­ra Share­hold­ers Fund, which is the, the, it’s actu­al­ly a trust, it’s the com­pa­ny I’m talk­ing about today, although it’s real­ly a trust, uh, and, uh, it allows.

[01:00:37] Tony Kynas­ton: Peo­ple who aren’t farm­ers to buy a unit in the trust and have the trust own­er share in Fonter­ra, the par­ent com­pa­ny. And so basi­cal­ly it enti­tles you to div­i­dends from the com­pa­ny and a split. Any oth­er sort of cap­i­tal returns that the com­pa­ny does from time to time. So the num­bers are a bit screwy if you look at them from a QAV point of view, because the com­pa­ny has a Fonter­ra Share­hold­ers Fund, does­n’t make any mon­ey.

[01:01:06] Tony Kynas­ton: Fonter­ra, the com­pa­ny, or Co op does. The Share­hold­er Fund does­n’t have a PE, it does­n’t have an EPS. It does have Oper­at­ing Cash Flow, which equates to the div­i­dends it receives from Fonter­ra. So that’s why it’s pop­ping up on our radar, because it’s got a Prop­Caf. Um, lit­tle bit of back­ground, uh, Fonter­ra, um, it’s, uh, 30, it’s respon­si­ble for 30 per­cent approx­i­mate­ly of the world’s dairy exports.

[01:01:35] Tony Kynas­ton: And with rev­enues exceed­ing New Zealand 22 bil­lion, it’s New Zealand’s largest com­pa­ny accord­ing to Wikipedia. So, it’s quite large. And I know from my time in New Zealand, the way it used to work, and this is going back sort of 12, 15 years now, uh, Fonter­ra would come out, I think, I’m going to say quar­ter­ly, but it could have been six month­ly or peri­od­i­cal­ly, I’m And they would, um, announce the price that they were pay­ing for milk.

[01:02:04] Tony Kynas­ton: And that was a hot­ly antic­i­pat­ed num­ber, and it could tip the, the New Zealand econ­o­my one way or the oth­er if the num­ber was high­er than what was expect­ed or low­er than what was expect­ed. It could have reper­cus­sions all the way through the New Zealand econ­o­my, because dairy farm­ing is such a big part of the New Zealand econ­o­my.

[01:02:24] Tony Kynas­ton: Um, there are, let’s see, anoth­er thing to, to high­light, and this came from the New Zealand Share­hold­ers Asso­ci­a­tion, is that, uh, the, the Fonter­ra Share­hold­ers Fund is a fund that only owns shares in Fonter­ra Coop­er­a­tive Group. Um, but, the, there are 107. 4 mil­lion units of FCF, But a total of 1. 609 mil­lion FCG shares, so 107 mil­lion out­sider shares and 1.

[01:02:59] Tony Kynas­ton: 6 bil­lion shares, farmer shares in Fonter­ra. So there is a con­flict of inter­est. And the New Zealand Share­hold­ers Asso­ci­a­tion rais­es this, uh, sup­pli­ers, i. e. the farm­ers, would rather receive a high­er price for their milk, um, but a high­er price means a high­er cost of sales to Fonter­ra, and sub­se­quent­ly a low­er prof­it, and thus earn­ings for share­hold­ers, and the share­hold­ers fund goes down.

[01:03:27] Tony Kynas­ton: So there’s a, Con­flict of inter­est here, and that’s, it’s always been a dicey one that co ops have to man­age is, um, how much do they give back to the mem­bers ver­sus how much do they keep as prof­it to, to fund their own expan­sion. Um, what else can I say about Fonter­ra? Uh, yeah, that’s prob­a­bly it. I’ve cov­ered most of the rest of it, the, uh, the quotes I’ve got there about how it works.

[01:03:52] Tony Kynas­ton: Uh, get­ting on to their de list­ing. So this was announced on the 15th of Jan­u­ary 2025, uh, Fonter­ra Share­hold­ers Fund has obtained approval from the offi­cial list of the ASX to have it removed, uh, and the tim­ing for the removal is to Uh, Wednes­day, the 26th of Feb­ru­ary, sor­ry, uh, Tues­day the 25th of Feb­ru­ary, SF S‑F-F-S‑F units will sus­pend from trad­ing on the A SX at the close of trad­ing Wednes­day the 26th to Thurs­day the 27th.

[01:04:29] Tony Kynas­ton: The quo­ta­tion of FSF units is sus­pend­ed. On the A SX, there’s no a SX trad­ing. Um, all a SX trades are set­tled with their two day set­tle­ment, and the units are then trans­ferred to the NZX. And on Thurs­day the 27th of Feb­ru­ary, uh, FSX, FSF is removed from the offi­cial list of the ASX at the close of trad­ing.

[01:04:52] Tony Kynas­ton: Excuse me. So, uh, where are we now? It does talk about in the release that they’re going to trans­fer any remain­ing ASX unit hold­ers across to the trust list­ed in New Zealand. Um, one thing I did­n’t men­tion was that, um, oh, this is anoth­er thing which I picked up from my research, which was inter­est­ing, and again, not high­ly Pro­mot­ed on the web­site was that, um, is pro­mot­ed well on the web­sites is the port­fo­lio of Fonter­ra brands includes West­ern Star, Per­fect Ital­iano Cheese, Big­ger Cheese and Main­land Cheese.

[01:05:31] Tony Kynas­ton: Um, and they also have some food ser­vice busi­ness­es sup­ply­ing to com­mer­cial, uh, food process­es. One called Anchor Foods and an ingre­di­ent, ingre­di­ents busi­ness called NZMP. How­ev­er, on the 11th of Novem­ber, 2024, Ontera announced that they were going to sale, are going to sell most of their con­sumer busi­ness­es and that they were going to focus on the milk So, um, they’ve long trum­pet­ed their own­er­ship in these food brands, and now they’re putting them up for sale.

