QAV 811 — Thinking About It

QAV 811 Club Audio

Cameron: [00:00:00] Wel­come back to QAV Tony, episode eight, 11, one off nine 11, uh, which is kind of what the mar­ket’s been like. It’s been a bit of a nine 11, uh, the mar­ket in the last week, but recov­ered last day or two, for some rea­son, I don’t ful­ly under­stand.

Mar­ket’s gone. Ah, it’s all okay now. Sure, sure it’s gone away. I know some­thing about inter­est rate cuts in the U. S. No tar­iff relief, but, uh, any­way. How’ve you been? How’s your week been, Tony?

TK: Yeah, real­ly good. And the mar­ket’s up today, which is good. But who knows why? You see, I’ve seen

Cameron: Yeah. Yeah. Ha ha ha ha ha ha ha ha ha!

TK: so sure about that. And if they did­n’t

Cameron: Ohh­h­h­hh.

TK: things, that’s not going to stop.[00:01:00]

Cameron: It’s all dif­fer­ent. It’s all bet­ter this week. It’s all Of

TK: last, uh, on the week­end say­ing that Trump, uh, declared him­self the win­ner of his annu­al tour­na­ment at his golf club, which I thought was hilar­i­ous.

Cameron: course he did. Well, let’s start off with the port­fo­lio update, because I did my newslet­ter this morn­ing. Dum­my port­fo­lio was up 3 per­cent in the last week ver­sus the bench­mark, which was down 0. 18%. We’re still 12 per­cent per annum up for the Finan­cial year ver­sus 5 per­cent for the bench­mark. So vis a vis the bench­mark, we’re doing quite well this year so far.

Um, but it’s par­tic­u­lar­ly grown like in the last, with this recent down­turn, you know, I think I even said on the show last week, or maybe it was on the US show that we did, that when down­turns hap­pen, we’re not immune from them. But this lat­est down­turn, we did [00:02:00] drop a bit, but we’ve recov­ered. Uh, far bet­ter for some rea­son might be some of the stocks that we’ve had that have had good weeks I don’t know

TK: Well,

Cameron: the u.

3. Port­fo­lio also recov­ered this week. It’s up 38 For the finan­cial year ver­sus wait for it the s& p 500 up 3. 6 Per­cent for the finan­cial year, so we’re doing 10, 10, we’re doing 10 times bet­ter than the S& P 500 over there with no mag 7 stocks,

TK: Yeah.

Cameron: did have to sell a stock this week and replaced it this morn­ing.

I did a new U. S. buy list for those peo­ple that have been ask­ing me to do a U. S. buy list. There is one up on our web­site. Well, yes­ter­day by the time you hear this, but on Tues­day our time. Um, weird lit­tle com­pa­ny I bought too, but I won’t bore peo­ple with it. We’ll save it for the next US show. Any­way, 10 times the S& P 500 this finan­cial year.

It’s just bonkers. Absolute­ly [00:03:00] bonkers. But, uh, there’s been some win­ners and losers this week, which we can get into. What do you want to start off with, Tony, in your list of talk­ing points?

TK: well, I think one of the win­ners slash losers, prob­a­bly more of a los­er this week has been Ramelius Resources. And I know that’s

Cameron: Hmm.

TK: from one of our lis­ten­ers, so I may as well cov­er it all off now. Um, I’m scratch­ing my head at this one. Uh,

Cameron: Hmm.

TK: when I did my results roundup on Ramelius, I thought it was a good result and I’ll read from Stock Doc­tor’s Uh, okay, so this is from the 5th of March, Stock Doc­tor said that they’re ini­ti­at­ing cov­er­age of the gold pro­duc­er, Ramelius Resources, as a star growth stock fol­low­ing analy­sis of its half year result and oper­a­tional risks. we did the pulled pork on Ramelius about 12 months ago. Here’s the piece. can go and lis­ten to that.

Um, I was [00:04:00] think­ing about doing it again, but I’ll cov­er off most of the recent issues, um, today any­way. Uh, their big oper­a­tion is, uh, in WA, uh, Mount Mag­net and Edna May are two of their mines, among oth­ers. Uh, they’re also, they’ve also been on the acqui­si­tion trail over the year in Stock Doc­tor Report.

They bought Spec­trum Met­als and Apol­lo Con­sol­i­dat­ed in recent years. Uh, their per­for­mance was Good for the first half of 25 rev­enue surg­ing 46 per­cent dri­ven by high­er pro­duc­tion and ris­ing gold prices net prof­it after tax or 313 per­cent 170 mil­lion reflect­ing a robust 61 per­cent cash oper­at­ing mar­gin. The com­pa­ny achieved an aver­age gold sale price of 3, 541 per ounce, that’s Aus­tralian dol­lars, well above its all in sus­tain­ing cost, AISC, of

Cameron: Uh, [00:05:00] Um, Uh, Um, Uh, Uh,

TK: of the strong gold prices. It also holds a strate­gic invest­ment in Spar­tan resources, a grow­ing gold explor­er. So tick, tick, tick, tick, tick. The only ques­tion I had about the results was 16. 99. For, uh, it’s costs, AISC costs is get­ting up towards the high end of the range. But when the gold prices are more than, we’re just about dou­ble that, it’s, it’s still a healthy mar­gin. So roll for­ward, um, a week and Ramelius came out with its plan or its long term plan for its flag­ship Mount Mag­net mine. Stock Doc­tor again, put out an update because, um. That, uh, that, uh, Remil­i­a’s, uh, announce­ment was, uh, was not good. [00:06:00] Uh, Remil­i­a’s largest, lat­est plan for its flag­ship Mount Mag­net mine was weak­er than expect­ed with annu­al gold pro­duc­tion now pro­ject­ed at 140, 000 ounces, sig­nif­i­cant­ly low­er than the pre­vi­ous esti­mates of 173, 000 to 182, 000 ounces. How­ev­er, the mine’s lifes­pan has­n’t been extend­ed by 10 The com­pa­ny is invest­ing heav­i­ly in expan­sion, with total cap­i­tal costs near­ly dou­bling to 823 mil­lion, well above mar­ket expec­ta­tions. a 95 mil­lion mill expan­sion will increase pro­cess­ing capac­i­ty, but long term through­put is expect­ed to decline due to hard­er oil. full capac­i­ty would require fur­ther cost­ly upgrades. To man­age finan­cial risks, Remelius has put Price pro­tec­tion mea­sures in place, secur­ing a hedge for 22, 500 ounces of gold in 2027. This helps off­set the impact of ris­ing costs and low­er ear­ly stage pro­duc­tion. antic­i­pate neg­a­tive earn­ings revi­sions to flow through [00:07:00]following this update and place the stock under review as we assess changes to its out­look. So that’s a week after the results announce­ments come out. It’s pos­si­ble they took the fol­low­ing week to final­ize their num­bers on their long term plan for Mount Mag­net. It’s also pos­si­ble they knew well what was going to hap­pen and could have announced the Mount Mag­net review at the same time as their annu­al results.

But any­way, a week after Stock Doc­tor praised them and made them a star income, sor­ry, a star growth stock, they put them under review. The share price tanked, I think, at the time of the announce­ment, it was around 2. 70. It dropped back to around 2. 20. uh, then yes­ter­day we get the news that, um, Ramelius is, uh, has made an offer to acquire Spar­tan Resources, the com­pa­ny he owns 19 per­cent of now. So that sum­ma­ry is Ramelius Resources plans to acquire [00:08:00] Spar­tan Resources in a 2. 4 bil­lion deal to cre­ate a larg­er, more attrac­tive gold pro­duc­er. Spar­tan share­hold­ers will receive 0. 2 1. 25 in cash and 0. 6957 Ramelius shares per Spar­tan share, valu­ing Spar­tan at 1. 78 per share and 11 per­cent pre­mi­um. The merg­er comes as gold prices hit record highs above 3, 000 per ounce. The com­bined com­pa­ny will be worth 3, 000. 4. 2 bil­lion, tar­get­ing half a mil­lion ounces of annu­al, sor­ry, half a mil­lion ounces of annu­al gold pro­duc­tion by FY2030. Spar­tan, hang on to say Spar­tan’s board sup­ports the deal. Ramelius aims to boost Mount Mag­net’s out­put and mar­gins by acquir­ing Spar­tan’s high grade Dal­go­ran­ga gold project while also achiev­ing cost sav­ings by elim­i­nat­ing dupli­cate expens­es.

So in oth­er words, the time­line is release good results, their price goes up. Release bad fore­cast for Mount Mag­net mine pro­duc­tion. Share price goes [00:09:00] down. plans to acquire Spar­tan resources to replace Mount Mag­net loss pro­duc­tion. has gone down two cents. Um, prob­a­bly because of the, uh, cost that, uh, will incur in doing the acqui­si­tion.

But

Cameron: Actu­al­ly,

TK: three

Cameron: can I just,

TK: a fair bit

Cameron: can I,

TK: plan­ning and they should have all been announced fair­ly close to each oth­er, clos­er than with­in three weeks of each oth­er.

Cameron: by just look­ing at, I’ve got the chart open. It was actu­al­ly at 2. 80 on the 10th of March. It dropped down to 2. 09. On the, uh, 12th of March. Uh, so that’s a big drop. It’s actu­al­ly up to 2. 20 today. So it’s, uh, recov­ered a bit since then. But that was a mas­sive drop.

TK: Yeah, so this is either a lot of mov­ing parts hap­pen­ing all at once and the [00:10:00] board could­n’t get itself orga­nized to do any­thing quick­er than what it did, or it’s a, it’s a breach of dis­clo­sure, con­tin­u­ous dis­clo­sure rules. And it would be a hard one to prove giv­en that every­thing’s hap­pened with­in a cou­ple of weeks.

The board would say that need­ed the time to pre­pare to announce things prop­er­ly, but it just. It just seems hand fist­ed at best, and a prob­lem with dis­clo­sure at worst. I’ve been think­ing, you know, that I’m more inclined these days to say we can’t rely on ASIC or the ASX to enforce con­tin­u­ous dis­clo­sures.

So maybe we need to start red flag­ging these com­pa­nies that aren’t giv­ing us good dis­clo­sure and just refuse to deal with them. And so, uh, it’s a hard one. I mean the, you know, if only we, if only we had a reg­u­la­tor who could tell us whether this was a breach of con­tin­u­ous dis­clo­sure or not, it’d make it eas­i­er.

But, um, yeah, I, I mean, we, we saw. Results that were a sur­prise on the down­side from 4DISKU, from [00:11:00] Bendi­go Bank, from, Ramelius’s results were good, but then their for Mount Mag­net was bad, and then they patched that with the announce­ment of the acqui­si­tion of Spar­tan. So, yeah, it’s a hard one. I’m think­ing about slap­ping a red flag on this com­pa­ny to improve its dis­clo­sure. Or until they improve their dis­clo­sure.

