Transcript QAV 351 – BUNNY BOILERS

File: QAV 351 – – BUNNY BOILERS

Length: 1:09:168

Tony Kynaston [00:05]: I said I was ready and I realized I had a cup of tea brewing so; I can get it.

Cameron Reilly [00:09]: Okay. Outside your room?

Tony Kynaston [00:15]: Yes, I’m sitting in a quiet bedroom in Wagga, who would know that in Wagga could be so noisy.

Cameron Reilly [00:21]: What’s going on in Wagga?

Tony Kynaston [00:23]: Cars?

Cameron Reilly [00:26]: What are you doing in Wagga? Tony.

Tony Kynaston [00:28]: Visiting my friend Mark Rudd, having a [inaudible 00:30] time.

Cameron Reilly [00:32]: Didn’t you just get on the piss with him like a week ago? I thought you were still recovering from being on the piss with Mark the last time we talked.

Tony Kynaston [00:40]: It a common theme. We had a good old chinwag and a half a bottle of scotch and a few bottles of red wine on Saturday night, which was good. [Cross-talking 00:49].

Cameron Reilly [00:49]: Which scotch were you drinking?

Tony Kynaston [00:51]: The cheap ones. I bought that bottle that you were given.

Cameron Reilly [00:55]: BenRiach.

Tony Kynaston [00:56]: It’s the one. But we haven’t opened that one yet. We’ve been getting rid of all the old Glenmorangie, which is not bad.

Cameron Reilly [01:04]: Well, welcome back to QAV. Everyone. Episode 351 was recorded on the second of November 2020. Two days, I guess in Australia before the presidential elections in the United States just had the election in Queensland on the weekend. And a star was brought back in and picked up some seats. I think so, I assume that’s a little bit of a golf clap for her for keeping our border closed despite the furor from the Murdoch media.

Tony Kynaston [01:42]: Do you think the border should be open?

Cameron Reilly [01:43]: I think the borders should be open when our chief medical officer determines that it should be open.

Tony Kynaston [01:48]: Yes, I agree. Do you know the political affiliations of the chief medical officer?

Cameron Reilly [01:53]: I die. But I’m not qualified to make any decisions about anything really, little I know how he handles a pandemic.

Tony Kynaston [02:06]: Well, I think you’re right, Cameron. I think Australia has done incredibly well at managing the pandemic. So, it’s hard to criticize, isn’t it?

Cameron Reilly [02:12]: Yes. Well, look, on one hand, Queensland has been fairly open since June.

Tony Kynaston [02:17]: Fairly open? Or you mean within Queensland?

Cameron Reilly [02:20]: Within Queensland, yes. Queensland has been open for business internally. We’ve gone back to normal since June. Meanwhile, Melbourne was shut down for many more months and the rest of the world’s exploding. I don’t know. I’m reasonably happy with the way all of our politicians have handled it. I mean, the Melbourne thing was unfortunate, but outside of that, I think everyone’s done a good job and deserves a golf club.

Tony Kynaston [02:48]: I’m in full support of that Cameron. And I think all these people who are trying to make party political points; however, they’re not seeing the forest for the trees. Really.

Cameron Reilly [02:56]: Tony, one thing that you and I a couple of awkward and uncomfortable things we should probably talk about this week. The first is I will be returning the cardiac watch that you gave me at the end of our last financial year because I don’t want you to have to resign over it. That would be disappointing.

Tony Kynaston [03:19]: But again, that’s a bright shiny object, isn’t it the land around the airport gets sold for 10 times its value but to look over here, this person gave cardiac a watch to this guy.

Cameron Reilly [03:35]: I got to tell you, anyone who knows me knows I’m not a huge fan of Australia Post. I spend way too much of my life complaining about what an absolute cluster Australia posters operation is. So, there are many reasons that I would have liked to have seen her resign or get fired. This isn’t one of them. But from a customer’s perspective. I just find Australia Post complete backwoods stuck in the 1983 disaster. A bit like [cross-talking 04:08].

Tony Kynaston [04:09]: Just want to say I don’t share that point of view. And if Australia Post wants to stop delivering to [inaudible 04:14] that’s fine with me.

Cameron Reilly [04:18]: Hey, don’t give away my address on the podcast. You want me to start giving away your address.

Tony Kynaston [04:22]: You have already.

Cameron Reilly [04:25]: No, I posted a photo, and then I took it down.

Tony Kynaston [04:29]: Okay, we didn’t run this.

Cameron Reilly [04:33]: Well, in the case went out to lunch with Steve Madden the other day and he goes I believe it was your birthday. Okay, yes did you bring me anything? He said no. I said okay. He did shout Taylor at our lunchtime so, I can’t complain. But if people want to send me a belated 50th birthday address now they know the street address anyway.

Tony Kynaston [04:51]: Just don’t use Australia Post.

Cameron Reilly [04:54]: You get a [inaudible 04:55]. Don’t go to Australia Post. We did that interview with Steven Moriarty. And that we put out last week and he made some commentary on Kate versus Kelly, before that earlier in the week, and he wasn’t happy. And I did a little bit of a preamble before I put the interview out. Thursday, I think it was the people who already know the story. But I guess do you want to add any comments? Or is that just likely to get us into more trouble?

Tony Kynaston [05:33]: Well, the only comment I’ll add is that, if we’ve offended, Steven, I apologize, not they are intended. I think the context for what I said about Kate and Kelly affecting the performance of my portfolio would have been put into the proper context by our listeners, who knows that I’ve done such testing in the past to see if I can improve based on things, we’ve learned by interviewing people. And in this case, it didn’t work for me, it doesn’t mean I was disparaging Steve’s book or his methodology. And I think even during the interview, we both said, or after the interview, we both said, Look, it sounds like a great system for someone who doesn’t want to go to all the trouble of stock picking as we do. And I still stand by that. And I’d also just invite Steve, if he wants to come on and talk about it with us or rectify any mistakes, he thinks we’ve made, please come on. We aren’t in the habit of doing hatchet jobs on people. And that’s not what they are intended. And I thought it was a good interview at the time. And if he wants to come back, he’s more than welcome.

Cameron Reilly [06:40]: Well said, we might talk a little bit more about Kelly, later on, depending on how we go with the time. But before we get into that, markets, taking a bit of a beating again, so far today, Tony, but is something that I just wanted to point out to our listeners, something that I’ve been thinking about a lot is the way I see our job. My job now as a freshly minted value investor. Baby steps wearing diapers value investor is my job is to beat the [inaudible 07: 22] in Australia to beat the market. Ideally, we want to double it, but that’s it. That’s all I care about when I’m looking at our results week on week, month, or month, year on year, is are we achieving what we want to achieve? And what we want to achieve, I think is, outperforming the [inaudible 07:45] getting our 15 to 20%.

