Transcript #531

QAV 531 CLUB

Cameron  00:07

Episode 531. We’re record­ing this on the ninth of August 2022. It’s about 2:20pm. The mar­ket’s hav­ing a good day I think, is it? The Fin said it was gonna go down this morn­ing but I’m not sure that that hap­pened. I haven’t had a look, but I want­ed to start any­way by giv­ing our apolo­gies… yeah, mar­ket’s up today: 0.28% so far… Give our apolo­gies to the fam­i­ly and friends of Olivia New­ton John. Two weeks ago, we did an episode, I sang Let’s Get Phys­i­cal, I called the episode Let’s Get Phys­i­cal and I think some­one told her and that killed her. It was too much, my ren­di­tion of Let’s Get Phys­i­cal, and she passed away today or yes­ter­day, one of the too.

Tony  01:05

We even shot that video of me in the gym.

Cameron  01:11

I was lis­ten­ing to the song over the week­end before she passed away, it came on, and I was just think­ing, like, when you lis­ten to that song, it’s all about hav­ing sex. It’s a very, very, very direct “I want to have sex with you song,” and the film clip being this Richard Simmons/Jane Fon­da and Jazzer­cise kind of thing, it’s a clas­sic piece of 80s mis­di­rec­tion.

Tony  01:38

That’s why the song was banned.

Cameron  01:41

Was it?

Tony  01:42

In some states in the US, it was, yeah.

Cameron  01:44

Real­ly?

Tony  01:45

So they said on the ABC this morn­ing. We actu­al­ly met her very, very briefly five or so years ago; she was in Mel­bourne at a thing called, I think it was called the Young Pres­i­dents Asso­ci­a­tion, that we knew some­one who was in who invit­ed us along-invit­ed Jen­ny along, I went along as well, and Olivia was there. She was a tiny, tiny thing. We’ve got a his­to­ry of pro­duc­ing singing budgeri­gars in Aus­tralia. But look, yeah, I mean, it’s not great news. She’s bat­tled with breast can­cer for a long time, which is a cause near and dear to our fam­i­ly, and she’s done a lot of work to help in that area so good on her.

Cameron  02:21

Indeed. I read in the ABC this morn­ing that she turned down the role of Grease orig­i­nal­ly because the role was sup­posed to be an Amer­i­can and she did­n’t want to do the accent, and so they said, “oh, that’s fine. We’ll just change it make it Aus­tralian.” And she was twen­ty-nine when she shot Grease, sev­en years old­er than John Tra­vol­ta was at the time. Sup­pos­ed­ly play­ing a high school stu­dent. Did­n’t mat­ter, it was great, she was great in that. Awe­some.

Tony  02:49

Yeah. And Judith Durham also passed away, as well.

Cameron  02:54

Judith Durham, that’s right. Two Aus­tralian singing leg­ends.

Tony  02:58

Yes. And I’d prob­a­bly have ear­li­er mem­o­ries of Judith Durham, I mean, the Seek­ers were very, very front and cen­tre in my ear­ly child­hood, mem­o­ries of Morn­ing town Ride and all those kinds of songs, New Day Dawn­ing, Car­ni­val is Over.

Cameron  03:16

Pret­ty sure the song­book that I had in pri­ma­ry school where we’d sing songs every morn­ing had a cou­ple of Seek­ers songs in there. Well, mov­ing right along, let’s talk about the port­fo­lio, Tony. Well, the mar­kets had a good week, more or less. It had a bit of a bad day on the third, but it recov­ered. We’re still under­per­form­ing for the finan­cial year; I think we’re up about 5% ver­sus the All Ords 200 up 10% for the finan­cial year. Nor­mal­ly it’s up 10% in a whole year, it’s like 10% a month in. Our top per­form­ers for the finan­cial year are IGL 28%, BFG 21%, AMO 19%, TRS 90%, and LAU up 15%. But from incep­tion, it has­n’t changed much from last week. We’re up about 18% over the, what is it? Two and a half years more or less. No, near­ly three years. We’re up 18% per annum rough­ly over the three years ver­sus the ASX 200, which is up about 6% per annum over three years. So, we’re doing about… we’re not up at our 19.5% goal, but we’re doing three times as good as the ASX 200 ver­sus twice as good. So, we’re beat­ing it on that met­ric. Best per­form­ers since incep­tion, includ­ing closed posi­tions: GRR up 184%, C6C 177%, FMG 87%, IGL 63%, and CAA 59%. So, not bad. Not bad with those guys. A cou­ple of dou­ble bag­gers there over a cou­ple of years.

Tony  05:12

Yep. And just echo­ing what you said in the last week or so, AMO is up 10.6%. On the flip side, the biggest down­turn was for New Hope Coal, down 7.7%.

Cameron  05:24

Coal’s tak­ing a bit of a beat­ing.

Tony  05:26

Yeah, it’s com­ing off a lit­tle bit. A lot of the com­modi­ties are at the moment, we don’t have much on the sell list for com­modi­ties at the moment — that isn’t a Josephine, any­way.

Cameron  05:34

Yeah. There’s a lot of things com­ing out of Josephine sta­tus. I picked up about eight or nine things that I could buy this week, filled up and port­fo­lio. But still a lot of things as we’ll see when we get to the Q&A, a lot of peo­ple are real­ly itch­ing to buy into C6C again now that alu­mini­um — sor­ry, cop­per is not a buy, but it’s going back up. We can’t buy it, unfor­tu­nate­ly.

Tony  06:02

No, that’s right. We are pre-empt­ing the Q&A. No, it’s not quite a buy yet, I don’t think. Although, BHP thinks it is, they launched a takeover bid for OZ Min­er­als, large­ly to get their hands on some cop­per mines that OZ Min­er­als has.

