QAV AU 903 — Nobel Prizes and Negative Sentiment

 

[00:00:00]

Cameron: I bet­ter sit up. Wel­come back to QAV Aus­tralia, Tony, episode 9 0 3. It is Jan­u­ary 20th, 2026. Is it 26? It is 26.

Tony Kynas­ton: yep.

Cameron: Um, I’ve got­ta tell you, Tony, um, I’m on the war path. I’m just, you know, because I did­n’t get a Nobel Peace Prize. Tony, I am telling you what I am just as good. I’ll take it and I’ll take every­thing else you’ve got as well.

Tony Kynas­ton: Care­ful, care­ful. What you wish for.

Cameron: Oh, fun­ny. Like, it’s, it’s, it’s so fun­ny. It’s like being in a sit­com real­ly, isn’t it? It’s like Amer­i­ca, the sit­com. If it was­n’t so [00:01:00] dan­ger­ous to glob­al affairs. But you got­ta laugh. You got to laugh.

Tony Kynas­ton: Yeah, I mean, it just reminds me of my, my child­hood when Ronald Rea­gan was in charge and we used to laugh at bed­time for Bon­zo and you know, the chimp had his fin­ger on the Adam bomb and all that. And it’s just going back to that same thing.

Cameron: Yeah. And you know, I mean, there’s a lot of crazy stuff going on, but in his­tor­i­cal con­text, you know, com­pared to, I don’t know, John­son and Nixon and Rea­gan, I always go, you know what? He’s not nec­es­sar­i­ly the worst pres­i­dent has ever been, and w And peo­ple go, oh, he’s the worst. I’m like, no, he’s not the worst.

And it will always get worse, you know? I think one thing that his­to­ry’s taught us is it can always get worse, but I.

Tony Kynas­ton: Repub­li­cans, right. Biden was asleep.

Cameron: Yeah. Yeah, I agree with you. Biden was non-comp men­tors [00:02:00] and the, and the Democ­rats were push­ing him for anoth­er term. Yeah. Like Anyw, who,

Tony Kynas­ton: and I think actu­al­ly that’s

Cameron: uh,

Tony Kynas­ton: that’s the tem­plate. If you are a pow­er bro­ker behind the scenes or wealthy per­son in Amer­i­ca, find some­one who’s non-comp men­tors and put them in the White House.

Cameron: I think that’s what Rea­gan taught them, right?

Tony Kynas­ton: Yeah,

Cameron: Oh, we can just hire an actor to be pres­i­dent. How good is this? Why did­n’t we think of this before?

Tony Kynas­ton: yeah.

Cameron: Well, mov­ing off of the us, uh, and onto Chi­na, Tony, um, as we love, love say­ing on this show, uh, Chi­na’s econ­o­my is either com­plete­ly crum­bling and fail­ing or. As we saw in the New York Times this week, it had just announced a record trade sur­plus as its exports, flood worlds mar­kets.

Chi­na’s sur­plus reached $1.19 tril­lion, a 20% increase from 2024, accord­ing to data released by the coun­try’s gen­er­al [00:03:00] admin­is­tra­tion of cus­toms. But there is lit­tle evi­dence in the data to sup­port the idea. Oh, this is a dif­fer­ent sto­ry. So that was the first sto­ry, um, in the New York Times. Um, now, I mean, record trade sur­plus does­n’t nec­es­sar­i­ly mean that their econ­o­my is going well on all mea­sures, but what it does mean is they’re still sell­ing a lot of stuff despite Trump’s tar­iffs, which was sup­posed to write the trade bal­ance between Amer­i­ca and Chi­na.

And we talked about how, you know, the, there were impli­ca­tions of that for the US econ­o­my. And there was anoth­er arti­cle in the finan­cial, uh, not the finan­cial review, the New York Times that I read this week. Um, with econ­o­mists talk­ing about the US econ­o­my and the, at one point they said there’s a lit­tle evi­dence in the data to sup­port the idea that tar­iffs are con­vey­ing broad eco­nom­ic ben­e­fits.

US growth has been strong in recent months, but econ­o­mists say that has been dri­ven pri­mar­i­ly by the boom and arti­fi­cial [00:04:00] intel­li­gence. The con­struc­tion of vast data cen­ters is boost­ing invest­ment while soar­ing AI stocks and mak­ing Amer­i­cans who invest­ed in the stock mar­ket rich­er, encour­ag­ing more spend­ing on goods and ser­vices.

New tax deduc­tions that were signed into law last year are also encour­ag­ing invest­ment, but man­u­fac­tur­ing the sec­tor that tar­iffs are designed to help. Appears to be strug­gling. Sur­veys show that man­u­fac­tur­ing con­tract­ed for a 10th straight month in Decem­ber and spend­ing on new fac­to­ries has slumped since the Biden admin­is­tra­tion, the Unit­ed States has steadi­ly she fac­to­ry jobs in recent months.

Any gains in the coun­try’s ane­mic job mar­ket last year were almost entire­ly from the health­care sec­tor. Small­er man­u­fac­tur­ers in par­tic­u­lar seem to be reel­ing from the high­er costs of inputs like met­al and machin­ery that have been hit by tar­iffs. Sev­er­al econ­o­mists said that the Unit­ed States was grow­ing not because of tar­iffs, but in spite of them.

Gita Gana, a Har­vard econ­o­mist and for­mer [00:05:00] first deputy man­ag­ing direc­tor of the Inter­na­tion­al Mon­e­tary Fund, said that the AI boom had basi­cal­ly off­set the drag from tar­iffs. So what do you make of all of that, Tony?

