QAV AU 839 — Breaking Nose

AU 839

[00:00:00]

Cameron: Wel­come to QAV Tony, episode 8 3 9. How you doing?

Tony Kynas­ton: Good. Good. Thank you. Back from Wag­ga had a great time,

uh, catch­ing up with Rod­dy, play­ing golf. Played three days of golf, stayed up late, blew the diet, had fun.

Cameron: Blew the diet.

Tony Kynas­ton: Oh, it’s,

Cameron: diet.

Tony Kynas­ton: well now I don’t drink. It’s like, it’s the only sort of advice I can do when I’m away from home is to have a bit of choco­late. Stay up late.

Yeah,

Cameron: Right.

Tony Kynas­ton: it was good fun.

Cameron: I can think of oth­er things you could do, but

Tony Kynas­ton: Yeah. It’s like good eye. But any­way, we did­n’t, not with Rod­dy any­way.

Cameron: Well, I think I was gonna say, you hit the town with rud­dy. I think

Tony Kynas­ton: Ah, right. Have you been to Wag­ga Wag­ga? It’s like,

Cameron: No,

Tony Kynas­ton: you can, you can go to the Air Force Pub, the Army pub, or the stu­dent pub. And if you

wait long enough, they all get togeth­er in the main street and fight at [00:01:00] about mid­night.

Cameron: Well, there you go.

speak­ing of fight­ing those peo­ple that are on, uh, our YouTube or Tik­Tok will notice my two black eyes and bruis­ing around my nose.

Tony Kynas­ton: uh.

Cameron: Uh, um, yeah, I got my nose bro­ken on Sat­ur­day and kung fu um, by a, by a 16-year-old lad, who dur­ing spar­ring, uh, sort of broke one of the car­di­nal rules and did a spin­ning elbow hit me in the nose. He’s pulled the spin­ning elbow on me a lot of times in spar­ring, and, um, I nor­mal­ly catch it. I’m wait­ing for it. I was­n’t wait­ing for it this time, me by sur­prise, slammed into the bridge of my nose and broke my nose. So that was fun.

Tony Kynas­ton: did he say dirty com when he did it?

Cameron: Dirty Com­mie?

Tony Kynas­ton: Yeah.

Cameron: Uh, no, no, no, no. He was hor­ri­fied and, [00:02:00] um, tried to leave. his bag, uh, after check­ing on me

Tony Kynas­ton: Oh.

Cameron: I said, I’m fine. I said, get out there, let’s talk. Go. It was an acci­dent, don’t wor­ry about it. And he was, he tried to pack his bag and leave and I had to stop him and say, dude, it’s okay.

Like, acci­dents hap­pen. You know?

Tony Kynas­ton: Or was a ball like

shark high

Cameron: Yeah, a

Tony Kynas­ton: get hurt.

Cameron: ice ice pack on my nose at the time, so it’s the first time I think I’ve had my nose bro­ken, so that was fun.

Tony Kynas­ton: Oh, wow.

Cameron: Any­way, so break­ing news, Tony. Um, before

Tony Kynas­ton: Apart from your nose?

Cameron: notes, pub­lish Nose. Oh, there’s a good episode. Hey, that’s a good title. Good

Tony Kynas­ton: Uh

Cameron: News.

Tony Kynas­ton: oh. When I first saw it, I thought Fox must have been, it must have grown a bit taller.

Cameron: Well, I went to, I went to see the GP yes­ter­day to get an X‑ray, uh, done on it. And first thing he said was, uh, oh, domes­tic vio­lence. [00:03:00] And I said, not this time. No, but I was say­ing to Chris­sy like, prob­a­bly believe me. But if Chris­sy had gone in there with the bro­ken

Tony Kynas­ton: Yeah.

Cameron: would’ve been a com­plete­ly dif­fer­ent sto­ry, I would’ve had to get a, a note from the fus.

I think to,

Tony Kynas­ton: Mm-hmm.

Cameron: back up my sto­ry news, just before we start­ed, uh, com­ing, going on, on air, on inter­net, on wifi, uh, South­ern Cross Media and sev­en West Media announced merg­er,

Tony Kynas­ton: Ah.

Cameron: to step down. Both are on our buy

Tony Kynas­ton: Mm-hmm.

Cameron: Uh, as far as I can tell, the share price has­n’t real­ly changed a great deal, uh, since the announce­ment came. But, um, you know, there, these are two of those com­pa­nies that when­ev­er I see them on the buy list, I kind of go, Ugh, not these guys again.

Tony Kynas­ton: Kind of like Mabb.

Cameron: Yeah. Kin­da like Mabb, kin­da like, [00:04:00] Atlas Pearls and who were the

Tony Kynas­ton: Oh,

Cameron: days?

Tony Kynas­ton: you don’t like Atlas Pearls? Uh, Apol­lo Tourism and Leisure.

Mm.

Cameron: got burnt by Atlas Pearls because of the,

Tony Kynas­ton: Ah, okay. Mm-hmm.

Cameron: SXW, uh, sor­ry. SXL. Um, oh yeah, it’s, uh, bumped up a bit. Uh, no, not today. Does­n’t actu­al­ly, it’s gone down today, so there you go.

Um, hold on. That’s, that’s not ASX. No. Even ASX has gone down a bit today. So that’s not good. not react­ing to the news very well. Who? And,

Tony Kynas­ton: It’s ah, it’s pos­si­ble that peo­ple are crunch­ing the num­bers to work out which side to to buy. It’s usu­al­ly you buy one and sell the oth­er in a merg­er.

Cameron: okay, so who’s the oth­er one? What’s,

Tony Kynas­ton: it was SWM and SXL?

Cameron: SWM[00:05:00]

Tony Kynas­ton: Yeah. Sev­en West Media.

Cameron: What’s going on now? Their show price is down too, from 16 cents down to 15 cents.

Tony Kynas­ton: No one likes the merg­er.

Cameron: Yeah. ’cause I was like, oh, well, you know, one of them will have, uh, jumped up as a result of that. Mm, no. Appar­ent­ly not.

Tony Kynas­ton: You promised us excit­ing news,

Cameron: Wow. Bro­ken nose. I

Tony Kynas­ton: bro­ken nose.

Cameron: Did­n’t say it was big. I tell you what

Tony Kynas­ton: Hmm.

Cameron: though, Tony is the, uh, port­fo­lio updates. I know I said this the last time we spoke, which was a cou­ple of weeks ago, but, um, port­fo­lios going nuts. Look at the light group. The light group all times. So this is like Feb­ru­ary 22 to today is up 20% per annum ver­sus 11% over the same time­frame for the SBDR 200. So almost dou­ble. But [00:06:00] if I look at the cur­rent cal­en­dar year, the group is up 31.5% ver­sus 10.8 for the bench­mark just nowhere going

Tony Kynas­ton: be report­ing, it’s got­ta be report­ing sea­son­al. The, the result of report­ing sea­son, I would think.

Cameron: Yeah,

Tony Kynas­ton: Yeah.

Cameron: up.

Tony Kynas­ton: Hmm.

Cameron: that, the first of the port­fo­lios, the one that’s real­ly strug­gled, 2, 2, 1 has jumped mas­sive­ly since report­ing sea­son.

Tony Kynas­ton: Good.

Cameron: back to all time, it’s still try­ing to catch up to the index. It’s at eight and a half ver­sus 9.8 for the index. But this is com­ing from a point where mid 2023, it was down 10% when the index was up five. it’s made a lot of head­way, uh, since report­ing sea­son. But, uh. The oth­ers 2, 2, 2 is up 18 and a half [00:07:00] ver­sus nine, since incep­tion 2, 2, 3 up 20.6 ver­sus 12 since incep­tion. And the fourth one is up 24% ver­sus 11 since incep­tion. Um, so yeah, like it’s, you know, in the dark days, you know, I tell myself all we need is a good peri­od and, uh, we, you know, back on top. But you know, you have to believe trust in the log­ic. Trust in the his­to­ry, what I’ve seen hap­pen before. And, uh, and then it hap­pens and you’re like, oh yeah, this thing does work. Dum­my port­fo­lio. Well, no, I know that, but you know, it’s still, you’re like, you know, it’s

Tony Kynas­ton: I know you were,

Cameron: and.

Tony Kynas­ton: you were, you were say­ing to me, can you rec­on­cile the trans­ac­tions? Can you look at the light port­fo­lio num­ber one and why isn’t it work­ing as well and all. It’s like, wait,

Cameron: no,

Tony Kynas­ton: it was sort it [00:08:00] out.

Cameron: you want me to check that? Make sure you’re doing the right thing.

Tony Kynas­ton: No, I did check it. You’re right.

Cameron: the dum­my port­fo­lio since incep­tion is up, uh, close to 18% per annum ver­sus eight and a half for the index. had a lit­tle bit of a bump too, but uh, it’s, you know, does­n’t show as much as the oth­er ones, but it’s doing bet­ter than dou­ble since incep­tion. So, uh, all good on those fronts. Tony, um,

Tony Kynas­ton: isn’t it?

Cameron: the, uh, stock Edia one too, let me bring that up while I’m at it. We’ll do a US show after this, but, uh, for what it’s worth for peo­ple that are pay­ing atten­tion, our US port­fo­lio all time is cur­rent­ly up 65% ver­sus 50. the s and p 500. it’s come back quite a bit from its hey­days, it’s even been falling late­ly. Um, over the last one year, it’s only [00:09:00] up 3% ver­sus 16 for the s and

Tony Kynas­ton: Oh, okay.