Cameron  06:16

Not pay­ing atten­tion to the 2BL. They need to pay more atten­tion. As Cos­min post­ed on the QAV club group yes­ter­day, fol­low­ing the rules is impor­tant. He was talk­ing about rule one. I think he’s kick­ing him­self for not pay­ing more atten­tion to rule one on a cou­ple of trades. For the record, the stocks that I found above the 2BL that were on the buy list this week — this isn’t all of them, these are just the ones that I did­n’t already have in a port­fo­lio — ASG Auto Sports Group, HLS Heal­ius Ltd, GMA Gen­worth Mort­gage Insur­ance, SKT (and I want to talk to you about that mov­ing for­ward), Sky Net­work, NZM which is NZME, SM1 Syn­lait Milk (talked about them recent­ly, I think), REG Reg­is Health­care, they were the ones that I picked up that were bare­ly above there 2BLs — most of these, bare­ly. In fact, I’m actu­al­ly look­ing at the chart I have for NZM now, it’s not above it. I don’t know what hap­pened there. Okay, dou­ble check NZM before you do any­thing. I thought that was above. Now I’m look­ing at the chart and it says it’s not. Oh, no, it is above. It’s com­ing down, but it’s above. Yeah, yeah. I’m good. I’m good. Let me ask you about SKT, Tony. I sent you an email about this, but I don’t think you replied to me. So, SKT, Sky Net­work. One note, because I learned from my mis­take last week and I Googled all of these before I bought them this week to see if there was any­thing in the news about them. And there was one thing about SKT: they have said that they’re cur­rent­ly nego­ti­at­ing to buy Media Works’ as radio and out of home adver­tis­ing busi­ness. And the share price took a bit of a hit when they announced, when they con­firmed that in the last week or so. I think it took a hit of about 6%. Still above the 2BL though when I looked at it, still on our buy list. You know, I don’t see that as a bad thing. It could go either way, but if they’re not being acquired, they’re mak­ing an acqui­si­tion, is that a risk fac­tor for us that would stop you from buy­ing it. Or steady as she goes?

Tony  08:27

I don’t think so. It sounds like it’s been fac­tored into the share price. So, if the share price was down 6%, I think I’d be wait­ing any­way because I don’t like buy­ing when the share price is trend­ing down. I’d wait for it to turn up a lit­tle bit any­way, even though it’s above its sec­ond buy line. But no, as the acquir­ing com­pa­ny it’s not like they’re being acquired and have a fixed price in the mar­ket and the mar­kets met that price, so there’s not much upside risk to that deal. This is a bit dif­fer­ent. So, no, I think giv­en the fact it’s been announced, it’s in the share price, the mar­kets adjust­ed to that, if it’s still a buy, it’s still a buy.

Cameron  09:02

It dropped by 6% but then it start­ed going back up. When I looked at it yes­ter­day it was going up. I think it was 215 when I looked at it yes­ter­day, its 220 today. So, yeah, it’s con­tin­ued to go in the right direc­tion. That’s good. Thanks for con­firm­ing that.

Tony  09:19

I can cross that email off my list with­out read­ing it.

Cameron  09:21

Yeah, there you go. 3PTL. Now Brett Fish­er of the Bret­te­la­tor…

Tony  09:27

*Crunch­ing nois­es from Tony*

Cameron  09:31

That’s a loud crunch you just made then, Tony. Tell us about the loud crunch, Tony.

Tony  09:36

Oh, I will as soon as my mouths free. Very sticky. Thank you, Cameron. Cameron bought me a box of See’s Can­dy peanut brit­tle, which I assume came back from the US.

Cameron  09:49

It did.

Tony  09:49

Got through cus­toms okay.

Cameron  09:51

Yeah, they don’t care about that. No, it’s pack­aged food, its shrink wrapped, it’s all good. It’s fine.

Tony  09:57

Yeah, it’s love­ly. I feel like Char­lie Munger here answer­ing ques­tions eat­ing peanut brit­tle.

Cameron  10:04

I brought back a box for us and a box for you. I did think about keep­ing the sec­ond one and eat­ing it myself, but Chris­sy said, “no. Send it to Tony.”

Tony  10:15

Thank you, Chris­sy.

Cameron  10:16

Its sur­pris­ing­ly good stuff.

Tony  10:18

Very tasty.

Cameron  10:20

And not over­ly sweet, it’s got a real­ly nice flavour to it, you know, very nut­ty.

Tony  10:28

Yeah, a lit­tle nut­ty. Just hard to do when I’m try­ing to do a pod­cast. It’s very sticky as well.

Cameron  10:35

Sticky and nut­ty, your two favourite things in the world. Brett of the Bret­te­la­tor sent an email. I think this was about HZN from mem­o­ry.

Tony  10:44

It was, we were ques­tion­ing the sec­ond buy line.

Cameron  10:47

Yeah, so I had been look­ing at the sec­ond buy line and the way that… We have an alpha ver­sion of the Bret­te­la­tor that’s attempt­ing to draw sec­ond buy lines which isn’t pub­licly avail­able yet because we’re still beta test­ing it, I guess. I was­n’t sure about the way‑I did­n’t like the way it was draw­ing HZN and so I sent it to you, and you sent it to Brett, and Brett replied, and his reply was inter­est­ing. I was draw­ing its line through two points, and it was com­ing down in a cer­tain way and the share price was already above it, and he said the prob­lem is it’s not inter­sect­ing with the line, so there’s no third point. So, that’s a two-point line, not a three-point line. And that’s done my head in this week. So, let’s talk about that if we can.

Tony  11:37

Yeah, well, sure. So, the good thing about the Bret­te­la­tor is it’s cod­ed all of our dis­cus­sions in the past, Brett and I, on three-point trend­lines. So, you know, when we get real Poindex­ter ques­tions about how to draw a line it’s good to have the rules, so to speak, in code. Not to say that we can’t change them if we think there’s a bet­ter way of doing it, but it’s good to go back to the rules and check it. So, I think Bret­t’s right; what he’s say­ing is that there has­n’t real­ly been a trend estab­lished if we only have two points. So, if peo­ple can visu­alise the Hori­zon, this is the Hori­zon Oil share graph, there was a very late H1. The high point on the graph is late in the day, and then it dropped and then it went back up again. So, it’s kind of like half a “v” or a Nike tick or some­thing like that. But we don’t have three points. So, we have an H1 and an H2, but they’re the only two points that we’re look­ing at. And I think Bret­t’s right, we need a third point. Typ­i­cal­ly, we want two peaks and then we can see the trend when it cross­es, or to two troughs and then we can see the trend when it cross­es. We haven’t been able to do that. There have been cas­es think­ing back where we’ve had almost a straight line and then there’s been a turn up, so we’ve actu­al­ly got three points on those lines. I’m think­ing about oil in par­tic­u­lar, going back to the COVID days where we had, again, an H1, steep drop off, there was a point there at the end of that month, and then anoth­er steep drop off and anoth­er point before it turned up. So, we did have three points there. So, there’s kind of at least two months’ worth of data to estab­lish the trend­line before it turned up.

Cameron  13:14

Okay, so when I’m look­ing for these 2BLs in par­tic­u­lar, I need to make sure that the price line is cut­ting through what­ev­er that buy line is that I’m draw­ing.