Tony Kynas­ton: Well, it answers the high lev­el ques­tion, um, that I pose when the tar­iffs were reduced, which is, you know, it, it will on the US econ­o­my and 12 months on it has­n’t seemed to have done that. So that answers that ques­tion, but it’s. If you look at the man­u­fac­tur­ing sec­tor, it’s exact­ly the same expe­ri­ence Aus­tralia had when it had a high tar­iff econ­o­my. Um, par­tic­u­lar­ly, well, my expe­ri­ence was with the tex­tile econ­o­my, with, um, cloth­ing man­u­fac­tur­ers and shoe man­u­fac­tur­ers and the like, as tar­iffs were unwound under the, um, suc­cess of gov­ern­ments and the eight­ies and nineties. Uh, but the, the thing is that if you are a, if you are a oper­a­tor of a busi­ness in that area, though the [00:06:00] imports are being hurt by tar­iffs, you still want a slow drip to nowhere.

You still want a slow decline. It’s a slow death. It’s, it’s like being, it’s like being treat­ed for can­cer. It’s like the, the cure is gonna kill you more than the will in some respects, because, um, you still. Peo­ple know that they can get a bet­ter prod­uct from over­seas. And so some­times they get around that.

Mar­kets get around that either they import it from a coun­try, like it goes via a third coun­try, which does­n’t have the tar­iffs imposed on them. Or some­one in Aus­tralia imports them cheap­ly some­how and gets around the tar­iffs and then sells them at markup prices and they make out like ban­dits or what­ev­er. But the local man­u­fac­tur­ers still don’t win because they’re sell­ing a high cost prod­uct to peo­ple who are not gonna pay a high cost for it, or they reduce their spend­ing in that area. And then if you’re the oper­a­tor of that busi­ness, why would you invest any more in build­ing new fac­to­ries or expand­ing?

So it [00:07:00] just becomes a slow, a slow drip depth death for you until you know you are one of the last play­ers and you’re the last play­er, and then you turn the lights out, and then the tar­iff get wound back. And it’s the same thing with man­u­fac­tur­ing in the us If like, why would you invest to expand your facil­i­ties, your, um, fac­to­ries or your foundries or what­ev­er, that. The gov­ern­ment could may change, or it may be in pow­er for­ev­er, but, um, under both

Cameron: If it changes.

Tony Kynas­ton: But yeah, if it, if it changes or if it does­n’t, the per­son in charge could on the whim reduce the tar­iffs

Cameron: Yeah.

Tony Kynas­ton: then you’re stuffed, so you’re

Cameron: Yeah.

Tony Kynas­ton: gov­ern­ment to, to keep prop­ping you up.

Cameron: Mm-hmm.

Tony Kynas­ton: you are man­u­fac­tur­ing some­thing which peo­ple know they can get a bet­ter qual­i­ty prod­uct cheap­er from over­seas.

And that’s where,

Cameron: Mm-hmm.

Tony Kynas­ton: that’s where the mar­ket will tend to grav­i­tate under, under what­ev­er cir­cum­stance it can to try and get that prod­uct into the hands of local con­sumers.

Cameron: Mm-hmm.

Tony Kynas­ton: invest and then you, if

Cameron: Mm-hmm.

Tony Kynas­ton: uh, you don’t grow. And if you don’t grow, [00:08:00] you even­tu­al­ly shrink. Um, and so it’s,

Cameron: It’s why I’ve,

Tony Kynas­ton: the way it’s gonna go.

Cameron: sor­ry. I’ve always been skep­ti­cal about this decou­pling from Chi­na argu­ment that we’ve been hear­ing for a few years now. I mean, I, it’s very hard to decou­ple. Well, once you’ve spent 40 years basi­cal­ly off­shoring you, your man­u­fac­tur­ing capa­bil­i­ty, you to, to bring that back inside your own bor­ders is a very, very dif­fi­cult, expen­sive, decades long exer­cise to build fac­to­ries and build ware­hous­es and skill up staff and, uh, you know, find stuff.

And, and you’re, as you say, you’re only gonna do that if you’re con­fi­dent that, uh, this is gonna be the tra­jec­to­ry that the coun­try’s going on. Of course, that’s the oth­er thing. I mean, I’m sure any­one look­ing at Mabb, any­one in [00:09:00] man­u­fac­tur­ing is also knows that. AI and robot­ics in the­o­ry, are gonna play a sig­nif­i­cant role in the future of man­u­fac­tur­ing, both domes­ti­cal­ly and inter­na­tion­al­ly in the course of the next 10 years.

So you have to take that into account if you’re gonna invest in man­u­fac­tur­ing capa­bil­i­ty. Are we invest­ing for a world where stuff is built by humans or is we invest­ing for a world where stuff is made by robots? And you know, if you’re gonna spend bil­lions of dol­lars invest­ing in man­u­fac­tur­ing capa­bil­i­ties, should you be wait­ing a few years until you just buy a fleet of robots?

And then are you buy­ing those robots out of the US or out of Chi­na where they’re gonna be a 10th of the price and prob­a­bly bet­ter.

Tony Kynas­ton: Yeah. they’re, they’re all good ques­tions and one of the rea­sons why I think man­u­fac­tur­ing will decline in the US and you can, you know, to, to pick spe­cif­ic exam­ples, Tes­las are still being made over­seas. They have, have a fair bit of man­u­fac­tur­ing back in the US but they’ve lost a lot of mar­ket share to BYD and the oth­er Chi­nese [00:10:00] EV com­pa­nies.