[01:06:02] Tony Kynas­ton: So, not only is Bon­ter­ra retreat­ing, or the FSF retreat­ing back to the NZ mar­ket, but Bon­ter­ra, the co op itself, is also retreat­ing back to its core busi­ness of food. buy­ing milk and sell­ing it as a pooled enti­ty. And I guess, I think they’re also keep­ing their com­mer­cial busi­ness­es, Anchor Foods and NZMP.

[01:06:23] Tony Kynas­ton: So a lot of mov­ing parts going on, a lot of announce­ments going on, which aren’t, in my opin­ion, weren’t very high­ly loud. You have to go right down to the detail of the ASX announce­ments to find out about it. I next looked at was the earn­ings. So FY24 earn­ings were sol­id com­pared to longer term trends, but down on last year. So last year was a bumpy year. Um, part of that was due to the sale of some of the busi­ness­es in Brazil and Chi­na, um, like for like sales were down 7 per­cent and the EBIT was down 11%.

[01:07:00] Tony Kynas­ton: Um, MPAT’s pret­ty hard to com­pare cause it was, um, inflat­ed last year by the asset sales. Uh, how­ev­er. Even though FY23 is slight­ly down FY24, sor­ry, 24 is down FY23. FY23 was way above the, um, medi­um term trends. So, FY22 was a lot low­er than FY23. So, even though, I think, um, I’ve read one of the ana­lyst reports, and they point­ed out that even though Num­bers were down this year.

[01:07:31] Tony Kynas­ton: It’s still padding shoul­ders above what it has been in the past. They weren’t over­ly con­cerned with that. In terms of the QAV num­bers, the share price I used was 4. 50. I think it’s a lit­tle bit high­er than that today. So even though it was going to be delist­ed on the ASX. I guess it’s being sup­port­ed by, um, the co op pric­ing in New Zealand.

[01:07:53] Tony Kynas­ton: Uh, there’s no, no con­sen­sus tar­get, um, so I can’t see how, uh, 4. 50 com­pares. Was high, uh, was a lit­tle bit high­er than TK1, uh, IV1, sor­ry. Uh, the yield is very good. Um, and this is a, um, a share­hold­er fund which is get­ting div­i­dends from the co op, so, uh, div­i­dends are impor­tant. Yield is high at 9. 5%, so it scores for us on that met­ric.

[01:08:19] Tony Kynas­ton: Stock Doc­tor can’t give it a finan­cial health score or trend, so we can’t, um, score it on that met­ric. And I believe it’s because we’re not see­ing any prof­it in the com­pa­ny in terms of earn­ings per share. Um, uh, S Stock­o­pe­dia is in a sim­i­lar boat, so its qual­i­ty rank­ing is 38, which is very low, and the over­all rank­ing is 80, which is also rea­son­ably low.

[01:08:43] Tony Kynas­ton: Um, so Stock­o­pe­dia, uh, give it a very low rank­ing, a very low F score, again, because of its lack of prof­it. Uh, how­ev­er, the Stock­o­pe­dia rank­ing for the Fonter­ra Co op itself, which is, NZX­Code­FCG is 96, which is quite high, with a qual­i­ty rank of 84. So the under­ly­ing busi­ness throw­ing off the div­i­dends, which fund the income into SFS, is scor­ing well in Stock­o­pe­dia.

[01:09:10] Tony Kynas­ton: So, uh, I’m rea­son­ably sat­is­fied with the qual­i­ty of, uh, The share­hold­er fund. Proc­Caf is strong at 4. 76 times. Can’t give you a lens on the PE because we don’t have one. NTA, this is trad­ing at less than book plus 30, 4. 65. And the NTA is 3. 55, which is also less than book plus 30. So it’s, you know, we’re buy­ing it for less than their assets.

[01:09:40] Tony Kynas­ton: Um, the share­hold­er fund has­n’t con­sis­tent­ly increas­ing its earn­ings, uh, so we can’t score it for that. Um, we talked before about whether it has a recent­ly, um, uh, upturned 3 point trend­line sen­ti­ment, and I thought it had­n’t, but as Cam point­ed out, the results, But this com­pa­ny come out in July. So it just makes in as a recent three point upturn since its last results.

[01:10:06] Tony Kynas­ton: Uh, it does­n’t have an own­er founder cause it’s basi­cal­ly a trust fund set up to um, allow oth­er investors into the, uh, Quat­era Co op. Um, so we can’t score it for that. Over­all, the qual­i­ty score is 63. 6 per­cent and the QAV score is 0. 13. So not at the high end of the buy list. Um, it’s been on there for a long time.

[01:10:26] Tony Kynas­ton: Um, so I thought I’d still cov­er it. But the high­light to me is peo­ple are going to have to decide in the next week whether they sell or whether they remain and get trans­ferred to the New Zealand Stock Exchange.

[01:10:37] Cameron Reil­ly: I just looked on the, um, My, uh, spread­sheet and I have it flagged as delist­ing, so it must have come up. At some

[01:10:47] Tony Kynas­ton: okay.

[01:10:48] Cameron Reil­ly: in the past, some­body must have flagged it. But, uh, yeah, we don’t hold onto it, but good, uh, heads up. If any­one out there lis­ten­ing holds onto Fonter­ra and you haven’t done some­thing about it yet, uh, you might want to get onto that.