Tony  13:28

Yeah. I guess the point is you ide­al­ly want to have two peaks. So, an H1 and an H2 peak, and then the price line inter­sects the line drawn across those two peaks. We’ve had cas­es, though, where we’ve had three, maybe even more points on an almost straight line, and then an upturn, and that’s also break­ing the trend as well.

Cameron  13:52

Okay, good reminder.

Tony  13:55

Yeah. Well, in Hori­zon’s case, the Bret­te­la­tor goes back to an ear­li­er date to draw its buy line, so it’s been above a sec­ond buy line the whole time.

Cameron  14:05

Since, sort of, late Feb­ru­ary, I think. Any­way, okay. Thank you to Brett and your­self for clar­i­fy­ing that for me. For peo­ple who are lis­ten­ing to this going “I can’t fol­low this because I can’t see it,” I’ll post it in the Face­book group so you can see it. Catch­phras­es: I did say at the end of the last show in the club edi­tion that we need­ed a catch­phrase to end out the show. Simo emailed me a cou­ple of sug­ges­tions. He’s obsessed with time trav­el, appar­ent­ly. He said “QAV won’t change your past, but it will change your future.” “It’s not a time machine, but thanks to QAV my future looks goood.”

Tony  14:51

They’re both good, well done Simo.

Cameron  14:53

I played around with a bunch: “if it is to be then it’s QAV.” Rhymes — does­n’t make a lot of sense — but it rhymes. I went through, “it’s not about intel­li­gence, it’s about a sys­tem.” “It’s not about your IQ, it’s about your IQAV.”

Tony  15:10

Yeah, that’s not bad.

Cameron  15:11

“What is your IQAV?” The one I came down to, though, is “slow and steady wins the race.” When I think about QAV, when I’m try­ing to boil it down to what the core prin­ci­ple of QAV is, I think that’s one of them any­way. “Slow and steady wins the race.”

Tony  15:31

Yep. Yeah, no, they’re all good.

Cameron  15:33

Did you come up with any?

Tony  15:35

Oh, just the one I’ve always used, which is “I can make you a mil­lion­aire, I just can’t do it overnight.”

Cameron  15:42

I thought it was “good­night from him, and good night from me.”

Tony  15:46

I thought that’s what you meant last week when you said we need a catch­phrase. I thought it was a sign off catch­phrase.

Cameron  15:51

Well, it is. It is a sign off catch­phrase. Yeah. “And remem­ber, as we always say…” We need some­thing to put in there that’s unique and orig­i­nal and clever and can’t rip off the two Ron­nies. Even though you are wear­ing Ron­nie Bark­er’s glass­es.

Tony  16:09

I like Simos: “QAV won’t change your past, but it will change your future.”

Cameron  16:13

Well, okay, good stuff.

Tony  16:15

It’s hop­ing for the bet­ter.

Cameron  16:17

We’ll go with that one for now unless some­body comes up with a bet­ter one. There’s a cof­fee mug in it for who­ev­er comes up with the best catch­phrase.

Tony  16:27

How are the cof­fee mug give­aways going?

Cameron  16:30

Oh, good. I’ve giv­en out a few this week, I sent out a few to peo­ple. I sent them out the same day I sent out your peanut brit­tle. They did­n’t get peanut brit­tle. I’m send­ing about now to peo­ple who refer a friend who puts their name down. When you sign up to QAV Club you get a lit­tle pop-up box that says “where did you hear about us? If it was a friend, tell us who it was, and we can send them a lit­tle gift.” I’m send­ing those peo­ple a cof­fee mug. Some­times peo­ple go “I heard about it from a friend,” but they don’t give me a name so I can’t help you there. But if they put your name down, I’ll drop a cof­fee mug in the mail to you as a lit­tle token of our appre­ci­a­tion.

Tony  17:10

It’s not as good as the peanut brit­tle.

Cameron  17:14

Next time I’ll come back with a case­load of peanut brit­tle, and I’ll send peo­ple a box of War­ren Buf­fet­t’s peanut brit­tle. What have you got to talk about this week before we get into the ques­tions, Tony? He’s point­ing at his mouth.

Tony  17:31

Maybe peanut brit­tle was­n’t a good idea. Not a whole heap. I’ve been almost glued to the com­mod­i­ty charts for oil and for gold — the Aus­tralian gold chart — because they’ve been bounc­ing around a bit and get­ting close to action­able break­outs, or the reverse. Oil has been flirt­ing with its sell line, which I peg at about $88.80. I did see it’s gone up again today, so it has­n’t quite crossed. It got as low as $92 or $93 at the end of last week, so it’s get­ting pret­ty close. So, I’m watch­ing those. And on the gold side, the AUD gold chart is no longer a sell. It’s back into buy ter­ri­to­ry but it’s still Josephine, so I’m not going to rush out and buy any gold stocks. But I did put the brakes on sell­ing West African Resources. I was work­ing through — over the last week or so since the Aus­tralian Dol­lar gold became a sell — sell­ing out, and I just put the brakes on that now because it’s climbed up above that sell line again.

Cameron  18:29

And how far away is it from cross­ing 2BLs?

Tony  18:33

A long way. It’s just a few dol­lars about the sell line. I think from mem­o­ry the fig­ures are the sell price is $2,550, and the price today was like $2,560, some­thing like that. So, it’s very close.

Cameron  18:47

And you’re going to do a pulled pork for us today.

