Transcript QAV 505

QAV 505 Club 

Cameron  00:17

Wel­come back to QAV. I think this is episode 505. We’re record­ing this Tues­day the 8th of Feb­ru­ary, 2022. It’s my wife’s 43rd birth­day today, so I’d like to wish her a hap­py birth­day even though she does­n’t lis­ten to this or any of my pod­casts, so she’ll nev­er know I said that. But I said it, and I know I said it, and that’s the impor­tant thing. With me in my office today is my spawn from a pre­vi­ous wife, Tay­lor. Wel­come to the pod­cast again, Tay­lor. It’s been a while.

Tay­lor  00:52

Howdy, thank you for hav­ing me on.

Cameron  00:55

Oh, well it’s always…

Tay­lor  00:56

It’s been a long time.

Cameron  00:57

It has been a long time.

Tay­lor  00:58

I think 2019 was the last time I was on one of these.

Cameron  00:59

I’m so sick of him ask­ing me stu­pid ques­tions. I said just come on and ask Tony. Wel­come to the show, Tony, how’s Cape Schanck been treat­ing you this week?

Tony  01:07

Yeah, love­ly. It’s beau­ti­ful down here at the moment. It’s sun­ny, the winds died down. Love­ly. Absolute­ly beau­ti­ful.

Cameron  01:15

How’s the golf going?

Tony  01:17

Real­ly good, yeah. I had anoth­er good round yes­ter­day. I went and played on the RACV course, which is the pub­lic course next door to the Nation­al and shot a great round, so I’m very hap­py.

Cameron  01:28

That’s good. Glad you’re hav­ing a good time. What else has been going on? You got any, got any big sto­ries for us this week, Tony?

Tony  01:37

No big sto­ries at all. Life goes on. The only thing, I’ll talk about in a minute, but Cred­it Cor­p’s first out of the blocks in terms of QAV stocks for its reports.

Cameron  01:46

Yes.

Tony  01:47

Its annu­al report. So, I thought I might do a pulled pork on Cred­it Corp today.

Cameron  01:51

Oh, okay. Rather than one of our stocks of the week? Fine.

Tony  01:54

Yeah.

Cameron  01:55

I’ve owned that stock for a while, it’s been very good to me, so hap­py for you to give it a plug and then all of our lis­ten­ers can go ahead and buy more. I don’t know if you saw the arti­cle that I post­ed on our Face­book group this morn­ing though by Kerr Niel­son from Plat­inum. Did you have a chance to look at that?

Tony  02:09

I did­n’t, no sor­ry.

Cameron  02:11

That’s fine. It was good. He was basi­cal­ly just talk­ing about lit­er­al­ly how all of the trendy tech stocks have crashed and burned and there were some good quotes from it that I thought I’d read out. He said “you will have come across lots of ref­er­ences to com­pet­i­tive moats, the virtues of plat­forms, two sided mar­kets and economies of scale. Right now, many of these con­cepts are being exposed as flat­u­lent labels rather than ade­quate descrip­tors of the wealth gen­er­at­ing engine of great busi­ness­es. Free mon­ey and the con­ver­gence of exter­nal fac­tors like the matur­ing of the inter­net, the wide­spread adop­tion of clever mobile devices and the emer­gence of cloud com­put­ing, com­bined with glob­al lock downs have caused or allowed investors to inter­min­gle their feel­ings with the facts. The incom­ing tide was so strong that those who protest­ed against crazed opti­mism were can­celled for not get­ting it while the par­ty goers cel­e­brat­ed their clev­er­ness and tran­sient gains. The new game in town was to address invest­ment propo­si­tions in terms of TAM, total address­able mar­ket, rather than the dri­vers of prof­itabil­i­ty, which allowed investors unre­strict­ed views of Nir­vana while help­ful ush­ers with an eye on the main chance of cor­po­rate advice kept the shim­mer­ing tray of mag­ic mush­rooms with­in easy reach of addled investors. Back to the more pro­sa­ic world of invest­ing, it is not about the shiny new thing; in fact, investor focus on the shiny new thing gives rise to the tired old thing becom­ing unusu­al­ly bor­ing and neglect­ed, and con­se­quent­ly under­priced in terms of the for­mu­la described ear­li­er.” I thought some of that rang true for QAVers.

Tony  04:00

Absolute­ly. What a great pro­sa­ic state­ment to make. I’m going to use flat­u­lent labels myself going for­ward, that’s a great line.

Cameron  04:07

I like that and “help­ful ush­ers with an eye on the main chance of cor­po­rate advice kept the shim­mer­ing tray of mag­ic mush­rooms with­in easy reach of addled investors.” That’s great. That’s like Hunter S. Thomp­sonesque.

Tony  04:24

It is, isn’t it?

Cameron  04:24

Yes. It’s very evoca­tive. I have to pay Kerr Niel­son, we’ll have to get him — I know we were try­ing to get him or some­body from Plat­inum on the show a while ago.

Tony  04:33

We did have some­one, we had one of their man­agers on if I recall.

Cameron  04:37

Oh, was it Per­pet­u­al or Plat­inum? I always get them con­fused.

Tony  04:41

Oh, might have been Per­pet­u­al, sor­ry. Yeah, you’re right.

Cameron  04:43

But we were talk­ing to some­body from Plat­inum at some point.

Tony  04:46

And of course top­i­cal too, Kerr Nielsen, sort of wind the clock back about ten or so years and he was the Hamish Dou­glas of the invest­ing com­mu­ni­ty in Aus­tralia and went through a divorce and peo­ple won­dered what was going to hap­pen to the com­pa­ny when the shares we’re held by the wife and all that kind of stuff.

Cameron  05:02

Right. Is Hamish still the Hamish of Aus­tralia? Is he still at Mag­el­lan? I saw a head­line this morn­ing say­ing he was gone. He’s gone-gone.

Tony  05:11

I don’t know if he’s gone-gone. He’s tak­ing sick leave, I think, under­stand­ably.

Cameron  05:15

Oh right. Per­son­al leave. Yeah. So any­way, that was Kerr Niel­son’s arti­cle this morn­ing in Share Cafe. I like that. Our port­fo­lio is look­ing par­tic­u­lar­ly good at the moment, Tony, both for the finan­cial year — I mean, not in real terms, I think when I was doing the newslet­ters yes­ter­day, it’s up about 3%, or 3.5% in real terms for the finan­cial year, but that’s about three times where the ASX 200 is at for the finan­cial year, so, com­pared to that it’s look­ing good. And, you know, that’s what we’ve decid­ed as the rel­e­vant bench­mark. And since incep­tion, our port­fo­lio is also per­form­ing at about three times the ASX 200. So, that’s pret­ty good across the board right now. Looks good.

Tony  06:02

Yeah, no, it’s pleas­ing. I agree.

Cameron  06:04

Well, the only oth­er news that I had before we get into Q’s and A’s and Tay­lor’s ques­tions if he has the cahonies to ask them in real time — try not to kick the desk, there, young fel­la — was our stocks of the week this week. OEL, Otto Ener­gy, was my small-cap stock of the week and ASX we end­ed up pick­ing as the large-cap stock of the week. But I’d orig­i­nal­ly gone with Adairs because I thought they had ticked up out of their Josephine sta­tus, but you put the kibosh on Adairs, you said no, you would­n’t touch it yet. You think it’s still a falling knife?

Tony  06:42

Yeah, I do. Yeah, it’s been a falling knife for a while. And I know that it has ticked up this month and its share price is high­er than what the month end close share price was last month, but if you look at the graph, it’s still declin­ing from its highs. So, I per­son­al­ly would­n’t be buy­ing Adairs at the moment. I know that we need to come up with some cod­ing for that, and I don’t have it at the moment, but I think if peo­ple just eye­ball the graph, they’ll see it’s a falling knife. And I’d want to see a big­ger uptick before I had any con­fi­dence that it was going to kick on.

Cameron  07:11

So, by cod­ing you’re refer­ring to word­ing for when a Josephine is no longer a Josephine, and the word­ing in the Bible does say that if at, any uptick from where it closed from the end of the pre­vi­ous month is con­sid­ered to be no longer a Josephine, an anti-Josephine. But you’d have talked in the past about look­ing for a new buy line, for it to cross a new buy line before it comes out of a Josephine. Is that what you’re think­ing more on?

Tony  07:40

Yeah, exact­ly. That’s, that’s more, I mean, again I don’t think I apply that rule even rig­or­ous­ly, but that would be a clear-cut sig­nal, I think. If you looked at the high price and then found a sec­ond peak below that, even though it still might be in buy ter­ri­to­ry as Adairs is from a much ear­li­er buy price, I’d want to see the uptick crossover that new, I’d call it the sec­ond buy line I guess or the most recent buy line before I’d be con­vinced.

Cameron  08:04

Why is the old rule not good enough for Adairs? Like the uptick, is it just that it’s been falling for such a long time now — like it’s been falling for, I think, five or six months — that a small uptick is not enough from a con­fi­dence per­spec­tive?

Tony  08:21

Yeah, that’s right. If you have a look at this graph on the way down, there has been upticks before and they’ve been false dawns, so at the moment to me it’s meet­ing the cri­te­ria for a falling knife rather than a hock­ey stick type graph which has been through some hard times and is now mak­ing a firm upturn.

Cameron  08:37

Okay. Well, thank you for bring­ing that to my atten­tion. Young fel­la.

Tay­lor  08:43

Can I get a ques­tion on that? Because I set up the new port‑I did a check­list last week, and then you explained to me that Josephine rule with that, with the uptick. Would that, for exam­ple, if it was down on the 31st and it only just ticked up like on the sec­ond or the third, and it’s a very small uptick, is that enough to qual­i­fy it no longer as a Josephine?

