Transcript QAV 358

File name: QAV358 The Hal­loween Pump­kin

Dura­tion: 1:02:12

[00:06] Cameron Reil­ly: Wel­come back to QAV episode 358 sea­son 3, 58. How are you this Mon­day? The 30th of Novem­ber 2020. 

[00:17] Tony Kynas­ton: Doing very well. Thank you. A lit­tle bit hot. Syd­ney had 240-day degrees on the week­end. It’s cool down a lit­tle bit now. With the win­dow closed and the air cool off plus the back­ground noise. But I’m start­ing to sweat.

[00:36] Cameron Reil­ly:  When you sweat. I bet It smells like cham­pagne. What are rich peo­ple sweat smell like Tony? 

[00:46] Tony Kynas­ton: Same as nor­mal peo­ple.

[00:48] Cameron Reil­ly: No. I like to think it smells like milk and hon­ey. Speak­ing of rich peo­ple. Famous peo­ple, celebri­ties. We just did a great inter­view with Cameron Williams chan­nel 9 sports edi­tor. I think he calls him­self. Which will be up in the next cou­ple of weeks. Some video, some audio of that. He’s been a QAV lis­ten­er for a year or so. He’s always fun to chat with. A lot of great anec­dotes. Tell us about when he met Mike Tyson, and Muham­mad Ali, 30 years ago. It’s a good sto­ry. 

[01:32] Tony Kynas­ton: Yeah. And I appre­ci­ate him, giv­ing us the time for it too. That was good.

[01:36] Cameron Reil­ly: He did­n’t have any pri­va­cy in the new stu­dio, so he went home to shoot it and then he has to go back to work. So that was nice of him. 

[01:44] Tony Kynas­ton: It was. We appre­ci­ate it. Thank you very much. I’m glad to hear you’re doing well with the process and the invest­ments.

[01:50] Cameron Reil­ly: Yeah, real­ly great. Before we get into the show this week. Jen­ny’s got a book. Tell us about Jen­ny’s book. 

[02:04] Tony Kynas­ton: The Gist of Gen­eros­i­ty by my wife.

[02:06] Cameron Reil­ly: Now is that a typo in the print­ing because I’m pret­ty sure she told me it was the gift of gen­eros­i­ty.

[02:11] Tony Kynas­ton: Yeah, I thought it was the Gift of Gen­eros­i­ty for a long time too. No, it’s not. and I remem­ber also that she ago­nized about whether it should be gift or gist. But she decid­ed gist. 

[02:20] Cameron Reil­ly: So tell peo­ple what the book is about and where and when they can get it.

[02:22] Tony Kynas­ton: Yes, it’s a cof­fee table book. It’s her thoughts on how she likes to live her life and what liv­ing a good life means. Which is being gen­er­ous to peo­ple. And it’s not a bad phi­los­o­phy real­ly because if we act like that. Every­one did some­thing for some­body else. And gives lots of things to oth­er peo­ple, which is also grat­i­fy­ing. So it’s a good phi­los­o­phy. And the book is lots of pic­tures of art­work that we, some of it are ours, some of it are our friends. Ones that they have pro­duced. Some my daugh­ter has pro­duced. So it’s sort of glossy, pic­to­r­i­al as well as hav­ing a lit­tle bit of text on each page about gen­eros­i­ty. Def­i­nite­ly a web­site. It looks like it’s not set up yet. Cause the book only arrived today. So I’ll get right to you.

[03:11] Cameron Reil­ly: Well that’s great. I’m look­ing for­ward to read­ing it. You two are cer­tain­ly very gen­er­ous peo­ple from my expe­ri­ence. We’ve always been appre­cia­tive. Being the recip­i­ents of your gen­eros­i­ty and also just how you two help peo­ple around you. So good role mod­els. 

[03:33] Tony Kynas­ton: Thank you. Yeah, it’s some­thing that we’ve evolved to. We’re being for­tu­nate enough to have made some mon­ey in our lives and we donate to var­i­ous char­i­ties and things. But I actu­al­ly pre­fer to help peo­ple around us who are in need, and get involved with them, rather than give it off anony­mous­ly. 

[03:58] Cameron Reil­ly: And you know in all the pod­casts that I do. Since we start­ed doing like pre­mi­um pod­casts six or sev­en years ago. We always had a pol­i­cy where we give free accounts to peo­ple that need it. Unem­ployed or stu­dents or just doing it tough. I always say lis­ten if you need a free account just email me and we’ll give you one. And it’s part of I guess that phi­los­o­phy is pay­ing it for­ward. I had one guy who’s recent­ly in the US, gone back to work after being out of work for a year and he had been on a free account for that time. A year or two actu­al­ly. He said I’m back at work now. He’s fin­ished, he went back to UNI and he said. How do I repay you? I said just you know pay it for­wards man. Find a way to be gen­er­ous to some­one. To give some­thing that you can does­n’t have, it’s not much but I think that’s a nice phi­los­o­phy to pass around. The pay it for­ward thing. 

[04:55] Tony Kynas­ton: Yeah, it is. And I think the oth­er thing too. One of the rea­sons for me doing the pod­cast is to pay it for­ward. I work in a soup kitchen, but that’s not the best use of my skills. Doing some­thing like this has a big­ger impact, I think. 

[05:09] Cameron Reil­ly: Yeah, def­i­nite­ly. Cameron Williams would say so. Well, that’s great. Look for­ward to get­ting our hands on a copy of that, and you just had some good news about Alex. Do you want to men­tion Alex’s good news as well?

[05:22] Tony Kynas­ton: Yeah. She just won the Dean’s award. Aca­d­e­m­ic award for paint­ing. She grad­u­at­ed from RMIT Fine Arts this year. So she’s very excit­ed. 

[05:32] Cameron Reil­ly: That’s awe­some. Good for her. 

[05:37] Tony Kynas­ton: I haven’t had a chance to go through them all yet. But I think there’s a web­site to go to and have a look at those as well, the paint­ings.

[05:43]  Cameron Reil­ly: So I can’t talk, I’m doing QAV Alex. That’s what she said?

[05:47] Tony Kynas­ton: Well we’re talk­ing with Cameron. I think that’s why my Skype, my Zoom was fight­ing. I kept get­ting ping after ping and text from Alex. 

[05:57] Cameron Reil­ly: Right, yeah that’s excit­ing. I will link to the stocks, you said some­thing about p f g and a qual­i­fied audit last week. I think you want­ed to clar­i­fy that this week.  

[06:09] Tony Kynas­ton: I did. We’re talk­ing about qual­i­fied audits. That was a ques­tion from a lis­ten­er last week. And we’re talk­ing about dif­fer­ent types of qual­i­fied orders and I said that often­times, more often than not, it did­n’t mat­ter what the qual­i­fied audit was. But the com­pa­ny will have prob­lems. Because we’re talk­ing about that stage which went down fol­low­ing its qual­i­fied audit. But it’s since gone back up again. And we’re talk­ing about the most mate­r­i­al of a qual­i­fied audit. Which is the one where the audi­tors, raise a ques­tion about the ongo­ing via­bil­i­ty of the com­pa­ny. 

