QAV AU 840 — Buffett’s Last Big Deal (And Why It Probably Isn’t)

 

Cameron: [00:00:00] Wel­come to QAV Aus­tralia, episode 8 4 0 tk. It is the sixth, no, 7th of Octo­ber, 2025, 12:14 PM in the, uh, Kings Zone State Kings­land, where we had the King’s birth­day hol­i­day yes­ter­day. And, uh, 1:14 PM down in new hea­then South­ern Estates with your day­light sav­ings.

Tony Kynas­ton: Lov­ing the day­light sav­ing. It was light here at eight o’clock last night, which is fan­tas­tic.

Cameron: Yeah. Well, good for you, Tony. How’s your week been?

Tony Kynas­ton: good. Thank you. We’re get­ting into it in after hours, I guess, but fair­ly social, which is good. We don’t

Cameron: That’s nice.

Tony Kynas­ton: Cape Schanck. We’re a bit remote, but, um, yeah,

Cameron: Yeah, was delib­er­ate, was­n’t it?

Tony Kynas­ton: I’m such an intro­vert, I just love it.

Cameron: Yeah. Yeah. Like us dur­ing COVID, we’re like, oh, I have to stay at home. Can’t talk to [00:01:00] any­one. Fan­tas­tic. How good is this? Uh, let me start with a bit of a port­fo­lio update, Tony. For the last 30 days, the dum­my port­fo­lio is up four point a half per­cent,

Tony Kynas­ton: Wow.

Cameron: a bit over the last cou­ple of days. It was up, uh, five point a half per­cent as of cou­ple of days ago, end of last week ver­sus the, uh, index which is up, uh, noth­ing.

0.06% in the last 30 days. Uh, cur­rent cal­en­dar year. The index is up 11.8% ver­sus the dum­my port­fo­lio up 29.16% for the cal­en­dar year to date.

Tony Kynas­ton: Well, you said

Cameron: And most of that,

Tony Kynas­ton: said you were wait­ing for the

Cameron: most of the, yeah. Yeah, most of that since July. It’s just gone bonkers in the last cou­ple of months. I dun­no why? I don’t have to know why.

Tony Kynas­ton: com­pa­ny reports.

Cameron: Well, yeah, but why we had, [00:02:00] we had report­ing sea­son last year and it did­n’t do well.

Why?

Tony Kynas­ton: Sci­en­tists don’t ask

Cameron: But that’s the thing. Oh, okay. I, I, I don’t ask. Well, that’s the good thing about this is I don’t need to know. It’s just, to me, it’s just Q’s

Tony Kynas­ton: phi­los­o­phy,

Cameron: It’s. Right.

Tony Kynas­ton: how

Cameron: Well, the why? Well, the why is because we try and iden­ti­fy under­val­ued com­pa­nies that are being well run and we invest in them and just let physics do the work.

Right.

Tony Kynas­ton: it works. Yeah. Any­way.

Cameron: and the light. I’ll do the light, uh, analy­sis too while I’m here because I like to. I like to see hap­py num­bers there. For the last 30 days in the light port­fo­lio, it’s up 8.7% ver­sus the index up 0.06 still. So it’s doing even bet­ter the group than the dum­my. [00:03:00] And for the cur­rent cal­en­dar year, it’s up 32.56%.

Yeah.

Tony Kynas­ton: off to all the light

Cameron: Um.

Tony Kynas­ton: with it ’cause it was slow going in the first years. But, uh, they’re reap­ing the rewards

Cameron: Dis­mal, dis­mal and um, and all time for the light port­fo­lios. So this is since Feb­ru­ary, 2022. The index is up 11.4%. Dum­my port­fo­lio as a group is up 20.62%.

Tony Kynas­ton: white port­fo­lio?

Cameron: Is that what I said? What’d I say?

Tony Kynas­ton: dum­my.

Cameron: light port­fo­lio as a group up 20 points. So it’s almost doing dou­ble mar­ket now. Uh, com­ing from neg­a­tive dou­ble mar­ket not that long ago to dou­ble mar­ket.

And you have always said this, it’s just takes one year. And in fact, it’s been since, again, since report­ing sea­son, end of July, just shot through the roof, [00:04:00] be ful­ly invest­ed. Play the game. Play by the rules. Just let the cycles come and go.

Tony Kynas­ton: baby. You can’t tell when the, the cards are gonna turn, but if they turn, when you’re not there, you lose all the mon­ey.

