What Is QAV?
QAV is a rules-based value investing system developed by Tony Kynaston over 30 years. It uses 17 data points to identify quality companies trading below their intrinsic value — and tells you, with minimal guesswork, when to buy and when to sell.
After 20 years in senior management at Shell and Coles, Tony retired at 43 to invest full-time. QAV is the method he developed for himself over 30+ years, studying the world’s most successful investors. He has achieved an average double-market return over that period. He is not, and has never aspired to be, a financial adviser.
Cameron left Microsoft to launch Australia’s first podcast in 2004 and the world’s first podcast business in 2005. He’s the author of The Psychopath Epidemic and producer of the QAV podcast. By his own admission, he knew nothing about investing when this started — which makes him the ideal person to make Tony explain everything from scratch.
What is value investing?
Made famous by Warren Buffett and his partner Charlie Munger, value investing is the discipline of only buying stocks in companies that are performing well, have good future prospects, and are currently undervalued by the market.
Most people invest based on two emotions: fear and greed. During bull markets they chase whatever’s hot. During downturns they panic and sell. Neither approach has much to do with the actual value of the underlying business.
“Did you hear about that hot new tech stock? It’s gone up 500% in one year!”
“Really? I better buy some!”
Value investing is the opposite. It’s about using data to buy shares of quality companies that are temporarily undervalued by the market. The theory is simple: if the business does well, the stock price will eventually catch up.
Buffett and Munger have used this approach to build Berkshire Hathaway into one of the largest companies in the world. Tony has used his version of it to achieve an average double-market return for over 30 years.
How do you find undervalued shares?
There are two main schools of thought. One involves deep domain expertise — knowing a specific industry, its competitors, its trends. That’s a full-time job, and most people can only be an expert in one sector at most.
The QAV approach is different: let the numbers do the talking. Rather than relying on stories, forecasts, or analyst reports, we look at 17 objective data points to evaluate how a company is performing and what we think its shares are actually worth. From those numbers, we calculate a QAV score — and buy the highest-scoring stocks that are trading below their intrinsic value.
The nine rules Tony follows
These are the principles that underpin every buy and sell decision Tony makes. Simple in theory; genuinely hard to stick to in practice.
Only buy undervalued shares with a high margin of safety. Look for the right combination of quality and value — not just one or the other.
Hold until one of three things happens: the company issues negative financials or guidance; the share price breaks the three-point trend line; or you need the funds for something else.
Always be investing. Bull markets, bear markets, kangaroo markets. It’s time in the market, not timing the market, that adds up over the long term.
No decisions based on emotion, forecasting, or FOMO. The numbers tell you what to do. Follow them.
Take a long-term view. Invest to build wealth over decades, not to get rich quickly.
Maximum ~20 stocks in a portfolio. Enough to diversify without diluting your best ideas.
Never catch a falling knife. If an undervalued stock is still declining, wait for a confirmed rebound before buying. There are always better things to do with your funds while it’s falling.
Ignore the stories. Listen to the numbers. Companies, brokers, and analysts are always trying to sell you something. The data doesn’t have an agenda.
Minimise fees and taxes. Every dollar lost to fees or unnecessary tax is a dollar that can’t compound.
Slow and steady wins the race
Stock markets have historically returned around 10% per year on average. Warren Buffett has averaged 19.7% annually over 48 years — and considers himself very low risk. That’s Tony’s benchmark: 19–20% per year, compounded over decades.
The returns don’t look exciting in the first few years. Then the snowball effect kicks in.
| Starting with $10,000 | After 10 years | After 20 years | After 30 years |
|---|---|---|---|
| 10% per year (index fund) | $25,937 | $67,275 | $174,494 |
| 20% per year (QAV target) | $61,917 | $383,376 | $2,373,763 |
“It’s time in the market, not timing the market, that counts.”
Charlie MungerAt 20%, it takes 14 years to turn $10,000 into $100,000. Then just another 6 years to reach $300,000. Five years after that, you’re approaching $800,000. That’s what compounding is about — the curve gets steeper the longer you stay on it.
How do I learn this?
The best entry point is the podcast. Tony and Cameron have covered the system in exhaustive detail across 400+ episodes. If you’re brand new, start with the reboot episodes — Episode 301, then 303 and 305 — before jumping into recent ones. The early episodes assume no prior knowledge; recent ones assume you already know the basics.
For reading, Tony recommends starting with Buffett: The Making of an American Capitalist by Roger Lowenstein. A full reading list is available here.
Then work through the rest of these member resources — starting with the Investment Ladder, then the Checklist.