Cameron: well, it came back, as I say, over and over again. Um, pre-Trump, it was gang­busters, Trump tar­iffs, all that kind of stuff.

And it, uh, took the wind out of its sails.

Tony Kynas­ton: So it’s a, it’s, it’s a Demo­c­rat port­fo­lio. Is it? So what’s the,

Cameron: it’s a san­i­ty port­fo­lio. Yeah.

Tony Kynas­ton: yeah.

Cameron: insan­i­ty.

Tony Kynas­ton: a white port­fo­lio.

Cameron: Yeah. But all, you know, all in all, it’s still doing quite well.

Tony Kynas­ton: Mm-hmm.

Cameron: in, uh, two years. So, you know, noth­ing to be sneezed at,

Tony Kynas­ton: Mm-hmm.

Cameron: but at one point it was doing like three times the index, which at the end of last cal­en­dar year it was up 95% ver­sus 35% for the s and p 500.

And, uh, then Trump got elect­ed and every­thing, [00:10:00] every­thing, every­thing went back­wards. But, uh, still it’s doing okay. Uh, alright, so that’s the port­fo­lios. Uh, I’ve got some bad news for you though, Tony, the gold­en age of val­ue invest­ing is over.

Tony Kynas­ton: Real­ly, it’s news to me. Yeah.

Cameron: Nev­er heard that before. I saw this in Bloomberg a week or so ago by Guy spear guest colum­nist. Bloomberg. He’s the author of the Edu­ca­tion of a Val­ue Investor and has man­aged aqua­ma­rine Zurich’s pri­vate­ly offered invest­ment funds since 1997. You’re famil­iar with the edu­ca­tion of a val­ue investor, Tony? Ever read that?

Tony Kynas­ton: I have. Yeah.

Cameron: Okay.

Tony Kynas­ton: Um, I’m just, just laugh­ing at, ’cause it was at Albert Spear run­ning the Zurich port­fo­lio. It’s like,

Cameron: Wrong spear, spelt

Tony Kynas­ton: I said, okay. [00:11:00] Maybe,

Cameron: hit, not Hitler’s archi­tect.

Tony Kynas­ton: Yeah. No,

Cameron: One of my favorite Nazis, though, I’ve got­ta say spear.

Tony Kynas­ton: because he, ’cause he defect­ed.

Cameron: well, no, but because he, well, he sur­vived Nurem­berg, but his archi­tec­ture was amaz­ing. Like he,

Tony Kynas­ton: Ah.

Cameron: great archi­tect. Any who, and a, and a reluc­tant Nazi, I think. But you know, any who. Um, this is what Guy Spear has to say. Um, for 30 years, my advan­tage as an investor was painstak­ing research. AI just made it worth­less. Uh. Um, he talks about his his­to­ry, Berk­shire Hath­away, blah, blah, blah. Uh, in those days, poten­tial investors in my fund used to ask, what’s your edge? Per­haps it was a short­hand for, do you have a source of insight infor­ma­tion Or more polite­ly, what’s your vari­ant insight? If I had any at all, it was based on this sort of scut­tle­butt, but that world is now [00:12:00] gone. Over the last decade, many of those advan­tages have been erod­ed, pound­ing the pave­ment, smil­ing and dial­ing were no longer nec­es­sary because those hard earned insights were being emailed, tweet­ed, live streamed, YouTube pod­cast­ed and more. Yes, you still had to pick your sources, but there was so much more that were sim­ply avail­able at the tips of any ana­lyst’s, fin­gers, and now comes ai. The way invest­ment research changed in the inter­net age was glacial­ly slow when com­pared to the earth­quake that as LLMs before Chat­G­PT, you still had to have the patience to assem­ble and read through the mosa­ic of sources.

Now you can just ask Chachi, t or Gem­i­ni to do all the trawl­ing. An LLM can give an instant sum­ma­ry of all that has been said in the pub­lic domain about a com­pa­ny, and it can be instant­ly ana­lyzed to pro­vide the cur­rent state of wis­dom on the top­ic. Um, fun­ni­ly though, you know, I’m in the val­ue invest­ing sub­red­dit and I con­stant­ly see peo­ple, uh, most­ly Amer­i­cans say­ing, I can’t find any­thing to buy.

There’s noth­ing to buy, no val­ue. Every­thing’s gone. [00:13:00] And I’m think­ing, I just did my US check­list and there was 200 com­pa­nies on the US check­list and you know, and, and, and I’ve gone over, I don’t think I’ve done it on this show, uh, for a while, but if I, I, do it on the US show. If I look at the, uh. Pulled porks I’ve done on QAV Amer­i­ca in the last five months. You know, Chemex is up 68% since then. Zep is up 1500%. Sasol is up 43%. Gray media is up 40% IHS is up 37%. Orx is up 27% Cana­di­an Impe­r­i­al bankers up 23% since, so did it in May. Uh, and then the rest are all up sin­gle dig­its, lit­tle bit low­er. Dou­ble pre­ci­sion drilling is up 18%. Like, um, plen­ty of val­ue we were find­ing in those stocks in those hun­dreds.

So I don’t, I don’t know that the tech­nol­o­gy, I remem­ber, you know, when [00:14:00] War­ren was asked about ai, I think a year or two ago at the Ag GM, you know, he said peo­ple will still be greedy and stu­pid. Um. You know, it does­n’t mat­ter what the tech­nol­o­gy plat­form is, he’s seen tech­nol­o­gy come the last 60 years and peo­ple still aren’t being long-term val­ue investors.

So I don’t know. I’m not sure that it’s as over as Guy Spear thinks.

Tony Kynas­ton: I don’t think it’s over at all. I mean, maybe it’ll end one day. Um, I mean, there’s a, there’s a cou­ple of real­ly big shifts in tec­ton­ic plates in invest­ing. And the rise of pas­sive or index invest­ing and ETFs is huge. Um, and. Spears, his right to talk about LLMs and

being able to have even more infor­ma­tion at your fin­ger­tips.

And he talks about not need­ing ana­lysts any­more to work for him. So yeah, all those things are huge, but how­ev­er, there are still always anom­alies. [00:15:00] And that’s what val­ue invest­ing is about. It’s about find­ing some­thing which is worth more than the price you’re being asked to pay for it. That’s an anom­aly.

So things like CB, a Comm­Bank, it is over­val­ued, but it’s still held in every index fund ’cause it’s the biggest stock in the share mar­ket.

So

hold­ing

Cameron: side neu­tral?

Tony Kynas­ton: pas­sive funds in over­val­ued mar­kets is a mugs game long term.

Cameron: know

Tony Kynas­ton: And even­tu­al­ly when

the mar­ket works it out and trades that way, it’s prob­a­bly gonna be a buy­ing oppor­tu­ni­ty for val­ue investors,

Cameron: the

Tony Kynas­ton: for stocks like CBA when they’re, when they’re, the pen­du­lum swings the oth­er way.

Um, and also too, like those ETFs, I don’t, I think I talked about this a lit­tle while ago, but, um. Index ETFs tend not to hold the small caps, they sam­ple the small caps. So, um, the way that the ETF works is that it has some big part­ners who are always com­par­ing the price of the ETF to, to the [00:16:00] under­ly­ing stocks in the index and trad­ing away the arbi­trages.

So if the under­ly­ing stocks are cheap­er than the index ETF and they buy the under­ly­ing stocks and sell the ETF and vice ver­sa. And that’s what keeps the ETF hug­ging the index. But a small cap is a real­ly small dri­ver of that kind of arbi­trage. So they just don’t get trad­ed by pas­sive funds. Even though you think you’re buy­ing the index, you’re real­ly buy­ing the top stocks in the index.

Um, and that means that for small caps and, and I don’t know what size it kind of. What, what’s the cut­off? But, um, there’s still huge oppor­tu­ni­ties in, in the bot­tom end of the index, maybe even the bot­tom half of the index, uh, to be able to find things which are under­val­ued, um, that aren’t being moved by index funds.

And most of the, like most of the cap­i­tal in Aus­tralia is in, is large­ly in super­an­nu­a­tion funds these days. And they’re not inter­est­ed in small caps either. They’ve got, [00:17:00] you know, a DT prob­lems. Um, so there’s, there’s still a very open play­ing field for val­ue invest­ing, at least at the low­er end of the mar­ket in terms of mar­ket cap.

Um, but the big­ger argu­ment, as Buf­fet says, there’ll always be behav­ioral anom­alies. And that’s what cre­ates the arbi­trage for us as well, is the things like the greater fool the­o­ry will always be there. Um, so to be able to buy when oth­ers are sell­ing is, um, is a huge advan­tage to some­one with a val­ue invest­ing sys­tem or a val­ue in invest­ing mind­set.

It does­n’t get swept away in the, in the. Emo­tions of the mar­ket. So, um, and I also think too, that as pas­sive invest­ing as LLMs or

becomes even more preva­lent, they’re gonna be gained by the own­ers of the comp, by the man­agers of the com­pa­nies. ’cause they’ve got big incen­tives to keep their share prices going up.