[01:11:03] Cameron Reil­ly: So you said they have 30 per­cent of the world’s dairy export mar­ket. That’s insane

[01:11:08] Tony Kynas­ton: real­ly sur­prised at that. It’s amaz­ing, isn’t it? Yeah,

[01:11:12] Cameron Reil­ly: Yeah.

[01:11:14] Tony Kynas­ton: and um, that was from Wikipedia, uh, and I saw some­where else that they were the biggest dairy co op in the South­ern Hemi­sphere, and I think either top 5 or top 6 in the world, so um, yeah, they’re quite large.

[01:11:29] Cameron Reil­ly: Wow. Thank you, Tony. Well, that’s it. After hours. What have you got for me this week?

[01:11:38] Tony Kynas­ton: Not sure if it was you who rec­om­mend­ed, I think it was, to watch Baby­lon, um,

[01:11:43] Cameron Reil­ly: The film?

[01:11:44] Tony Kynas­ton: the film, yeah, which I did, I thought it was great.

[01:11:47] Cameron Reil­ly: loved it. It’s crazy, isn’t it? It’s

[01:11:49] Tony Kynas­ton: it is, isn’t it? It’s a, it’s a bit of a mas­ter­piece, I think, like a full uni sort of mas­ter­piece.

[01:11:55] Cameron Reil­ly: Belli­ni, that’s exact­ly what I said when I watched it. It’s his attempt at doing a Felli­ni film. Yeah, it’s just that kind of bizarre sort of, uh, what­ev­er, you know, Felli­ni esque thing, yeah. Very, very Felli­ni esque, yeah.

[01:12:10] Tony Kynas­ton: Yeah, crazy. I thought it was great. I mean, I’m gonna, um, call out to the kids lis­ten­ing in the car, don’t watch it, it’s full of sex and drugs, but, um, but I loved it. I thought it was great. Oh,

[01:12:22] Cameron Reil­ly: per­for­mance I thought was fan­tas­tic.

[01:12:24] Tony Kynas­ton: sen­sa­tion­al. I, I, that was the real high­light for me, yeah.

[01:12:29] Cameron Reil­ly: great per­for­mance from her. Like, it’s a great char­ac­ter. She’s done a lot of great per­for­mances, a lot of great char­ac­ters, but that was right up there.

[01:12:38] Tony Kynas­ton: Yeah,

[01:12:38] Cameron Reil­ly: Pitt was good, you know, it was sort of an easy role for him, play­ing an aging, fad­ing movie star kind of thing,

[01:12:44] Tony Kynas­ton: Yeah.

[01:12:44] Cameron Reil­ly: thought he did a great job show­ing the inse­cu­ri­ties of that guy.

[01:12:49] Tony Kynas­ton: Yeah. Yeah, so I, I real­ly enjoyed it.

[01:12:52] Cameron Reil­ly: And the one scene I real­ly remem­ber is the scene between him and Gene Smart at the end. Plays the, like, the PR hack, yeah, the cock­roach. And she basi­cal­ly says, look, you had your moment, you made some stuff, every­one’s time pass­es, Hol­ly­wood will sur­vive you. And I think I said to you at the time, my take­away on the, like, the under­ly­ing mes­sage That Damien, what­ev­er his name was try­ing to get across in the film.

[01:13:19] Cameron Reil­ly: It’s all about how Hol­ly­wood’s chang­ing because of Tik­Tok and AI and all this kind of stuff that’s com­ing. It’s like, don’t fight it. Things change,

[01:13:28] Tony Kynas­ton: Yeah. And the stream­ing ser­vices.

[01:13:31] Cameron Reil­ly: yes, all of that. Yeah. Things don’t stay the same as they were, you know, when you. Became a big movie star, like, things change and there’ll be a new gen­er­a­tion of film­mak­ers and enter­tain­ers and what­ev­er that’ll fig­ure out the new busi­ness mod­els and they’re gonna be dif­fer­ent from the old busi­ness mod­els, but that’s just progress, right, in the enter­tain­ment indus­try.

[01:13:53] Tony Kynas­ton: And it was, um, and that’s the, the movie is about the tran­si­tion from silent movies to talkies and how Brad Pit­t’s act­ing style did­n’t suit the talkies. And like the first movie he made, he walked into the, in the RBA Cos­tume into the back of the movie the­ater so he could blend in. And, um, every­one was laugh­ing at, uh, his, uh, emo­tion­al scenes.

[01:14:19] Tony Kynas­ton: Um, so, uh, that, that’s the, that’s the movie, um, in a nut­shell, but it had par­al­lels with one, uh, Once Upon a Time in Hol­ly­wood to anoth­er Brad Pitt film where, um, Leo DiCapri­o’s. strug­gle. His char­ac­ter strug­gled to move from West­ern movies to TV West­erns and how the rise of TV was hurt­ing the movie indus­try.

[01:14:40] Tony Kynas­ton: So that was an inter­est­ing par­al­lel, I thought too.

[01:14:43] Cameron Reil­ly: Yeah, yeah, I had­n’t thought about that, but yeah, it’s two movies by two great direc­tors. And, but the, he won an Acad­e­my Award for Once Upon a Time in Hol­ly­wood, Baby­lon got trashed by the

[01:14:55] Tony Kynas­ton: It did. Yeah. Unde­served­ly so, I think.

[01:15:00] Cameron Reil­ly: That was my take on it, too. Like, I checked it out, even though I’d heard bad things about it, because the direc­tor, it’s the same guy who did La La Land and, um, the, the drum­ming

[01:15:12] Tony Kynas­ton: uh, Whiplash, yeah,

[01:15:14] Cameron Reil­ly: Both great films, real­ly, real­ly good films. Great, inter­est­ing films. And I thought, this guy knows what he’s doing.