And then there are oth­er var­i­ous grades of it. I did men­tion a com­pa­ny that I had invest­ed in, in the past. And it had a qual­i­fied audit. And the share price went down quite dra­mat­i­cal­ly and quick­ly. And I thought that com­pa­ny was PFG but it’s not. I just want­ed to cor­rect that. The com­pa­ny I was think­ing of was Pio­neer Cred­it PNC Not PFG which is a pre­mier Finan­cial Group. So apolo­gies to any­one asso­ci­at­ed with that com­pa­ny for mix­ing that up. And I hope it goes straight now. 

[07:20] Cameron Reil­ly: Well speak­ing of Zim­plats. Actu­al­ly got a ques­tion on the Face­book page this morn­ing from Paul in Syd­ney. Lawyer Paul, he says does sim­plex have a clear audit? I can’t under­stand what the audi­tor’s report is actu­al­ly say­ing, did you find if there was an update to that audit. A qual­i­fied audit that they had ear­li­er in the year? 

[07:40] Tony Kynas­ton: Yeah. I had a look after our show last week. It’s still vague. It looks like Zim­plats may have change audi­tors between its half-year and full-year account. [cross talk­ing 07:55] As soon as my side that they will try and get a bet­ter result. But has­n’t changed. To me read­ing it. I’m not an expert in this area but it looks like they are not ques­tion­ing the ongo­ing via­bil­i­ty of the com­pa­ny. But they are call­ing out that they may have been a breach of law. Or at least in breach of the account­ing stan­dards. As far as Zim­bab­we goes, where Zim­plats is based. 

Because the audi­tors point out that some of the assets on the Zim­plats bal­ance sheet and their reg­is­ter. Have been booked using US dol­lars, where­as the law in Zim­bab­we says they should­n’t be booked using what­ev­er the cur­ren­cy is in Zim­bab­we. Now I can ful­ly under­stand why Zim­plats would have done that because chances are, they had to con­vert Zim­bab­we cur­ren­cy into US dol­lars to buy min­ing equip­ment and what­ev­er else they’ve put on the reg­is­ter. And that’s pret­ty com­mon in Zim­bab­we because the dol­lars are not wide­ly accept­ed out­side of Zim­bab­we. But the oth­er prob­lem with Zim­bab­we, of course, is that they’ve had hyper­in­fla­tion. For a while and it must be hard to pin down what the exact cur­ren­cy exchange is. To put some­thing down on an asset. Reg­is­ter, one day it’s worth a mil­lion Zim­bab­we dol­lars. The next day it might worth 2 mil­lion. 

But the US dol­lar does­n’t fluc­tu­ate as wide­ly. So I can see why they’ve done it from a prag­mat­ic point of view. But they should have done it in the local cur­ren­cy. The man­age­ment of Zim­plats is say­ing it’s too hard to go back and unpick that spaghet­ti. And then try and work out the right con­ver­sions for those assets. And so they are going to leave it where it is. And the audi­tors have high­light­ed that as being a poten­tial prob­lem for Zim­plats going for­ward. What the mag­ni­tude of that prob­lem is I don’t know. Whether it’s a fine. Whether it’s a slap on the wrist. Whether it means noth­ing, or whether it could be a com­pa­ny threat­en­ing event. And so that’s one of the rea­sons why I still wait for that to be cleared off the books of Zim­plats. Before I look to it as an invest­ment going for­ward. 

[10:02] Cameron Reil­ly: Some­where in my office where I’ve got some, I think a cou­ple of bil­lion-dol­lar notes from Zim­bab­we. That my friend, the jour­nal­ist Adam Schande gave me. He’s got a house in Zim­bab­we. He usu­al­ly spends six months of the year there. He mar­ried a Zim­bab­wean and he came back from there once. And gave me a cou­ple of, I can’t remem­ber if they are bil­lion-dol­lar notes or mil­lion-dol­lar notes. But what­ev­er it was they are ridicu­lous. 

[10:31] Tony Kynas­ton: I think I had anoth­er friend they had them Thorsten and sent us some. He’s from Utopia. On Bit­coin as a way of kind of high light­ing how the cur­ren­cy can have lots of prob­lems. But Bit­coin will be here for­ev­er. 

[10:46] Cameron Reil­ly: Yes, we still need to get Thorsten on the show. Speak­ing of the doc­u­men­tary. Some­body pinged me over the week­end and told me that they found it on Mag­el­lan TV. Which is doc­u­men­tary only I think cable chan­nel and online chan­nel online thing, stream­ing net­work in the US. Can also down­load an app for like Net­flix but it’s only doc­u­men­taries. [cross talk­ing 11:19].

[11:26] Tony Kynas­ton: I’m sure those cents per view are just going to.

[11:27]  Cameron Reil­ly: Zim­bab­we mil­lions. I bet I have in Zim­bab­we dol­lars. Okay, so that’s Zim­plats. Do you have stock of the week that you want to draw peo­ple’s atten­tion?

[11:42] Tony Kynas­ton: Yeah, I have a cou­ple. So I do the down­load last week­end and sent you some stock jour­nals. So let’s talk about those. Three of them I was going to focus on. The first one is called, the code is MLD which is a com­pa­ny called Mica. M.I.C.A. Just going to call up the stock doc­tor now and have a look at it. It’s a min­ing ser­vices com­pa­ny. And it’s been on our watch list for a while and in the last week, its share price has risen. And it’s now just crossover at three-point by long. 

[12:14] Cameron Reil­ly: Sor­ry not MCA that’s [inaudi­ble 12:16]. What was it MCD?

[12:17] Tony Kynas­ton: MLD Mica lim­it­ed 

[12:28] Cameron Reil­ly: Aus­tralia does but that sounds like an inter­est­ing busi­ness. So yes, back to MLD.

[12:34] Tony Kynas­ton: Yeah. So they’re a  ser­vic­ing com­pa­ny for mines. Con­tract min­ing, they do some crush­ing. Crushed down the ore and sep­a­rate it. And a lot of con­struc­tion work for the min­ing indus­try. I think also too from mem­o­ry. They may have start­ed off as a provider of min­ing camps of side camps for fly in fly out work­ers to live in. But I could have that wrong. Cer­tain­ly, a provider of ser­vices to the min­ing indus­try for a long time. They’ve been up and down over the years I’ve learned them in the past, but they just turn up again now. And the QAV is pret­ty good so I’ll just call it up too. When I did my down­load which was last week, there was some­thing like about QAV of 0.38. But I’ll just have a look at that to con­firm that.

[13:29] Cameron Reil­ly:  Yeah, I’m look­ing at that chart now. Point three eight is what you told me in the jour­nal. So, you will walk us through the chart because peo­ple love a bit of chart talk. I’m get­ting the high point, going back to late 2017, maybe August, Sep­tem­ber, and then Sep­tem­ber, and then the sec­ond point. Just July, August 2020, is that what you’re using?

[13:59] Tony Kynas­ton: Just let me con­firm that. Sounds right I’ll just have a look at that, and it is August 2020. Yeah. Just let me turn my phone on. I’m going to video­tape myself. Hold­ing a ruler up to the screen just so we can show peo­ple what we are doing. This is not a bad exam­ple. If it works for you, you can post it when you do you.

[14:26] Cameron Reil­ly:  Hot and sweaty, Tony. In the video, hold­ing a ruler.

[14:32] Tony Kynas­ton: Good thing it’s not smellivi­sion. Okay, just let me get my phone on. 

[14:41] Cameron Reil­ly: Hi Call me. Call me now. Tony Kynas­ton. 