So, um, I don’t know what, you know, how they will game those [00:18:00] sys­tems, but they’ll work it out and they will. So again, anom­alies will, um, hap­pen in the sys­tem and, you know, like, it’s like you don’t hear the, you don’t hear the, the Matt Koman, the CEO of Comm­Bank say­ing, oh, don’t buy our shares. They took, they’re over­priced.

So, you know, in some, in some ways he’s kind of. Gam­ing the sys­tem by being qui­et about it, um, and allow­ing your shares to be bought when they’re mas­sive­ly over val­ue. CBA is the most expen­sive bank in the world, but it’s a, it’s a sleepy build­ing soci­ety, um, essen­tial­ly in terms of the rest of the banks and the world.

Um, and even­tu­al­ly it’ll be sold off on that basis and there’ll be a chance for val­ue investors to buy.

Cameron: An anom­aly in the sys­tem. That’s like, that’s what Neo was in the Matrix. He was an anom­aly in the sys­tem. But I think it’s, I think it’s mind­set. I think you nailed it. Like the tech­nol­o­gy is a sec­ondary thing. It comes down to the mind­set. my favorite quote that I’ve used in all of my, I think, light updates for the last six months is, uh, [00:19:00] from Lynch, uh, every­one’s a val­ue, every­one’s a long-term investor until the mar­ket col­laps­es or some­thing like that, until the mar­ket goes down.

Tony Kynas­ton: Yep.

Cameron: and we saw that with our mem­bers dur­ing the tar­iff inter­est rate ris­es and of the things that hap­pened there, the trade wars and all that kin­da stuff. Uh, the Ukraine war, when the mar­ket col­lapsed, peo­ple just evac­u­at­ed. Um, you know, they give in, they’re like, ah, no, I can’t stom­ach this.

I’m like, well, you know, it’s not gonna last for­ev­er. Right. Goes down and comes back up. But, um, yeah, some peo­ple just aren’t cut out for hold­ing on for the long term, fol­low­ing the rules, regard­less of what the under­ly­ing tech­nol­o­gy is.

Tony Kynas­ton: That’s right. That’s, that’s exact­ly the point. Just make you, the tech­nol­o­gy is a tool that lets you do it faster and quick­er and across, you know, more stocks, but it does­n’t change the approach real­ly.

Cameron: Yeah. Until the AI [00:20:00] takes over your port­fo­lio and goes, no, I’m not gonna let you sell. That would be stu­pid. Um, sor­ry. I’m sor­ry, Dave. I’m afraid I

Tony Kynas­ton: Yeah.

You haven’t brought up, you haven’t bought up, uh, atom­ic Ener­gy, elec­tric­i­ty plants from my, my, um, what do you call ’em? Data Farm from my serv­er farm. Yeah.

Cameron: what you got on your list of talk­ing points? Tk. I’ve got 20 sto­ries here, so I’ll let you take one

Tony Kynas­ton: Oh, okay. Thanks. I got a few. Um, so if any­one lis­tened to our show last week, which was an AI gen­er­at­ed dis­cus­sion about the QAV Bible, it, it did men­tion an out­dat­ed fig­ure. So I just wan­na clear the air that, um, back when we start­ed QAV, my CGA was 25, it was 19.5%, but it’s not that today, it’s come down. Um, it’s less than that.

Um, I went and had a look at the mar­ket over the same time peri­od and that’s also gone down. So I’m still dou­ble mar­ket, but, [00:21:00] um, but not 19.5%. So I want­ed to just clar­i­fy that and I, I think that’s fair. I think, um. The mar­ket’s always gonna come up and go up and down and over the long term, the aver­ages will rise and fall.

And I think, I think because we’re invest­ing in the share mar­ket, we’re kind of, I’m kind of tied to the share mar­ket. So say­ing some­thing like we hope to achieve dou­ble mar­ket is a much more real­is­tic goal. And putting a num­ber out there and say­ing, you’ll get 19.5% or what­ev­er the num­ber is. There’s been peri­ods when I’ve had more than that.

This is a peri­od where I’m hav­ing less, as you said before, we’ve come through a two or three years of ris­ing inter­est rates. They’ve just been cut recent­ly. But, um, and, uh, lots of, lots of humal in world mar­kets, um, because of what’s going on in Ukraine, Rus­sia in the us. Um, so yeah, I’m not get­ting 19.5%. I just want­ed to clar­i­fy that.

Cameron: And we’ve changed it to dou­ble mar­ket every­where else in

Tony Kynas­ton: Yeah,

Cameron: miss one of the [00:22:00] lines in the Bible, so

Tony Kynas­ton: no, that’s fine. I

that.

Don’t hold that against you, but I just want­ed to clar­i­fy it. Um, in terms of stock news, I had a look at the lat­est buy list and Grange Resources is back on. I for­got. I did a down­load today to prep for the show and, um, gr r’s the code. And I remem­ber doing a pulled pork on Grange back in Feb­ru­ary and I, I can’t recall if we red flagged it.

We may have, but um, I was real­ly sur­prised to see the stock being bid up at the moment fol­low­ing its lat­est results, which by the way, and it lat­est results, the prof­it was down 48%, um, half on half. Yeah. And back in Feb­ru­ary, the, the dri­ving, um, or the biggest risk that they, they face was, uh, and I’ll quote from, um.

Uh, I can’t recall who, where this came from, pos­si­bly from the AFR, pos­si­bly from a Tas­man­ian news­pa­per. Um, but it says one of [00:23:00] Tas­ma­ni­a’s biggest employ­ers has warned that it’s 1.3 bil­lion plan to expand the Sav­age Riv­er Mine South is unvi­able at fi, fore­cast iron prices. So. Uh, the mine that oper­ates. So go, I’ll go back a step.

Gran Resources is an iron ore min­er and it’s, um, it’s sell­ing point is that it mines iron ore pel­lets, which are, um, I guess con­cen­trat­ed iron ore, I guess if I can sum­ma­rize it that way, which makes it eas­i­er to trans­port, um, which they need because they’re fur­ther away from the mar­kets than the WA min­ers are.

Uh, but also greater puri­ty. So, um, that’s its big advan­tage. How­ev­er, the mine that they oper­ate from in Tas­ma­nia is, um, get­ting close to final­iza­tion. So again, the arti­cle says the mine’s out­put will begin falling in 2027 and it is expect­ed not to pro­duce any­thing by about 2029 if the site which pro­duces the high grade iron or con­cen­trate shipped from a jet and knee burn does not process.[00:24:00]

Pro progress with the pro­posed under­ground expan­sion. Um, and they, they came out and said they weren’t going to, and the share price went down a lot. And, um, uh, I did a pulled pork on it and said, look, we prob­a­bly should­n’t be invest­ing in this if it’s, if it’s got a mine life of at the most four years, um, it’s gonna even­tu­al­ly wind up.

There was a cou­ple of sav­ing graces, I think from mem­o­ry. They were look­ing at start­ing a mine in wa and as at the stage of the pulled pork in Feb­ru­ary, they had­n’t decid­ed whether they were gonna go ahead with it and they were still crunch­ing num­bers on, um, the expan­sion to the mine In Tas­ma­nia, it looks like what’s hap­pened is, um, they’ve come out and said that they, they’re now seri­ous­ly con­sid­er­ing turn­ing the mine, which is an open cut mine in Tas­ma­nia into an under­ground oper­a­tion and that will help.

The busi­ness because [00:25:00] it’ll be cheap­er to run than an open cup mine. And the rea­son for that is because it, it’s, what was it called now? Block. Block cave is the process they’re going to use bit like blockchain, but in a cave. Um, and the idea is that instead of blast­ing to, uh, get at the, uh, iron ore, um, they drill a bit and let the mine col­lapse a bit, and that, um, helps to sep­a­rate the iron ore from the what­ev­er’s around it, the dirt, I guess.

Uh, and that improves the effi­cien­cies of, um, min­ing for the iron ore. How­ev­er, that requires some­thing like near­ly a bil­lion dol­lars of financ­ing to, to make that change. So the com­pa­nies announced that they are try­ing to secure that financ­ing, and that’s their plan, and that’s where it’s at. Um, so despite hav­ing real­ly poor results, I think the mar­ket’s say­ing, well, maybe they will go on min­ing from this mine.

So I think it’s a, it’s all very risky and up in the air. And if, um, I’m just kind of call­ing this out for peo­ple to be ful­ly aware, if they do see Grange on the [00:26:00] buy list to. Do your own research and maybe by the time some­one decides to buy it, there’s more clar­i­ty as to what’s hap­pen­ing in the mine’s future.

But at this stage it’s, it’s um, it’s slat­ed to close in four years. It’s, uh, await­ing finance to con­vert from an open cut to a, um, an under­ground mine. It’s using this block cave process I’ve nev­er heard about before. So maybe it’s pio­neer­ing tech­nol­o­gy. And they, the arti­cles also said they were going to make a num­ber of their staff redun­dant ’cause they need less peo­ple on the pit.

Um, on the, uh, yeah, on the under­ground mine com­pared to the open pit. So there could be indus­tri­al prob­lems. So there’s all sorts of issues this com­pa­ny has to get through before I be bull­ish on the stock. So just bear that in mind if you see it on the buy list.