[01:15:21] Cameron Reil­ly: I’m at least check it out. And I just, I just thought it was ter­rif­ic. And I assume that because it was sort of crit­i­ciz­ing Hol­ly­wood and peo­ple bitch­ing and moan­ing about how things are chang­ing, that Hol­ly­wood turned on him. And the crit­ics, uh, even though like Gene Smart, the crit­ic is the one that comes out as sort of the smartest one at the end of it, um, they turned on him for some rea­son, but, uh, I don’t know.

[01:15:50] Tony Kynas­ton: and it remind­ed me, I mean, I remem­ber read­ing a book called Hol­ly­wood Baby­lon many years ago, and a lot of the sto­ries from that were in the movie as well, so I’d done a pas­tiche of the sup­pos­ed­ly Fat­ty Arbuck­le sto­ry where the, you know, the fat come­di­an, um, kills a girl he’s with, and how they had to hush it up and var­i­ous oth­er sort of things I recall from that and that book were in there in dif­fer­ent scenes and dif­fer­ent parts even just the size

[01:16:18] Cameron Reil­ly: Rot.

[01:16:18] Tony Kynas­ton: that was inter­est­ing yeah I love see­ing Flea, uh, the bassist from Red Hot Chili Pep­pers play a char­ac­ter he was good real­ly good yeah

[01:16:28] Cameron Reil­ly: Flea turns up in all sorts of things. Like, he was in Back to the Future 2 as

[01:16:33] Tony Kynas­ton: oh real­ly

[01:16:34] Cameron Reil­ly: yeah, as one of, um, uh, you know, pay atten­tion McFly, who, Biff, he’s one of Bif­f’s sort of hench­men, hang­ers

[01:16:45] Tony Kynas­ton: right

[01:16:46] Cameron Reil­ly: in Back to the Future 2. Like, he’s been around doing act­ing bits since the 80s, uh, and he’s still turn­ing up in stuff, which is great. Um, yeah, so that’s good. That’s good. I took Chris­sy out to see the Aus­tralian Cham­ber Orches­tra last night. It was my birth­day present to her. Tick­ets to see them do the Brahms Vio­lin Con­cer­to and Beethoven’s 7th Sym­pho­ny, which we enjoyed. Uh, but, um, can’t beat Shostakovich. I could­n’t find, I could­n’t find them

[01:17:22] Tony Kynas­ton: I’ve tried.

[01:17:23] Cameron Reil­ly: per­for­mance, but yeah.

[01:17:24] Cameron Reil­ly: You tried.

[01:17:26] Tony Kynas­ton: I did­n’t get into it. No.

[01:17:27] Cameron Reil­ly: Did­n’t. Oh, my God. Alright, so yes­ter­day I went on my two and a half hour bike ride at 6am. I lis­tened to a pod­cast about Shostakovich’s Fifth Sym­pho­ny. Part two of a pod­cast done by a con­duc­tor out of Boston. Then over the course of the day, I lis­tened to four dif­fer­ent record­ings of it. I think over the course of the day while I was work­ing, um, I’m, yeah, I’m sort of still deeply obsessed with, uh, the fifth sym­pho­ny, the

[01:18:00] Tony Kynas­ton: I do like the ACO. Many years ago, Jen­ny and I went along to a fundrais­er for them at, um, Fran Larn­er, one of the Myer fam­i­ly hous­es in Mel­bourne. And, uh, it was when Richard Tognetti, their lead vio­lin­ist, had been gift­ed a very old vio­lin by, um,

[01:18:17] Cameron Reil­ly: Guarneri

[01:18:18] Tony Kynas­ton: Crowe. Yeah,

[01:18:21] Cameron Reil­ly: He was play­ing, he was, so last night he was play­ing the lead vio­lin in the Vio­lin Con­cer­to and con­duct­ing. He’s been the Artis­tic Direc­tor of the ACO now for 35 years.

[01:18:32] Tony Kynas­ton: yeah, wow,

[01:18:33] Cameron Reil­ly: He was 24 when he took the posi­tion. 35 years now, 59, mar­ried to Prin­ci­pal vio­lin­ist, when he’s not the prin­ci­pal vio­lin­ist. Um, yeah, and he did a great job. Chris­sy was, it’s not the first time we’ve seen the ACO, but it’s been a while. And she was like very, very impressed with their per­for­mance. So it was good.

[01:18:59] Tony Kynas­ton: yeah, good, uh

[01:19:01] Cameron Reil­ly: I’m still read­ing Yes Prime Min­is­ter, Yes Min­is­ter scripts and read­ing, uh, the third Le Carre book and I’m enjoy­ing the Carre book.

[01:19:08] Cameron Reil­ly: The more it gets into it, the more I’ve just real­ly, it’s a bit, it’s very sim­i­lar to Yes Min­is­ter in a way about the inner machi­na­tions of these guys and the bureau­cra­cy and just the way he depicts all of these guys as kind of schlep­py losers, um, in a way. Try­ing to be more than

[01:19:29] Tony Kynas­ton: the Euro­crats, yeah,

[01:19:30] Cameron Reil­ly: Yeah, and they’re all, Try­ing to be impor­tant, but they’re just kind of, yeah, mid­dle, mid­dle of the lad­der bureau­crats who have been left behind and they’re, you know, it’s such a dif­fer­ent take on spies to what I’m

[01:19:48] Tony Kynas­ton: yeah, dif­fer­ent to Bond, isn’t it, yeah,

[01:19:50] Cameron Reil­ly: It’s 180 to Bond, you know, it

[01:19:52] Tony Kynas­ton: and Len Dighton’s even more down that path as well, because he, his, uh, his, um, main char­ac­ter is, is kind of a work­ing class lad, he’s not just bat­tling all of that, but also bat­tling the class. struc­ture as well. And he’s, but he’s full of dou­ble cross­es in the bureau­cra­cy and peo­ple out to get him because he’s not, does­n’t have, did­n’t go to the right school and all that kind of stuff.