[14:44] Tony Kynas­ton: Okay here is my stock doc­tor screen for MLD. It’s a five-year month­ly chart. The high point you can see quite eas­i­ly. So, if we work from there, going for­ward. The sec­ond point is the point in the next month. But if we use that it becomes a cell where it cross­es the line down here. So what I’m going to do to neglect that is to just take the ruler and rotate it. A bit high­er. It’s kind of a sec­ond time, put the ruler on top so we can see it a bit eas­i­er. It kind of cross a sec­ond time. And that sec­ond time is right around there which is. That’s going to be, if I use the next high­est peak for the line it’s Novem­ber 2019. 

The three-point bars going across it in May 2020. And then if we use the right­most peak which is the last. It’s basi­cal­ly the high­est point on the graph. And the last peak that does­n’t have any oth­er peak cross­ing it. You can see right down in the cor­ner. The point today is pok­ing up above the line. And that’s a 3‑point thread line. I’ll do it both ways with the ruler below and the ruler above. And you can see in the bot­tom cor­ner there it’s just pok­ing above. So that’s how I do it. A short video to show you and if peo­ple have ques­tions, they can just know. Okay, we’ll stop there.

[16:23] Cameron Reil­ly:  Any wor­ries that this might be a falling off? 

[16:28] Tony Kynas­ton: Yeah poten­tial­ly, it could be a falling off. 

[16:32] Cameron Reil­ly: It seems to keep sort of stick­ing its head up above the byline and then a ground­hog back in.

[16:39] Tony Kynas­ton: So it could be a falling off. But cer­tain­ly, it’s a tough one. I start­ed to do a bit of research on it. Because just to do some research for the show. As they’ve got some expo­sure to a mine which has now been shut­tered and basi­cal­ly rid­ing off the lost pay­ments on that and it’s going to admin­is­tra­tion. So they could be, it could be a loss of rev­enue for them. But by the same token, they’re also announc­ing. They’re pick­ing up. Morn­ing con­tract work at the moment. And one of those com­pa­nies is remil­ious resources, actu­al­ly. Which we’ve kind of gone full cir­cle there, but it’s got such a good qual­i­ty score I sus­pect it may not be a falling off. 

[17:24]  Cameron Reil­ly: So, talk me through your think­ing with a falling off/ ground­hog, like this. If it was at the top of the list. And if you were look­ing to buy some­thing and you saw this and you saw the falling off on the chart. Would you buy it any­way but then keep an eye on it. And sell it if it drops back below the buy line. Or would you just skip it because it’s falling and look for some­thing with a bet­ter buy line? 

[17:53] Tony Kynas­ton: I think, in this case, it looks rea­son­ably clean. There’s an optic so I would buy it and then watch it. And if it fell back below before the end of the month or soon after­ward, I’ll be sell­ing it. And you can see as well from the sell line stock, which is going to be. Using March 2020 and then Octo­ber 2020. That sell line is not going to be too far away from where the share price is now. It might not take much if it does turn down to go back across the sell line. So you def­i­nite­ly have to watch it. Some of the ones where I strug­gle to buy them. Is when per­haps last month for this stock. It was just get­ting up to the buy line. But has­n’t pushed through yet. Then I prob­a­bly hang back and just wait for a bit of con­fir­ma­tion. For a month or so. 

[18:43] Cameron Reil­ly: Right. Yeah, so I’m just hav­ing anoth­er look at this now to try and see where the sell line is. 

[18:51] Tony Kynas­ton: March 2020 is the low point on the graph. 64 cents. And then Octo­ber 2020 is at eighty-two and a half cents. So just eye­balling it, it’s going to be around the low 90s I think prob­a­bly about 92. If I bought shares in this, the next thing I would do. Is to get on to the three-point thread cal­cu­la­tor. Work out what the sell price is and put a stock alert in stock doc­tor for that pass.

[19:16] Cameron Reil­ly: Yeah. So we’re good. You also talked about it. Well, you talked about a bunch of stuff. Do you want to talk about base resources?

[19:26] Tony Kynas­ton: BSE is anoth­er min­er­al sands min­er which is inter­est­ing. We’ve had a cou­ple of those pop up on our list. So some­times that hap­pens with the indus­try itself. Might be show­ing some signs of the loft. Any­way, so again, just like the last one has just gone through a three-point trend, buy line in the last month. In fact, it’s kind of quite dra­mat­i­cal­ly in the last month from some­thing like it was 23 and a half cents an ounce. 29.7 cents so it’s run-up 25% rough­ly in the last month. But if I look at this graph, the high point is back in Octo­ber 2017. At a price just above thir­ty-two cents. And then the next point would be March 2019 and that price was 13 and a half cents. And then if I put my ruler across those two. It’s just crossed in this cur­rent month. Into the buy ter­ri­to­ry.

[20:31] Cameron Reil­ly:  Yeah. Again, just pok­ing its head but not as much of a falling off as the oth­er one and the sell line goes right back to ear­ly 2016. 

[20:42] Tony Kynas­ton: Yeah so, we go sell line back here in Jan­u­ary 2016. Of course the sec­ond point, so the sell was going to be just around 15 cents. 

[20:54] Cameron Reil­ly: Yeah, just south of 15 cents, the big gap there, it looks bet­ter now. In the jour­nal, you said it had a QAV score of point three one but actu­al­ly, in your buy­er list, it seems like it’s point two nine so I’m not sure which one of those is out of date. Fair­ly close though.

[21:11] Tony Kynas­ton: Yeah, it’s prob­a­bly just the change in the price. 

[21:17] Cameron Reil­ly: Yeah, right. Okay. 

[21:17] Tony Kynas­ton: And look­ing at the aver­age dol­lar trades on both of those. Because I think they were rea­son­able from mem­o­ry so 150,000 for the base. 344,000 for [inaudi­ble 21:28]. It’s not too bad. And then just to men­tion a cou­ple of oth­er ones quick­ly. An ETF called AUDS which is an Aus­tralian dol­lar invest­ment ETF. That’s also cropped up as a buy recent­ly a decent score, that’s got a score of 33 or.33 I should say. And just gone into an uptrend and I would guess it’s gone into an uptrend because the Aus­tralian dol­lar is ris­ing. 

Part­ly because the US dol­lar is falling. And part­ly because the Reserve Bank cut inter­est rates again which can some­times cause the dol­lar to go up. So that’s what peo­ple might want to have a look at, as we’ve dis­cussed before on the show. Those kinds of ETFs come onto the QAV watch list because they prob­a­bly had a sale of some oth­er under­ly­ing assets which has come through as a large oper­at­ing cash income. So they often come on for six months and then go off for six months. But it’s cer­tain­ly scor­ing well at the moment. And prob­a­bly the last, well a cou­ple more to men­tion but. 

[22:39] Cameron Reil­ly: Hold on. Before you move on. Can we just talk about the chart for IUDS? So I’m get­ting the buy price com­ing in, just south of 10 bucks it’s cur­rent­ly at 10.51. Is that what you got? And it’s actu­al­ly I will say it’s a short­ing it if I look at the sell line. 

[22:59] Tony Kynas­ton: Almost, maybe there’s a smidge in between them, but it’s cur­rent­ly [cross-talk­ing 23:06] So I’ve got a high point in Jan­u­ary 2018. Yep. And then next I’m going to use the right­most PQ which is the appro­pri­ate one the sec­ond point. And that’s August 2020. That would give me a buy price. It’s going to be about nine cents and it’s cur­rent­ly ten and a half. And in the sell is also going to be around that buy price.