Cameron: Like I, we’ve been doing this show for six years. I under­stand the the­o­ry. I sprout the the­o­ry. I believe in the the­o­ry. I’m a true believ­er. You and I were just talk­ing off air about faith and belief. Uh,

Tony Kynas­ton: Not in

Cameron: I believe. No, but I do believe it. I’ve seen it play out a cou­ple of times now, but it’s still some­what sur­pris­ing to me when I see this hap­pen.

Know­ing that I. Uh, as an ama­teur, I can just fol­low the sys­tem that you built. And it just works. It’s insane how sim­ple it is real­ly in, in con­cept. You know, you, you did a lot of work to put it togeth­er, but the con­cept of it. [00:05:00] Look for busi­ness­es that are doing okay but are under­val­ued for some rea­son, invest in them, and more often than not, they’ll prob­a­bly out­per­form.

I mean, it’s so sim­ple. You could write it on the back of a play­ing card.

Tony Kynas­ton: that’s right. But human psy­chol­o­gy, it’s like, I could tell you a sto­ry and I, I don’t think my friend will be lis­ten­ing, but I met up with a friend I had­n’t seen for a while on the week­end. And, uh, invari­ably we come around to talk about stocks because he was a QAV. Sub­scriber and he’s not now. Um, and he, he was talk­ing about his stock port­fo­lio.

He was using a finan­cial plan­ner and it’s going well, et cetera, he said, and you would­n’t believe it. There’s three stocks I still have from when I was a QAV sub­scriber. They’re my best per­form­ers. They’re, they’re up a heap. I’m like, what does that tell you?

Cameron: Sur­prise.

Tony Kynas­ton: Any­way? I mean, he was, he was,

Cameron: I, uh,

Tony Kynas­ton: fair enough, he said he just did­n’t have the time and was busy with work, et cetera, et cetera. So he want­ed to [00:06:00] do some­thing a lit­tle bit more pas­sive. So I said, yeah, that’s fine.

Cameron: right. Um, yeah, I was on the, um, val­ue invest­ing sub­red­dit. The oth­er day, and there was a post called Most peo­ple are Bet­ter Off Being Growth Investors, includ­ing this sub, and some­body was mak­ing an argu­ment that, you know, val­ue invest­ing’s done and can’t per­form and blah, blah, blah. My, my reply was, I’m not sure how you define most peo­ple, but any­one who wants to con­sis­tent­ly out­per­form the mar­ket over the long term can still do so with some knowl­edge about how to find under­val­ued stocks and a ton of dis­ci­pline.

So you ignore the noise. Any­one who says dif­fer­ent either does­n’t know what they’re talk­ing about or is try­ing to sell you some­thing. Despite you say­ing the mar­ket today isn’t filled with val­ue oppor­tu­ni­ties, I just did my us buy list for the week and there’s 170 stocks on it that are all com­ing up as scor­ing.

Well for being under­val­ued while still [00:07:00] gen­er­at­ing a lot of cash, I’ll take my chances with those over­growth stocks any day and it’s had no likes. No likes, no que no likes, no ques­tions, no. Oh, what’s no noth­ing. Just

Tony Kynas­ton: And you were, you’re a prof­it

Cameron: silence.

Tony Kynas­ton: the val­ue invest­ing sub­red­dit, no likes, but what’s the men­tal­i­ty of some­one going onto a val­ue invest­ing sub­res, ’em they’re all dumb and they should be into growth stocks? I mean. First of all, if growth stocks were work­ing, be too busy buy­ing growth stocks to try and troll the val­ue of investors.

What’s the point?

Cameron: Well, they, they, you know, if you bought, if you’ve been buy­ing Mag sev­en, you’ve prob­a­bly done okay in the short term. But, uh, yeah, I would­n’t wan­na be in it for the long term. Hmm. Alright, well back to, uh, news any­way. RBA Tony, you had a pre­dic­tion last week. How did your pre­dic­tion go?

Tony Kynas­ton: Oh, one out­ta [00:08:00] one. trend.

Cameron: I, hun­dred per­cent, unless you include the pre­vi­ous one.

Tony Kynas­ton: Oh, like 50%. That’s still pret­ty good.

Cameron: There’s goods odds.

Tony Kynas­ton: yeah,

Cameron: So rates are on hold.

Tony Kynas­ton: Greats on hold. saw an arti­cle today in the paper where econ­o­mists, the con­sen­sus is there’ll be two more rate cuts. I’m not so sure. I don’t think the econ­o­my’s that strong. Um, anec­do­tal­ly. We’ll see. I, I don’t know. I

Cameron: What did, what, what did Sher­iff Bul­lock have to say? I was­n’t, I did­n’t real­ly pay much atten­tion.