On average compounded year on year, with relatively low risk, not no risk, but relatively low risk, we’re not taking huge risks here, we’re investing in companies that we think are undervalued and perform well and aren’t going to disappear tomorrow. And we’ve stopped loss if they go south for some reason, and without putting in a huge amount of effort, don’t have to spend 50 60 hours a week on it. And just to get a 15 to 20% or to double the [inaudible 08:20], depending on what the [inaudible 08:22] is doing, we say 15 to 20%, because it usually, on average over time perform somewhere between 9 to 11%. And that’s it. So, I feel good about that. As long as I look at that thing. And we’re at the moment, as of this particular moment, my dummy portfolio says the [inaudible 08:39] growth since the 31st of August, when we clicked over into our new year with our portfolio, because we started at the beginning of September last year, [inaudible 08:48] is up 0.13% was negative about an hour ago, were up 1.4% in the same period. So, 1.4% doesn’t sound like a lot, although it’s only two months. But compared to the [inaudible 09:00], it’s significantly better. So, I’m good. Is that how you think of it? Or am I off track?

Tony Kynaston [09:09]: Now that’s how I think of it, I’d probably add a couple of things there. You could say its kind of a false [inaudible 09:16] to say we’re at 1% when the ordinaries are flat, and that’s a great thing it is. But ideally, we want to get more than that. But I think we are somewhat tied to the market. So even though I try and be contrary and it’ll be very unusual for us to be going up when the markets going down, for example, or vice versa. So, we are still directionally following the market. That’s why I think the double market is a good result. And I think if we’re not getting that sort of 15% plus figure then we should look at alternative people out there who are getting more than we are and invest with them and from time to time that happens but over the long haul, I think I’ve been able to beat most of the other performers in the market. And that’s important that you judge things over a 10 or 20-year horizon and not last year, or even the last couple of years, or the current months sort of thing.

Cameron Reilly [10:10]: That’s hard to do if you’re just getting started. So, it’s okay for you to do that. But for us, how do we measure our success year on year?

Tony Kynaston [10:19]: Well, they report the fund management performance every six months. So, Morningstar, do it and Constar do it. So, you can always go and have a look at those. And they generally will have a long-term return for the people who’ve been in the market for a long time. But generally, I find that for fund managers that we can invest in either their funds are getting so big, that they start to have a bit of inertia, as Buffett always says, they do because of the amount of cash they have to deploy, or they can’t sustain high performance for a long period. So, whatever their system is, it works. It goes in cycles. Whereas if we’re sort of trying to take out the bad stocks from the market and find the good ones, and then find the good ones with the price well, I think, yes, we’re kind of directionally going to follow the market, but we should do better than the market. And that’s the aim.

Cameron Reilly [11:16]: My question in terms of the 20-year thing is, I can’t look at my 20-year performance, measure how it’s doing, all I can look at is, week to week, month to month, and what should I be looking to achieve in that period? I guess? That’s my question is, how do I know if my portfolio’s doing as well as it should? Should I be comparing it to the [inaudible 11:39]? Or should I be comparing it to something else?

Tony Kynaston [11:43]: Should compare it to the [inaudible 11:44] if we can’t beat the [inaudible 11:45] and go and buy an index fund and golf and play golf, and don’t even bother trying to do it for yourself. But I think we can do better than that. My second point was when you have enough history, then go and compare yourself to some of the other fund managers and make an educated decision about whether you should be investing with someone else or doing it for yourself. But I think you need a couple of years of history behind us before you start making that big decision.

Cameron Reilly [12:12]: Until then?

Tony Kynaston [12:15]: Keep doing what you’re doing. If we underperformed the all ordinaries change, but now I think we have to keep doing what we’re doing.

Cameron Reilly [12:23]: Right.

Tony Kynaston [12:25]: I once read a book many years ago, I can’t remember its exact title, but it was something like growth with the double market and the author set out to show that the good companies and I guess like kind of class myself as a company because I’m in the business of investing. Investing seems to be money into stocks, but it could be money into widgets. And generally, I forget what the numbers are but once you get to about double market growth, then you’re sort of really maxing out the ability of someone to work well given the constraints of operating in a particular market. And I think that’s important to know, as well. You could probably look at some people’s returns in the short term. And if they’d been invested in some of the internet growth stocks or the buy now pay later stocks, they’ve had a terrific year. But I know I wouldn’t feel comfortable investing in those because I don’t know when they’re going to turn south and turn south heavily.

Cameron Reilly [13:25]: Well, I figure if Buffett’s sort of goal performance has always been bad double market, then that sounds like a pretty good benchmark to go for.

Tony Kynaston [13:37]: I agree. That’s one of the benchmarks, which we should use is, again, if we can’t beat Buffett, then let’s put them put their money in Berkshire Hathaway.

Cameron Reilly [13:47]: $400,000 to buy a share?

Tony Kynaston [13:49]: Well, they do have a baby book. So, you can buy fractional shares.

Cameron Reilly [13:53]: I’ll do that. Okay. So, I’ve been reading the little book of Behavioral Investing by James Montier recently. Are you familiar with that one?

Tony Kynaston [14:04]: No, but I’ve read [inaudible 14:05] thinking fast and slow. Is it similar to that?

Cameron Reilly [14:08]: Well, the beginning of its exactly that instead of talking about [inaudible 14:15], system one and system two. I like this because he calls it McCoy and Spock, the McCoy brain, and the Spock’s brain.

Tony Kynaston [14:28]: That’s not bad.

Cameron Reilly [14:31]: So, he says, The McCoy brains the emotional one. And the Spock brains, the logical brain. And he talks about the problem that we have getting our brain to think logically and not jump to conclusions. And he talks about these three questions, which I’ve seen before they pop up on Facebook and stuff, and I’m pretty sure that these were all part of my interview questions when I was interviewing for Microsoft 20 years ago. But he says Shane Frederick of Yale, formerly of MIT has designed a simple three-question test which is more powerful than any IQ test or SIT score and measuring the ability of the SI system as he calls, I think that’s the Spock brain to check the output of the x system together. These three questions are known as the cognitive reflection task, the CRT, consider the following three questions a bat and a ball together cost $1.10. In total, the bat costs $1 more than the ball. How much does the ball cost?

Tony Kynaston [15:37]: [Inaudible 15:36] in total a bat costs how much more than the ball? Sorry?

Cameron Reilly [15:40]: A $1 more.