[23:44] Cameron Reil­ly: Not shred­ding it, because it’s above that. But the sell price and the buy price are about the same. 

[23:47] Tony Kynas­ton: Yeah, that’s right. But it’s well and tru­ly above that. So it’s safe ter­ri­to­ry. It could be a falling off cause it’s been going down since 2018. But so is the Aus­tralian dol­lar.  Prob­a­bly scrap the Aus­tralian dol­lar, I think. I don’t have any idea where that’s going to go.

[24:14] Cameron Reil­ly: Because you don’t fore­cast. 

[24:16]  Tony Kynas­ton: I don’t fore­cast. Espe­cial­ly not the cur­ren­cy that’s for sure.

[24:21] Cameron Reil­ly: You mean George Soros has­n’t told you what’s going to hap­pen with the cur­ren­cy. Don’t you talk to George, fair­ly reg­u­lar­ly? 

[24:26] Tony Kynas­ton: I’ve nev­er spo­ken to George. 

[24:30] Cameron Reil­ly: My mis­take. You don’t catch up with the rich guys’ secret meet­ings or any­thing like that?

[24:37] Tony Kynas­ton: Well first rule.

[24:47] Cameron Reil­ly: Good one, what’s next? 

[24:50] Tony Kynas­ton: My old friend MYI. That’s come back onto the buy­er list. Yeah, I think this is one of what they call the rota­tion stocks. So now that there’s a vac­cine on the hori­zon. Some of the stocks have suf­fered bad­ly dur­ing the COVID lock­down. And now find­ing some love in the mar­ket. Peo­ple are start­ing to go back out to depart­ment stores. And they are a good thing, but we will see. 

Any­way, if you look at that share price graph. That the high point is back in Decem­ber 2016. At $1.38. And I’ll use my ruler again. And now I’m going to use the peak in Sep­tem­ber 2019 at 61 cents as the sec­ond point. And so it’s just crossed over at 6 by, which would be around 26 cents that’s now 30, 36 cents. There’s also some oth­er spec­u­la­tion in the news­pa­pers any­way that could be bought out again. 

[26:06] Cameron Reil­ly: And the sell line comes in. A lit­tle bit below the buy lines. 25 cents ish. kind of they try to get 36, so it’s well above both lines. But again, looks like a falling off but you think it’s one of these things that might do well now that COVID. Well, it’s been falling since 2017 it’s not COVID-relat­ed full. Though it did take a hit of course dur­ing COVID it’s been going south for a long time. Kind of reminds me of the con­ver­sa­tion we had with your mate Joe. Last year, is like one of our first guests, I think. And Joe was talk­ing about, we were talk­ing about the chal­lenges in retail that was 18 months ago. 

[26:50] Tony Kynas­ton: Yeah, know exact­ly, tri­pod areas. And I think, the whole trend is being fall­en is being a fix­a­tion of man­age­ment who is try­ing to turn that around. The lat­est guy seems to be quite expe­ri­enced. And is seem­ing to kick some goals. So that could also be won­dered too.

[27:05] Cameron Reil­ly: Yeah, I tend to think none of these peo­ple have a clue what they’re doing. They are like tele­vi­sion. When we were talk­ing to Cameron. Tele­vi­sion, news­pa­pers, old retail­ers, old tele­coms. They’re all just cling­ing on for dear life as their indus­tries get these, the dis­rupt­ed. I was think­ing of anoth­er D‑word. But that will do. Decon­struct­ed by the inter­net, they are like yeah, it’s all going to be great. We’ve got a great plan. Every cou­ple of years. I hear DC talk about what a great plan they going to have. And then they lay off 10,000 peo­ple. Now that we’ve laid off those peo­ple. It’s going to be great from here on in. I don’t real­ly see them doing any­thing.

[27:57] Tony Kynas­ton: The plan for MYI has been real­ly obvi­ous for a long time. Based on its online pres­ence. And closed down half its net­work. 

[28:05] Cameron Reil­ly: Which makes sense but, I mean, I haven’t bought any­thing from online MYI, have you?

[28:11] Tony Kynas­ton: I did Christ­mas before last, I think. And It was an absolute dis­as­ter. 

[28:18] Cameron Reil­ly: Right, yeah. So, like, if I’m going to buy some­thing online. I go to eBay first, Ama­zon sec­ond, and that’s about it real­ly. Unless it’s a spe­cial­ty thing, that’s where I go look­ing for stuff. I don’t even think about going. I would­n’t even know where MYI’s online pres­ence is. But maybe that’s just me. 

[28:37] Tony Kynas­ton: I’m no expert either. I tend to just Google things and go, whichev­er way I’m direct­ed. Yeah, that’s the plan. The trick is If you cut out. Well first of all I prob­a­bly can’t. Close half their stores because I’ve got long leas­es, you know 15, 20, 25 leas­es. And the sec­ond thing is, if you shrink the retail pres­ence and you haven’t grown the online pres­ence, you start to lose a lot of bar­gain­ing pow­er with the peo­ple who sup­ply your goods. And so your prices go up so you can’t be the cheap­est in the mar­ket which is impor­tant if you’re a retail­er. So that’s a fine bal­anc­ing act and to date, MYI just has­n’t got their head around it yet. 

[29:20] Cameron Reil­ly: All right. Do you want to talk about our port­fo­lio, for a bit? 

[29:25] Tony Kynas­ton: Okay, sure. I haven’t looked at it for a while. How’s it going?

[29:28] Cameron Reil­ly: Yeah, well we sort of jumped up a lot last week after we throw in some div­i­dends and also just with the growth going up. At the moment we’re run­ning. For this new year we’re run­ning at 9%, and the old orders at 10%. So we’re at a point below. It’s obvi­ous­ly, today’s the end of the month. And before I send out the newslet­ter this morn­ing I jumped in and just did a quick end of month sum­ma­ry. Even though it’ll change a lit­tle bit by close of busi­ness today.  Since Incep­tion was run­ning at 13.3%. The total return is 6.2. So we’re doing rough­ly dou­ble we’re up 7% on that. We’re run­ning with sort of the goal of dou­ble all odds since incep­tion. Even with the huge jump that the old orders had this month. I actu­al­ly did some chart­ing. Because last week on the show you said it’s most­ly the banks and cuan­tas and peo­ple like that. I jumped in and have a look at a bit a lit­tle chart hav­ing a look at the share price in the last month and it is insane like some of them are 25, 30%. The banks, cuan­tas, etc. in Novem­ber. So they had a huge jump. 

[30:42] Tony Kynas­ton: Yes. And like­wise too. And also oth­er things we had some gold min­ers which are hold­ing us down. And once the vac­cine became inevitable. Peo­ple took more risks, and they took invest­ments out of gold and put them back into these beat­en-up stocks. Because of COVID. 

[31:04] Cameron Reil­ly: As you men­tioned last week one of our big win­ners. In terms of recent addi­tions is C6C. Cop­per Moun­tain, we bought that a month ago it’s up 35%. 

[31:16] Tony Kynas­ton: Yeah, we should have just sold the port­fo­lio on [inaudi­ble 31:19]. 

[31:20] Cameron Reil­ly: If only we knew. Which one is the win­ner? 

[31:22] Tony Kynas­ton: Well I hope some of our lis­ten­ers have fol­lowed us in, that’s good.