Tony  09:05

No, I don’t think it is real­ly. And it depends on what the graph shape is. I mean, if it was going in a gen­er­al uptrend and it had a down tick for a month and then ticked up, then I would­n’t say it was, I would say it’s not a Josephine. But if it’s been in a down­trend for a num­ber of months like Adairs, and maybe it’s gone side­ways for a bit and then up, I would say it’s still in the down­trend.

Tay­lor  09:26

So, you draw a new buy line for it. Is that what the strat­e­gy is?

Tony  09:30

Well, there’s no, like I said there’s, I haven’t yet come up with hard and fast rules for this. We did put that rule that’s in the Bible in there, that if the cur­rent month is above the pre­vi­ous mon­th’s close then that’s an uptick and it’s no longer a Josephine. But I don’t think that’s good enough in the case of Adairs where if you look at the graph, I mean it’s come back from a high of $4.78 in May of last year back to where it is today at $3.31. So, it’s come off quite a bit. And yeah, it has start­ed to turn up again, I guess — do we have num­bers? No, we’re still using the old num­bers — but I know it came out recent­ly with a sales update as part of its con­fes­sion sea­son com­ing into its announce­ment of results. So, that must have had some good news in it. But we’ve seen this before. If you look back at, say, Novem­ber 2021, it went through a pret­ty sol­id run com­ing into Christ­mas and it got to a high there of around $4 and it’s come back 70 cents from there. So, it’s real­ly just mak­ing new lows all the time, rather than mak­ing new highs.

Cameron  10:29

But every­thing crashed in Jan­u­ary.

Tony  10:31

Yeah. It’s been a strug­gle to find some­thing that’s not a Josephine, has­n’t it?

Cameron  10:35

Yeah, it’s, Jan­u­ary was a tough month right across the mar­ket after that first peak. So, I mean, it looks to me like it’s try­ing to recov­er back to where it was at the begin­ning of Jan­u­ary, that first recov­ery it tried. But the mar­ket is so volatile at the moment that who knows? Every­thing can crash again next week, right?

Tony  10:52

That’s right. If you say that it’s not a Josephine and apply the lit­er­al rules you can cer­tain­ly buy it, but be pre­pared to sell it again as a rule 1 or even as a sell — what’s it’s sell line? It was quite a bit above its sell line the last time I had a look.

Cameron  11:04

Yeah, the sell line that I’ve got has it com­ing in at around just over a buck.

Tony  11:09

Yeah, right. So, it’s a long way off, isn’t it?

Tay­lor  11:11

Is that sell line too long off If you have it down at $1? Or just over $1?

Tony  11:16

Yeah, this is an age-old ques­tion. I don’t think so, par­tic­u­lar­ly, because the thing is, in a cou­ple of months the cur­rent L1s going to start rolling off and we’re going to start using March 2020. So, using a five-year graph will even­tu­al­ly reset that sell line even though it’s get­ting a bit long in the tooth now, but it’s not very far off reset­ting.

Tay­lor  11:37

Oh, so explain to me the reset­ting. How does that work?

Tony  11:40

Yeah. So, if you look at the graph at the moment, L1 is back in May 2017. And then L2 is…

Tony  11:49

COVID. Yeah, actu­al­ly, it’s the, yeah, March 20, COVID. So, the one that’s the L1, May 17, is about three months, so it’s on the left-hand side of the graph, and in three months’ time it won’t be there any­more. And, I think that will make the COVID cough the low point and we’ll draw anoth­er line, and it’s going to be in sell ter­ri­to­ry in three months’ time. Unless it picks up.

Tay­lor  11:49

COVID.

Tay­lor  12:11

Ah, okay, that makes a lot more sense now.

Tony  12:14

So, look, I’m not, I’m not try­ing to fore­cast. I’m not say­ing that’s a rea­son to base deci­sions, but it’s the rea­son why I’m not chang­ing the sell line at this stage, because it will change itself soon.

Tay­lor  12:23

That makes a lot of sense now, why it does­n’t…

Cameron  12:25

But it does­n’t… Yeah, but it does­n’t always work that way, and Tay­lor and I’ve had a num­ber of these con­ver­sa­tions over the last cou­ple of weeks that yeah, look, some­times stocks have a very low sell line and rather than take prof­its, as we’ve been talk­ing about in recent weeks, on the way down you hold because you believe more often than not it’ll turn around and come back up.

Tony  12:48

Yeah. So, I mean, just again using this Adairs exam­ple, at some stage it will rebound, and it might be this report­ing sea­son, and we might see it tick on from where it is now. And you know, one of the rea­sons for that is because it’s on our list, it’s got good num­bers, it’s an attrac­tive invest­ment to make. I’m not that famil­iar with the stock, but I would­n’t mind bet­ting that its sales decline has been because of COVID. So, “one day this war’s going to end” is the famous line, and even­tu­al­ly peo­ple will go back to shop­ping in stores and stocks like Adairs will rebound. So, if I did own Adairs I would­n’t have a prob­lem hold­ing it because even though it’s dropped from maybe 25% from its highs, it’s still got a good chance of rebound­ing and get­ting back up to those highs as well.

Cameron  13:28

“You know, son, one day this war’s gonna end.” Sad. Colonel what’s his name?

Tay­lor  13:35

Is that from a movie that’s way too old?

Tony  13:37

Kil­go­re.

Cameron  13:37

Yes.

Tay­lor  13:37

Yeah.

Cameron  13:38

Kil­go­re. Apoc­a­lypse Now, man, you should watch. It’s a great film.

Tony  13:42

Oh, Tay­lor, you haven’t watched Apoc­a­lypse Now?

Cameron  13:44

You know, he won’t watch any films that were made before he was born. The list of movies he has­n’t watched would bring you to tears, Tony.

Tony  13:52

Oh, no.

Tay­lor  13:54

It’s fun­ny, it’s like I had a father who did­n’t show me any of them.

Cameron  13:56

Oh! Your father who showed you Ter­mi­na­tor when you were sev­en years old?

Tay­lor  14:02

Left home when I was sev­en years old.

Cameron  14:04

Yeah, but I still tried to show you great movies.

Tay­lor  14:06

Went to get a car­ton of milk and I’ve only just seen him now. So Tony, I guess the, that makes a lot more sense now because dad and I’ve been argu­ing over that thing, he nev­er men­tioned there was a, there’s a five-year rule to it.

Cameron  14:21

I’ve men­tioned it like twen­ty times.

Tay­lor  14:24

The biggest exam­ple, I think, I’ve been look­ing at over the last week is GWR. It went all the way up like, what was it, like 600% or some­thing, and then it came all the way back down again. And it was up there for, what was that, the bet­ter part of a year? I just looked now, pulled the graph up, and it’s I think three months off also using a new sell line. And that would make sell. Any­way, that makes a lot of sense now.

Tony  14:49

Yeah. And look, Tay­lor, we’ve spo­ken a lot about this in the pod­cast and these ques­tions have come out before too and peo­ple, I know some of our lis­ten­ers do draw more recent sell lines to try and lock in some recent prof­its. My expe­ri­ence is that’s at best a 50/50 deal, because we tried out Fortes­cue Met­als Group as the exam­ple that proves or dis­proves that rule. If you drew a much more recent sell line on FMG, it did dip down sort of halfway through the five-year upturn, but then it kicked on again, so you would’ve missed out on all that. So, I know it can be hard to watch some­thing come down from its highs and then wait for it to retrace those highs, or even be forced to sell and you missed out on the prof­its, but sta­tis­ti­cal­ly speak­ing, apply­ing these rules are still the best way I’ve found to make mon­ey. We won’t always max­imise your prof­its in these cas­es, but across a whole port­fo­lio, it does max­imise the returns.

Tay­lor  15:41

I don’t know if you know, me and one of my friends have been doing a check­list about once a week now for the last month,

Cameron  15:47

One of my friends and I.

Tay­lor  15:48

Yeah, I realised as soon as I said it.

Cameron  15:50

Sor­ry, that was a pub­lic school, Queens­land pub­lic school edu­ca­tion.

Tay­lor  15:55

Because you took all of the pub­lic school [tuition] and invest­ed it for the last…? That’s a call back. But yeah, I think that was the biggest one we did­n’t under­stand, because I under­stand not sell­ing, not sell­ing when it’s up and let­ting it hit a sell line. But I guess under­stand­ing why five years and not three years on that sell line and to make a new one.

Tony  16:21

Five years or three years? That’s a good ques­tion. I’ve nev­er actu­al­ly researched sta­tis­ti­cal­ly which is bet­ter. That might be a ques­tion we can get Dylan to have a look at even­tu­al­ly. But five years is just what I’ve always used, and that pro­duces the returns I get. Like I said, some peo­ple who lis­ten to us, you know, try and draw more recent lines. They call them hug lines, so they try to hug the uptrend and take prof­its. And I think that’s legit­i­mate, but you have to also bear in mind that the stock may, you know, have a kick upwards and could dou­ble from where you sold it at, so you have to be pre­pared to live with the fact you missed out on the upturn that’s even­tu­at­ed. Because a lot of these times, the stocks are good, their good invest­ments, and even though Mr Mar­ket marks them down from time to time, they’re still you know, recent­ly good long term holds. So, even though they have come back off their highs, like every­thing has at the moment, they still rep­re­sent a good longer-term invest­ment.

Tay­lor  17:09

Yeah, I guess the part I was strug­gling with was the whole gam­bling ele­ment of it, where it’s like, if you drew a slight­ly more aggres­sive sell line you would walk away at least with some prof­it off that. I under­stand the log­ic there, but I guess what I was think­ing about it, it’s one of those things where I think I’m hap­pi­er if a stock goes up 100% and I sell it when it comes back down to 50, I’m hap­py, even if it goes up to 200, know­ing I secured at least 50% on it. But then that makes a lot of sense.