Tony  18:49

I am. I’m going to do a pulled pork on Kel­ly Part­ners. That was a request from one of our lis­ten­ers two weeks ago, and actu­al­ly hav­ing gone through it today its quite a good one to do. It’s a very inter­est­ing com­pa­ny again — well, in a dif­fer­ent way to Soul Pat­tin­sons last week, but that was also an inter­est­ing one to research. So, Kel­ly Part­ners isn’t on our buy list, although I’m pret­ty sure it was ear­ly on. I can remem­ber look­ing at KPG a year or two ago. The com­pa­ny itself is essen­tial­ly a roll-up of account­ing firms, char­tered account­ing firms. They basi­cal­ly have, I’ll call it a fran­chise mode; it’s a part­ner­ship mod­el any­way, where they pro­vide the back-end sys­tems and the brand and the mar­ket­ing, and then go and take 51% share in local account­ing firms and aggre­gate them into a net­work. It’s main­ly based in New South Wales, but they have one or two in Vic­to­ria, and they even have one over­seas, one account­ing firm over­seas in Hong Kong. They focus on the SME mar­ket so they’re not try­ing to take over or not try­ing to mus­cle in on the Big Four account­ing firms’ ter­ri­to­ry, the PWCs and KPMGs and that kind of thing. But they’ve been pret­ty suc­cess­ful in start­ing part­ner­ships with these small account­ing firms and they cur­rent­ly have twen­ty-nine busi­ness­es which they’ve acquired since list­ing, which is only in the last cou­ple of years. So, basi­cal­ly, they’re tak­ing over tax account­ing firms, but they are branch­ing out and offer­ing oth­er ser­vices that the accoun­tants can, I guess, bolt onto their busi­ness­es like audit, cor­po­rate advi­so­ry and acqui­si­tions, sup­port for acqui­si­tions. So, they’re able to offer addi­tion­al ser­vices to just the straight tax account­ing, which is, I guess, part of the attrac­tion of sell­ing out your busi­ness to Kel­ly Part­ners. It looks almost like a fran­chise rela­tion­ship to me but they call it a part­ner-own­er dri­ven mod­el. So, they’re basi­cal­ly becom­ing part­ners in the busi­ness, even though they take 51%, and keep­ing exist­ing accoun­tants in place, and then improv­ing the local busi­ness with their back-end sys­tems mar­ket­ing and these addi­tion­al ser­vices. Some of the strengths of this mod­el is because they are accoun­tan­cy and tax accoun­tan­cy busi­ness­es, most of the rev­enue, in fact, some­thing like 99%, is recur­ring. So, that’s a nice sta­ble busi­ness mod­el to have; you’re not spend­ing a whole heap of cash going out try­ing to find new busi­ness or even retain your exist­ing busi­ness. Essen­tial­ly, this com­pa­ny, Kel­ly Part­ners, looks like a roll-up to me. So, we’ve talked about roll-ups in the past where some­one is attempt­ing to con­sol­i­date a pret­ty frag­ment­ed indus­try, and at the moment this com­pa­ny has like less than 1% of the mar­ket share in the SME account­ing branch busi­ness. So, it’s a large mar­ket, there are heaps of oper­a­tors from one-man-bands through to small teams of peo­ple. The inter­est­ing thing about this com­pa­ny, which I think is why it was referred to have a look at for a pulled pork, is that the own­er, Mr Kel­ly, is apply­ing a lot of War­ren Buf­fet­t’s philoso­phies in his busi­ness. So, they’re not issu­ing shares to acquire new account­ing busi­ness, which I think is an inter­est­ing strat­e­gy because it means they have to raise debt. We’ll come back to that in a lit­tle while, but he’s tak­en the War­ren Buf­fett phi­los­o­phy of not issu­ing new shares so you’re not dilut­ing your cur­rent share­hold­ers to buy out these account­ing firms. And he’s also not sell­ing the busi­ness­es once they’re acquired. So, once they’re in, they’re in for life. Some of the ben­e­fits of this mod­el are the busi­ness sys­tems are pro­vid­ed by Kel­ly Part­ners and that improves the effi­cien­cy and ser­vices of the account­ing firms they’re acquir­ing, which means that their prof­itabil­i­ty and sales go up. There’s no doubt that tax­a­tion busi­ness is nev­er going to get any sim­pler, it’s cer­tain­ly becom­ing more and more dif­fi­cult with com­pli­ance reg­u­la­tions and increas­ing com­plex­i­ty. So, I can’t see there being a short­age of need for account­ing firms going for­ward. They’re cre­at­ing, I guess, a ver­sion of the net­work effect which we’ve heard about before in dis­cussing tech­nol­o­gy stocks, where if you have enough eye­balls it becomes a sort of self-per­pet­u­at­ing machine because they can cross sell oth­er ser­vices into the account­ing net­works, there’s economies of scale. And as more accoun­tants become part of this busi­ness mod­el and like it they pro­vide more refer­rals, and so the busi­ness becomes big­ger. The own­er of the busi­ness talks about build­ing an eco­nom­ic moat, which is some­thing that War­ren Buf­fett talks about. But he’s essen­tial­ly say­ing this net­work effect allows them to build a moat because as their economies of scales get bet­ter as they pro­vide more and more ser­vices, then it becomes hard­er for some­one else to com­pete against them. You basi­cal­ly got your big four which is a space they’re not play­ing in, and then your indi­vid­ua one-man band oper­a­tions, and then you’ve got some­one in between like these guys. If some­one tries to repli­cate the mod­el, they’ve got to invest quite heav­i­ly to do it. The busi­ness has been grow­ing quite health­ily and they’ve actu­al­ly, on a rev­enue basis any­way, achieved 30% rev­enue increase CAGR in the last five years. So, it’s grow­ing quick­ly. One of the inter­est­ing things about the busi­ness is if peo­ple want to go and check out Kel­ly Part­ners’ web­site, they’ll see an own­er­ship man­u­al, or an own­er’s man­u­al on the web­site, which talks about a lot of the things I just had, but also goes fur­ther and talks about some of the philoso­phies of the busi­ness. And in this own­er­ship man­u­al there’s a cou­ple of slides on some of the philoso­phies of Mr Kel­ly, includ­ing a check­list he’s put togeth­er from The Out­siders, the book that we have spo­ken about before which was writ­ten to talk about com­pa­nies with out­sized returns who don’t play by the rules. And The Out­siders check­list talks about hav­ing the founder and CEO mak­ing your cap­i­tal allo­ca­tion deci­sions, hav­ing a deter­mined hur­dle rate for those cap­i­tal deci­sions, and in this case, they want a 20% return on invest­ed cap­i­tal after tax. They cal­cu­late returns for all inter­nal and exter­nal invest­ment alter­na­tives and then rank them. They’re always on the look­out to repur­chase their own stock and they’ve done a lit­tle bit of that, and they pre­fer to do that rather than to issue new shares. They focus on after tax returns and run all trans­ac­tions by their tax coun­cil. Being tax accoun­tants, they see obvi­ous­ly oppor­tu­ni­ties in doing that, because they can max­imise the tax­a­tion posi­tion. They deter­mine accept­able con­ser­v­a­tive cash and debt lev­els, which they have. Although I ques­tion whether they have con­ser­v­a­tive debt lev­els, but I’ll come back to that when we go through the num­bers. Some of the impor­tant things: they con­sid­er a decen­tral­i­sa­tion organ­i­sa­tion­al mod­el, and Kel­ly Part­ners has fif­teen cen­tral peo­ple in their ser­vices team, and they have three hun­dred accoun­tants in the over­all group so it’s very decen­tralised. 