Tony Kynaston [15:42]: Okay, so the bat costs $1.5, and the ball costs five cents.

Cameron Reilly [15:48]: Tick. All right. Okay, you go through to the next round, Tony. Question number two, if it takes five minutes for five machines to make five widgets, how long would it take 100 machines to make 100 widgets?

Tony Kynaston [16:04]: That’s a good question. It sounds like these are quick questions. And it’s trying to get me to say five minutes. But if five machines take five minutes, then 100 machines should take 20 times as long maybe. So, 100 minutes?

Cameron Reilly [16:19]: No, five minutes?

Tony Kynaston [16:21]: I got it right the first time.

Cameron Reilly [16:28]: And the third one’s the old thing about the lily pads doubling in size every day. If it takes 48 days for lily pads to cover an entire pond. How long will it take to cover half the pond?

Tony Kynaston [16:40]: 47 days.

Cameron Reilly [16:42]: Right. So, he says psychologists have explored this question and come up with the following conditions which increase the likelihood of X system thinking when the problem is ill-structured and complex when information is incomplete, ambiguous and changing when the goals are ill-defined, shifting or competing when the stress is high because either time constraints and or high stakes are involved when decisions rely upon interaction with others.

Tony Kynaston [17:12]: So, I think that point about stress is really important. And that’s one of the things we spoke about way back at the start of the podcast is if we can think in units rather than thinking dollars, and get used to managing money and pushing money around and becomes less stressful for you, as the numbers get larger.

Cameron Reilly [17:32]: You think of it in terms of just pieces on aboard.

Tony Kynaston [17:39]: Yes, Buffett’s always said, it’s not the dollars that motivate him it’s the game that motivates him. And so, if you think of it as a game, and these are just units you’re playing with or tokens, it’ll take all the stress out of it. And I think I maybe controversially said to people go down to the racetrack with 1000 bucks and get used to moving money around that might hurt you if you lose it.

Cameron Reilly [18:05]: This is not financial advice. Just want to be cleared Tony is not a financial advisor.

Tony Kynaston [18:09]: You said that last time. And I’m also trying to segue into my Melbourne Cup tips as well.

Cameron Reilly [18:16]: Well, let’s leave that to the end of the show, make people sit through everything before they get to that. Now people are fast-forwarding, so we’ll put it in actually 20 minutes and the people who fast-forwarding.

Tony Kynaston [18:26]: We talk about that 19 minutes ago?

Cameron Reilly [18:33]: Or did we? You have to listen to the whole thing to find out. My point was going to be one of the things and I know I’ve probably said this in different ways before but one of the things I really like about the checklist system is it’s helped me remove the emotion from investing once I felt confident that the system worked, which mostly I had to accept initially on your say so, but then we did our first year of the portfolio. And that added additional evidence that it works certainly beat the [inaudible 19:08]. And then, once I’m confident in using the checklist, how to get the QAV score and rank the QAV score, these days when I go to buy something or go buy a stock. I feel very little emotion involved in it. It’s like okay, well, this is a transaction, I’m buying one of the stocks that the system has produced, the stock may or may not do well if it doesn’t, I know what to do if it does great. But the chances are that it will probably do well. The odds are that it will do well rather than it won’t do well. And it’s just made it sort of a lot easier for me to execute it. It’s kind of a weird feeling when I’m doing it, now it’s like, I’m sort of a little bit removed from the fear and the emotion and the anxiety of throwing my money out there.

Tony Kynaston [20:09]: And [inaudible 20:10] That’s right. And Buffett and Munger have always said that have a system or a framework to invest in, and that’ll take the emotion out of it. And I mean, critics of this kind of style of investing will often say it’s robotic. But to me, that’s one of its big advantages. It’s robotic. We’re applying an algorithm and it takes the thinking and all the emotional input away from it.

Cameron Reilly [20:32]: And if you trust the algorithm, and the system will work over the long term, okay, it’s like, turn on the light switch. I’m not nervous as to whether or not the lights are going to work, or the electricity is going to flow. I just trust the system. And if it stops working, then I’ll worry about it, then most of the time, it just works anyway. But I like the McCoy and Spock brain better than system one, system two, I like that. That’s a fun way to think about it.

Tony Kynaston [21:01]: It is good, isn’t it?

Cameron Reilly [21:02]: One of the things that Damian Parker suggested we do was pick three stocks each week to talk about that if you were going to buy something this week, what three stocks would you buy? And why? Do you want to start there?

Tony Kynaston [21:22]: Apologies, I’ve only really got one to talk about this week. And as you know, I’m having a bit of a break in August. So, I haven’t done a download for a couple of days. But I did write a stock journal last week before I left. And in that journal, people may have seen it. But MFF, the Magellan fund is has broken at three-point cell lines. So, we’d say up. But sand fire resources and the code are SFR has just become a buy. So that’s that would be the one that I would ask people to look at. And again, this is another recommendation. I think even when Damian suggested this, he suggested we do this as a way for him to start his research. And I think that’s a really good way of contextualizing it. So, sand fire resources have come into the buy list. And if I had some spare money this week. That’s the one I’d be buying. And if I just do a bit of a talk about or summary of Sandfire.

Cameron Reilly [22:20]: Can I stop you before you do that? It’s way down on the buy list. Why are we looking at that with a score of point two, seven, and not something with a higher score?

Tony Kynaston [22:35]: I’ve got point three, three. So, I take your point, the reason why I’d be looking at is its average daily trade, which is over $4 million per day. And that’s one of the things that I have to do when I’m filtering stocks on my buy list is to take the one that we publish, but then pull out the ones which are too small to invest in. And that leaves the big ones. And so, I’d be looking at the sand fire, which has 4.156 million traded every day, on average.

Cameron Reilly [23:05]: Okay, fair enough. So, it’s a big enough stock for you. But what date did you do this download the one I’ve got up in my portfolio. The last buyer list is on the 27th of October. That’s Tuesday.

Tony Kynaston [23:19]: I think it was after that. And I just have a look at the stock journal yesterday at 5 pm. Yes, it reads Hi, Cam MFF capital investments breached that cell line recently is removed from the buy list. And sand fire resources have just crossed its byline. And is added to the buy list with the QAV score of point three, three.

Cameron Reilly [23:39]: Yes, didn’t get it [inaudible 23:40].