So, yeah, again. you’re on the Tes­la board, you’re think­ing to your­self, we’re los­ing mar­ket share against the cheap­er com­peti­tor. Why are we gonna invest in high cost man­u­fac­tur­ing facil­i­ties on the US soil when just gonna turn out a high mar­gin prod­uct, which we can’t com­pete with over­seas, um, for. So they must be, you know, real­ly turn­ing them­selves inside out, try­ing to work out what their future looks like. if you are Apple, you know, you said you’d bring plants back to the US but I don’t think they have yet, or they may have brought one back to the us. sort of deal, right? Um,

Cameron: Yeah.

Tony Kynas­ton: you’re tread­ing a thin line between what works for the polit­i­cal nar­ra­tive and what works for

Cameron: Hmm.

Tony Kynas­ton: nar­ra­tive. Um, yeah, that’s, that’s tough. think, hav­ing said all that, Chi­na’s real­ly shown the tem­plate for the future. One of the things that they’ve been suc­cess­ful at is that they are mak­ing them­selves self-reliant.

Cameron: Yeah.

Tony Kynas­ton: why EVs are so cheap [00:11:00] in Chi­na is because they real­ized that they had. Depen­den­cies on over­seas oil. So they said, well, let’s try and reduce that. And the way to reduce that is to man­u­fac­ture EVs cheap­ly

Cameron: Yeah.

Tony Kynas­ton: and, sure our, our, um, domes­tic fleet is now elec­tri­cal­ly based and not using oil.

Cameron: Yeah.

Tony Kynas­ton: and that’s the one of the byprod­ucts of that is, um, well we can export those cheap cars around the world too. one of the arti­cles I looked at when you sent me your, um, arti­cles about this was the fact that imports from Chi­na are up 18% in the last half they’re not going to the us they’re com­ing here. And the biggest dri­vers of that import increase are elec­tric vehi­cles and, uh, alter­na­tive ener­gy assets like solar pan­els and wind­mills and things like that.

So, We don’t have a man­u­fac­tur­ing base on either of those two things, so I don’t think we’ll be putting tar­iffs on them. just be accept­ing them. But, you know, it does cre­ate a depen­den­cy. And [00:12:00] if there’s ever an issue with, know, some kind of con­flict where we side with orca over the Chi­na and we can’t get access to those things cheap­ly, we’re strand­ed. We don’t get, we have to pay through the nose and for Tes­las again. So it’s,

Cameron: Mm-hmm.

Tony Kynas­ton: you know, it’s, it’s, there’s a polit­i­cal risk to all this when the world’s. I remem­ber we talked about this a few years ago about the Shell plan­ning process and when I was at Shell. So what, what Shell does is it, it starts from the top lev­el up from the macro, and it says, we’re gonna devel­op four poten­tial sce­nar­ios that we think are the most like­ly for where the world goes in the next five to 10 years. when I was there, and I think what it does then from mem­o­ry is it’s, it, it dis­cards two after the first year and says, okay, they’re less like­ly now after we’ve seen it play out a bit and it focus­es on one or two, and then it focus­es on one. And where it got to when I was at Shell was, um, what they called inter­na­tion­al trade.

So basi­cal­ly the world was. Devolv­ing from being, um, cen­tered around [00:13:00] coun­tries and was becom­ing more inter­na­tion­al­ly depen­dent. And, uh, and there­fore shell at least had, had quite, would there­fore expand its fleet of ser­vice sta­tions and refiner­ies all over the world it could, it would have, uh, know, um, un well large­ly unim­ped­ed ship­ping.

It would have large­ly unim­ped­ed abil­i­ties to invest and, and then to repa­tri­ate the funds and all that kind of stuff. Now, the cur­rent shell. the­sis is, has gone from what was called glob­al me McCan mer­can­til­ism back to um, nation states. So it’s now say­ing the world’s retreat­ing back to um, Europe look­ing after itself.

Chi­na look­ing after itself, Rus­sia look­ing after itself and the US look­ing after itself and emerg­ing mar­kets look­ing after them­selves. So,

Cameron: Hmm.

Tony Kynas­ton: um, that’s the kind of world we’re in. A Aus­tralia has­n’t cot­toned onto that yet ’cause we still have a big deficit in terms of our roy­al needs, a big deficit in terms of our man­u­fac­tur­ing needs, cetera, et [00:14:00] cetera.

So if we ever get on the wrong foot of Chi­na or some­body else, we’re gonna face a prob­lem. And I don’t think the gov­ern­men­t’s tak­ing that into account. There’s cer­tain­ly not enough oil reserves. There’s cer­tain­ly not enough. Um, there’s cer­tain­ly not a man­u­fac­tur­ing base any­more that can build cars, all that kind of thing.

So, um, we’re stuffed as opposed to Chi­na who will sur­vive if they go into a, a. Mil­i­tary con con­fronta­tion with some, some oth­er part of the world. So, um, it’s very inter­est­ing to watch and I guess we’re Aus­trali­a’s pret­ty prag­mat­ic ’cause we’ll just take the cheap cars while they’re there, but even­tu­al­ly we’re gonna, um, come across or if there is a, if there, if the walls go up, so to speak, because of con­fronta­tions around the world.

Cameron: Hmm.

Tony Kynas­ton: But as we’ve said many times before, that’s all macro and it does­n’t affect our share um, process at the moment.