5% works in head office and the rest work in the branch­es, so to speak. Their return on invest­ed cap­i­tal is greater than 20% since IPO and they don’t like pay­ing out div­i­dends, so the yield on the stock is only 1%. So, they pre­fer to rein­vest in their busi­ness while it grows. Their pref­er­ence is to per­ma­nent­ly own the busi­ness­es that they acquire. So, inter­est­ing that he’s put down in writ­ing dis­tilled wis­dom of the book The Out­siders, which if peo­ple haven’t read, I rec­om­mend. It’s on our web­site. There’s a sec­ond check­list there as well about the com­mon traits about The Out­siders, which is fed into the check­list. So, div­i­dends are shunned, the founders are still own­ers in the busi­ness, they like buy­backs, they like acquir­ing new busi­ness­es, decen­tralised organ­i­sa­tion­al struc­ture, no Wall Street guid­ance, so no guid­ance to the stock mar­ket. They do their own idio­syn­crat­ic mea­sure­ments of the busi­ness, their own met­rics. So, for exam­ple, he’s list­ed Buf­fett as hav­ing a met­ric of how much float they hold, and they have a focus on tax­a­tion. In the same own­er’s man­u­al, there’s also anoth­er page which I won’t go through, it’s a sim­i­lar sort of page, but it comes from a book called 100 Bag­gers, which I haven’t read yet, so I might go and pick that one up. And again, it lists ten check­list items from that; like, for exam­ple, oper­at­ing in an unpop­u­lar and frag­ment­ed indus­try, high gross prof­it mar­gins — Kel­ly Part­ners has 60% — own­er-founder, etc. And there was also a read­ing list at the back of the own­er’s man­u­al. Most of them we’ve cov­ered, like The Out­siders, Com­mon Stocks and Uncom­mon Prof­its by Philip Fish­er, The Lit­tle Book that Beats the Mar­ket, Damn Right by Char­lie Munger, Titan which was the Rock­e­feller sto­ry, Dan­do Investor, The Snow­ball, The Intel­li­gent Investor, the War­ren Buf­fett Way. So, it’s actu­al­ly a good lit­tle thing to read through. So, Kel­ly Part­ners is try­ing to imple­ment these prin­ci­ples, and I applaud them for that. How­ev­er, it’s not a QAV stock. It has been in the past, but cur­rent­ly it’s not. Just to run through some num­bers: it’s cur­rent­ly a small, thin­ly trad­ed stock. The ADT is only 77,000 which will suit some peo­ple, but not a lot. The mar­ket cap is $225 mil­lion and I’m doing this analy­sis on a $5 share price. The yield as I said before is less than 1%. This is one of the few stocks that we have, that we look at, which has the share price above the con­sen­sus tar­get. So, the peo­ple who do cov­er this, and there aren’t many, think it’s over­val­ued. And its Pr/OpCaf is 12.8 times, so on our basis we think it’s over­val­ued too. The finan­cial health I want­ed to spend a lit­tle time talk­ing about; so, the finan­cial health for this com­pa­ny is mar­gin­al, and it’s been mar­gin­al for the last cou­ple of halves. So, it’s a steady finan­cial health but it’s not liked by Stock Doc­tor’s sys­tem, and the main rea­son I could see while hav­ing a quick look at the Stock Doc­tor finan­cial health ratios is there’s a fair bit of debt. Lia­bil­i­ty to assets, lia­bil­i­ties as greater than assets, which is some­thing stuck up to focus­es on, and the quick ratio is low, so they can’t find cash quick­ly if they need to. And the com­pa­ny looks like it’s about a bit over 70% geared. Bur­row­ing into their bal­ance sheet, it seems to be the case that what they’re doing is they’re bor­row­ing to acquire these indi­vid­ual char­tered account­ing busi­ness­es to bolt on to Kel­ly Part­ners, and that’s an inter­est­ing way of doing it. I do ques­tion whether that’s a mis­take or not. I get the whole, “I don’t want to issue new shares and dilute cur­rent share­hold­ers,” but the clas­sic busi­ness mod­el for a roll-up is to do exact­ly that: to lever­age off the high PE ratio. So, in this case, the PE ratio for Kel­ly part­ners is 30 times, which is quite high. So, you’re issu­ing less shares to take over a small account­ing firm, which I would guess on the mar­ket might be get­ting a PE of 5 to 10. Small busi­ness­es that aren’t grow­ing dra­mat­i­cal­ly tend to be sort of around 4/5/6 PE ratio. So, in a nut­shell, if you could do this, one Kel­ly part­ner share could prob­a­bly buy four or five account­ing com­pa­nies. It actu­al­ly tra­di­tion­al­ly makes sense to issue shares in Kel­ly Part­ners to take out these oth­er small­er com­pa­nies, but they’re not doing that. It does, I think, weak­en their finan­cial posi­tion, and Stock Doc­tor thinks that as well. So, they are fair­ly heav­i­ly indebt­ed. Just quick­ly run through the num­bers. Stock Doc­tor actu­al­ly has them as a neg­a­tive NTA, which will be because they’re car­ry­ing good­will, but the net equi­ty per share is 98 cents against the share price of $5. So, they cer­tain­ly are nowhere near book plus 30%. The PE is also ham­per­ing their growth over PE score, it’s cur­rent­ly 1.08. Even though they’re achiev­ing 21% growth pro­ject­ed for the busi­ness, the PE of 30 makes that met­ric fail on our check­list. On the pos­i­tive side, they’re still 52% owned by direc­tors, so very much a founder-led busi­ness. On the man­u­al­ly entered data side, there’s no record low PE. The stock has been going up for quite a while now, but it’s not a new upturn, and they just fail on con­sis­tent­ly increas­ing equi­ty; it was close, but there was one peri­od where it was a lit­tle bit below. All in all, five out of fif­teen for qual­i­ty 33% and a QAV score of 0.03, so well below our cut off. And I think my sum­ma­ry is two issues: poten­tial­ly too much debt, they’ll prob­a­bly argue if they were here talk­ing to us that the com­pa­ny is grow­ing enough to reduce that quick­ly, but at the moment the met­rics are too much debt. It also fails on the val­u­a­tion met­rics. So, again, it’s a growth com­pa­ny and peo­ple are fac­tor­ing in growth until the end of days in giv­ing them a PE of 30, so that’s an issue. The ques­tion with roll-ups is always what hap­pens when they get to a mature stage, and they can’t find any more account­ing firms to acquire. I think in this case, giv­en the frag­men­ta­tion in the mar­ket that’s a long way down the track, but it’s still going to hap­pen at some stage. That’s one issue and the oth­er issue is debt. You know, if they ever asked me for any advice, I’d prob­a­bly like to see them issue some shares and to take out some of the account­ing firms that they want to acquire next and pay down some of the debt.

