QAV America (free feed)

Episode Overview In this episode of QAV America, Cameron and Tony open with reflections on the tragic Bondi attack and Australia’s long-standing gun laws before turning to the week’s U.S. stock market action. They discuss recent market jitters, AI-driven volatility in tech stocks, and the ongoing rotation into “value” names. Cameron then delivers a deep dive on Ziff Davis (ZD) — a little-known but highly profitable owner of the internet’s comparison-shopping and review infrastructure. The conversation explores ZD’s long history, its reinvention after the dot-com crash, its heavy reliance on SEO and affiliate monetisation, and the existential question hanging over the business: will AI replace human-driven product reviews? Rather than forecasting the future, the episode frames ZD through the QAV lens — cash flow, valuation, optionality, and downside protection — and examines why a business that looks structurally threatened may still offer attractive value today. ⸻ Timestamps & Topics 00:00 – Australia, violence, and contextReflections on the Bondi tragedy, Australia’s gun laws, and why mass shootings remain rare compared with the U.S. 01:40 – U.S. market news: jittery but selectiveU.S. indices drift lower as investors wait on jobs and inflation data; discussion of “value” rotations and why index definitions of value differ from QAV’s approach. 02:40 – AI stocks wobbleAI-linked stocks pull back sharply, with Broadcom (AVGO) highlighted as suffering its worst three-day decline since 2020. 03:30 – Commodities and energy signalsBasic materials outperform; copper strength linked to data centres and electrification; weakness in oil and LNG despite geopolitical tensions. 04:30 – QAV America portfolio performanceShort-term underperformance versus the S&P 500, but strong long-term outperformance since portfolio inception in September 2023. 05:00 – Winners, laggards, and watchlist highlightsReview of top portfolio performers and notable stocks previously covered but not purchased. 07:30 – Deep dive : Ziff Davis (ZD)Introduction to Ziff Davis (ZD) and its role as the hidden infrastructure behind tech reviews, VPN comparisons, speed tests, and product rankings. Transcription   [00:00:00] Cameron: Welcome to QAV America. Tony, episode 32. What do you know? Tk? Tony Kynaston: Well, it’s reached the shores of America and America’s new outlets, but it’s been an unfortunate. Well, worse than unfortunate time in Australia. So, um, a lot of, uh, reflection going on in Australia over the terrible things at Bondi Beach. I had lived in Sydney where I was living, uh, we would’ve been pretty close to it. Cameron: Yeah, very shocking. Um, I think it’s maybe the third mass shooting we’ve had in. Nearly 30 years. Tony Kynaston: Mm-hmm. Cameron: Does that sound about right? Tony Kynaston: Yeah. I can only think of poor Arthur and this one being that bad as being a couple of. know, sort of murder, suicide things, farms or whatever along the way. But this is the first, Cameron: Yeah. Tony Kynaston: uh, with, you know, weapons that shouldn’t have been licensed, I don’t think in the first place to people. Cameron: In public, Tony Kynaston: Mm-hmm. Cameron: you know, civilians, uh, all of that kind of stuff. The first one [00:01:00] like that, since 1996. That we’ve had every 30 years. So yes, very shocking, very sad, very tragic, very complicated. Very complex. Uh, but, um, yeah, it’s something that we’re, we’re used to reading about in the front cover of the New York Times, but not, uh, about Australia. So anyway, moving right along. Um. Let’s talk about stock market news in the United States over the last week, Tony. And then I will do a deep dive on Ziff Davis. ZD is the ticker Tony Kynaston: Would that be Cameron: as IZD. Yeah, ZD you’re right. And as I mentioned, there’s an Isaac Asimov, uh, leak to this, which you will enjoy ’cause they’re both big fans of Asimov. Tony Kynaston: Mm. Cameron: Well, the market’s been a little bit wobbly in the US again. Uh, finished the week with modest [00:02:00] losses s and p 500. The Dow and the NASDAQ are all trending. Lower traders over there are waiting for key economic reports on job and inflation. Um, stocks saw pressure as investors are moving into. Value area, Tony? Value. Tony Kynaston: Oh, we can, got someone to sell to. Cameron: Yeah. Although quite often what we’ve seen over the years is when they talk about value, it’s not the same way that we talk about value. Tony Kynaston: not. Cameron: Our definition of value is a little bit more specific. I think Tony Kynaston: Yeah. Cameron: the AI. Tony Kynaston: the indices normally talk about value as being the lowest deciles of the PE ratio range, but as we know, PD ratios aren’t a great guide to the value of a company Cameron: yeah. Tony Kynaston: mm. Cameron: We’re looking, we’re looking at their ability to outperform, uh, as businesses and getting a bit of discount. [00:03:00] What else? AI and tech sectors, uh, sort of jittery as a result of some of this stuff. Some AI linked names like Broadcom have had some big declines. It had its worst three day drop since 2020 was some of the AI investment narratives, uh, facing some scrutiny. Basic materials and financials have outperformed. Uh, in our Australian show, we were just talking a lot about copper. And, uh, you did a deep dive on one of the Australian copper miners. There is resources, obviously there’s, uh, gold is still doing well from a commodities perspective. Uh, prude oil and LNG are not doing well, and we aren’t really sure why. But movements around Russia, Ukraine, and Venezuela might have something to do with it. And we also we’re talking about the fact that all of the. Urgency around building data centers and the energy requirements for data centers. Uh, playing a big role in driving copper prices up. [00:04:00] Um, what else have I got? That’s basically it for the us I think, uh, general overall market news, it’s a bit jittery over there at the moment, but our, before our portfolio has had a good 30 days. Relative to the s and p 500, it’s up 3.2% in the last 30 days. Our portfolio in the us, that is versus 1.22% for the s and p 500, but year to date, we haven’t had a good year. Still, I think we’re down about 10, 11% versus the s and p up 14%. But, uh. All time. If I go back, since the beginning of our portfolio in the us, September, 2023, we’re up 64% versus the s and p 500, up 53% over that period of time. So we’re doing okay over that two plus [00:05:00] years. Um, big performers in our portfolio, uh. See, I’ll stack rank and by game still, Willis Lease Finance Company up 186% in Nova International, up 169% Euro Cs up 99% BLX. The Foreign Trade Bank of Latin America is up 84%. RM Regional Management is up 70%. UBS is up 38. Gas, stealth gas is up 37, 30 8%. Sarcos Energy Navigation. TEN is their ticket. They’re up 32%. KT is up 23%. Your initials in reverse. Jackson Financial is up. 17. Renaissance Air Holdings is up four, and our most recent acquisition career Electric Power is up one and a half percent since we added it a few weeks ago. And then I like to talk [00:06:00] about the companies that we’ve talked about but haven’t actually bought because our portfolio is full. Uh, it’s been some great performance, uh, from these companies. Obviously the top one Zep, the Chinese watch company, uh, is up 850% since we talked about ’em in July. Uh, ChemX is up 106% since we covered ’em back in March. Lot of around 40% Canadian imperial banks, up 46, uh, ORX corporations up 40. Precision Drilling is up 43 IHS is up 37. Sasol is up 26. Ford is up 26. People told me on Reddit that Ford was a dud, shouldn’t, shouldn’t even be looking it for, it’s up 26% since May. American Airlines is up 11% since we talked about ’em. Topgolf is up nine air cap that we talked about. The end of November is up [00:07:00] 8% since then. So all in all, uh, we’ve talked about 29 companies on the show since March 22 of them are up, seven are not the win ratio of 76% so far with those. So. They’re doing okay. The system is working as we would expect it to in the us Tony. So today I am going to talk about a little company called Ziff Davis. As I said, um, you know, you’d be familiar with Ziff Davis, I’m sure. I know you’re not necessarily a big tech head, but you, you’ve heard of Ziff Davis, I’m sure zd. Tony Kynaston: You’d lose that bet. I hadn’t heard of ’em until I started researching them today. Cameron: Really? Oh, okay. Well, you haven’t been in the tech industry like I have for the last 30 odd years. Tony Kynaston: no. Cameron: you are, Tony Kynaston: But wasn’t there once, but not, not for a long time.[00:08:00] Cameron: yeah. So if you, if, if you are trying to Google the best tech product, uh, best VPN because you care about your privacy, you’re probably gonna end up on a Z Davis. Um, which cameras should I buy? Ziff Davis. Which phone? Which anti forest package. If you’re ending up on a website, you’re probably ending up on one of the many, many properties owned by Ziff Davis. Tony Kynaston: I Cameron: They make about half a, yeah, I mean, I am your Ziff Davis. Yeah. What should I get then? I’ll ask Ziff Davis and then I’ll come back to you and tell him. Um, Tony Kynaston: so Cameron: a half a bill. Tony Kynaston: that Cameron: Hmm. Tony Kynaston: you are not your surplus to the chain. Now I can just, uh, yeah, speed things up. Cameron: Yeah, but then you, that would, that would require you going online and looking something up. So how old are you now? Tony Kynaston: That’s Cameron: 60. What? Yeah. Yeah. So people are over 60. Dunno how to dunno how to [00:09:00] internet like us young kids. 55. You miss the cut. Uh, they make about half a billion dollars a year by. Basically being the people that tell you what to buy

Overview In this episode, Cam and Tony dig into the strange, noisy twilight zone of the current US market: rate-cut expectations, mega-cap fatigue, and a broadening rally that’s finally throwing some love toward the small and mid-caps that QAV thrives on. They walk through the performance of the US portfolio, poke at the rotation narrative, and then Cam takes everyone deep into the iron-ore jungles of Brazil with a pulled-pork deep dive on Vale — “the FMG of Brazil”, complete with dam failures, lawsuits, ESG fallout, and fat cashflows. Along the way they contrast Brazil vs Australia, FMG vs Vale, talk iron ore cycles, passive-investing distortions, and the macro-agnostic stubbornness that keeps QAV on the rails. It’s part markets, part commodity history lesson, and part true-crime mining documentary.  — Timestamps & Topics 00:00 • Fed rate-cut probabilities and why QAV ignores macro04:00 • US portfolio performance vs S&P 500 06:00 • Small-cap underperformance creates QAV pickings 07:30 • Passive funds distorting large-cap flows 08:00 • US portfolio winners rundown14:00 • SEC leadership change and weakening shareholder power • (none)16:00 • Pulled pork intro: Vale (VALE), “the FMG of Brazil” • VALE, FMG Transcription   Cameron: Welcome back to QAV America Tony, episode 31. Big News in America. Tony the Fed is meeting rate cut widely Expected markets are pricing in a 90% chance that the Fed will cut rates by 25 basis points today. Tomorrow, we’ll see what happens. It’s driven a big rally across equities in the us. A Santa Claus year end rally, they’re saying, but we were just, we were just talking on our Australian show about our. Reserve bank that’s meeting today, that’s, uh, gonna decide what they’re doing about interest rates and it doesn’t really matter. A great deal to us can have an impact on the broader economy, but from a QAV perspective, we play the cards as they’re dealt. Interest rates go up, interest rates go down, doesn’t really affect our system. One jot does it. Tony Kynaston: No. I mean, it may cause us a bit of work if we have [00:01:00] to buy and sell something, but no, we don’t. Rely on macro themes at all, nor can I explain them most times and even more remotely can I predict them, so I don’t, don’t even try. Cameron: On the Australian show, I was just reading out results from some of our Australian listeners, uh, following our system. One guy was saying his portfolio’s up 90% this year. Another was saying it’s up 50, 55% this year. Great results across the board. Uh, and it’s a good year, uh, in the Australian market as well as in the US market. Our portfolios are doing well. But as we were talking about, it’s just the system just tells us what to do, uh, tells us what to buy, when to buy, what to sell, when to sell. And what I’ve learned to do in the years we’ve been doing the show is just follow the system. It removes all of the emotion from it, and it also means I don’t really need to follow what’s happening. [00:02:00] Macro economics or in the market, generally speaking. ’cause the system factors all of that in. It works in ups, boom cycles, it works in bear cycles, it works if interest rates are high, it works if interest rates are low. It really just tells us what to do and I, you know, I don’t really need to do much at all. As I was saying on the Australian show, if one of my alerts goes off and says I need to sell something, I sell it. I replace it and then I go back to what I was doing before and just ignore the noise, which is a great way to invest. Tony Kynaston: It’s the only way to invest, I think. And I, I just wanna add one more thing to that, and that is that, um, because of that, the, the, I guess the number one thing you can have as a trait to be an investor is persistence. It’s just if you know your system’s gonna work on all kinds of. Ups and downs in market situations, and it has for me over [00:03:00] decades. then rely on it. Don’t start second guessing it. Don’t start oh, it’s been a really good year because like, I’ve had a good year on the share market this year. And, and straight away my brain goes, oh, maybe it’s time to sell. What can we have two good years in a row? What about three? Can we have three good years in which it’s like, it’s like. They just fools errands trying to work out what’s gonna come Cameron: Yeah. Tony Kynaston: So you have a system and you stick to it, and if the market does turn down, you stick to it because you’ll ride it through and then you’ll catch it, at reasonably or low point and it’s way back up again. Cameron: Yeah. Well, speaking of portfolios, so looking at our US portfolio in stock, EDIA, it’s up around about 3% this month versus the s and p 500, up about 1.75%. Um. All time. Our portfolio is up around about [00:04:00] 58%, which all time for this US portfolio is from September, 2023. So just over a couple of years versus the s and p 500, up 54%. So we’re doing a little bit better then the market over that time and. It’s, there’s an interesting story I saw in Morningstar, Tony about rotation away from mega caps in the US towards value, small cap and core stocks. Um, this is dated 4th of December in Morningstar article says. As of November 28th, 2025, the US equity market was trading at a 3% discount to a composite of our fair value estimates. Of the over 700 stocks we cover the trade on US exchanges. Later on in the article, he says, small cap stocks outperformed in [00:05:00] November as the Morningstar US small cap index rose 2.48% comparatively Morningstar’s, US mid cap index rose 0.64%, and the US large cap index declined 0.05%. Small cap stocks remain the most undervalued trading at a 50. 15% discount to fair value compared with large cap and mid cap trading at 3% and 2% discounts respectively. But obviously the big, the, you know, we’ve talked on earlier episodes that, like the Mag seven has been like 70% of the markets growth for performance this year. So the fact that it’s coming off a bit, uh, doesn’t really discount the impact that it’s had on the market over the course of the year. But when I look at our buy list. Our US buy list each week. There’s still just plenty of opportunity at the small and mid-cap market space, which just seems to be getting ignored by the [00:06:00] general market for some reason. I dunno why we’re, we’re seeing so much, uh, opportunity of stocks that are coming up, showing up as undervalued, but you know, it’s a good time for us. Tony Kynaston: well, I think, you know, that it’s, it’s been a tale of two markets, perhaps three markets really in Australia and in the us. Mag seven have driven the growth. And, and I guess if you can cast that net a little wider into things like, um, data centers and power supplies to data centers, that kind of thing, have all been dragged up, in the, um, in the AI revolution. But. That if you exclude that from the market, it’s been reasonably flat or certainly it hasn’t been growing as quickly as all that. But what we also found in Australia, and I guess it’s the same in the us, is that with a lot of passive investing done these days, and even with big, even if it’s not passive investing, it’s if it’s big active fund managers because of their size, they still are buying into big [00:07:00] caps and um. That’s kind of opened the space a bit in the smaller cap market for, uh, stock pickers to come in and pick the eyes out of it and do really well because, um, you’re not, know, the, it’s, small caps go through cycles. They outperforming underperform, they’ve been underperforming recently. So, um, as people sort of, wake up to the fact that there’s not as much passive investment in the small cap universe, it, um, it’s, it’s doing better. Cameron: Yeah, well, like, uh, just running through some of the stocks in our portfolio, some of the best performers over the last couple of years. Willis Lease Finance, we talked about them again on the show last week. They do, uh. Plane engine leasing, I think, uh, they’re up 168% since we bought them in Nova International, ENVA. Uh, they’re a online financial services company. They’re up 120. [00:08:00] 7% Euro CS Limited, ESEA. They’re in the shipping business, dry bulk and container carrier stuff. They’re up 120% BLX, the Foreign Trade Bank of Latin America. Is what it says on the label. They’re up 82% since we bought them. Regional management, RM diversified consumer finance company, they’re up 57%. Sarcos Energy Navigation, TEN. They’re a Greek based. Crude oil shipping company, they’re up 40% since we bought them. The list goes on. So, you know, these are companies I’d certainly never heard of before we started doing the show. I I, I would gather most Americans and most American investors have never heard of these companies. They’re not well known Brad names. They’re your classic sort of, as we often say, classic Berkshire type companies. They’re just boring businesses that have [00:09:00] got. A line of business they’ve been in for decades. They’ve got good customer relationships, supplier relationships, they generate cash, and because they’re boring, we’re able to get ’em when they’re at a discount to their valuation, and then we just ride it out. Tony Kynaston: Yep. Cameron: Uh, regression to the mean, some of the stocks that we’ve talked about on the show, but don’t necessarily own the ones that I’ve done deep dives on over the last year, uh, that have done well. ChemX Corporation CX is the ticket code. Uh, they’re up 94% since I talked about ’em in March of 25. Canadian, Imperial Bank of Commerce, CM is up 40% since I talked about ‘ em in May. Ford Motor Company is up 22%. IHS holding is up 39%. Precision Drilling Corporation. PDS, we talked about them in June. They’re up 42% Zep. Of course, the Chinese smartwatch company is still up [