Cameron: Well, a cou­ple of things on that. Num­ber one, I had a chat with chair­man Mab this week and I know you have been chat­ting with him as well about this chair­man of the Aus­tralian share­hold­ers asso­ci­a­tion for new lis­ten­ers. Um, he’s com­ing on the show next week to talk about this. He’s been doing his inves­ti­ga­tions as.

Part of his role at the ASA is going to come in and share what they’ve dis­cov­ered, what their con­clu­sion is. Sec­ond­ly, I want to just, uh, dis­close that I own two parcels of RMS in my super fund, uh, and a cou­ple in the light port­fo­lios as well. One of the, one par­cel of my super fund I bought back in March of 23, I’ve held it for.

Two [00:12:00] years. It’s up 97%, but the sec­ond par­cel I bought Feb­ru­ary 25 and it’s down 12%. The light parcels are down 9 per­cent and 17 per­cent respec­tive­ly. Um, so, and the third ques­tion, if you’re talk­ing about red flag­ging this, would that be a red flag, don’t buy it or a red flag, sell it. What kind of lev­el red flag?

Are we talk­ing

TK: Ha

Cameron: red, red flag? Do we have a dou­ble, dou­ble red flag sta­tus? Because we, sud­den CEO or CFO res­ig­na­tion is a imme­di­ate sell

TK: Mmm

Cameron: red flag. A qual­i­fied audit is a don’t buy red flag. Um, is qual­i­fied audit a sell red flag? I don’t know if we’ve ever had that. It

TK: Yeah, we had, yeah, it was a cell. I think Apol­lo Tourism and

Cameron: is a cell.

TK: a, a qual­i­fied audit [00:13:00] when it was in one of our port­fo­lios.

Cameron: That was a long time ago. Uh, as long term lis­ten­ers will know,

TK: Ha

Cameron: my neme­sis, Apol­lo Tourism. Uh, so yeah, what do you think about non dis­clo­sure?

TK: it’s a good ques­tion, isn’t it, um, It’d be a red flag don’t buy for me, I think, rather than a sell, um, because the sen­ti­men­t’s still hold­ing up. And look, I’m not even sure about red flag­ging Remelius, because like I said, these things have hap­pened sequen­tial­ly, and the board could per­haps argue that, you know, you can’t just do every­thing at once, it would, um, there was a bit of plan­ning and prepa­ra­tion required to get the infor­ma­tion out

Cameron: the acqui­si­tion of Spar­tan, the acqui­si­tion of Spar­tan I can buy, but, you know, the per­for­mance of the Mount Mag­net mine, sure­ly, they knew that when the results came out. They should have known that. That’s part of,

TK: Yep.

Cameron: Prepar­ing your results, right? As if you’re a min­ing com­pa­ny is [00:14:00] get­ting your mind man­agers to tell you what they think the out­look is for the next year, two years, five years.

And you, that’s the whole point of a report is to report on how your busi­ness is going, where you can’t put out a report and say, well, we could­n’t report on how the busi­ness is going when we put out a report cause we could­n’t get our ducks lined up in time. Like that’s your job. You have one job.

TK: hmm.

Cameron: Report on how your busi­ness is going.

TK: I’m not gonna dis­agree with you. Um, I also, I’m kind of reluc­tant to put a red flag on Ramelius. As you said, it’s been on the buy list for a long time. Um, on and off any­way. Um, I’ve owned them in the past. I’ve been hap­py to own them in the past. They’ve done well for me in the past. the gold price is fly­ing. Um, I can’t see much that’s going to bring the gold price down giv­en vac­il­la­tions that are going on in the U. S. and the, the height­ened volatil­i­ty in the stock mar­ket. So, [00:15:00] yeah, I think you’re right. I think it’s not a red flag don’t buy. It’s a, but it’s prob­a­bly a, sor­ry, a red flag don’t, it’s not a red flag sell, but I think it’s a red flag don’t buy. So,

Cameron: uh, we’re going to add a col­umn to the check­list now.

TK: I don’t know, I haven’t real­ly thought through this at all. I just got pret­ty upset with the announce­ment yes­ter­day. It almost, to me it smacked like they were, they were patch­ing up their mis­takes from last week when they announced the Mount Mag­net mine was­n’t going to do as well as first thought was going to cost more. So they’ve gone, uh, what can we do about that? Oh, we own 19 per­cent of the next, next door mine. Let’s launch a takeover to the gap. Um,

Cameron: So is it con­tin­u­ous dis­clo­sure red? Is it, is it con­tin­u­ous dis­clo­sure red flag dif­fer­ent to a con­fes­sion sea­son fail­ure flag, or are they the same flag

TK: I don’t know. Why don’t we just

Cameron: in the­o­ry?

TK: it for anoth­er week or some­thing, but, um, they’re all good

Cameron: Well, I’ve got a ques­tion lat­er on [00:16:00] about the last time you said you need­ed to think about it, which was, do we real­ly need the orig­i­nal byline if we have the sec­ond byline? I think it was like 18 months ago, the last time you said, I just need to think about it a bit. So, we’ll get to that lat­er on.

TK: Oh, are we?

Cameron: I’m not so sure about this.

I need to think about it a bit thing.

TK: Well, you’re ask­ing good ques­tions and I don’t have an answer for them, so all I can do is think about it. All I’ve got in my notes is I’m

Cameron: Okay,

TK: a red flag out there for con­tin­u­ous dis­clo­sure.

Cameron: yeah, I think it’s like, I think we’ve been, you know, we’ve seen a num­ber, it’s too many of these things recent­ly. This is real­ly a dis­turb­ing trend in all of my years of invest­ing expe­ri­ence. Tony, five of them, what­ev­er it is,

I have, uh, I’m shocked that there is gam­bling going on in this estab­lish­ment. It just seems, I, I, [00:17:00] I, there’s some­thing in the water.

TK: yeah,

Cameron: some word has gone around. Ah, we, it’s, yeah, we don’t need to do that any­more.

TK: I think you’re right. I think because that, you know, in my 25 years plus of invest­ing, I don’t think I’ve ever heard of any­one pinged for breach­ing con­tin­u­ous dis­clo­sure. There’s cer­tain­ly been some, uh, class actions which have uncov­ered it. And that’s, that’s a dis­grace. It goes on with our share mar­ket.

It’s a reg­u­lat­ed mar­ket, but it takes actions by lawyers to point out of con­tin­u­ous dis­clo­sure. Not that there’s been a whole heap of those, but there’s cer­tain­ly been some. Um, but not a lot. And I think you’re right. Direc­tors are just say­ing whether they’re over­worked, whether there’s too much red tape, they’re just going, uh, con­tin­u­ous dis­clo­sure, for­get about it.

No one’s ever been pinged. And they’re not doing it.

Cameron: Mm, mm, mm. Or, you know, they get a slap on the wrist or a tsk tsk and a fin­ger waved at them and,

TK: [00:18:00] And I’m

Cameron: you know.

TK: not sure that if we put a red flag on a com­pa­ny for a breach of con­tin­u­ous dis­clo­sure that that solves the prob­lem because they’re the com­pa­ny that’s prob­a­bly learnt their les­son and it’s going to be some­body else who does it next time. So, um, that’s why I think I’ve

Cameron: How have they learnt their les­son?

TK: Oh, well, the share price has tanked after they sur­prised the mar­ket. I mean, that’s, that’s one thing that will ingrained in the mem­o­ry of boards is, hey, CEO, last time you did this, price dropped from 2. 80 to 2. Don’t do it again.

Cameron: So, which makes me ask the ques­tion, why not dis­close dur­ing con­fes­sion sea­son, what­ev­er it is. I mean, if you don’t dis­close because you’re wor­ried the share price is going to take a hit, then you final­ly come out with it and the share price takes a hit.

TK: It’s

Cameron: It’s not like you’re the gov­ern­ment.

Releas­ing bad eco­nom­ic fig­ures at five o’clock on a Fri­day and you hope you’re going to get through the week­end media cycle and every­one Will have for­got­ten about it. You hope Don­ald Trump does some­thing over the week­end to take every­one’s [00:19:00] mind off it on by Mon­day I mean the the if you’re a decent sized com­pa­ny Ana­lysts are going to see this, the mar­ket’s going to react to it.

You’re not going to get away with it unless you’re a very small com­pa­ny that does­n’t have a lot of cov­er­age. So, uh, I don’t under­stand what the think­ing of the incen­tive behind not dis­clos­ing would be. I can’t make the algo­rithm work here, but

TK: I think it’s, it’s at best some kind of bad games­man­ship. If we put out good results first, then we announce bad news, then we announce an acqui­si­tion to replace the bad news. Maybe they think they’ll get away with it. Would be, would be one, one

Cameron: that’s this par­tic­u­lar instance I’m talk­ing about,

TK: that’s the case in this case.

Cameron: but I’m talk­ing about all of the com­pa­nies we saw

TK: well they’re

Cameron: sort of just skip con­fes­sion sea­son.

TK: They’re scared. Either they think they’re going to get

Cameron: Of what?

TK: scared that when they

Cameron: How did,

TK: the bad [00:20:00] results, they’re going to take a hit. But it’s, it’s like, it’s like Buf­fett says, you know, all he wants from his man­agers are if you have good news, write me a let­ter.

If you have bad news, pick up the phone. got to get in front of bad news. Just get it out there, you know, um, con­fess as Buf­fett does in his first line of every Annu­al report. I stuffed up this year, and here’s how. Just get it out there.

Cameron: yeah,

TK: It’s because

Cameron: yeah, you got­ta love that.

TK: sales peo­ple. They don’t, they don’t want to announce bad news.

Cameron: But again, as you said, like it comes out even­tu­al­ly,

TK: Yep.

Cameron: you know, the, the share price takes a hit. So I, I, I just don’t, I mean, like, I don’t know. I, I’ve, I’ve nev­er been a CEO of a pub­licly list­ed com­pa­ny, so I don’t know what’s involved. But it just seems like it’s a no, there’s, there’s no upside for them that I can see apart from kick­ing the can down the road by a cou­ple of weeks or a cou­ple of months, you know.

TK: Yeah, and look, I think [00:21:00] Remil­i­a’s kind of showed itself on the foot. No one was ask­ing for a 10 year update on Mount Mag­net Mine Expan­sion. Um, it’s a bit like, you don’t hold a roy­al com­mis­sion until you know what the answer’s gonna be. It’s like, you know, why did they even announce a 10 year update to Mount Mag­net if it was gonna be bad news?

Like, just Don’t, don’t fin­ish the report, put it in the bot­tom draw­er and bring it out when the news gets bet­ter. Or when you’ve got an update that will be thought of kind­ly by the mar­ket.