Tony Kynaston [23:41]: Anyway, I didn’t do a full download. I raised an alert for a price alert for it in stock doctrine, which is why I got a message from them saying it had become a buyer. I think on Friday afternoon, I got that. And then did a bit of analysis over the weekend and came up with it, edit it to the QAV buy list. So, it’s a gold and copper miner. And I think that’s a fairly important thing because both of those commodities are doing well at the moment coppers just turned up. Gold’s been up for a while. And I’ve got an only sand fire in the past before disclosure, but I’ve breached its three-point trend line a little while ago. Let me have a look at the chart here. Sand fire went right up to a high of like $9 and then started to come off. And I sold it on the way down as we do about, I would think somewhere around $7.50. So, it wasn’t too bad for me.

And it’s just heading up again. The thing I needed to just outline about sand fire resources is its mind. And there’s always been a question over how long that mind has to go before it exhausts the audits in the tenement. And the last time I looked at it was about three or four years, so It’s coming to the end of its mental life, which always makes people a bit nervous. But it is taking an awful lot of money and exploring for replacements to that mind. And in the last week or so it signed a deal for a tenement next door to the grace of mine, which is the one I’m talking about, which gives it I think it’s like 80%, I think of joint venture ownership of that particular tenement. And so, it’s trying very hard to find other mines in the area, which will allow it to leverage its current infrastructure at the Grasa. But continue to mine golden copper, after the Grasa runs out of all.

Cameron Reilly [25:41]: Okay. And you bet you like this, for what particular reason, the just the copper uptick side of it?

Tony Kynaston [25:49]: I think so. The share price has ticked up, I think last week, because of the signing of the JV with the mine next door to Grasa. So that’s probably what’s driving sentiment at the moment. But I think the copper price increase will also start to see the share price going north as and if you think about mines, as highly leveraged plays on the underlying commodity price, so every time it’s a bit like thinking about internet startups, when they talk about every new customer goes straight to the bottom line, once the commodity price reaches break-even for the mine, every dollar of all sold goes straight to the bottom line. So, the underlying commodity prices are important and coppers just turn is going to go up. So, if it continues to go up, then it’ll be really powerful in terms of supporting the share price for all copper miners, but potentially this one as well.

Cameron Reilly [26:47]: Okay, so not financial advice. But if you’re looking for something you might want to do some analysis. That reminds me of last week, we replaced think something in our portfolio. Remember what it was?

Tony Kynaston [27:11]: I think we took out grange resources and put in CAA and C6C.

Cameron Reilly [27:16]: And there was some discussion on our QAV club, Facebook page, about one of those, whether or not it was gained benefit. Let me just dig that up. Tim suggested I don’t buy into CAA on the Facebook page. I think because he didn’t want the Cameron curse to kick.

Tony Kynaston [27:45]: Fair enough, Tim. It’s only [inaudible 27:48] portfolio at the moment. So, you’re safe.

Cameron Reilly [27:51]: There we go. It was from Brett, what Brett said really interesting to hear following the three PTL of commodities which led to buying CIA from what I can tell the CIA produces Aluminium products, not Aluminium itself. So, with higher Aluminium prices hurt rather than help them.

Tony Kynaston [28:11]: That’s a really good point, I think it depends on the pricing power of the CIA to sell Aluminium product. But generally, I would have thought if the commodity inputs going up the like they would be able to put their prices up. And I would think most people in the market will do that. But it does require I would have to do a fair bit of analysis to look at the pricing power of the CIA. This is what they call low cortisol costs costing come in. So, I don’t know where CIA sits on that kind of graph, but the company that can produce the product, the widget, the Aluminium widget in this case, but the lowest court or price will get the most benefit in terms of pricing power. So, I’d have to do a lot more analysis to work out whether that’s the case or not. So, I take the point that was made. It’s not necessarily the commodity input price that will cause problems if they can’t pass it on to their customers. But I would have thought that given all the Aluminium producers will have similar price increases that they probably will pass on those prices.

Cameron Reilly [29:34]: Right. [Cross-talking 29:35]. Well, good question, Brett. We’ll keep an eye on it.

Tony Kynaston [29:39]: I’m trying to think of an analogy. It’d be a bit like if a steelmaker could not pass on. Its price increases even though the iron old prices of its all-time high at the moment. They probably are still makers out there who can’t do that.

Cameron Reilly [29:56]: Well, I was going the other way when the RBA put out an interest rate cut, and the banks just don’t reduce their home loan rates. The inverse of that scenario.

Tony Kynaston [30:11]: And that’s one of the things that Buffett looks for is there some kind of moat that they can keep their prices higher even though the inputs are rising? And the banks have a moat? Because they just all have to look across the street and see what the other bank is doing. And if they all decide not to pass on the rate decrease in happy days for them all.

Cameron Reilly [30:34]: I thought, when you were saying moat there, I thought you were gone like regional Australia, you were like hey mate, how’s it going mate? You’re good mate?

Tony Kynaston [30:45]: No, his name is the moat that Buffett talks about the moat around the business. And it’s the quick summary it’s a moat exists when a company can raise prices when others would win at a higher rate than their inputs when others can’t.

Cameron Reilly [31:01]: Like apple?

Tony Kynaston [31:02]: Yes, exactly.

Cameron Reilly [31:06]: The top-of-the-line iPhone now is like $2,000. It’s crazy.

Tony Kynaston [31:14]: Yes, it is, isn’t it?

Cameron Reilly [31:18]: Imagine going back 20 years ago and trying to tell somebody you’d be paying $2,000 in 20 years for a mobile phone. We thought everything would get cheaper.

Tony Kynaston [31:29]: The thing was 20 years ago; we were paying $2,000.

Cameron Reilly [31:34]: That’s right. Well, in 1990, when I bought my Motorola, my first Motorola brick phone. I think it costs 1000s. You’re right. And had about 30-minute battery life. I had to screw on the antenna. And everyone who saw me using it would call me a Yuppie Wang.

Tony Kynaston [32:01]: Exactly. I’m guessing you’re driving a BMW back then too.

Cameron Reilly [32:05]: No. those were before the BMW years. No. I wish. Okay. John mentioned last year. And so, he asked the question last week, but he wanted some clarification on it this week if we can. Last week’s question was, some of the companies on the buy list use their retained capital more effectively to make more profit than others? This is measured by return on equity or assets. Some also grow their sales more than others. Could we rank these higher? And I think you said its sort of factored into some of the financial ratings that we look at. And you also suggested John may be tested out. And this week’s question is, how does he test this out?