Overview In this episode of QAV America, Cameron and Tony take a tour through the strange split-brain mood of the US markets, where weak economic data is somehow bullish because investors are convinced the Fed will cut rates in December. They break down the odd macro setup, check in on the portfolio, and walk through fresh results from star performer **Willis Lease Finance (WLFC)** and a big buyback from **Enova (ENVA)**. From there, Cameron recaps the performance of the 27 US stocks they’ve analysed this year, before diving into a full deep-dive on **AerCap (AER)** — the world’s largest aircraft lessor. The conversation covers why airlines lease instead of own, how aircraft leasing actually works, why Ireland is the global nexus for the industry, the wild origin story of Guinness Peat Aviation, and the massive headache AerCap faced when Russia and Ukraine seized more than 150 of its aircraft in 2022. They wrap with QAV scoring, book-value checks, revenue and profit trends, and a broader conversation about how the leasing model fits into cyclical markets, AI, mobility, and long-term capital allocation. Everything from the Fed to kung-fu neural adaptation shows up along the way. — Timestamps & Topics 00:00 – Market mood & macro split-brain (no tickers) 02:00 – Portfolio news: Willis Lease Finance (WLFC) 03:40 – Enova International (ENVA) buyback 04:30 – Portfolio performance overview 06:00 – Recap of stocks covered this year 08:00 – Deep dive introduction: AerCap (AER) 40:00 – Final wrap & philosophical detour (AI, kung-fu, skills vs computation) Transcription   Cameron: [00:00:00] Welcome back to QAV America, Tony, episode 30. It’s the 2nd of December, 2025. How you doing? Tony Kynaston: Good summer in Australia. I’m Cameron: Summer in Australia? Uh, not in the United States though, and it’s the overall mood in the US markets. Tony, kind of weird, uh, to say the least bit of a split personality over there at the moment. I think on one side, investors seem to be getting increasingly confident that the Fed will cut rates in December. I think the future markets have the odds sitting at roughly 85%. Now, which is high enough that everyone’s basically planning their Christmas shopping around it. But the flip side is that the economic data, backing that up. It isn’t pretty. Um, you know, I know that there was sort of a break in gathering data while the government was shut down for a while. But manufacturing continues to slump. Inflation and [00:01:00] income growth are cooling off broad GDP expectations for next year of drifted down toward the 2% mark. So it’s sort of a bit of a soft landing fantasy mixed with a little fear that maybe things are wobbly over there. The market o. Tony Kynaston: cuts. That’s the looking The things are looking wobbly. We go through the looking glass like 10 years ago, 20 years ago. Those kinds of numbers were out and about. The market would be tanking. it’s doom and gloom. The economy’s busted. The inflation’s coming down and exports are going down. it’s like yippee. The fed’s gonna cut. We can Yeah. or Yeah. But it’s the, it’s the double-edged sword, right. Um. Yeah, the market’s not doing well, so interest rates are gonna get cut, but the market’s not doing the, the economy’s not doing great. Cameron: Hmm. put Tony Kynaston: called, people Cameron: And as we’ve talked about over the last year on this show, we know that most of the [00:02:00] returns in the Dow Jones are coming from six stocks or seven stocks. Um, so it’s very uneven. That said. Yeah, things are doing okay from our portfolio perspective, but, um, the market opened pretty strongly last week, but then by the beginning of this week, it seemed to have cooled off again. Crypto’s having one of its spasms, bond yields have jumped in terms of our portfolio specific stories though, Tony, some good news. Uh, Willis Lease Finance Company, WL. FC, which has been the rockstar in our portfolio, our US portfolio over the last couple of years. Um, it’s up 152% since we added it, but it was up at one point about over 300%. But they came out with their results this week. Uh, revenue came, [00:03:00] this is for the third quarter. Revenue came in at $183 million, which is up 25% year on year. Pre-tax income grew by the same percentage utilization of their engine and aircraft portfolio. So they lease out engines, mostly few aircraft, but mostly engines, uh, was up 86%. They lifted their dividend from 25 cents to 40 cents. They did note that margins of. Tightened a little, but overall, very solid results from them. And how did their shares do as a result? Uh, nothing much happened. Uh, just it went down. Um, so there you go. Great news. Let’s sell, as you know. Tony Kynaston: money. Let’s sell. want some more loss making companies to invest in? Cameron: Yeah. What, but what’s their AI story? That’s what we wanna know. Um, only other stock in our portfolio that had, [00:04:00] yeah, the only other stock in our portfolio that had any news that I could see was in Nova ENVA. They just announced a $400 million buyback, which we like to see. That’s all of the market news that I’ve got though this week, Tony. I’ve got, uh, I thought I’d just do a portfolio update while I’m at it though, uh, I’ll talk about some of the companies that we’ve talked about in recent weeks. So, the dummy portfolio that we run in the us uh, since I started it in late 22, September, no, sorry, 23. September, 2023 is up 53.3%. Uh, no, sorry, up 53.04% versus the s and p 500, up 53.3%, so we’re now returning. Pretty much exactly the same as the s and p 500. We’ve come from doing triple the s and p 500. At the end of last year, we were up 90% versus [00:05:00] 30%. We are back down this year to sort of neck and neck with the s and p. So it’s not been a good year for the stocks in our portfolio. They’ve all. Had fairly average years at least versus the index. But, you know, looking for it, looking at it over the long haul, I’m pretty happy with 53% return over a little over two years. Although if you could just buy an ETF and do the same, um, that’s, you know, be a lot easier to do that in some ways. But I do know that we will get back to our performance if history is any guide over the next couple of years, Tony Kynaston: case in Australia and for me over 30 Yeah. Yep. Cameron: And the, and the case from what we’ve learned from Buffet and Munger and all those guys over the years as well. For the month, uh, our US portfolio is down 3% versus the s and p, which is pretty much neutral for the last 30 days. Uh, of the companies that we’ve covered on the [00:06:00] show over the last six or seven months, there’s been some really great results there. I wish I had owned, uh, all of these stocks. I had the opportunity to put ’em in our portfolio. Remember Topgolf, Callaway we talked about a few weeks ago, we talked, we, we talked about them at the beginning of November’s 12th of November. They’re up 17% since then. There was up 20%. They’re down 4% today. So that was pretty good. I thought you’d like that. Um, community health systems are up 20% since we talked about ’em in October. Uh, lots of other great results in there too. Zep the. Chinese watch company is up 800% since we covered ’em in July. That’s still the highlight. Um, so out of, out of all of the stocks that we’ve covered, which is 27 on the show, I’ve done a deep dive on this year. 21 are up, six are not, six are down. [00:07:00] Um, the average growth out of all of them is about 43%, but it’s a 78% win loss ratio at the moment, so that’s pretty good. Tony Kynaston: kind of randomly too, aren’t you? From the Cameron: They’re on the buy list. But yeah, there’s usually about a hundred stocks on the buy list, and I don’t go from the top of the list as I normally would if I was getting add into portfolio. I select them based on them being a good story to talk about something interesting. And I have another interesting one this week, Tony. Tony Kynaston: uh, Cameron: I think you’ll find it interesting. No, but a company very similarly similar to WLFC, funnily enough, they’re called. Air cap. A-E-R-A-E-R is the ticket code for air cap. Air cap owns and leases out commercial aircraft, passenger jets, cargo planes, aircraft engines in helicopters. They don’t fly them. They rent them long term to airlines and other [00:08:00] operators similar to Willis Lease, but Air capa the. Um, the, the Walmart in this space, they’re the Costco, uh, WLFC are more of a, a family owned, uh, corner store. Uh, these guys are the giant supermarket of aircraft leasing. They will buy jets, lease them for eight to 12 years per contract. They manage a massive fleet. And then they do lease buybacks and sell them and juggle it. Assets. They also do engines, but they’re sort of a side quest for them. Willis Lease is a specialist boutique firm that focuses on engines, air cap, do everything. Um, Tony Kynaston: of way most operate these days, they would rather lease their planes than, than buy. Them outright. Better use of capital to lease. Cameron: don’t. ruin my narrative here. Tony. You’re [00:09:00] jumping ahead. You’re doing, you’re doing what Ray does. Cutting to the cutting. You, you, you’re doing the Reader’s Digest version of my very long story here, but yes, you’re right. Tony Kynaston: don’t wanna do what Ray does. I’m not gonna sit here, eat gummies when, when you. Cameron: Maybe you should. Uh, he apparently thinks it’s the best way to get through an hour with me is just to eat gummies. Um, yeah. Like, and that surprises me ’cause I, I know nothing about. Uh, these businesses, and we’ve talked about a number of companies that lease the shovels and, uh, what do you call it, the  picks and shovels. Yeah. Yeah. Uh, I think we talked about, well, we talked about

Episode Overview This week we dive into Korea Electric Power (KEP), a deep-value, government-linked Korean utility that has quietly swung from crisis-level losses to massive operating cash flow. We explore the company’s unusual history stretching back to a royal electrification project in the 1890s, its modern political entanglement with tariff controls, its nuclear-heavy energy mix, and why the market may be mispricing a regulated monopoly with a price-to-operating-cash-flow ratio of 1.5. We also cover the recent sell of VSAT on a 3PTL rule, the psychology of Reddit outrage at PCG, and the broader role utilities play in an AI-powered future where electricity becomes the new picks and shovels. Timestamps 00:00 – Opening chatter, Reddit outrage. 00:01:15 – VSAT sell rule triggered 00:02:00 – Introducing this week’s pulled pork: KEP 00:22:00 – Portfolio philosophy: buy deep value, sell by rules, ignore Reddit foam 00:23:00 – Final wrap-up and sign-off Transcription   Cameron: Welcome back to QAV America, Tony, episode 29. Uh, how are you? Tony Kynaston: well, thank you. Yep. All Cameron: I tell you what, the folks on Reddit on the value investing sub Reddit did not like my PCG uh, Paul Pork. Last week I did a summary of it for Reddit. Oh, the hate for PCG Tony Kynaston: bet. Cameron: was, so, it was great. They had, Tony Kynaston: did Cameron: mean, there’s so much hate. Tony Kynaston: with Love? Cameron: I did, I called it Leading With Love. Yeah, yeah. Uh, and manslaughter. I, um, Tony Kynaston: What? Oh, so PC G’s part of the hive mind on Pluribus. Now they come Cameron: yeah, it is, Tony Kynaston: love. Cameron: they’re leading with love. Yeah. That should be the tagline for that show. Um, but, uh, yeah, and it was just h hilarious to me how much anger and hate came out, and I was like, Hmm. Tony Kynaston: Well, I’m Cameron: Sounds like a good investment. Tony Kynaston: I. Cameron: Well, but they weren’t talking about the manslaughter. They were just talking [00:01:00] about it being a dog of a company Tony Kynaston: okay. Cameron: and somebody was going on about how they diluted their shareholders when they had to pay for the fires. And I’m like, and why do I care? Like I’m, I’m looking at it post dilution, not, Tony Kynaston: Yeah. Cameron: doesn’t affect me as an investor today, what happened in 2019, or whatever it was. Anyway. I did have to sell something outta the US portfolio. This week I sold Vsat. It was a three point trend line sell, and I replaced it with the company. I’m doing a pulled pork on today. Korean Electric Power, Korea Electric Power, KEP. Kepco. One of the few times I’ve been able to actually do a pulled pork on a stock that is now in our portfolio. Because I actually had to sell something. Don’t tell me what happened to the share price for Vsat today because you just broke the Ex-Girlfriend rule on our Australian show, and uh, I don’t want you to do it again. So, uh. The kept story. I know you’ve got furniture being delivered, so I’m gonna [00:02:00] run through this one quickly today. Uh, another power company. So last week we did PCG. This is another power company, obviously based in Korea. If you hadn’t guessed from the name another regulated monopoly like last week’s show, but this time they’re regulated monopolies in entire country, not just parts of California. Although we know California’s pretty big. And just a heads up, KEP report their financials in Juan, KRW. Bit like posco, the steel slash energy company that we covered a while ago on a, an earlier episode, episode 12, I think I did. Posco. And they’re also a competitor to KEP as it turns out. But we’ll get into this, but when you look at the numbers in stock, EDIA, they’re all in one, so you need to do the conversion. Uh, one USD is about 1,465 KRW, uh, what was that TV show in the eighties? Um, about a radio [00:03:00] station in the us That was it. Not, not, not the Korean one. WKRP, not KRW. Okay. The current share price at the time I’m doing this for KEP is about $16 74. They’re listed on the New York Stock Exchange, so, uh, they’re known in Korea as ion I believe. What they actually do is, well, they’re basically the power grid for South Korea. Um, essentially they transmit, generate, transmit, and distribute electricity to almost every type of customer, from households to Samsung fabs, to shipyards, to farms. The entire market is what they look after the National Grid. They handle virtually a hundred percent of transmission and distribution. They have about six generation subsidiaries across coal, gas, nuclear, wind, solar, you name it. [00:04:00] They produce about 60 to 70% of the electricity. There’s a handful of companies, including Costco, that uh, also generate electricity. Poco. When we did the pulled pork on them, I mentioned as a steel company, but it turns out steel mills are effectively power plants in disguise. Tony Kynaston: Okay. Cameron: making steel requires an immense amount of heat and energy. And when you blast iron ore and furnaces to make steel, you produce byproduct gases, waste gas, which instead of venting the gas, they capture it and burn it in their own onsite power plants to generate electricity. And they became so good at it that they started building standalone power plants and selling electricity back into the grid. And I think they might even be the second largest, uh, generator of electricity now. In Korea after Kepp. But uh, back, back to kep. [00:05:00] They also sell power related services. They run it and maintenance businesses around the grid. They have a whole bucket load of overseas projects, including they own a couple of coal mines in Australia or have interest in one boutique coal that they’ve had for. 15 years and they bought another one by Long Coal Mine. But they own a bunch of stuff all over the world related to energy. But, uh, you know, last week’s show, PCG, we had great. Well, not great. Fascinating stories about manslaughter and, uh, terrorist attacks and all sorts of stuff. Just a good story behind the founding of this company. Uh, not directly related to Kepp, but worth telling anyway. ’cause I’ve found it fascinating. The company started life in 1898 as the sole electric company. It was a [00:06:00] royal project by King Gaji who brought together trams and electric lights into the capitol. He ruled Korea for 43 years, from 1864 to 1907, first as the last King of Joon, and then is the first emperor of the Korean Empire from 1897 until he was forced to abdicate by the Japanese in 1907. And his wife, queen Min, who posthumously honored as the Empress.  Was even more powerful than he was apparently at the time of her death. She was this canny political player who was even more powerful than him, apparently, and was roundly hated in Korea by her, by his father, as well as the Japanese that were [00:07:00] ostensibly running the country at the time. And there was a conspiracy against her. One night agents were let into the palace by pro Japanese, Korean guards. Once inside, they beat and threatened the royal family and the occupants of the palace. As they were looking for her two women were killed mistaken for her. Um. Then they eventually located her, and I won’t give you the details, but it wasn’t nice what they did to her. She was assassinated by these Japanese agents and then her corpse was covered in oil and set fire to, so that’s how unpopular she was. She had Aly begun negotiations with the Russian Empire to align Korea with the Russians to play ’em off against the Japanese. Tony Kynaston: high. power prices. Cameron: No, I don’t think there was a lot of [00:08:00] power actually getting out to people at the time. Um. The king was first crowned in 1863 at the age of 12, and as I always say on my Roman Empire shows nothing works out better for a country than making a 12-year-old emperor. You can’t go wrong with that Tony Kynaston: Fox works well at your Cameron: Give, oh my God, nothing. Nothing could ever go wrong, giving complete power to, uh, a child. Never in history. Has that ever been a bad idea? So the Hung Song Electric Company, as it was known. Completed its first power plant in 1899. By the end of that year, they had launched their first streetcar service. They turned on the first electric lights in SO’S Jon, go Street, Jong yo Street, and then they continued to build a public lighting network and. Started offering electrical services to private homes. They even built a movie theater, which could be traveled [00:09:00] to by streetcar that went through downtown Seoul. And apparently it was, uh, a marketing ploy to promote the convenience of trains and attract tram passages over the 20th century. This basically morphed through nationalization and reorganization into Kepco. Modern corporation dates from 1961 and it’s always sort of been a political en enterprise. Really it’s all been about building a modern South Korea. It was run by Americans for decades until they were forced to sell it eventually to, uh, a Japanese company in the early part of the 20th century. But, uh, after World War ii, you know, America obviously was basically running South Korea for a very long time. After, well before the Korean War and during, and then after the Korean War. South Korean dictatorships were basically proxies for [00:10:00] the United States. Probably still are to a large degree, although no one would wanna say that publicly. Um, the Korean government invested a ton into it, even though it. But it floated on the Korean Stock Exchange in 1989 and then on the New York Stock Exchange in 1994. But it, it was like the Korean Development Bank and the National Pension Service. It was seen as one of the founding principles of the modern South Korea. Today the government owns just over 51% o

Episode Overview This episode dives into Pacific Gas & Electric (NYSE: PCG) and its strange mix of monopoly power, criminal convictions, billions in liabilities, climate exposure, and a CEO who says she’s “leading with love.” Cameron takes us through PG&E’s century-old origins, deadly infrastructure failures like the Camp Fire manslaughter convictions, the bizarre history of repeat explosions and corruption, and the unusual financial structure that keeps the company alive despite $58B in debt. Tony questions whether a guaranteed utility should even be privately owned, compares it to safer options like Berkshire Hathaway’s utilities, and wonders why we’d touch a business known for burning down half a state. Despite the horrors, PG&E lands on the QAV buy list due to cheap cashflow valuation, a protected regulated monopoly, and a massive turnaround driven by mandated wildfire-prevention spending and government-backed debt. Timestamps  00:00–02:00 US Portfolio performance update General markets02:00–03:30 MODG rises after last week’s pick MODG (TopGolf Callaway)03:30–04:30 Recent picks performance rundown 05:30–06:30 AU market outperforming “trash” theme Australian context06:30–41:00 Feature Deep Dive: Pacific Gas & Electric PCG41:00–47:00 After-hours: Stalker, House of Guinness, Slow Horses Transcription   Cameron: Welcome back to QAV America. Tony, I would ask how you’re doing, but I know because we just did our Australian podcast and you’re doing great. Let me answer that question for you. Tony Kynaston: I’m doing great. My portfolio is doing great. Everything’s great. Cameron: Everything’s great. Our US portfolio, Tony, I’m just bringing it up on the screen here all time. So it’s been running since, uh, September, 2023 is up 55% versus the benchmark I use the s and p 500, which is up 50%. So we’re doing 10% better than the benchmark, 55% over. A little more than two years. It’s not bad. Pretty happy with that. Tony Kynaston: I agree. Cameron: Pretty good. Tony Kynaston: We normally say it’s up 5% though, so usually you take one away from the other rather than make a percentage of a percentage. Cameron: [00:01:00] Okay. Tony Kynaston: better, but Cameron: But if we’re saying double market, then that’s a hundred percent. Isn’t that? How do you say that? If we’re saying double market. Tony Kynaston: Well, double market’s just double market. Cameron: It is double Tony Kynaston: market. Yeah. Cameron: twice as good. Okay. Um, some of the, uh. Tony Kynaston: raise that with me and said, are we better off saying we do five to 10% better than the market? ’cause in Australia, I guess in the US as well, the long term’s, about 10%. So, um, I said, yes, if the market does 10%, it’s right. But if it’s doing, if it’s up as in the America, America, it’s, um, it’s wrong. Cameron: Yeah. Right. Tony Kynaston: Mm-hmm. Cameron: Some of the, uh, just looking at the last, uh, let’s say the last 30 days in our portfolio, our portfolio is beating the index in the last 30 days. Uh, not by a huge amount, but by, well actually I guess judging by [00:02:00] the way you are rating it, s and p is up 0.13% in the last 30 days. Our portfolio is up 0.61%, so that’s five. Five times better. That’s what I was gonna say. Yeah. Uh, the, Tony Kynaston: I like the core skill of marketing. Okay. It’s great. Cameron: yeah. Uh, unfortunately stocked doesn’t tell me how the individual stocks have performed in a 30 day period. It just gives me it from the get go. But, uh, I did want to just look at our, uh. Performance of some of the other stocks that we’ve, uh, talked about over the, uh, last six months or so. We’ve been doing the show, see how they’re all doing. You’ll be happy to know that the company that we talked about last week, top Golf, Callaway Brands, [00:03:00] M-O-D-G-A-K-A, modern golfers up 3% since we talked about it. Tony Kynaston: fantastic. Cameron: Um, some of the others aren’t. Tony Kynaston: little putt, Cameron: Yeah, that was us. That was all our putt. Yeah, that was, that was all our putt. Yeah. Tony Kynaston: another Cameron: IS Tony Kynaston: that I can get excited about? Do you have a Cameron: uh, no, I’ve got some horrifying, horrible stories to talk about this week, but, uh, it should be fun. I wanna admit, I saw a video the other day yesterday of a golf robot that got a hole in one. Have you seen that? Tony Kynaston: No. Cameron: I thought that’s the next evolution. I know for your 60th birthday, we got you a robot, uh, caddy. Tony Kynaston: Catty. Cameron: Uh, we’re gonna get you a golf robot for your 70th birthday. You don’t have to do anything now. You just go out there, plays golf for you. It’ll be fantastic. You’ll love it. Uh, so American Airlines we talked about a couple of weeks ago, it’s down 10%. Um, American Axle is down 1%. Cal [00:04:00] Main Foods is down seven. Community health is stable. Methodex is down 10. Um, Titan Machinery is down 19. But outside of that, we’ve got quite a few winners. Uh, Chemex is up 77% Canadian. Imperial Bank is up 36. Zep Health Corporation, which somebody on Reddit said was a Chinese fake stock is up 705% since we talked about it. The average of all the companies that we’ve been covering in our deep dive segment since March, their average is a 37% return on them, uh, over the course of that period. So they’re not all winners. There’s, there’s about 30% are actually down now, the rest of winners, but the US market. Interesting and challenging this year. It’s funny, we just did, in our Australian show, we talked about an analyst from Macquarie Bank saying all the companies that are doing well in Australia are the [00:05:00] trash. It’s been a dash for trash, but our portfolio’s going great. Guns in Australia, and they’re all good value stocks generating a lot of cash. Tony Kynaston: Yeah, Cameron: the same sort of stocks that we’ve had in the US not doing as well in the us um, because the market over there, well, not as well as they’re doing here. Yeah. Okay. Yeah. But the Australian portfolio is up about, what’d I say? It’s up 40, 37% this year or something. Tony Kynaston: I think you said? Yeah. Cameron: Oh yeah, no, that was in the last six months. 26% In the last six months. It’s up like 37% this calendar year. It’s crazy. But the company that I’m gonna talk about today, Tony is Pacific Gas and Electric Company. Did you watch the Electric Company in the seventies? Tony Kynaston: Yeah, Cameron: That was a great show, wasn’t it? Tony Kynaston: first went to. Cameron: Before it was like Sesame Street. We’d on here in Australia, we’d have Sesame Street and sometimes the electric company would be on [00:06:00] instead of it or after it. Um, I dunno what happened to that show, but I remember loving it as a kid. Dunno anything about it though. I don’t. Was it a Henson show? Don’t even know. Tony Kynaston: a Henson show. Yeah, Cameron: Was it? It was. Tony Kynaston: I think so. Yeah. Cameron: But this is not that, that, uh, electric company, this is, uh, their ticker code is PCG. They’re, they go by pg and e and, uh, wow. What a story. What a story. Tony Kynaston: Electricity is brought to you by the letters P, g and Cameron: C and g. Yeah. Oh man. This is, uh, one of the oldest and largest utility companies in the United States. They supply electricity and natural gas to roughly 5.2 million households or 16 million people across northern and central California. Their job is basically to keep the lights on and the gas flowing. They operate one of the, Tony Kynaston: can I interrupt there? Cameron: yeah. Tony Kynaston: So it’s one of the largest gas and electric companies that [00:07:00] supplies how many people? 16 million. Cameron: Yeah, that’s it. Tony Kynaston: That’s it. Are there a lot of fragmented utilities in America? Are there Cameron: I guess there must be, and there one, there’s like five or six big ones just in California alone, but the, the area that they cover is quite large and quite complex. It’s like northern and central California. So I don’t think it’s like, it’s not, uh, la it’s like sort of more regional parts of California. Um, they operate one of the most complex and climate exposed power grids in the world. 70,000 square miles of mountains, forests, farmland, and dense urban centers. But what makes them most unusual is they are the only major American power company. That has been criminally convicted of manslaughter, forced [00:08:00] through multiple bankruptcies and publicly blamed for catastrophic wildfires and wow. And that’s just the tip of the iceberg, the scandals that they have been through over the years. It’s, uh, man, you could make a whole Netflix series over these guys. Uh, and I’ll tell you about a couple of them just for the salacious fun of it. In 2018 and 2019 investigations by the California Department of Forestry and Fire Protection, AKA Cal Fire found the company’s infrastructure primarily responsible for causing two separate devastating wildfires in California, including the 2018 campfire. The deadliest wildfire in California history caused 85 fatalities, displaced more than 50,000 people destroyed more than. 18,000 structures and caused an estimated 16 [00:09:00] and a half billion dollars in damage. And because California holds utilities financially responsible for any fires caused by their equipment, even if maintenance was properly done, there was a $30 billion liability. That the company was facing and they declared Chapter 11 bankruptcy in 2019. They made a settlement offer of 13 and a half billion to the wildfire victims, and, uh, they pled guilty to 84 counts of involuntary manslaughter. Tony Kynaston: You were saying before about the US at the heart of the US as lawyers and at the heart of China as engineers, Cameron: Hmm. In China, they would’ve jus