Cameron: Well, I just wan­na point out that when you did the Paul Pork, that was in our episode 8 0 6, came out on Feb­ru­ary 12th, 2005, the title of which was the Riley Indi­ca­tor, when I sug­gest­ed that a lack of [00:27:00] sell sig­nals could indi­cate an impend­ing mar­ket cor­rec­tion, you sn it at me at the time. Um, I wan­na point out that the all odds on the 12th of Feb­ru­ary was at 8, 8 0 4.

It then slid all the way down to 7, 5, 6, 1 on the 9th of April recov­er­ing. Um, so I think the Riley indi­ca­tor has been proven, now

Tony Kynas­ton: Shall we try?

We’ll trade it from now on.

Cameron: Unfor­tu­nate­ly, I stopped track­ing the num­ber of cell sig­nals at some point after that, so I don’t have any data. I could prob­a­bly do it, but yeah, I remem­ber think­ing at the time, there was, uh, not a lot of things turn­ing up in my new cells list and that that was prob­a­bly a sign that things were a bit frothy. Prob­a­bly not an orig­i­nal insight. I, I, I con­fess. But, uh, there you go.

Tony Kynas­ton: I don’t think any­thing I do is [00:28:00] orig­i­nal, so.

Cameron: Yeah, good point. Maine, uh, fore­cast Tony inside Maine farm­ers suit as bat­tle to sink. Project croc­o­dile. I saw this on the. Uh, finan­cial review this week, US Health­care giant Cosette alleges Maine, should have known it could not mean not meet earn­ings fore­casts when it signed the 671 mil­lion deal in Feb­ru­ary. So basi­cal­ly the, uh, down here. You know, we, um, talk a lot about, um, dis­clo­sure and our com­plaints about the lack there­of. It looks like we’re not the only one who’s upset about. Um, I’m mak­ing alle­ga­tions about lack of dis­clo­sure. This US pri­vate equi­ty based, [00:29:00] uh, com­pa­ny had agreed to buy main farmer, an Ade­laide based man­u­fac­tur­er of wom­en’s health and der­ma­tol­ogy prod­ucts for $671 mil­lion in a deal code named Project Croc­o­dile the due dili­gence process, CO’s army of lawyers and advi­sors wad­ed through 2000 doc­u­ments down­loaded into an AI pow­ered vir­tu­al data room set up four months ear­li­er. Bot­tom line is that, uh, main hand­ed coz and earn­ings fore­cast based on six months of actu­al earn­ings and anoth­er six months of fore­cast for the 2025 fis­cal year at pro­ject­ed earn­ings before inter­est tax­es. Depre­ci­a­tion, amor amor­ti­za­tion of 69.9 mil­lion. Coze is try­ing to ter­mi­nate the deal because it says there was a mate­r­i­al adverse change in con­di­tions. Um, appar­ent­ly main uploaded a doc­u­ment into the data room enti­tled CFO report Feb­ru­ary FY 25, which was [00:30:00] grim read­ing accord­ing to the finan­cial review. And, uh, things weren’t going as well as they said they were gonna go. And so this com­pa­ny’s upset about it. I don’t think Maine is some­thing that we hold or own, or have talked about, but I just thought it was, it was an inter­est­ing sto­ry that, um, fore­cast even at that lev­el of deal fore­casts and pro­jec­tions and trans­paren­cy. Appar­ent­ly these guys have some con­cerns. Alleged con­cern, well, not con­cerns, con­cerns over alleged mis­rep­re­sen­ta­tion of the, uh, finan­cials. I thought, oh, yeah. We’re not the only ones who feel upset about that.

Tony Kynas­ton: Yeah. Yeah. I mean, it’s a deal too. So who knows what the moti­va­tions were to make pro­jec­tions, prob­a­bly to get the sale done, I guess.

Cameron: yeah. What else you got?

Tony Kynas­ton: What else have I got? [00:31:00] Uh, well, it, um, it range weren’t the only ones with bad results. There’s a cou­ple of oth­er stocks that are on our buy list, which, uh, peo­ple won’t be buy­ing because the sen­ti­men­t’s bad. But, uh, KAR Karoon ener­gy came out with a npa, uh, NPA num­ber, which was down 61% on last year’s, and the CEOs exit­ed.

Looks like the CEOA guy called Julian Fowls is leav­ing because the com­pa­ny’s going to relo­cate its head­quar­ters into, uh, Hous­ton. Um. And he did­n’t wan­na move there. Uh, but they don’t have any­one yet to replace him, and they, he’s stay­ing on till the end of the year to run things, um, till that hap­pens. Uh, but yeah, they’re in, they’re in a lot of, lot of pain at the moment.

Karoon, um, we’ve, I did a pulled pork on them. They are oper­at­ing and explor­ing [00:32:00] oper­at­ing fields and explor­ing for, uh, oil and gas in the waters off Brazil. And, uh, they’ve had a very up and down sort of peri­od with that. And they’re also being pushed around by the com­mod­i­ty prices too, so not a great result for them.

Um, the oth­er one was Mabb and I, I won’t go into it in too much detail because it was splashed across the front page of almost every paper, but, um. Myers down dra­mat­i­cal­ly from its highs. I think it got to about a dol­lar 20 and now it’s down around 30 or 40 cents. So it’s a big fall from Grace. The head­line or the arti­cle read in the first para­graph, Myers botched roll­out of its nation­al dis­tri­b­u­tion cen­ter, will cost 32 mil­lion more to fix and will not be ready for the peak Christ­mas trad­ing peri­od, uh, which caused a heavy sell off in the com­pa­ny shares after it report­ed a dis­ap­point­ing annu­al result.

The depart­ment store group led by exec­u­tive chair­woman Olivia Wirth, report­ed that net prof­it slumped [00:33:00] 30% to 36.8 mil­lion for the year to July 26th. The prob­lems with its new dis­tri­b­u­tion cen­ter as well as poor sales from its appar­el brands port­fo­lio, which had acquired from bil­lion­aire Solomon, who in Jan­u­ary weighed on earn­ings.

So, um, I remem­ber at the time we had lots of ques­tions when. May pro­posed, uh, to com­bine with a lot of the brands from Solomon Lou’s port­fo­lio, the appar­el brands port­fo­lio, and then inte­grate those into stores. And peo­ple were ask­ing, is it a good deal or a bad deal? Well, as it turns out, not that great at this stage any­way.

Cameron: hmm. I’ll tell you who isn’t good deal. San­tos AFR report­ing mas­sive. $36.4 bil­lion. San­tos takeover deal col­laps­es as ad knock walks away. Abu Dhabi nation­al oil com­pa­ny has walked away from its $36 bil­lion takeover for San­tos [00:34:00] becom­ing the third bid­der to aban­don a pro­posed acqui­si­tion for the coun­try’s sec­ond biggest oil and gas pro­duc­er.

In a shock state­ment, just two days before the dead­line for a bind­ing deal to be signed, XRG said it had with­drawn its indica­tive bid and would not pro­ceed to a bind­ing offer. So I had a note, uh, in our buy list on San­tos that it was, uh, a takeover,

Tony Kynas­ton: Yep,

you can.

can remove that.

Cameron: I can, well, I’m updat­ing the note to say the takeover col­lapsed. Um, so on the buy list? STOI know they have been on and off it. They’re not on it at the moment, but, um, the fact that it col­lapsed, I mean, is that a, is that a good sign or a bad sign for us [00:35:00] investors?

Tony Kynas­ton: Good ques­tion, isn’t it? And if you don’t know, unless XRG comes out and say, it says why it col­lapsed, but, um, and look, it, it may have col­lapsed because they, they had to, uh, um, they had to get for­eign invest­ment review, board approval, and I think also to the approval of the South Aus­tralian gov­ern­ment and per­haps even the trea­sur­er.

So they may have start­ed that process and worked out. It was­n’t gonna hap­pen, for exam­ple. So there could be a num­ber of rea­sons why it col­lapsed, or it could be that they did­n’t like what they saw when they got to the bot­tom of their due dili­gence. Um, so it’s, it’s not a good look when a takeover, um, does­n’t pro­ceed.

And, uh, yeah, I mean, we’ll let, we’ll let. Our num­bers tell us whether in the future it’s worth buy­ing or not. But, uh, San­tos has had a his­to­ry of merg­ing and get­ting bids, but they’re not [00:36:00] going ahead. So it’s, um, yeah, it’s a hard one, isn’t it? It’s, there’s, there’s some­thing about it that, that when peo­ple have a close look at it, they don’t like, and that’s a lit­tle bit wor­ry­ing, I think.

Cameron: Hmm.

Tony Kynas­ton: Could just be price. That’s always an issue. And it could be that they can’t get the approvals that they, they need if they’re an over­seas buy­er. But, um,

yeah, you just don’t know.

Cameron: Alright, well I’ll take my note off and we’ll keep an eye on it. What’s next?

Tony Kynas­ton: What else have I got? So the RBAs meet­ing today large­ly expect­ed to keep, keep rates on hold?

Cameron: isn’t it the first Tues­day of the month? Do they meet?

Tony Kynas­ton: No, I think I.

Cameron: of the month.

Tony Kynas­ton: No, it used to be, but like they’ve changed it now. They’re not, they’re not meet­ing month­ly. Um, so yeah, not, oh, maybe I’m wrong. I thought it was this week. Thought it was today. Could be wrong. Could be next week. [00:37:00] Um,

you googling it? Can you find out? I thought it was today,

Cameron: Um, yeah. No, it’s right. You’re right. Steven Miller, for­mer advi­sor to Paul Keat­ing. Not that Trump, Steven Miller dif­fer­ent. Steven Miller says, uh, meets Mon­day and Tues­day this week.