[01:20:15] Tony Kynas­ton: But they’re real­ly good too.

[01:20:18] Cameron Reil­ly: You’ve rec­om­mend­ed one of his to me before and I can’t

[01:20:22] Tony Kynas­ton: Yeah, a cou­ple. Oh, the Ipcris file is the most famous, which is real­ly good.

[01:20:25] Cameron Reil­ly: Ipcris. Yeah, that’s right.

[01:20:27] Tony Kynas­ton: The movie was­n’t so great, even though I’m a big fan of Michael Caine, but, uh, the book’s ter­rif­ic.

[01:20:33] Cameron Reil­ly: Har­ry Palmer.

[01:20:35] Tony Kynas­ton: Har­ry Palmer, that’s right, yeah. Har­ry Palmer.

[01:20:40] Cameron Reil­ly: read that or not. Um, I also did my first 24 hour fast in 30 years or 20 years yes­ter­day.

[01:20:50] Tony Kynas­ton: She was so healthy.

[01:20:52] Cameron Reil­ly: I’ve been doing inter­mit­tent fast­ing for the last, you know, Week or so, prob­a­bly? I’ve been doing 18, uh, 19. 5 most days, 18. 6 some Kung Fu days, if we’re Because my eat­ing win­dow’s at 4pm today, 4 to 9, so I fast from 9pm through to 4pm and then I’ll eat for 5 hours.

[01:21:13] Cameron Reil­ly: But on Kung Fu Day, some after­noons we go, we go at 3. 30, so I eat at 3 instead, so I don’t have to eat at Kung Fu. But I did a 24 hour fast yes­ter­day, so 9pm to 9pm, so we got out of the Sym­pho­ny and I had a mues­li bar at the train sta­tion, wait­ing for the train. I’m build­ing up to a 48 hour fast, prob­a­bly in the next week or two I’ll do,

[01:21:33] Tony Kynas­ton: Oh, wow.

[01:21:35] Cameron Reil­ly: I haven’t fast­ed like this since my ear­ly 30s.

[01:21:39] Cameron Reil­ly: You know, my dad died when I was 30, 31, and I was like 130 kilos or some­thing at the time. And I decid­ed to, yeah, so my ear­ly days at Microsoft, when I was going out break­fast, lunch, and din­ner on the com­put­er. Cor­po­rate card and just not exer­cis­ing. And, you know, the Scot­tish, Scot­tish DNA kicked in real­ly quick­ly.

[01:22:03] Cameron Reil­ly: And I lost, uh, like 30 kilos. Um, but I did a 30 day fast. I did a lot of like sev­en day fast and then I did a 30 day fast back then. And it’s easy. Once you get over the thing with, I don’t know, have you ever done any long fasts

[01:22:19] Tony Kynas­ton: Not that long, I’ve done 24, I, you know, um, I don’t reli­gious­ly fol­low any of these things, but I gen­er­al­ly don’t eat until lunchtime. Yeah, so it’s kind of like that, but, um, I don’t know if it’s good or bad, it’s just how I am.

[01:22:36] Cameron Reil­ly: No, that’s good. I mean, I think you get the, they, they say that most of the ben­e­fits of the, like the autophagy and stuff like that kick in sort of in the 18 to 24 hour mark. And then after that, that’s where you get most of the ben­e­fits from it. But any­thing after like 12 hours is good. Any­way, um, remem­ber when I did the 30.

[01:22:59] Cameron Reil­ly: The first three or four days of a long water fast are the hard­est. And then you sort of kick into the full sort of keto­sis thing and your body’s, you don’t get hun­gry real­ly after that your body’s feed­ing off the, the ghre­lin, um, caus­es the hunger pains goes away and, and you feel great, remem­ber feel­ing great.

[01:23:23] Cameron Reil­ly: But I was doing, I was, I was liv­ing in Mel­bourne at the time doing reg­u­lar run around the tan with my friend, Michael. every cou­ple of days. And I remem­ber this one day, ear­ly in the morn­ing before work, I did this run around the TAN, and I got about halfway around it. The TAN’s like about 5k, I think. Got about halfway around it, and all of the mus­cles in my back seized up, because I was­n’t tak­ing any elec­trolytes.

[01:23:51] Cameron Reil­ly: And I crawled the last time, lit­er­al­ly on my hands and knees. I had to crawl back to my car, climbed into my car, and uh, I, that was it. I cut the fast. I don’t think I ever fast­ed again after that. These days. I know I’m smarter and I know. You know, I need to put some, so like when I go to Kung Fu and I’m fast­ing, I put some salt in my water and that kind of stuff.

[01:24:15] Cameron Reil­ly: So I’ve got some elec­trolytes, but,

[01:24:18] Tony Kynas­ton: did you find, did you find when you fin­ish the long fast like that you actu­al­ly, like you obvi­ous­ly lose weight, but did you put it back on quick­ly because your body goes oh thank god the famine’s over I’m going to store up for the next one.

[01:24:30] Cameron Reil­ly: no. And, and what I used to do back then is, um, you know, I would eat nor­mal­ly for a while. And then if I found that my, like, when you, when you start eat­ing again, after you do a fast, you real­ly appre­ci­ate, Every­thing, like nat­ur­al foods, right? Veg­eta­bles, raw, and I’d eat a lot of raw sal­ads and that kind of stuff.