Cameron: So now you’re say­ing they should­n’t have dis­closed that

TK: They had to once they knew. All right.

Cameron: Yes.

TK: But that’s,

Cameron: Yeah. Once they knew

TK: idi­ot­ic. Like, like, they spent all that time putting it togeth­er, which means they have to dis­close

Cameron: Yeah,

TK: At some stage dur­ing the

Cameron: yeah,

TK: would have said halfway through, uh, check this spread­sheet. Not look­ing good, boss. And the boss should have

Cameron: yeah.

TK: go and do some more num­bers and I’ll think

Cameron: Sort of gone. La, la, la, la, la, la, la, la, la, la, la, la, la, la.

TK: Let

Cameron: Yeah, I’m think­ing about it. Yeah. . [00:22:00] Yeah. All right. Mov­ing right along. What else you got?

TK: Okay. Well, I had a come across a sto­ry which, um, again, I’m think­ing about, is amus­ing. Oh, I am mus­ing about this. And this was in the Fin Review. Uh, it was titled Small Caps Tram­pled in the Rush to ETS. it was an arti­cle which was slant­ed towards say­ing that there were a lot of com­pa­nies out­side the ASX 300, which were being starved of cap­i­tal. So, um, the kind of, as a whole. back­ground part to the arti­cle which talks about how com­pa­nies in Aus­tralia tend to list ear­li­er than com­pa­nies over­seas because there’s not as much depth of pri­vate equi­ty fund­ing in the ear­ly stages in Aus­tralia and so they list. List­ing is expen­sive and it comes with all the red tape of list­ing. Tra­di­tion­al­ly, that has been the road to rais­ing mon­ey as they need it to grow. But now, uh, it’s, [00:23:00] that’s not hap­pen­ing as, as much or as well because, um, and I’ll, I’ll quote from the arti­cle, uh, where are we now? I’ll look back in 2022 or 2023. gov­ern­ment man­dat­ed, let me just try and find it. Um, here we are, Big Super start­ed to pull, put small and micro caps stocks in the dump­ster in 2022 when the fed­er­al gov­ern­men­t’s Your Future Your Super leg­is­la­tion made the S& P ASX 300 the bench­mark for MySu­per’s Aus­tralian equi­ty mar­ket returns. The gov­ern­ment was warned at the time that the MySu­per bench­marks could encour­age short term deci­sion mak­ing, dis­cour­age invest­ments that were not well rep­re­sent­ed by the bench­marks and reduce choice diver­si­fi­ca­tion. active man­age­ment, and inno­va­tion. That’s pre­cise­ly what has hap­pened. super embraced index hug­ging to avoid being, avoid being pinged by the reg­u­la­tor for poor, for poor, poor per­for­mance of their my super prod­ucts. This pro­found struc­tur­al [00:24:00] change con­tributed to the clo­sure of many small and micro cap funds,

Cameron: Um,

TK: the A SX 300, and as we know, um, fund man­agers tend to find it hard to beat the index, and so they tend to, to cling to the index and only make some slight move­ments away from it so that if they get it wrong, they fall a lit­tle bit behind.

And if they get it right, they fall a lit­tle bit above and they. can boast about their out­per­for­mance. what it has mean though, is that a lot of pas­sive mon­ey has gone into the ASX 300 in the last three years that was­n’t there before. And that’s what’s got me think­ing. Rather than, yes I under­stand that the small caps are being starved of cap­i­tal rais­ings because funds are being forced to, um, to not invest in that area. But it also means that [00:25:00] there’s less pas­sive funds going into that area, which might give us an advan­tage. And one of the things I was think­ing about was that, you know, when we see Com­mon­wealth Bank trad­ing as the rich­est bank in the world, on the back of index fund mon­ey going into the ASX 300 or, um, or even high­er up the Um, I’m won­der­ing whether we should­n’t be focus­ing on out­side of the ASX 300.

And it’s cer­tain­ly been, uh, because I’m now hav­ing to buy large caps, I think I’m not get­ting the per­for­mance that dum­my port­fo­lio is. Since 2022, I think you’ve said some­thing sim­i­lar about your self man­aged super fund or your super fund to invest in ASX 300 stocks. And I’m won­der­ing if that’s the rea­son um, they’re, they’re being ham­mered by pas­sive invest­ing, which is forc­ing up the val­u­a­tions. on those stocks and that if we I’ve always liked to invest where fund man­agers are look­ing [00:26:00] and I’m won­der­ing whether that means we focus on the out the small­er caps now there’s 1700 of them the cut­off seems to be around eight bil­lion dol­lars mar­ket cap so we’ve still got plen­ty of to uh to oper­ate in yeah, look, I think more thought required. I had a look at Wil­son Asset Man­age­men­t’s port­fo­lio, so WAN, which has been around for a long time and had decent results. Most of their shares are small caps, if not a lot of them. Their largest mar­ket cap seems to be 9 bil­lion. For port­fo­lios like mine, it might mean a larg­er port­fo­lio of small­er ADT stocks, but it’s some­thing I’ve got to look at, I think, and some­thing which I need to think about fur­ther now that I’ve under­stood what’s

Cameron: Which would mean,

TK: 300.

Cameron: which would mean you’d have to have a larg­er port­fo­lio, right? So as not to get into ADT exit trou­bles. Um, My, my only point on that is that the light port­fo­lios haven’t [00:27:00] per­formed that much bet­ter in the last few years. And I can’t remem­ber what the break­down is between small and large cap, but it would be major­i­ty small cap because I don’t have the ADT, um, restric­tions on that.

So, I don’t know that

TK: Look,

Cameron: small caps have, I’ve done that much bet­ter out of small caps.

TK: I had a look at the dum­my port­fo­lio, and there’s only two large caps, um, Qan­tas and ANZ, that I could see in the dum­my port­fo­lio. The rest are all small caps. I did­n’t get a chance to com­pare that to the light port­fo­lios to see, um, the ratio was in the port­fo­lios or not.

Cameron: I did do an analy­sis on it like last year when I was try­ing to fig­ure out why the per­for­mance for the light port­fo­lios had been sort of mid over the last cou­ple of years. I can’t remem­ber the num­bers. It’s prob­a­bly in my notes some­where, but the major­i­ty small caps, I think. And because we were look­ing at this [00:28:00] ques­tion a year or so ago, is it a large cap, small cap thing?

And I did an analy­sis and the small caps weren’t real­ly doing any bet­ter. I mean, there’s a, there’s a. You know, a cou­ple of, um, good news sto­ries in there. But, uh, gen­er­al­ly speak­ing, I don’t think they were doing that much bet­ter. So,

TK: Yeah, my expe­ri­ence over time

Cameron: mm,

TK: mat­ter because we were always try­ing to buy the

Cameron: mm,

TK: So if it was a large index or a small index, we were still get­ting a good, good bar­gain.

Cameron: mm,

TK: But yeah, that was before this sort of rush of pas­sive invest­ing to the ASX 300s occurred.

Cameron: mm. Okay.

TK: I’ll do some more dig­ging.

Cameron: What’s next? Yeah. You’ll think about it.

TK: um, con­tin­ue the, don’t laugh, I think a lot.

Cameron: I know you do.

TK: Want­ed to con­tin­ue the results roundup and with a cou­ple, one being Perseus. So Perseus results [00:29:00] were good. Perseus Min­ing Lim­it­ed report­ed strong finan­cial results for the half year end­ing 2024, Decem­ber 31st, show­cas­ing a sig­nif­i­cant increase in rev­enue and prof­it com­pared to the same peri­od in the pre­vi­ous year. com­pa­ny achieved rev­enue of 581 mil­lion up 19 per­cent from the pre­vi­ous year, and a net prof­it after tax of 201. 1 mil­lion, reflect­ing a 22 per­cent increase. Gold pro­duc­tion totaled 253, 000 odd ounces at an all in site cost of 162 per ounce, so much cheap­er than Remil­i­a’s. The com­pa­ny’s gold sales amount­ed to 245, 518 with an aver­age sale price of 2350 per ounce, indi­cat­ing a strong mar­ket per­for­mance despite ris­ing oper­a­tional costs

Cameron: [00:30:00] you

TK: won’t get the cur­rent div­i­dend. Uh, the oth­er one to look at, um, today was Met­al­sX, MLX, again, a long term in and out of the buy list over the years, um, this is a tin min­er from, uh, Tas­ma­nia from mem­o­ry, uh, rev­enue was up 42%, prof­it was up 602 per­cent from 14.

5 mil­lion to 102. 3 mil­lion, so a huge increase, in Met­al­sX, and I’m gonna read from the exec, The non exec­u­tive chair­man’s let­ter in the annu­al results, a guy called Peter Gun­zberg. In the last 12 months, uh, oper­a­tion has ben­e­fit­ed from a high­er than bud­get­ed tin price and a low­er than bud­get­ed Aus­tralian dol­lar. These two fac­tors com­bined with man­age­men­t’s abil­i­ty to increase both pro­duc­tion and recov­er­ies of tin to deliv­er record annu­al tin pro­duc­tion of 11, 000 tons, result­ed in an increase in cash flow from oper­at­ing activ­i­ties of [00:31:00] 121%. With a sig­nif­i­cant­ly health­i­er bal­ance sheet, your board made two con­se­quen­tial invest­ment deci­sions dur­ing the year and announced a pos­si­ble third. first deci­sion was to imple­ment an on mar­ket share buy­back, which result­ed in 20 odd mil­lion Met­als X shares, rep­re­sent­ing approx­i­mate­ly 2. 3 per­cent of the issued cap­i­tal being repur­chased and can­celled. was to acquire 29. 91 per­cent inter­est in Lon­don list­ed First Tin PLC, owns the Taron­ga Tin Project in north­ern New South Wales and the Sec­ondary Tin Project in Ger­many. As a con­se­quence, fel­low direc­tor Mr. Brett Smith and I joined the First Tin Board. third pos­si­ble invest­ment deci­sion con­cerns the Hong Kong list­ed Green­Tech Tech­nol­o­gy Inter­na­tion­al Lim­it­ed. I think it’s fair to say, yeah, so that’s, um, sor­ry, I’ll stop it there. want­ed to just add his last sen­tence, which I thought was, was, um, hilar­i­ous. I think it is fair to say that the stars align for Met­als X dur­ing the year, and whilst it is not in man­age­men­t’s pow­er to [00:32:00] align stars, I am con­fi­dent they will con­tin­ue their best efforts to man­age those things with­in con­trol. Which I thought was very play­ful. Obvi­ous­ly, he’s, uh, he’s on a bit of a high after boost­ing prof­its six times dur­ing the year.

So that was Met­als

Cameron: So what’s caus­ing, what’s caus­ing the rise in tin prices? Is it sort of elec­tron­ics indus­try boom or what? Do you got any idea?