Tony Kynaston [32:54]: Good question. I’m not sure that are we and sales growth are factored into the checklist. So, it’s worthwhile exploring. And I’d probably add return on invested capital to that list as well, which is, I think what John’s also alluding to with his question. So, both of the metrics of return on investment in sales growth are available on the stock doctor. So, we can certainly do some filtering on the current results. But unfortunately, we don’t get to filter the historical data from the stock doctor so, in an ideal world, we’d have, say, five years’ worth of data for our checklist companies. And then we could add the two new metrics return on equity and sales growth and see if those were added to the checklist, whether it would help us to improve our returns. And at the same time, I think what I probably do is also just look at the report, I rank companies by those two metrics, are we in sales growth, and take the top 20 and look at those returns and see if they are independent of our checklist did better or worse than our now QAV the returns because that can also be a good way of seeing whether they should be added to the checklist, the problem is getting access to that data.

So, I have thought over the course of the podcast series, I should go to the stock doctor and see if we can somehow get maybe a data dump of all data. So, we can do tests like this, so I’ll do that. But the other way to do it is to accept the fact that we don’t have a decision now. And if John wants to, he could add a couple of columns to both the stock doctor QAV filter that we use and the master checklist download, and over the next six to 12 months, just see if those two things are improving the score, or they’re improving the returns on the checklist. And also, as I said, do a separate download for just those two metrics. And then rank companies by taking the top 20 companies and see if a portfolio that was only invested in companies that scored high on those two metrics outperformed QAV because that’s another interesting analysis to do.

My gut feel says and I haven’t done that, but I think those two metrics are ones that people commonly focus on. So, I would think that the top 20 companies by ROE and sales growth would probably be heavily populated by all the very high-priced companies. So, it’s really interesting to see how things have evolved in the market because ROE, in particular, was always something that people, like I think, from memory Peter Lynch, would say was the go-to metric you want a company that if I invest $1 in it, and then it earns $1, and it can reinvest that dollar and make a good return higher than the market return. And that’s kind of like an investment flywheel. So, it’s getting my dollar and it’s reinvesting it at a high rate of return, and therefore, it’s going to compound quickly. So, back before the Dotcom Boom, companies that could be very light with their manufacturing, or maybe advertising companies that didn’t have many assets, would typically fall into the hierarchy camp. So, they could grow earnings and grow sales, without having to invest too much in their business. Then along comes Dotcom Boom. And suddenly it had, I guess you could call them factories producing products, but they just did it all digitally.

And so, yes, you still had an investment in databases, and I.T cost but they were oftentimes a lot less than having to go out and buy or build factories, or go and buy and build stores. And so, there are always were high multiples higher than a typical industrial factory. And so, they became very popular because up until Dotcom Boom, people were always pushing that ROE was a great metric. So, I think my gut feel says if we added ROE to a checklist, we’d start to introduce some of the higher value companies into our analysis, and my Sorry, not higher value companies, higher price companies into our analysis, and they probably fall off at the hurdle of price to operating cash flow. So, I guess what I’m saying is, it’s a good analysis to do. But we’re moving away from being value investors if we start to invest in that type of company. Is that clear? Cam? Do you have any questions?

Cameron Reilly [37:28]: Yes, I do. So, our checklist already looks at consistently increasing equity.

Tony Kynaston [37:37]: Correct.

Cameron Reilly [37:38]: Doesn’t that in a way pick up, return on equity companies that consistently increasing their equity, getting a better return on equity than those that aren’t consistently increasing their equity?

Tony Kynaston [37:53]: Yes, it does. As long as the ROE company is putting its increased profits back into equity. I’m just thinking out loud here. You could have, for example, a mining company with a high ROE that uses the return it’s made on its equity to drill for new mines, and therefore the equity isn’t growing. So, there should be a correlation. But it doesn’t always work that way.

Cameron Reilly [38:18]: I see. So, they can have a good ROE way, but not consistently increasing equity at the same time.

Tony Kynaston [38:25]: Yes, they should. But sometimes, if they’re developing products, or looking for new mines and stuff like that, they’ll use up that high profit and pull it back into their own company. We are to invest in the company, but necessarily the equity.

Cameron Reilly [38:40]: Right. Well, John there goes if you want to test that out.

Tony Kynaston [38:44]: And look, it’s the way I do things, I often have thoughts like this. And then I set up like a sidebar in my spreadsheets and do a download and check maybe a couple of hubs of returns and see if it’s making a difference, as opposed to going back and trying to get data and do a regression test. So that’s how I do it.

Cameron Reilly [39:05]: This could be a way of just getting access to a big dump of historical data, you would think? [Inaudible 39:13].

Tony Kynaston [39:13]: I guess that someone like Reuters, or the people who are applying or providing data, the stock doctor will have it, but they probably charge a lot to get out. So, I think the first port of call is to talk to the stock doctor who already has it, and see what other arrangements we can get from them to get access to historical data. Because if you look at the stock doctor you can go back into the prior halves and see what a different era we use. And certainly, we could go back for those companies that were in our portfolios in the past and see if the ROE was high that’s another way of doing it or if their sales growth was high, and try and form a view as to whether we’d be better off investing in companies that were on our checklist, but we’re also high ROE in high sales growth. Just by doing it manually looking at the historical dollar and stock doctor. [Cross-talking 40:09].

Cameron Reilly [40:22]: Yes. Next question. Another one from Brett, I’ve been going through the latest buy and watch list and have some questions by list. LYL Lycopodium. Has it lost its sentiment looks like it crossed the cell line at some stage? During each of July, August, September, and October. A bit of a falling knife he asks LYL.

Tony Kynaston [40:56]: I agree, I think it says a sell, we should remove it from the buy list. And look, this is one of the issues. We need someone like Brett to come through and check these things. But one of the issues is there’s a lot of stocks on our watch list or court. So, the ones that get downloaded but don’t become buy because the sentiment hasn’t been confirmed as a buy without going but sometimes if it to a company, I think might be interesting, I’ll work out what I think the buy price is and raise a price alert and stock doctor. And likewise, for companies that I own, I’ll go through and work out their sell price and raise a price alert and stock doctor. That’s still fairly laborious.

And the other problem, of course, is that they need to be updated. Because the price alerts can go out of fashion or out of relevancy every month if a new high comes along, or a new low comes along. So, it still has to be monitored. So, I haven’t cracked yet how to do this in an automated sense. But I guess at some stage we will. And then we can spit out a report which says go back and look at things like a podium, it’s become a sale. And until that time, you have to do it manually. So, thanks, Brett, you can be our intern of the week for doing that manually for us.

Cameron Reilly [42:20]: So, do you have the Lycopodium chart in front of you?

Tony Kynaston [42:23]: No, I don’t but I call Lycopodium.

Cameron Reilly [42:25]: I’m just wondering what you think the byline looks like on this?