Tony  17:37

No, I under­stand your think­ing, just yeah, I mean, if you want to oper­ate that way, do it. Let us know how you go, because it’s, yeah. I tend to find that the stocks rebound more often and they keep going down to their sell lines.

Tay­lor  17:49

Yeah, I think you’re right on that. I think I prob­a­bly will find that out with time. I think it’s one of those things where you have to fig­ure it out your­self or see it to under­stand it or ful­ly grasp it. It’s not like… you got­ta go through it.

Cameron  18:02

Or you just stop try­ing to think you’re smarter than Tony, and you just do what Tony tells you to bloody do.

Tay­lor  18:09

If Tony told you to jump off a bridge, would you do it?

Cameron  18:11

Yes. If he told me that was the best thing for my port­fo­lio, I would fol­low Tony. I know you don’t lis­ten to your father, but lis­ten to Tony.

Tay­lor  18:20

I think with every­thing, and my phi­los­o­phy for every­thing I’ve learnt my entire life, or at least since I’ve left high school, is you can learn about 90% of it and then 10% of it, you’re just gonna have to fig­ure out your­self through tri­al and error.

Tony  18:34

Absolute­ly. So, I’m not gonna tell any­one to fol­low what I do blind­ly, I’m just say­ing if you do fol­low it, this is what the returns can be. So, I’m not say­ing you can’t dou­ble your returns by fid­dling with it, but do it sci­en­tif­i­cal­ly, you know, have a plan, have a rea­son, run some tests, run some tri­als and all that, and then, and then try it. But look, get­ting back to GWR, it’s an inter­est­ing exam­ple. I don’t know if you’ve got the graph open for it there, but if you look at it, like, it went back in sort of 2018 — looks like it’s about March 2018 — it made new highs and then it came back down again. So, you could have sold it on the way down but if you had you would have missed out on the big jump when it, you know, sort of dou­bled from that 2018 high again. So, it’s a volatile stock and it does have a his­to­ry of going up and down, but over­all, it’s gone up.

Tay­lor  19:18

Well inter­est­ing, now I’m just look­ing at this, I don’t even know if it’s right. I would have, like, drawn a sell line maybe even from that 2017, ah, when is that, June 2017? And then anoth­er point on 1st of Jan­u­ary, 31st of Jan 2018, which would have mean you sold it, I don’t know, some­where around,

Tay­lor  19:38

Yeah.

Tay­lor  19:38

70 cents. And then if you’ve drawn anoth­er buy line then from the peak down, you would have bought it again as it’s just come back up for that big peak.

Tony  19:47

Yeah, exact­ly.

Tay­lor  19:49

Because if you draw a line from that to there, it would’ve…

Tony  19:51

Yeah, that’s exact­ly how you should have done it.

Tay­lor  19:53

But, then I think then you prob­a­bly, it’s not day trad­ing, but then you’re just not as long term, you’re sort of hav­ing to active­ly be pay­ing atten­tion.

Tony  20:02

Well, no. You’ve had two buys in five years so it’s not day trad­ing but it is max­imis­ing your returns because, you know, when­ev­er you bought it you sold out, as you say, in prob­a­bly Jan­u­ary 19 or there abouts, gone off and done some­thing else and then come back into it in, when’s that? Towards the end of 2020. And you’re still well up on that invest­ment even though it’s gone up, it went up sort of 400% from there, even though it’s come back, you still have some­thing like 80% from that orig­i­nal buy price.

Cameron  20:30

And that’s assum­ing that you did buy back into it, because as we know, once your port­fo­lio is full, you quite often, you’re not buy­ing back into things because you don’t have spaces, you don’t have holes in your punch card left. So, you’re gonna miss out on some things. I just want to point out that, Tony, that its going into the Bible now that if you’re gonna fid­dle, do it sci­en­tif­i­cal­ly. I think that’s sci­en­tif­ic, sci­en­tif­ic fid­dling. I think that’s going to be the title of this episode.

Tay­lor  20:55

It sounds ille­gal.

Cameron  20:56

Yeah. Well, it’s cer­tain­ly not what my Catholic priest told me when I was young. But if you got­ta fid­dle, fid­dle sci­en­tif­i­cal­ly. I think that’s, that’s a bit of new wis­dom from Tony.

Tony  21:06

Well, it’s true. You know, I encour­age peo­ple to do their own thing if they have doubts, but yeah, doing sci­en­tif­i­cal­ly. Def­i­nite­ly.

Cameron  21:12

Tony encour­ages peo­ple to have a fid­dle. Let’s talk about your stock of the week, Tony. What did you say your drill down was gonna be?

Tony  21:19

I’m gonna do a pulled pork on Cred­it Corp.

Cameron  21:21

CCP?

Tony  21:22

Yeah, just to run through the num­bers quick­ly. So — and the rea­son for doing it, not only is it the first cab off the rank in terms of QAV stocks, but when we men­tioned that, I think it was last week, in last week’s show, that the results came out and the share price went up like 9% I think, it’s come back down again. So, I did want to drill down into the num­bers and make sure there was, there was noth­ing too wor­ry­ing there. And there’s not, but it is at the very bot­tom of our buy list now. So, there has been, I think prob­a­bly there will be a less­en­ing a bit in the qual­i­ty score, and maybe a ris­ing in the price. But just to run through it, and by back­ground, Cred­it Corps been on our buy list for a long time, it’s been a good stock. I’ve owned it for decades, I think I sold it dur­ing the GFC‑I had to sell it dur­ing the GFC, but oth­er­wise I’ve held it for a very long time. It basi­cal­ly buys what they call debt lists off banks and cred­it card com­pa­nies and the like, some­times it gets them from gas and elec­tric­i­ty util­i­ties, but basi­cal­ly they’re, after banks or the sell­ers of these debt rolls have had a first go of try­ing to recov­er the mon­ey that’s out­stand­ing, they give up and they say, “well, it’s gonna cost us a lot to process say the last 20% of col­lec­tions. We’d rather sell the, cut our loss­es, sell that ledger to a com­pa­ny who does it pro­fes­sion­al­ly for a liv­ing and that’s all they do, and has the economies of scale to, to make it more viable for them to go after the last 20%.” And that’s what Cred­it Corp does. The rea­son that first attract­ed me to this com­pa­ny was I did go to a pre­sen­ta­tion at my stock­bro­kers many, many years ago, prob­a­bly decades ago, or maybe a decade ago, and had a good chat with the CEO. And he impressed me and what impressed me about him was his, I guess, respect for the cus­tomer is prob­a­bly the way to put it. So, you know, I had made some sil­ly joke about what sized base­ball bat did he take to the cus­tomers on his debt lists, and he was shocked and said they don’t work that way, they work to get a rela­tion­ship going with the cus­tomer, they work to try and help them bud­get, they work to try and sort out their finances so they can make the repay­ments. And he said they were that suc­cess­ful in doing that, that the com­pa­ny was now open­ing up a new divi­sion of lend­ing those peo­ple future cred­it because they had a good cred­it under­stand­ing on them, a good cred­it pro­file of those cus­tomers, and have worked with them to repay their cred­it card or what­ev­er out­stand­ing debt there was and they were now in much bet­ter finan­cial shape and were there­fore lend­able again. And that busi­ness has grown over the years and it’s now going into the US as well, so that’s their, sort of, growth engine I guess. So, I’ve always liked it, I’ve always respect­ed man­age­ment, I think that it’s very good man­age­ment. But to run through the num­bers, which is what I was focus­ing on today. It’s a high ADT stock, there’s just over $4 mil­lion trad­ed on aver­age each day so it should suit all investors. I’m using num­bers from the week­end when the share price was 3193. It’s a few cents high­er than that today, but not much, and it’s less than its, then the con­sen­sus tar­get for this stock which is about $35.10. It’s a bor­der­line star stock and a star income stock, so it gets half a point each for that in our check­list. I was inter­est­ed to see it’s a star income stock because the yield is down to 2.3%, so I’m not sure why it’s a star income stock. Usu­al­ly Stock Doc­tor gives that sta­tus to com­pa­nies that pay a high yield. So, it’s pos­si­ble that in the com­ing weeks when Stock Doc­tor gets to the end of report­ing sea­son and relooks at its stock sta­tus for some of these stocks it may lose that star income stock sta­tus, but we’ll see. But any­way, finan­cial health is strong and steady, so it scores for that. The price to oper­at­ing cash flow is just over five times, so its start­ing to get up there towards our lim­it. And inter­est­ing­ly enough the PE is 23 times, so it’s a high PE stock. So, even though it’s throw­ing off lots of cash, it still has lots of costs in there as well. So, that’s pos­si­bly also why it’s get­ting towards the bot­tom of our QAV list as well, the buy list. In both cas­es, it’s above IV 1 and IV 2 so it does­n’t score for val­u­a­tion there, and it does­n’t score in terms of its net equi­ty per share, which is around $10. So, it’s three times that, so it’s not a buy in terms of book val­ue. It’s not grow­ing aggres­sive­ly. So, it is grow­ing and the growth pro­jec­tion is 7%, but it does­n’t meet our hur­dle of, of 1.5 times, or a score of 1.5 for growth over PE. Direc­tors aren’t hold­ing enough to qual­i­fy for a founder-oper­a­tor, which is a bit sur­pris­ing, I thought, giv­en that, as I said before, Thomas Bere­gi is a very good CEO. It isn’t the low­est of its most recent six halves in terms of PE score, but it does have con­sis­tent­ly increas­ing equi­ty; that’s prob­a­bly one of the stand­outs for this com­pa­ny, it has been grow­ing share­hold­er equi­ty for a long time. So, over­all, it gets a qual­i­ty score of 54% which is quite low in terms of what we nor­mal­ly want to see, and a QAV score right in our bor­der­line of 0.10. So, I sus­pect that one of the rea­sons why it’s been hang­ing around this, sort of, low $30 share price for a while is that it’s not scor­ing well enough to be that attrac­tive to peo­ple. So, we’ll see what hap­pens in the future. If peo­ple want to get in, I mean, I still own it. I think you do, Cam. But, I think it’s quite pos­si­ble with an increase in share price from here, which is always like­ly with this stock — it does tend to creep up in terms of price — I think it might drop off our buy list fair­ly soon.