[31:29] Cameron Reil­ly: Yeah, Capral, the alu­minum guys. It’s up 6%, so it’s not ter­ri­ble, but not as good as C6C. Grange has­n’t moved since we bought it, a week or two ago, sit­ting at zero move­ments. But our port­fo­lio is doing okay. I mean, up 9%, since the begin­ning of Sep­tem­ber’s pret­ty good. I mean, not as good as the odds but still pret­ty good for three months. 

[32:00] Tony Kynas­ton: It is. I mean there’s a lot of arti­cles around at the moment. Say­ing with vac­cines com­ing and bor­ders open­ing etc. The gov­ern­ment want­i­ng that job safe­ty. The econ­o­my might do well next year. Who knows? I’m not going to pre­dict at all. We had a top­sy turvy year this year. And hope­ful­ly, it is going to be bet­ter next year. To teach stock mar­ket invest­ing, I think. Yeah, I think we learned lots of lessons along the way. Get­ting in and out of the mar­ket at the right time using that 3‑point trend lines. Yeah. Well, I think back to COVID we’re all scratch­ing our heads. Not know­ing what was going to hap­pen. Pre­dic­tions were out there about mil­lions of peo­ple dying or hun­dreds of 1000s of peo­ple dying. Which did­n’t even­tu­ate. So it’s been inter­est­ing. 

[32:51] Cameron Reil­ly: Except in the US. 

[32:56] Tony Kynas­ton: And it’s still hap­pen­ing, unfor­tu­nate­ly.

[32:56] Cameron Reil­ly: I think yes­ter­day they had their first 200,000, new case day. 

[33:03] Tony Kynas­ton: I read a, might have been in the last week or so any­way. I had a link to a blog post by some­body who was a hos­pi­tal work­er in one of the US hos­pi­tals. And they said the worst part of being a front­line work­er in the US Med­ical Sys­tems is you come home. You’re absolute­ly exhaust­ed, you wipe the sweat off your face from being in full PPE all day. And then you remem­ber that the last per­son you helped was some­one who was try­ing to get your way because Joe Biden was going to steal their rights. I just thought, how coura­geous are these peo­ple who are just treat­ing every­body when these idiots try­ing to refuse treat­ment. Because they think their rights are being vio­lat­ed. 

[33:56] Cameron Reil­ly: I’ve got a cou­ple of lis­ten­ers to some of my his­to­ry shows, hus­band, wife, doc­tors in Utah, Salt Lake City. And Megan, the wife is an ER doc­tor. Post some updates on Face­book or Insta­gram fair­ly reg­u­lar­ly. Just talk­ing about what she’s see­ing in the hos­pi­tal. Just how hor­ri­fy­ing it is. Just the peo­ple that come in, that are just dying in dri­ves. Well not in dri­ves, in Utah. Utah is not one of the worst places over there. But reg­u­lar­ly. That she’s you know they just can’t help. Even with all the stuff that they’ve learned this year, it’s just dev­as­tat­ing. And one of Chris’s friends. A woman in Albu­querque who actu­al­ly came out and vis­it­ed us a few years ago. Did some guest teach­ing she’s a vol­un­teer. Did some guest teach­ing for Chris out here.

She and her hus­band were in their 60s, I think. Both in ER at the moment or in ICU  beds with COVID. And the woman join has been post­ing video updates from the hos­pi­tal bed to Face­book. And she looks and sounds like she’s on death’s door. She’s bare­ly able to get a sen­tence here. But she’s say­ing I’m doing this because I want peo­ple to know what this is like. Like this is, this is real. We’re bare­ly hang­ing on prob­a­bly going to die from it the way we’re going. She’s post­ing, like dai­ly teary updates that we’ve been watch­ing. It’s dev­as­tat­ing just to watch peo­ple you know go through this. And we are at a dis­tance, we’re not see­ing it close up. 

[35:42] Tony Kynas­ton: That’s a hor­rif­ic sto­ry. And there’s a virus and peo­ple have died in Aus­tralia as well. But it’s not the virus that’s killing peo­ple, it’s peo­ple killing peo­ple. It’s the beliefs and their point of view and their mis­guid­ed actions. Espe­cial­ly in places like the US. I even heard of a case. A friend of a friend in Greece was over there for work. And he caught it try­ing very hard when he was over there to use lots of antibac­te­r­i­al. Wear masks and all the rest of it. He caught it and he said the rea­son was that the Greeks, just like the Amer­i­cans don’t fol­low the gov­ern­ment. The gov­ern­ment is telling them what to do and what the Greeks are like. No, we’ll be alright. We’ll still go out for din­ner. We’ll still get togeth­er at peo­ple’s places. And that kind of stuff. 

[36:32] Cameron Reil­ly: Well the Greeks have got a long tra­di­tion of that. 

[36:35] Tony Kynas­ton: Peo­ple defeat­ing the peo­ple. I just don’t get that. 

[36:39] Cameron Reil­ly: I saw this, some­body in Ada­line in quar­an­tine. She like escaped quar­an­tine to go out for piz­za or some­thing.

[36:50] Tony Kynas­ton: I think there is a lan­guage bar­ri­er, the per­son was an Eng­lish as a sec­ond lan­guage stu­dent. And piec­ing togeth­er what I’ve heard on the news this morn­ing. He was, I think he did like a week in quar­an­tine and had a sec­ond test. And he thought he was told that after the sec­ond test he was safe to leave. So he went out. Obvi­ous­ly, being locked up for a week. I’m going to get out and have some fun. 

[37:19] Cameron Reil­ly: Any­way, as a ques­tion. A cou­ple of div­i­dend relat­ed ques­tions. Kel­ly part­ners KPG has switched from quar­ter­ly to month­ly div­i­dend pay­outs. I was after TK’s thoughts on month­ly div­i­dends as I’ve not come across them before. I’ve nev­er heard of that before either is that a com­mon thing, TK?

[37:38] Tony Kynas­ton: Not com­mon at all. I can’t think of anoth­er stock that does it. Very uncom­mon. 

[37:45] Cameron Reil­ly: Have any idea why they would do that?

[37:47] Tony Kynas­ton: I don’t know the busi­ness that well. But I would think it’s because they’re try­ing to appeal to the retiree mar­ket peo­ple who need it. And so, you know, they want that reg­u­lar month­ly div­i­dend check to fund the retire­ment. That would be my guess. But don’t hold me to it. That’s only a guess. Just look­ing at it now, the yield is. It’s cur­rent­ly 4.36%. That’s pret­ty good spin hard on that. On June 20 it was 7.79%. If you bought back, then you’re doing well.

[38:20] Cameron Reil­ly: A sin­gle brain char­tered account­ing net­work, KPG. Not to be con­fused with KPMG. So that’s inter­est­ing brand­ing Kel­ly Part­ners. 16 own­er-dri­ver oper­at­ing busi­ness­es across greater city and dri­ver oper­at­ing this. Do we call that an account­ing busi­ness and own­er-dri­ver, real­ly? I guess I thought that was taxi busi­ness­es than own­er-dri­vers. And one oper­at­ing busi­ness in Hong Kong pri­mar­i­ly focused on pro­vid­ing account­ing and tax­a­tion ser­vices to pri­vate small and medi­um enter­pris­es. So they prob­a­bly know a lot about what retirees are look­ing for, in terms of div­i­dends. 