Tony Kynas­ton: No, not at the do to be hon­est.

Cameron: Uh, okay.

Tony Kynas­ton: was, I mean, it’s this age old argu­ment. There was a one month CPI num­ber. They’re wait­ing for the quar­ter­ly CPI num­ber to come out before they make a deci­sion. Um,

Cameron: Right,

Tony Kynas­ton: I’m like, can’t you just do rolling three months? What? This is a dumb excuse. You’ve got 400 econ­o­mists work­ing for you at the RBA.

Sure­ly some­one can update the spread­sheet every, every month to [00:09:00] add the last two. Give you a rolling num­ber. Come on.

Cameron: and real­ly they’re just get­ting Chat­G­PT to do it all now any­way. I’m pret­ty sure.

Tony Kynas­ton: And if you, if you

Cameron: Hey.

Tony Kynas­ton: a deci­sion except for the, when the qual­i­ty num­ber comes out, just meet four times a year. both­er us for the rest.

Cameron: Oh, now, gee, you, you’re so hard on these. Poor, yeah.

Tony Kynas­ton: Geez.

Cameron: Okay. Well, in oth­er news, War­ren Buf­fett, his last big deal, it’s being called Tony Berk­shire Hath­away, is buy­ing Oxy­Chem, the chem­i­cal busi­ness of Occi­den­tal Petro­le­um for 9.7 US bil­lion dol­lars in cash. I thought he already owned Occi­den­tal Petro­le­um. I thought that was, is it Occi­den­tal Insur­ance that he owns?

Tony Kynas­ton: Uh, he owns, he owns a

Cameron: Uh.

Tony Kynas­ton: Petro­le­um. Yeah, so he was kind of deal­ing with [00:10:00] him­self there. And, I, did read the arti­cle you sent through and the ana­lysts were crit­i­cal because, uh, they thought that Occi­den­tal and Berk­shire would use script to buy the, this chem­i­cal busi­ness.

But, you know, War­ren’s got 300 odd bil­lion dol­lars of U US dol­lars of. Cash. So I use cash, which means that now face a cap­i­tal gains tax bill on the sale as well. So it’s not look­ing like a good deal for Occi­den­tal, but it’s a good deal for Berk­shire. But, but you know, two things are wrong with that head­line. $9 bil­lion isn’t a big deal for Berk­shire Hath­away when you, when you’ve got 300 bil­lion in your back pock­et,

Cameron: Three 40 bil­lion.

Tony Kynas­ton: Sor­ry. I short­changed them by 10% or 11%.

Cameron: Yeah. Yeah.

Tony Kynas­ton: uh, so they could have,

Cameron: 9 bil­lion is what? 3%?

Tony Kynas­ton: the, my, my round­ing error. Yeah. Um, so it’s not a big deal

Cameron: Hmm.

Tony Kynas­ton: There. There’s, I’ve read some arti­cles recent­ly about [00:11:00] poten­tial big merg­ers hap­pen­ing in the rail­roads in the us. Uh, you know, Berk­shire owns a big rail­way rail­road com­pa­ny, so that could be a big deal for them. If they hap­pen to get the approvals to merge with anoth­er one, that’d be a big deal. Um, so that’s the first thing.

It’s not, it’s not a big deal. It’s, it’s chump change for Berk­shire. And sec­ond­ly, the only way that’s War­ren’s last big deal is if he hap­pens to die tomor­row. ’cause he’ll keep mak­ing deals until they put him in the, in the ground. So I doubt if it’s the last action he takes.

Cameron: Also in that arti­cle it said War­ren is no longer rais­ing mil­lions for char­i­ty by auc­tion­ing off the oppor­tu­ni­ty to have lunch with him as he has in years past. But a bronze bust of him sold this week for $26,201 in an eBay sale orga­nized by Mon­ish investor who calls him­self an ardent dis­ci­ple of Buf­fet.

It is for the. Ben­e­fit of the Dak Shana Foun­da­tion, which offers high­er edu­ca­tion, entrance exam, poach­ing to impov­er­ished stu­dents in rur­al India as part of an effort to [00:12:00] alle­vi­ate pover­ty. Did you buy that by any chance? I expect­ed to see it your desk when you rang in today. Uh,

Tony Kynas­ton: a val­ue investor, I can prob­a­bly pick up the bus cheap­er if I go to the Berk­shire. There was a store some­where, I’m

Cameron: right.