Overview In this episode of QAV America, Cameron and Tony dig into the state of the U.S. market, exploring how AI investment is distorting capital flows, weakening job markets, and reshaping traditional sectors. They discuss how “the Great Freeze” in hiring and the surge in data-centre spending are reshaping the economy. Then Cameron serves up a Pulled Pork deep dive on MODG (Topgolf Callaway Brands)—a company blending golf, entertainment, and retail that’s now splitting itself apart to “unlock value.” Tony reflects on golf’s pandemic-era revival, the engineering of the Big Bertha, and why Callaway’s merger with Topgolf sent its share price into the rough. They unpack tariffs, impairments, and the business logic behind spinning off Topgolf, ending with a lively riff on humanoid robots, golf robots, and even robot jockeys. ⸻ Timestamps [00:00 – 02:00] Portfolio update – U.S. fund down ~2.5 % vs S&P neutral; long-term performance still ahead.[02:00 – 04:00] AI-driven GDP growth — Microsoft, Alphabet, Meta pouring US $370 B into data centres.[05:00 – 08:00] Labor market weakness — “The Great Freeze” as firms delay hiring for AI.[09:00 – 11:00] Humanoid robotics — Tesla Optimus, Xpeng Iron, and China’s robot surge.[11:00 – 12:00] Fed policy, tariffs, and inflation risk.[12:00 – 48:00] Pulled Pork: MODG – Topgolf Callaway Brands Transcription   Cameron: Welcome back to QAV America, Tony, episode 27. Tony Kynaston: Wow, that’s gone fast. Cameron: it’s been a couple of weeks since we did a US show. Didn’t have time to do one last week, but, I’ll just start with a bit of a portfolio update, get into some news, and then I’m gonna do a, a special deep dive pulled pork that I prepared just for you. Tony went way down the list to find this one for you. Tony Kynaston: forward to it. Cameron: The portfolio has not had a good 30 days. Our US portfolio, it’s down 6% in the last 30 days versus the s and p 500, which is pretty much neutral in the last 30 days. So it hasn’t been doing great too. Um, hold on. Did I say how long it’s down? That’s, let me see what, no. Down, down two and a half percent, not 6%. Two and a half percent in the last 30 days. Um. So it’s hasn’t been, uh, a great, uh, period for us still tariffs. I think that [00:01:00] just the general US economy is not boating well for our portfolio over there. But that said again, if you look at, uh, since inception, which is. Just a little bit over two years. September 23, we’re tracking at 53% return versus the s and p 551%. So we’re still beating the index over the last couple of years, but, uh, the year to date we’re down 18% versus the s and p 500, up 14%. So it has been a rough calendar year for our portfolio. For all the reasons I mentioned before, but some of the stocks are still, I mean, everything’s doing quite well. I mean, everything’s up, everything’s doing well, just not as well as it was doing. So Tony Kynaston: peak. Cameron: nothing to complain. Yeah, yeah. Like me, um, Tony Kynaston: Best days are ahead of you Can. Cameron: uh, [00:02:00] I keep telling myself that Tony, uh, listen. It been interesting a couple of weeks in the US market. Corporate earnings are surprisingly strong for the third quarter of 2025. Median earnings for the Russell 3000 Index rose about 11% compared to a year ago. Six of the 11 sectors in the s and p 500 reported positive earnings growth up from just two sectors. In the prior quarter. Big tech industrial energy have been leading consumer facing firms, however, showing more signs of strain according to the Financial Times investment in AI and data centers, though, as we know, is the big driver over there. Microsoft Alphabet meta are projecting total capital expenditures in 2025 of around US $370 billion for data center and infrastructure. And I was reading an analysis of this in Wide Magazine. They were [00:03:00] saying they’re funding it all from cash to these companies. ’cause they’re sitting on buffet levels of cash Tony Kynaston: Wow. Cameron: according to one estimate nearly. Tony Kynaston: Aren’t they just passing it? around to each other? He, Cameron: Well, in some cases, yeah, NVIDIA’s just handing it out and getting it back. According to one estimate, nearly all of us GDP growth in H 1 20 25 was accounted for by investment in data centers and software processing tech. Tony Kynaston: Wow. Cameron: Since chat, GPT launched in November 20, 22, 3 years ago, AI related stocks have accounted for 75% of s and p 500 returns and 80% of earnings growth according to JP Morgan. So that’s absolutely insane considering, you know, that’s, uh, half a dozen stocks, um, and open AI isn’t even listed. Tony Kynaston: Yeah. Cameron: Um, but you know, as we say, each [00:04:00] episode, uh, we are finding tons of value opportunities and, uh, there’s, there’s no, there’s no, um, trouble finding good quality companies that are generating cash that you can buy very, very cheap. Looking at, you know, price to operating cashflow, looking at their book price, which includes the one I’m gonna talk about today. Not that there aren’t challenges, but you know, plenty of stuff to buy. Tony Kynaston: Well, as we were just speaking about, if, if a lot of money’s going into the AI sector, the tech sector, there’s not many bids going into you run of the mill industrial company. And that’s, I think, creating value within the rest of the market. in here, in the, in, well more in the us Australia doesn’t really have an AI sector, but um, certainly if the hot sector is, is, uh, is taking inflows away from the general market. So the general market must be undervalued. Cameron: There’s this huge sucking sound Tony Kynaston: [00:05:00] Yeah, Cameron: as all the money gets pulled into this one zone and um, yeah, it means that everything else is cheap. Tony Kynaston: pockets. Cameron: The five pockets. Yeah. Back to the US economy, what is showing cracks is the labor market. And broader participation is weakening. In October one, private sector data tractor reported 9,100 jobs. Lost. Lost, and planned. Planned layoffs surged to 153,000. I just mentioned on our Australian show, I read, um, uh, some quotes from Jerome Powell in the last week or two where he was saying what they are seeing is a lot of companies saying they’re not. Planning on hiring people because they expect AI to be able to do those jobs, particularly people coming outta university. It’s being referred to as the great freeze by some economists over there. There’s a freeze on job hiring. We’re seeing it happening here as well, predominantly in the tech sector, but other, other professions as well. You know, with [00:06:00] these junior level clerical. You know where I got my first job was, you know, bank clerical stuff. I, you know, when I was 17, 18. A lot of those jobs are gonna just be replaced now by AI companies are expecting they will be able to replace them with an AI tool. Tony Kynaston: And that’s an important point you make there, the expectation, because I’ve seen similar parallels to this happen. In the past where it’s almost dere, you’ve gotta say, we are freezing hiring. If you’re not saying we’re freezing hiring, the analysts are on your, you know, like, like, uh, bees to a honey pot. Why? Why aren’t you freezing hiring? Everyone else is freezing hiring. So they freeze hiring and then, you know, a couple of quarters time they start hiring again because it, didn’t really apply to them. So it’ll be interesting to see. I’m not saying that. Companies won’t need as many staff because of, the impacts of ai. Um, but it’s almost becoming clearer to me now that, uh, at [00:07:00] least at this stage, right, I know there’s a lot more to come and a lot more upgrades to, um, to be released. But at this stage, it’s almost like what we’re seeing is an increase in the power of computing that’s brought about by ai. you know, so. We were talking before about, uh, being able to target ads better. It’s, there’s nothing revolutionary in the concept of targeting ads, but if it’s done cheaper and faster, then yeah, people will lose their jobs, in marketing departments or whatever. So I get that. Um. Whether it, it, you know, it’s, it’ll be interesting to watch if it is a great freeze and, and suddenly we have people not going to universities. That’ll be a big impact on society, I think. But, um, let’s just watch the space and see what happens. Cameron: Yeah. Why are you gonna spend well in Australia 2030 grand to get a university degree? In the us hundreds of thousands of dollars to get a university degree if there’s very high chance that there won’t be a job for you at the end of it. So then what do those [00:08:00] people do? What, what do they go and do instead of going to university? Tony Kynaston: Well, Cameron: Um, do they? Tony Kynaston: possibly Cameron: Yep. Tony Kynaston: the US but in Australia there’s definitely been a tr being a trend towards trades and the trend towards working in sectors like the mining industry. Might be different in the us but yeah, there’s, I think it’s quite legitimate now for someone leaving school to say, well, you know, I can go and make as much money if I get a trade and become a qualified plumber, electrician, contractor, build or whatever. Um, as opposed to spending three plus years at university, getting a degree, and then going into an entry level job. So been Cameron: Except. The next three to five years, humanoid robots are gonna hit the market all with superpowered AI brains, and a lot of those jobs aren’t gonna be there either. Elon just got his trillion dollar pay package approved and part of that is. Tony Kynaston: he’s taken that bet that it’s gonna happen. Cameron: Well, part of that is he has [00:09:00] to ship a million optimist robots in the next 10 years. Now a mi

Episode Overview In this episode of QAV America, Cameron and Tony dive into a deep analysis of American Airlines (AAL) — exploring its towering debt, its loyalty program goldmine, and its future prospects. They unpack how AAL’s Advantage points system, underpinned by a major new 10-year co-branded card deal with Citi, might serve as both ballast and buoy for a company flying through turbulence. Along the way, they riff on the airline industry’s cyclic nature, the debt-leverage paradox, and the Piotroski F-Score quirks that make AAL intriguing. Climate change, loyalty economics, Pratt & Whitney’s cursed engines, and the Buffett-era lessons on airline KPIs all make an appearance. After the financial deep-dive, the conversation drifts into lighter territory—Scorsese films, Gravity’s Rainbow, and Cameron’s bruising Kung Fu grading. ⸻ Timestamps & Key Topics 00:00 – 03:00 Market chatter: US–China trade mood, inflation data, and QAV portfolio updates03:00 – 06:00 Portfolio performance review: strong gains in Australian holdings vs. US pullback06:00 – 08:00 Introduction to this week’s pulled pork – AAL (American Airlines); early data glitch, initial impressions34:00 – 39:00 After-hours chat: Scorsese’s After Hours, King of Comedy, and the perils of late-night Pynchon, Wing Chun grading recap – Cameron’s ribs survive another day Transcription Cameron: Welcome back to QAV America, Tony, episode 26. It’s a beautiful day. Tony in America, east Ballroom being torn down. President Trump’s Tony Kynaston: it Cameron: gonna meet with President Xi. They’re gonna do the greatest deal. You won’t believe how great this deal is gonna be. It’s gonna be the greatest deal of all time. It’ll last about a week. Then it’ll fall apart and there’ll be more tariffs. Uh, but meantime, everything’s going great. Market’s up. US market was up yesterday, supposedly on the, uh, joy that, uh, all the beef is behind them. Rare earth minerals will be flowing back into the United States. Tony Kynaston: From Cameron: We’ll see. Tony Kynaston: From Australia but um think I think the market’s up potentially more so on the fact that the inflation figures came in okay on Friday And Cameron: Did they? Tony Kynaston: So Cameron: Oh, okay. Tony Kynaston: that’s probably driving the Cameron: Interest [00:01:00] rates are being cut, Tony Kynaston: Uh I think the the central bank meets this week I’m not sure what day potentially Cameron: right. Tony Kynaston: I’m not sure Cameron: Ooh. Okay. Well, uh, before we get into my pulled pork for the week, I just thought I’d give an update on our portfolio and how things are going. Our US portfolio, which has been running, oh, here’s my, uh, smoothie delivery system. Thank you, dear. Uh, Tony Kynaston: Black belt smoothie delivery system brown belt Cameron: right. Yeah, the, uh, delivery, the delivery, the portfolio that’s been running since September, 2023. Uh, so a little over two years is up 57.6%, uh, versus the s and p 500, up 54.7%. So we’re beating the index just by a little bit, but that’s okay. That’s good. Um, the [00:02:00] pork situation, the pulled pork that I’ve done, uh, over the course of the show, I haven’t had a look to see how they are doing. Uh, where is that list? Tony Kynaston: that you were you were talking Cameron: Hmm. Tony Kynaston: portfolio’s performance and um for this financial year which in Australia’s only four months in cause we are 30th Cameron: Hmm. Tony Kynaston: June end of year Cameron: Hmm. Tony Kynaston: financial Cameron: Hmm. Tony Kynaston: And and that’s pretty good Do you recall those numbers Cameron: Yeah. Uh, well, I do, the Australian portfolio is up like 25% this financial year. Our financial year is, uh, from the beginning of July through to whatever we are now, end of October. I. For the calendar year, current calendar year, uh, our Australian portfolio is up 31% versus the benchmark. The index here, which is up [00:03:00] 14%. So a little bit sort of double the Australian market. So it’s going well year to date. Our US portfolio not doing so good. It’s down 16% versus the s and p 500, up 16, 17%. But as I say, every week, that’s because our portfolio was up so much. Towards the end of last year before Trump took over the White House, that it had a lot of gains and it’s come back. It’s not like the portfolio’s done badly, it’s just come back a lot from massive gains. At the end of last year, it was like Tony Kynaston: Must Cameron: incredibly inflated. Tony Kynaston: lots of work stocks in there Cameron: Well, it was Willis Lease Finance Company, which was the big one. It was up 300%. It’s now only up 175% since we bought it. I dunno how woke Willis Lease Finance Company is, but there you go. Tony Kynaston: Well it was a black Cameron: Um, Tony Kynaston: stepfather wasn’t it Very woke Cameron: what you, what you’re talking about Willis Lease Finance Company. It’s what you’re going for there. Yeah. Um. [00:04:00] Some of the companies, so I’m gonna do a pulled pork on American Airlines this week, but some of the ones that we’ve done over the last four or five months, just a review of how they’re doing. Some good, some not so good. Zim. Is down 20% since we talked about it in March. Uh, Methanex we talked about at the end of September is down 12. Titan Machinery is down 14. That’s so most of the down ones in terms of the up ones. Zep Health Corporation we talked about in July is up 1444% since we talked about it. Ford Motor Company that everyone said was carrying too much debt when we talked about it in May is up 23% since then. Uh, let’s see. Chemex we talked about in March is up 65% Canadian. Imperial. Bank of Commerce we talked about in May is up 30% since then, some big numbers. Sasol is up 28% since we talked about it in July. Precision Drilling Corporation is up [00:05:00] 26% since we talked about it in June. IHS holding, we talked about in May it’s up 27%, but. A couple of weeks ago or a month ago, uh, a 3rd of October, I did a pulled pork on community health systems. Remember them? Hospital rollup up, up 47% since I talked about ’em at the beginning of this month. Tony. Tony Kynaston: They mustn’t be doing vaccinations or dispensing time and they’ll that network Cameron: 47% since then. That’s, uh, kind of crazy ’cause it was sort of, it was a good story, but I didn’t expect that. Um, Tony Kynaston: and I Cameron: no one expects, Tony Kynaston: the point to make is Cameron: Hmm, Tony Kynaston: a lot of those stocks aren’t in our portfolio We you just pick a stock to do deep dive on from our buy list but we only change the portfolio over if something’s a sale and Yeah So we Cameron: wish I had put all of those in them. Tony Kynaston: Yeah So what that’s I guess what I’m getting that’s what I’m getting at I guess is that there are plenty of opportunities outside [00:06:00] our portfolio to to buy Cameron: Plenty of opportunities and things are going great and um, you know, I’m often seeing, as I’ve said before, people on the in value investing subreddit saying they dunno what to buy. And I’m like, are you kidding me? Opportunity everywhere. If you Tony Kynaston: what you’re talking about Willis Lease financing Cameron: Willis, lease Finance company. There are opportunities everywhere when we look at the US market and apply your QAV process to it. Well, this week I was gonna do Shell because you used to work for Shell, your old employer. They are on the buy list, but crude oil is a Josephine for us. Um, it’s in a sell state, so I thought I won’t do that. So I looked around and as every week most of the buy list is full of finance companies or shipping companies. That’s been true for the last six months. Still true today, and I’m sick of talking about finance companies and lease and shipping companies. So I’m always looking for something different. And this week I [00:07:00] picked a a l, American Airlines, which was on the buy list. Now I’m gonna preface it by saying. After I did three hours of research on it, I checked its chart and realized it’s a Josephine, which for us means it’s above its cell line, but below its byline. It’s recovering from a bit of a dip. No, sorry, it’s not a Josephine, it’s not even a buy. It’s not above its byline at all. Um. But that’s because my script, uh, had a bug in it. My US script had a bug in terms of doing the charting analysis. So when I was doing this yesterday, the current price was about $13 78. Buy price is actually $15 87, so we wouldn’t buy it unless it went above that. But it’s an interesting story and I wanted to do it anyway to get your thoughts on it, assuming that it does become a buyer. ’cause it’s, it’s got a lot of problems, a lot of possible red flags and um, it’s also got a big point [00:08:00] system and I know that you used to run a points based company here for one of Australia’s largest retailers. So, you know, points. Tony Kynaston: didn’t run up but had a yeah had a Cameron: CFO. Oh, I thought you were the CEO of it. Tony Kynaston: No Cameron: Okay, well, still a good story, Tony Kynaston: yeah I still have a fair bit of experience with the with loyalty programs for sure Cameron: right? So I’m looking forward to getting your thoughts on this when I run through it. Basically, American Airlines is a domestic heavy network with a loyalty cash engine. Lot of possible red flags, though. It’s all about the prm, Tony, that’s what I’m gonna call this episode. It’s all about the prm, PRM passenger revenue per available seat mile. Tony Kynaston: Oh yes Cameron: And it turns out if you don’t have enough prm, you fall into the chasm. Which is, uh, Tony Kynaston: Hmm Cameron: it’s a little thing. Cost per available seat mile is your [00:09:00] PRM versus your chasm, your revenue versus your cost. Tony Kynaston: Well it’s interesting bec