[01:24:58] Cameron Reil­ly: But then over time, as I found my diet was slip­ping and I was start­ing to get lazy and I was start­ing to eat processed foods, I’d do anoth­er fast just for a cou­ple of days, just to sort of reboot my appre­ci­a­tion for nat­ur­al foods again and get back into it. No, I sort of kept my weight down at sort of a hun­dred.

[01:25:19] Cameron Reil­ly: Then for years it was only like the last, you know, just before kung Fu years where I start­ed to get up around sort of 104, 105 again, and it was like, okay, that’s not good. I bet­ter. Do some­thing and, you know, now I’m down to like 91.

[01:25:39] Tony Kynas­ton: yeah, right. Well good for you.

[01:25:42] Cameron Reil­ly: yeah, but the fast­ing’s fun and it’s kind of gets addic­tive though.

[01:25:46] Cameron Reil­ly: I was talk­ing to Chris­sy about it this morn­ing. She was, she was, um, in her twen­ties, uh, up until when I met her, she had, Body issues. Sor­ry, I’ve been drink­ing Yer­ba Mate. I’ve got some tea stuck in my throat. And she was like, uh, bulim­ic, a lit­tle bit bulim­ic. Um, had all sorts of body, you know, image issues.

[01:26:13] Cameron Reil­ly: Because I think her dad told her she was fat when she was a kid. Um,

[01:26:17] Tony Kynas­ton: gosh.

[01:26:18] Cameron Reil­ly: and so we were just talk­ing about it and how addic­tive it is. Like, when my fast­ing win­dow was up last night at 24 hours, I was talk­ing to her going, Part of me wants to push it through to tomor­row morn­ing, just make it 36. Like I’ve done it this far, I might as well just keep going.

[01:26:35] Cameron Reil­ly: And she’s like, yeah, it’s a slip­pery slope. You know, when you start to get to that point, she said, you had a plan, stick to the plan. Because it does, it becomes addic­tive, right? You, you start going, all right, well, I’ve gone this far. I might as well just go anoth­er 24 hours. Like, what’s the big deal? I just might as well push it, push it out.

[01:26:55] Cameron Reil­ly: Like I’m deal­ing with it fine. I’m used to the hunger, you know. Any­way,

[01:27:01] Tony Kynas­ton: Oh,

[01:27:01] Cameron Reil­ly: if you have a cer­tain kind of addic­tive per­son­al­i­ty, as I do, it’s very easy with this kind of stuff to get a lit­tle bit sort of obses­sive, com­pul­sive with it, I think.

[01:27:13] Tony Kynas­ton: yeah, right.

[01:27:15] Cameron Reil­ly: Oh, and my guru

[01:27:15] Tony Kynas­ton: I haven’t.

[01:27:16] Cameron Reil­ly: last

[01:27:17] Tony Kynas­ton: Yeah, I heard that. I saw your post on that.

[01:27:21] Cameron Reil­ly: Sailor Bob saved my life 35 odd years ago. Um, and, uh, he final­ly passed away in his late nineties, I think. So there you go. So that was, uh,

[01:27:36] Tony Kynas­ton: You’ve spo­ken to me before about Sailor Bob and I went to his web­site and bought his book and stuff, but it’s all a bit Shostakovich to me. I going down the East­ern, East­ern reli­gion path­way and I thought, nah, that’s not me.

[01:27:51] Cameron Reil­ly: Well, you read the Three Illu­sions too, right? And

[01:27:53] Tony Kynas­ton: yeah, which

[01:27:54] Cameron Reil­ly: to you even­tu­al­ly?

[01:27:56] Tony Kynas­ton: oh no, absolute­ly. I com­plete­ly get all that kind of stuff.

[01:27:59] Tony Kynas­ton: I com­plete­ly get. Ein­stein when he talks about, you know, the time and its rela­tion­ship to how we see it and all that. So I com­plete­ly get the sci­ence of it and no free will and all that kind of stuff. And you prob­a­bly helped me to under­stand that. But, um, yeah, when I start­ed talk­ing about the East­ern Reli­gion side of things in Sailor Bob’s books, it, um, I lost it. I

[01:28:24] Cameron Reil­ly: Well, you know, my, the Three Illu­sions, I guess, was my attempt to take the East­ern reli­gion stuff and put it in a sci­en­tif­ic, sci­en­tif­ic terms, right? Because I, I did­n’t relate eas­i­ly to the Indi­an ver­sion of it either. Whilst I, whilst I read it.

[01:28:45] Cameron Reil­ly: It helped me and it took me down that direc­tion by doing inquiries into the nature of self and the nature of free will and the nature of time. The ter­mi­nol­o­gy that you inher­it from une­d­u­cat­ed mys­tics from India did­n’t work for me very well, uh, for many, many years. Peo­ple would say, well, every­thing’s made of ener­gy, and I’d go, well, Hold on.

[01:29:16] Cameron Reil­ly: Ener­gy is a mea­sure­ment to mea­sure the amount of work that can be done in a sys­tem. So you’re say­ing every­thing’s made of a mea­sure­ment of work? What does that mean, real­ly? So, uh, they, they tend to use Well, every­thing is con­scious­ness, you know, con­scious­ness is a prop­er­ty of the brain in my mind, so what are we talk­ing about here?

[01:29:41] Cameron Reil­ly: So there’s, the ter­mi­nol­o­gy as they’re used to using it does­n’t fit well in my brain, I had to pass it into lan­guage that I could work with, you know, which was, took me years. Any­way.