TK: I don’t know. I don’t know. I think most com­modi­ties or a lot of com­modi­ties are doing okay, but I could­n’t say what was dri­ving tin.

Cameron: Okay, well 602 per­cent prof­it increase. That’s, that’s Some­body’s hav­ing a good bonus, uh, hol­i­day. A bonus cel­e­bra­tion there, I bet.

TK: for any of our lis­ten­ers who own shares of Met­als X, which has been around for a while on the buy list.

Cameron: Oh, I got­ta check that. Let me see. By the way, I had to dis­close I have PRU2 in my I’ve had it since April 24, it’s up [00:33:00] 38%. Not gonna snort at that, that’s okay. MLX, we do own MLX. Uh, it’s in the light port­fo­lios and the dum­my port­fo­lio. Um, bought all of them in the same week. June of 2023 at 27 and a half cents.

It’s now 66 cents. So up 140%. So we’ve done very well out of MLX. Thank you, MLX. Good job, MLX. It’s down 4 per­cent today though.

TK: Keep up the tin pan­ning. I’m not sure how they mine tin.

Cameron: Prob­a­bly with a pan. I’m sure that’s how it’s still done. Yeah. What, what else you got?

TK: Just a pulled pork on Shape Aus­tralia, but I can wait if you want­ed to do ques­tions first. to you.

Cameron: Well, um, yeah, we’ll do a ques­tion, but before that, I want­ed to talk about [00:34:00] DSK.

TK: Mm hmm.

Cameron: on Mon­day. It sank like a stone. Um, and I, I could­n’t. Real­ly fig­ure out why it went ex div five cents a share ful­ly franked, but dropped 20 per­cent and I don’t know. It had sev­er­al good reports recent­ly. I could­n’t see any news relat­ing to it so, uh Yeah, I mean, I always sort of dodgy buy­ing a soap busi­ness.

I was like real­ly? Soap? You know, I don’t know

TK: Soap and can­dles. Don’t for­get the can­dle side of it.

Cameron: Can­dles yeah So it’s it’s con­tin­ued to decline too. It’s Went from 1. 32 down to 1. 09. So I had to think three points sell that yes­ter­day Um, it was only in a [00:35:00] pos­si­ble, uh, port­fo­lio. It was­n’t in a real one, but yeah, we, I don’t know if we have a com­mod­i­ty price for can­dles or soap, but, uh,

TK: Yeah, haven’t

Cameron: apolo­gies to any­one that bought DSK.

It was­n’t our buy list and yeah, 20 per­cent down and no news. That always bugs the hell out of me.

TK: Yeah, it’s a small cap stock so it does­n’t get much cov­er­age but I could­n’t find any news either. And I sus­pect that well, either the news will come out or it’s algo trad­ing when ex div­i­dends start­ed to drop it just kind of became a bit of a

Cameron: Just kept going. That’s what I fig­ured.

TK: which

Cameron: I actu­al­ly said that in my light email yes­ter­day. Yeah, my light email, and well, in fact, you know, when I looked at my alerts yes­ter­day morn­ing, it was slight­ly below, only a few cents below its 3ptl, and I’d only added it. As a by the week before and I was draft­ing my email to the light sub­scribers say­ing you know what I’m going to give it some grace [00:36:00] here because it’s only a few cents below and I think it’s an over­re­ac­tion to going X div, etc, etc.

And then it just kept falling dur­ing the morn­ing. It just kept falling and kept falling and kept falling. And I went, Oh, okay, screw it. Okay,

TK: Uh,

Cameron: I got­ta, I got­ta bail. This is, this is get­ting too bad. So I reword­ed my email. Um, we have a ques­tion from Tom that I’ll get to in a sec­ond. But I did have ques­tions on Josephine and sec­ond bylines that I was in Face­book.

that I said I would ask you about today. This gets back to the orig­i­nal byline ques­tion, but there’s a few rel­a­tive­ly new mem­bers that asked about sec­ond bylines and charts, um, with regards to, I know White­haven was one of them and the oth­er was NHC. So, I just want­ed for, for new lis­ten­ers, uh, new club mem­bers that are try­ing to [00:37:00] work out the chart­ing stuff, I just want­ed to run over this.

One more time. So if you look at the bread lat­er, you will see. Two buy lines, there’s the yel­low sol­id buy line, which is the orig­i­nal buy line, that’s the actu­al buy line of the stock. And if you look at NHC, it became a buy back in mid­dle of 2021, and the price has been, well it went up a lot after that for a few years, it’s been declin­ing more recent­ly.

But that is still the buy line because it has­n’t breached a sell line. Since then, um, it’s, uh, L2 was back in sort of May 2021, and it’s got a fair­ly low byline, but it has been declin­ing since late 2023. It’s been a Josephine. So the green dash line in the bread or lat­er is what Brett calls the lat­est byline.

We some­times refer to it as the [00:38:00] sec­ond byline, and that’s the line that we want it. We want to see it get above so we know it’s re estab­lished pos­i­tive sen­ti­ment. So, the ques­tion was, well, should it be on the buy list if it’s below that? And that’s a good ques­tion. I mean, uh, the way that I’ve cur­rent­ly got the buy list, uh, I put it out is I do put out stocks that are Below their sec­ond buy line if they are above their buy line and the sell line because they’re still a buy and in some cas­es We will have stocks that I have been a Josephine But they’re fair­ly close to going above their sec­ond buy line and it can change dur­ing the course of a week So I tend to leave those on there and then I just check it If I’m look­ing to buy some­thing, I’ll Check where they sit, um, with regards to their sec­ond byline, [00:39:00] but there has been some dis­cus­sion between Tony and myself and Brett over the last year or so about whether or not we need the orig­i­nal byline or if it’s the sec­ond byline that real­ly mat­ters here.

And I don’t think, um, I think you said you thought there might be exam­ples when we still need­ed it, but I’m not sure that we ever found one.

TK: um, yeah, mem­o­ry, it was dur­ing the GFC. But basi­cal­ly, the sec­ond byline was an as well to try and qual­i­fy what a Josephine is. So, you know, look­ing at that graph you talked about, which I’m, got NHC open, uh, New Hope Coal’s been well above its byline for many years now, um, but it’s been in a side­ways to slight­ly down­trend over the last cou­ple of years, and that’s when the sec­ond byline, um, comes into, into its use­ful­ness.

So how do you even though it’s been above its [00:40:00] byline for a long time, how do you know when it’s break­ing out of that sort of short term over a short­er peri­od because the the bylines worked out five year month­ly and then the oth­er ones worked out, um, can be over. It was still using five year month­ly but it’s a short­er term trend.

Um, and I think it’s still use­ful because

Cameron: Well, it’s ignor­ing.

TK: it’s below the, it’s below the sec­ond byline.

Cameron: Sor­ry, yeah, the sec­ond byline’s ignor­ing the buy ver­sus sell, um, rule. So, you know, nor­mal­ly if we have a byline and I’ve been try­ing to code this for the last month. So it like every day you would not believe it. Like every day I’m simul­ta­ne­ous­ly, I’m doing all my oth­er work. I’ve got a cod­ing dis­cus­sion going on in the back­ground with an AI where I’m try­ing to code, uh, byline stuff and work through edge case sce­nar­ios with it.

Um, and it’s insane­ly dif­fi­cult, [00:41:00] but. The, uh, for new peo­ple, you know, we When we’re draw­ing a byline and a cell line, we’ve got this old rule, the byline fol­lows the cell line and vice ver­sa. And so the, what, what looks on the bread lat­er is the orig­i­nal byline is the first byline that could be drawn after there’d been a cell event.

So then there’s a by event. That, uh, and that if, if there has­n’t been anoth­er sell event, since that buy event, that buy event is still valid, it’s still tech­ni­cal­ly a buy, even though price has been declin­ing for the last cou­ple of years because there has­n’t been anoth­er three point trend­line sell. And so, you know, I think a few years ago when we came up, we start­ed talk­ing about Josephine’s, um, the orig­i­nal.

Um, the­o­ry was it was no longer a Josephine if it had a month when the price went back up, but then we real­ized some­times these prices decline, um, [00:42:00] you know, for a long peri­od of time, they’re a falling knife and we don’t want to buy them until they’ve gen­uine­ly reestab­lished pos­i­tive sen­ti­ment, a pos­i­tive uptrend.

So we need­ed a, some sort of a three point trend line to go that. So it’s the actu­al cur­rent buy line. So we take the real high­est peak. And, you know, draw it through the next high­est peak that does­n’t cut off any oth­er peaks on the right hand side. By the way, as I’ve been build­ing, as I’ve been cod­ing this, I’ve been using the AI to artic­u­late all of the strate­gic the­o­ry.

Behind our three point trend line strate­gies into this long ever grow­ing doc­u­ment that has all of the edge cas­es and but what about this and what about that and if not this and that and it’s going to be, I’m going to sub­mit it as a For my PhD the­sis when we’re fin­ished. PhD in [00:43:00] QAV. Um, any­way, uh, so yeah, so that’s why we have the sec­ond byline.

And again, in my mind, that’s the byline that if it exists, that’s the one that I’m pay­ing atten­tion to, but it’s still on the buy list. Even though it’s not above the cur­rent byline, which I think is con­fus­ing for new mem­bers.

TK: we do that, I remem­ber hav­ing a debate about that. We do that because, again, dur­ing times like COVID, uh, the, the graphs can change pret­ty quick­ly. And so we put out a, a buy, we put out a buy list on Mon­day and some­thing was­n’t on the buy list and then it did trig­ger a buy dur­ing the week, you would­n’t see that. So we put out every­thing which qual­i­fies as a buy, even if it’s not. I buy accord­ing to the graph and then you check the graph when it’s when you know if it’s Wednes­day or Thurs­day or Fri­day when you’re buy­ing your­self um, you look it up and see if it see if it is. Yeah

Cameron: And the bread like a bread let­ter makes [00:44:00] that easy to do. You just need to go and check and make sure it’s above that green dash. So Daniel asked tak­ing WHC as an exam­ple, this is not cur­rent­ly a Josephine. Um, well, I, I, I think it is cur­rent­ly a Josephine Daniel. Um, I pulled it up this morn­ing. Let me just pull it up again.

Um, Yeah, it’s, it’s cur­rent­ly a Josephine. So even though the cur­rent price is 5. 78 and the pre­vi­ous mon­th’s close was 5. 63, so it’s above the pre­vi­ous mon­th’s close, but it’s been declin­ing since Novem­ber 22, when it was at. 10, you know, it sort of declined a lot. Then it recov­ered a bit, um, up to Jan­u­ary, 2024.

It got back up to 8. 50 and then it’s declined, uh, [00:45:00] since then down to where it is today, 5. 78. So it’s a falling knife. It’s a Josephine it’s been declin­ing. We don’t want to buy it until that declin­ing trend, uh, turns around. Does that make sense, Tony?