**Episode Overview**In this episode of *QAV America* (Ep. 25), Cameron and Tony unpack a wild few weeks in the U.S. markets following Donald Trump’s latest tariff threats on China and the subsequent “birthday crash.” They discuss Australia’s surprising role in rare earths, portfolio moves including DAC and GTN, and new additions VSAT and RNR. The main feature is a deep dive into Cal-Maine Foods (ticker: CALM), America’s largest egg producer, exploring its scandal-ridden history, DOJ investigations, and surprising fundamentals. From “egg cartels” to F-scores, the duo balance analysis and absurdity, topping it off with film talk (Scorsese, Lynch) and kung fu bruises. — ### ⏱️ **Timestamps** **00:00** – Market chaos, Trump’s tariff tantrum, and rare earths politics**06:30** – Australia’s rare earth advantage and Gina Rinehart’s role**10:00** – Portfolio moves: selling DAC and GTN, buying VSAT and RNR **18:00** – Portfolio performance update and lessons from volatility**22:30** – *Pulled Pork:* Cal-Maine Foods (CALM) deep dive **52:00** – After Hours: Scorsese, *Taxi Driver*, Lynch’s *Elephant Man*, and kung fu chaos Transcription   Cameron: [00:00:00] to QAV America, Tony, episode 25. We’re recording this on the 21st of October, 2025. Well been a big couple of weeks in the US market. Tony, uh, Donald Trump. Crash the market again on my birthday, October 10th. It was his, uh, birthday present to me, which I appreciate. I’m wearing your birthday present to me. My fight club t-shirt, um, was good ’cause I had a broken nose and black eyes when you sent it to me. That was fun. Uh, but Donald Trump threatened massive increases in US tariffs on Chinese imports, following China’s announcement of stricter export controls on rare earth elements. And the market predictably crashed and then he said, uh, 10 days later, yesterday, today when meeting with our prime Minister, Anthony Albanese, our KAKA [00:01:00] Albo. For the Americans. That’s what we call our prime minister here. That’s the amount of deference you get as a Prime Minister in Australia. We call you Albo. He had a fantastic deal he’s gonna put together with China after a fantastic deal with Australia. I mean, I don’t know. I don’t know about you, but I think Albo was very happy. About the, uh, announcement of the rare earths deal from China, because it gave him a really good chance to have a really great meeting with President Trump. They had something that they both wanted to talk about, gave Trump a good positive news release. Our former Prime Minister, Kevin Rudd, who’s the current, uh, ambassador, didn’t have as good a time with President Trump. He said, I don’t even know who you are and I don’t like you, but it’s all forgiven. He said, immediately afterwards. Tony Kynaston: Yeah, it’s, it’s, it’s, um, it’s hard not to like someone you don’t know, but I, I take. I take Cameron: I dunno. I, I, I saw, I, I had a look [00:02:00] at Kevin Rudd’s face and decided I didn’t look at him too. Tony Kynaston: he is. He’s Trump’s not alone is he. Cameron: No, no, no. Tony Kynaston: gotta say Australia saves the day again. we elbow’s ridden into the US with a mineral, a rare minerals agreement. You know, hold my beer. I got this. We got you want rare minerals. Let’s do a Cameron: yeah, Yeah. Tony Kynaston: yeah. Cameron: yeah. G Gina Reinhardt to the rescue. ’cause she controls a lot of what we have apparently. Uh, but just to put it in perspective. Australia is the fourth largest producer of rare earth minerals in the world at present on track to be number two, I believe. But China controls 70% of the global market and even an A larger share, 85 to 90% of the refining and processing capability globally. Tony Kynaston: which is important. Cameron: if we can dig it out the ground. We need to send it to China to get [00:03:00] processed probably. So you know they, Tony Kynaston: called Linus, which has got a plant to process rare earths minerals in, say the Philippines. I think somewhere in Southeast Asia. Cameron: Hmm, Tony Kynaston: easy. There’s been a few with the local government over it, but um, yeah, there is a fallback. Cameron: right. But anyway, the market recovered. Uh, it tar and, uh, everything’s back kind of to where it was pre the announcement. So the frothy market is back, and I did have to sell a couple of things though in that period, uh, out of our US portfolio, which is rare. So I had to sell DAC Dan aos, a Greek shipping company that I had owned. For quite a while and got to sell it at a profit too, but it broke our three point trend line sell trigger for new listeners. Uh, we try and hold [00:04:00] for as long as possible when we buy a company, but we do have a couple of sell triggers. One of them is a three point trend line sell. We’ll track it on a five year, month end. Graph and if it breaks through that support line, we’ll sell it. And this did, but I still managed to sell it at a 5% profit. Plus there were dividends over that period as well, which don’t get factored into stock edia. But, uh, neither does the s and p five hundreds dividends, so it all tracks. Okay. So we sold it at a 5% profit. I also had to sell GTN the TV guys. Tony Kynaston: really? Cameron: came back quite a bit and also became a three point trend line sell neutral result for us. Plus, there were dividends factored into that one as well. And I added two new companies to the portfolio, VSAT via sat, a global tech, a global communications company, has defense and advanced technologies. It’s up [00:05:00] 7% since I bought it. Which is pretty good. And Renaissance Air Holdings, RNRV, SATs on the Nasdaq, RNR is on nzi. Um, it’s a global provider of reinsurance and insurance companies. It’s down 5% since I bought it, so they kind of six seven is the kids say you don’t have kids, so you probably don’t know that, but six seven. Six seven. Yeah. God. Thank think yourself. Lucky you don’t have a 11-year-old boy right now ’cause that’s all you hear all day, every day. 6, 7, 6, 7. Tony Kynaston: okay? Cameron: and I probably should have done a pulled pork on one of those today, but I’m not. Because I wanna talk about eggs. But before we do that, um, I’m also gonna talk about our US portfolio, which is not having a good time. Quite honestly. It for the Cal, for the 12 month period, it is down. 17% versus the s and p [00:06:00] 500, which is up nearly 15% year to date. It’s down. Well, about the same actually. So it’s all started. It started when Trump took office. Whether or not that is coincidental, I don’t know, but uh, for the. All time since inception, which is September 20, 23, little over two years, our portfolio is up 56% versus the s and p up 51.5%. So we’ve. We were doing triple the SMP going back to late last year and now we’ve come back to even Stevens. So has not been a great year for our portfolio, but it’s still doing okay. Like all in all, all told we’re beating the index so over two years, which is fine, up up nearly 60% in two years. Like no rational investors gonna [00:07:00] complain about that, but I. It has not been a good year for our US portfolio. Not that anything is done particularly badly. I mean, I’ve had to sell a couple of things. Everything’s doing okay. It’s just come back from insanely good highs, as I say, every week, but I’ll say it again. Willis Lease Finance Group, which is our best performer, was up like 300% late last year. Now it’s only up 174%, so it’s lost a lot of gains, but still it’s up. 174%, uh, since I bought it in November, 2023. So two years up, 174%. I’m not complaining. It’s doing okay. But the company I’m gonna do a Paul pork on today, Tony is Palm, CALM. Keep calm and keep trading trade on. Tony Kynaston: what we need When the [00:08:00] portfolio comes back to the index isn’t it Cameron: keep calm. Keep calm. Great Ticker. I had to do it. I saw that I had to do it. The company is actually called Cal Maine, and they are the largest egg business in the us. The largest producer and distributor of fresh cell eggs in the United States. Guess you could say they’re an excellent company, Tony, an excellent stock. But I’m not sure if I’m gonna call this episode number one in the pecking order or the Bad Egg. ’cause they’ve had quite a few scandals. Tony Kynaston: Oh really Oh dear Cameron: Yeah, yeah, yeah. Well. But, but before we get into that, couple of things I wanna point out. If anyone’s thinking about investing in them, we wouldn’t right now, because they are a Josephine No, actually, they’ve kind of rebounded from a Josephine. They were a Josephine. So from our perspective, a Josephine is a stock that is above a byline above our cell line. [00:09:00] But it closed or its price was less than the end of the previous month. It, it has come back from its peak, but it’s rebounded from that. So it’s still above, its. Bylines in its latest bylines, so it’s probably still okay. But there is a egg commodity. You know, we, we love to track underlying commodities and this has an egg commodity. There are, there is an an eggs US commodity that I found on trading economics.com eggs, us and eggs are currently a three point trend line cell. Tony Kynaston: That’s why the prices are down probably and calm Cameron: Yeah, well actually it’s, it’s a Schrodinger. Um, so for new listeners, what we call a Schrodinger is when it’s simultaneously above its byline, but below its cell line. So it is both things at the same time, like Schrodinger is cat. Uh, until you look at it and then you go, okay, well it’s below its cell line, so it’s a cell not that far below its cell [00:10:00] line, so it doesn’t have to recover much to get back above. Um, but it is so, uh. The way QAV works. If we have a stock that has an underlying commodity and that underlying commodity is in a, is not in

Cameron and Tony kick off episode 24 of QAV America by discussing the U.S. government shutdown drama and comparing it to Australia’s last major political standoff under Whitlam in 1975. The conversation then turns to portfolio performance: while the Australian portfolios continue to outperform dramatically, the U.S. one has cooled a little since the Trump administration’s return. They dig into long-term value investing principles and how cycles of underperformance are normal. Cameron presents this week’s Pulled Pork on American Axle & Manufacturing Holdings (AXL) — a classic, boring-but-profitable value stock that makes axles and driveline components for giants like GM, Stellantis, and Ford. They explore its fundamentals, merger news with Dowlais Group, and why its low valuation may make it attractive. The show wraps up with their trademark “after hours” chat: Tony’s social adventures, new music finds (Red Continent, Lyle Lovett, Sparks), Cameron’s film pick (Stalker by Tarkovsky), and their reflections on Asimov’s I, Robot, fascism, capitalism, and the short-termism of modern democracy. ⸻ ⏱️ Timestamps & Topics 00:00 — U.S. government shutdowns vs. Whitlam’s dismissal in Australia.03:00 — Portfolio performance: U.S. QAV fund up 62% since inception vs. S&P 500 up 51%.06:00 — Revisiting QAV philosophy: buying quality companies at a discount.07:00 — Historical perspective: patience through short-term underperformance.08:00 — Review of recent Pulled Porks10:00 — Portfolio holdings update11:00 — This week’s Pulled Pork: American Axle & Manufacturing (AXL) deep dive.30:00 — After Hours Transcription   [00:00:00] Cameron: Welcome back to QAV, the American Edition. Tony. I think this is episode 24. How are you doing? Tony Kynaston: I’m very well. Thank you. Nice and Cameron: I know that ’cause we, we just did our Australian edition. Yes. Very hot. Where I am. Very cool where you are. That’s Australia right now, depending on which part of the coast you’re in. Well, Tony, uh, talking about American news. Got a, they’ve got a, a shutdown. They’re funny. They have these shutdowns. We don’t really understand shutdowns. Last time we had a shutdown kind of thing in Australia. It was during the Whitlam government, wasn’t it? Tony Kynaston: November, 1975. Yep. Cameron: Yeah, it is. 50 years ago. The last time we had a government down, and it’s still talked about in Angry Voices to this very day. Tony Kynaston: We’ve had a couple of other examples, like a, ’cause they call it block supply here. So a government has to [00:01:00] be able to guarantee convince the Governor General, they can guarantee supply, which means that their budget will pass. So there’s been other cases where there’s been minority governments that can become topsy tur. Like the most recent case was in Tasmania when, uh. The minority government there had a vote of no confidence and the blocking of supply, and then they had to go to an election and they got reelected. Same problem. Yeah. Different time. Cameron: Well, the market, uh, you know, did stumble a little bit when they couldn’t, uh, prevent it, but yeah, thinner. Well, I don’t know. I mean, I have seen these sorts of things before. Not exactly with this level of urgency and animosity, I think, Tony Kynaston: always is that level of urgency and animosities happened what 11 times since Clinton or something’s been a lot it, [00:02:00] and it’s always brinkmanship. Cameron: yeah. Tony Kynaston: for the government workers who don’t get paid and they may not get paid under this current In the past they generally Cameron: Yeah, Tony Kynaston: they’ll get back pay. But that’s, there’s threats to withhold that. So we’ll see what happens. Cameron: I like other things that happen in the news, in the economy. We tend to ignore it and just stick to our knitting. Um, I do wanna. Talk about our portfolio performance, though our US portfolio, which for new listeners, we’ve been running well for new listeners. Uh, we’ve been doing a value investing podcast for six years in Australia. Tony’s been a value investor for 30 odd years. Oh, gangbusters. Absolutely. Our por, our Australian portfolios are all doing gangbusters, double market or better. Um, our US portfolio is doing okay. Not as well. It was, it was like three times market before the Trump administration came in. [00:03:00] It’s come back a little bit this year, but it’s only two years old and, you know, we work on five to 10 year timeframes for cycles to, uh, come and go. Um, I’ll start with the all time performance. So we started the US portfolio back. A little over two years ago, 19th of September, 2023. Since then, our portfolio is up 62% versus the s and p 500, up 51%. So we’re doing better than the s and p 500 over the long haul, but we’ve come back a long way. Um, a year ago we were up a hundred percent versus the s and p up 34%. So, uh, after the Trump administration came in, things started to go south for some of our stocks, but it’s not that bad. I mean, Willis Lease Finance Company, WLFC, which is our best performing stock, at one point it was up 300%. It’s [00:04:00] now up 189%. So it’s come back nearly half then, but still up 189% since we added it. I don’t know when, uh, let me see. Tony Kynaston: blame the Trump government on some of those. I mean, they wouldn’t have an impact on Willis Lee’s finance. It’s probably got more to do with interest rates than anything else. I would’ve thought, Cameron: I am not blaming them. I’m just saying it’s a fact. Since the Trump administration came into power went backwards, Tony Kynaston: well, it’s, but Cameron: we’ve. Tony Kynaston: is it just coincidence? Cameron: Who knows. That’s beyond my pay raise. My pay grade, Tony. Um, we bought Willis Lease Finance Company in November, 2023. It’s up 180% since then. So I’m not complaining it’s at all. But year to date, our US portfolio, uh, is down 13.44%. By the way, year to date, I’m talking. Um. Tony Kynaston: Calendar. Cameron: Uh, [00:05:00] calendar year. Yeah. So January 25, it’s down 13% this calendar year versus the s and p 500, up 14%. In the last month. Our portfolio is down 6% versus the s and p up 4%. So it’s not a good part of the cycle for us, but as we were just talking about in the Australian show, some of our Australian portfolios were underwater. Six months ago, now they’re doing double market ’cause they’ve exploded in the last few months. So it comes and goes. At the end of the day, the QAV philosophy is to buy. Shares and companies that seem to be generating a lot of cash when we can buy them at a discount to their intrinsic valuation for whatever reason, hold them as long as we possibly can. We have a couple of sell triggers that we will obey, but other than that, we hold them as long as we can wait for their share price to regress to the mean wait for the market to [00:06:00] pick up in one way or another. This is actually a healthy little business and. Six times outta 10. We hope that we buy the right ones and, uh, we outperform The market that seems to have worked for you over 30 years seems to have worked for other value investors over many, many decades, and in the years we’ve been doing the show, it seems to work well for us as well. Tony Kynaston: And we saw the same sort of thing happen with the Australian portfolio when we first set it up. And the first couple of years it, remember it in the first year, I think it outperformed about four times compared to the index. And then it went backwards and there were periods of underperformance. That’s, it does take a little while for a portfolio to beat itself down, usually. Um. it stutters and you have to sell things quicker than you’d like, and then start again. So, yeah, it’s, it’s the old, I mean, you talk to anybody about, um, investing and they say don’t base your decision on the one year return. at a longer term. So we have [00:07:00] a two year track record now. It’s still outperforming the market. But yeah, give it, it three to five before you sort of can see the real proof in the pudding. I think. Cameron: And since we started doing this show regularly in March of 2025, I’ve been doing a deep dive or a pulled pork, as we call it, on a stock every week. And most of those have been doing gangbusters since we talked about them. Uh, the one I always start with, Zep, which we did in July Z Double P, Zep Health Corporation, is now up nearly 1800% since we talked about it. Um, which is like, it’s not a Mag seven, no one’s heard of it. But, uh, doing gangbusters share price has gone from $2 98 when we talked about it to $56 today. They make, uh, like an iPhone competitor. Um, and they’ve just not an iPhone Apple Watch competitor, smartwatch, uh, company. Tony Kynaston: people who, Cameron: Yeah.[00:08:00] Tony Kynaston: fans like me would know that’s reference to Cameron: A Chinese Watch Tony Kynaston: really Cameron: this. Watch. Ready? Yeah. Tony Kynaston: Yeah. Cameron: Mother. Um. Yeah, but a lot of, uh, a lot of the other companies that we’ve talked about have done well as well. ChemX is up 59% cement company, Canadian Imperial Bank is up 28%. Orx up 24. Jackson Financial up 22 IHS holding 24 Ford Motor Company, which has a little bit to do with the company I’m talking about today. Up 18%. Gray media, up 28% Sasol. Up 24%. Couple have gone backwards. Titan Machinery’s gone back 14% since I talked about it. Um, it’s the most surprising one. Zim Integrated shipping, which we said was looking dodgy at the time when we talked about it’s gone back 24%. But, uh, you know, the rest have done pretty, pretty well. So, as I always say, you know, I [00:09:00] mentioned. In my last show that I was on the value investing subreddit the other day, and people are complaining about how there’s no value opportunities l

