Hi folks,

I hope you’re all hav­ing a great week and your port­fo­lios are crush­ing it. It’s been a busy week at QAV with dai­ly Aus­tralian buy lists being cre­at­ed dur­ing report­ing sea­son, although there still isn’t much show­ing up to buy. By next week things should have returned to nor­mal.

I’d like to thank Dave from Newy, who recent­ly cel­e­brat­ed his FIVE YEAR anniver­sary as a QAV mem­ber (what’s the tra­di­tion­al gift for that?) and sent me a love­ly email about his expe­ri­ence and per­for­mance which I’ll read out on next week’s show. But here’s a snip­pet which I want­ed to share:

I think as I look back I realise I’ve made a lot of mis­takes, espe­cial­ly at the start. It was all behav­iour­al (includ­ing get­ting way too attached to the stocks and con­stant­ly try­ing to out think the process). This has set­tled a lot for me, which again is where I get my val­ue as a mem­ber — the rein­force­ment week-in-week out to just take all the emo­tion out of it (highs and lows), be as black and white in the deci­sion mak­ing as pos­si­ble, and just trust the process and that the math will work in the long run. And then the con­fi­dence that comes from see­ing all that actu­al­ly hap­pen and work over a five year peri­od even with me in there try­ing to screw it up once in a while.

Well said, Dave.

Any­way, let’s get into the thick of my week­ly updates.

All the Best,
Cam

QUIZ OF THE WEEK!

Each week we’re ask­ing you to choose from two stocks from our buy list this week. Which do you think will be the best per­former over the next 12 months?

Tony sug­gest­ed I change it to just the best per­former over the fol­low­ing WEEK. So last week the choic­es were DSK or SRV. Out of the votes received, SRV was the clear favourite.

Well how did they fare?

Con­grat­u­la­tions to the genius­es who picked SRV. It .… bare­ly moved, but was still the win­ner! Some­times in life, you can win just by stand­ing still and let­ting the world fall down around you.

Let’s see who can pick the win­ner this week between…

Click the image and take your chances!

May the Munger be with you.

NOTE: Apolo­gies to our Amer­i­can audi­ence. I promise to come up with an Amer­i­can poll for you soon.

QAV MYTH KILLERS

Peter Lynch Was Wrong — Don’t Invest In What You Know

I love Peter Lynch.

There. I said it. And I say it with­out embar­rass­ment, even though I’m about to spend the next few hun­dred words pick­ing apart one of his most famous pieces of advice.

Lynch is one of the great­est investors who ever lived. Full stop. His thir­teen-year run man­ag­ing the Mag­el­lan Fund at Fideli­ty — turn­ing $18 mil­lion into $14 bil­lion and aver­ag­ing a 29% annu­al return — is the kind of num­ber that makes you ques­tion whether the laws of physics apply to him. He was also that rare thing: a fund man­ag­er who could actu­al­ly explain what he was doing in plain Eng­lish.

The quotes alone are worth the price of admis­sion.

“The per­son who turns over the most rocks wins the game.”

“If you spend more than 13 min­utes ana­lyz­ing eco­nom­ic and mar­ket fore­casts, you’ve wast­ed 10 min­utes.”

“Go for a busi­ness that any idiot can run – because soon­er or lat­er, any idiot prob­a­bly is going to be run­ning it.”

And, on a per­son­al note, this one has defined my life since I left Microsoft and start­ed the world’s first pod­cast net­work twen­ty years ago:

“Find some­thing you enjoy doing and give it every­thing you’ve got, and the mon­ey will take care of itself.”

One Up On Wall Street and Beat­ing the Street are absolute clas­sics. I have enor­mous respect for the man.

But not every bon mot of wis­dom can be tak­en as good invest­ing advice with­out a lit­tle con­text and per­spec­tive.

Take his famous line: invest in what you know.

What People Think He Meant

I have heard this trans­lat­ed, more times than I can count, as: “I like Apple prod­ucts, I under­stand Apple prod­ucts, there­fore I should invest in Apple.”

Or: “I shop at Cost­co every week, I know how good the hot dogs are, time to buy some stock.”

It’s a seduc­tive idea. You feel like an insid­er. You have infor­ma­tion. You eat the Dunkin’ Donuts, there­fore you under­stand the busi­ness. Buy.

The prob­lem is that this is almost exact­ly back­wards.