TK: it does and I think what might be con­fus­ing The lis­ten­er was that before we had this cod­ed by brett. We were using our Josephine test is the cur­rent price is above the close end price for last month um And if you look at WHC’s graph, you can see why that’s not help­ful in this case, because there are plen­ty of months in the last year or so where that’s where the price has gone above the pre­vi­ous mon­th’s close, but then it’s dropped down again, so it’s been a falling knife. And so,

Cameron: Yeah.

TK: so yeah, this, I mean, the fact that this month the price is above the close of last month [00:46:00]be the start of an upturn. But. to be sure i’d rather wait until it gets above the sec­ond byline trend

Cameron: Cause it’s had a num­ber of false starts like that. You go back and look over the last 12 months, it’s dropped and it’s recov­ered a bit, then it’s dropped again. It’s recov­ered. It’s dropped again. It’s recov­ered. It’s dropped again. Um, it’s like, it’s not real­ly a good. Descrip­tion of a falling knife, but I don’t know what to call it.

What, what drops and then ris­es, then drops again, and then con­tin­ues to rise and drop and con­tin­ue.

TK: a falling but­ter knife a ser­rat­ed edge 0.

Cameron: It’s bounc­ing off the kitchen bench, then it’s bounc­ing off your knee, then it’s bounc­ing off of things as it falls down, yeah. So that’s, I mean, the whole point of it there is to Stop us from, I mean, the whole, the whole idea behind three point trend lines is sen­ti­ment like is the mar­ket, you know, you’ve, you’ve talked about this a mil­lion times [00:47:00] over the years, but we can, we can look at all the num­bers and we can decide the num­bers are great and it’s got good man­age­ment and some­times, you know, stocks on our buy list don’t have nec­es­sar­i­ly the best man­age­ment, their qual­i­ty score may be low, But they’ve got a real­ly low prop calf and so they end up with a good QAV score.

Despite the qual­i­ty score being not above 75%, it might be a 56%. I think when I looked at today, met that met­ric, actu­al­ly US stock that I bought CX, it’s a cement com­pa­ny. Um, it’s prop calf was 0. 01.

TK: okay so you’re buy­ing it for what’s that does that mean that means you’re buy­ing it for cash flow

Cameron: Well, pret­ty much, you know, it would take you three days, 3. 6 days, [00:48:00] 1 per­cent of a year to get your mon­ey back. Um. So, but it’s qual­i­ty score was, I don’t know, 56%, but it’s QAV score was like 48 or some­thing. And I looked at it, I dug in, I was like, oh, this could be a val­ue trap, there’s some­thing wrong here.

But, you know, the, um, num­bers aren’t that bad. Like, you look at it’s prof­it line, et cetera, et cetera, it’s doing okay. So any­way, um, the Point being that some­times stocks are on our buy list because the num­bers, as we slice and dice them, say it’s a good buy. But if the mar­ket is dump­ing it for a long peri­od of time, and the price is going down, we don’t wan­na, we don’t wan­na buy in.

I mean, there are val­ue investors that will do that and say, screw the num­bers. I mean it for the long haul. And then you say, yeah, I’d rather put my mon­ey in it. Like, it’s not [00:49:00] like there’s only three things out there for us to buy. And we have to, we have to invest our mon­ey. And we’re not, we’re not War­ren Buf­fett where.

We can’t find any­thing to buy because of the sorts of num­bers that we’re deal­ing with. So we can, uh, par­tic­u­lar­ly those of us with low­er ADT restric­tions, there’s, there’s always, I mean, with rare excep­tions in the last five or six years dur­ing mas­sive, um, eco­nom­ic col­laps­es, but there’s gen­er­al­ly. Five or ten things on the buy list at any giv­en time that I can buy and some of those that have pos­i­tive sen­ti­ments So why would you buy some­thing that where the price is going down when you can buy some­thing that seems to be get­ting?

Sup­port­ed in the mar­ket and the price is going up It’s just if they have both have good num­bers you buy the one where the price is going up not the home where the price Is going down, right? It’s just com­mon sense

TK: and I think it’s also fair to say that we at for­ward, um, esti­mates on earn­ings per share growth, which is only one part of our check­list. But [00:50:00] some­times if a stock has good num­bers now and it’s sen­ti­ments bad, it’s because worked out that the num­bers aren’t going to be as good next half, year. um, they’re sell­ing out, so, it’s a bit of insur­ance again. Uh, but, but again, if it’s, if the share price is going down, why don’t you just wait until, um, you get it cheap­er? Why would you buy today? mean, you could dol­lar

Cameron: Exact­ly. Yeah

TK: But, um, but yeah,

Cameron: Yeah,

TK: for the, for the, as a bit of insur­ance against, um, uh, not know­ing what’s going to hap­pen next year, as opposed to some­body who might have a bet­ter hold on that infor­ma­tion than we do, um, and for the very plain and sim­ple fact that if I wait longer, I can get it cheap­er, why would you? Buy it when the sen­ti­men­t’s bad.

Cameron: some­body might have done a 10 year fore­cast on their gold­mine and decid­ed

TK: We must,

Cameron: it’s time to get out, but they haven’t

TK: Maybe we should run

Cameron: Well,

TK: work­shops for com­pa­nies. Look, you’re meant to do this.

Cameron: that’s a great idea [00:51:00] yeah

TK: press the but­ton on the Excel spread­sheet. Till

Cameron: Yeah

TK: good, then you can dis­close it.

Cameron: War­ren Buf­fett says if you have bad news make a phone call in your case if you have bad news put it in the bot­tom draw­er And

TK: just cut off the bad news before you get it. You just don’t do that final cal­cu­la­tion. Then you

Cameron: well, so how do you know some­body, some­body has to know there’s bad news some­where in the some­body has to real­ize there’s bad news are com­ing and then make it dis­ap­pear, put it in the, I’m going to think about a tray and cause maybe, maybe your num­bers are wrong. You go, I bet­ter think about my num­bers and then just think about it for a real­ly long time.

TK: until the num­bers get

Cameron: Any­who. Hope that helps, uh, Chris and Daniel with under­stand­ing why the, the dif­fer­ence between the yel­low line and the green dot­ted line.

TK: And I [00:52:00] think

Cameron: Tom has a ques­tion.

TK: that, just

Cameron: Hmm.

TK: to point out is that, um, uh, peo­ple can get the most recent ver­sion of the Bret­ta­la­tor from the QAV pod­cast web­site in the resources sec­tion. If they are scratch­ing their head and say­ing, why does­n’t my Bret­ta­la­tor have a light? It only came in, I think, 12 months ago. If they’ve got an old ver­sion and haven’t updat­ed it, it won’t be there.

Cameron: It was a lot longer than that, but yeah, at some point,

TK: Yeah.

Cameron: yeah, that’s how long you’ve been think­ing about whether or not we should only use the 2BL. It was in place for like a year before that, I think. Any­way, mov­ing right along, Tom. With the mar­ket decline of recent weeks, I thought a dis­cus­sion on hedg­ing may be of inter­est to the group, though I strong­ly sus­pect TK just sticks with the process and fol­lows the num­bers with dis­ci­plined stop loss­es.

Wow, Tom, you’ve been pay­ing atten­tion. I have been con­sid­er­ing this [00:53:00] recent­ly and Ask­ing if invest­ments such as a cryp­to ETF, or that’s going to go down well, a Chi­nese equi­ties ETF, gold ETFs, or put options are worth­while. Per­haps only 10 per­cent of cap­i­tal allo­ca­tion, but a hedge against the mar­ket pull­backs in Aus­tralia and the devel­oped world.

Cheers, Tom.

TK: Do you want

Cameron: What say you TK?

TK: I wrote LOL beside Tom’s ques­tion when I saw it today.

Cameron: There’s this meme, I don’t know, you must have, there’s this meme that’s been going around for years. It’s from an old Bat­man, gold­en era Bat­man com­ic from like the 70s. And it’s the, the, you know, the, uh, voice, what do you call it? The voice clouds? Uh, the dia­logue box­es are blank and you write in what­ev­er you want.

And it’s always Robin get­ting halfway through ask­ing a ques­tion and then Bat­man slap­ping him in the face with an answer. Yeah, and I imag­ine, I should have one for you, it’s like [00:54:00] Should we change the bang? No, you don’t change the rules. You fol­low the rules, Tony. You’re Bat­man, just slap­ping us in the face when­ev­er some­body sug­gests we should do some­thing dif­fer­ent, do some­thing clever.

TK: on hedg­ing, but my expe­ri­ence is it does­n’t work. And all you do is give up per­for­mance on the rest of your port­fo­lio. So, a whole, a whole field of ques­tions and sub­jects raised by Tom. Um, he sug­gests that per­haps only 10 per­cent be allo­cat­ed to a hedge. does that mean if your port­fo­lio, you know, does 90 per­cent drops, that 10 per­cent is going to make up for it? So, why 10 50%? Um, I don’t think 10 per­cent in a hedge against the 90 per­cent of the rest of the port­fo­lio is going to help. My expe­ri­ence is, um, you’re get­ting into the game of pre­dic­tion here, where, you know, you think that the, that a cryp­to ETF might help you if the share mar­ket’s [00:55:00] going down, might, but it might go down too. cer­tain­ly, Dur­ing big peri­ods of dis­rup­tion in the mar­kets like the GFC, like COVID, every­thing goes down. I know in COVID, bonds even­tu­al­ly went up, but for the first of the while, every­thing went down. but if you had 10 per­cent of your port­fo­lio on bonds, hap­py days, you’ve made 100 per­cent on 10%, but your port­fo­lio went down 50 per­cent on the oth­er 90%, so it does­n’t

Cameron: Mmm.

TK: up for it as such. Um,

Cameron: Mmm.

TK: it’s nev­er been a use­ful game for me to look at, um, for a long time, tra­di­tion­al think­ing was to have a 60 40 port­fo­lio of stocks and bonds, 60 per­cent stocks, 40 per­cent bonds, and over time they’d, know, even out, but, you know, you pick up any sort of news­pa­per these days and they’re say­ing that era’s dead and they’ve got to look at rebal­anc­ing the ratios and all that kind of stuff. Um, yeah. I call it diver­si­fi­ca­tion. I think you’re bet­ter off find­ing some­thing which works and then going all in and stick­ing with it [00:56:00] rather than try­ing to sec­ond guess it. Um, and yeah, it’s, I just go back to all the times in the mar­ket every­thing’s gone down, par­tic­u­lar­ly the share mar­ket, and every­thing has gone down. Prop­er­ty, yeah, gold, what­ev­er. Some­times gold stays up like it’s doing now. Um, But, but, and I have Perseus in my port­fo­lio, not because I think I need to hedge my port­fo­lio, but because Perseus comes up on the buy list and it’s got pos­i­tive sen­ti­ment. So you kind of buy that next. So there’s kind of a bit of nat­ur­al hedg­ing going on in the QAV process any­way, but we don’t do it to hedge our port­fo­lio. We do it because that’s the process. So, um, Tom, um, hap­py to be. Dis­cuss it fur­ther, it’d be proven wrong, but, um, I need some evi­dence because I haven’t seen any­body. do it well, or do it, do it in such a way that it’s out­per­formed, um, a process which gets dou­ble mar­ket [00:57:00] in the share mar­ket.