In this episode of QAV America, Cameron and Tony review the US portfolio’s performance in 2025, which—despite lagging this year—is still well ahead of the S&P 500 since inception. They reflect on past stock picks, before diving into this week’s “Pulled Pork”: Community Health Systems (NYSE: CYH). The discussion ranges from the messiness of America’s healthcare system to the company’s staggering debt load, CEO transition, scandals, and surprisingly strong cashflow. They weigh the risks (reimbursement uncertainty, capital raises, softening acuity mix) against the opportunities (deep undervaluation, strong operating cash generation, potential turnaround with new leadership). Along the way, they also touch on cultural differences in healthcare, Reddit debates about value investing, and how profit is often a “management decision,” while cashflow is the truer measure of resilience. ⸻ Timestamps • [00:02:00] Portfolio check-in – US portfolio performance vs. S&P 500. • [00:04:30] Revisiting past Pulled Pork picks  • [00:08:00] Pulled Pork: Community Health Systems (CYH) – Company overview, history, scandals, and current challenges.   Transcription   Cameron: [00:00:00] Welcome back to QAV America, Tony, episode 23. We’re recording this on the 30th of September, Australian time, 2025. Been a couple of weeks since we’ve talked about the United States. Tony, uh, I know that you’re an avid follower of the Wall Street Journal. Anything going on? Anything go happen in the United States in the last couple of weeks? I haven’t seen anything about the United States for a couple of weeks in the news. Nothing going on. Tony Kynaston: The contractor to service the UN elevators or escalators is up for That’s a bad end. I think Cameron: Well, the story there is that it was, uh, did you see that? Why the escalator stopped? Tony Kynaston: number of reasons why the escalators stopped, including a photographer pressed the stop button. Cameron: I read it was Trump’s photographer who was going backwards up at whose foot got caught in it and it jammed and stopped, and then the teleprompter was apparently run by the White House who screwed up the teleprompter. So it was, uh, [00:01:00] his own fails from his own team apparently, is what I read in the New York Times. The failing New York Times. Well, Tony, I thought I would, uh, that’s what he calls it, doesn’t he? I dunno if they’re failing or not. Um, probably large media. I wanted to, before we get into my Paul Pork this week, I just wanted to do a quick recap of how our US portfolio is doing and talk about what’s going on with some of the other companies that. We’ve covered over the last few months on this show how they’re doing. So let me bring up our US portfolio. As I’ve said many times before, it’s been an interesting year for our portfolio in the US It was. Doing three times the market by the end of last year, but then after Trump got elected, it has not had a good year.[00:02:00] So all time, our portfolio in the US has been running for just over two years now. I started at 20th of September, 2023. Over that period of time, it’s up 65% versus the s and p 500, which is up slightly less than. 50%, so it’s doing reasonably better than the s and p 500, but not double like we’re doing in the US and certainly not like triple like. By the end of 2024, a US portfolio was doing three times as good as the s and p 500. So it hasn’t had as good a year. 20, 25 year to date, it’s actually down 12% versus the s and p 500, up 13%. As we know, that’s how it goes. We go up, we go down, but generally we go up more than we go down over the long haul. Tony Kynaston: Great. just. Cameron: of the, uh. Tony Kynaston: can I jump in here? There was a, um, I know the show was [00:03:00] released in the US last week, which was a discussion of the QAV Bible and it mentioned that, um, long-term returns were 19.5% cagr, and that’s certainly the case back when we started QAV, but uh, it’s not the case now. So I just wanted to highlight that for people don’t wanna mislead them. That’s why we use the term double market. ’cause my returns are the markets or roughly twice the market still. Um, but the market’s moved since then, so, um, it’s, I just don’t wanna mislead people by putting, posting a number out there. Um, it’s more instructive to look at the long term, um, and to expect to get something like twice the index if you, um, successfully according to what I’ve been doing for a long time. Cameron: So I’m just, uh, looking up my list of Paul Porks that I’ve done over the last six months. Can’t remember who I did in episode 21. I. [00:04:00] Um, oh, MEOH. Yeah, right. I don’t have an update on MEOH, but for the rest, uh, like I was saying to you on our last Australian show, um, when I’m on the, some of the value investing forums in the us like the subreddits, that kinda stuff, a lot of people talking about how. They can’t find anything to buy. Value investing is dead. Uh, I saw, we saw an article from some guy saying that, uh, people saying they can’t find anything, all the value’s gone. And I’m like. What is your problem? Because I did a buy list, a US buy list at the end of last week, and there was like a 200 companies that were on the buy list, which means that, you know, they’re, that’s what our, our buy list is showing us as being undervalued at the moment. Well performing, well performing businesses that are undervalued, but just the list of companies that I’ve talked about on this show since March. Zim was the first one that I did on the 13th of March. It is [00:05:00] down 26% since I talked about it. Uh, but then in order of shows that we’ve done, so the next one was CX Chemex. It’s up 68%. Dan Aos, DAC is up 16% since we talked about it. Canadian Imperial Bank is up 23%. Chile is down 10%. Ford Motor Company is up. Eight IHS is up 37. JXN is up 16. Oryx Corporation is up 27. Precision Drilling is up 18. Costco’s up five Zep. Corporation, Zep Health is up 1511% since we talked about it on the 11th of July. Sasol is up 43%. Bausch Health Companies up 16 Seneca up 9% Gray media up 40%, and we talked about that on the 7th of August. There’s up 40% in less than eight weeks in seven weeks. An old television station, Titan [00:06:00] machinery’s up 11%. Kimball Electronics is up seven. Sno is down two since we talked about it at the beginning of this month. And then, um, M-E-O-H-I, I’m, oh, I can have a quick look on Yahoo Finance. Let’s see, how’s MEOH doing? Tony Kynaston: post out. to this Reddit sub value sub investors club, or whatever it’s Cameron: I do, I do, I do. And every I get just get abused for being an idiot. Um, em, me, O-M-E-O-H, um. Tony Kynaston: rich idiot, though, isn’t it A successful idiot. Cameron: MEOH uh, is up a couple of points since we talked about it. Um, actually it’s about the same, it was about $39 when we talked about, it’s still about $39 Methodex Corporation Co. So anyway, so there’s, I, I dunno what people’s problem is. I dunno what kind of value investing they’re doing that where they can’t find [00:07:00] value when we are finding value all over the place. So speaking of that, I thought I’d, um. Tony Kynaston: to interrupt, is that, um, you’re not even picking the top stock in the buy list. You are just picking out stocks, which are interesting that we don’t have Cameron: Yeah. Tony Kynaston: or just look worthy of a bit of investigation. So it’s kind of a random selection from the buyers that you’re picking. Cameron: Yeah. Yeah. I’m looking for something that’s, you know, different to what we, because as we keep saying every episode, there’s a lot of shipping companies, a lot of financial services companies, and I just don’t wanna talk about the same thing every week. Well. We’ve talked about a lot of dirty businesses, um, in this epi in this show over the last six months, Tony, and this time I’m gonna do dirty healthcare, not because I wanna highlight the company we’re talking about as dirty. Although they have had a very long list of scandals and fines and things like that, but just because the healthcare system [00:08:00] in the US is just a mess. Now, you know, obviously we’re Australian and we have a very different healthcare system, but I would not want to be a patient in the US for for-profit healthcare system. And that’s what I’m gonna talk about today is one of the companies over there, CY. H is the name of the company, community Health System. CHS. It’s known as, but the ticket code is CYH and I, you know, I often hear Americans in person and online. You know, I’m married to an American, spent quite a lot of time over there. They think they have the best healthcare in the world for some reason. You often hear American politicians, particularly Republicans, stand up and say, we have the best healthcare in the world. And, and, and I’m hate to break it to Americans, but that is just not the case. Compared with other rich countries, the US has worse population health and the most expensive popu, uh, health care [00:09:00] system in the world. Hold on. I just hit the wrong button here. Okay. Um, you know, just to give you an indication. Bottom line is despite far higher spending per capita, the US has worth, worth. Lemme start that again. Worse population health. In 2023, US life expend expectancy was 78.4 years versus 82.5. In peer nations, the lowest among the group, and every US state sits below the peer average. Life expectancy gap is big and stubborn. The US rebounded post pandemic, but still trails by 4.1 years in 2023, that gap predates COVID and reflects higher premature deaths from overdoses, violence, and chronic disease. Infant deaths are higher, maternal mortality is higher. Avoidable deaths trend the wrong way. Where the US does [00:10:00] shine, it ranks second on c

We discuss the latest U.S. economic slowdown, then pivot to a detailed portfolio update (US portfolio vs S&P 500). After a rapid recap of recent stock picks — from ZEPP to ZIM — we dive into a comprehensive analysis of Methanex (MEOH): its global footprint, methanol market dynamics, e-methanol shipping prospects, the Geismar 3 outage governance risk, and key valuation metrics. Timestamps • 00:03:00 – US Portfolio Update: +7.6% in 30 days vs S&P 500 +1.65%; since inception +70.4% vs S&P 500 +46%   • 00:06:00 – Deep Dive on Methanex (MEOH) Transcription   [00:00:00] Cameron: Welcome back to QAV America, Tony. This is episode 21. How are you? Tony Kynaston: I am well, thank you. Father’s Day celebrated Cameron: good. Tony Kynaston: Hope everyone out there did the same. Cameron: No, they’re Americans, Tony, they celebrate Father’s Day in a completely different time of year to us. Mm. Tony Kynaston: did. Anyway. I was gonna segue that into hope they all got their small packages, but, um, can’t Cameron: They’re small packages, Tony Kynaston: Day gifts from Australia, which have been held up. Cameron: Oh, that’s a reference to the fact that Australia Post has stopped shipping packages to the United States because of the de minimis ch rule changes. Uh, we were just talking on our Australian podcast about the, uh, state of the economy in the US second lot of weak jobs, job numbers has just come through, and as I pointed out in the last episode, all of the reasons that we’ve been [00:01:00] talking about. Over the last, uh, six months or so on this show, according to the failing New York Times, as the president likes to refer to it, analysts offered a variety of explanations for the slowdown the president’s tariffs on nearly all imports have driven up, driven up costs for companies and prices for consumers. Mr. Trump’s immigration crackdown has made it harder for many businesses to find workers while, while simultaneously reducing the need for them because they now have fewer customers. The federal government has cut jobs directly and canceled grants and contracts that have bled into the private sector. The uncertainty surrounding Mr. Trump’s ever shifting policies has made corporate executives more cautious about hiring and investing. So. You know, who would’ve guessed that, uh, putting Donald Trump back in the White House would lead to chaos and uncertainty? Tony? No, certainly not me. I, that was not on my bingo list. I thought, here’s a man who’s calm and [00:02:00] most stable genius I’ve ever seen. So it’s deeply surprising to me. What about you? Tony Kynaston: Yeah, surprising, surprising to all the Republicans, I would’ve thought. Who, uh, Um, yeah, but I, well first of all, I didn’t access the New York Times ’cause it’s a paywall and I’m not gonna sign up to the New York Times. with the Wall Street Journal, Cameron: What do they have to say? Tony Kynaston: probably the Cameron: Right? Tony Kynaston: Reprinted, uh, anyway. Cameron: uh, as I, I’m gonna do a pulled pork this week on an interesting company, meo. They’re a, uh, methanol, well, they’re the 800 pound gorilla in the methanol space, which is interesting ’cause I know or new before this. Nothing about methanol. But before I do that, I just want to. Give a portfolio, uh, performance update. Our US portfolio is up about 7.6% in the last 30 days versus the s and p 500, which is up [00:03:00] 1.65%. Uh, since inception, which is, uh, September, 2023, our US portfolio is up 70. 4% versus the s and p 500, up 46%. Year to date though we are still struggling. We’re down 7.2% year to date calendar, year to date versus 10.43 for the s and p because of some of Mr. Trump’s policies that tanked our portfolio at the beginning of the year, but over a one year timeframe. We are up 31% versus 20% for the s and p 500. So despite having a rough start to the year, uh, we’re still looking pretty. Um, I, I’ll also just, uh, mention the companies that I’ve done pulled Porks on over the last, uh, 20 episodes on this show. Um. Zap in order of best stories, [00:04:00] zap the smart Chinese smartwatch company that I covered on the 11th of July is now up 1511% since then. It’s just not slowing down. It is down 4% today. Um, but it’s just not slowing down. Gray media is up 40%. Titan machinery is up 11% since we talked about it. Precision Drilling is up 18%. Orx Corporation up 27 IHS holding up 37. Ford is up eight since we talked about it. Chemex is up, uh, 68%. Dan aos is up 16 Canadian. Imperial Bank of Commerce is up 23%. Jackson Financial, up 16%. Costco’s up five. Sasol is up 43% since I talked about it in July. I said they were a dirty, dirty, dirty business they were in and they’re up 43%. Bausch Health Companies is up [00:05:00] 16%. Seneca Foods is up nine. Kimball Electronics is up seven Sno that I talked about last week though is down 2% since last week. So there you go. Then there’s also Zim, uh, which is down 26% since we talked about it back in March and, and now Chile is down 10%, but the rest of them doing quite well. Well, with that out of the way, let me, let me talk to you a tale of Meow, Tony. Meow, MEOH. There’s the ticket code for Methanex. I’m calling it Meow though. We’re talking about the world’s biggest methanol producer. That’s who these guys are. Headquarters in Vancouver. Plants all over the map. Louisiana, Canada, Chile, New Zealand, Trinidad, and [00:06:00] Egypt. But I’m gonna preface this as I did last week by saying that the underlying commodity for Metanx, which is methanol, is a Josephine. So for new listeners, we chart underlying commodities on a three point trend line, looking at month end prices over a five year graph, and when a. Price has been in decline. We classify it as a Josephine. It could also be a cell, but this isn’t a cell. It’s not below its cell line. It’s above the cell line below the byline, so it’s a Josephine, so we wouldn’t, what that means is, regardless of the numbers, I’m gonna talk you through with Methanex today. We wouldn’t buy it. We’re not, we, we don’t have any room in our portfolio anyway, but if, if, if we did, we wouldn’t buy it until the underlying commodity gets back into a buy territory. Because we’ve learned from experience that prices tend to follow the underlying commodity price, which makes sense. Tony Kynaston: [00:07:00] methanol used for? Cam, Cameron: Tony, I’m glad you asked. Thank you for asking. Tony Tony Kynaston: you are Cameron: Methanol’s used for pretty much everything. It’s the Lego of the chemical world. It’s used in millions and millions of different things, including making crystal meth as we all learned from breaking bad. Um, it’s precursor to methyl a methyl lamine. Methyl lamine, I think is what they had to hijack trucks, uh, or trains in the desert, uh, in wherever they were. New, New Mexico, new something. Anyway, it methanol is the simplest alcohol, CH three. Ohh. It’s a clear liquid. It burns cleanly, mixes with almost anything mostly made from natural gas methane. Then you catalyze it into. Methanol. It’s used in plastics, paints, adhesives, resins. It’s blended into fuels, biodiesel, [00:08:00] gasoline, and the big future for it is something called e methanol, which is formed from CO2 and green hydrogen, and it’s a low carbon marine fuel. All those tankers moving. Well, you know, but based on President Trump’s tariffs, we won’t have to worry about shipping stuff around countries anymore ’cause it’ll all be made in America by, not by immigrants though, by good, good Americans, we’ll be working factories for $1 a day and happy. That they have a job that hasn’t been taken by a robot or AI yet. But basically this is the, it’s the Lego brick of the chemical world. Cheap, versatile, snaps into more complex stuff, and. Tony Kynaston: bare feet. Cameron: And Well, I was gonna say, light Legos. Don’t eat it because it’s highly, highly toxic and can kill you. So [00:09:00] don’t get it in your eyes. Don’t breathe it in, don’t get anywhere near it in its raw state, and that’s one of the problems as we’ll see. But methane X-M-E-O-H is the world’s largest methanol producer, as I said. They not only produce it, they run their own fleet of tankers, which is good bit of vertical integration, probably also why they want to have their, uh, own shipping product, fuel product, marine product, and it. It also means they can shift supply to whichever region is paying best, uh, at a fairly low cost. And these guys run a really efficient, low cost operations. One of the reasons why they’re on our buy list, they go back to a company called Ocelot Industries, which was like a oil and gas company. 1968 in Calgary, pivoted to methanol in the 1980s, became Methanex. And they’ve survived despite the government policies [00:10:00] around the world regarding methanol being pretty volatile, as is methanol over the last, uh, 50 years, which I’ll talk about. But first of all, I wanna talk a little bit about the methanol market. It’s global, it’s priced in USD. The big markets are China, Europe, south America, Korea. 22% of the market is in China. They use it for fuel blending and plastics feed stock. Dunno if you know this Tony, but a lot of plastic stuff gets made in China. They use a lot of methanol. Um. Europe and the US use it for chemical intermediates and some energy. South American Korea use it for a whole bunch of different things. The basic price drivers for the methanol market are natural gas costs, oil and NAPFA spreads the competition for fuel and regulat. Both in terms of what you can put in your [00:11:00] fuel and also rules around what can be used and when it can be used in like marine rules and those sorts of things. Bottom line is the prices swing hard. There’s a lot of inputs, a lot of variables, and it’s a fair