Cameron  26:46

And we would­n’t buy it now because it’s a Josephine.

Tony  26:48

Is it? Okay, I haven’t had a look.

Cameron  26:50

Yeah. Closed last month up around, let’s see, 3387. Cur­rent­ly 3197.

Tony  26:58

Okay, yep.

Cameron  26:59

To com­pare this chart to the… what was the one we were look­ing at ear­li­er? Oh, ADH. If this turned around now would you anti-Josephine it because it only just turned down.

Tony  27:14

Yeah, I would. It’s not a falling knife. It’s been going up from the COVID cough and I guess, you know, start­ing to slow down that rate of growth. But if it turned up now I’d cer­tain­ly take it off the Josephine list.

Cameron  27:26

So, that’s the dif­fer­ence between a falling knife and a recent Josephine that might turn around.

Tony  27:33

Cor­rect. Yeah. It’s got, mind you, it’s got, as you say, last it closed at 30, just under $34. So, it’s just under 32 at the moment, it’s got­ta go up a rea­son­able amount to get back into pos­i­tive ter­ri­to­ry and not be a Josephine at the moment.

Cameron  27:47

Oh, well, no, I thought like the rule in the Bible is any uptick after the close of last month.

Tony  27:54

Yeah, so last months close was 3389. It’s cur­rent­ly 3199. So, it’s got­ta go up two bucks.

Cameron  28:01

Oh, okay. So, to be above that it would need to go up. I see what you’re say­ing, yeah, right. Okay. Thank you for that. CCP, Tony and I both hold it, so be aware of that if you rush out to buy it that you can’t because it’s a Josephine. So, good luck. Any­thing else before we get into the Qs Tony? We’ve got lots of Qs again this week.

Tony  28:26

No, I’m good. Thanks.

Cameron  28:27

All righty. First one from Leigh, get­ting in nice and ear­ly. Leigh says “great episode last week, thank you for answer­ing my ques­tions. My ques­tion re LEAPs,” this was his LEAPs ques­tion from last week ask­ing if you ever con­sid­ered using LEAPs, which stood for Low Earth Orbit­ing Satel­lites, or some­thing, “came from read­ing John Green­blat­t’s fan­tas­tic book You Can Be a Stock Mar­ket Genius. I am now get­ting start­ed on his class notes, Spe­cial Sit­u­a­tions Invest­ing. These two resources teach how he did it and make for awe­some read­ing. Many of the case stud­ies remind me of the busi­ness­es we invest in using QAV. You may or may not know that Green­blat­t’s fund, Gotham Cap­i­tal, aver­aged 50% CAGR for a decade before he turned to char­i­ties and teach­ing.” Wow, that’s crazy.

Tony  29:19

That is crazy.

Cameron  29:20

50%

Tony  29:21

Why did he stop?

Cameron  29:23

Turned to char­i­ties and teach­ing appar­ent­ly, prob­a­bly made so much mon­ey he could­n’t be both­ered. War­ren Buf­fett, too easy. “War­ren Buf­fett keeps a copy of the book in his office accord­ing to two pod­casts I lis­tened to, so it must be true.” Yep, the Ora­cle approves. “The Ora­cle is also known to have used options but admits it’s def­i­nite­ly not for the every­day investor. I’m hop­ing we are open mind­ed to look­ing at a pos­si­ble lev­el five in TK’s invest­ment lad­der here. Hope this at least pro­vides some inter­est­ing read­ing. Cheers, Lee.” So, Joel Green­blatt and LEAPs, Tony, does that… you ever read this book, You Can Be a Stock Mar­ket Genius?

Tony  29:58

No.

Cameron  29:59

I’ve read a cou­ple of Green­blat­t’s books, but not that one.

Tony  30:02

Yeah, I’ve read the oth­er one, too. I think The Lit­tle Book that Beats the Mar­ket was one of his which is very good, too.

Cameron  30:07

Yeah, some­thing like that.

Tony  30:08

And it’s, you know, peo­ple might want to have a look at it. It’s kind of a slimmed down check­list on how to beat the mar­ket. So, it’s a good one. I haven’t read this, I’ve ordered it now and it’s been deliv­ered to Syd­ney so when I get back there I’ll have a read. But yeah, gosh, Lee, thanks for the lead. 50% per annum would be fan­tas­tic. We would­n’t have to do any more pod­casts, Cam.

Cameron  30:29

Well, we’d have to teach peo­ple how to get 50%, Tony, that’s, we’re here to teach.

Tony  30:34

They can read the book.

Cameron  30:36

They can read the book. Peo­ple don’t read any more, Tony. That’s, read­ings old school. Tay­lor, when was the last time you read a book?

Tay­lor  30:46

Ah, shit. That’s embar­rass­ing. Could­n’t tell you.

Cameron  30:49

Tay­lor always tells me…

Tay­lor  30:50

I need to, It’s actu­al­ly a big focus of mine for this year.

Cameron  30:53

No, it’s not.

Tay­lor  30:54

It is.

Cameron  30:54

Yeah, real­ly?

Tay­lor  30:55

Seri­ous­ly.

Cameron  30:56

Tay­lor always tells me “any­thing I need to learn, I can get off YouTube. I don’t need to read books.”

Tay­lor  31:00

No, that’s not true. I can get most of my infor­ma­tion from YouTube.

Cameron  31:03

Right.

Tay­lor  31:04

Or from oth­er inter­net sources where I can prob­a­bly con­sume it fifty times faster than read­ing a book.

Cameron  31:08

Right.

Tay­lor  31:09

But, not knock­ing read­ing books.

Cameron  31:11

It’s because you’re a slow read­er?

Tay­lor  31:12

No, I’m a fast water.

Cameron  31:15

Nice one. All right. Thank you for the tip on the book, Leigh, I’m going to get a copy of it as well. Next ques­tion is from Mark: “hi Cam, can Tony please restate his views on 3PTL sells? Sell imme­di­ate­ly or wait a few days, or wait until month end? I recall it as imme­di­ate­ly, but what the hell would I know? Thing is, stocks that breach the sell line dur­ing the month but recov­er by month end appear in the Bret­ta­ma­jig as though the breach nev­er hap­pened.” Oh, I wish I’d thought of Bret­ta­ma­jig, that’s prob­a­bly easy to say than Bret­ta­la­tor, but any­way. We’re stuck with Bret­ta­la­tor now. “Exam­ple is MYR, Myer. Bret­ta­ma­jig has it as a sell from the 17th to the 27th of Jan­u­ary but a buy on the 31st of Jan­u­ary. So, the Bret­ta­ma­jig buy line has not been redrawn, but should­n’t the buy line be redrawn with H2 in Sep­tem­ber 21? This would make the new buy price 50 cents and remove it from the buy list.” And then he has some oth­er exam­ples. What are your thoughts on when/how quick­ly to sell, Tony, once there’s a breach?

Tony  32:19

Yeah. Well, so, I think the ques­tion is do we sell dur­ing the month or wait until month end, and I’d sell dur­ing the month. In terms of doing it imme­di­ate­ly, it depends on the cir­cum­stances. Yes, I do it imme­di­ate­ly if there was a clear breach. There have been cas­es where a stock has just, sort of, been on the sell line and has­n’t quite dropped below it in which case I’d wait. Or if it’s just below it, I might wait and see if it rebounds. But gen­er­al­ly, I’ll sell it straight away and def­i­nite­ly dur­ing the month rather than the month end. In terms of what the Bret­te­la­tor is doing, the Bret­te­la­tor is work­ing fine. It’s show­ing sells-the Bret­te­la­tor works on a month­ly graph, but it does give us data dur­ing the month as well for the very last, the most cur­rent month. So, I think in the cas­es that Mark has men­tioned like Myer it did cross its sell line but then went back up above it by month end, so that’s why you don’t see a redrawn buy line in the Bret­te­la­tor. I mean, I did­n’t look at Myer dur­ing the month, but I imag­ine the Bret­te­la­tor did redraw the sell and the buy line, or the buy line sor­ry, after a sell and that was prob­a­bly tak­en out when the clos­ing price came for the month and it went back above the sell line. So, it’s the kind of mar­ket we’re in. It’s very volatile, and we are see­ing stocks, sort of, breach their sell lines and retrace above them again. So, yeah, it’s just a peri­od we’re in. I’m not over­ly wor­ried about it, but I am, I am see­ing more volatil­i­ty in my port­fo­lio as well. I think it’ll set­tle down once peo­ple get their head around inter­est rates and Omi­cron and all that kind of stuff, from Rus­sia and Ukraine and what­ev­er else is going on in the world. Par­tic­u­lar­ly inter­est rates, I think the mar­ket will set­tle down once they’ve fac­tored in the right cal­cu­la­tions there.

Cameron  33:58

Well, as that chart you shared with us on Face­book last week demon­strates there’s always crises and we’ve always recov­ered from the crises. And then there’s anoth­er cri­sis and then we recov­er from that.

Tony  34:11

Yeah, and the flip side of volatil­i­ty is that we’ll come out the oth­er end, and if we keep the sys­tem intact we will make mon­ey and more than recov­er any, sort of, loss­es we we’ve incurred along the way.

Cameron  34:23

Speak­ing of Myer, just look­ing at the chart I think it is ooh, very close to a sell. I know Tay­lor and I had to dump it. I think we rule 1’d it, did we rule 1 it? No, no, we did sell it recent­ly.

Tay­lor  34:37

We sold it.

Cameron  34:39

Yeah, its back above the sell line then but it’s real­ly close still there, sad­ly.