Cameron: I just, uh, I just made one of these things. I’m gonna share it with you.

Where’s, where’d you go? Oh, there you are. There we go. Can you see that? Yeah. There we go.

TK: I can, no, I can just see us. Oh, yeah, there it is, yep. Should we hedge, fol­low the rules, yeah, yeah, exact­ly, yeah, I

Cameron: Yeah,

TK: peo­ple who say that you should go to cash, like, and I guess Buf­fet­t’s doing that, he’s wait­ing for the mar­ket to crash and he’ll buy in. Um, but again, I think that’s, that’s not him hedg­ing. It’s the fact that he can’t find any­thing to buy. So it becomes a nat­ur­al part of his process rather than a hedge. Even though it ends up

Cameron: he wants his mon­ey to be doing some­thing.

TK: Yeah, cor­rect.

Cameron: Alright, Tom, but, you know, brave of you to ask the ques­tion. Um, and thank you for

TK: it’s a good ques­tion. I think that peo­ple turn their minds to that kind of thing when the mar­ket goes down. It becomes

Cameron: Of course they do. Yeah. Bit­coin. Um,[00:58:00]

TK: Gamestop.

Cameron: I haven’t, I haven’t looked at GameStop. Yeah.

TK: yeah.

Cameron: I, um, haven’t looked at the, uh, Mag7 and the Bit­coins and what­ev­er today. Uh, down, down, do down. Down, down, down. Oh my god, Tes­la, look at that.

TK: go on the front lawn of the White House and pump Bit­coin the same way he did Tes­la last week. Oh,

Cameron: yeah. Was­n’t that hilar­i­ous? Oh my god.

TK: seen a pres­i­dent of the USA naked­ly shilling a prod­uct like that

Cameron: Yeah.

TK: It’s incred­i­ble. Oh,

Cameron: lots of things, but usu­al­ly it’s wars to sup­port the mil­i­tary [00:59:00] indus­tri­al com­plex in gen­er­al, but not a prod­uct like that. But, you know, again, my take on it is it’s just, it’s flood the zone. Have you seen that? Have you seen the Ban­non stuff that’s been out there recent­ly?

TK: I’ve seen, I

Cameron: remem­ber Steve Ban­non?

TK: yeah, yeah,

Cameron: Yeah. So Ban­non has come out recent­ly and said that when he was Trump’s chief strate­gist back in the 2015 2016 cam­paign, you know, the think­ing then was, in terms of the media strat­e­gy, was flood the zone. So just fill it up full of crazy bonkers sto­ries and then do what­ev­er you want in the back­ground.

They’ll be run­ning around and he’s basi­cal­ly say­ing the cur­rent Trump team have per­fect­ed that. It’s just three crazy sto­ries before lunch. Get the media, you know, lick­ing it up because they love it. Because it dri­ves eye­balls, uh, to their con­tent, makes their rev­enues [01:00:00] go up. They love it. They pre­tend they don’t.

There’s lots of gnash­ing of teeth and wring­ing of hands and rent­ing of gar­ments, but they love it because it’s dri­ving rev­enue. Every­one’s pay­ing atten­tion. Mean­while, go do what­ev­er you want

TK: yeah,

Cameron: the scenes.

TK: it’s a Joe Bianchi Peter­son strat­e­gy, feed the chooks,

Cameron: That’s right. All right. That’s all I got.

TK: I don’t know, we had anoth­er ques­tion

Cameron: You wan­na, we just did that, did­n’t we?

TK: No, he’s got a sec­ond ques­tion about the Spar­tan resources takeover that we spoke about before. You sent it, in the notes you

Cameron: Did­n’t you, did­n’t you? Oh, yeah, did­n’t you han­dle that already?

TK: No, so

Cameron: Oh, no. Okay. Sor­ry.

TK: That’s right.

Cameron: I thought we han­dled that when we did the Spar­tan thing before I for­got. Sor­ry. Let me ask it Tom again I’ve got shares in Spar­tan resources that I’ve held since it was Gas­coyne resources. I Did­n’t real­ize that Gas­coyne had become Spar­tan Ignor­ing rule one plunges along the way now.

I’m up [01:01:00] about 350 per­cent and it makes up about 30 per­cent of my port­fo­lio nice­ly played Tom They have announced a merg­er with RMS and I’m won­der­ing how Tony would pro­ceed. Nor­mal­ly with a takeover I would sell and take the prof­it, but as RMS is a QAV stock, I’m think­ing of hold­ing on and watch­ing the flow­ers grow.

Any thoughts? We’ve talked about merg­ers and acqui­si­tions a lot in the past. Let me see if I can recall your Line of attack here. Is it ana­lyze the stock that you’re going to end up with accord­ing to QAV rules? And if you like it, great. If you don’t get out,

TK: Yeah, cor­rect. Um, there’s a cou­ple of oth­er twinges or lit­tle things on the site for that. And this is not spe­cif­ic finan­cial advice, Tom. You’re going to have to work it out for your­self. But, um, yeah, that’s been my basic rule. Uh, It’s com­pli­cat­ed now [01:02:00] because I think Remelius has bought its copy book with all this, um, dis­clo­sure mix ups.

Um,

Cameron: flag has a red flag. Now dis­clo­sure, red flag.

TK: So it makes it a bit trick­i­er. But the oth­er thing that Tom needs to con­sid­er and prob­a­bly just as impor­tant is his tax posi­tion because, uh, cap­i­tal gains tax may get trig­gered by takeover. gen­er­al­ly it does­n’t if it’s an All script so there’s a thing called rollover relief.

So, um, if all the Spar­tan shares were being acquired by an All script offer, um, from Remelius then the tax office would wait, uh, until Remelius, your Remelius, your new Remelius shares were sold before lev­el­ling CGT the Spar­tan cost base on the Remelius shares. Um, this is already get­ting com­pli­cat­ed, but, uh, I noticed that Ramelius were, had a cash com­po­nent to the offer.

So that might trig­ger cap­i­tal gains tax for Um, like­wise, if he decides to sell on mar­ket before the takeover, that [01:03:00] will def­i­nite­ly trig­ger cap­i­tal gains tax and giv­en that it’s up 350 per­cent now a third of his port­fo­lio, I’m guess­ing cap­i­tal gains tax will be an issue. that Tom needs to con­sid­er.

So, um, click your email, your account and email and out­line the sit­u­a­tion and just ask them for their advice on CGT and then fac­tor that into your deci­sion mak­ing. Um, nor­mal­ly if it’s on the buy list like Ramelius and it rolls over and there isn’t a CGT event I would keep it and then just three point trade it there.

So that’s my sort of gen­er­al rule. It’s a bit murky this time because I’m not sure whether Ramelius is a red flag or not. Um, and Tom will have his own CGT issues, but, uh, sure he can work through them.

Cameron: And what about the fact that Remelius is obvi­ous­ly going to be a Josephine at the moment?

TK: Yeah, that’s part of the com­pli­ca­tion, isn’t it? And you’d expect the

Cameron: Yeah,

TK: would be a Josephine. The Spar­tan’s gone up because they’re being hunt­ed. [01:04:00] Ramelius is, it’s gone down because of the Mount Mag­net, um, dis­clo­sure. But, uh, usu­al­ly the acquir­ing com­pa­ny does­n’t go up when there’s a takeover announced.

So it’s always prob­a­bly going to be the case. Yeah. That’s,

Cameron: I mean it’s well above it, so I’m just look­ing at the Bret­ta­la­tor for Remelius now. Inter­est­ing­ly, it’s, it’s above its buy line and above its sec­ond buy line, even though the share price has col­lapsed. Because, um, it had sort of gone above anoth­er, you know, an ear­li­er sec­ond buy line. The way the Bret­ta­la­tor draw­ing it is it’s crossed the sec­ond buy line about a year ago.

So, uh, even though the share prices Yeah, [01:05:00] because it’s sort of, yeah,

TK: So you

Cameron: but it’s dis­count­ing the fact that, sor­ry, yeah, go on. Well, it sort of, um, it’s a weird sec­ond byline. If you look at it in the Bret­ta­la­tor, like it’s, it had a small decline mid­dle of last year, recov­ered from that and passed its sec­ond byline, but it’s, uh, had a cou­ple of declines since then.

Um, so, I don’t know. Buy it with the recent price drop even though it’s gone above a pre­vi­ous sec­ond buy line or would you be draw­ing anoth­er sec­ond buy line based on its recent peak and col­lapse and wait­ing for a new H2 to form before you get in?

TK: I would­n’t be draw­ing any more lines. That’s def­i­nite­ly a Josephine. It’s um, [01:06:00] month close was 263 and it’s cur­rent price is 221. So sen­ti­men­t’s down this month in the short term. Yeah, I’d wait to buy it. May go low­er or it might start to turn up and that’s a good time to buy it. But that’s how I read that.

That’s my strat­e­gy on that one.

Cameron: All right, okay. Hmm.

TK: it’s, it’s um, In the absence of know­ing the answer to these things, I’d use the three point trend­lines in the bread lat­er, um, to swap Spar­tan for Remelius, but please check out the cap­i­tal gains tax ques­tion. I also noticed for the first time that I can remem­ber there’s a clause in the about the takeover that if the scheme of arrange­ment isn’t approved, then Remelius will go hos­tile and make a bid for the com­pa­ny.

Any­way, so I had­n’t seen that before but that also, uh, I don’t think the details were there about whether it was going to be a cache bid or a script bid, but just make [01:07:00] sure if it’s a cache bid you’re ful­ly aware of your CGT. lia­bil­i­ties in that kind of case. And the oth­er thing too is that, uh, it was as was point­ed out I think in the Finn review today, the pre­mi­um on Spar­tan for this takeover offer was much low­er than sim­i­lar sorts of takeovers.

So I think the pre­mi­um for the bid was about 17 per­cent from mem­o­ry, that kind of order of mag­ni­tude, where­as com­pa­nies in this space in the boom­ing gold mar­ket are gen­er­al­ly going for 40 per­cent plus pre­mi­um. So this may well trig­ger anoth­er bid from some­body else who can see val­ue in acquir­ing Spar­tan as well.

Cameron: I know the Spar­tan share price has gone up sig­nif­i­cant­ly in this last week too. Gone from a 1. 36 up to a 1. 77 just in the last week. So, uh, yeah. Some­thing’s push­ing the price up. I don’t, no.