In this episode, Cameron and Tony dive into the turbulent world of tariffs, the performance of the QAV US portfolio, and Cameron’s “Pulled Pork” deep dive on Brazilian pulp and paper giant Suzano (SUZ). The discussion ranges from Trump’s tariffs being declared illegal, to the surprising success of companies like ZEPP (the smartwatch maker), Gray Media, and others. Cameron traces Suzano’s roots back to its immigrant founder, explores its dominance in eucalyptus pulp production, highlights both its financial strengths and ESG controversies, and weighs up risks like Brazil’s economic volatility and cyclical pulp prices. It’s a mix of global politics, investing fundamentals, and a surprising education in “fluff pulp.” ⸻ Timestamps & Stocks • [00:00:30] Trump’s tariffs ruled illegal — implications for markets. • [00:02:30] QAV US portfolio update: performance vs. S&P 500. • [00:04:15] Reviewing past Pulled Pork picks: • [00:07:30] Pulled Pork: Suzano (SUZ) — Brazil’s pulp and paper giant. Transcription   [00:00:00] Cameron: Tony, I’m the chillest person on the planet. Welcome to QAV America. Tony. Episode 20. Uh, Tony’s just laughing Tony Kynaston: Mm. Cameron: ”cause I said I don’t have any aggression. Tony Kynaston: person on the planet, Cameron: I am the chillest person on the planet. You should know that by now, Tony. Um, uh, well, we’ve, we’re just talking about this in a. Tony Kynaston: I post, uh, democratic, things on Facebook. Cameron: You doing your, uh, David Markin impression? Um, Tony Kynaston: I did Cameron: uh, we just, Tony Kynaston: when you started talking politics. Cameron: yeah. We talked, uh, on our Australian show just now about Donald Trump’s tariffs being declared illegal by a federal appeals court. Tony Kynaston: Has Cameron: so no. Well, no, but he, he reckons it’s gonna go to the Supreme Court, but it just fascinates me when governments. Do [00:01:00] things that they know are illegal. I mean, he must have had somebody in it. I know his administration isn’t necessarily stacked with the finest and the brightest minds, uh, available, but they must have known that, well, we can’t really do this. Let alone the big card that said, these are reciprocal tariffs when they were just made up numbers. But Tony Kynaston: Oh, I, Cameron: must have known that it wasn’t legal. Tony Kynaston: about that. I think the advice, the legal advice was if you declare an emergency, then you have the power to implement. Well, the executive has the power to implement tariffs and that’s Cameron: courts are saying no, Tony Kynaston: Well, this, the and the courts are saying no. which means the underlying court said yes. it’ll go to the Supreme Court and I’d Cameron: No, the first court said, no. The first court, the first court said it was illegal. The Trump administration appealed the first court’s ruling, and the apple at court said no. It was the second time it was declared illegal.[00:02:00] Tony Kynaston: Pesky Cameron: anyway, we’ve talked a lot about how, you know, and I’ll talk about it again when I do my Paul pork today, how it’s, you know, just throwing everything into disarray and as it turns out, is illegal in the first place. And the Supreme Court may or may not side, but the president probably will. ’cause they seem to be pretty favorable towards letting him do whatever the hell he wants to do. But if they say no, who knows what happens next. But um. Tony Kynaston: I will Anyway. it Cameron: Yeah, Tony Kynaston: in the first place. Cameron: I guess, and, and you’ll probably get Congress to back it, so yes. Should have been doing that all along. Before I get into my pulpo for the week, Tony, just do an update on our US portfolio. Uh, in the last 30 days, our US portfolio is up 12.5% versus the s and p 500, which is up 3.5%. Year to date though, our portfolio is down 7.5% versus the s and p. That’s up nearly 10%. But [00:03:00] as I pointed out in our last show, that’s because at the end of last year, our portfolio was up. Uh, I don’t know. Crazy amount. Like 80%. Tony Kynaston: 80%. Yeah. Cameron: 80%. And then, uh, the, at the beginning of this year, when Trump’s Liberation Day, et cetera happened, a lot of our stocks gave up a lot of the gains that they’d had. Um, all time though, going back to when we started this portfolio in September, 2023. So two years ago we will be in a couple of weeks. Our portfolio is up 73% versus the s and p 500, up 45%. So still doing quite well. I also wanted to update you on the performance of the pulled porks that I have done, uh, since we started this show. Uh, just because they’re not all reflected, well, most of them aren’t reflected in our [00:04:00] portfolio. Um, of course the big one being, uh, Zep, the Chinese smartwatch company, which I did on the 11th of July when they were trading at $2 98, they’re now trading at $45. They went up 19% today. Tony Kynaston: Really? Cameron: crazy. They’re, they’re now tr they’re now. Yeah, we talked about this last time. They just signed a bunch of brand deals, uh, not brand deals, ambassador deals, all these, uh, yeah, sporting ambassadors. Uh. Yeah. Um, well that’s why they’ve gone up 14, uh, a hundred percent since, uh, I, I first talked about them. I dunno what happened today in particular. Um, but, uh, I do have a, there is a site called, um, is it Fin Viz? Yeah. Fin Viz carries all of the Zep news. Let me see what happened today.[00:05:00] Uh, a Mabb Fit. Oh, that was August 13th. No, there’s been no news in the last couple of weeks, but you know, all of the news articles from early August were a Mabb Fit Partners with, which is one of their brands, partners with female elite trail runners. Croft and Rosala to drive innovation in sports watches. Before that, it was a Mabb fit announces Ultra Runner Rod F’s new brand ambassador, NFL running back. Derrick Henry joins a Mabb Fit as Athlete Ambassador. Um, so they came out with a bunch of these. Promotional brand ambassador deals. I assume that’s had something to do with it. They also came out with their unaudited financial results, which said that revenue was up 46% year on year. So that might’ve helped. Tony Kynaston: Yeah. Cameron: Anyway, we covered it just at the right time before they blew up luck more than skill, [00:06:00] but the rest of the stocks are doing okay. Gray media’s up 40% since we did it, uh, early August. Um, Tony Kynaston: and said, how can this legacy media company go anywhere from where it is? Cameron: yeah, right. Um, Python machinery that I covered on the 14th of August is up 5% since then. Kimball Electronics from last week is up 1% since we covered it. But, uh, anyway. Tony Kynaston: you just, blow my mind talking about gray media. I mean, it’s up 40%. It’s not a Mag seven stock. It doesn’t make semiconductors for AI processing. It’s a, it’s a television network in a dinosaur industry, but it throws off Yeah, but they’re doing a lot of new media stuff. Remember they’re sort of down in Atlanta and they’re getting people in and they’re doing cool stuff. They’ve got ponytails like me, Tony, a lot of guys with ponytails doing, they’re cool stuff, Yeah. Cameron: double [00:07:00] macchiatos. Yeah, the But, but did you say but successful? Yeah, right. Just like you, but successful. Oh, right. Tony Kynaston: I did Did you have Uhhuh? You thought it, but uh, did you have any other, did you have any other, uh, news that you wanted to talk about US related? Before I get into my deep dive, Tony, I uh. you. Cameron: Okay, so unlike some of the dirty businesses I’ve covered recently, like Sasol, this one Suzano, SUZ, is the ticker is kind of clean. I say kind of. There might be a little bit of greenwashing going on and how clean they make out they are, but cleaner than oil. I guess Ano is a bras Tony Kynaston: comment. Cameron: which bit cleaner than oil. Tony Kynaston: Well, I know you’re gonna talk about this [00:08:00] company and it’s a, it’s a paper manufacturing company, isn’t it? Um, that Cameron: paper. Tony Kynaston: on the Australian stock market called Guns, which ran the processing mill in Tasmania. And I, I, you know, it might be different in that I think guns got involved in some old growth for us, but they were certainly also. paper from Plantation Forest, but it involves a lot of chemicals. It’s a very heavy duty plant and it releases a few toxic, I shouldn’t make any allegations here. It can release toxins into the water supply, clean, pristine lakes and rivers. So, yeah, dunno about this company, but the industry hasn’t always been seen as being green Cameron: Yeah, I’ve, I’ve, as we get into it, I’ve got a lot of the criticisms from different, uh, environmental, uh. C agencies or whatever about these guys and what they’re doing. So we’ll talk about that. But certainly their website, they talk about sustainability a lot. [00:09:00] It’s, uh, all over their website about what a great job that they’re doing. Maybe that needs to be tempered a little bit. Um, but we’ll get into that later. But it’s interesting particularly, Tony Kynaston: timber company, they are renewing what they cut down. So that’s a good thing. And hmm. that’s a good thing. So yeah. Cameron: Planting trees and then cutting them down. But um, and they’re also only growing on lands that have already been degraded, previously degraded lands or something like that. I think they call it. They’re not like chopping down. Pristine forest. But there, there are other issues about monocultures, et cetera, which I’ll get into, but they are a Brazil based forestry company, a developer of products made from eucalyptus forests and eucalyptus pulp and paper and Latin America Now as Australians, that’s weird, right? Because we think of eucalyptus as an Australian native tree. You and I were just talking

In this episode, Cameron and Tony dive deep into the US market’s latest moves following Jerome Powell’s comments at Jackson Hole, the surprising resilience of investor sentiment, and a look at how the QAV US portfolio continues to beat the S&P 500. They track the extraordinary rise of ZEPP (up 1,200% since Cameron’s July deep dive) and review other stocks they’ve covered, from Titan Machinery to Sasol. Cameron then takes us through a fascinating pulled pork on Kimball Electronics (KE), tracing its history from pianos and pipe organs to becoming a global contract electronics manufacturer. Along the way, Tony and Cameron unpack value investing lessons, the quirks of US versus Australian markets, and finish with a colourful chat about The Who, Leonard Cohen, Rip Torn, and China’s unique economic model.   Timestamps & Stocks Mentioned • 00:00 – 01:30 | Market update — Jerome Powell’s comments at Jackson Hole, Fed signalling • 01:30 – 03:00 | QAV US portfolio performance (up 74% vs S&P 500’s 45%) • Stocks doing well: RM (Regional Management), GASS (StealthGas), ENVA (Enova International), WLFC (Willis Lease Finance) • 03:00 – 05:00 | Cameron’s deep-dive tracker results • ZEPP (Zepp Health) up 1,218% • 08:30 – 36:00 | Pulled Pork: Kimball Electronics (KE) • 36:00 – 39:00 | Comparing US vs Australian markets, portfolio returns • 39:00 – After Hours • Tony’s golfing holiday & horse racing story • Cameron on The Who still rocking in their 80s, Leonard Cohen doco, Rip Torn nostalgia, and books on China’s economic model   Transcription   Cameron: [00:00:00] Welcome to QAV America. Tony, how you doing? Tony Kynaston: I’m doing well. I’ve just had a week off and it has been lovely and, played golf up in Yarra Wonga on the Murray, Cameron: let’s talk about US market. Um, j Powell. Jerome h Powell said The balance of risks across the economy had started to shift raising the odds. The central bank lowers borrowing costs at its next meeting in September. After, uh, he was at Jay Hole. Jay Powell was at Jay Hole. Um, you would think that when the Chairman of the Fed says The economy’s not going well, the market would react negatively to that. On the contrary market, thought that was the best news. Say Dad. Oh, week awake. Tony Kynaston: Uh, it’s, we’re through the looking glass, aren’t we? Cam? I mean, that’s just, yeah. Own. Powell came out and said that he thought there could be a decline in employment, which would, uh, [00:01:00] cause a slowdown in the economy and the market. She, and went up one and a half percent the day Cameron: Yeah. Tony Kynaston: Mm-hmm. Cameron: times. Good times. Well, speaking of good times, uh, we just talked about our US portfolio, so for new listeners, hi, welcome. Yes. We’re two Australians talking about value investing in the United States. We’ve been doing a podcast, uh, about value investing in Australia for five or six years, and, uh, we’ve got a US portfolio that I started back in September, 2023 following our QAV methodology that Tony’s been developing over 30 odd years. Quality at value is what that stands for in case you’re wondering. And that portfolio since inception is up about 74% versus the s and p 500, up about 45% over that period of time. In the last 30 days, our portfolio is up [00:02:00] 8.6% versus the s and p 500, up about 0.8%. So in the last week, some of the stocks that have done particularly well for us are RM regional Management up 8.5% gas ga a s, stealth gas up seven point a 5%. Enva, ENVA and Nova International up about 6.2% overall, our best stock, uh, has and continues to be. Willis Lease Finance, WLFC. It’s up 223% since we bought it, although it hasn’t had a good year. It’s down from about 300%. At some point it was. But generally speaking, our portfolio is doing well in the us Tony, and, um, as I did, uh, last time we did an episode, I’ve got, I’ve been keeping a list of the stocks that I’ve been doing deep dives on this [00:03:00] show. And just to see, because we don’t hold most of them in our portfolio. ’cause our portfolio has been fully invested for quite some time. And unless I need to trade something, I don’t have any capital left to put stocks in. So, but I’m keeping track of how they’re doing. Some of them have done. All right. Um, Zep, the, uh, Chinese smartwatch manufacturer that I did a deep dive on, on the 11th of July is up. 1218% since then. Tony Kynaston: Wow. They should send you a cheap watch. Cameron: Price was $2 98 when I talked about it. It’s currently $39 29. I like somebody, somebody on TikTok, when I posted a story about that last week, said, yeah, but it’s not gonna last. It’ll come back down Tony Kynaston: Nice. Cameron: it probably will, but yeah, up [00:04:00] 1218%, that’s insanity. And um, I think last time we spoke, I said I didn’t know why. I do know why they have, they hadn’t come out with new results since then, but they have come out with celebrity endorsements for their products. So, um, they, I mean, celebrities that mean nothing to me because I’m an Australian, but, uh, they have come out with news about, uh, various celebrities that are doing, uh, you know, something, something, something promoting their products, which is apparently as good. So, um, yeah, that’s good for them. Uh, dunno if that’s everything that’s got to do with their price rise of 1200%, you’d think that there’d be more than a couple of celebrity endorsements to do that. But no new [00:05:00] financials have come out that I can see, so unless it was just me talking nicely about them. Um, I don’t know. So, uh, what else? Let’s see. Um, the last one I did Titan Machinery. I did that a couple of weeks ago. They’re up 8% gray media that I talked about. 7th of August. They’re up 37%. GTN Sasol, the dirty, dirty company, oil company that I talked about are up 40% since we talked about ’em in the middle of July. Tony Kynaston: Interestingly Cameron: say something. Tony Kynaston: GTN. Yeah, I, I meant to mention this on the Australian show that, uh, I forgot to, I’ve noticed on, on our buy list, we’ve had, um, legacy media companies like Seven News and Seven Western News that’s called, Southern Cross Entertainment. So their TV networks in Australia, and uh, they’ve been on [00:06:00] our buy list on and off for a long time. They’ve all kicked up and since reporting. Results in the last week or so in Australia. Some, I, I, I think Southern Cross was up like 30% on the day of its results announcement. So, um, I’m wondering whether that’s, uh, a theme that’s going on in the market at the moment that Legacy Media, which has been much unlocked. Because, uh, streamers are, are taking over. you know, when they, I’ve seen this before. When an industry goes through a phase where it’s unloved, it becomes a value stock. And if the underlying business still has good assets, um, eventually they become so cheap that they get bought, um, Cameron: Mm Tony Kynaston: could be the case with GTM. Cameron: mm mm Well, yeah, a lot of, uh, I don’t know, but a lot of our stocks have been doing well that we’ve covered on this. Couple haven’t, Zim integrated shipping that I did back in March is down 21% since I talked about it. N now Chile that I covered in May is down [00:07:00] 13%, but the rest are very much. In the, uh, black. So Tony Kynaston: a good point Cameron: yeah, Tony Kynaston: um, you know, as we know from our experience in Australia, we don’t get every call Right. Or every stock that we analyze goes up. It’s, it’s the fact that we get, you know, probably six out of 10 right? And they do well and they, um, us to cover the four out of 10 that, that don’t do as well. Cameron: and we have rules in place for when to sell things. So the things that don’t go well, we get rid of them. When the time is right and replace ’em. Yeah. So the company that I’m gonna talk about today, Tony, is Kimble Electronics. KE is the ticket code. I do wanna point out though, that uh, I’m using an analysis that I did on August 8th when the price was $19. Since then, they came out with new financials on August 14th, and the price is now $28. [00:08:00] So, um. This would’ve been a much more impressive pulled pork if I’d done ’em a couple of weeks ago. I haven’t run the new numbers, um, but they probably look good because the share price went up. 50%. I, I did run the new price. I put the new price into our checklist and it didn’t change the scoring a great deal. But, um, I think price to book is the only one that it did score for, and now it doesn’t score for, because the new price is above the book price, but it still came out well, assuming the rest of the numbers are just as strong. I do because of how the share price reacted to their, uh, results. Anyway, as I often say when I do these, um, obviously do your own research. This isn’t a recommendation. It did turn up on our buy list a few weeks ago. I think it’s an interesting story, but the more interesting I. Thing that for me when I’m doing [00:09:00] these, is the kinds of businesses that are available to invest in, in the United States that I’ve never heard of. They’re not the kind of businesses that we see in Australia on our buy list. It’s a different market, much bigger market, much broader scope for investments, but it’s just to point out that there are lots of, when you’re turning over rocks. Us. There are lots of gems under these rocks. Is that what you find under a rock, or do you find Tony Kynaston: Inside the Cameron: Yeah, inside the rock. Okay. Picking up the rock. Cracking it open. Yeah. Okay. Tony Kynaston: Well, it’s, and the US market has different characteristics to the Australian market too, which is the other interesting thing. Far Cameron: Yes, Tony Kynaston: companies in the US than there are, in Australia, which is dominated by

In this episode of QAV America, Cam and Tony dig into the latest market moves, starting with the chaos in gold prices caused by unexpected US tariffs on Swiss gold imports. Cam reports on the strong performance of the QAV US portfolio—up nearly 64% since inception—highlighting big winners like ZEPP (+964% in a month), CX, IHS, and Orix. They cover portfolio changes, including selling OPHC and adding Jackson Financial (JXN), and discuss broader US economic news, including tariff extensions, inflation concerns, and Fed rate expectations. The centrepiece of the episode is Cam’s deep dive (“Pulled Pork”) on Titan Machinery (TITN), one of the largest US agricultural and construction equipment dealers. He breaks down the company’s history, revenue mix, recent financial challenges caused by the US farming downturn, and why it still scores well under the QAV system. After the investing talk, the “After Hours” segment touches on classic films, new TV shows, and even the Rumble in the Jungle. ⸻ Timestamps & Stocks Mentioned • [00:00] – Gold price swings after surprise US tariffs on Swiss gold imports. • [00:02] – Portfolio update • [00:06] – Selling OPHC after sharp drop; replacing with Jackson Financial. • [00:09] – Broader US news: Trump’s China tariff truce extension; inflation report expectations. • [00:12] – Pulled Pork: Titan Machinery (TITN) – background, business model, global footprint, financial performance, challenges in the US ag market, valuation metrics, and QAV scoring. • [00:31] – Tony’s analysis on TITN’s debt, equity, and cyclical challenges. • [00:34] – After Hours: “The Man Who Fell to Earth” (SBS), “The Apprentice” (Stan), “The Handmaid’s Tale” final season, 1980s sci-fi cult films, “Kings” TV series, and Muhammad Ali vs George Foreman fight rewatch.   Transcription   [00:00:00] Cameron: Welcome to QAV America. Welcome back to QAV America, Tony, episode 18. Uh, we are recording this on the 12th of August, 2025. Well, Tony, it’s, it’s been a big week in America. Markets are kind of booming, kind of crazy, just, uh, the regular going on over there. Any US news stories that, uh, pique your interest this week? Tony Kynaston: Uh, a lot of us news stories picked my interest this week, not the least of which was the gold price movements on Friday afternoon, US time when, uh, Switzerland, which has had lots of tariffs put on it. Um. Somehow I, I’m not sure of the full detail of this, but somehow gold bars being transferred from Switzerland to the US attracted a tariff and that threw the gold market into a tier. And the government came out and said they didn’t mean that to happen. And so it’s all up in the air at the moment. But yeah, the gold price [00:01:00] vacillated quite a bit on Friday, and since then, um, settled down little bit. Um. But, uh, yeah, just a lot of on the fly decision making going on. So it’s, it’s dynamic, entrepreneurial it’s, it’s, uh, causing a few splashes here and there as well. Cameron: Yes. Lots of craziness. Well, I am gonna do a deep dive on another company that I think you’re gonna like today. This is, uh, Titan Machinery Inc. TITN is the ticker. And we’ll get into that in a little bit. Before we get into that, for new listeners welcome. I wanna explain what you’re listening to. Uh, yes. We are two Australian value investors. We’ve been doing a podcast, uh, on value investing for five or six years. Tony’s been a value investor for. 25, 30 years, and he built a system that we call QAV Quality add value buying shares in quality companies when you can get them at the right [00:02:00] discount to their intrinsic valuation. And we’ve developed a methodology, or Tony’s developed a methodology for doing that. It’s a spreadsheet checklist that we run companies through. We teach how to do that on this podcast. We’ve got. Big membership in Australia that we teach, uh, the system to every week. And a few months ago, we decided to start looking at the US market and applying QAV to that. And it’s been going quite well. In fact, we’ve got a US portfolio that I started using our system in September of 23. No, September. Yeah, September 23. Uh, over that period of time, coming up two years, it’s up 63, nearly 64% since then versus the s and p 500, which we use as a benchmark, which is up about [00:03:00] 43% over the same period of time. So it’s outperforming the s and p, and that’s kind of what we look at as our benchmark. Uh, and in the last, um, week. It is had some interesting results. GTN uh, TV stock that I talked about on our show last week. I did a deep dive on GTN and I actually had added it to our portfolio because I had to sell something and replace it. It’s up 23% today, Tony, today. Tony Kynaston: Okay. I can’t explain that. I was gonna mention that, um, their quarterly results were out, uh, and that revenue was down 7%, but it was above analyst expectations they had paid, I think it was 170 million to buy another network. Um, but those announcements were last week, so I’m not sure why that’s fuelling today’s stock [00:04:00] price rise. Cameron: I don’t know either, but it’s only up about 8% net since I added to the portfolio. ’cause it dropped a little bit after I added it. But I guess it’s probably, um, our episode coming out, which is probably responsible for, you know, we, I. Did talk about it on Reddit. I posted it to the value investing subreddit, and I’m sure everyone on that, uh, took my words of wisdom and, and jumped into the market. So I’ll say that’s the QAV factor unless people prove me wrong. Tony Kynaston: Well done. Cameron: Yeah, it’s the, the burden of proof is on people to prove me wrong. Uh, one of the stocks that I did a pulled pork on about a month ago, Chinese smartwatch manufacturer, Zep, ZE double P, is now up 964% since I talked about it a month ago. Again, I’m putting that down to the QAV factor. Um, that’s [00:05:00] pretty crazy stuff. Tony. 964% in a month Tony Kynaston: out there want us to Cameron: I. Tony Kynaston: pulled pork or want you to do a pulled pork on their company, they know where to contact you. Cameron: That’s right. I did a, I did the, uh, deep dive the Paul Pork on the 11th of July. Uh, it was at trading at $2 98. It’s now trading at $31 80. And there haven’t really been any announcements, uh, come out since then. So I do. I think it’s, uh, maybe an acquisition target. It might be what’s going on. But, um, anyway, that’s been a, and unfortunately I didn’t add it to our portfolio at the time because we were full. We didn’t have any room in the portfolio. We were fully invested. Damn shame that, uh, looking, looking through some of the other stocks that I’ve done deep dives on over the last, uh, few months. [00:06:00] Uh, Cemex CX is up 53% since we talked about it at the end of March. Uh, IHS holdings is up 25% since we talked about it at the end of May. Orix Corporation is up 20% since we talked about it in the middle of June. Yeah, most things have been doing really well. Poco is up 13%. Precision Drilling Corporation is up 14%. Jackson Financial, which I just added to our portfolio by the way, that’s up 10%. So I did wanna mention that I have done some trading in our portfolio since, uh, our last episode. I had to sell OPHC Optimum Bank Holdings on the 8th of August, the top. The stock tanked roughly 10 to 11% in a single day, became a three point trend line sell, but it, we sold it at a 2320 3% profit over the 18 months that we held it from November, 2023. So [00:07:00] that’s okay. Basically, they came out with results. Earnings quality were decent, but there was dilution per share decline in the EPS despite strong profit growth. So I think they’ve been issuing stock or converting preferred shares or something is going on to dilute the EPS. And also they reported loan book shrinkage. In a, an environment when interest rates are still high, so not really sure what’s going on there. Bottom line is I had to let them go and replace them with Jackson Financial, which was my pulled pork on episode nine. They’re the seventh largest US life insurance company for memory based outta Michigan, I think Jackson, Michigan, something like that. Where they got their start. Anyway, so the US market is booming, our portfolio is booming, but nothing like zep a th You ever seen a thousand percent increase in a QAV stock [00:08:00] in 30 days? Tony? A 10 bagger? Tony Kynaston: And I wonder whether there was Cameron: No. Tony Kynaston: kind of stock split. on that may have accounted for it, but I couldn’t see it in the announcements. Cameron: Yeah, me either. Tony Kynaston: Yeah. And the other one that, um, you haven’t mentioned that you did a pulled pork on was forward. And I, I’ll just, uh, bring you back down to worth a bit, even though the share price hasn’t, uh. Gone too bad. I don’t know what the numbers are like since he did the pool port, but their quarter, to profit was pretty much wiped out by the US tariffs that have come in. Um, and they a lot of importing of aluminum in particular, which is retracting high tariffs. I. Cameron: Yeah, I covered them on episode six. On the 21st of May, they were trading at $10 80. At the time, they were trading at $11, 14 as of last close. So they’re up 3% since then. So, you know, not shooting the lights out, but they haven’t gone the wrong way either. The only one that’s really gone backwards since I talked about it was, uh, who I mentioned last [00:09:00] week, INEL Chile, ENIC. They’re down 18% since I covered them in episode five on the 14th of May, but everything else is done reasonably well, Tony Kynaston: Again, I wonder if that’s Cameron: so. Tony Kynaston: driven too, if they’re exporting from Chile into the US perhaps. Cameron: Yeah. Dunno. So what else? Donald Trump signed an order extending China ta