Tay­lor  34:44

But it’s been going down for the last five years. Like…

Cameron  34:48

Yeah, but it had some good growth though back then, I don’t know, post-COVID, but yeah. Thank you, Mark. Alice asked a ques­tion on the Face­book group and Phillip said he want­ed to know as well. “Should MAM be on the list?”

Tony  35:02

No, I took it off because it’s a list­ed fund man­ag­er. It’s like an LIC. I took the rule to take the ETFs and LICs out of the buy list a lit­tle while ago, main­ly around the fact that their oper­at­ing cash flow was­n’t always, I’ll use the term busi­ness like. So, it’s not like a, not like a cof­fee shop where you’re oper­at­ing cash flow is nor­mal­ly the receipts less the cost of col­lect­ing those receipts. For, less so for an LIC than an ETF. ETF oper­at­ing cash flow can just reflect often, you know, mon­ey in mon­ey out by the peo­ple who are buy­ing the ETF as they sell and buy that par­tic­u­lar stock. There can also be some hedg­ing in there, like cur­ren­cy fluc­tu­a­tions and some gear­ing, so. But it’s not like the oper­at­ing cash flow gen­er­at­ed by the under­ly­ing port­fo­lio. And a lit­tle bit the same with List­ed Invest­ment Com­pa­nies, they can have more of a oper­at­ing cash flow that’s reflect­ed by the under­ly­ing port­fo­lio. I’m not famil­iar with in your MAM, but if it’s the man­ag­er then it’s going to be, the oper­at­ing cash flow is going to be affect­ed by the fees that they can gen­er­ate, so it’s more about the size of the fund and the per­for­mance of the fund. So, they can be attrac­tive invest­ments. But in both cas­es, I decid­ed to take them out. Peo­ple can leave them in, and cer­tain­ly there have been cas­es where they’ve been good invest­ments for us before I put them out, but I also thought too if you find a fund man­ag­er that’s get­ting a bet­ter return than QAV then go and invest in it. Put your mon­ey in that stock. So, that was the rea­son for tak­ing these kinds of things out of the buy list. It was, you know, not an easy deci­sion — it was easy for ETFs but less so for the fund man­agers — but once I did I don’t think it’s caused much prob­lem with the port­fo­lio. And MAM is a list­ed fund man­ag­er, so it’s out.

Cameron  36:47

Well, accord­ing to Stock Doc­tor, MAM, Microe­quities Asset Man­age­ment Group Lim­it­ed, is a bou­tique val­ue-dri­ven fund man­ag­er spe­cialised in exchange list­ed indus­tri­al micro caps and small-cap. MAM expand­ed into funds man­age­ment in ear­ly 2009 by launch­ing its flag­ship fund, the Deep Val­ue fund. Today Microe­quities man­ages five invest­ment funds and has over 300 mil­lion of funds under man­age­ment. So, yeah, they’re, well they’re kind of like a Berk­shire I guess real­ly, you know, they’re invest­ing in these busi­ness­es.

Tony  37:25

I mean, again, I don’t know them in detail. What you’ve just read out sug­gests to me that they’re the fund man­ag­er and they’ve got, they’re get­ting their fees from oper­at­ing the under­ly­ing funds, which, which peo­ple can invest in. It’s often the case that if you can invest in the fund man­ag­er it’s a bet­ter deal than invest­ing in the fund, because the fund man­ag­er can get out­sized returns because of the fees that they take from those funds. I guess an exam­ple would be, if you look at, say, the Wil­son Asset Man­age­ment LIC’s, and there’s a whole sta­ble of those like WAM and, and the var­i­ous oth­er ones, Wil­son lead­ers and future gen­er­a­tion funds, the funds them­selves do well. I think WAM for exam­ple gets, sort of, 15/16% CAGR since incep­tion. Although that’s, there are some twists and turns in that because they often issue lots of options and take over oth­er List­ed Invest­ment Com­pa­nies, so it’s not a straight line by any stretch of the imag­i­na­tion. But, the com­pa­ny that runs those funds, the Wil­son, Jeff Wil­son com­pa­ny that runs those funds is unlist­ed, and I would sus­pect that he’s made more mon­ey than if he had invest­ed all his mon­ey in the funds. I don’t know for sure, but typ­i­cal­ly it’s the case that the fund man­ag­er does bet­ter than the funds because when the funds do well, they do real­ly well, because their fees are a per­cent­age of the per­for­mance of the fund. So, that could be the case with MAM. And that, you know, is a bet­ter argu­ment for hav­ing it on the QAV list, because it is more like an oper­at­ing busi­ness because it’s gen­er­at­ing-its oper­at­ing cash flow is from its per­for­mance. So, you know, maybe it can go in, but gen­er­al­ly speak­ing list­ed funds and ETFs don’t have the sort of busi­ness met­rics that we want to include in the oper­at­ing cash flow part of our check­list.

Cameron  39:04

And we know that’s the key met­ric, right, in our check­list is the Pr/OpCaf. So, if we can’t get a good read­ing on that it throws every­thing out.

Tony  39:14

Cor­rect. Yeah. And get­ting back to this idea of putting list­ed, the man­ag­er of the funds in, it’s a bet­ter argu­ment than putting the funds them­selves in but they can be also very volatile and if you look at Mag­el­lan, that’s the clas­sic exam­ple of what can hap­pen with a fund man­ag­er.

Cameron  39:28

So, just an update on the MAM dis­cus­sion. This is a note from the edit­ing room the fol­low­ing day. Tony sent me an email this morn­ing say­ing “hi Cam, I did some more research into Micro Asset Man­age­ment, MAM, after the ques­tion on yes­ter­day’s show, and they can be added back to the buy list as they are a list­ed fund man­ag­er rather than an LIC. Their oper­at­ing cash flow is derived from the fees they charge clients of their funds. Thanks, Tony.” So, I left all the con­ver­sa­tion in that you just lis­tened to about LICs and the chal­lenges because I thought that’s a good revi­sion any­way, but in this par­tic­u­lar instance, Tony had anoth­er look at it and decid­ed MAM does not fit that bill, so good to go. So, well done for ask­ing that ques­tion Alice and Phillip. Okay, hope that helps, Alice and Philip. Eric asks, “about a week or so ago, a stock showed up in my port­fo­lio. Took me by sur­prise because I did­n’t pur­chase it. OXT, or Orex­plore Tech­nolo­gies Ltd. After doing some dig­ging, I found out that I was issued these shares as a result of the demerg­er of Swick Min­ing Ser­vices, SWK. Only I had sold my SWK shares a month ear­li­er on account of rule num­ber one. In any case, I now have these shares new­ly list­ed on the ASX. There’s no chart his­to­ry, so I can­not do any 3PTL assess­ment. Also, did not pur­chase them. Essen­tial­ly got these shares for free, so there’s no rule 1 to apply.” So, I think Eric’s ask­ing, what do I do? How do I know when to sell them If there’s no chart his­to­ry?

Tony  41:11

Yeah, so this has hap­pened to me a num­ber of times in the past, and I still use the rules  to sell. I’ll hold on to them. They often­times don’t rep­re­sent busi­ness­es which I go out and invest in, because they won’t be on the buy list because some­thing like an Orex­plore Tech­nol­o­gy sounds a bit like a tech stock, so may not even have a bot­tom line at this stage or pos­i­tive bot­tom line at this stage. But, I just take issue with the com­ment that was made that he got them for free. He did­n’t get them for free, they were spun out of SWK. So, and I think, you know, I don’t know the tim­ing of when SWK was rule 1 as a sell, but just be care­ful and pay atten­tion before you sell some­thing because if SWK became a rule 1 because they spun off OXT you should have added that back in, because you would have still had the share price from SWK added to the share price, not nec­es­sar­i­ly the share price, but the val­ue of OXT to see if you would still hold it from a rule 1 per­spec­tive. It’s a bit like a div­i­dend, I guess. We add it back until we get an amount in our bank account. So, that’s the first thing to note, and I’m assum­ing that Eric may have tak­en that into account.

Cameron  42:18

No, I don’t think Eric knew that OXT exist­ed when he rule 1’d SWK. I think he just learned about it after­wards.

Tony  42:26

Okay, so I did a lit­tle bit of research into this this morn­ing. Not a great deal. But SWK issued one OXT share for every three SWK shares that was held. And that hap­pened back in Jan­u­ary, 21st of Jan­u­ary was the list­ing day, I think it was the reg­is­ter shut. They ruled their books on the 31st of Decem­ber to see who was enti­tled to these shares, which is prob­a­bly why Eric sold the shares and still got the OXT because it was, he must have sold them after the end of Decem­ber last year. Any­way, that one for three, the share price back in Decem­ber was 31 cents and when the OXT list­ed in Jan­u­ary was 32 cents. So, it does have a buy price which is one third of 31 or 32, take your pick, but it’s around 10.5 cents. So, if this had hap­pened to me, I’d be using 10.5 cents as my rule one and then wait­ing until we had prob­a­bly about three months’ worth of data. Hope­ful­ly in that sort of time peri­od you’d be able to start draw­ing some, a cou­ple of peaks and look­ing at buys or sells based on the graph. But yeah, cer­tain­ly I would say rule 1 at about 10.5 cents and then wait over time If you haven’t had to sell it for rule 1 rea­sons to see when you get some L1s and L2s or H1s and H2s in the graph.

Cameron  43:37

Cool. Thanks Eric. Petra: “can TK go through the move­ments of the share price for MXI? There was a spe­cial div­i­dend paid in Decem­ber of 62.5 cents as a result of sale of a part of their busi­ness, the share price dropped since more than this amount. Now they’re look­ing to raise cap­i­tal to buy anoth­er busi­ness and the share price looks to be drop­ping more, clos­er to the offer price. How do we decide the 3PTL? Would TK just trust man­age­ment and wait to see what the wash up will be? It seems that trend lines will be dif­fi­cult to estab­lish with so much change going on.” I think Tay­lor and I got our offer from MXI yes­ter­day, we are both-were share­hold­ers. I still am, I don’t think Tay­lor is, but yeah, we got an offer yes­ter­day. I think it was $2.50 and the share price is cur­rent­ly $2.60.