[39:02] Tony Kynas­ton: Yes. Speak­ing of div­i­dends too. I should just men­tion that. That stock we spoke about base min­er­als. It was pay­ing a 12% div­i­dend yield at the moment too. If any­body’s inter­est­ed in that. 

[39:15] Cameron Reil­ly: So I’m look­ing at the Kel­ly Part­ners chart. It’s a nice-look­ing toothy grin. Do we have a name for these? For the toothy grin?

[39:29] Tony Kynas­ton: Looks like a Hal­loween pump­kin does­n’t it?

[39:30] Cameron Reil­ly: It does look like a Hal­loween pump­kin. That’s the offi­cial title for these now. It’s a Hal­loween pump­kin. It’s, they’ve had a lot of pos­i­tive growth since the COVID crash. I won­der what’s lead­ing to that.

[39:44] Tony Kynas­ton: I think it’s also being on their bor­der since about then. You know the price of, prob­a­bly around a dol­lar. And it’s now $1.62.

[39:56] Cameron Reil­ly: Real­ly what’s the QAV score. Oh, there we go 0.14. Not great, not bad. But not great. It’s ranked like 47 or some­thing on their buy­er list of 40 on their buy­er list. 

[40:10] Tony Kynas­ton: Yeah, but I’m pret­ty sure it’s been much hard­er. The price rise brought back that to worth. Sor­ry, I can’t shed any more light on it. But I don’t think it means much to the com­pa­ny where the replies are six-month­ly, quar­ter­ly, or month­ly. Except that there’s a lot more admin involved. Obvi­ous­ly, they’re try­ing to I think encour­ag­ing peo­ple to buy the shares if they’re inter­est­ed in get­ting a month­ly income.

[40:39] Cameron Reil­ly: Let’s do some chart­ing on this one. Because it’s an inter­est­ing one. Buy line would you start­ed back on Feb­ru­ary 18 and then use the sec­ond point is sort of Decem­ber 19. 

[40:52] Tony Kynas­ton: Yeah. So it’s actu­al­ly Jan­u­ary 19, I think. And then I would use the sec­ond point as I would use Decem­ber 19.

[41:08] Cameron Reil­ly: Right. Then after the COVID dip, it would have crossed the buy line in April, May 2020. And the sell line is one of these that is flatlin­ing. Comes in at around 73, 74 cents or some­thing. 

[41:28] Tony Kynas­ton: Oh no. I think the sell line. Let me just check that. Let me just have a look, hang on. So there’s a 72 cents. There’s actu­al­ly you’re right sor­ry. There’s a 72 cents trough in May 2019. And a 72 and a half-cent trough. It’s going to be in that sort of 72 and a half, sev­en­ty-three. So you’re right, yeah.

[41:49] Cameron Reil­ly: So it’s well and tru­ly been bounc­ing up. But you don’t think that the month­ly div­i­dends are going to mean the bit of the price will drop every month. As a result of the usu­al sell on the div­i­dend activ­i­ty?

[42:02] Tony Kynas­ton:  Well it has­n’t been. Every month it’s been going up. I don’t think so because it’s pay­ing a 4% yield now. It’s going to give a very small div­i­dend yield as a per­cent­age each month. One-twelfth of 4% so what’s that point three of a cent or some­thing. Point three of a cent.  So I can’t see it affect­ing the share price much at all. 

[42:24] Cameron Reil­ly: Sec­ond part of our ques­tion is, that the KPG div­i­dend has steadi­ly increased year after year by about 10%. Is this some­thing Tony reg­u­lar­ly sees with div­i­dend-pay­ing com­pa­nies. That score well with the QAV sys­tem. My thought is that it prob­a­bly is giv­en the qual­i­ty side of the QAV sys­tem. Looks at cash flow net equi­ty finan­cial health etc. Thanks to both of you I nev­er thought I would look for­ward to lis­ten­ing to two men talk so much. You’ve cre­at­ed a great com­mu­ni­ty.

[42:58] Tony Kynas­ton: Thanks for that feed­back Allen, I appre­ci­ate it. 

[43:02] Cameron Reil­ly: Div­i­dend increas­es. Do you see that often in QAV stocks?

[43:08] Tony Kynas­ton: No. Not nec­es­sar­i­ly. There’s no link between the QAV score and increas­ing div­i­dends. Just try­ing to work out what the pay­out ratio is. Don’t know if we can see it in stock doc­tor eas­i­ly. I’m just going to have a look at what the earn­ings per share are. Which were three, rough­ly three cents in June, and then the div­i­dend per share is. They’re actu­al­ly pay­ing out 4.8 cents per share and they’re only mak­ing three. So that’s a bit of a red flag there. First of all. They will be pay­ing out from equi­ty. Or from cash reserves or bor­row­ings. So that’s a prob­lem. If you go back six months before that. The earn­ings per share were 10.46 cents. And they were pay­ing out 4.62 cents. 

So they are pay­ing out just under half 38, 39% of their earn­ings are pay­ing out in div­i­dends. That’s a rea­son­able amount to be pay­ing out. But when their earn­ings per share at the last half dropped to three cents. They are pay­ing out more in div­i­dends and they’re actu­al­ly earn­ing. So they’re either bor­row­ing to fund that or they’re tak­ing it from cash reserves. I also has­ten to add that the fore­cast earn­ings per share for this com­pa­ny for June 21 is back up to 10 cents again. So this June 20 result is obvi­ous­ly some kind of aber­ra­tion. Prob­a­bly COVID relat­ed but I could­n’t say for sure.

But the point I was going to make is. That’s some­thing to look at for high com­pa­nies, com­pa­nies that pay lots of prof­it in div­i­dends. Because of the share if the income per share drops. There’s no way they’re going to low­er their div­i­dend. And if peo­ple are buy­ing the shares to get a div­i­dend. Then that can be a lid weight around the share price. It has­n’t been at the moment, I guess peo­ple look­ing for­ward to next year. But I like the idea that in the past six months pri­or to June. So back in Decem­ber, they were pay­ing out less than 40%. So that gives them plen­ty of income to rein­vest in the com­pa­ny as well. Which is what we want com­pa­nies to do. Not nec­es­sar­i­ly pay­ing less div­i­dends. And that’s real­ly what hap­pened to the bank, the big banks. The big four banks in Aus­tralia. 

After the GFC they latch on to this trend of peo­ple want­i­ng to own com­pa­nies that paid good div­i­dend yields. And so the big four banks and Tel­stra, and some of the big com­pa­nies like that. Start­ed to pay out some­thing like 70 to 80% of their prof­its in div­i­dends. And the fol­low­ing sort of five to 10 years. They’ve real­ly hurt that because they don’t have enough mon­ey to rein­vest into their own busi­ness or going out the door and div­i­dends. 

[46:08] Cameron Reil­ly: Div­i­dends you said before, the con­sis­ten­cy of div­i­dends does­n’t fac­tor into our check­list. I’m assum­ing that’s because you’ve nev­er found a cor­re­la­tion between that and a good stock?

[46:23] Tony Kynas­ton: It’s a good ques­tion. I have found cor­re­la­tions and cer­tain­ly if the stock breaks. It’s the trend of div­i­dend-pay­ing. it can be a real prob­lem for it. So it’s kind of a neg­a­tive score if you like, it does break it. 

[46:39]  Cameron Reil­ly: But how does that fac­tor into a check­list?

[46:42]  Tony Kynas­ton: It does­n’t. We don’t have an opin­ion on it. There is some­thing I can take on board and have a look at. 