Tony Kynas­ton: right?

Cameron: Hmm.

Tony Kynas­ton: Yeah. So, but, um, I, I don’t think they’re gonna cut rates. I think they’ll be on hold. There was, there was some infor­ma­tion out last week on CPI, but, uh, I think from mem­o­ry there was a, maybe a month­ly indi­ca­tor and they like to wait for the quar­ter­ly. There was some depres­sion in the jobs num­bers, so, uh.

The, the con­sen­sus that I’m read­ing any­way is that they won’t, they won’t, uh, drop rates. They’ll stay on hold, so we’ll see.

Cameron: Did­n’t you get this com­plete­ly wrong last time?

Tony Kynas­ton: Yeah, yeah, yeah. Well, I’d like, I’d like to see them cut. I don’t think the econ­o­my’s going any­where fast, so I think we do need to cut, but, um, uh, I don’t think they will. We’ll see.

[00:38:00] Yep.

Cameron: emailed me after our last show when we were talk­ing about my buy­back, um, script. said, I think you have to check for buy­back noti­fi­ca­tions. Oth­er­wise you might include stocks that have under­tak­en a share con­sol­i­da­tion.

Tony Kynas­ton: That’s a real­ly good pick­up, Dave. I think he’s right.

I don’t think it’ll be an oner­ous task ’cause he only had three on the list with buy­backs or with share con­sol­i­da­tions or with reduc­tions in shares more than 5%. So would­n’t be hard to do a quick search on those three stocks to see if they did under­take a buy­back, which they have to announce.

Oth­er­wise it would be con­sol­i­da­tion. So I think Dav­e’s right. Good pick­up. Thanks Dave.

Cameron: right. Thank you, Dave. What’s next?

Tony Kynas­ton: So I saw an arti­cle in Livewire about some work Mac­quar­ie Bank researchers had done, and the head­line is, is Buf­fet’s Rule Reversed? And, um, the, the Buf­fet rule they’re talk­ing about was a quote that, uh, is [00:39:00] War­ren’s wide­ly known for Mabb in 1989. It’s far bet­ter to buy a won­der­ful com­pa­ny at a fair price than a fair com­pa­ny at a won­der­ful price.

Um, and that, you know, that’s kind of the essence of QAV is get­ting a qual­i­ty com­pa­ny at a, um, a won­der­ful price. Uh, and you know, that there’s, it’s my expe­ri­ence that the. The more mal­leable of those two things is the qual­i­ty score that you know that if we can buy some­thing that’s a bit low­er on qual­i­ty of the fair price, we still do it.

Um, and I think that this research from Mac­quar­ie has also found that too. So, uh, Mac­quar­ie glob­al Quant team, uh, back test­ed 30 years across 10 glob­al mar­kets and found that fair com­pa­nies at cheap prices often out­per­formed won­der­ful com­pa­nies, bought at fair val­u­a­tions. Um, so that’s kind of what I think too.

Uh, [00:40:00] they did iden­ti­fy some Aus­tralian stocks that they thought were, um, not great. So try­ing, how am I try­ing to say this? What’s the word­ing they’ve used? They’ve got a very awk­ward way of talk­ing about this. I, I guess to try and not to offend the com­pa­nies. They call ’em fun­da­men­tal­ly cheap stocks, busi­ness­es with fair to sol­id fun­da­men­tals that, uh, are offered at a cheap price, is what they’re say­ing.

And their list includes some of ours, like, uh, what’s this? We’ve had a rise in the past. It’s on their list. We’ve had, um, new Hope, it’s on their list. We’ve had Sky Net­work Tele­vi­sion. Uh, tow­er Insur­ance I think is, might still be on our buy list. Yanko was, cred­it Corp has been on the buy list. So fair­ly sim­i­lar sort of, um, over­lap to what we’ve seen and a fair­ly sim­i­lar result.

And it’s hard to go up against the, the great man War­ren Buf­fet and, um, say he’s wrong. But I, you know, I’ve always thought that, uh. [00:41:00] He changed cours­es mid­stream when he went from being a, a deep val­ue cig­ar but­ton investor to being, um, more of a qual­i­ty investor. And his returns were always bet­ter in the first half of his career than the sec­ond half of the career.

And I think, uh, that’s because he got away from deep val­ue, which he prob­a­bly had to. Qual­i­ty com­pa­nies are often high mar­ket cap com­pa­nies. Um, and he had to, as his funds got big­ger, go after high, high qual­i­ty com­pa­nies. But, um, any­way, bit of research, which backs up my find­ings as well.

Cameron: Dif­fer­ent chal­lenge when you’ve got hun­dreds of bil­lions that you need

Tony Kynas­ton: Yeah.

Yeah.

Cameron: Hmm. Accord­ing to a shout out to Bren­dan, I got an email from Bren­dan, um, over the last week. He’s just, he’s been a light mem­ber since 2022, which a round of applause, um,

Tony Kynas­ton: Thanks Bren­dan. Well done.

Cameron: well, because that was a rough cou­ple of

Tony Kynas­ton: Yeah.

Cameron: to stick it out dur­ing those cou­ple of years, take some, uh, stones, he [00:42:00] said, I said, how’s, how’s your port­fo­lio doing?

He just upgrad­ed from light to club and he said my port­fo­lio was slow­ly track­ing upwards through 23 and 24, but this year, since March, it’s scream­ing ahead, cur­rent­ly show­ing a 61.48% return. I use QAV Light for the major­i­ty of my invest­ing. How­ev­er, I also DCA into the s and p 500 and hold a few Mag sev­en stocks, which I owned before sign­ing up to QAV. But he then said the major­i­ty of my return has come from QAV light stocks, which make up rough­ly 65%. So, uh, well done Bren­dan.

Tony Kynas­ton: Yeah.

Cameron: Um, I don’t hear much from the QAV like mem­bers about how their port­fo­lios are doing, despite me ask­ing from time to time, but appre­ci­ate, uh, Bren­dan shar­ing that.

Hope you don’t mind me shar­ing it on the show, Bren­dan, but well done. Good on you for stick­ing out the rough years. That was a rough time to start. 2022. It was the dark years, um, when the ring in the hands [00:43:00] of, uh, the wrong peo­ple. Uh,

Tony Kynas­ton: And then if we’re still try­ing to get it back,

Cameron: No, we’re def­i­nite­ly back, baby. We’re back.

Tony Kynas­ton: oh, we are. Yeah. But the, the ring is still being held by some of the dark forces in the world.

Cameron: Oh,

Tony Kynas­ton: what else have I got? I’ve got, um,

no, actu­al­ly that’s all my news. I’ve got, uh, I pulled pork to do on M‑L-G-M-L‑G. Ords is the com­pa­ny. So when you’re ready.

Cameron: Well, I got a new new script ver­sion of my new script run­ning in the last week, so I got a bunch of news sto­ries with QAV relat­ed stocks. I’ll just run through them quick­ly. Min­ing receives pres­i­den­tial decree for Under­ground Under­ground Project at Y They received a pres­i­den­tial decree for this project, which is a sig­nif­i­cant mile­stone for the com­pa­ny. sig­nif­i­cant invest­ment of 170 mil­lion expect­ed for the project first or pro­duc­tion tar­get­ed for [00:44:00] Jan­u­ary, 2026. The, uh, this is in oh, get­away cook­ie, cook­ie thing. The ko Deir Ko Deir the Yor gold­mine is. It’s always good when you get the pres­i­den­tial decree. I thought it was Don­ald Trump, one of his decrees.

At first I thought they’d got a decree from him. He likes throw­ing those around,

Tony Kynas­ton: The share price react­ed well to that.

Cameron: did it.

haven’t Hmm.

for a cou­ple of days. P‑R-P-A‑U,

Tony Kynas­ton: One of my, first of all, I should say I hold it, but one of my bet­ter per­form­ing stocks.

Cameron: Yeah. Oh yeah. Look at that Jump from 4 65 up to 4 96. Came down a bit, but, uh, today. But yeah, it’s, um, it’s been a great stock in all of my port­fo­lios. I think I hold it in a bunch of dif­fer­ent port­fo­lios, [00:45:00] uh, it’s been, it’s been a real win­ner, has­n’t it, over the last cou­ple of years. Let me see.

P‑A-U-P-A‑U up, uh, yeah, super port­fo­lio, I’ve had it since April 24. It’s up 111%, added to a cou­ple of light port­fo­lios. Uh, may 24, it’s up a hun­dred per­cent. Uh, March, 2005, I added it to a cou­ple port­fo­lios. Light port­fo­lio’s up 60% since then. So yes, it’s been a ker,

Tony Kynas­ton: Maybe we should­n’t com­plain about the weath­er rings being held at the moment in the Dark Forces, because means the gold price keeps going up.

Cameron: Yeah. Uh, Wood­side breaks ground on a $17.5 bil­lion. Louisiana LNG mega project, sup­posed to enhance their posi­tion as a glob­al NNG leader. Uh, con­struc­tion on the first LNG train is [00:46:00] over 22% com­plete long-term capac­i­ty. Pro­ject­ed at 16.5 NPTA with poten­tial expan­sion sale of 40% stake to Stone Peak Invest­ment Firm. What’s Wood­side’s, uh, code W these

Tony Kynas­ton: WDSS. Yep.