In Episode 17 of QAV America, Cameron and Tony dive deep into the murky waters of the US media landscape with a pulled pork on Gray Television (GTN) — a classic “cigar butt” Berkshire-style stock that’s generating mountains of cash, trading at absurdly cheap levels, and doubling down on local television and film production while Wall Street yawns. They dissect Gray’s sprawling empire of local stations, film studios, and sports networks, and discuss how its political ad revenue, cash flow, and real estate assets might be wildly mispriced. Along the way, they contrast value investing orthodoxy with their QAV system, explore commodity trends, and reflect on the ideological decay of US political and corporate culture. It’s old media, new math, and some good old-fashioned cynicism. ⸻ ⏱️ Timestamps & Stock Mentions: • [00:00:00] Introduction and banter about speaking pace, US markets, and ideological denialism in politics and business • [00:03:00] 📈 Portfolio Update • QAV US portfolio 30-day: -1% vs S&P500 +1% • 12-month: +19% vs +18% • Since inception: +56% vs +42% • WLFC (Willis Lease Finance Co): former star performer • [00:04:30] 💰 Commodity Trends Update • Iron ore, coal, copper, platinum, etc: many become Josephines • Gold, lithium, steel: remain buys • Wheat, nickel: now sells • [00:05:45] 🚫 Stock Sale: ENOC (Enochian Biosciences) hit Rule 1 • [00:06:10] 🐷 Pulled Pork: GTN (Gray Television) • TV empire with deep assets and hidden value  • [00:29:00] 🧠 Discussion on cigar butt investing, M&A potential, market sentiment, and why now might be the time to buy • [00:33:30] Speculation about Skydance, Paramount, and future acquisitions • [00:34:00] Wrapping up – final thoughts on GTN and QAV philosophy Transcription   [00:00:00] Cameron: Welcome back to QAV America, Tony, episode 17, recording this on the 5th of August, 2025. We talk too slowly to somebody on YouTube, Tony Kynaston: Really. Cameron: so can you, can you speak faster this time, Tony? Tony Kynaston: I Cameron: Uh, well, not fast enough for this person on YouTube. have you been? Tony, you’ve been following the US market,  you’ve been reading the Wall Street Journal this week, Tony, Tony Kynaston: I have, yes. Read the Wall Street Journal every day. At Cameron: what have you learned about the US market from the Wall Street Journal this week? Tony? Tony Kynaston: don’t learned this week. Cameron: Yes, Tony Kynaston: it’s a Cameron: yes. Tony Kynaston: Taught to us Cameron: Yeah, as we were talking about in our last show, uh, as people may or may not know, I’ve spent the last 20 years doing mostly history related podcasts and a lot of it on, uh, Soviet [00:01:00] Union and the Cold War. And it is very reminiscent of, you know, uh, an ideology based state like, uh, Soviet. Union under Stalin or uh, communist China under Mao, where you have a particular ideology and messaging that you wanna convey. And if the facts and the data don’t map neatly to that ideology, you deny it, you ignore it, you arrest the people that are promoting it, and, uh, make sure that you end up with a. With a culture, with a society where everyone is too scared to speak the truth, and they just say things that they feel they will be rewarded for, and that’s the problem. You, you, you, it’s a slippery slope then into a society that ignores, uh, facts and data. And, uh, it’s not, it’s not a good thing for society. It’s not a good thing for [00:02:00] industry. It’s not a good thing for business. It’s not a good thing for investors. Uh, so yeah, hopefully this trend in the US gets, uh, turned around at some point   Tony Kynaston: is never a good And I’ve seen it, and it’s kind of a corporate approach to things too. I Cameron: Mm-hmm. Tony Kynaston: plenty of times in big businesses where a boss wants a number when you come to your results, you hit the number by all call Cameron: Mm Tony Kynaston: even if Cameron: mm. Tony Kynaston: sometimes. So, uh, Yeah. no, Cameron: Yeah. Well, um, I think I will just do a quick portfolio update, uh, for our US portfolio. I did have a look at it this morning. And let me see. For the last 30 days, our portfolio was down 1% versus the s and p 500, which was up 1%. For the last 12 months, our portfolio is up 19% versus the [00:03:00] s and p 500 up 18%. And since inception, for our portfolio, which is September, 2023, we’re up 56% versus the s and p 500, up 42%. And as I said to you on our last show, you know, one of the. Well, the big, uh, success in our portfolio is Willis Lease Finance Company, WLFC, which it, by the end of last year was up like 300% since we bought it. It’s come back about 30%, so now it’s only up about 200% since we bought it. But a lot of the, uh, retreat in our portfolio this year has been Willis Lease Finance Company giving up. Its 300% returns down to 200%. So our portfolio. This year looks like it’s been going backwards, but really it’s just giving up some of the gains that had, that had already amassed last year. Still 56% versus 42% for the s and p 500 is, is a nice return in September 23, so like not quite two years, but almost two [00:04:00] years, nearly a 60% return. It’s pretty good, right? just on a commodity update this week, for people who are new to our show, when we’re investing in commodity stocks, which is a big thing in Australia, we tend to look at the underlying, uh, performance of the commodities that the companies are built on top of. If they’re a gold miner, we look at the gold commodity or iron ore or coal. There was some cha, there were some changes when I looked at the commodity graphs this week. Iron ore has become a Josephine, um, for new QAV listeners, that that means that it’s in a by state, but it’s declining. Uh, so the price. Today is lower than the price was at the end of last month. Yeah, end of the month was only a couple of days ago, but it’s retreating a little bit, but still in a buy state technically. But we’re gonna, we would wait if, if we had an iron ore stock that was a buy on our buy list. If the underlying commodity is a is a Josephine, [00:05:00] and I called it that because I’m a Napoleon buff, and Napoleon famously. Supposedly said, not tonight, Josephine. Um, gold is a buy. Thermal coal is a Josephine Coke, and Cola is a buy. Crude oil is a Josephine Copper is a Josephine. Uh, wheat is a cell. Nickel is a cell. LNG is a Josephine Platinum’s. A Josephine aluminum’s. A Josephine zinc’s. A Josephine tin is a Josephine Steel is a buy. However, lithium is a buy, so there’s been some changes this week. Iron ore, coal, platinum, aluminum, zinc, all became josephine’s this week. Nickel became a cell and wheat became a cell. They were the big changes for this week. So if you’re holding any stocks that are nickel or wheat based, you might want to think about stealing those, not financial advice. Do your own research also in a portfolio. Last week I sold a stock for the first time in a long time, I had to sell [00:06:00] Enoch. Um. Which I think I did a pulled pork on a little while ago. They became a rule one sell and an advanced Rule one sell too. They dropped 20% below the price that we bought them at, so I let them go and I replaced it with the company that I’m gonna do a deep dive of pulled pork on today, which is GTN Tony, and I’m quite excited about this one. Like the company I did last week, this is strikes me as another Berkshire classic Berkshire type company. Kind of out of favor, little bit boring, but generating a lot of cash. Uh, seems to have a bit of a moat and, um, we’ll see what you think after I deep dive.  So I. Tony Kynaston: these. I. like these Berkshire [00:07:00] stocks. Cameron: Yeah, me too. And it’s interesting to see them, um, in the, in the US market because we, you know, we don’t, I mean, maybe we do have a lot, I mean, we have a lot of sort of in the, in the Australian market, companies that are certainly outta favor on our buy list all the time because they’re dirty mining companies. They’re digging up coal or they. In oil or things like that. And so they’re not ESG friendly, but we, we don’t tend to get a lot of businesses like this one. We do have some television networks. It’s in old media companies that pop up from time to time. GTN is gray television. There are, they call themselves a multimedia company. They’re really a television business with some add-ons. But I nearly bought this a year ago, July, 2024. For our US portfolio. And then you talked me out of it. ’cause it had a bad Zed score. That’s when we were still paying attention to ZED scores. It [00:08:00] was a good call though. ’cause at the time I was trading at $5 51. Today it’s $4 46. So glad you did talk me out of it, but now we we’re ignoring Zed scores. It’s back on the buy list. And I did add it last week. It has since become a Josephine at the end of the month. I will just call that out. So it’s price. Uh, this morning was $4 46. At the end of the month it was $4 51. So it’s slightly below that. So I wouldn’t buy it today, but it was okay when I looked at it, uh, late last week. But who are they? Gray, as I said. Yeah. Tony Kynaston: I, I what josephines, not Josephines, because, um. The long term trend might mean it’s a buy, but we can probably buy to a better price if it’s slower than what it was, but it closed out at the end of the month, So that’s the reason for looking at the short term trend as well. the short term trend is higher than the end of the last month, then the [00:09:00] upward trend is still intact and gives you, gives me more confidence that the momentum’s behind this stock. ’cause if it’s down, even in the short don’t know whether it’s a Cameron: Which makes you different from a classic value investor who just believes that if it’s a good company, you buy it regardle

In this episode of QAV America, Australian value investors Tony and Cam are focusing on Seneca Foods, a classic American company known for its packaged fruits and vegetables. They discuss Seneca’s financial performance, history, and why it’s a compelling value stock despite being considered a boring business. The hosts also reflect on other stocks they have reviewed recently, showing significant gains, and emphasize the ongoing potential to find undervalued stocks in the US market. The podcast aims to apply value investing principles to identify promising investment opportunities. 00:00 Introduction to QAV America00:57 Success Stories and Market Insights04:34 Highlighting Seneca Foods05:33 Seneca Foods: History and Operations13:00 Challenges and Financial Performance19:15 Competitive Advantages and Industry Overview20:21 Financial Performance Analysis21:35 Cash Flow and Investment Strategy24:05 Stock Performance and Market Sentiment28:59 Seneca’s Historical Context32:57 Investment Opportunities in the US Market37:03 US Portfolio Performance38:57 Disclaimer and Transparency Transcription   Cameron: [00:00:00] Welcome back to QAV America. Tony, this is, uh, for new listeners. Welcome. We’re two Australian value investors talking about the American market. We’ve been talking about the Australian market for years. We’re like, let’s broaden our horizons. Let’s, let’s start investing in American stocks as well and applying value investing principles. So each week on the show, we take a stock. That’s on our US buy list, and I do a deep dive into it. Let’s try and figure out why it’s turning up in our buy list, as we call ’em a pulled pork. But, uh, how have you been, Tony, since we last spoke 20 seconds ago? Tony Kynaston: Thank you. Are we called QAV Cameron: I, Tony Kynaston: now? Is that, do we have to change our name? it’s no longer the Gulf of, Cameron: yeah. Tony Kynaston: it’s, or QAV. Cameron: Yeah. Tony Kynaston: QAV Cameron: Well, originally we were, yeah, we were QAV Mexico, but then Trump said we had to change it to QAV America. Tony, a couple of weeks ago on this here [00:01:00] podcast, I did a deep dive on a company called Zep, Zep Health, Chinese Smartwatch Company. Within days of me publishing that their share price jumped up 400%. Um, so I’m not saying I’m a genius. But, um, Tony Kynaston: It’s Cameron: some people say I’m the greatest genius who ever lived, so that was an interesting one. Um, they have. The this, this smartwatch technology that we talked about sounded pretty good, but apparently within a few days of me publishing that they came out and said that they expect the 30% year over year revenue growth growth for the second quarter of 2025. This would be their first revenue increase in three years, and it was seen as a big turnaround. We did talk a lot in the Paul [00:02:00] pork about. Some of the structural things that they were doing and changing their branding. And, uh, they’ve also apparently signed a couple of prominent athletes, NFL running back, Derek Henry and Ultra Runner Rod Fava as brand ambassadors for a maze fit one of the brands that they market under. On Amazon, which as I said, makes you think that it’s associated with Amazon, but it’s not. It’s just something they sell on Amazon anyway, so we don’t hold them. Tony Kynaston: they had, low point price points, I think too, didn’t they? Which was their, one of their big Cameron: Very low. Yeah. We don’t hold them, uh, in our portfolio. I wish we did, but our portfolio was full. We didn’t have any capital left to allocate to them or I would’ve bought them, but I did. Uh, the reason I found this out is I put together a spreadsheet just tracking the stocks that, uh, I’ve done a pulled pork on that we don’t hold in our official portfolio. [00:03:00] And, uh, they’ve, some of them have done really well. Um, CX is up 49% since we talked about it at the end of March. That one Z is up 361% since we talked about ’em on the 11th of July. Some of the other big ones are Poco Holdings. Remember them? There was on the 1st of July. They’re up 20% since we talked about them on the 1st of July. Precision Drilling Corporation we did at the end of June. They’re up 12% IHS holdings we did at the end of May. They’re up 18% Canadian Imperial and Bank of Commerce is up 16%. Uh, Dan OS Corporation is up. 13% Greek shipping company. The one that hasn’t done as well was NL Chile. It’s down 20% since we covered them in May, but the rest are all doing quite well since we’ve covered ’em on the show, which. Is, you know, all jokes aside, just evidence of a couple of things. [00:04:00] Number one, the US market is kind of bonkers at the moment, so I think a lot of things are doing well over there. But also, you know, we are picking stocks that are, um, undervalued, doing good businesses that are undervalued, so we expect them to do well over time. Tony Kynaston: and if you, I mean, it’s a kind of almost like a law of physics if you give. A lot of cash to good managers. They’re gonna invest it wisely and make money for shareholders. So, uh, that’s Cameron: You hope? Tony Kynaston: you hope. Yeah. All things being Cameron: You hope? Tony Kynaston: should happen. Yeah. Cameron: Well, the stock that I’ve got for this week, Tony, is unusual in a couple of ways. Number one, it’s a NASDAQ stock. I think I said in last week’s show. We don’t tend to. Tony Kynaston: Can you, whisper it to me before you announce it so I can. a four bagger this week. No, we don’t front run stocks. We should say that. We don’t. We don’t Cameron: Yeah. What have you done? Tony Kynaston: it. Yep. Cameron: No, uh, it might be one of the ones that goes down 20% too. You dunno. [00:05:00] It’s a NASDAQ stock. We said last week that, you know, we don’t tend to get NASDAQ stocks a lot on our buy list. Technology stocks tend to be way too expensive for us, but this, for whatever reason, is an NASDAQ stock. It’s also sort of a classic Berkshire type stock. Hmm. Tony Kynaston: find it on the nasdaq, isn’t it? It’s, I couldn’t see the Cameron: I dunno why it’s on the nasdaq. Tony Kynaston: and this company. Yeah. Cameron: No. Well, maybe when it floated back in 1995 it was. Anyway, the company is Seneca Foods, and I think if you’re a North American listener of this, you probably know Seneca Foods. I asked Chrissy, my American wife, Hey, you know Seneca Foods. She was like, yeah, of course. I was like, okay. Um, they, they distribute all around the world too, so I’m pretty sure we’ve bought. Seneca Products had them here, but [00:06:00] they’re a, they’re a classic American company. Been around since 1949. Big into canning and food packaging. So beans, corn, fruit. Um. Anything that needs packaging. They’re the kings of packaging food and they’ve acquired a lot of different companies over the years. They’ve been around, but it’s, it’s, it’s like one of those classic Berkshire type businesses, unlike a lot of the companies that we’ve talked about in the last. Few months, you know, like weird fracking operations and, and walking, um, oil wells and, and, and mobile phone towers in South Africa and smart watches in China, et cetera, et cetera. This is a boring food manufacturing business. And as I just said to you on an Australian show, I did have a question for you about it ’cause it is a little bit unusual. It’s cashflow. Tri is a little bit unusual, but we’ll get to that [00:07:00] later. So their website, by the way, their tagline on their website is Farm Fresh Goodness made Great. I dunno if that’s a MAGA add-on. They’re making farm fresh food great again, or if they’ve had that pre maga, not sure Tony Kynaston: Uh. Cameron: but. The founding of it is a good story. Founded in 1949 by a guy called Arthur Walcott, art Walcott, who had just graduated from doing a degree in, uh, business and economics at Cornell University in New York. He went to an auction in Dundee, New York. Uh, actually hadn’t graduated. He was a Cornell senior. He was looking for a good deal on a typewriter. He ended up buying a bankrupt grape juice plant instead, which apparently did own at least one [00:08:00] typewriter. So you buy the bankrupt company and you get the typewriter thrown in kind of deal. He must have seen something in it. Because he took it over and I think the first year it did like a hundred thousand dollars in revenue. Something small like that. Well, smallish but not bad. Tony Kynaston: big Cameron: And um, Tony Kynaston: though. Cameron: yeah, probably, yeah, would’ve been a lot. And he, but he turned it into an absolute monster company and he only passed away. In 2021, age 95, he was the chairman and president of Seneca Foods from 1949 to 1987, and then served as chairman of the board until he passed away at 95. So yeah, he sort of reminded me of a Charlie Warren sort of guy, been around, run his thing, stuck to his knitting, Tony Kynaston: it, Cameron: a good Tony Kynaston: out Cameron: [00:09:00] solo visit. Yeah. Yeah, yeah. Um, in the 1950s, Seneca contracted with Minute Made to co-pack the first frozen grape juice in the United States. And today they produce canned, frozen, bottled fruits and vegetables sold under their own brand and also through major retailers, private labels. In the 1990s, they did lots of act acquisitions and became for a period of time the world’s largest processor of canned vegetables. In 1995, the company went public. Today about 85% of their revenue comes from canned vegetables and fruits. The rest comes from pro frozen products, juices and snacks, and they have an EBITDA margin about 10 to 12%. Um, I told you about Walcott. He was married to his wife Audrey for 72 years. [00:10:00] Married her and bought the bankrupt grape juice plant in the same year, 1949, while still a senior at Cornell. G