Cameron: Um, talk­ing to Tay­lor, uh, in the last week because he’s just done his first car deal with his cl for his clients. And, um, uh, I, I [00:15:00] read an arti­cle, I can’t remem­ber where it was, but I. Say­ing that, um, the num­ber of car ven­dors in Aus­tralia is gonna dou­ble in the next cou­ple of years from about 35 to 65 or 70 or some­thing like that.

And most of them are com­ing from Chi­na. Like just all of these brands

Tony Kynas­ton: Yeah.

Cameron: that are explod­ing. And this is on the futur­is­tic show for the last year or so, I’ve been say­ing this is what I expect to see hap­pen with, um, humanoid Robot­ics. There’ll be just thou­sands of com­pa­nies in Chi­na com­pet­ing for the robot­ic space, dri­ving the price down, uh, dri­ving inno­va­tion up.

Um, just flood­ing the mar­ket with low cost robot­ics any­way.

Tony Kynas­ton: And then there might be some issues with that. ’cause like, you know, the, head of the Aus­tralian secu­ri­ty ser­vices here is say­ing that, um, they can have back­door entry into those things. They can be kill switch­es. They, they can at least take your data and all the rest of it.

Cameron: I thought [00:16:00] you were talk­ing about sex robots there for a sec­ond. When you’re talk­ing about back­door entry into the robots, slow down.

Tony Kynas­ton: But, um, and, and look, that could just all be smoke and mir­rors that they’re try­ing to stop peo­ple from buy­ing Chi­nese cars. But, um, it’ll be inter­est­ing to see what, how that devel­ops as well.

Cameron: Yeah. Alright, well mov­ing on from US and Chi­na econ­o­my stuff. Got a ques­tion for you. Got a lot of ques­tions from lis­ten­ers this week.

Tony Kynas­ton: Yeah,

Cameron: It’s good. But I got a ques­tion from, uh, myself. Um, so on our buy list this week,

Tony Kynas­ton: your­self high­er than all our lis­ten­ers do. You’ll go first? Yeah.

Cameron: of course. Um, yeah, this is impor­tant stuff. Um, on our buy list this week, FWE Fleet­wood Mac

Tony Kynas­ton: FWD.

Cameron: again. Um, one of the few things. I could actu­al­ly buy that I had­n’t, did­n’t already have parcels of some­where in the port­fo­lio along with OML and DSK, and I yuck at both of [00:17:00] those, ’cause I’ve both bought both of those like 10 times and had to sell ’em over the years.

Every time I see Ooh, media or dusk, I’m like, Ugh, God, not you guys again. And, uh, their prices have not gone the right way. You know, some­times you buy some­thing and you sell it and then you look at it six months lat­er and the prices has gone up and you go, oh, I coul­da held it. No, not with these guys. That just keeps going down.

But, um, Fleet­wood was back on now. Uh, uh, you may recall the CEO was fired last Novem­ber, late Novem­ber. We sold it. It was a red flag. The price has risen since then

Tony Kynas­ton: Mm-hmm.

Cameron: and it’s back on the buy list. Um, when do we take the red flag off? It is when they come out with new finan­cials.

Tony Kynas­ton: Yeah, it’s a good ques­tion. I, I don’t real­ly have a hard and fast rule, but, so I’m hap­py to go with new finan­cials. Um, I, I did note, I mean, the share price has risen since Novem­ber, [00:18:00] but not by a whole lot. So I don’t know if, um, if that’s a, if the mar­ket’s sort of ten­ta­tive at the moment for that stock or whether it’s whole­heart­ed­ly. into it. But look, it’s always a prob­lem in Jan­u­ary any­way, because we’re gonna get new num­bers with­in the next month or so too. So it fleet­wood may not be on the buy list when it announces. Um, the flip side has always been in my mind that if we buy it now and they announce good results, we get that first 10 or 20% uplift on the day.

So,

Cameron: Well, don’t we have a Yeah,

Tony Kynas­ton: we’re not buy­ing in Jan­u­ary any­way, so ’ cause of

Cameron: uh

Tony Kynas­ton: we’ve had, what we’ve had prob­lems with in the last cou­ple of, um, years. Yeah. Or last cou­ple of halves.

Cameron: huh. I’d for­got­ten about that. So we’ve got a, a block on con­fes­sion sea­son buy­ing.

Tony Kynas­ton: Yeah. So we’re wait­ing any­way, but as to, I mean, the only way we’ll ever know whether the red flags removed is if Fleet Fleet­wood actu­al­ly com­mu­ni­cates with the mar­ket and the share­hold­ers and say, Hey, here’s the sto­ry, here’s the new [00:19:00] per­son, here’s what hap­pened. Every­thing’s hunky dory, but they haven’t, they’ve just been qui­et.

They’ve been stung since Novem­ber. there’s been no, there’s, there’s been an announce­ment say­ing the CEO did­n’t align with their strat­e­gy and their strat­e­gy’s still intact and they’re with it, but it was still a shock announce­ment and the guy was out the door in 24 hours, which is nev­er a good sign.

So, yeah, I, I’d like to know more about it, but yeah, if I come out with good num­bers and it’s a buy, I think that’s good enough.

Cameron: Yeah.

Tony Kynas­ton: Yeah.

Cameron: Okay. Well I’m glad I brought that up because I’d for­got­ten about the con­fes­sion sea­son hold. Um,

Tony Kynas­ton: Yeah.