Cameron  33:02

And why did you do this? What is the pulled pork? Was this a request from some­one?

Tony  33:05

It was, yeah, we had a request about two weeks ago to do it. Some­one sug­gest­ed this. I think it’s — I’m not sure of Mr Kel­ly’s first name, John Kel­ly — is talked about as being the War­ren Buf­fett in Aus­tralia.

Cameron  33:18

Oh yeah, well, it cer­tain­ly sounds like it from what you read out, the sort of approach that he’s been doing.

Tony  33:24

Cer­tain­ly been influ­enced by it. It will be inter­est­ing if there’s some kind of down­turn in the busi­ness or in the econ­o­my and their PE comes down, it might come back on the buy list for us.

Cameron  33:33

It was Lee, Lee Gant who asked for that one. So, there you go, Lee, it sounds like a real­ly inter­est­ing and well-run busi­ness.

Tony  33:43

Yeah, it does. There’s a ques­tion mark on the debt lev­els, but cer­tain­ly every­thing else looks very inter­est­ing and they’re try­ing to do the right thing.

Cameron  33:49

Yeah, I real­ly liked that: pub­lish­ing the own­er man­u­al, and the list of the books and the phi­los­o­phy and the check­list, and “this is how we run our busi­ness.” That’s ter­rif­ic.

Tony  33:58

Yeah. Very trans­par­ent and very upfront with some­one who might want to sell their busi­ness to them, they know what they’re get­ting into. Yeah, that’s good. And I urge peo­ple to go and have a look at it because there is a list of books there, which if they haven’t come across before, I’d cer­tain­ly endorse each of those books to read.

Cameron  34:15

We should try and get Mr Kel­ly on the show.

Tony  34:17

Yeah, he can you can tell us why he prefers debt to issu­ing shares.

Cameron  34:21

It’d be an inter­est­ing con­ver­sa­tion, for sure. All right. Thank you for that, TK. Kel­ly part­ners, KPG. Let’s get into some Q&A. Kush wants to know if you would mind doing a pulled pork on CIA at some stage?

Tony  34:37

Yeah. Have we done CIA?

Cameron  34:39

I’ve done a very long series on the Cold War show about The CIA. I think we prob­a­bly have done CIA at some point.

Tony  34:49

I think we have, I’m hap­py to do it again though. That’s fine.

Cameron  34:53

I searched in my notes on CIA, I’m get­ting a lot of stuff about black tor­ture sites in the mid­dle east and stuff.

Tony  35:01

Cham­pi­on Iron is the com­pa­ny.

Cameron  35:03

Yeah, but I would­n’t have writ­ten that in my notes.

Tony  35:05

Oh, okay.

Cameron  35:06

I can’t see them as a pulled pork in recent his­to­ry.

Tony  35:12

I have a vague rec­ol­lec­tion.

Cameron  35:13

Oh, here we go. Jan­u­ary.

Tony  35:15

I was gonna say, I was a Cape Schanck when I did it, I’m pret­ty sure.

Cameron  35:17

There you go, Jan­u­ary. So, QAV Episode 500, Kush. Check that out, have a lis­ten. If you think it needs an update, let us know, but prob­a­bly not a lot has changed since then apart from if their reports have come out. Prob­a­bly their half year report come out after that, and the full year report should be out now, or soon to be out. Gra­ham asks, “when AFIC reports on val­ue of net asset back­ing, is this the val­ue of the shares they have in the port­fo­lio or is it the net asset val­ue with­in the shares in their port­fo­lio?” AFIC you’ve talked about many times before: Aus­tralian Foun­da­tion­al Igloo Com­pa­ny, is that it? They make igloos, I think.

Tony  36:07

Yeah, the oth­er one. Aus­tralian Foun­da­tion Invest­ment Com­pa­ny.

Cameron  36:10

Oh, not the igloo busi­ness. The igloo busi­ness last time I looked was strug­gling.

Tony  36:16

Sales were melt­ing down. Yep.

Cameron  36:18

Well, they always said their sales­peo­ple were so good they could sell igloos to Eski­mos, and that’s their entire busi­ness. Well, turns out, they weren’t that good. They could­n’t sell.

Tony  36:28

It turns out they’re still look­ing for Eski­mos in Antarc­ti­ca. It’s the oth­er end.

Cameron  36:33

And they don’t like to be called Eski­mos, or do they?

Tony  36:36

True, no they don’t. They’re Inu­it.

Cameron  36:38

Inu­it peo­ple. AFIC, Aus­tralian Finan­cial Invest­ment Com­pa­ny. They’re basi­cal­ly a LIC?

Tony  36:44

They are a LIC, prob­a­bly the largest and the old­est. I think they’ve been around for almost as long as the stock mar­ket, and for a long time they were man­aged by JBWere, a stor­age stock broking firm in Mel­bourne. But JBWere were bought out by NAB, so they’re prob­a­bly now being man­aged by an inde­pen­dent… well, they’ve always been an inde­pen­dent board of direc­tors com­pris­ing of JBWere staff, but they would just be like any oth­er pub­licly trad­ed com­pa­ny now. But still, yeah, been around for a long time, large list­ed invest­ment com­pa­ny. Gen­er­al­ly seen as an index fund, but they don’t oper­ate nec­es­sar­i­ly as an index fund. But they do try and keep pret­ty close to mar­ket weight of the com­pa­nies they own. But to answer Gra­ham’s ques­tion, the net asset back­ing is the val­ue of the shares in the port­fo­lio plus what­ev­er cash and div­i­dends they receive, not the net asset back­ing of the shares indi­vid­u­al­ly in the port­fo­lio, if that makes sense. It’s the mar­ket price.

Cameron  37:41

Can you explain it to me again?

Tony  37:43

Yeah okay, so they will own a cer­tain per­cent­age of BHP as Aus­tralian foun­da­tion invest­ments. So, the net asset val­ue as far as Aus­tralian Foun­da­tion Invest­ments is con­cerned is the share price of BHP. So, that’s the asset they hold, is a mark­er for the share of BHP. But BHP itself will have a dif­fer­ent net asset val­ue, which will be the under­ly­ing assets of BHP; the val­ue of the iron ore mines, the equip­ment of what­ev­er else they got, which will be dif­fer­ent. So, BHP share price is usu­al­ly always dis­con­nect­ed from its NTAs, net tan­gi­ble assets, or its net asset val­ue. But it’s the share price which Aus­tralian Foun­da­tion Invest­ments uses to cal­cu­late their NTA.