[01:29:59] Tony Kynas­ton: Well, I’m glad you did, because that’s much more acces­si­ble for me, any­way, read­ing the Three Illu­sions than read­ing Sailor Bob’s book.

[01:30:07] Cameron Reil­ly: Yeah, well, I’m glad. But, you know, Sailor Bob, um, what an amaz­ing life. Like, for peo­ple who don’t know, I met this guy when I was 19. I was very messed up, psy­cho­log­i­cal­ly, emo­tion­al­ly. I’d been sober for about a year or two, but, um, still just Real­ly in a bad place. Met Bob and um, he basi­cal­ly gave me one thing to think about.

[01:30:31] Cameron Reil­ly: He said, you know, ask your­self the ques­tion, what am I? Just go and sit with that. Come back to me when you have some­thing. And about a year lat­er, I did­n’t need to go back to him. I mean, I would go to his thing every week and he’d go, how are you going with that? I’m like, I’m still think­ing about it. He goes, all just keep think­ing about it.

[01:30:49] Cameron Reil­ly: And then after about a year, I. Kind of had a break­through and real­iz­ing that I could­n’t find any­thing that I could say was me, so I decid­ed that I did­n’t exist. Um, but

[01:31:00] Tony Kynas­ton: And yet you do, I can see

[01:31:03] Cameron Reil­ly: what you can see and what exists are two dif­fer­ent things. You can’t see me actu­al­ly, you know, pho­tons are being, uh, bounc­ing off the, uh, atoms in my body and then those pho­tons are, you know, hit­ting a cam­era and the cam­er­a’s trans­lat­ing that into a sig­nal and that sig­nal is being trans­mit­ted to your cam­era.

[01:31:24] Cameron Reil­ly: lap­top screen which is send­ing light as pho­tons which hits your eye and is con­vert­ed into an elec­tri­cal sig­nal and the elec­tri­cal sig­nal is going through to your optic cen­ter of your brain which is cre­at­ing an image for you but you’re not actu­al­ly see­ing me you’re see­ing some­thing in your brain that’s a rep­re­sen­ta­tion maybe of what is hap­pen­ing here but i don’t know i could be

[01:31:45] Tony Kynas­ton: Real­ly? If Sailor Bob asked me the ques­tion, I’d say, I’m a bag of bones, and so are you. That’s my answer to that ques­tion. What’s me? Meat­bag. It is! Oh, okay, you’re going to play that game.

[01:32:01] Cameron Reil­ly: right but which which bits of the meat­bag are you? Well the, the, the, the, the, The

[01:32:11] Tony Kynas­ton: this bit, the total.

[01:32:13] Cameron Reil­ly: meat, the meat, the atoms that made up your body, uh, 10 years ago are not the atoms that make up your body today. So are you the atoms from 10 years ago, which are now some­thing else, or are you the atoms from today? And when did you become the atoms

[01:32:28] Tony Kynas­ton: on both. On, on, on the meat bag Made of atoms, which may not be the same as they were 10 years ago.

[01:32:35] Cameron Reil­ly: so the atoms that were your meat bag 10 years ago aren’t you any­more?

[01:32:39] Cameron Reil­ly: There’s some­thing else now.

[01:32:41] Tony Kynas­ton: Yeah. They’ve grown off to do some­thing else in the uni­verse

[01:32:43] Cameron Reil­ly: Okay, so you, you are a tem­po­rary con­fig­u­ra­tion of atoms, which are being replaced con­stant­ly. Every, every sec­ond of the day, new atoms are com­ing in, old atoms are going out. Just a tem­po­rary, any par­tic­u­lar atoms? What if you lost an arm? Would you still be you?

[01:33:04] Tony Kynas­ton: Yeah, of course I would. I’d be arm­less, mate.

[01:33:08] Cameron Reil­ly: you lost two arms and two legs, would you still be you?

[01:33:11] Tony Kynas­ton: Just a flesh wound, yeah. Haha.

[01:33:16] Cameron Reil­ly: So you’re not those, you’re not all the atoms in the meat bag, you’re just some of the atoms in the meat bag.

[01:33:22] Tony Kynas­ton: Yeah, I guess so.

[01:33:24] Cameron Reil­ly: Which

[01:33:24] Tony Kynas­ton: Well, right, now I’m all the Right, right now I’m all the atoms in the meat­bag though. I haven’t lost enough.

[01:33:30] Cameron Reil­ly: And, and how do you know where you stops and the chair starts?

[01:33:35] Tony Kynas­ton: Ah, cause I can get up and walk away from the chair.

[01:33:39] Cameron Reil­ly: Right, but when you Sit­ting on the chair, there’s no hard delin­eation between the atoms of your body and the atoms of the chair or the atoms of the air around you. ’cause atoms don’t have a hard shell. We know that they’re most­ly emp­ty and they have a, a cloud, a prob­a­bil­i­ty cloud of elec­trons orbit­ing the nucle­us.

[01:34:00] Cameron Reil­ly: So they

[01:34:01] Tony Kynas­ton: But I have a nucle­us.

[01:34:04] Cameron Reil­ly: have a nucle­us. Yeah. Which. Does­n’t

[01:34:07] Tony Kynas­ton: The nucle­us in my butt is dif­fer­ent to the nucle­us in the chair,

[01:34:11] Cameron Reil­ly: real­ly exist until it’s observed, observed.

[01:34:16] Tony Kynas­ton: Boo? Yep.

[01:34:17] Cameron Reil­ly: Yeah, so accord­ing to wave par­ti­cle dual­i­ty, those things spend most of their times as just a prob­a­bil­i­ty field.