Cameron: have to let. Light mem­bers know about that. Um, I’ve got was I can get into some of the lis­ten­er stuff or have you got some­thing you wan­na talk about before we do that?

Tony Kynas­ton: The only thing I had to talk about this week, and I guess I did­n’t. Record did­n’t put a lot into my notes after I saw the list of ques­tions you had. ’ cause

Cameron: Hmm.

Tony Kynas­ton: uh, role came down for the [00:20:00] week­end. My broth­er-in-law and my sis­ter, which had, we

Cameron: Mm-hmm.

Tony Kynas­ton: togeth­er.

Cameron: Hmm

Tony Kynas­ton: played a bit of golf and um, they did a lot of sight­see­ing, but it was good to catch up. But he asked me a ques­tion. He said he’s had a good year with QAV. I think we talked about his results last week the show. He said he was think­ing of putting a rule, one of reset­ting his rule ones to his Decem­ber 31 clos­ing prices. So try­ing to lock in the gains he had from last year in case he gave them all back. And, um, I said, yeah, inter­est­ing idea. Um, it’s a bit like putting a trail­ing stop-loss on the stocks. it makes you hap­py and makes you sleep at night, go for it. Um, I

Cameron: hmm.

Tony Kynas­ton: do it ’cause I’ve cer­tain­ly seen that have had a high and then come off 10%, 20% and then make new highs again. Um, par­tic­u­lar­ly when you num­bers come out, for exam­ple.

So,

Cameron: Hmm Hmm.

Tony Kynas­ton: You could eas­i­ly have some­thing retreat, 10, uh, 10 or 20%, sell it and then find it goes up or

Cameron: Because oth­er peo­ple are [00:21:00] doing the same thing. Oth­er peo­ple are tak­ing prof­its, sell­ing it,

Tony Kynas­ton: Yeah,

Cameron: but it’s still a good busi­ness. It’s still got a lot of upside. Yeah.

Tony Kynas­ton: yeah. So it’s bench­ing Michael Jor­dan, so to speak.

Cameron: Yeah.

Tony Kynas­ton: Yeah.

Cameron: Hmm.

Tony Kynas­ton: Um, and if, if I look at my hold­ings, um, over the, the year some, yeah, they have retreat­ed 10%, 20% and then kicked on again. So,

Cameron: Yeah.

Tony Kynas­ton: worked out well for me. Not to say it’ll con­tin­ue to work out well, but, um, it’s hard for me to answer a ques­tion like walls because I haven’t mod­eled it. Um, you’d need to do years of regres­sion test­ing to see if it’s bet­ter than our cur­rent strat­e­gy. Um, so

Cameron: A feel­ing I have.

Tony Kynas­ton: You have,

Cameron: Not a feel­ing. I mean, I dun­no, I mean not defin­i­tive­ly, but I’ve gone through and picked up lots of exam­ples when this comes up in the past of stocks that have dropped by 20% and then gone up 50%. Yeah.

Tony Kynas­ton: Yeah, we do.

Cameron: So for,

Tony Kynas­ton: I think, you did mod­el that. You’re right.

Cameron: for every exam­ple that peo­ple have where we lose, and I’ve had [00:22:00] plen­ty of those.

Um, like Mey­er is the one that always comes to mem­o­ry that was up like 80% and then went, became a real one for every one of those. I’ve got one or two counter exam­ples. Uh, so yeah.

Tony Kynas­ton: Yeah, look, but I’m not gonna tell peo­ple not to do it if, if Will feels com­fort­able doing it, um,

Cameron: Yeah,

Tony Kynas­ton: the chances are he is gonna, he’s got a good chance of buy­ing a stock that will go up if he’s going back to the buy list again. So

Cameron: yeah,

Tony Kynas­ton: he may, come out in front. It’s, it’s prob­a­bly like a 60 50, 60 40 thing.

So,

Cameron: yeah, yeah.

Tony Kynas­ton: you feel com­fort­able with.

Cameron: Yeah. And I think, I mean, that’s one of the great, um. Pieces of your phi­los­o­phy with QAV is at the end of the day, you got­ta be able to sleep at night. So do what­ev­er you are com­fort­able with, but do that know­ing that if you start to tweak the rules you, you know, with­out hav­ing done regres­sion test­ing on the [00:23:00] impact of tweak­ing them, that you could be los­ing per­for­mance.

But you know, if you’re pre­pared to try.

Tony Kynas­ton: Yeah,

That if that’s the cost of peace of mind and it’s an

Cameron: Yes.

Tony Kynas­ton: Yeah.

Cameron: If you’re pre­pared to trade that for being able to sleep at night, then go do it.

Tony Kynas­ton: Yeah.

Cameron: Alright, let’s get into some of the lis­ten­er stuff. Jason. Jason is a QAV Light sub­scriber, has been pret­ty much since day one. One of our very ear­li­est light sub­scribers.

Tony Kynas­ton: Oh,

Cameron: to send me a lot of emails, a lot of ques­tions, and I appre­ci­at­ed that in the ear­ly days, clar­i­fy­ing stuff and help­ing me think through light stuff.

And as every­one knows, the light port­fo­lios real­ly strug­gled for the first cou­ple of years. A lot of peo­ple did­n’t make it, but Jason did and he sent me a great email. Um, hap­py New Year to you, TK and your fam­i­lies. I was catch­ing up on last year’s episode with Scott the oth­er day when you were talk­ing about peo­ple that start­ed in 2020 2 23 made me reflect on my jour­ney.