Tony  44:28

Yeah and the Bret­te­la­tor has a sell price of $2.40, so it’s head­ing down towards that sell price. Inter­est­ing­ly enough, that’s kind of around the val­ue of I think the shares will get to based on dilu­tion, because of the raise and poten­tial­ly also because of the decrease in share price because of the return of cap­i­tal of 65 cents that hap­pened at the end of the last year. I got­ta say, this is a real­ly strange way to do things. I kind of ques­tion MXI’s board as to why they’ve returned so much cap­i­tal and then put their hands out the next month and try to get it all back again. So, well unless that it was just coin­ci­dence that this oppor­tu­ni­ty to buy the truck com­pa­ny that they’re rais­ing cap­i­tal to buy was­n’t known about as a deal when they sent cap­i­tal back to share­hold­ers, which I guess is pos­si­ble, but unlike­ly, or there was some kind of frank­ing cred­it ben­e­fit to the div­i­dend. So, maybe they were try­ing to get rid of frank­ing cred­its on their, their bal­ance sheet, which is to the ben­e­fit of the recip­i­ents; espe­cial­ly those who have self-man­aged super funds, for exam­ple. So, that’s my first com­ment, very strange things going on with the board of Maxi Trans. How­ev­er, the kind of cal­cu­la­tions I did when I had a look at it was when the spe­cial div­i­dend was paid the share price was around three bucks and it was a 62.5 cent div­i­dend, so the ex-div­i­dend price should be around $2.45, which is above what the price is now. But, it may well set­tle down back towards that price. And like­wise, when I did the cal­cu­la­tion for the retail offer, which is one new share, or you can buy one new share for every 9.7 you hold at $2.50, that dilutes the share­hold­ing base by, well, you know, rough­ly 10%. One for ten would be 10%. And again, when that was announced, if you take 10% off that share price you’re get­ting around $2.35 as the share price might get to after it’s dilut­ed. So, giv­en all those things are in plan as Petra, you know, quite right­ly said, there’s a lot of mov­ing parts here. I’m still going to use the Bret­te­la­tor at $2.40 as the sell, and you’ve still got a bit to go before the fundraise clos­es which I think it is in the start of March. So, I’d be watch­ing the share price just to see if it’s a decent buy towards the end of Feb­ru­ary before I made my deci­sion about whether to buy some more shares. But, I sus­pect it’s going to be line ball here. It’s going, if the dilu­tion is fac­tored in the way I think it will be, and the ex-div­i­dend is the big dip spe­cial div­i­dend, I guess dilu­tion or effect on the share price works out the way I think it’s gonna be, it’s all going to set­tle around that kind of, well just below the offer price. And the Bret­te­la­tor sells at $2.40, so it’s I think it’s going to be a line ball, but I’d cer­tain­ly wait until clos­ing date for the offer price for the retail enti­tle­ment before I made a deci­sion about whether to tack it up or not.

Cameron  47:12

Yeah, it’s cer­tain­ly, it’s not a con­fi­dence build­ing look­ing chart, is it?

Tony  47:17

No, but bear in mind, you did get 65 cents back as a cap­i­tal return.

Cameron  47:21

Yeah, that’s true. So, wait and see for MXI.

Tony  47:26

Wait and see, and I’m still gonna apply the Bret­te­la­tor to those four years of sell price. Well, I don’t own it, if I did own it, that’s what I’d be doing.

Cameron  47:32

Good. Thanks for ask­ing that, Petra. James, “two ques­tions for the pod­cast,” James, real­ly? Oh, aren’t you spe­cial? “For Episode 429, in which TK shows how one can use the equi­ty in one’s prop­er­ty to invest in shares. Should we show the cost of mort­gage repay­ments per year? Invest­ing in shares does­n’t have this cost. Is it still worth­while to own and not rent the prop­er­ty if the prop­er­ty does­n’t appre­ci­ate at a rate high­er than the inter­est you’re repay­ing the bank. Rel­e­vant now as inter­est rates are set to rise, and if the prop­er­ty is a unit, not a house, which increas­es around 5–6% per annum,” in a par­tic­u­lar sub­urb of Syd­ney that he was look­ing at, I think, based on some fol­low up infor­ma­tion he sent us in an email.

Tony  48:21

Yeah, so if peo­ple recall what James is talk­ing about is I laid out what I did over my invest­ing career, which was to buy hous­es, pay down the mort­gage, wait for cap­i­tal appre­ci­a­tion, and then use the equi­ty to up my bor­row­ings and to invest in the share mar­ket and let the div­i­dends repay the addi­tion­al mort­gage costs. And then kind of rinse and repeat on that. So, as the share port­fo­lio grew to be a large share port­fo­lio, I would sell the share port­fo­lio, sell the house, buy big­ger house and start the process again. So, that has, you know, real­ly done well for us over the years, and I think these ques­tions per­tain to the spread­sheet that Cameron put togeth­er to out­line that. So, specif­i­cal­ly, yes, you should be includ­ing mort­gage, increase mort­gage costs into the cal­cu­la­tion. I think what James is allud­ing to there is if you-he’s lay­ing out three options for com­mu­ni­cat­ing this to his chil­dren. And option one, I think, was to buy a prop­er­ty and just live in it and see what that does at the end of the mort­gage over thir­ty years, and option two was to rent for that peri­od of time and put the mon­ey in the share mar­ket, which was a bet­ter option because the share mar­ket returns are big­ger than the prop­er­ty mar­ket returns, at least using QAV. And then option three was the one I out­lined about increas­ing your mort­gage when the equi­ty in the house allowed. And so, yes, I would put the mort­gage cost into the oth­er two options, as I guess it’s an oppor­tu­ni­ty cost, to answer that. I guess, before I get to my gen­er­al com­ments, there was anoth­er spe­cif­ic ques­tion about whether it’s bet­ter to rent or to own if the cap­i­tal appre­ci­a­tion of the prop­er­ty you are own­ing does­n’t reach the inter­est rate on the mort­gage. So, for exam­ple, if inter­est rates are at 5% but he’s only get­ting a 4% appre­ci­a­tion out of the prop­er­ty that they bought, is it worth­while? I still think it is because that still beats rent, even though it’s only 4% per annum at least it’s not the neg­a­tive drag of rent. So, you are build­ing some equi­ty favour over time, it’s just a slow way to do it. So, I guess my gen­er­al com­ments. At some stage, and I think James’ exam­ple — and it was fair­ly detailed, so I won’t go through it — but he’s talk­ing about teach­ing this to his, one of his chil­dren who have moved into a unit in an area of Syd­ney which is quite heavy with units and there­fore only get­ting a, sort of, 5% return from prop­er­ty invest­ment. My first com­ment is that at some stage in their plan­ning, they should plan to move away from, well in this case it’s Alexan­dria, but it might be South­bank in Mel­bourne, or Tener­iffe in Bris­bane, I’m not sure of the oth­er cap­i­tal cities, but every cap­i­tal city tends to have this clus­ter of recent­ly built high rise res­i­den­tial units. And my rea­son­ing for that is because my gen­er­al rule of prop­er­ty is you want to buy some­thing which can’t be eas­i­ly replaced, and so there’s some scarci­ty val­ue to it. Gen­er­al­ly, that means, you know, in the cap­i­tal cities it’s sort of five to sev­en K’s out from the, from the CBD. And it’s, you know, a Queens­lan­der in Queens­land in Bris­bane, it’s a ter­race house in Syd­ney and Mel­bourne, but just the var­i­ous Coun­cil reg­u­la­tions means you can’t build any more of those. It’s impos­si­ble to go and build a Fed­er­a­tion style ter­race house now in Mel­bourne because the coun­cil rules have whole heaps of reg­u­la­tions around dif­fer­ent drain pipes and clear­ances from the neigh­bours bound­ary and all that kind of stuff. So, yeah, it makes it very dif­fi­cult if not impos­si­ble, notwith­stand­ing the fact that the cost of doing that would be much high­er than build­ing a mod­ern home because you know, the cost of putting on ter­ra­cot­ta roofs and lace­work and all that kind of stuff, and spe­cial tiles and Hawthorn brick­work and all that kind of thing, adds to the build. So, if you went and bought a ter­race house in Mel­bourne it’s gonna appre­ci­ate more because of that scarci­ty com­po­nent to it, you can’t build more. So, I just want­ed to make that gen­er­al com­ment. If you are buy­ing a unit in Alexan­dria or Tener­iffe or Dock­lands in Mel­bourne, be aware that two things can hap­pen. Num­ber one: if you have a good view, some­one could come along and build anoth­er tow­er next to you and you could lose that view, which is going to be a cap on your appre­ci­a­tion from then on. But more impor­tant­ly, num­ber two is devel­op­ers in these areas know when the prices are appre­ci­at­ing on the apart­ments, and guess what they do? They put up more apart­ments and they soak up that appre­ci­a­tion, so they get the ben­e­fit of it, not the own­ers of the units that are already exist­ing. That’s kind of been in gen­er­al the rea­son why, as James said, places like Alexan­dria have had about a 5% his­tor­i­cal increase in prop­er­ty, where­as the over­all mar­ket is sort of more like 9/10% long-term. So, yeah, I think at some stage that if his kids have already bought a unit in those places, then their salaries will get bet­ter, they’ll get prop­er­ty that will appre­ci­ate, and it might be time for them to look at some­thing like a ter­race house or a stand­alone house which will get bet­ter appre­ci­a­tion. So, that’s the first thing. I think the oth­er com­ments I’d make is that don’t for­get to take into account that extra mort­gage draw­downs can be fund­ed by div­i­dends that are avail­able in the mar­ket. And often­times, com­pa­ny div­i­dends kind of go lock­step with mort­gages. So, we’re actu­al­ly in a sit­u­a­tion at the moment where div­i­dends in the mar­ket, I think the mar­ket aver­age is about 3.5/4%, and that’s about if not a bit more than what you can get if you’re savvy at get­ting a mort­gage from the banks at the moment. And I know from his­tor­i­cal involve­ment that div­i­dend yields rose to sort of, you know, 6% when mort­gage rates went high­er as well. So, you know, they do tend to have the same sort of pres­sures on them in terms of inter­est rates and div­i­dend yields that the prop­er­ty mar­ket does as well. And the last com­ment I’d make is that James or his chil­dren do need to put into their plan­ning a fore­cast for high­er inter­est rates, because they will go up from here. And I think if you went to a bank now and asked to bor­row some­thing they’d prob­a­bly want to stress test your abil­i­ty to pay inter­est rates of around 6 or $7, or 6/7%, rather than the cur­rent sort of rates to make sure that you could be a long term cus­tomer and not get into finan­cial dif­fi­cul­ty. So, I guess they’re my com­ments, noth­ing against peo­ple using places like Alexan­dria as a starter and buy­ing a unit rather than a house, but because, you know, it’s dif­fi­cult to get into the prop­er­ty mar­ket and that’s one option as a way to do it. But, I would encour­age them to, as soon as they can, to try and upgrade their prop­er­ty and get a bet­ter return from the prop­er­ty mar­ket than 5%.