Cameron  38:30

So, it’s just the sum of the prices of the shares that they own at any giv­en point in time.

Tony  38:37

Yeah, and that’s one of the ben­e­fits of own­ing LICs, is because by law they have to tell you once a month what the val­ue of their port­fo­lio is. They mark to mar­ket. And then they also add in any cash they’re hold­ing or any div­i­dends they’ve received as well. And some LICs will have non list­ed assets and they’ll have to get those val­ued inde­pen­dent­ly, too.

Cameron  38:59

But we stopped look­ing at LIC’s in run­ning them through the QAV check­list a while back, you decid­ed that was a lit­tle bit ten­u­ous.

Tony  39:08

Yeah. So, par­tic­u­lar­ly for ETFs, because the oper­at­ing cash flow has more to do about the funds flow­ing in and funds flow­ing out: so, the peo­ple who are buy­ing shares in the ETF. With the LICs, it’s a lit­tle bit dif­fer­ent to that but it’s still not like the oper­at­ing cash flow of a reg­u­lar busi­ness, of an oper­at­ing busi­ness. So, the oper­at­ing cash flow for the LIC, like, if it’s receiv­ing lots of div­i­dends will look good, or if it’s sold lots of shares will look good. But if it’s chug­ging along not doing much oper­at­ing cash flow would be almost zero. Yeah, so we took it out.

Cameron  39:41

Okay, thanks for that. The next ques­tion is from Liz, who’s asked “is cop­per a buy?”

Tony  39:50

And we’ve already answered: not yet. Looks like it’s get­ting close, but no, we still need to see it go upwards a lit­tle bit from where it is now.

Cameron  40:00

Yeah, so I’ve got XCU_ open in front of me on Stock Doc­tor. Pulling up my seg­ment tool and, yeah, okay, so if I use March ’22 as the new H1 for the 2BL, and I use May ’22. May ’22?

Tony  40:23

Yep, I’ve got May ’22 as the H2.

Cameron  40:27

But May ’22 isn’t a peak, real­ly, it’s a point but not a peak.

Tony  40:31

Yeah. Which is accept­able.

Cameron  40:33

But why would you use that, then, and not April ’22?

Tony  40:38

April’s a trough, part of a trough.

Cameron  40:41

No, its not.

Tony  40:43

Yeah, it is.

Cameron  40:43

How is it part of a trough?

Tony  40:45

One sides low­er than the point, so it’s half a trough just like the oth­er ones half a peak.

Cameron  40:51

Half a trough? But yeah, okay, but it’s a high­er point than May. Why pick May? It seems a bit arbi­trary to me. Why May and not April?

Tony  41:05

Well, first of all, if you use April there’s only two points in that line again. So, it’s not going to pro­vide a great trend.

Cameron  41:11

If you draw it through April it cross­es, the line cross­es through it. If I extend the line out through March and April, it ends up cross­ing it, like, well it cross­es it on the way down, but it cross­es. But yeah, it cuts off the May point.

Tony  41:30

Yeah, so, one of the things we do when we draw these lines is if we have a point that’s out­side it, we redraw the line to take that point into account.

Cameron  41:37

Even though it’s not a peak, it’s just a point.

Tony  41:39

Cor­rect. It’s a point, yeah.

Cameron  41:41

So that puts, if we take it through May, as the L2 for the 2BL. Sor­ry, the H2 for the 2BL. It brings, I think, the point it’d need to go above, the price of cop­per would need to be about $8220. It’s cur­rent­ly about $7834.

Tony  42:02

Yeah, I think you’re right with those num­bers.

Cameron  42:04

It’s on its way up. I mean, if I draw that line, con­tin­ue draw­ing it down and look at the direc­tion the price is head­ing in, it might cross it in the next cou­ple of weeks if it keeps going up.

Tony  42:17

Yeah, I would think so.

Cameron  42:19

But that said, if I look at the MACD lines at the bot­tom of the chart here, it’s crossed over recent­ly into neg­a­tive ter­ri­to­ry. Is that buys or sells, or is that just mov­ing aver­age? That is mov­ing aver­age, right? 12269, okay. Well, I don’t know what I’m read­ing then. What does the red line and the black line tell me with the mov­ing aver­ages?

Tony  42:47

I’m real­ly not a user of these lines, so I don’t want to ven­ture an answer with­out look­ing at it in more detail.

Cameron  42:53

Me either. Ignore all of that about the MACD. Bot­tom line is no, cop­per is not a buy yet.

Tony  43:01

Its close.

Cameron  43:02

The next ques­tion is from James: “did TK buy a heap of C6C today just to prove that we should buy from the top of the list?”

Tony  43:09

No.

Cameron  43:13

Well, they’re easy ques­tions. We had no ques­tions and I said to peo­ple, “give me some ques­tions,” and I don’t think they tried very hard with the ques­tion.

Tony  43:20

C6Cs pret­ty small, too, I don’t think I’ll be buy­ing that one. ADT of $52,000.

Cameron  43:28

Yeah, right.

Tony  43:29

Just on that, I mean, obvi­ous­ly BHP has seen some upside in cop­per by mak­ing this offer for Oz Min­er­als.

Cameron  43:36

Yeah, but, you know, they’ll regret their deci­sion not to fol­low the rules of QAV. They have a low IQAV.

Tony  43:46

BHP does­n’t have a great track record of acquir­ing com­pa­nies either, by the way. I guess for what it’s worth, and prob­a­bly not much, mar­ket com­men­tary around cop­per is it usu­al­ly only turns up when all the cylin­ders are fir­ing in the world econ­o­my. It’s kind of a proxy for world growth because you need cop­per for wiring, train lines, that kind of thing. So, cop­pers down for good rea­son at the moment. The world is not real­ly going any­where with all the prob­lems it has, so it may cross and hap­py to buy it, but I’m not sure it’ll be a last­ing trend. But I could be wrong.

Cameron  44:23

Well, some­body who think there’s mon­ey in cop­per are the two men who stole about $20,000 worth of cop­per from a build­ing site in Mel­bourne yes­ter­day.

Tony  44:35

That’s usu­al­ly a sign the price of cop­per is high. Fools, they should­n’t wait, wait for the cross. Give it back.