I start­ed my QAV life in March, 2022. [00:24:00] Why did I start it? Well, the fam­i­ly and I had been trav­el­ing around Aus­tralia in 20 20, 20 21, and when we got back in March, 2021, we were basi­cal­ly start­ing from scratch again, exhaust­ed all our funds on a trip of a life­time. So I thought there had to be a smarter way to get in front.

After lis­ten­ing to a cou­ple of episodes, I found QAV. It fit­ted my process per­fect­ly. Had and still have no desire to learn the ins and outs of busi­ness and don’t pic­ture myself read­ing busi­ness reports and p and l state­ments. So a process dri­ven sys­tem that also takes the emo­tion out of invest­ing was right up my alley.

The worst my port­fo­lio was doing was minus 8%. That was on the 18th of June, 2022, but at the time the index was minus 10%, so I did­n’t feel so bad. The real tough times were when I was still hov­er­ing around minus six, minus 7%, and the index had recov­ered to plus two, plus three. This time was chal­leng­ing and giv­en the con­stant small par­cel size I was pur­chas­ing and the bro­ker­age, it felt as though I was in an MMA fight.

[00:25:00] I was down on the can­vas and the ASX just com­ing in with ham­mer fists bru­tal. Any­way, I got punched in the jaw in uh, uh, spar­ring on Sat­ur­day, so I know how that feels. Got punched in the left and I, it’s hurt on the right to chew for the last few days, but we were at our physio this morn­ing. She was work­ing on my ankle, which is still out, but I to men­tion to the judge, she goes, oh, okay.

She worked on it and it’s all good now. She fixed it any­way. I was just think­ing about Ham­mer fests. Any­way, roll for­ward a cou­ple of years and I’m up 17.52%, which is a PB peanut but­ter. Last cal­en­dar year I did a 21.75, quite the turn­around. Just by fol­low­ing the process, there has­n’t been a huge stand­out either.

Best per­formed stock has been NHC at 80.77%. Cou­ple of oth­ers at the sev­en­ties, and then most oth­ers hov­er­ing around the 30 to 50% return. So just to shout out to you guys for stick­ing with the process, stick­ing fat with the process, and encour­ag­ing us to do the [00:26:00] same. Thought that was a typo. Then I real­ized, oh no, we meant that results speak for them­selves.

Now I got­ta con­fess, I did pur­chase a par­cel of VAS, that’s Van­guard. Just want­ed to see how it would per­form. I thought he made a vasec­to­my and I had one of those and I don’t rec­om­mend it. Um, not after my expe­ri­ence hurt like bug­gery. It was a moment of weak­ness. Yeah. I had a moment of weak­ness when they start­ed cut­ting it.

I was like, Hey, the aes­thet­ic, Hey. Okay, I’ve got a com­plete, I got­ta, I got­ta do a got­ta do. A side note here. Do you know where anes­thet­ic, how it was dis­cov­ered and where it comes from?

Tony Kynas­ton: I think I have read the sto­ry, but no. Remind me.

Cameron: So I’ve been read­ing this book, the Ser­pent in the Rain­bow. Um, it’s one of the books about, uh, phar­ma­col, uh, phar­ma­col­o­gy, um, where this guy’s, a Har­vard sci­en­tist in the sev­en­ties, I think, uh, went to Haiti and was study­ing, uh, voodoo and zom­bie drugs, the term peo­ple into zom­bies. [00:27:00] Um, any­way, he was talk­ing about, uh.

An aes­thet­ics and I delved into it. So 200 years ago, raves were ether par­ties and, uh, nitrous oxide par­ties like I had in high school. I did­n’t real­ize how far that went back. So peo­ple would get togeth­er in high soci­ety in the ear­ly 18 hun­dreds.

Tony Kynas­ton: had an

Cameron: Yeah.

Tony Kynas­ton: nitrous oxide. Oxide, Raven, when you were in high school. Cool.

Cameron: We used to nitrous oxide all the time. When we would get togeth­er, we would have the can­is­ters and the old, um, cream dis­penser things so to stream,

Tony Kynas­ton: Yep.

Cameron: and we would hit them up and we, we did it every par­ty until I turned blue one night after tak­ing like four or five of these things and we all kind of agreed, this is prob­a­bly a good time to stop.

Any­way, they, we used to do these par­ties and there was a den­tist there, I think his name was [00:28:00] Howard Wells, and he, he saw a guy fall down and gash his leg and not feel it. And went, huh, I won­der if we could use this stuff in den­tal surgery. And that’s how it got start­ed. And, um, chlo­ro­form and ether and, uh, nitrous oxide start­ed to become used in med­ical prac­tice, but it was a par­ty drug.

So it was fas­ci­nat­ing. I was like, how come I nev­er knew that before? That’s fan­tas­tic. Any­way, back, back to, uh, moment of weak­ness, um, with my port­fo­lio at 11 Stocks, which I’m hap­py with the size of, I’ll just con­tin­ue to build on larg­er par­cel sizes when I need to sell and buy and hope­ful­ly increase the over­all port­fo­lio val­ue.

Oh, and thanks for bring­ing back the week­ly free pod­cast. Cheers, Jason. Uh, well that’s great Jason. And, um, as I said in my email, um, con­grat­u­la­tions on, uh, stick­ing through it and trust­ing in the sys­tem to come. Good. You know,

Tony Kynas­ton: Yeah.

Cameron: to pay off.

Tony Kynas­ton: That’s

Cameron: Hmm.[00:29:00]

Tony Kynas­ton: Good to hear.