TK: so [01:08:00] it may already be above the offer price, which means the mar­ket thinks there’ll be anoth­er bid from some­one, either from Ramelius or some­one else.

Cameron: Mmm,

TK: So, Tom,

Cameron: I’m look­ing at the,

TK: Great posi­tion to be in. And lucky you for hav­ing Gas­coigne turned into Spar­tan and now being tak­en over.

But just check with your accoun­tant what your CGT options are and then, go from there.

Cameron: mmm. Alright, okay, on to Shah.

TK: Ah, yes, So I was find­ing it hard in the using the Buy List today to work out. a stock that was still going up giv­en all the gen­er­al malaise in the mar­ket over the last week or so. But, but Shape Aus­tralia has been going up strong­ly recent­ly. Uh, it’s new on the buy list this week. So I thought I’d do it as a pulled pork, even though it’s not a big stock.

It’s um, ADT is prob­a­bly only going to suit small port­fo­lio investors. It’s ADT is 114, [01:09:00] 000. So I’ll call that out. the start. new on the buy list this week, Shape Aus­tralia is a con­struc­tion, fit out and refur­bish­er of com­mer­cial prop­er­ties. So it’s, uh, it’s been around for a long time. Um, and it basi­cal­ly does fit outs, but it’s just branch­ing out now into, into bills as well. Uh, from their web­site. They, they say that they are a nation­wide ASX list­ed fit out and con­struc­tion ser­vices busi­ness with a team of more than 645 peo­ple work­ing across all cap­i­tal cities and a num­ber of large region­al cen­ters. We’ve deliv­ered more than 7, 250 projects val­ued at 10 bil­lion over the 35 plus years. We have been in busi­ness with a focus on inno­va­tion, safe­ty, and build­ing trust­ing rela­tion­ships. Our clients span the com­mer­cial, edu­ca­tion, gov­ern­ment, retail, and health sec­tors, their ori­gins in com­mer­cial fit out have cre­at­ed strong foun­da­tion for the busi­ness. Our 3. 2 bil­lion [01:10:00] pipeline for FY25 spans

Cameron: Silence.

TK: some kind of joint ven­ture with an Abo­rig­i­nal focused com­pa­ny, which is in part­ner­ship with the David Lid­di­ard Group.

So David Lid­di­ard is an Abo­rig­i­nal. busi­ness per­son who’s done a lot of work­ing get­ting Abo­rig­i­nals to own, run, and be employed in busi­ness­es, and SHAPE have worked with them to a part of their busi­ness to fos­ter those, career paths and own­er­ship and employ­ment oppor­tu­ni­ties for our Indige­nous nation. DLG SHAPE had near­ly a [01:11:00] hun­dred mil­lion dol­lars in rev­enue for the year, so it’s been some­what of a suc­cess. This is a suc­cess for them. Lat­est results are good. Rev­enue is up 15. 4%. Prof­it after tax is up 25. 6%. And they went ex div­i­dend a lit­tle while ago, but the div­i­dend has now been paid on the 10th of March, which was 10 cents, so we can use the bread lat­er with­out mak­ing an adjust­ment for them. Uh, they called out in their results that, uh, they’ve, uh, under­tak­en two expan­sion strate­gies in the last 12 months. Uh, they have, actu­al­ly three, they’ve, um, moved away from the com­mer­cial sec­tor, or the office sec­tor, they, uh, have won con­tracts in hotels, edu­ca­tion, health, retail, and defense, and they’ve also expand­ed geo­graph­i­cal­ly and won ten­ders on the Gold Coast, New­cas­tle, and Tas­ma­nia. And so they’re now branch­ing out and putting some offices in those loca­tions as well. They also launched two new divi­sions last year, which are [01:12:00] grow­ing okay. One’s called the After­care and Facil­i­ties Man­age­ment Divi­sion, which looks at main­te­nance of work that they’ve done in the past. And they’ve also now, they now have a design and build busi­ness, which is, as it says, design­ing new con­struc­tion.

They did also call out that part of their busi­ness is start­ing to slow, which is called the façade reme­di­a­tion work, which is to do with replac­ing the cladding on build­ings that was­n’t fire resis­tant enough. So that’s sort of com­ing to its end nat­u­ral­ly, but the rev­enue was still at 15 per­cent even though that part of the busi­ness was slow­ing down. Uh, One oth­er thing to notice is that Shape Aus­tralia, though it’s a small, uh, cap com­pa­ny, has, uh, just, or is just about to be added to the All Ordi­nar­ies Index on the 24th of March, so announce­ment came out a lit­tle while ago, and I think that’s part of the rea­son for the share price increase, as com­pa­ny, as fund man­agers try and get the bump from inclu­sion in the [01:13:00] index, uh, and I sus­pect on the 24th the bump will con­tin­ue as fund man­agers who that index includ­ed in their port­fo­lios.

So, um, I think in the short term the share price will be under­pinned at least. Uh, going to the num­bers, um, price I used for this analy­sis was 2. 96. it’s 17 per­cent low­er than con­sen­sus, uh, uh, share price. So that’s good. Um, but it’s above IV1 and IV2. IV1 is 1. 08, IV2 is 2. 22. So we can’t buy it from that, that per­spec­tive. Uh, the yield is strong in this com­pa­ny, 6. 35%. And just above our hur­dle of 6. 12%. NEPS is only 40 cents per share. So we can’t buy this one for book val­ue. Stock Doc­tor Finan­cial Health and Trend is Sat­is­fac­to­ry and Recov­er­ing, we score it a 2 for Recov­er­ing. Stock­o­pe­dia give Shape a qual­i­ty rank­ing of 94, which is good, and [01:14:00] an F score of 7 out of 9, which is very good. have an over­all rat­ing for Shape of 99 in their rank­ing, which is out of 100, so that’s excel­lent. Uh, we don’t score for ROE, but I did notice that ROE was 58 per­cent for this com­pa­ny, so that’s, that’s pret­ty, um, pret­ty good, pret­ty prof­itable. PE is 14 times, which is nei­ther high­est or low­est in the last three years, so we don’t score it for that. But prop cap is only 5. 5 times, so that’s one of the rea­sons why it’s on our buy list for a val­ue, from a val­ue per­spec­tive. earn­ings per share growth is only 6%, so we can’t score it for that. Um, Direc­tors hold 5%, so we’re not going to score it for own­er founder. How­ev­er, I did a bit of dig­ging and the orig­i­nal founders still hold approx­i­mate­ly 30 to 40 per­cent of the share.

So still a sig­nif­i­cant amount of own­er founder, um, own­er­ship of the com­pa­ny, even though they’re not sit­ting on the board. of the founders, Stephen McDon­ald, passed [01:15:00] away recent­ly. So that may affect that. But the oth­er founders, um, remain­ing who hold shares are Ger­ard McMa­hon, Daryl Dray­ton, and Mike Van Leeuwen. I said, they still own between 30 and 40 per­cent. Uh, last­ly, SHA is grow­ing its equi­ty con­sis­tent­ly, which is a nice thing to see. So over­all, qual­i­ty for this com­pa­ny is a score of 10 per­cent. And the QAV score is Uh, is of,

Cameron: Silence.

TK: And, uh, you know, some­times that can be, um, just, uh, lip ser­vice, but it does seem to be part of their, their cul­ture, so it’ll be a strength. And it’s also poten­tial­ly shap­ing their involve­ment with DLG Shape, their, um, Abo­rig­i­nal busi­ness. I think it’s good that [01:16:00] they’re, um, uh, grow­ing the busi­ness away from office fit outs, but, and that would have been a good thing to do when work from home was in its, um, you know, start­ing its trend or, or hap­pen­ing in, in dri­ves. But that seems to be revers­ing a bit now with more and more com­pa­nies man­dat­ing returns to the office.

So that may dri­ve that busi­ness again, um, for office fit outs to, uh, accom­mo­date peo­ple return­ing. So that might reverse, I think the risk for a com­pa­ny like this, like any builder, it’s cost blowouts, and been man­ag­ing their costs well accord­ing to their results, so their mar­gin remains strong, even though wages costs have been going up, and prod­uct costs have been going up, but cost blowouts are always a risk for this kind of com­pa­ny, as is ten­der­ing risk, so, get­ting caught with the wrong kind of con­tract when costs go up. So, um. Mit­i­gat­ing those two things though are the fact that it’s been around for 35 years and [01:17:00] the man­age­men­t’s very expe­ri­enced through a num­ber of cycles like this, so they should be able to, well they’re show­ing that they can man­age those risks. So, uh, yeah, that’s, uh, SHA, inter­est­ing com­pa­ny I had­n’t heard of before.

Cameron: Thank you, Tony. Um, they have been on the buy list before this week at some stage because I’ve had them in the light port­fo­lio for a while,

TK: Okay.

Cameron: but, uh, not that long. So I think they turned up a few weeks ago or some­thing. Yeah, but, uh, dropped out and then came back in because, um, let me see. When did I add them?

5th of March, oh so only two weeks ago, right, so they’re up 1%, killing it since then. Good job SHA, keep it up. Alright, well that is that for this week. After hours, you had a win, Tony.

TK: Ch [01:18:00] Ch Changes had a win, uh, at Gee­long on Sat­ur­day, which was great. I think she might have a bright future as a 2, 000 meter horse. Uh, we had Baf­fleck run, uh, she ran, or he ran third, and then we had Lake For­est run sixth, which was a bit dis­ap­point­ing. But, um, yeah, it was nice to see one of the hors­es win last week. also Poi­fect will have a run this Sat­ur­day at Moonee Val­ley. Um, at least that’s, uh, she’s nom­i­nat­ed for, so she’s back into work now, which is good. Good to see. Back to the races.

Cameron: Now that you, now that you’re down there, are you going, were you at Gee­long? Are you going to Moonee Val­ley?

TK: I did­n’t go to Gee­long, cause, um, except for tak­ing the fer­ry across, it would have been a long trip. But, um, I may go back to Moonee Val­ley on Sat­ur­day, yeah. See my horse run. Always good fun.

Cameron: Top hat and Tails? Get the mono, mono, so, what do you call it? Mono

TK: Val­ley for a while, no, prob­a­bly just busi­ness casu­al, I think. I might wear a suit.

Cameron: Oh, okay.

TK: Hmm.[01:19:00]

Cameron: What do you call a, one glass? A mono some­thing. Mon­o­cle! Good mag­a­zine. I should have remem­bered that. I used to read Mon­o­cle mag­a­zine. You ever read that?

TK: Oh, ages ago, a lit­tle bit, yeah.

Cameron: Used to be in air­ports, fan­cy places like that. Uh, very good! Well, con­grat­u­la­tions. That’s nice. Nice to have a win. You Seen any­thing good? Read any­thing good? Heard any­thing good?