Cameron: Yeah. Um, I put them out as a pos­si­ble in the light port­fo­lio in June. They’re only up 2% since then, but, uh, hope­ful­ly that’s gonna give them a bit of a bump. Aus­tralia approves exten­sion for Wood­side oper­at­ed NWS project, North­west Shelf Project. Anoth­er Wood­side News. They’ve received envi­ron­men­tal approval from the Aus­tralian gov­ern­ment with strict con­di­tions to man­age emis­sions. This is for, uh, well, this requires reduc­tion of emis­sions by up to 60% by 2030 and net zero by 2050. [00:47:00] There you go. So they hold a 33% inter­est in the NWS and relat­ed projects. ASX growth stocks with high­er insid­er own­er­ship, dis­cuss Dura Tech, anoth­er great QAV stock, dura Tech’s insid­er own­er­ship. Um. Thought this was inter­est­ing ’cause you know, we like skin in the game. in Yahoo Finance. The Aus­tralian mar­ket showed signs of resilience as the index rebound­ed, tak­ing cues from Wall Street’s, recent highs, blah blah blah. Goes on to talk about a bunch of com­pa­nies with high insid­er own­er­ship. Some are famil­iar like Findy, 33.6%, great QAV stock, but a bunch of oth­ers that I haven’t heard of. W‑W-Z-R‑W and the name is, the name of the com­pa­ny is WISR, wis­er Dun­no what they do. Point­er New­field Resources in Hype­r­i­on X [00:48:00] image resources. I haven’t seen them on the buy list for a long time, but they were a main­stay many years ago. Findy Echo IQ at Ver­i­tas and a crooks says Dura Tech. Uh, inside own­er­ship, 29.4%. And, um, I know that’s, as I said, that’s been a great QAV stock over the years. Uh, let me see up 316% in one of the light port­fo­lios since I added it in Novem­ber, 2022. Added it again in June of 23. It’s up 196%. Feb­ru­ary 23 to the dum­my port­fo­lio. It’s up 192% since then. Cou­ple of pos­si­bles I added to, it’s up 140%. A hun­dred per­cent. Any­way,

Tony Kynas­ton: Well, all I can say Cam, all I can say Cam is that the rumors of the death of val­ue invest­ing are great­ly exag­ger­at­ed.

Cameron: [00:49:00] Yeah, right. 300%

Tony Kynas­ton: Hmm

Cameron: Some news from Clover, I think they’re CLVI hold them in a light port­fo­lio. Clover’s full year 2025 earn­ings report high­light­ing sig­nif­i­cant rev­enue and net income growth, sur­pass­ing ana­lyst expec­ta­tions. increase by 38% year over year to 86 mil­lion. Net income surged 363% year over year to 7 mil­lion. Prof­it mar­gin rose, 8.2% from to, uh, two, sor­ry, rose to 8.2% from 2.4% and FY 2024. So, uh, let me see. How are CLV doing? Added them back in June to a light port­fo­lio. They’re up 37% since June. Not bad. White Haven coal. Uh, announced updates on their mar­ket buy­back progress. I thought this was inter­est­ing. With our recent [00:50:00] edi­tion of point Scor­ing for buy­backs, they’ve announced an update regard­ing its ongo­ing on-mar­ket buy­back of ordi­nary, ful­ly paid secu­ri­ties as of Sep­tem­ber 29th, 2025.

The com­pa­ny has repur­chased repur­chased a total of 5,794,792 secu­ri­ties. Um, there are Josephine on, they’re on our buy list this week, but Cole is a Josephine, so just let­ting peo­ple know that. And the last thing I’ve got is from. he sent me an email. Hi Cam. I sub­scribed to the Wall Street Jour­nal on some bar­gain sale recent­ly, and I’m quite enjoy­ing it. An arti­cle popped up today. Jonathan Clements, long­time WSJ colum­nist, dies at 62. Turns out he wrote the Wall Street Jour­nal per­son­al finance Col­umn. Col­umn. Get­ting going from 1994 to 2008 seemed inter­est­ing, so I kept dig­ging and found this col­umn from Decem­ber 31st, 2000. [00:51:00] these 25 basic prin­ci­ples or prin­ci­ples of invest­ment will help you save. Uh, I’m gonna run through them very quick­ly. Um, one time and a healthy sav­ings rate will solve most invest­ment wounds Two top finan­cial pri­or­i­ties should be max­ing out your 401k plan every year and pay­ing off your cred­it card bal­ance each month. If you do those two things and noth­ing more, you’ll be in bet­ter shape than the vast major­i­ty of Amer­i­cans. Three. Your employ­er’s stock is the risk riski­est stock you can own. After all, you already rely on your employ­er for a pay­check and pos­si­bly your health and life insur­ance as well. Why crank up the risk lev­el even more by bet­ting your port­fo­lio’s future on the same com­pa­ny? Uh, four, if you invest in just a

Tony Kynas­ton: Yeah, except that we do like to see skin in the game, as you said before, so, and it’s the one invest­ment if you do work at a com­pa­ny where you have shares in it, it’s the one invest­ment you can have a hands on con­trol over in a small way, per­haps. But still, I’m not [00:52:00] sure about that.

Cameron: prob­a­bly don’t pay for your health or your

Tony Kynas­ton: Yeah.

Cameron: but,

Tony Kynas­ton: Yeah.

Cameron: Uh, I’m actu­al­ly in the US Show today. I’m doing a health­care com­pa­ny, hos­pi­tal, a com­pa­ny that owns a bunch of hos­pi­tals and look­ing at the for-prof­it busi­ness mod­el of the US health­care. And my take­away from it is, I’m glad I don’t have to be a patient, uh, in the us That’s, you know, the health­care costs are insane as, as we all know. Um, four, if you invest in just a cou­ple of stocks, the odds sug­gest you will lag behind the mar­ket aver­age. How come in any year the mar­ket’s return is dri­ven by minor­i­ty of stocks that post blowout gains. Unless you diver­si­fy broad­ly, you prob­a­bly won’t own any of the big win­ners. Thoughts on that, Tony?

Tony Kynas­ton: Oh, I think it’s prob­a­bly true. Um, I, I hold a fair­ly con­cen­trat­ed port­fo­lio, but it’s still, I think got six or eight stocks in it. Um, and we rec­om­mend 15 to 20 for peo­ple. So, yeah. Um, we’ve seen it time and time again that our [00:53:00] port­fo­lios are dri­ven by one or two stocks, and if you don’t hold them, you don’t get the per­for­mance.

Cameron: I would­n’t say 15 to 20 is diver­si­fied. Broad­ly though,

Tony Kynas­ton: Um, yeah, I dun­no what he means.

Cameron: Yeah.

Tony Kynas­ton: Yeah. It’s enough. I think oth­er research has shown that that’s a good, a good size for a retail investor to whole.

Cameron: Yeah. Um, I’ll skip some of these, the, the cou­ple that stood out for me over the long haul, a mediocre stock fund will out­per­form a bril­liant bond or mon­ey fund man­ag­er.

Tony Kynas­ton: Yeah. Well that’s just, stock­’s always out­per­formed bonds and cash. That’s, that’s kind of self-evi­dent real­ly.

Cameron: To avoid a big finan­cial hit, steer clear of the deriv­a­tives mar­ket. Don’t bet heav­i­ly on any sin­gle stock. Keep mar­gin debt to a min­i­mum and try your darnedest not to get divorced.

Tony Kynas­ton: Sounds like some­thing War­ren Buf­fet would say. Yeah, I agree whole­heart­ed­ly. I mean, it’s a, War­ren Buf­fet has said if he, he had. [00:54:00] If he, peo­ple were always pitch­ing to him to take out mar­gin loans to, um, boost, uh, his hold­ing in Berk­shire Hath­away. And he has said if he had tak­en out mar­gin loans on Berk­shire Hath­away, he would’ve been bank­rupt­ed twice over his life­time.

Cameron: Yeah.

Tony Kynas­ton: Hmm.

Cameron: let’s see. I’ll pick one more here. When in doubt do noth­ing. It’s almost always the cheap­est course of action.

Tony Kynas­ton: So true. Isn’t it? I mean, we’re. Espe­cial­ly for peo­ple who’ve had careers in busi­ness, you, you’re kind of hard­wired to always be doing some­thing, aren’t you? Some­thing hap­pens and your boss says, get onto it. Fix it. It’s just so you sort of get into that ham­ster wheel, but invest­ing’s kind of the reverse.

It’s patience. It’s, it’s, you know, um, oper­at­ing with incom­plete infor­ma­tion. Some­times it’s, it’s using prob­a­bil­i­ties. Yeah. So doing noth­ing is often the right call, but it’s hard to do. ’cause you, you are hard­wired to, I’ve got­ta make a change. I’ve got­ta, [00:55:00] I’ve got­ta do some­thing to be seen, to be doing some­thing and it’s wrong in terms of invest­ing any­way.

Yeah.

Cameron: Um. Actu­al­ly, I will pull one more. I pull one more out­ta here. A tum­bling stock mar­ket may be upset­ting, but it does­n’t have any finan­cial impact unless you have to sell. If you have the mon­ey to buy, the sell off becomes an oppor­tu­ni­ty. It’s an old bism, isn’t it? when there’s blood in the streets.