Tony Kynaston [42:34]: So, I think from memory, we said it was a buy when the high point was just before the COVID crash, and then the next high point was just to the right of that. So, the buy would have been somewhere around about April of this year. For those 40. It’s gone up and then down again since then. So, let’s come back to being a cell. So, Brett’s right. And the cell would have occurred probably around August has he said it would have been a cell. So that’s what we always say Cam that things are on the buyer list. But take it as a starting point for doing your research before you buy because the buy prices and sell prices may be out of date. And until we can automate the process. We are going to back in check.

Cameron Reilly [43:31]: You’re not checking the graph on each of every week?

Tony Kynaston [43:34]: No correct.

Cameron Reilly [43:37]: Okay, more from Brett here. He says on the watch list. CCV cash converters look like it broke the byline about three to 4 pm on the 26th of October. Being very specific, their Brett’s byline on the 26th of October was 0.201. Then it hit point 205. Similar to what happened with RXP on the 26th of the eighth at 11 am that bumped up at sentiment CCV.

Tony Kynaston [44:07]: What was I doing at 11 o’clock on the eighth? CCV cash converters. Well, I mostly heard about cash converters. I think it’s a little bit below its price at the moment. So, I’m looking at the first time point being March 2016. And then the-second-high point being March 2018. And I’m getting a buy price if I use my three-point train calculator of 19.8 since, and it’s currently 19. So, we can find it and so I said the-second-high point was March 18. But if you go down and use the rightmost peak, which I wasn’t inclined to do in this case, because there if I use that and draw a line with the highest point it did leave a peak exposed above that line. So that’s why I didn’t use it. But if you drew the second highest peak, then it could be a buy. That’s a fudge. So, if you use the rightmost peak is the second highest peak, then it could be a buy, but it’s that’s a fudge.

Cameron Reilly [45:15]: Okay, I’m just going to do a screenshot of these because someone asked me to include some three-point bylines in the weekly newsletter. That would have been Nick Bailey, Nick suggested he said, you know, I’m still struggling with the graphs and I would like some more visuals each week. And if you could send them through in the newsletter, that’d be great. So, good suggestion Nick I’m going to do that. So, let me do the ones that we spoke about today. Which I think of it.

Tony Kynaston [45:49]: And I think just cash converters I think Brett’s right it could be a falling knife because the share graph is high up left on the x-axis, it drops down to the low right on the graph and so it is in a downtrend. So, we need to see a fairly good breakout before we can say it’s a buy, I think.

Cameron Reilly [46:16]: Okay. RXP was Britt’s other one here. RXP services are limited. All right.

Tony Kynaston [46:36]: What was Brett’s question about RXP?

Cameron Reilly [46:39]: He said it was similar to cash converters looked like a broke the byline.

Tony Kynaston [46:45]: I’ll just have a quick look at it. So, I don’t think it has I’m going to look at this. I’m going to say that the highest point is November 16. At $1.035. And if I start to hold a ruler up to the screen, which is a simple test. And start at that high point, the next highest point, I think is going to be in December 2019. At 53 cents.

Cameron Reilly [47:21]: That’s where I had it as well.

Tony Kynaston [47:23]: In which case, it’s slightly above the share price at the moment where it crosses the x-axis. It’s currently trading at 34 cents as we speak. And it looks like it’s going to be just a bit north of that by a couple of cents.

Cameron Reilly [47:36]: May have been above that when Brett looked at it on the 26th of August.

Tony Kynaston [47:42]: That’s right.

Cameron Reilly [47:43]: I don’t know. But there was it was a while back.

Tony Kynaston [47:46]: We’ve often seen monthly graphs that can move over the month from being a buyback to being a hold.

Cameron Reilly [47:52]: But he was saying RXP bumped at cinnamon on the 26th of August. That was two- and a-bit months ago.

Tony Kynaston [48:03]: And it could of because that was the rightmost peak is the end of August. So, chances are it could have been higher at the time, in which case it may be in buy, but it’s time again.

Cameron Reilly [48:12]: The last one Brett asked us to look at does [inaudible 48:14] DKM he said it looks like across the byline in August and hasn’t gone near the cell line since. Is there another gate I’m neglecting its quality score is only 36%? But QAV scores point two three. So maybe based on poor quality? The chart for this one is interesting. It’s got a high point back in September 2016, which was pretty much the same price. It was at the end of August 2020, 27 15.

Tony Kynaston [48:50]: And so, before that equal High Point came up. The next going back to the left, the next high point would have been 26 cents in July 2018. And then drawing a line from the first high point, which is as you say, September 16 through July 18 would have given us the share price just below that peak of 27 cents in August 2020. So, it would have been a buy then it’s now slipped back below that buy, but it’s way above its sell line. To me, this looks like it’s sort of trading sideways. And in that range, which shares can sometimes do but no Brett’s, technically right? It has become a buy and we should add it to the list. And I just had a look at my latest download.

Before we came on to the show. And Brett said I think he had a QAV score of about point two, three due to mine. But I get point three, seven. And I think the reason why we different might be and Brett might want to checklist himself is that when [inaudible 50:03] was on our download list, but the sentiment was entered as no, none of the manually entered data was in. So, changing that sentiment to yes. And then going back and looking at the other manually entered data, boosted the score up for me to point three seven. I don’t bother putting into manually enter data if the sentiment is not a buy.

Cameron Reilly [50:28]: Just more work. So, before we move on, talk me through this one again. So, I’m not quite sure I understand it. So, it crossed its bylined. In August, then it’s dropped back below the byline. But as it’s above the cell line, it’s still a buy.

Tony Kynaston [50:48]: That’s a good question. No, I think it’s a hole. So, if someone bought it back in August, they can hold on, they don’t need to sell because it’s way above the cell line, which is going to be around about 13 cents, I would think. But I would stop buying once the buy price drops back below the buy price.

Cameron Reilly [51:09]: Right. Okay. I thought I’d missed something there but you know.

Tony Kynaston [51:13]: No, I see what you’re saying. So, should it be added to our buyer list or not? Good question. Thinking about it, maybe not. Because it stopped being a buy. It’s not a sell, but it’s not a buy.

Cameron Reilly [51:32]: And it’s not a [inaudible 51:33] either. Because it’s above the cell line.

Tony Kynaston [51:38]: We’ve had cases like this before, where it’s the share price has gone above the byline for a little bit, but then dropped back. And I think in one of the gold miners’ case, we saw because that was during the month. It was intramonth and I wasn’t. I didn’t think the end of month price would be above the ball line. So, we sold it. But certainly, in this kind of case, I would stop buying if the uptrend wasn’t continuing.