What He Actually Meant

Here’s the thing — Lynch him­self antic­i­pat­ed this mis­read­ing and cor­rect­ed it, right there in One Up On Wall Street. This is the pas­sage most peo­ple skip:

“How­ev­er a stock has come to your atten­tion, whether via the office, the shop­ping mall, some­thing you ate, some­thing you bought, or some­thing you heard from your bro­ker, your moth­er-in-law, or even from Ivan Boesky’s parole offi­cer, the dis­cov­ery is not a buy sig­nal. Just because Dunkin’ Donuts is always crowd­ed or Reynolds Met­als has more alu­minum orders than it can han­dle does­n’t mean you ought to own the stock. Not yet. What you’ve got so far is sim­ply a lead to a sto­ry that has to be devel­oped. In fact, you ought to treat the ini­tial infor­ma­tion as if it were an anony­mous and intrigu­ing tip, mys­te­ri­ous­ly shoved into your mail­box.”

In oth­er words: famil­iar­i­ty is a start­ing point, not a con­clu­sion. A lead, not a the­sis.

When Lynch talks about “know­ing” some­thing, he means the kind of deep, struc­tur­al insight you have because you work in an indus­try. Not “I eat at McDon­ald’s” but “I’m a sup­ply chain man­ag­er in the fast food sec­tor and I can see things that out­siders can’t.” Not insid­er trad­ing secrets — just the mechan­ics of an indus­try, under­stood from the inside.

And even then, he’s clear: do your research. Know­ing the indus­try is just the first shov­el in the ground.

“Invest­ing with­out research is like play­ing stud pok­er and nev­er look­ing at the cards.”

Fair enough, Peter. We agree on that.

Here’s Where QAV Goes Further

But here’s where I’d gen­tly part ways with Lynch, even on his cor­rect­ed ver­sion.

Because I don’t know a lot about any com­pa­ny or sec­tor. I can talk until the cows come home — and often do — about why Julius Cae­sar crossed the Rubi­con, why Fidel Cas­tro over­threw the Batista regime, or why Leonar­do da Vin­ci was obsessed with the tongues of wood­peck­ers. But none of that helps my invest­ing.

I have no spe­cial insight into almond farm­ing. I could­n’t tell you the first thing about what makes one com­mer­cial office rental com­pa­ny bet­ter than anoth­er. I have nev­er once in my life thought deeply about the logis­tics of indus­tri­al scaf­fold­ing.

And yet — some of the best per­form­ing stocks in our port­fo­lio have come from exact­ly those kinds of busi­ness­es.

Tony has taught me that the research that mat­ters isn’t about the busi­ness. It’s about the num­bers. It’s about lis­ten­ing to what the finan­cial state­ments are telling you.

Is the com­pa­ny mak­ing mon­ey? Is man­age­ment eat­ing their own cook­ing — do they own a mean­ing­ful stake? Is rev­enue grow­ing con­sis­tent­ly? What does the bal­ance sheet look like? Is it finan­cial­ly sta­ble?

Before I buy a stock, I’ll take a quick look at who the com­pa­ny is and what they do — most­ly just to make sure they’re not in the mid­dle of a merg­er, sell­ing off a limb, or about to be delist­ed. That’s about the extent of it. I don’t need to under­stand their prod­ucts. I don’t need to have used their ser­vices. I don’t need a per­son­al con­nec­tion to the busi­ness at all.

I just need to know that it rep­re­sents a fair com­bi­na­tion of qual­i­ty and val­ue.

Knowing Why You Own It

Lynch had one more line that I actu­al­ly think is the best thing he ever said about this:

“Know what you own, and know why you own it.”

I love this. And I believe it com­plete­ly.

Here’s the thing though — even though I might not know much about what a com­pa­ny does, I always know exact­ly why I own it. It passed the check­list. The num­bers stack up. Qual­i­ty is there, val­ue is there, man­age­ment is aligned. That’s why I own it.

That’s all the “know­ing” I need.

Lynch was right that famil­iar­i­ty can open a door. But in QAV, we’ve realised that the door was nev­er locked in the first place. Any com­pa­ny’s finan­cials are pub­licly avail­able. The infor­ma­tion isn’t hid­den. You don’t need indus­try exper­tise to read a bal­ance sheet.

You just need to know what you’re look­ing for.

STOCK ANALYSIS OF THE WEEK

We are still in “Report­ing Sea­son” in Aus­tralia, but I’ve found a few things to buy this week and you can see my Light posts here.