[46:54] Cameron Reil­ly: Intern, bring me a cof­fee and look at the con­sis­ten­cy of div­i­dends cor­re­lat­ed to growth. 

[47:04] Tony Kynas­ton: Yes. And I think also, prob­a­bly more impor­tant­ly div­i­dend pay­out ratio. 

[47:08] Cameron Reil­ly: I think our intern, the intern did­n’t reply. I think she’d already gone out for.

[47:11] Tony Kynas­ton: No it’s a he. 

[47:17] Cameron Reil­ly: You’re intern might be a he. My imag­i­nary intern is she. 

[47:22]  Tony Kynas­ton: You turned to your­self and you ask for some cof­fee. Then you turn back to your­self and say milk and sug­ar with that.

[47:30] Cameron Reil­ly: Yes. Okay. Thank you. Good ques­tions, very good.  Ashish post­ed on Face­book dur­ing the week ask­ing about GURU focus. It’s a web­site that is sup­pos­ed­ly all about val­ue invest­ing. And charts and met­rics and data all geared around val­ue invest­ing. I remem­ber I did look at this site back ear­ly on when we start­ed. But did­n’t spend a lot of time on it. When I was look­ing for stock doc­tor alter­na­tives. And Ashish asked if it was a stock doc­tor alter­na­tive. Because it’s cheap­er, I think he said it’s half the cost of a stock doc­tor. Don’t know if that’s still true. With the stock doc­tor Christ­mas pro­mo­tion that’s being run at the moment. If you haven’t seen the link to that. Check out the lat­est blog post on their web­site. Lat­est pod­cast notes. They are run­ning a dis­count sale. As the share site,  peo­ple were kind enough to give us. What are you laugh­ing about? 

[48:29] Tony Kynas­ton: Sor­ry. I thought you said share analy­sis.

[48:31] Cameron Reil­ly: Share site. Share analy­sis is the oppo­site of a dis­count. You pay your mon­ey, and they take it and run. Share­sight, Doug Mor­ris was on the share site. He was a guest. And they’ve giv­en us a ter­rif­ic deal. I think you say four months of the cost of an annu­al share site sub­scrip­tion. If you use the QAV link. sharesite.com/qav. But back to guru focus. I’m guess­ing you prob­a­bly haven’t looked at it in the past.

[49:02] Tony Kynas­ton:  I haven’t I only came across it when you made me aware of it last week. And I start­ed to play around with it. Not enough to work out whether or not it could replace doc­tor stock. [cross-talk­ing 49:19].

[49:19] Cameron Reil­ly: A lit­tle bit. I want to set aside some time this week to play around with it more. I have to sign up for one of their pre­mi­um plans to real­ly get. To play with Aus­tralian stocks, you have to so you can test it with the US stocks. But to test the Aus­tralian stocks, you need to sign up for a pre­mi­um plan. I plan on doing that this week. I noticed they do have what they call a screen­er. Which basi­cal­ly looks like a stock doc­tor fil­ter. You can go in and select the sort of data that you want. I don’t know how flex­i­ble it is. And how much it, how close­ly it maps to your check­list. But I’ll spend some time on that this week­end and see.

[49:56]  Tony Kynas­ton: Okay thanks. I could­n’t see oper­at­ing cash flow. I don’t know if you’ve seen that yet. 

[50:01] Cameron Reil­ly: Price oper­at­ing cash flow is there. [cross talk­ing 50:09] They have a price to free cash flow and a price to oper­at­ing cash flow. 

[50:11]  Tony Kynas­ton: Okay well good. Well, that’s a first, I could­n’t find it. So you’ve found it, that’s great. Because my ques­tion was going to be whether the account­ing stan­dards in the US were the same as those in Aus­tralia? And was oper­at­ing cash flow was the same thing. We need to do a com­par­i­son. 

[50:26] Cameron Reil­ly: Yeah. Yes, I want to try and set up a fil­ter on it. And run it and com­pare it to a stock doc­tor fil­ter and see what we get. It’s always nice, we had share analy­sis. As a sec­ond source for a while. This might be a replace­ment for the stock doc­tor. might be a sec­ondary data source for us to replace share analy­sis with.

[50:48] Tony Kynas­ton: Oth­er mod­els if we can repli­cate stock doc­tor with US stocks and over­seas stocks. That might give us an inside into those mar­kets too. 

[50:56] Cameron Reil­ly: Yeah, because we have been try­ing to fig­ure out how to lunch a US addi­tion to the show. Because we have a num­ber of US sub­scribers. Clutch­ing togeth­er and Cana­di­an sub­scribers clutch­ing togeth­er. Their sys­tem instead of the best they can. We’ve been try­ing to find some­thing. So thank you for re bring­ing that to my atten­tion. The last ques­tion was from Jamie this morn­ing on Face­book. He says the KMDCO has just resided. Is that a trig­ger to sell? Oth­er investors seem to think so. Giv­en the share price slum this year.

[51:30] Tony Kynas­ton: I have not seen that. Let me have a look. I’m sur­prised to hear that. What’s hap­pen­ing? I just got a call from the stock doc­tor. What’s hap­pen­ing with the share price. It’s gone down a bit. Just going to look at the five years share price. Looks like it might be get­ting close to a sell. NO, it’s prob­a­bly still above its sell. I don’t think that’s where the morn­ing news has­n’t prob­a­bly caught up with the month­ly share graph yet. That would be my guess.

[51:53] Cameron Reil­ly: Just pulling up the announce­ment off of stock doc­tor. Res­ig­na­tion of Kath­man­du hold­ings group CEO Xavier Symon­ette. After five and a half years with the com­pa­ny. Xavier has decid­ed to pur­sue anoth­er oppor­tu­ni­ty. With the Aus­tralian pub­lic ser­vices in a senior role. Which will be announced short­ly. He’s ever remind­ed the com­pa­ny through a six-month notice peri­od. Until the board decides to release him. The chair­man, David Kirk said we are dis­ap­point­ed to lose Xavier. But under­stand his desire to take up a senior role in Aus­tralia, pub­lic ser­vice. For which he has very cre­den­tials. Does­n’t sound like he’s being fired for doing a shit­ty job.

[52:31] Tony Kynas­ton: No. He’s been there for 5 years.

[52:38]  Cameron Reil­ly: Share price, share prices. Not been doing well this year. But that’s under­stand­able. What’s it like over the long term?

[52:46] Tony Kynas­ton:  Well it’s like all the oth­er [cross-talk­ing 52:48] that went down dur­ing COVID has come back up. So if in review say­ing that the CEO Xavier Symon­ette has resigned. After 5 and a half years. Is going to hit up the Aus­tralian trade and invest­ment com­mis­sion.

[53:07] Cameron Reil­ly: Oh, that sounds like a cushy retire­ment. 

[53:10] Tony Kynas­ton: Well he’s pret­ty young, he’s not that old. [cross-talk­ing 53:13] And the trade min­is­ters have announced there.

[53:21] Cameron Reil­ly: I met the Aus­tralian guy once. I was fea­tured as an Aus­tralian promi­nent export Austrade thing in LA. Some years ago. The height of my noto­ri­ety.

[53:37] Tony Kynas­ton: What were your export­ing?