Tony Kynas­ton: Mm-hmm.

Cameron: So thank you Mark for send­ing that good stuff. Some good wis­dom in there. Uh, time for a Paul Pork, Tony, MLG.

Tony Kynas­ton: MLG and talk­ing about skin in the game. This, this is a, is a stock which is owned 51% by its founder. So the com­pa­ny, the com­pa­ny’s full name is MLG, odds code is MLG. It’s new on the buy list this week. Only a small stock in terms of a DT prob­a­bly ’cause the founder owns half the stock, so he’s not trad­ing it.

Uh, a DT $71,000. So it won’t suit big port­fo­lios, but I [00:56:00] thought I’d do it ’cause it’s inter­est­ing and it’s, um, it’s been doing well late­ly. Uh, who are they? I had, I had­n’t heard of them. Um, they’re a KLI based min­ing ser­vices con­trac­tor with oper­a­tions in WA NMT. Uh, they do well, they claim cra­dle to grade ser­vices from plan­ning to con­struc­tion to oper­a­tion of mine sites.

Um, and that involves pro­vid­ing engi­neer­ing ser­vices for the plan­ning and con­struc­tions. Stages of a mine site pro­vid­ing haulage of the o, crush­ing of the o, pro­vid­ing aggre­gate, um, so like cement, et cetera. Um, to be able to, uh, build the mine site con­struc­tion ser­vices to build the mine site blast­ing and drilling used to oper­ate the mine site, con­tract man­age­ment ser­vices, JV ser­vices, and then reha­bil­i­ta­tion ser­vices once the mine is, is shut down.

So they, they are in every stage of, of the min­ing life­cy­cle. I think it’s fair to say though, their back­ground is in, is in haulage of, [00:57:00] or, and aggre­gate, and that’s still pos­si­bly the biggest part of their busi­ness. They own and oper­ate 1,470 heavy equip­ment vehi­cles across 38 sites. So even though they, um.

They’ve been going for 23 odd years and start­ed with one truck. They’ve cer­tain­ly grown a lot over that time. Um, I think the inter­est­ing thing at the moment is, uh, they oper­ate across most min­ing sec­tors and they’ve recent­ly com­plet­ed work for Fortes­cue Met­als and uh, for a lithi­um mine. How­ev­er, some­thing like 94% of rev­enue comes from the gold sec­tor, and they’re based in Kal­go­or­lie.

So very much heav­i­ly into the gold sec­tor. And as we just spoke about before, the gold prices is hit­ting record lev­els. So there’s a. Big tail­wind for gold min­ers at the moment, and the eight old, the age old adage comes to mind when there’s a gold boom. Invest in the com­pa­ny sell­ing the picks and shov­els.

And, uh, this com­pa­ny is cer­tain­ly one of those, they’re sell­ing ser­vices to a, a, a gold [00:58:00] boom. Um, they, you know, they do all the things. One of their spe­cial­ties is off-road haulage, so they get into mines that aren’t ser­viced by tad roads, so it’s got­ta be an advan­tage for them. And a, I guess a bar­ri­er to entry, uh, for their busi­ness.

Uh, they were found­ed in 2002, um, by their man­ag­ing direc­tor Mur­ray Lee, and I guess the astute lis­ten­ers will work out that MLG stands for Mur­ray Lee Gold, MLG, um, start­ed by Mur­ray Lee. Uh, he ini­tial­ly, um, he ini­tial­ly was a trap dri­ver call­ing sil­i­ca. For BHP, um, even­tu­al­ly got a fleet of trucks list­ed on the ASX and is now expand­ed dra­mat­i­cal­ly.

Results were good for the, for the, um, annu­al num­bers, rev­enue was up 13.8% and Pat was up 10%. Gear­ing was down 37%, and they point out that their rev­enue has grown at the rate of [00:59:00] 32% since 2018 per annum. So it’s, it’s cer­tain­ly expand­ing quick­ly. Uh, in terms of QAV num­bers, the price for the analy­sis was 90 and a half cents per share, which is.

10% below con­sen­sus Tar­get above iv, one of 36%, sor­ry, 36 cents. But below IV two of a dol­lar 21, net equi­ty per share is 98 cents. So it’s below book val­ue for this com­pa­ny. And obvi­ous­ly Book plus 30 isn’t pay­ing a div­i­dend, so we can’t score it for that Stock Doc­tor. Finan­cial health and trend is strong and steady.

Stock. Edia gives it an 81 for qual­i­ty in its rank­ing sys­tem. F score is five out of nine, which is accept­able. Uh, the over­all stock rank in stock, EDIA is 99, so they like this com­pa­ny as well. PE is just under 13 times, which is not the high­est or the low­est in the last three years. Uh. The real big, um, heavy lift­ing.

KPI for us is Pr/OpCaf. So [01:00:00] price to oper­at­ing ca cash flow is only 2.3 times, so throw­ing off lots of cash, which is why they’re pay­ing off debt as well. Earn­ings per share growth is fore­cast at 71%, so it’s, um, it’s, it’s grow­ing growth over PE is 5.5, so it’s way above our cut­off or our, our hur­dle of 1.5.

So that gets a two in our check­list. Uh, as I said before, the founder, Mur­ray Lee, L‑E-A-H-L-E-A-H‑Y Lee, or Lay holds 51% of the stock. So he con­trols the com­pa­ny basi­cal­ly. Um, uh, and which means is not as much stock as we’d like to see in the float every day, but, um, cer­tain­ly he’s doing a good job. It’s a new three point trend line upturn.

So we, we give it a score for that does, it does­n’t have con­tin­u­ing increas­ing equi­ty and it just missed by a lit­tle bit one half a cou­ple of years ago. So that’ll roll around to being con­tin­u­ous equi­ty, I would think, but we don’t score it for that yet. Over­all qual­i­ty score is, uh, 88%, 15 out of a [01:01:00] pos­si­ble 17, and the QAV score is 0.38, which makes it in our top 10 on the buy list.

Risks, uh, oppor­tu­ni­ties. Oppor­tu­ni­ties is obvi­ous. If the gold price keeps increas­ing, they’ll do well. Um, the risk is the flip side. The gold price turns down, then um, the work will dry up. And that’s okay. The real risk is that they get, um, strand­ed with equip­ment and, um, they point out their, all of their equip­men­t’s on a lease basis, or most of it’s on a lease basis of up to sev­en years.

Uh, so there’ll be some equip­ment which might get, they might get caught with in a down­turn, uh, if they can’t offload it. So that’s a risk. The oth­er risk, which I thought was inter­est­ing was the, the, um, own­er Mur­ray Lee point­ed out that they oper­ate in Kal­go­or­lie and Kal­go­or­lie faces an accom­mo­da­tion prob­lem at the moment.

So find­ing, uh, accom­mo­da­tion for their staff is tough. Um, but I’m sure they’ll find a way. So that’s, uh, MLG some­thing new to me. Um, own a founder, which is [01:02:00] good grow­ing like Top­sy, um, but still being able to be bought at a lit­tle over twice times oper­at­ing cash flow, which is again, anoth­er sign that val­ue invest­ing isn’t dead.

Cameron: They were on our buy list, I remem­ber last year, but they had a qual­i­fied audit.

Tony Kynas­ton: Uh.

Cameron: em off and then that got removed and we put ‘’em back

Tony Kynas­ton: Right.

Cameron: and they’re cleaned now. But yeah, I’ve seen them on and off over the last cou­ple of years. Inter­est­ing. I would say one of the risks of Kal­go­or­lie is cli­mate change and how hot it’s gonna be in Kal­go­or­lie over the next cou­ple of years.

Tony Kynas­ton: What

Cameron: you do a pulled pork recent­ly on a com­pa­ny that in build­ing accom­mo­da­tion in places like Kal? Gur­ley? They like to

Tony Kynas­ton: uh,

Cameron: fly in, fly out accom­mo­da­tion.

Tony Kynas­ton: pos­si­bly. It’s not ring­ing a bell, but yeah, there’s, I know there was, um, a cou­ple on the buy list many years ago, but I, I can’t recall which one it is.

Cameron: Hmm. he did [01:03:00] one like in the last cou­ple of months. I can’t

Tony Kynas­ton: Okay.

Cameron: Alright, thank you tk. Uh, after hours, apart from play­ing golf, what have you got? How are the hors­es going?

Tony Kynas­ton: Lake For­est ran third on Sun­day, and, uh, dou­ble mar­ket runs tomor­row that sand down race six. So, um, the, the train­er reck­ons it’s a bit of a head out and she’ll want fur­ther to go, but he says Don’t be sur­prised if she runs a place. So, dou­ble mar­ket’s back. Um, Ryder Cup was, I guess, the big watch­ing for me on the week­end.

Are you famil­iar with the Ryder Cup cam in golf

Cameron: No, I’ve heard of it, but what is it?

Tony Kynas­ton: Caught any of the con­tro­ver­sy over this lat­est edi­tion?

Cameron: No.

Tony Kynas­ton: Okay, so it’s been, it was going on for three days. It’s the Europe ver­sus the US in Beth­page Park, which is a state for­est on [01:04:00] the out­skirts of New York in Long Island. Pres­i­dent Trump turned up to which the, uh. US team. Well, they lost, of course, which is actu­al­ly unusu­al.