Tony Kynas­ton: them in the, in the big hall when I was there for their 50th A GM. And they weren’t 27,000, but good on him. That’s the I from mem­o­ry. He’s the author of the, is it the Daoist Investor or the Dan­do Investor?

Some­thing like that. One of the

Cameron: Yeah, Dan­do?

Tony Kynas­ton: When it came

Cameron: I think so.

Tony Kynas­ton: Um, a good read and I rec­om­mend, um, yeah. So good on him rais­ing mon­ey for char­i­ty.

Cameron: I’d have a bust of War­ren, a bust of War­ren and a bust of Napoleon side by side. I think that’d be nice. And Cae­sar, we’ll put Cae­sar in there as well and one of you just to round it out.

Tony Kynas­ton: Did I tell you, Alex made a bust of me once, but it explod­ed in the kiln, so we don’t have it.

Cameron: Wow. That’s, that’s a, a, [00:13:00] a sign from the heav­ens.

Tony Kynas­ton: It Yeah.

Cameron: Hey, before I throw to you to talk about news, just as I was doing a last check of things before I came on air today and look­ing at the port­fo­lio, EDU Hold­ings is up 19% today, two today.

Tony Kynas­ton: do you know why?

Cameron: I do, I went to Stock Doc­tor, uh, they put out a press release today, icon T 3 25, enroll­ments up 82% on PCP. Uh, I think that’s a drug.

I think that means 82% of their stu­dents are tak­ing PCP and for some rea­son the mar­ket real­ly liked that news. EDU Hold­ings are lead­ing. Ter­tiary edu­ca­tion Group is pleased to report con­tin­ued strong growth in new and total stu­dent enroll­ments for trimester 3 20 25 in its high­er edu­ca­tion busi­ness Icon Insti­tute.

Any­way, it’s at 82% [00:14:00] on the pre­vi­ous peri­od, the, uh, pre­vi­ous cor­re­spond­ing peri­od, the PCP. So yeah, up 19%. I added it to a light port­fo­lio on the 18th of Sep­tem­ber. What’s that? Two in a bit weeks ago. It’s up 42% since then.

Tony Kynas­ton: Oh, that’s great. I think I did a pulled

Cameron: good job to any­body who bought that. I think it did. Yeah.

Tony Kynas­ton: group, I remem­ber talk­ing about Icon.

Cameron: Yeah. So there you go. There’s a, there’s a, there’s a win. Um, but that’s all I’ve got. Very low, low Newsweek. I’ve been run­ning my news script every day. Noth­ing’s com­ing up that’s relat­ing to any of our stocks. What have you got?

Tony Kynas­ton: Not even the merg­er between South­ern Cross Media and Sev­en West Media. That

Cameron: talked about that last week.

Tony Kynas­ton: well, it hap­pened when we were on air, um, but this is more infor­ma­tion that’s come to light since then.

Cameron: Oh, okay. No. [00:15:00] Well, it did come up, but I ignored it.

Tony Kynas­ton: the bit of news I want­ed to share was, it seems there’s a bit of a back­lash from a lot of the investors involved in, um, South­ern Cross Media in par­tic­u­lar, this is anoth­er exam­ple where the deal does­n’t have to go in front of the share­hold­ers. we talked about this a lit­tle while ago, James Har­vey. Uh, their investors were up, up in arms because they were buy­ing or with the US com­pa­ny and the script deal, and there’s a loop­hole in the list­ings rules, which allowed them to do that with­out going in front of the share­hold­ers for a vote. thing seems to have hap­pened now. So it’s, um, for ASX is just burst­ing at the seams at the moment. It’s just creak­ing. Um, like a rust buck­et needs to be trad­ed in. Any­way, there’s an arti­cle, um. I want­ed to quote from, so I will just skip through this a bit. So peo­ple who don’t know, they’re both, they’re two media com­pa­nies.