TK: I’m still going through source code, which I’m real­ly enjoy­ing, but, um, a lot of peo­ple would­n’t, because they weren’t into com­put­ers like I was when I was 14 or 15, like Bill Gates was when he was 14 or 15, so back a lot of mem­o­ries for me. Yeah, so that’s good. Um. No, I haven’t watched much, uh, I mean the new sea­son of Full Swings out, so I’ve been watch­ing that. Play­ers Cham­pi­onship was on the TV, so I watched that on the week­end, because it’s prob­a­bly the

Cameron: It’s a golf show, full swing.

TK: Yeah, it’s a Net­flix golf show. [01:20:00] And I went to the

Cameron: Like a

TK: last

Cameron: fic­tion­al

TK: fun.

Cameron: Oh, did you see Hunter there?

TK: No. No.

Cameron: Hunter was Hunter flew I just picked him up from the air­port this morn­ing. He, um, he was in Austin, Texas for a Ben Affleck event and then he flew to LA Did some events in LA. Then he flew to Mel­bourne for the F1, flew all the way from LA, just went straight through to Mel­bourne. He was being host­ed by Qatar air­lines as one of Tay­lor’s new clients as Qatar air­ways, and they host­ed some of Tay­lor’s tal­ent, um, there.

So yes, Hunter was in a box for them. Where were you?

TK: Oh, I was walk­ing the grounds with my broth­er in law who had a spare tick­et. On the Thurs­day, too. Yeah, so Tay­lor would have been there on Sun­day, prob­a­bly. [01:21:00] it was good to get

Cameron: Hunter.

TK: Hunter, sor­ry. Good to get out. Good fun.

Cameron: Tay­lor’s in LA. Yeah, nice. Loud. I’ve only been to the For­mu­la One once. Very, very loud.

TK: Very loud, um, and very high pitched mos­qui­to sort of noise. It’s very dis­tinc­tive.

Cameron: Mm.

TK: Yeah, I mean, Shell used to be a spon­sor, so I used to go quite a bit into the Fer­rari pits and all that kind of stuff, so it brought back mem­o­ries. I haven’t been for 10 years or so, or more. But good fun.

Cameron: Mm. Very good. Did you put a, did you have any mon­ey rid­ing on any­thing? Do you put a lit­tle bit? No?

TK: I did­n’t, no.

Cameron: um, Tay­lor’s in L. A., Hunter just got back but he’s been away, Chris­sy and Fox are on Bri­bie Island for a school camp for a few days. So I’ve been, uh, batch­ing it for the last, uh, day and a bit. But, uh, [01:22:00] they’re back tomor­row so it’s not gonna last. Um, what else? I’ve been obsessed with Shostakovich still.

It’s tak­en over my brain. All I do. Is lis­ten to Shostakovich 24 7, um, it’s kind of crazy. It’s a virus. I’m, I’ve start­ed to sus­pect that maybe Shostakovich was a KGB. Um, and his music is a virus to infect the minds of cap­i­tal­ists, although it did­n’t work with you and you’re the biggest cap­i­tal­ist, but, uh, it’s maybe it iden­ti­fies pro­to com­mu­nist social­ists that it can infect.

And unfor­tu­nate­ly Shostakovich, you know, his rep­u­ta­tion is that he hat­ed Stal­in. So I’m not sure how that works, but it’s infect­ed my brain.

TK: I’ll have to go back and try it again. I could­n’t get into it when I tried the first time.

Cameron: Well, you got­ta, I think you got­ta find the right start­ing [01:23:00] point, I guess. String quar­tet num­ber right.

TK: Not yet.

Cameron: One of the sym­phonies, 5th, 10th. Lis­tened to the 10th on my bike ride. I did a big bike ride last night. And, uh, lis­tened to the 10th sym­pho­ny. It’s got some, it’s got some great stuff in it. And it’s the one that he did when Stal­in died.

It was sort of his, maybe we can all learn to breathe again now, sym­pho­ny. Um, what else? There’s a good series on pa on On Net­flix called Pan­theon that I’ve been watch­ing. It’s an ani­mat­ed series basi­cal­ly about, um, a girl and her moth­er, a teenage girl and her moth­er who. start to sus­pect that her dead father’s mind has been uploaded into an AI.

Uh, he starts, some­body starts reach­ing out to her on chat rooms and mes­sage boards. [01:24:00] And, um, she comes to believe it’s her father who passed away a few years pre­vi­ous­ly and was some sort of involved with some sort of shady dig­i­tal up mind upload­ing type orga­ni­za­tion and think he’s con­scious in the.

Con­scious in the Machine, and it’s, it’s pret­ty well done. I’ve been enjoy­ing it. Um, that and the sec­ond sea­son, The Sev­er­ance, that Chrissie and I have been watch­ing

TK: I’ve got to

Cameron: now and again when we get a chance to watch stuff.

TK: like to see that. I

Cameron: the sec­ond sea­son?

TK: seen the sec­ond sea­son. I watched the first sea­son. And I’m wait­ing for June to catch up so we can watch the sec­ond sea­son togeth­er.

Cameron: Yeah, right. Prob­lem is, um, there’s such a long gap between us watch­ing the first sea­son and the sec­ond sea­son that we’re like, Who’s, who’s that? What did they do? What hap­pened last time? I can’t remem­ber. I have to ask the boys. Cause I think Tay­lor watched them back to back. So I’m like, who’s she again? He has to tell me.

Um, [01:25:00] Tay­lor and Amy, his girl­friend have got tick­ets to the pre­miere. I guess there’s an event, the final episode of Sev­er­ance comes out this week. Um, there’s an event hap­pen­ing in Hol­ly­wood with all the cast and Ben Stiller and Tay­lor and Amy have got tick­ets to that that she got from her agent. They’re like doing, you know, sort of after par­ty stuff with all of them, I think.

So

TK: Oh,

Cameron: it’ll be fun for them.

TK: Yeah.

Cameron: Tell you the oth­er thing I’ve been lis­ten­ing to, which you might be into is ear­ly Blondie live record­ings.

TK: Mm hmm.

Cameron: There’s a bunch on Spo­ti­fy. I just dis­cov­ered recent­ly, like late sev­en­ties, 78, 79. Live gigs from Blondie at var­i­ous places when they were still, when they were like a punk band before

TK: Atom­ic.

Cameron: sort of full dis­co.

TK: Moroder. Yeah.

Cameron: [01:26:00] Yeah. Well, um, you know, the, the, uh, we’ve talked about this before, but the. Hangin on the Tele­phone and, um, Heart of Glass were co writ­ten, pro­duced by Bris­bane Boy, Mike Chap­man.

TK: Mm.

Cameron: And on Spo­ti­fy they have demo record­ings that he did where he sang the bits and did the pro­duc­tion. And if you go on Spo­ti­fy you can find Blondie’s orig­i­nal demo of Heart of Glass which was called, uh, some­thing else.

One of the oth­er lyrics from it. Um, And it’s a reg­gae song

TK: Uh huh.

Cameron: and it was Mike Chap­man. I think that decid­ed to turn, put a faster beat behind it. And then they then, um, Chris Stein came up with the digital[01:27:00]

TK: Mm.

Cameron: thing behind it and you, you can sort of, there’s like three or four ver­sions of it on Spo­ti­fy. You can see it go from uh, sort of a funky island records reg reg­gae beat through to what it end­ed up as.

And it’s kind of fas­ci­nat­ing, but yeah. But, uh, they’ve got a song, Kung Fu Girls, that, uh, has become Chris­sy’s theme song now, which is just, uh, real­ly kick ass, three chord, Stooges y type punk track. They could real­ly Throw down in their ear­ly days.

TK: yeah. I used to, I real­ly liked them. Um, and then Des McCauley gave me

Cameron: Thought you might. Yeah. Yeah.

TK: B, I think was at Par­al­lel Lines. They were great. Albums in the late 70s. What was the movie with um with Deb­bie Har­ry in it? I’m just try­ing to remem­ber there was [01:28:00] an indie movie where she did a cou­ple of tracks

Cameron: Yeah. I, um, vague­ly recall that, um, just look­ing it up.

TK: Yeah, I’m try­ing to as well.

Cameron: Video­drome, 1983.

TK: don’t think so. Union City maybe?

Cameron: Hair­spray, should have ver­sion of hair­spray. Um,

TK: I remem­bered it as Union City but I don’t think that’s it. not the one I’m think­ing of where she was out in the desert play­ing, um, I just can’t remem­ber who it was. Way back in the ear­ly

Cameron: hmm. Well there was a film called Union City, Road­ie, Video­drome, Rock and Rule,

TK: Oh, it might have been Road­ie.

Cameron: New York Sto­ries, Girl at Blind Alley. Eh, don’t know. [01:29:00] Any­way,

TK: Yep, any­way,

Cameron: it’s good to get into that. I haven’t heard of ear­ly Blondie for a long time.

TK: Yeah,

Cameron: And I’m still read­ing, um, still read­ing, uh, Bukows­ki among oth­er things. But I, via Bukows­ki, I I came across this guy I was going to ask you about, that he was a big fan of, but was sort of a lit­tle known writer.

A guy by the name of John Fante. His most famous book is called Ask the Dust. Well, I was read­ing one of the Notes of a Dirty Old Man parts, and Bukows­ki was talk­ing about the books that peo­ple should be read­ing. And Fante, he says, is the great­est writer of all time. And when I looked him up Uh, turns out that he, he was the guy that inspired Bukowski’s style of writ­ing, um, and [01:30:00] he did­n’t have a lot of suc­cess, but, um, I thought you might’ve known about him.

So I got my hands on, uh, this book, ask the Dust or what­ev­er it’s called. Fan­ta, F‑A-N-T‑E. Yeah, ask the Dust. So when I fin­ish the Bukows­ki, I’m gonna. Going to read that because it’s inter­est­ing, dig­ging back into that sort of, uh, mid 20th cen­tu­ry Amer­i­can skanky lit­er­a­ture, which is always fun.

TK: Yeah.

Cameron: Bukowski’s so great though, just like, like almost every para­graph of his, I just want to copy into my book of notes, you know, just so much great stuff.

Any­who, alright, I know you got­ta go, I got­ta go, uh, have a great week, thank you TK, uh, have a good week every­one, and we’ll be back next time with more, see whether or not [01:31:00] crash­es the mar­ket the next week.

TK: Yep.

Cameron: Yeah, yeah, you think, you go think,

TK: Hmm.

Cameron: alright,

TK: We’ll have,

Cameron: thanks, cheers,

TK: about it next week too.

Cameron: oh we will, yeah, we, I’m sure he’ll, he’ll be think­ing about that

TK: Hmm.

Cameron: between now and then,

TK: Have a good week.[01:32:00]