I also added some­thing to the U.S. Light port­fo­lio this week. U.S. Light and Club mem­bers can read it here.

On the full Aus­tralian pod­cast this week, Tony did a deep dive on Chal­lenger (CGF). See the pod­cast link down below if you want to lis­ten to his analy­sis.

BUY LIST

Each week, we pro­duce a buy list based on our val­ue invest­ing sys­tem that we share with our QAV Club mem­bers. The intend­ed pri­ma­ry pur­pose of this buy list is for club mem­bers to use as a ref­er­ence for com­par­ing their own buy list. In the­o­ry, all of our buy lists should look pret­ty sim­i­lar each week.

I did pub­lish a buy list for Aus­tralia this week and Club mem­bers can find it here.

Below is a link to the US list for this week (avail­able to our U.S. Club mem­bers):

QAV Amer­i­can Val­ue Invest­ing Buy List 2026-02-22

PORTFOLIOS

We com­pare our per­for­mance to what we think is the most rel­e­vant bench­mark (SPDR 200 in Aus­tralia, S&P500 in the USA), but if you’re new to invest­ing, these com­par­isons might not mean much. Instead, you can com­pare our per­for­mance to the top-per­form­ing Super Funds in Aus­tralia and see why an ama­teur active investor (who has a sys­tem to fol­low) can out-per­form most of the “pro­fes­sion­als”.

AUSTRALIAN

QAV DUMMY

Five Year Report: Over the last five years, our port­fo­lio is +16.6% p.a. vs the bench­mark +10.4% p.a.

Month­ly Report: The AU Dum­my Port­fo­lio was ‑0.4% p.a. for the last 30 days vs the bench­mark +3% p.a.

I added a par­cel of CGF to our port­fo­lio this week.

For FY26, our port­fo­lio is +23.8% vs +10% for the index.

QAV LIGHT

As of Mon­day this week (the last time I did a report), in the last 30 days, the Light port­fo­lio was +0.79% vs the index which was +2.5%.

Our best return for the last 30 days is still SXE (South­ern Cross Elec­tri­cal Engi­neer­ing) but guess what?

Last week I said it was our best stock for the month and it was +13%. Well this week it’s +42%! FOR THE MONTH! The mar­ket REALLY liked their H1 FY26 Results that came out last week.

That means our two hold­ings of it are up 318% and 340%. Huz­zah!

SXE CHART FOR THE LAST MONTH:

A QUADRUPLE MARKET YEAR

For the last 12 months, the Light port­fo­lio is +40% vs the index +13%.

Since incep­tion (Feb 2022), the Light port­fo­lio is +22% vs the index +11%, dou­ble mar­ket, right on tar­get.

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Become a QAV Light Member today and start your investing on the right track

If you want to find out what we’re trad­ing in QAV Light each week, sign up to become a mem­ber. You’ll get an email from me every Mon­day let­ting you know what we’re buy­ing and sell­ing in that port­fo­lio. You can choose to copy our trades or not. It’s the eas­i­est way to start your rules-based invest­ing career… and you don’t even need to know the rules. I’ll fol­low the rules for you. It’s a good first step to even­tu­al­ly becom­ing a QAV Club mem­ber and learn­ing how to run the sys­tem by your­self.

AMERICAN

QAV DUMMY

Since incep­tion (Sep 2023), our port­fo­lio is +105% vs the S&P 500 +55%. Not quite dou­ble mar­ket but get­ting very close.

Our U.S. port­fo­lio for the last 30 days was +7.6% vs ‑0.8% for the S&P 500.

No trades this week.

QAV LIGHT

I recent­ly start­ed our U.S. Light port­fo­lio, and it’s had a slow start, and is cur­rent­ly ‑2% vs the S&P 500 +0.4%.

THIS WEEK’S EPISODES

QAV AU 908 — Blow­ing the Doors Off

SHG – The Seoul of Val­ue: QAV AMERICA 40

STOCK NEWS AND UPDATES

COMMODITIES

This week all of the com­modi­ties were either in a Sell or a Josephine state with the excep­tion of Gold, Coal (ther­mal) and Crude Oil which remained Buys.

DISCLOSURE

Please review our trad­ing and dis­clo­sure pol­i­cy.

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That’s it for the week!

QAV A GOOD SHAREMARKET!

Got a ques­tion? [email protected]