Sev­en West is owned by Ker­ry [00:16:00] Stokes and his fam­i­ly, and they’re merg­ing with South­ern Cross, which owns the Triple M radio net­works and a few oth­er things. the arti­cle says crit­ics have drawn the com­par­i­son to recent con­tro­ver­sies, con­tro­ver­sies sur­round­ing James Hard’s takeover of US Group aec. Which involved a 14 bil­lion buy­out that its own share­hold­ers could do noth­ing to stop under ASX list­ing Rules, com­pa­nies need share­hold­er approval to issue more than 15% of new shares. There is an exemp­tion, how­ev­er, when enter­ing a takeover. These rules are cur­rent­ly under review by the ASX Sand and Cap­i­tal Man­ag­ing Direc­tor Gabriel Radzin­s­ki. Who has been build­ing a sig­nif­i­cant stake in South­ern Cross and cur­rent­ly owns 11.3% said it was non­sen­si­cal for com­pa­nies to be able to take huge actions with­out share­hold­er input. There are a few ways to destroy share­hold­er val­ue. One is by share­hold­er acqui­si­tion. Because of this ASX sleep hole, that risk is one of the only areas where share­hold­ers have no means of pro­tect­ing [00:17:00] them­selves.

He said, if a trans­ac­tion is real­ly that good, make the case to share­hold­ers. So, uh,

Cameron: And who is gonna be our guest on the show next week?

Tony Kynas­ton: Gabriel Rodin­sky.

Cameron: He is. He is gonna come on and talk to us about his approach to val­ue invest­ing and being an activist investor.

Tony Kynas­ton: So that’s a bit of

Cameron: I.

Tony Kynas­ton: for his

Cameron: Yeah.

Tony Kynas­ton: next week. Yeah. So thank you to the lis­ten­er who, um, sug­gest­ed that and well done Cam for going out and orga­niz­ing it.

Cameron: Yeah. I can’t even remem­ber who it was, but you know who you are. Um, some­body sent me an email sug­gest­ing we get him on. I’ll give him, give him a thank you when I look at my email. But yeah, that should be good. So, yeah, so that’s a big deal. So he’s say­ing, uh, there should be. More. More trans­paren­cy, more,

Tony Kynas­ton: that par­tic­u­lar loop­hole should go. Um, inter­est­ing­ly enough, there was a, there’s been a few arti­cles to and fro in the AFR in the last week about it, and [00:18:00] some after James Hardy. their deal, um, most­ly by m and a lawyers say­ing it would be a ter­ri­ble thing to see this loop­hole closed. like, it’s like Bar­bara’s com­plain­ing about bald men. It’s like it’s bad for busi­ness, there was no

Cameron: yeah.

Tony Kynas­ton: rea­son why, um, that they could put that you should­n’t get rid of the loop­hole. Oth­er than that, there’d be less script takeovers, but that’s prob­a­bly a good thing. Yeah. Yep. It’s just part of the ero­sion of, of small share­hold­ers guardrails on the ASX.

Cameron: Yeah.

Tony Kynas­ton: let’s see what Gabriel has to say in per­son next week about it.

Cameron: Yeah. What else you got?

Tony Kynas­ton: Steven Main in one of his columns recent­ly, he, he often bangs on about, uh. Retail­er, small retail share­hold­ers, get­ting the rough end of the pineap­ple when com­pa­nies raise mon­ey. ’cause, uh, often­times the share, well the com­pa­ny rais­es, shares, uh, through their big insti­tu­tion­al [00:19:00] share­hold­ers and it’s all done and dust­ed before the small retail­ers even find out about it.

That’s if they get a chance to, to join in. But appar­ent­ly one of the com­pa­nies, um, think it’s on the buy list now, but it has been, I cer­tain­ly did the pulled pork in the last 12 months on it. Vul­can Steel. Um, mak­ing com­pa­ny we spoke about, they, uh, they did a nov­el fundrais­ing, which Steven Maine has high­light­ed and praised. so what they did was they gave, um, they did a, a, a share rais­ing, but they also gave. Retail share­hold­ers are right, which, um, they could exer­cise if they did­n’t take up their share allo­ca­tion in the place­ment. And so there was a, uh, a retail short­fall auc­tion of 2 mil­lion shares. Which gen­er­at­ed a dol­lar 25 per share com­pen­sa­tion pay­ment for retail investors who did­n’t par­tic­i­pate in the rais­ing. Um, and it also meant that the retail share­hold­ers who did par­tic­i­pate, uh, got, [00:20:00] um, more than what they asked for or ’cause usu­al­ly these things work as lot of investors who lis­ten­ing would know is that you get scaled back. um, it looks like it was a, um, a win-win for retail investors for those who. Applied for shares and those who did­n’t, they both got some­thing out of it. So, um, Steven says he could­n’t recall a struc­ture like that ever being run before, but well done to v Vul­can Steel for pio­neer­ing some­thing new. So hope­ful­ly some oth­er com­pa­nies will catch onto that.

Cameron: The Horse­shoe loves Vul­can Steel.