Hi QAVVERS,

I hope you’re hav­ing a great week. My thighs hurt from an insane kung fu ses­sion on Wednes­day night (lots of squats and low horse stance) but, apart from that, I’m doing well.

I’ve start­ed a new men­tal health rou­tine this week that I can rec­om­mend — some­thing that I heard from a friend who heard it from Bri­an Eno. First thing in the morn­ing, I take my cof­fee out on the deck and write in a jour­nal. No phone. No tablet. No lap­top. Just a note­book and a pen. I’m try­ing to clear my mind before I sit down and start work for the day and get swamped by every­thing I have to do. I’ve find myself look­ing for­ward to it every day. Just sit and write. No agen­da. No plan. Just write what­ev­er comes to mind. Try it out.

AUSTRALIAN MARKET UPDATE

The All Ordi­nar­ies edged up approx­i­mate­ly 0.2% for the last sev­en days to close near 9,298 points. Noth­ing to write home about.

US MARKET UPDATE

The S&P 500 pulled back this week, retreat­ing from its record high of 7,798.99 set on August 13 to close around 7,641 on August 20.

• The Trea­sury Depart­ment announced it would more than dou­ble repur­chas­es of 10‑, 20- and 30-year debt over the com­ing months, after the 30-year Trea­sury yield had jumped to its high­est lev­el in near­ly 20 years ear­li­er in the week.

• Oil prices climbed to their high­est lev­el in over two weeks after Pres­i­dent Trump said he intends to inflict more eco­nom­ic pain on Iran and threat­ened action over the Strait of Hor­muz, despite hav­ing claimed he’s won the war 47 times in the last six months, with Brent crude trad­ing near $91 per bar­rel and WTI ris­ing to $84 per bar­rel.

So, let’s get into my week­ly updates and see where we are at.

All the Best,
Cam

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QAV MYTH KILLERS

Works Both Ways

Mor­gan Housel has a blog post called “100 Lit­tle Ideas”. It’s a list of con­cepts from dif­fer­ent fields that help explain how the world works, and num­ber 52 on the list is ‘Feed­back Loops’.

“Falling stock prices scare peo­ple, which cause them to sell, which makes prices fall, which scares more peo­ple, which caus­es more peo­ple to sell, and so on. Works both ways.”

We cap­ture this in QAV with our three-point trend lines. The check­list might turn up a com­pa­ny with ter­rif­ic look­ing num­bers, but if the chart is head­ing in the wrong direc­tion, there’s not much sense buy­ing into it until it turns around. We could get killed by a neg­a­tive feed­back loop.

You’ll hear peo­ple say that mar­kets are ratio­nal because every­thing is known and priced in. The flaw in that the­o­ry is that mar­kets are made of humans.… and humans aren’t ratio­nal. If I was ratio­nal, I would­n’t be mak­ing his­to­ry pod­casts for a liv­ing. I’d get a real job.

Daniel Kah­ne­man put it about as plain­ly as it can be put in Think­ing, Fast and Slow. Every time a share changes hands, one per­son is buy­ing and anoth­er is sell­ing, at the same price, on the same day, with the same pub­lic infor­ma­tion sit­ting in front of both of them. Both can’t be right.

“The puz­zle is why buy­ers and sell­ers alike think that the cur­rent price is wrong. What makes them believe they know more about what the price should be than the mar­ket does? For most of them, that belief is an illu­sion.”

I guess both can be ratio­nal, mak­ing the best deci­sion they can based on the data they have and their oper­at­ing the­sis for the stock. But they obvi­ous­ly think they know bet­ter than the mar­ket. As do we — so does that make us irra­tional? Or just more con­fi­dent in our mod­el?

You might think ama­teurs pan­ic and the pro­fes­sion­als sit there con­fi­dent­ly hoover­ing up what­ev­er the ama­teurs dump… but I debunked the val­ue of con­fi­dence in a recent arti­cle.

A few weeks ago I wrote about Richards Heuer’s Psy­chol­o­gy of Intel­li­gence Analy­sis and those eight horser­ace hand­i­cap­pers who were giv­en more and more data about each race. Their accu­ra­cy did­n’t move. Their con­fi­dence climbed the whole way. On five pieces of infor­ma­tion their con­fi­dence was rough­ly cal­i­brat­ed to how well they were actu­al­ly doing. By forty they were bad­ly over­con­fi­dent. The clin­i­cal psy­chol­o­gists did the same thing, and so did the doc­tors. Being a pro­fes­sion­al does­n’t exempt you from that. More screens and more data buy you con­vic­tion rather than accu­ra­cy, and con­vic­tion is the fuel a feed­back loop runs on. You might look busy. You might feel busy. But you’re still wrong.

Our three point trend lines also lever­age the upside of pos­i­tive feed­back loops. There’s a well-known paper from the Jour­nal of Finance in 1990 argu­ing that, when enough peo­ple are trad­ing on price direc­tion rather than val­ue, the ratio­nal move for a sophis­ti­cat­ed investor is to get in front of them, buy ear­ly and ride it. That’s why our check­list gives an extra point if there’s a new three point upturn. Of course, we’re only buy­ing a stock if it stacks up well enough on oth­er met­rics to have a strong QAV score, we’re not just trad­ing on sen­ti­ment alone.