Cameron  54:48

Thank you, Tony. Thank you, James. Hope that helps. Dave. Dave from Newy: “hi Cam, ques­tion for the pod. Assum­ing Tony bought West­pac when it was a buy and did­n’t sell on a 3PTL. How would he approach the buy­back which clos­es this week? Would he sell into the off-mar­ket buy­back, or wait and hope it con­verts to an on-mar­ket one? Obvi­ous­ly, depends on how the shares are owned, tax rate impli­ca­tions, etc., and the final dis­count to mar­ket price applied. The offer seems line ball at best, though. Thanks, Dave from Newy.”

Tony  55:22

Yeah, so I guess the first com­ment is I would­n’t be own­ing West­pac, I would have sold it before. It’s come down from a sort of high of around $24.50 back to about $21.82. So, it’s look­ing a bit like a falling knife. It actu­al­ly had to extend the buy­back because it was meant to close in Decem­ber but the share price dropped sig­nif­i­cant­ly since then, so they’ve extend­ed the buy­back until the end of this week. So, I think, again, tak­ing into account dilu­tion, etc. — and this is a buy­back where you can spec­i­fy how much you’re will­ing to sell your shares for, so Dave can play around with that, he might jag a good price to sell his shares with — how­ev­er, you real­ly sort of being exposed to a falling knife here again. And, you know, if you can finesse the buy­back, great, he might be able to sell his shares for a bet­ter price that way. But yeah, I think he should just sell and move on. They’ve come down a lot, and I can’t see them get­ting much bet­ter at the moment.

Cameron  56:19

What’s going on with West­pac, man?

Tony  56:21

Well, it’s kind of coun­ter­in­tu­itive. This is an inter­est­ing point too, because it’s coun­ter­in­tu­itive that you, sort of, think you’re get­ting a dis­count, but real­ly, it’s still a falling knife so you don’t want to be exposed to it even if you think you’re get­ting a good deal to be exposed to it. I think you should get out.

Cameron  56:35

Yeah, well done, Dave. Again, it sounds quite strange though, does­n’t it? 0.0000 cent per share?

Cameron  56:35

All right. Dave also had a fol­low up, he said “report­ing back. I did some more dig­ging on MAD, M‑A-D, the Mad­er Group.” This harkens back to a ques­tion he had in an episode in Novem­ber, where he said he noticed that Stock Doc­tor report­ed 200 mil­lion ful­ly paid ordi­nary shares, yet the equi­ty share cap­i­tal was only $2,000. He said “in short, yes, the share cap­i­tal is cor­rect to $2,000. The IPO was not about rais­ing cap­i­tal, rather exist­ing share­hold­ers real­is­ing their ini­tial invest­ment. There were orig­i­nal­ly 40 mil­lion shares at 0.00001 dol­lars and three at $1 for $43 in total share cap­i­tal. Then in 2019, there’s been some sort of split and cap­i­tal reor­gan­i­sa­tion to get it up to 200 mil­lion shares and ready for IPO. The share cap­i­tal did­n’t change through­out.” So, there you go, a bit of Sher­lock Holmesing there from Dave, that makes sense.

Cameron  57:44

Yeah, who does that? Who issues 40 mil­lion shares at $0.00001 a share? Alright, last ques­tion from Ed: “do we still need to check for a qual­i­fied audit if it’s an ASX 200 or 300 Com­pa­ny? Is there a cut off point?”

Tony  58:01

Yeah, good ques­tion. I mean, I must admit, I do gen­er­al­ly accept that the big com­pa­nies won’t have a qual­i­fied audit because you know, we gen­er­al­ly read about it in the Fin Review if they did. You can imag­ine if BHP had a qual­i­fied audit, for exam­ple. I don’t know what the cut­off is, though, because I’ve cer­tain­ly had some com­pa­nies with qual­i­fied audits that would have been I guess in the ASX 300, pos­si­bly in the ASX 200 in the past. So, yeah, look you, I don’t have a hard and fast rule for it. I won’t gen­er­al­ly always check the big com­pa­nies, I just accept that we’d hear about them if they had a qual­i­fied audit, but any­thing out of the, say, the top 20 or so I will check because I have been sur­prised in the past.

Cameron  58:39

Alright, thank you, Ed. Thank you, Tony. That’s all the ques­tions for this week. Unless young fel­la, you have any more ques­tions for the great man while you’re here?

Tay­lor  58:48

How did he become so wise?

Cameron  58:50

I meant, I meant me by the way. You can also ask Tony ques­tions. How did he become so wise?

Tay­lor  58:58

Yeah.

Cameron  58:58

He was born that way, like baby Yoda,

Tay­lor  59:00

Real­ly?

Cameron  59:01

Grew up to be Tony. Yeah. Tony was sit­ting around at kinder­garten, just dis­pens­ing wis­dom to the oth­er kinder­garten­ers. Alright, let’s talk about after hours. I watched Don’t Look Up. Chris­sy and I watched don’t look up final­ly last night.

Tony  59:18

What did you think?

Cameron  59:19

Oh, depress­ing as all hell. I mean, fun­ny. Well done I thought, very well done. But yeah, depress­ing. And it was the wrong idea to watch it late at night; I end­ed up just think­ing about the end of the world all night dream­ing about dis­as­ter sce­nar­ios, sit­ting around and hav­ing din­ner with my fam­i­ly just wait­ing for the comet to hit.

Tay­lor  59:37

Did you watch the post cred­it scene? Make sure you stay for that.

Cameron  59:40

I did see the post cred­it scene, yeah, I’m glad I watched that. That was, that was fun­ny.

Tay­lor  59:44

Real­ly should­n’t have been a post cred­it scene, it need­ed to be the final scene of the movie. I’m sure peo­ple missed it.

Cameron  59:49

It was good. Yeah. Yeah, well, I remem­ber you saw it a while back. What did you think, Tony? Remind me?

Tony  59:54

Yeah, I loved it. I thought it was a great black satire and an indict­ment of mod­ern pol­i­tics. To me it was all about cli­mate change, it was a, you know, it was a proxy.

Cameron  1:00:03

Of course, yeah.

Tony  1:00:04

So yeah, but very, very fun­ny. Some great act­ing in there.

Cameron  1:00:08

Yeah, yeah. Great cast, great to see DiCaprio when he does these roles where he’s not Mr Smooth-talk­ing con­fi­dence guy. Real­ly great from all the cast. Adam McK­ay is real­ly doing a great job between The Big Short and this and some­thing else that he did recent­ly, I can’t remem­ber what it was now, but he’s come a long way from Fun­ny or Die.

Tony  1:00:30

Yeah, right. And speak­ing of great casts, have you seen the French Dis­patch yet?

Cameron  1:00:34

No. Is it out? Where did you see that?

Tony  1:00:37

Yes, I saw it on Fox­tel, I think it also might be on Dis­ney+ at the moment.

Cameron  1:00:42

Wes Ander­son, love Wes, can nev­er get enough.

Tony  1:00:44

Yeah.

Cameron  1:00:45

It’s always a high­light when there’s a new Wes Ander­son film.

Tony  1:00:48

Yeah, not for every­one, but if peo­ple like the Grand Budapest Hotel they’ll love this. It’s fan­tas­tic. And the cast I mean, there must be fifty top name actors in it, it’s just bril­liant. Beni­cio Del Toro, Lea Sey­doux, Fran­cis McDor­mand, of course all the reg­u­lars are there; Bill Mur­ray. It’s just bril­liant.

Cameron  1:01:06

I did, I saw a behind the scene thing about the mak­ing of that a while back, and some big actor, I can’t remem­ber who it was say­ing, you know, “I had to trav­el across the coun­try dur­ing COVID to, you know, sit around for a cou­ple of days just for one scene that I’m in,” which is like ten sec­onds of film. They go “but you do that for a Wes Ander­son film. That’s what you do. You just drop every­thing and you just, if you’re a seri­ous actor, char­ac­ter actor, you rock up for a Wes Ander­son film.” That’s great.

Tony  1:01:37

Yeah. And it’s clear that’s what peo­ple were doing. I mean, there’s just small cameos from, even peo­ple like Hen­ry Win­kler has a drop-in cameo for it. Yeah, it’s just great.