[53:37] Cameron Reil­ly: Pod­casts. The pod­cast net­work. They had me up there. I’ve got a pho­to of myself shak­ing hands with the CEO of Austrade. Or what­ev­er his posi­tion was at the time. Yes, they’re not near the sell line yet. I’m look­ing at their chart, but it actu­al­ly might be almost ready to cross the buy line. 

[54:02] Tony Kynas­ton: Yes. I think they have been on the buy list at some stage. 

[54:06]  Cameron Reil­ly: They have been yeah. But looks like they are just on the buy line now. 

[54:12] Tony Kynas­ton: Right. Okay. Well, I think we have to wait and see what hap­pens with the share price. I’m won­der­ing why some­one has been run­ning the pub­lic retail com­pa­ny. Is going back into pub­lic ser­vice roles. Espe­cial­ly a chal­leng­ing one with a. I’m mak­ing this Austrade we’re deal­ing with the Chi­nese tar­iffs com­ing on. While in the bowl and oth­er things. That would be a tough gig. He was, just read­ing through the rest of the arti­cle. It was at the head of Kath­man­du last year when they bought Rico and dou­ble the size of the com­pa­ny. But also increase their debt. I’m para­phras­ing here. And their prof­its, their 2020 prof­its were dec­i­mat­ed by the pan­dem­ic. 

Which reduces sales and lead to a 44% drop in under­ly­ing net prof­it. So, read­ing between the lines here and sug­gest­ing that. The pos­si­bil­i­ty is that he did­n’t get a bonus this year. Or he’s being shown the door for putting extra risk in the com­pa­ny. And who knows. I’m spec­u­lat­ing there. I don’t know. At this stage, to answer the imme­di­ate ques­tion. I’m going to wait and see what hap­pens with this com­pa­ny. It’s not liked the per­son is being sacked for putting his fin­gers in the till. Or doing a spec­tac­u­lar­ly bad job. It seems more like that there might be some oth­er issues applied. And I mean a lot of the share price will hinge on as they replace this per­son as well.

[55:44] Cameron Reil­ly: Well if you look at the finan­cial health in the stock doc­tor. It’s been strong. Neu­tral to strong for the last few years. 2019 it was neu­tral, but 17 it was strong. 18 it was strong, 20 its’s been strong. Rev­enue growth has been strong, even this year. If you go back, the last few years. Last few halves 7.89, 4.36, 1.35, 9.16,17.75 Jan­u­ary 19. 40.26 on July 19. 32.96 on June 20. 41.9 on July 20. Although I guess acqui­si­tions will help with that right. Yeah, basi­cal­ly by rev­enue.

[56:30] Tony Kynas­ton: And I’m just look­ing at it now. So the down­loaded last week has a share price of $1 49 on that, and it’s now $1.16.So it dropped sig­nif­i­cant­ly. $1.49 was just off the bot­tom of the buy­er list. I’m just going to look at this $1.16. And it’s, no it’s still at a .09 score. I don’t think this is real­ly get­ting to the buy­er list. But it’s get­ting close. 

[56:59] Cameron Reil­ly: So I guess the ques­tion here is. We often talk about one of the rea­sons you’ll sell a stock. Is on bad news. CEO resign­ing slash get­ting pushed. Is that nec­es­sar­i­ly kind of bad news that would make you sell or as a con­tin­gent on oth­er things?

[57:20] Tony Kynas­ton: I think it’s con­tin­gent. Like I said if there was some kind of pro­pri­etary going on behind us. Which does­n’t seem to be the case. Then I’d def­i­nite­ly sell it. But I’m going to see what the share price does. It’s still a bit above its sell price. It’s down a lot, from $1.60 to $1.16. So the mar­ket isn’t that hap­py with what’s going on. I think for me it’s a worse case. Who does the per­son gets replaced by? That anoth­er inter­est­ing thing in itself. If this guy, well I imag­ine he’s been inter­view­ing for the Austrade job for a while. If he has­n’t kept his com­pa­ny or his board apprised of what’s going on. And they haven’t got some­one to go under­wings. Then this looks like, it’s a quick job. And then some­thing’s hap­pened to pre­cip­i­tate, the move. Because if it was a good suc­ces­sion plan. They would have come out and say sor­ry to see the old guy go. Meet the new one. But they are not say­ing that. That’s a red flag because that could mean that this guy or the board has uncov­ered some­thing. They are meant to tell the mar­ket if they have done that. Some­times they can be a bit slow in doing that. The more I think about it. The more I prob­a­bly go towards sell­ing in this case. 

[58:47] Cameron Reil­ly: Do you hold it?

[58:47] Tony Kynas­ton: I don’t, no.

[58:50] Cameron Reil­ly: It’s not in our port­fo­lio either. Yeah, it’s inter­est­ing. It’s an inter­est­ing one when there is no announce­ment of the tran­si­tion. 

[59:00] Tony Kynas­ton: Yeah. Exact­ly. 

[59:03] Cameron Reil­ly: So on the month­ly graph. It’s still hold­ing up well. I’m kind of 50–50 on this. I’d like to know who is going to replace the guy. And what the ball plans were. Good one. Thanks for bring­ing that to our atten­tion Jamie. And that’s the full lid boys and girls.  As CJ Craig would say. 

[59:22]  Tony Kynas­ton: Well thank you. Spend a cou­ple of hours talk­ing with Cam Williams. And then going through this as well. So some good ques­tions there.

[59:29] Cameron Reil­ly: Yeah. Been fun. What’s on for you for the rest of the week TK? When do you head to the coun­try vil­la?

[59:37] Tony Kynas­ton: Not for a cou­ple of weeks. But I’m going down to play golf in the hunter over the week­end. I’m tak­ing a long week­end up there.  Which will be nice. Every year around this time we have a char­i­ty chal­lenge. Golf tour­na­ment.

[59:51] Cameron Reil­ly: You said the one you won last time. 

[59:54] Tony Kynas­ton: Yeah, it’s the same guy. Slight­ly dif­fer­ent tour­na­ment. This is anoth­er, the one we won last time, was an annu­al event that sort of cor­re­lates after a year. Of the golf tour­na­ments. This one fol­lows that, and the same peo­ple go away for a week­end. Play cours­es usu­al­ly in Mel­bourne. Because the third day is a celebri­ty Ambrose event to raise mon­ey for char­i­ty. But we are doing it in the hunter this time. Because the bor­ders were opened when it was being planned.

[1:00:27] Cameron Reil­ly: Right. Is this with Rud­dy? Is he com­ing up on the team?

[1:00:30] Tony Kynas­ton: Yes. Def­i­nite­ly. We’ll have some fun. Even if we don’t play golf very well. But we’ll have some fun. 

[1:00:37] Cameron Reil­ly: Bot­tles of red wine in the Hunter Val­ley region already run­ning for cov­er.

[1:00:46] Tony Kynas­ton: They are putting their prices up. Because they know they’ll make sales this week­end.

[1:00:48] Cameron Reil­ly: Tony is com­ing. Prices are up. Christ­mas comes ear­ly. 

[1:00:56] Tony Kynas­ton: That will be fun. So you just want to get a few things knocked off before I go. Because we will come back and head for our hol­i­day again on vaca­tion.

[1:01:06] Cameron Reil­ly: Right. Love­ly. Okay, enjoy your week. Stay out of the heat.

[1:01:13] Tony Kynas­ton: Yes. I can’t wait to put the air con­di­tion­ing back on.

[1:01:19] Cameron Reil­ly: Thanks.

[1:01:17] Both: Bye.