Cameron: Yeah. Yeah. I had­n’t heard from him for a while. Um, so I was hap­py to hear from him.

Uh, real­ly impor­tant ques­tion to hear from Tom. Um, but he says it’s an after hours ques­tion, so we’ll leave it for after hours. Um, Scott,

Tony Kynas­ton: Okay.

Cameron: it’s about golf clubs for lis­ten­ers.

Tony Kynas­ton: all right.

Cameron: Um, oh, here’s a good one. This is from Scott, who is the afore­men­tioned Scott Jason’s email, uh, lov­ing the Sun­day buy list, delv­ing deeply into it with hap­pi­ness. Dou­bly hap­py it came through nice and ear­ly. How good. I’m very thank­ful. It was actu­al­ly a Sat­ur­day night buy list this week, believe it or not.

Got home from kung fu wrecked on Sat­ur­day and did the buy list. You’re wel­come.

Tony Kynas­ton: go home from the nitrous par­ty, the ether.

Cameron: I wish. Got home from hav­ing my jaw bro­ken and, uh, did the buy list. Mean­while, I’ve done a lit­tle analy­sis that you and TK might find of inter­est. A few weeks back I noticed that MAH had reap­peared on the buy list, and it was about three times what I [00:30:00] sold it for when it became a rule one sell for me in May last year, feel­ing very wronged by this injus­tice.

I thought I would fol­low up on what I men­tioned about a his­tor­i­cal track­er of your buy list on the pod­cast and what it would look like if we held a selec­tion of them from the first time they appeared on the buy list and just wait­ed. So my detailed data only goes back to the 2nd of Feb­ru­ary buy list last year when I start­ed track­ing on my own spread­sheets just under 12 months and 51 bias in total.

I then took a large selec­tion of the buy­ers from that first week, a few more from the next few weeks, and bun­dled them into a port­fo­lio with $5,000 invest­ment in each and no sell­ing or buy­ing from that point on. I also includ­ed all the ones I bought in this peri­od, whether I end­ed up sell­ing or not, just for my infor­ma­tion.

Inter­est­ing­ly, there were 74 stocks on that 3rd of Feb­ru­ary buy list. About five or six had dis­ap­peared for what­ev­er rea­son, so they were exclud­ed. The results were astound­ing. Spread­sheet attached. In [00:31:00] short, 58 QAV stocks select­ed 43 return­ing pos­i­tive results. 15 neg­a­tive six. Over a hun­dred per­cent return from between 106% and 157%.

14 over 30%. Return 17 with a 10 to 30% return, sev­en up to 10% of the losers. The worst were ASX one neg­a­tive 57%, and the best. SUL neg­a­tive 7%. The best of the worst, I guess he means in dol­lar slash per­cent­age amounts. $290,000 invest­ed in $5,000 lots with 50 of the 58 stocks bought before the 31st of March, 2025 would now be worth 362,000 and change, or 24.84% of growth.

You could have just ran­dom­ly picked 58 stocks, just wrote out the whole year pret­ty much. And despite all the chaos and the mad­ness, you would’ve end­ed up win­ning and win­ning very well. So sound like Trump there so much [00:32:00] win­ning, you won’t believe how much win­ning you would’ve done. Some peo­ple say it was the great­est win­ning of all time.

Some of my picks if I just held them instead of sell­ing, would’ve made my port­fo­lio look much bet­ter. Exam­ples, met­als X bought at 67%, sold at 52 and a half cents. Now trad­ing at a dol­lar 25 Ouch. A1C mines bought at 35 cents. Sold at 31.5, now trad­ing at 60 cents. MAH as not­ed before, that stings a caveat is that in my man­u­al data entry of each buy list that I have pulled the infor­ma­tion from, so some of it could not be quite a hun­dred per­cent cor­rect, but I doubt it would’ve had a mate­r­i­al impact.

I thought there may be some cor­re­la­tion between how often a stock has appeared on the buy list and it’s suc­cess, and there might be some­thing in this, but I don’t have the skillset to work that out. Some inter­est­ing obser­va­tions though. Two of the 10 per­form­ers only appeared five or six times in the 51 weeks I’ve been trad­ing.

I’ve been track­ing, sor­ry, GNP and PIU, although it is pos­si­ble with those two, that they’d been on the buy list reg­u­lar­ly [00:33:00] pri­or to this and had reached the end of their shelf life due to the price going up Of the top 10 per­form­ers that were on the buy list and aver­age 24 out­ta 51 weeks tracked with the most being PRN 41 weeks.

Of the bot­tom 10 per­form­ers, the aver­age was 17 out­ta 51 weeks tracked and the high­est being LAU 31 weeks. Note that not all the stocks were on the list from the 2nd of Feb­ru­ary, but the major­i­ty were tracked from before the 1st of April last year when the world went a lit­tle upside down thanks to Orange Man.

I’ll make a note to redo this around the 1st of April and let you know the results of this. Maybe there is an argu­ment for not look­ing back because you can find any­thing you like in data from a set point in time, but I thought this might be of inter­est to you and TK look­ing into strate­gies around hold sell for QAV Dis­ci­ples.

I can hear TK say­ing We don’t pre­dict the future, but when you’ve got a rough­ly 75% win rate on a ran­dom data set, you are pre­dict­ing the future with a great rate of suc­cess from the buy list. Per­haps it is just sim­pler to buy and [00:34:00] hold and review every three months or so to see how you’re going. There is a ques­tion in here some­where along the lines of, can we do a deep­er dive into this and see what hap­pens if we just buy and hold a ran­dom selec­tion of buy stocks from this week and the next three to four weeks, or just track the last three to four weeks, then come back and look at them in 12 months, 24 months, et cetera.