Cameron  44:41

Well, they’re gonna hold, they’re gonna sit on it. The price is going back up so they get to sit on it and just wait. “The two men were caught on CCTV steal­ing two drums of cop­per from a con­struc­tion site on Vic­to­ria Parade in East Mel­bourne. At about 2:15 am on Wednes­day July 20th, the footage has shown the pair strug­gling to load the drums into the back of an old­er mod­el Ford Ute before they dri­ve away. They fled towards Mel­bourne West accord­ing to police.” Reminds me a) of the scene in Break­ing Bad where Walt and Jesse are caught on cam­era steal­ing con­tain­ers of methy­lamine, I think, and strug­gling to get them down the stairs and all this kind of stuff. It also reminds me of The Wire for peo­ple who are fans of The Wire. One of the addicts in The Wire, Bub­bles, was always going past build­ing sites and steal­ing cop­per that he would then go back and sell to the build­ing com­pa­ny on site. “Hey, we just found this stuff walk­ing in the street, man. I don’t know, but if you want it, I’ll sell it to you cheap.” And the guy was like, “this is the fifth time you’ve done this to me in the last month.” He goes, “well, you know, if you don’t want it you can go pay retail for it,” and they sell it back to them for 20 cents on the dol­lar and uses that for his crack habit.

Tony  46:02

Those builders aren’t the kind of builders I know. Go and try that at the CFMEU sites and see how far you get.

Cameron  46:09

How many fin­gers you have when you walk away and legs that aren’t bro­ken.

Tony  46:12

Yeah sure, come in. Yeah, bring the cop­per in and we’ll have a good look at it. Yeah, I’ll just close th door.

Cameron  46:18

Have a cof­fee.

Tony  46:19

Don’t wor­ry. Our CTV cam­eras are bro­ken at the moment.

Cameron  46:22

Yeah.

Tony  46:23

You won’t be filmed. That’s always a ques­tion I’ve got when two guys steal cop­per, a roll of cop­per and put on their old ute. Where do they sell it? Is it on a trad­ing post? Two spools of cop­per, $50.

Cameron  46:38

They melt it down and sell it on Etsy as jew­ellery.

Tony  46:44

How do you melt cop­per down? Like, these guys are dri­ving an old ute. Just take it out to the forge?

Cameron  46:51

Yeah, well maybe they have one, who knows? Any­way, good luck with their endeav­ours. Steven asks, “I’m curi­ous to know the longest peri­od of under­per­for­mance TK has expe­ri­enced over the thir­ty years he has been invest­ing.”

Tony  47:06

Yes, I went back and had a look. So, two years dur­ing the GFC I under­per­formed, mind you the mar­ket was going down as well. So, that was ’07 and ’08, but in ’09 I out­per­formed by 100% so made it all back. And then there were three oth­er years over the peri­od of my records where I have one year under­per­for­mance. So, that’s five years on, I think my records go back about twen­ty-two years, some­thing like that.

Cameron  47:34

So, five years or three years?

Tony  47:37

So, I had the two years dur­ing the GFC and that was the longest peri­od of under­per­for­mance, but I had three sep­a­rate one year under­per­for­mance.

Cameron  47:47

Right, and you nor­mal­ly recov­ered after that one year strong­ly.

Tony  47:51

Yep.

Cameron  47:51

And were those peri­ods, the two years was obvi­ous­ly the GFC when the mar­ket was down. The oth­er three years, did they coin­cide with mar­ket cor­rec­tions or were they just…?

Tony  48:01

Just ran­dom I think, I don’t know. I mean, it hap­pens. I mean, you know, you can be in the wrong sec­tor, or what­ev­er. It does hap­pen. Just like it’s hap­pen­ing now for our dum­my port­fo­lio for what­ev­er rea­son.

Cameron  48:12

KT has a ques­tion: “is TK ful­ly invest­ed cur­rent­ly, or still being cau­tious?”

Tony  48:17

Well, they’re not mutu­al­ly exclu­sive. I am not ful­ly invest­ed, and I’m try­ing to get back into the mar­ket, it’s just tak­ing time. I actu­al­ly signed the forms to allow my stock­bro­ker to claw mon­ey out of my bank account direct­ly, which I’ve resist­ed for a long time, so now I can trans­fer big licks across. But it’s just been that the mar­kets are still a bit volatile. So, you know, for exam­ple, today I bought some AMP, and I bought some last week, but in between the share price went down a lit­tle bit so I put the brakes on. So, it’s just real­ly get­ting back into the mar­ket in an order­ly fash­ion, I guess. Even though I’m still not try­ing to buy any­where near the ADT vol­umes for a stock, I’m still try­ing to also break it up a lit­tle bit so I’m not going to push the share price up with my pur­chas­es.

Cameron  49:03

Yeah, right. There was a cou­ple of large caps that came up for me yes­ter­day, one was Heal­ius, and I think GMA was the oth­er large cap.

Tony  49:13

Oh, okay. Yeah.

Cameron  49:14

GMAs prob­a­bly not large cap enough for you, though.

Tony  49:17

Right.

Cameron  49:17

Aver­age Dai­ly trade of $2 mil.

Tony  49:19

Yeah, no, not big enough.

Cameron  49:21

Heal­ius is about $10 mil, though.

Tony  49:23

Yeah, I looked at Heal­ius. I haven’t seen what it did today, but every time I went to buy it last week it was on a down day. Yeah, see it’s down a lit­tle bit today as well. So, I’d pre­fer, like, I’d pre­fer to see if that trend keeps going down or whether it turns up with some strength. I am try­ing to buy back into the mar­ket, it’s just tak­ing a lit­tle while.

Cameron  49:42

Well, that answers that ques­tion. Last ques­tion from Simo, Simo of the catch­phrase: “ques­tion for Tony. Can Tony please do a pulled pork on SDG, Sun­land Group? It’s been a stock of the week recent­ly. Had a good look, could­n’t see a recent break­down.” Do you remem­ber doing SDG?

Tony  50:04

Yeah, I do. Pret­ty sure I did that one. It’s a Gold Coast prop­er­ty devel­op­er.

Cameron  50:10

Not com­ing up in my list but I’ll have anoth­er look for you, Simo, and I’ll let you know.

Tony  50:18

Yeah. If we’ve done it, we’ll let you know, if we haven’t we’ll do it for sure.

Cameron  50:22

Okay, added to the list. That’s it for ques­tions. Very light on ques­tions recent­ly, not a lot going on. I think peo­ple know every­thing.

Tony  50:31

It’s a smart group of peo­ple.

Cameron  50:35

Yeah. Let’s get into after­hours…

Cameron  1:09:59

The QAV Pod­cast is a pro­duc­tion of Space­craft Pub­lish­ing Pro­pri­ety 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.