Cameron Reilly [52:02]: It’s in purgatory. It’s neither alive nor dead, me walking the earth nor in the afterlife.

Tony Kynaston [52:11]: It’s, it’s what the stockbrokers will call a hold.

Cameron Reilly [52:17]: Right. That’s boring. I like poetry better we’re going with that. It’s in purgatory.

Tony Kynaston [52:24]: So, we have to pray for it, that’s right.

Cameron Reilly [52:27]:  Well, if you’re so inclined. The last question is from Mark. M. He was asking about a selling price for SUL super retail group. This is a funny one. I had a look at this the other day when Mark posted on a Facebook group. And I was like, I don’t know what to do with this one man. This is crazy. Can you walk me through this one, TK?

Tony Kynaston [53:00]: Okay, so let me have a look, I’ll just call a graph up. What’s the question? Sorry, is it a buy or sell?

Cameron Reilly [53:06]: Well, what’s the selling price? Because if you look at the lowest price on the chart like Noah said, March 2020, something like that. What second point do you take here? Because it just goes pretty much straight up in that. I know we’ve done straight up somethings like this before, but maybe but remind me.

Tony Kynaston [53:30]: Okay. So, in this case, I think what we’re seeing is a whole series of buys and sells. So, you’re right, the buyers back on December 15 and then probably on August 16. So, it’s a buy definitely by August 20 but maybe even the month before that you’re probably August 20. So, then we’re looking for a cell line after August 20. And so that cell line would be the first lowest point on the graph is still March 2020. But then the next trough after our buy is going to be September 2020 which means that almost straight away it becomes a sell again so but then it goes up and becomes a buy again and then sell so it’s a bit like Santos and some of those other ones which are going up steeply but in gear but it’s almost like an upward Schrodinger or an inverse Schrodinger.

So, I see these are just being continuous until there’s a really strong trend continuously a buy than a sell and a buy and sell. So, you see the first sell point in March. When did you say the second one is? Let me have a look. September 2020. And that’s on the basis that the buy the stock was or the month before that in August 2020. I’m looking for the next trough after the buy. Where can I draw a sell? [Cross-talking 55:12].

Cameron Reilly [55:15]: Right? But you’re still starting it before the buy?

Tony Kynaston [55:18]: Yes, I’m still taking the first. Because basically what I’m doing in shorthand is saying, if I take the lowest point and the next lowest point, it becomes a sale, and a sell and a buy. And then that becomes a new cell line. So, if you do it like as if you’re a computer and iterating, it’s a whole series of buys and sells. So, the last step in our iteration is to find the most recent buy and then look for the cell line after that.

Cameron Reilly [55:43]: So, then it would have breached the sell line at the end of September, but then it went up in August. So how would you draw the new byline after that?

Tony Kynaston [55:54]: Well, it’s like I’m saying it’s an upward Schrodinger. It’s a buy and sells at the same time after that, isn’t it? I don’t think it’s calling you by a line from there. Because it’s been selling.

Cameron Reilly [56:06]: Sell line keeps going up.

Tony Kynaston [56:08]: It’s a sell. But at the same time, it’s above its last byline, but we keep getting sell signal. So, it’s a bit like these shares, which are falling nice, where they keep sort of jaggedly going down. This one’s jaggedly going up. And unfortunately, that’s a short shortcoming of this process, because it’s giving us mixed signals.

Cameron Reilly [56:36]: My brain just goes are too hard to find something else.

Tony Kynaston [56:40]: Yeah, I think mine does too.

Cameron Reilly [56:41]: Too complicated. It’s not like there’s only one stock to look at when I find charts like that, that is gone wacky. I’m like, too hard. It’s like meeting a gorgeous woman at a bar when she’s on the third bottle of wine and starts telling you some crazy stories. You’re like, this is going to be too hard. I’m out, there are other fish in the sea. I don’t need to process this one.

Tony Kynaston [57:17]: So instead of calling the Schrodinger as we should call them bunny boilers. That’s what we used to call crazy when you meet in the bar after bottles of wine.

Cameron Reilly [57:28]: Should say that the same applies to men. Bunny boilers, you can have male bunny boilers. Okay. Bunny boilers. That’s the new term. That’s the title of this episode. Bunny Boilers I like it. [Cross-talking 57:47]. We’re an errand five in probably no more time to talk about Kelly Investing. But you can give us your cup tip.

Tony Kynaston [57:57]: I want to talk about Kelly. So, look next time next week, we need to spend a good 20 minutes talking about the Kelly criterion of the Kelly formula. Not enough time to dial a guess but let’s make it top of the list next time. Okay. We bumped it twice now. And given it’s been a bit of a topic with our interviews with Mr. Moriarty, then I think we should talk about explain what we’re talking about to our listeners.

Cameron Reilly [58:25]: I was going to call you Sherlock this week. Because your Nemesis is now Moriarty. I forgot to do that at the beginning.

Tony Kynaston [58:36]: Yes, we don’t mean that. Steve, we’d love you to come back and talk to us on the podcast if you’re available and want to.

Cameron Reilly [58:43]: Maybe we do. Maybe I do. I watched a bit of a video by Tobias Carlisle. Coincidentally, during the week and he and these guys were talking about Kelly, the Kelly criterion for investing. I still don’t understand how you would apply it to stocks. And I don’t think they do either. They were just like Kelly’s Okay, to a certain point and then it just becomes more trouble than it’s worth. They kind of dismissed it as being overly complicated to try and apply to stocks.

Tony Kynaston [59:16]: I think that’s a good summary in terms of stocks. I think that’s a good summary. But I really would like to go through it with their listeners, because I think it’s a great piece of history and a great piece of math and I find it very interesting.

Cameron Reilly [59:30]: All right, well, let’s do it when you’re not in Wagga on the [inaudible 59:33]. The Wi-Fi on the [inaudible 59:39].

Tony Kynaston [59:39]: I’ve got Wi-Fi problems.

Cameron Reilly [59:41]: All right, give us your cup tip.

Tony Kynaston [59:43]: All right, so, cup tips. And again, I’m applying the quality value criteria here. So, I’m going to drag this out for five minutes. But the way I look at the Melbourne Cup and it tends to only work for the Melbourne Cup and I’m not sure if that’s because you’ve got really good horses in the Melbourne Cup or whether it’s because the handicapper medals a bit more in the Melbourne Cup than other races, or because it’s a two-mile race, which is very long and carrying even a kilo or half a kilo, in white difference can tell on the horse over that time. Over that distance, sorry, but what I like to do is to look at the writing of the horse, and just quickly, all the horses in the Melbourne Cup, all the horses that write in Australia get a horse racing. And it’s a way of trying to standardize their performance across different venues and different countries. In other words, if someone wins a group one overseas, they’ll receive a rating.