Cameron  1:01:46

Yeah.

Tony  1:01:47

Prob­a­bly, I would say prob­a­bly the most artis­tic of his films. So, there’s just great art­work, great sets, great opti­cal illu­sions. The sto­ry is bro­ken up into three mini sto­ries. So, it’s meant to be the French Dis­patch is a news­pa­per sup­ple­ment, so it’s like three of their sto­ries, and one of them is set inside a prison and they keep stop­ping and mak­ing these live action tableaus. So the, the whole scene of like a prison fight, for exam­ple, stops, every­one’s frozen in space. It looks like it’s a paint­ing of it but they’re actu­al­ly the live actors who have all just stopped. They’ve all been posi­tioned. There’re things like glass­es fly­ing and they’ll all be glued to each oth­er in a big arc. So, it’s just incred­i­ble the way it’s done. It’s very artis­tic. It’s great.

Cameron  1:02:33

Yeah, he is very artis­tic.

Tony  1:02:35

I saw the Sparks doc­u­men­tary. That was good, watched that last night.

Cameron  1:02:38

Oh, what did you think?

Tony  1:02:39

Yeah, loved it. Not, not real­ly a fan of their music, but great sto­ry about peo­ple just spend­ing a life­time with their art get­ting right into it.

Cameron  1:02:49

We became total­ly obsessed with their music after watch­ing it. Like, when you drill down into the lyrics their songs are all, like, the lyrics are just quirky and weird and fun­ny, and they write songs on any top­ic. Just, what he had for lunch today, he’ll write a song about it and it’ll be hilar­i­ous. But yeah, it’s kind of weird music, right? It’s like real­ly hard to groove to. Tay­lor, have you got any­thing, any great books you’ve read? Oh, we know that’s not true. Any­thing you’ve watched or lis­tened to you want to give a plug for that you think’s good?

Tay­lor  1:03:22

Not real­ly, I’ve just gone back recent­ly and watched a bunch of the old Pixar movies as an adult. And that’s deep, man. Like it’s a real­ly dif­fer­ent per­spec­tive.

Cameron  1:03:32

They hold up.

Tay­lor  1:03:32

They real­ly do. Com­plete­ly dif­fer­ent movie when you watch it as an adult ver­sus eight years old.

Cameron  1:03:37

Yeah

Tay­lor  1:03:37

But, apart from that,

Cameron  1:03:39

It’s like watch­ing Futu­ra­ma. Fox is watch­ing Futu­ra­ma at the moment, he does­n’t get 98% of the jokes.

Tay­lor  1:03:44

Tony, I also hear you being hus­tling Wor­dle?

Tony  1:03:47

Yes. I love Wor­dle, do it every day.

Tay­lor  1:03:50

Yeah, I think we all have been as well.

Tony  1:03:52

It’s great. Although, it’s just been bought by the New York Times, so I don’t know how long it will be avail­able to us free. Any­way.

Cameron  1:03:58

Yeah. Tay­lor and I’ve also been watch­ing Peace­mak­er. Have you watched Peace­mak­er? I don’t think it’d be your thing. It’s, it’s um, did you ever watch Dead­pool?

Tony  1:04:08

Yeah, yeah, I loved Dead­pool.

Cameron  1:04:09

Okay, very much in the vein of Dead­pool. Its a DC thing that comes out of Sui­cide Squad. James Gunn has direct­ed it, it stars John Cena, the wrestler, plays this super­hero called Peace­mak­er whose mis­sion is to bring about world peace even if he has to kill every man, woman and child on the plan­et to do it. And it’s about, it’s a rag­tag bunch of, it’s basi­cal­ly a bunch of under­cov­er oper­a­tives with him as the super­hero and a cou­ple of oth­er super­heroes but he’s, it’s just real­ly vio­lent, real­ly fun­ny. Done in a sort of Tarantinoesque/Deadpoolesque, not tak­ing itself too seri­ous­ly kind of style and I think it’s real­ly well done. Like every episode I think is very well craft­ed, very fun­ny. And it’s also, it’s also got a good human side to it, too. It’s about this guy who did build him­self this idea that he was going to be this vio­lent super­hero and he starts to ques­tion him­self as he goes along when every­one just thinks he’s a com­plete tool. He starts to have to ques­tion his moti­va­tions and look inwards, and he’s very lone­ly as this doo­fus super­hero. But yeah, if you like those sorts of vio­lent fun­ny things, check out Dead­pool. And the hair met­al song that I gave a plug to in our, when I pub­lished the buy list this week, Do You Real­ly Wan­na by Wig Wam is the open­ing theme for this and you got to, if noth­ing else, if you do noth­ing else, just watch the open­ing cred­its to Peace­mak­er because I think it’s prob­a­bly the great­est open­ing cred­its sequence ever done of any TV show, ever.

Tay­lor  1:05:50

It’s the only TV show I can name with a dance num­ber.

Cameron  1:05:53

A dance num­ber with, yeah, it’s just, check it out. If you watch the open­ing cred­its and you don’t like it then don’t watch any­more, because the show is pret­ty much defined by that open­ing cred­its sequence. But yeah, I can rec­om­mend Peace­mak­er.

Tony  1:06:10

Okay, good. I guess before we go, the one thing I did want to men­tion about the Sparks doc­u­men­tary which might be rel­e­vant to lis­ten­ers is they’ve been going for forty years, fifty. In one stage dur­ing the doc­u­men­tary some­one made the point that, you know, most rock bands from the 60s have like a one hit won­der and then they lost all their mon­ey through blow­ing it all or being ripped off or what­ev­er. But these guys did­n’t and they’ve just lived a very fru­gal lifestyle, very dis­ci­plined, did the same thing every day, went to the same cafe, the farm­ers mar­ket, bought mod­est hous­es. And the point was made they just spent their mon­ey wise­ly and they’re still going fifty years lat­er.

Cameron  1:06:48

And they’ve been able to afford to just put out an album every two years because they don’t need to make-it’s like the Woody Allen school of film­mak­ing, right?

Tony  1:06:55

Right, yeah.

Cameron  1:06:56

Keeps his bud­get low, just has a cult audi­ence that he puts a film out for every two years and does­n’t, you know, does­n’t need to shift a hun­dred mil­lion units to sur­vive.

Tony  1:07:07

Yeah, that was one of the takeout’s I had. Anoth­er movie that Jen­ny and I liked we watched a lit­tle while ago was called The Ten­der Bar. Have you seen that one?

Cameron  1:07:15

No. The tin­der or ten­der?

Tony  1:07:18

Ten­der, ten­der, The Ten­der Bar. So, very small indie I guess type movie, but great per­for­mance from Ben Affleck who plays the uncle of a writer as he grows up. And I think it was direct­ed by George Clooney, which is nei­ther here nor there, but yeah, it was worth a… Very, very qui­et sort of lit­tle movie, but I quite enjoyed it. Great per­for­mance from Ben Affleck.

Cameron  1:07:39

Thanks, Ten­der Bar. I’ll check it out. I also want­ed to give a plug to artist of the week, Alex Kynas­ton. One of Chris­sy’s birth­day present is I com­mis­sioned a paint­ing from Alex for Chris­sy, which is still being com­plet­ed but she showed Chris­sy where it’s at today and Chris­sy was blown away. And as she said, she’s very excit­ed about hav­ing an Alex Kynas­ton hang­ing on her wall. So, if you’re look­ing to com­mis­sion an art­work by an up and com­ing artist, you know, guar­an­teed to be a good invest­ment in the future, let us know and we’ll put you in touch with Alex and she can paint you some­thing. Noth­ing like a paint­ing, an orig­i­nal paint­ing hang­ing on the walls.

Tony  1:08:29

Yeah, I agree. I think she has an Insta­gram account if any­one wants to check out her work too.

Cameron  1:08:33

Great. I’ll give it a plug on our Face­book group. Alex remind me to do that when you lis­ten back to this. Put it in the tran­script. *Alex here, my account is @alexkynaston_art* All right, any time­line on going back home, Tony?

Tony  1:08:49

Look­ing like it’s prob­a­bly the first week of March at this stage, but I’ve got a body cor­po­rate meet­ing tonight to Zoom into to try and get our ren­o­va­tions past and start­ed, and hope­ful­ly they will be fin­ished by then.

Cameron  1:09:01

Well, Tay­lor’s head­ing down to Mel­bourne this week.

Tony  1:09:03

Oh, right.

Cameron  1:09:04

He should come down to Cape Schanck and pay you a vis­it.

Tony  1:09:07

Mm-hm, sure.

Tay­lor  1:09:07

Catch the train, which prob­a­bly takes like five hours to get there.

Cameron  1:09:10

Yeah.

Tony  1:09:12

It stops half way.

Cameron  1:09:12

I’m sure Tony would come and pick you up.

Tay­lor  1:09:14

Tony as the shut­tle?

Cameron  1:09:15

Yeah. You should have a shut­tle going down there, yeah.

Tony  1:09:19

Yeah, true.

Cameron  1:09:20

Alright. Thank you mate. Have a good week.

Tony  1:09:22

Thanks, bye. Bye Tay­lor.

Cameron  1:09:23

Cheers.

Tay­lor  1:09:27

Bye.

Cameron  1:09:27

The QAV Pod­cast is a pro­duc­tion of space craft pub­lish­ing Pro­pri­etary Lim­it­ed autho­rised rep­re­sen­ta­tive of AFSL 520442 AFS rep­re­sen­ta­tive num­ber 001292718. Please don’t make any invest­ment deci­sions based sole­ly on lis­ten­ing to this pod­cast. This is pre­sent­ed as gen­er­al advice only not per­son­al finan­cial advice. We don’t know your per­son­al finan­cial cir­cum­stances. Please see a finan­cial plan­ner before mak­ing any invest­ing deci­sions.