[01:34:23] Tony Kynas­ton: Yeah.

[01:34:24] Cameron Reil­ly: Which is where it comes down to me, like, iden­ti­ty, the nature of iden­ti­ty, when you scratch the sur­face, becomes mun­gi­ble.

[01:34:33] Cameron Reil­ly: It’s very hard to, uh, put a hard cir­cle around, this is what I am at any giv­en point in time. Any­way, back to Bob, he spent the last 50 years of his life just sit­ting down in rooms and talk­ing to peo­ple about this stuff, nev­er charged a dime for it, just gave it away as it was giv­en to him by a guy in India, Nis­ar­ga­dat­ta, when he was there in the ear­ly 70s.

[01:35:01] Cameron Reil­ly: Um, yeah, just spent

[01:35:04] Tony Kynas­ton: I did buy his book though.

[01:35:06] Cameron Reil­ly: he wrote some books, yeah, I don’t think he made a lot of mon­ey out of sell­ing books.

[01:35:11] Tony Kynas­ton: No. I could­n’t imag­ine.

[01:35:13] Cameron Reil­ly: He ran a health food store when I first met him. He actu­al­ly, you know, he and his wife at the time owned a health food store in Hawthorne, Glen­fer­ry Road, Hawthorne, which they sold and did okay, I think, out of that for their retire­ment.

[01:35:28] Cameron Reil­ly: And they had a nice prop­er­ty, uh, up in the Dan­de­nongs, which they sold to at some point, but, um, so he lived on that. But, uh, yeah, any­way. It was a

[01:35:37] Tony Kynas­ton: Well, I’m sor­ry. I’m sor­ry for your loss. It, um, it was a big part of

[01:35:41] Cameron Reil­ly: no loss. He’s still in my mind, he’s still part of my mem­o­ries, and I was just filled with, like Chris­sy was like, are you sad? I’m like, no, I’m just filled with love and grat­i­tude for what he gave me and what he gave many, many, many peo­ple over the course of his life.

[01:35:59] Cameron Reil­ly: Just love and grat­i­tude, you know, it was a life well lived in my book.

[01:36:05] Tony Kynas­ton: Very good.

[01:36:07] Cameron Reil­ly: Just like Elon Musk. Uh, Baphlech.

[01:36:11] Tony Kynas­ton: there.

[01:36:12] Cameron Reil­ly: How’s Baphlech going, Tony?

[01:36:14] Tony Kynas­ton: Uh, pret­ty good. He’s going to race on Fri­day or the Atoms, which will con­sti­tute Baf­fleck will race on Fri­day. Um, and so we’ll charge the changes. I think we’ll race on Thurs­day. I just picked up a notice about that one too. Um, Baf­fleck, the. The train­er sends me about three or four dif­fer­ent options for when it’ll run.

[01:36:36] Tony Kynas­ton: So I don’t nor­mal­ly find out until the day before, but yeah, it’ll be end of the week for Baf­fleck. And if there’s any changes, I’m a bit more cer­tain I will prob­a­bly run at Pak­en­ham in the evening at about quar­ter past eight on Thurs­day.

[01:36:50] Cameron Reil­ly: Did you see the oth­er BAFLEX, Super Bowl, Dunkin Donuts com­mer­cial?

[01:36:55] Tony Kynas­ton: I did­n’t, no. Good.

[01:36:59] Cameron Reil­ly: It’s mild­ly fun­ny, uh, he did one last year when he was mar­ried to J Lo, and now he did one, now he’s not mar­ried to J Lo, with his broth­er, and Jere­my Strong is in it, uh, he’s the good, it’s a very long video, but they’re basi­cal­ly doing an ad for Dunkin Donuts, and Jere­my Strong is try­ing to get in char­ac­ter as, uh, uh, some guy from Amer­i­can, um, Rev­o­lu­tion, can’t remem­ber his name.

[01:37:31] Cameron Reil­ly: But, uh, it makes fun of, it makes fun of Baf­fleck. Affleck­’s mak­ing fun of him­self and all of his issues. And they’re mak­ing fun of Jere­my Strong’s rep­u­ta­tion for being a seri­ous method actor as to, you know, get into char­ac­ter and stay in char­ac­ter and they take the piss out of him and, uh, he takes the piss out of him­self in it.

[01:37:53] Cameron Reil­ly: So it’s fun­ny for that. But I just, I was watch­ing it going,

[01:37:55] Tony Kynas­ton: it up.

[01:37:56] Cameron Reil­ly: Tony’s got a horse called Baf­fleck.

[01:37:58] Tony Kynas­ton: Yeah. Out of a May­er called JLO.

[01:38:03] Cameron Reil­ly: Yeah.

[01:38:05] Tony Kynas­ton: Yeah.

[01:38:06] Cameron Reil­ly: All right. Well, I guess

[01:38:07] Tony Kynas­ton: all I got.

[01:38:09] Cameron Reil­ly: Thank you, TK. Enjoy Wag­ga. Safe trip back.

[01:38:12] Tony Kynas­ton: you. Yep.

[01:38:13] Cameron Reil­ly: Talk to you next week. QAV a good week,

[01:38:15] Tony Kynas­ton: a walk now with Rod­dy.

[01:38:17] Cameron Reil­ly: Love­ly.

[01:38:18] Tony Kynas­ton: Tell Tay­lor we’ll be, he’ll think we’ll be hold­ing hands and skip­ping into the sun­set, but we’re just going for a bit of exer­cise.

[01:38:24] Cameron Reil­ly: No judge­ment.

[01:38:26] Tony Kynas­ton: No, good. We’re not going to merge our items for­mal­ly. Have a good week.