The home team almost always wins the Rid­er Cup. Um, so it was a kind of climb­ing, uh, the, the moun­tain for the Europe Euro­peans to get up. They were warned that the New York crowd would be row­dy and would­n’t like them, and they did­n’t dis­ap­point. They, the, the stuff you go and Google, it’s quite inter­est­ing.

So,

Cameron: at golf tour­na­ments. I

Tony Kynas­ton: you don’t nor­mal­ly

is,

this was, uh,

excep­tion­al. Usu­al­ly they had to, uh, at

one stage they had to call in 20 state troop­ers to stand beside Mau­ry Rory McEl­roy, the num­ber one Euro­pean golfer to keep the crowd away. Um,

they, they, some­one threw a beer at his wife who had to leave the course in tears.

Um.

Cameron: my God.

Tony Kynas­ton: They were, they were say­ing all kinds of mean things. One of the Euro­pean [01:05:00] play­ers, Tom­my Fleet­wood has a wife who’s about 23 odd years old­er than me, and they were con­tin­u­ous­ly say­ing, my grand­ma’s younger than your wife and things like this, and call­ing some of the play­ers fat­so and you just, just yelling on their back­swing, all sorts of things.

Um, so yeah, pret­ty much, well, New York crowd, I think New York NFL type crowd real­ly, but just went over the line, crossed the line. Um,

Cameron: Wow.

Tony Kynas­ton: so yeah, so like a, you don’t see golf make the front pages some­times, but it was wide­ly report­ed. All these inci­dents and dif­fer­ent things that were going on, uh, peo­ple being eject­ed.

Um, one of the Euro­pean play­ers had to be held back by his Katie from jump­ing into the crowd to punch some­one out. It was just

Cameron: was like,

Tony Kynas­ton: crazy.

Cameron: It was a

Tony Kynas­ton: Yes, it was,

Cameron: Hap­py Gilmore. Hap­py Gilmore three.

Tony Kynas­ton: was the real hap­py Gilmore. Yeah.

Cameron: Fin uh, watched Hap­py Gilmore tour. I got like five min­utes into it and got inter­rupt­ed and haven’t got back to it.

Tony Kynas­ton: Yeah. Good fun. Yeah, so [01:06:00] that was, that was, um, my TV view­ing recent­ly.

Cameron: the, only sport­ing thing I saw was Snoop Dog­g’s, uh, per­for­mance at the A FL Grand Final. that on YouTube

Tony Kynas­ton: You a fan

Cameron: well, I’m a fan of Snoop Dogg, but, uh, this was m um, bleeped. Well, no, he was, it was san­i­tized, is crazy. Like he’s talk­ing about, you know, was, uh, all my hit­ters. like singing songs down with my N word, but it’s like he’s doing the songs, but instead of using the N word, it’s down with my hit­ters. Shout out to all the moth­er hit­ters in the audi­ence. It was just, it was like ridicu­lous. Like,

Tony Kynas­ton: of.

Cameron: why are you get­ting him to do these hits? And then mak­ing him like, edit the, the lyrics. And

Tony Kynas­ton: Why was he?

Cameron: instead of smoke weed every day, he would just like not say the [01:07:00] weed word. And was, it was like, I don’t, I don’t, I don’t, I don’t get the impe­tus to have, get Snoop Dogg, but then, well, you can’t actu­al­ly sing the songs.

We have to clean it up for the audi­ence kind of thing

Tony Kynas­ton: Well, I could­n’t see why they got Snoop Dogg, I must admit. I mean, he, they, they paid $2 mil­lion for that 10 minute per­for­mance. Luck­i­ly there were a cou­ple of Aus­tralian acts that joined him, which hope­ful­ly they got a fair share of that. But they prob­a­bly did­n’t. They

Cameron: and what­ev­er did

Tony Kynas­ton: Bak­er boy. Yeah,

Cameron: they just get an Aus­tralian Why? Why have

Tony Kynas­ton: Pay, pay them,

$2 mil­lion.

Yeah,

Cameron: Yeah.

Tony Kynas­ton: I, I agree whole­heart­ed­ly. I thought it was wrong, but, um, and I, and I could­n’t tell what the lyrics were. I dun­no. Any Snoop Dogg songs. Not a fan. Not that I have any­thing against him. He’s, he’s fine, but yeah, not a fan. Um, so just thought it was strange.

Cameron: hop? Yeah. Um, the, the, the one thing I did wan­na rec­om­mend if you haven’t seen it, is the David Chase slash Sopra­nos doc­u­men­tary. Have you [01:08:00] seen it

Tony Kynas­ton: I have, yeah, it came out six months ago, I think. A while ago. Yeah. Mm-hmm. Oh, good. Yeah,

Cameron: enter­tain­ing than I even expect­ed it to be. He’s an inter­est­ing char­ac­ter and it was just

Tony Kynas­ton: very.

Cameron: the sto­ries and, but I was, you know, the, the whole thing about just remind­ing me of Gal Feeney and how young he died, like he was rel­a­tive­ly unknown before he did the Sopra­nos. Then he was one of the biggest. Actors on the plan­et. And then few years after he fin­ished, he died.

So lit­er­al­ly his entire career essen­tial­ly was play­ing Tony Sopra­no. like, and knocked it out of the gate, obvi­ous­ly just an incred­i­ble per­for­mance. Gave every­thing and, uh, put on weight and died. So yeah, just so trag­ic his sto­ry in a way, and, and obvi­ous­ly the toll that it took on him per­son­al­ly, uh, uh, as well as on his health.

Tony Kynas­ton: Yeah, it was a good [01:09:00] doc­u­men­tary and the sto­ries about David Chase being advised by his friends to write about his moth­er, like, he kept, he kept catch­ing up with peo­ple. They’d say, you know, don’t get writer’s block write about your moth­er. That’s

Cameron: yeah.

Tony Kynas­ton: who was Sopra­no’s moth­er and the

Cameron: by the Easy Writ­ers guy that

Tony Kynas­ton: Biskin.

Cameron: Yeah. So I’d read a lot of this stuff that was in the book, but it was just good see­ing it on. TV and see­ing David Chase talk about it. So that’s pret­ty much the only thing I can real­ly rec­om­mend, uh,

Tony Kynas­ton: Well, we’ve had, there’s a lot of, lot of new. Um, sea­sons for series that we like, which have come out. So, uh, Tul­sa King, you watch the first episode, um, of the new series, sea­son three on the week­end. And the same with Slow Hors­es, which we love. They’ve got a new sea­son out two, but the stream­ers are drop­ping them one per week.

So, and they, and some of them have ads. It’s like there’s no dif­fer­ence now [01:10:00] between stream­ing and free to wear tv except you’re pay­ing for the priv­i­lege these days.

Cameron: ads, uh, dri­ve me nuts ’cause it’s, and it’s the same bloody ad

Tony Kynas­ton: Mm-hmm.

Cameron: SBS the same ad you see every 10 min­utes.

Tony Kynas­ton: Yeah,

Cameron: Uh,

Tony Kynas­ton: it’s a shame. And I guess, I guess they do it because you sub­scribe for longer. ’cause I guess like we do some­times is we stop sub­scrib­ing when the sea­son’s fin­ished for, for, uh, series that we like, for shows that we like. So I guess if they drop them one a week for 10 weeks at least they’ve got our mon­ey for a cou­ple of months

Cameron: Yeah. that’s prob­a­bly the ratio­nale. Although, you know, then you just don’t sub­scribe until the sea­son’s

Tony Kynas­ton: or the end. Yeah,

Cameron: Yeah.

Tony Kynas­ton: and And unfor­tu­nate­ly all your friends have told you what hap­pened and it was­n’t that great and all that.

Cameron: Yeah. Yeah, yeah.

Tony Kynas­ton: Yeah. But any­way. I agree.

Cameron: Chris, Chris­sy and I, like you are rec­om­mend­ing shows, hunter rec­om­mends shows. I reck­on Chris­sy and I watch one episode of TV a [01:11:00] week. These days, maybe two. We just don’t have time to watch tv. I’m just, either work­ing or we’re a kung fu or what­ev­er. I just don’t have time to sit and relax and watch TV any­more. well, if you don’t have any­thing else, I guess that’s it. I wan­na

Tony Kynas­ton: Good.

Cameron: to Kovich. It was his birth­day in the last week. The anniver­sary of my father’s death. It

Tony Kynas­ton: Hmm.

Cameron: day as Shostakovich’s birth­day, so to think they’re con­nect­ed in some way. No, prob­a­bly not. But any­way, Shostakovich’s birth­day, so lis­ten to Shas­takovich peo­ple.

If I haven’t got you down that rab­bit hole yet. End­less joy I get from sh Kovich.

Tony Kynas­ton: that’s nice.

Cameron: It is. And, uh, we’re gonna go talk about the Unit­ed States, uh, mar­ket. So thank you, tk. Thank every­body. Que have a good week.

Tony Kynas­ton: Yeah, you should be hav­ing a good week. The mar­ket’s doing real­ly well, and our shares are doing real­ly well.

Cameron: Yeah, yeah. EE. Easy time to [01:12:00] be a val­ue investor right now, despite Albert spi. Okay.

Tony Kynas­ton: All right, thanks.

Cameron: See ya.