Could be a pod­cast episode on this annu­al­ly and repeat it each 12 months with a new list from Iran. Lease select­ed month of buy lists. I would love to go back to the very begin­ning and track each stock after a debuts on the buy list and see how they went since incep­tion of QAV would be a great insight and maybe even a sell­ing tool for new sub­scribers.

Might need a spread­sheet guru to assist me though. Hope this is of inter­est. Cheers, Scott. So first of all, well done Scott. Noth­ing. I love more than see­ing peo­ple start to think deeply about invest­ing and invest­ing strate­gies and buy­ing and hold­ing and toy­ing with stuff and.

Tony Kynas­ton: Yeah.

Cameron: Get­ting, get­ting into the, the [00:35:00] analy­sis and the num­bers, it’s addic­tive.

Um, you’re down the rab­bit hole now, Scott,

Tony Kynas­ton: Yes.

Cameron: how­ev­er

Tony Kynas­ton: That’s, what I say. The Excel is my men’s shed. Just what?

Cameron: Hmm.

Tony Kynas­ton: into the shed. For a cou­ple of

Cameron: Yeah,

Tony Kynas­ton: do this kind of

Cameron: yeah.

Tony Kynas­ton: Yeah.

Cameron: Hmm. Do you have, do you have play­boys wrapped inside your Excel spread­sheet, like hid­den behind Excel spread­sheet? Isn’t that what men do in mens sheds?

Tony Kynas­ton: I

Cameron: No, I, I dun­no, I’ve nev­er had a mens shed. I have my, my lit­tle office here, so I did my own analy­sis, um, my buy and hold exper­i­ment. So I went back to the ear­li­est buy list I have, which is the 5th of Sep­tem­ber, 2021, and I just did a spread­sheet where I bought 20 stocks on that buy list from the top.

Down, assumed an ini­tial cap­i­tal of [00:36:00] 20,000 thou­sand dol­lars into which like we did with the dum­my port­fo­lio and then just did buy and for­get until today. So pre­tend I did­n’t check them, just let ’em run and then I checked to see where it is at. And that would be, what’s that, Sep­tem­ber 21 to now? So four and a bit years.

I did fil­ter for a DT greater than 15,000 though before I bought them. Um, and the results were not great. Uh, 4.37 years, actu­al­ly I did it. Um, the total cur­rent port­fo­lio val­ue. So if we start­ed with 20,000 and just let it run the cur­rent port­fo­lio val­ue, do you wan­na take a guess, Tony? Lis­ten­ers at home, pause and have your own guess.

Start­ing with $20,000 4.37 years ago, what do you think [00:37:00] it’s worth? It would be worth now,

Bernard: Q A V is a check­list-based sys­tem of val­ue invest­ing devel­oped by Tony  Khyne­ston. over 25 years. To learn more about how it works and how you can learn the sys­tem, vis­it our web­site, Q A V Pod­cast dot com dot A U.

This pod­cast is an infor­ma­tion provider and in giv­ing you prod­uct infor­ma­tion we are not [01:29:00] mak­ing any sug­ges­tion or rec­om­men­da­tion about a par­tic­u­lar prod­uct. The infor­ma­tion has been pre­pared with­out tak­ing into account your indi­vid­ual invest­ment objec­tives, finan­cial cir­cum­stances or needs. Before you decide whether or not to acquire a par­tic­u­lar finan­cial prod­uct you should assess whether it is appro­pri­ate for you in the light of your own per­son­al cir­cum­stances, hav­ing regard to your own objec­tives, finan­cial sit­u­a­tion and needs. You may wish to obtain finan­cial advice from a suit­ably qual­i­fied advis­er before mak­ing any deci­sion to acquire a finan­cial prod­uct. Please note that all infor­ma­tion about per­for­mance returns is his­tor­i­cal. Past per­for­mance should not be relied upon as an indi­ca­tor of future per­for­mance; unit prices and the val­ue of your invest­ment may fall as well as rise. The results are gen­er­al advice only and not per­son­al prod­uct advice.

Trans­paren­cy is impor­tant to us. We will always be very [01:30:00] open and hon­est about the stocks we own. We will also always give our audi­ence advance notice when we intend to buy or sell a stock that we are going to talk about on the pod­cast. This is so we can nev­er be accused of pump­ing a stock to our own advan­tage. If we talk about a stock we cur­rent­ly own, we will make it known that we own it.

This email is autho­rised by Antho­ny  Khyne­ston. Autho­rised Rep­re­sen­ta­tive Num­ber zero zero 1 2 9 2 7 1 8 of M F & Co. Asset Man­age­ment Pro­pri­etary Lim­it­ed (A F S L five 2 zero 4 4 2).
No part of this con­tent may be repro­duced in any form with­out the pri­or con­sent of Space­craft Pub­lish­ing.

Quote of the day: “The­o­ries destroy facts,” said Peter Medawar at a Men­sa con­fer­ence in the 1960s. He meant that a gen­er­al the­o­ry can remove the need to record huge quan­ti­ties of iso­lat­ed facts.”

The Col­lapse of Chaos: Dis­cov­er­ing Sim­plic­i­ty in a Com­plex [01:31:00] World

Ian Stew­art