The clean­est demon­stra­tion of the pow­er of feed­back loops is cryp­to, which we have talked about a lot on the show. Our fun­da­men­tal issue is that no-one can tell you what a sin­gle Bit­coin is worth. There’s no cash flow to dis­count, no assets to count, no earn­ings to mul­ti­ply. There is no ratio­nal mod­el avail­able for work­ing out whether today’s price sits above or below intrin­sic val­ue, because there’s noth­ing to mod­el.

And yet the price moves vio­lent­ly, up, down, based pure­ly on feed­back loops, noth­ing else.

It works at the lev­el of an entire mar­ket, too. On the 19th of Octo­ber 1987 the Dow fell 508 points in a sin­gle ses­sion, 22.6%. The Fed­er­al Reserve’s own his­to­ry of the crash describes the mech­a­nism in one sen­tence: “An ini­tial price decline starts a vicious cir­cle by caus­ing port­fo­lio insur­ers to sell, caus­ing fur­ther price declines, caus­ing port­fo­lio insur­ers to sell again, and so on.” The offi­cial inquiry, the Brady Report, called it “a self-rein­forc­ing con­ta­gion of fear”.

We see it hap­pen on a small­er scale all of the time when a stock goes ex-div­i­dend. The price will drop as peo­ple who were hold­ing out for the div­i­dend sell their hold­ings. But then the price con­tin­ues to drop, well below the val­ue of the div­i­dend. Why? Feed­back loops. The price is falling so peo­ple (and algo­rithms) sell. It’s easy for an investor to get caught up in the emo­tion and the pan­ic.

Which is why our trend lines exist.

The check­list tells us if a busi­ness con­tains a good bal­ance of qual­i­ty and val­ue. It has noth­ing to say about what sev­er­al thou­sand oth­er peo­ple are going to do with the share price over the next few months. Some of them are sell­ing because the chart looks bad. Some of them are buy­ing because the chart looks good. Whether that’s ratio­nal or not does­n’t much mat­ter, because they both affect our invest­ment.

The trend lines recog­nise group­think, but they also allow for the pos­si­bil­i­ty that a stock falling despite good num­bers on paper might be falling for per­fect­ly ratio­nal rea­sons that we’re sim­ply not aware of, because we’re not experts in that com­pa­ny or its sec­tor or what its com­peti­tors are up to.

And we don’t want to be experts. We don’t have to be. We’re experts at using the sys­tem. That, as it turns out, is enough.

The sell line tells us the mar­ket has turned pes­simistic on a stock, right­ly or wrong­ly. The buy line tells us there’s enough sup­port behind it that the mar­ket isn’t reject­ing the the­sis. Nei­ther one is a fore­cast. They’re a read­ing of where things stand today.

Works both ways.

STOCK ANALYSIS OF THE WEEK

Aus­tralian Mem­bers can check out the stocks we trad­ed in QAV Aus­tralian Light port­fo­lios this week.

Amer­i­can Mem­bers can check out the stocks we trad­ed in QAV Amer­i­can Light port­fo­lios this week.

No pulled pork from Tony this week due to our inter­view with Alan Kohler.

On the Amer­i­can pod­cast this week, I did a pulled pork on an inter­est­ing Flori­da home insur­ance com­pa­ny, SLDE. The pod­cast link is down below if you want the full analy­sis.

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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.

AUSTRALIAN BUY LIST

QAV Val­ue Invest­ing Buy List (AU) 2026-08-15

U.S. BUY LIST

QAV Val­ue Invest­ing Buy List 2026-08-18

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PORTFOLIO PERFORMANCE

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”.

We pub­lish a fresh per­for­mance snap­shot once a month. Week­ly noise does­n’t tell you much in a val­ue-invest­ing sys­tem — what mat­ters is the trend.

August 2026 per­for­mance snap­shot.

Aus­tralian Mod­el Port­fo­lio: No trades this week.

Amer­i­can Mod­el Port­fo­lio: No trades this week.

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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.

QAV LIGHT: He already knows where they are.

(Note: Amer­i­cans inter­est­ed in join­ing QAV Light or Club please go here instead.)

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Add QAV America — US stocks, the same QAV method

Already a QAV mem­ber? You can add QAV Amer­i­ca as your sec­ond mem­ber­ship at 50% off — US-list­ed stocks, the same QAV approach, billed in AUD through this site (just one pay­ment to keep an eye on). Add QAV Amer­i­ca →

Not a QAV mem­ber yet? Join QAV first, then you can add QAV Amer­i­ca at the 50% mem­ber rate.

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THIS WEEK’S EPISODES

Alan Kohler Returns: Bub­bles, Hous­ing, and Why ETFs Won’t Save You — QAV AU #933

The Flori­da Slide: How a Five-Year-Old Insur­er Is Beat­ing Every­one at Their Own Game: QAV Amer­i­ca #66

STOCK NEWS AND UPDATES

COMMODITIES

This week the big changes to com­modi­ties were the fol­low­ing:

Com­mod­i­ty	Sta­tus
Iron Ore	SELL
Coal (cok­ing)	JOSEPHINE
Wheat	BUY
Lithi­um	BUY

DISCLOSURE

Please review our trad­ing and dis­clo­sure pol­i­cy.

SIGNING OFF

SSDD!

• Cam

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That’s it for the week!

QAV A GOOD SHAREMARKET!

Got a ques­tion? [email protected]