And that’s done statistically looking at the performance of horses who won that race. So, when they come to race in Australia, we can judge the ratings of the horses here against the ratings of the horses overseas. So writing is a good way of checking for quality. But because this is a handicap race, horses will carry different weights. So, what we’re looking for in our horses is a highly rated, carrying lightweight. And we start that process by looking at the top weighed in the Melbourne Cup, which is a horse called Anthony Van Dyck. And he carries a rating of 122 which is a very high rating internationally. But the second rated horse in the Melbourne Cup is a horse called Sir Dragonet, which is only rated one rating list, but it’s carrying a lot less weight than it thinks is carrying two and a half kilos less and Anthony Van Dyck so that’s the value component, we’re finding a quality horse carrying less weight, which means it’s been well handicapped to win the race. And there are two horses in the Melbourne Cup, which are like that, the other ones called Russian Camelot, which is a couple of reigning points lower than Anthony Van Dyck, but it’s carrying three kilos less than what all it should be carrying compared to Anthony Van Dyck.

So, they’re my two tips Russian Camelot and Sir Dragonet. I’m finding it a bit hard to split them, but I’m leaning towards Russian Camelot, which is the Australian horse. So that’s my tip. It’s currently about 13 or $14 in the market, if you also wanted to bet Sir Dragonet, which is a good horse, it’s about $9 in the market or $10 in the market, so they’re both good values. Two more horses fit the profile but don’t get as much of a weight drop as those two and they are the favorite Tiger Moth at $9. And a horse called Warning at $51. Which one that is the VRC Darby last year and they’re both again well waited for their ratings but not they don’t get the white props that Russian Camelot and Sir Dragonet do. So, if you want to have a trifecta, box those up, but I’m going to probably buy Russian Camelot and so dragon a probably leaning towards Russian Camelot just a little bit. That’s my tip.

Cameron Reilly [01:03:01]: What time is the rice on?

Tony Kynaston [01:03:02]: Good question. It’s usually around three or four o’clock. It’s race seven. So, three o’clock tomorrow afternoon.

Cameron Reilly [01:03:10]: I should probably get this podcast edited and uploaded before then. But then they don’t get to hear all your analysis, but I’ll try and get it done.

Tony Kynaston [01:03:28]: And then you can go once Russian Camelot wins. We can just go all up into the presidential election on Tuesday night.

Cameron Reilly [01:03:37]: I’m doing a live show Wednesday morning with Ray we’re going to be covering the Russian. The Russian. No, that was a slip of the tongue. Sorry. I know nothing about the Russians. American election we’re going to do live coverage of it just for shits and giggles on Wednesday. You’re welcome to come and join us to give us a live commentary.

Tony Kynaston [01:04:00]: I’ll be in the car driving back to Sydney I think, you could be doing that commentary for months because I don’t know if we’re going to know who wins the US election after Yeah. Tuesday night, us time.

Cameron Reilly [01:04:10]: I caught up with my friends David and Maria yesterday, David just turned 95 on Saturday, Marie turned 84 the week earlier and she’s going in for hip replacement surgery on November 11. And she said to me, what, if I don’t come out of the operating theatre, I’m okay with that. I’ve kind of lived long enough. I’m good. And I said, don’t you want to know how it all ends? And she said, I just want to know that Trump’s gone. That’s all I need to know. And I said, Well, I hate to break it to you. But I don’t think you’re going to need to know that. But you’re going to know that by November 11. You’re going to need to come out and you need to stick around for at least another three or four months. We’ll see how it plays out.

Tony Kynaston [01:04:50]: Quite possibly, unfortunately. It will be interesting, whatever happens.

Cameron Reilly [01:04:54]: So, I’ll David turns 95. He greeted us with a song when we walked in and I said what are you reading at the moment? He goes I’ll show you and he go off to his bedroom and he comes out a massive book on the collected writings of Emmanuel Kant that he’s halfway through. And he’s on it for 60 years book on some advanced mathematics problem, the Rosencrantz and Guildenstern function or something. And he said, I bought this book 60 years ago when I was at MIT he said, this has never been solved this problem and I got angry because I couldn’t make it, he flicked me through it. It’s just like, complicated equations that the entire book. He’s been sitting on this book for 60 years and he’s just cracked it open again. And he said now I get it all now I’m loving it flying through it it’s terrific. He’s 95 solving advanced math’s problems. That’s what he does in his spare time rates can’t solve math problems. I think that’s inspirational.

Tony Kynaston [01:05:56]: It is, isn’t it? It like keeping your mind active is a good leading indicator for a long life hopefully. Did you ask him what the secret to his longevity was?

Cameron Reilly [01:06:04]: Just good genes and marriage. He said to us he eats bad food never taken care of himself. But it’s the love of his wife. He said I you know I stick around because I love being with Maria. I don’t want to be without Maria. They’ve been married for 40 odd years. 40 45 years I think and their sweet old couple. They love each other to bits. He’s deaf as a post and has been for 10 years I’ve known him so he’s always What. What. It’s I showed Chrissy the night before the Fawlty Towers episode with the deaf woman with a hearing aid is this a piece of your brain and was very relevant, because that’s exactly what it was like catching up with David. But no, he said the like the old age thing is just genetics. His grandfather lived to 107 his mother lived to I think 97 98 but he’s always kept his mind active like at that age. Most people are vegetables, but he is killing it man, always reading and wants to argue history and politics and science with me. It’s fantastic.

Tony Kynaston [01:07:14]: That’s great. Well, next time you go there, can you get a like a lock of his hair or a piece of skin follicle, and then we’ll run it through a CRISPR and find out what that long live gene is.

Cameron Reilly [01:07:25]: Splice it into ourselves. Okay, well, good luck on the ponies tomorrow. Tony, have fun. Say good night to Roddy for me. And I’ll talk to you next week.

Tony Kynaston [01:07:37]: And we’ll do Kelly next week. Well, hopefully, we can do it next Monday in the world hasn’t collapsed after the US election and everything’s hunky-dory.

Cameron Reilly [01:07:46]: Well, when you say Kelly, I assume you’re talking about the Kelly’s Heroes criterion. That one.

Tony Kynaston [01:08:08]: That’s right. So, we’re calling episode. Kelly’s Heroes.

Cameron Reilly [01:08:13]: Talk to you later. Bye.

What? A free weekly investing newsletter? Oh yes please.

Every Monday we publish a newsletter with updates on our podcast and portfolio activity. Sign up now to get your copy completely free!