This week on QAV America, Cameron delivers a doozy of a pulled pork on Bausch Health Companies (BHC), the scandal-riddled pharma beast formerly known as Valeant. From jacking drug prices to a multi-billion dollar loss for Bill Ackman, this company has a backstory filthier than a New Jersey motel carpet. But does all that stink mean it’s a value investor’s dream? We break down the history, the cashflow, the debt, and whether BHC’s rebrand is enough to justify a second look — or if it’s just lipstick on a particularly greasy pig.   Tony weighs in on cultural overhang, conglomerate discounts, and why even psychopaths can run a good balance sheet. Oh, and we talk Trump, Maxwell, and the goddamn Godfather. — ## **⏱️ Timestamps + Stocks** – **00:00** – Welcome to QAV America 15: NYSE focus and value investing lens – **02:00** – This week’s pulled pork: Bausch Health Companies (BHC) – **04:00** – Dirty history: Valeant, price gouging, and the big rebrand – **07:00** – 10,000% price hikes and congressional heat – **09:00** – Philidor scandal, shady pharmacy networks, and fake aliases – **10:30** – Bill Ackman’s $2.8B loss and catastrophic exit – **12:00** – The Sprout female Viagra saga: billion-dollar boomerang – **13:30** – Current financials: $1.6B OCF, $20B debt, and F-score of 7 – **16:00** – Xifaxan, IBS, and hepatic snuffleupagus – **18:00** – Bausch + Lomb confusion: spin-off but 90% still owned – **20:00** – Conglomerate discount, legal overhang, and valuation mess – **24:00** – Why value investors should care: deep discount and high cashflow – **26:00** – Quality and QAV metrics: QAV score ~0.45 – **28:00** – Trump, Ozempic, and pharma pricing politics – **30:00** – Portfolio update: US portfolio YTD and all-time performance – **33:00** – After hours: The Open Championship, Godfather rewatch, John Wick realism, and Robert Maxwell conspiracies Transcription    [00:00:00] Cameron: Welcome back to QAV America, Tony, episode 15. We are recording this July 22nd Australian time, 2025. Just did our Australian show. Now talking about America. For new listeners, welcome. We’re two Australian value investors that have been doing a podcast in Australia for about six years on value investing, and now we’re doing one on the American market as well, where each week I take a company. On the New York Stock Exchange or NASDAQ in theory, but they always tend to be New York Stock Exchange. ’cause our system of value investing doesn’t tend to score very many NASDAQ companies very highly. But, uh, there’s a lot to choose from. On the New York Stock Exchange, so I, I pick one every week. That scores highly in our system of looking for [00:01:00] quality companies. And by quality companies we mean a lot of different things, but essentially generating a lot of cash is the big one that we’re looking for. And then we look at the, the valuation. What can we, can we buy them at a discount? We’re looking for companies that generate a lot of cash. Particularly interested in the ones that we can buy to discount to what we think their intrinsic valuation is. Then I’ll do a little bit of a deep dive or a pulled pork as we call them. And this week, oh, this is a terribly dirty, dirty company story. Yeah. I think last, I can’t, I think last week we were talking about dirty oil or dirty something. This week it’s dirty, dirty drugs Tony Kynaston: about coal tile last week. Cameron: Ah, that’s right. Well, this time it’s dirty drugs and dirty contact lenses. You don’t want your contact lenses to be dirty, but uh, turns out the business of contact lenses is dirtier than I realized. So the company is called. [00:02:00] Bausch Health, you’re probably familiar with Bausch and lom. The, uh, eyewear brand. Well, this is the parent company now, confusingly Bausch Health. BHC is the company that I’ll be talking about. Bausch Lo is a separately listed company on the New York Stock Exchange. They spun it out. I think it’s B-L-B-L-C-O is Bausch and Lam. Not talking about Bausch and Lobo. I’m talking about Bausch Health. They still own 90% I think of Bausch and lom. They floated off a small amount of it, and they might float off the rest of it too, which I’ll get to, but this is BHC. Now, I do want to preface this by saying. From a sentiment chart perspective, they are currently what we call a Schrodinger. They are above their byline, but slightly below their sell [00:03:00] line. So they’re simultaneously a buy and a sell. So we wouldn’t buy them, they just tipped down they were a buy. So I ran my checklist, my, my buy list, like, uh, two weeks ago. They were a buy at the time. They’ve just dipped a few cents below. Well, it’s a bit more than a few cents. Their sell price is $6 49. They’re currently about $6 31, so they’ve dropped 18 cents or so below their, uh, buyline. So we wouldn’t buy them at this stage, but I’m gonna talk about ’em anyway ’cause they could pop back up above that at any given moment. They’re a global diversified. American Canadian. Really? Canadian American. ’cause they come outta Canada. Pharmaceutical company. Primarily global corporate headquarters are in Quebec at a place called Laval in, uh, Quebec. Its US headquarters are in New Jersey, which is [00:04:00] fitting because I think for a long time they sound like they were run by like the mob. Tony Kynaston: Allegedly. Cameron: Oh, it sounds like they were run like the mob, not by the mob, like the. Dirty. Very, very dirty. Uh, they develop, manufacture a market range of pharmaceutical products, from diarrhea to constipation, from female horniness to itchy skin conditions and better contact lenses. They’ve got it all covered, although they sold off their female Viagra product. But it’s a really good story because I’m, I’m gonna get to that later on. They’ve had a bunch of scandals over the last decade in particular, uh, actually had other scandals going back to the nineties, but thi this is a company that has a stank on it. They’ve had lots of very, very expensive headline grabbing corporate scandals over the last 20, 30 years, [00:05:00] and that’s one of the reasons I think why they’re cheap at the moment. It’s just one of the reasons so bad they had to do a rebrand to try and get away from the stink on their brand. So they used to be known as Valiant, V-A-L-E-A-N-T. But then about seven or eight years ago, they changed their name to Bausch. So, um, people, as I said before, if you, if you, if you wear glasses or you have ever walked past a glasses shop, you’ve probably heard of Bausch and lom. They’re a pretty big global brand. This is the parent company. They bought that business quite some years ago. But they really are post-scan rebrand of this company, Valiant Pharmaceuticals. They have one of the filthiest backstories on the market. Um, about 10 years ago, they were in a heap of trouble in the US for all sorts of things. Jacked up, drug prices, lied about sales cooking. The [00:06:00] books blew up one of the most famous hedge funds on Wall Street. Your old friend Bill Ackman, then they changed their name in 2018. To, you know, I guess to in hope that the market would forget, and it hasn’t really, but this is how it all went down. I mean, the company goes way back many, many years started by a, I think it was a Canadian pharmacologist, but it went through decades of development. In 2003, it was called ICN Pharmaceuticals changed their name to Valiant. And decided they didn’t. The guy who was the CEO at the time decided they didn’t want to develop drugs. They just wanted to buy existing brands. So he started doing this massive rollup. A debt fueled rollup of other smaller drug companies, stopped really spending on r and d and just started borrowing like crazy, gobbling up small drug [00:07:00] companies. And then once they bought it, jacking the prices up. Through the roof, they would. Buy an old medicine, cut costs, raise the price and then milk the hell out of it. Got some examples. In 2015, they bought two old cardiovascular hospital drugs, Isoprel and Nitropress, and then raised the prices overnight by 525% and 212% respectively. No new research. No better version, just. A new sticker price, and that wasn’t a one off. They did that on 62 different drugs, raising the prices in some cases by more than 500%, and one antifungal called flu toine. It’s being sold in the US for 10000% more than it was costing in Europe, [00:08:00] 10000%. So they got themselves the, uh, in all sorts of trouble with Congress, the me there was a media storm around it. Then in 2015, the activist firm, Citron Research called Seller, Andrew left, who I think we’ve talked about before. He’s one of these guys that like in the big short, uncovers companies that he thinks are doing dodgy stuff and then he shorts them and then. You know, writes about them and tries to destroy the business. Yeah. He accused them of accounting fraud in 2015 through a shady pharmacy network called philidor. His allegations were that they had a fake pharmacy that they secretly controlled. Yeah, then they would use it to push their own expensive drugs and make the numbers look better than they really were. Valiant employees. Were allegedly working at [00:09:00] Philly door under fake names. So basically valiant people. Um. Pretending to be philidor people emailing doctors and insurers using fake aliases to hide the connection. The whole thing blew up in October, 2015. Valiant denied it at first, then tried to quietly cut ties with Philidor and get rid of the whole thing. Meanwhile, bill Ackman, the guy who runs the Pershing. Fund an activist investor, one of the biggest names on Wall Street. Loved Valiant. He took a massive position in Valiant over the years. At its peak, he was up billions of dollars. He loved the business model. Then when a

**Episode Summary** In this episode of QAV America, Cameron dives deep into the murky, combustible world of Sasol (NYSE: SSL), a South African company built on the back of coal liquefaction technology born in Nazi Germany and refined under apartheid. It’s the kind of “anti-woke” fossil fuel juggernaut value investors might love—or love to hate. With Tony chiming in, they explore Sasol’s origins, tech, environmental baggage (they’re the world’s largest single emitter of CO₂), explosive safety record, and its appeal as a classic ugly-duckling value stock. They also tackle the ethics of ESG investing, ADR headaches, and Sasol’s brutal-but-effective cash-generating machinery. — **📊 Timestamps + Topics** – **[00:01:00]** Introduction to QAV America and this week’s pick: Sasol (SSL) – **[00:02:00]** History of Sasol: Nazi-era tech and apartheid origins – **[00:04:00]** How coal liquefaction works (Fischer-Tropsch & hydrogenation) – **[00:07:00]** WWII Germany’s reliance on synthetic fuel – **[00:10:00]** Sasol’s Secunda plant: 150,000 barrels/day, world’s #1 CO₂ emitter – **[00:13:00]** Environmental targets and underwhelming progress – **[00:14:00]** The disastrous Lake Charles Chemical Project and $4B overrun – **[00:15:00]** Ethane cracker 101 + LyondellBasell JV – **[00:16:00]** Explosions, deaths, and new CEO (Fleetwood Grobler out, Simon Baloyi in) – **[00:18:00]** Revenue breakdown: energy, chemicals (Africa, America, Eurasia) – **[00:20:00]** Currency complications: ZAR reporting on NYSE – **[00:22:00]** The QAV stance on ESG investing – **[00:25:00]** Sasol’s debt, coal reserves, and South African market dominance – **[00:27:00]** CO₂ taxes kicking in from 2026 – **[00:28:00]** Key QAV metrics: – Price/Op Cash Flow = 1.4x – F-Score = 6 – Price/Book = 0.39 – QAV Score = 0.51 – **[00:30:00]** Value thesis: ugly duckling, monopoly position, tons of cash – **[00:34:00]** US investor challenges with ADRs – **[00:35:00]** Final take: not pretty, but potentially profitable Transcription   Cameron: [00:00:00] Welcome back to QAV America, Tony, two Australian value investors talking about investing in the US market. That’s just, I put, put that in there for new listeners. How are you, Tony? Tony Kynaston: I am well, thanks, cam. Yep. Just finished the hour and a half on stocks in Australia, so it’s fun to see you Cameron: I. Tony Kynaston: Good to see you say Cameron: Well, um, I don’t really have any sort of broad news, as we say every week on this show. It’s in such a state of flux. The US market with tariffs are on, tariffs are off, tariffs are up, tariffs are down. It’s, you know, it, it’s really hard to make any sense of it. And so we don’t try, I mean, we just. Um, for people that are new to QAV, uh, what we try and do is look at the fundamentals of individual businesses and try and find [00:01:00] something that is a bargain. Something that we think is generating good cash flow, but we can buy it at a bargain for one reason or another. And, uh, then on this show, I pick one each week. That is on our US buy list and I talk about it for half an hour, uh, and why it’s on our buy list. And this week I’m doing a company called Sasol, which kind of sound we were just talking about, the Godfather. Um. On our Australian show, and it’s, there’s a character in, in one of the Godfather films, Joey Saso, I can’t remember. Tony Kynaston: part three. Cameron: Is it right? Joey Saso. Okay. Tony Kynaston: Yeah. Sza. Cameron: Oh yeah. Joey Saso. Yeah. Yeah. It’s, uh, well he’s, he plays Vincenzo Corleone, [00:02:00] his Sonny Zi. Tony Kynaston: kills Joey Cameron: S Joey Sasa. That’s right. Yeah. He’s saying something bad about Michael Corleone. Yeah. Yeah. Isn’t that uh, yeah. I can’t remember the name of the actor who played him. Anyway, not to get distracted. Sasol. SSL is the ticket code for Sasol. And you were on an Australian show. You were talking about anti woke. ETFs and I said, well, I’m gonna talk about an anti work company in some ways. This, this company is, uh, what a story they’ve got behind them. Uh, they’re a South African coal liquification. Company and they do other things, but that’s mainly, uh, their background and, and where most of their revenue still comes from. Today, I knew absolutely nothing about coal liquification. Don’t think I’d ever, ever even heard of coal liquification before I started this, but now I [00:03:00] know a little bit about it so I can talk to you about it. But this company, um, was started in the fifties in apartheid South Africa, mostly as a way of securing their energy independence. Because they don’t have a lot of oil in South Africa and they were under economic sanctions and so they were getting, finding it difficult to buy oil. So they needed to figure out how to take what they did have, which was coal, and turn it into petrol and chemicals that could be used for everything that they needed petroleum for. And so Sasol was founded in a dusty little town called Sasol Berg, which was created in 1954 to provide housing and facilities for Sasol employees. The, um, [00:04:00] there’s a couple of different ways to take coal and turn it into liquid petroleum, essentially synthetic gas or synthetic petroleum. And it was first discovered by German chemists in the early 19 hundreds, and the, there’s, the main way of doing it is called the Fisher TRO process. After the names of the. Two, uh, Germans who developed it Fisher, who was not a Nazi at the time, but became one later, uh, trs, got the hell out of there in the late twenties and ended up in the US But uh, Fisher stuck around. Basically you can take coal and force it to give up its liquid hydrocarbons. Uh, one way is to just make it really, really hot, and the other way is to pulverize it [00:05:00] and then put it under huge amounts of pressure. So without going into too much detail, the first way is what’s called the indirect route, which is the fisure tr method. You gasify the coal. Creating synthetic gas or sin gas as it’s known, you basically heat it up to 1300 degrees Celsius or 2,370 degrees Fahrenheit, which is pretty hot. You ever stood inside, uh, next to a furnace like that? Tony Kynaston: Ooh, good question. Uh, no. I’ve done firefighter training when I was working at Shell. It gets pretty hot doing that, so, but not a furnace hot. Cameron: I have stood near furnaces when, in my Microsoft days, um, uh, in Victoria we had some coal industry clients. I can’t remember who they were now, but I remember doing tour of some of their facilities. [00:06:00] And I remember being next to a furnace. Actually, no, this wasn’t coal, it was steel. They were melting steel, which is about the same temperature that it takes to gasify coal. And I remember, you know, being in the room next to the room where the furnace was on, and it was insane. It was like standing close to a sun. It was. The Oh hot. It was absolutely bonkers. Terrific experience. Highly recommend it. If you ever get the chance, stand, stand next to a feel steel furnace. Anyway, so they heat it up, then they clean it, run it over an iron or cobalt based catalyst that stitches the molecules back together in a way that you end up with wax, just these hydrocarbons that are a wax, and then you crack the wax and you end up with diesel and naptha. And this was a big deal in Nazi Germany. Uh, believe it or not, Hitler struggled to get his hands on [00:07:00] enough oil during World War ii, so not a lot of oil wells in Germany. Uh, so it became a huge part of German industry during World War ii, CTL as it’s known, coal to liquid provided 92% of Germany’s air fuel and over 50% of its petroleum supply in the 1940s. Uh, but then when they lost the war, it sort of got a bad rap because some Germans believed that they lost the war because they couldn’t produce enough. Uh, fuel out of that had nothing to do with the fact that the Americans and the, uh, Russians joined up and they just got summarily defeated and Stalin crushed them at Stalingrad. But that’s another story. Then the other way of doing it is called, uh, hydrogenation, the direct route it’s called where you pulverize the coal. Mix it with heavy oil and [00:08:00] hydrogen under 300 bar for people like me who dunno what that means. Um, I know you’ve been to at least 300 bars in your time, but that’s a different story. One bar equals atmospheric pressure. So 300 bars is 300 times 14.5 PSI. So 4,350 PSI comparable to the water jet cutting pressure used on stone basically. Then you strip out the sulfur and the oxygen, it’s quicker, but it’s a pretty harsh way of doing it. So you do this and it’s actually very expensive to do this. The output cost sits north of $50 US per barrel. Um, but you. You have to do it. If you don’t have access to liquid oil, if you can’t get it outta the ground, you just have to suck it up, which was a apartheid South Africa apparently. Tony Kynaston: I was gonna ask that because, um, [00:09:00] been some coal seed gas companies in Australia over the years and they’ve never off. And I think one of the reasons was it was just uneconomical. The, the process sounds fine and we have lots of coal, but, uh, never survive. But I guess if you are in apartheid South Africa, you need to do it Cameron: Or Nazi Germany. Yeah, Tony Kynaston: Nazi Germany. Cameron: and well, Tony Kynaston: now then if it’s, uh, South Africa Cameron: because it’s huge. Uh, it’s, it’s huge. Um, it’s turned into a absolutely mega company that’s produces a ton of this sort of stuff and I don’t know, they must be able to justify it, uh, economically. So they produce roughly two barrels of liquid for every ton of coal plus buckets of CO2 sulfur and ash. Which is where the, uh, anti woke side of this comes in. Um, [00:10:00] so Sal’s main operation is calle

**Episode Overview:** In this episode of _QAV America_, Cam and Tony dissect the fundamentals of **Zepp Health (ZEPP)**, a Chinese smartwatch manufacturer with aspirations well beyond step counters. They unpack the company’s evolution from low-margin Xiaomi contractor to an ambitious, vertically-integrated brand aiming to take on Apple — at a fraction of the cost. Cam walks through the business model, leadership, geopolitical hedging via a Netherlands HQ, and a potential future in AI-powered wearables. Despite being unprofitable, Zepp boasts positive operating cash flow, aggressive R&D spend, and a book value nearly five times its share price. Tony and Cam debate its merits as a deep value tech stock in a crowded, commodified market — with a few detours into Marx Brothers references and Cameron’s post-Kung Fu abs. — ### **🔢 Timestamps & Topics** – **[00:00:00] Trump’s Tariffs & Market Volatility** Trump’s threats to Japan/South Korea spark global market reactions. – **[00:02:00] What is QAV America?** Quick refresher on the QAV system and the process behind selecting U.S. stocks. – **[00:03:20] Zepp Health (ZEPP) Introduction** Zepp’s background, link to Zeppo Marx, and business model basics. – **[00:06:00] What They Make** Smartwatches, fitness bands, health-focused earbuds under brands like Amazfit and Zepp. – **[00:08:00] Price Point Strategy & Competitive Landscape** Sub-$200 devices aiming to mimic Apple Watch functionality. – **[00:12:00] Founder Story & Business Transition** From a hacked pedometer to $10M investment from Xiaomi. – **[00:14:00] Post-COVID Strategy Shift** Moved final assembly to Vietnam, dropped Xiaomi contracts, chasing margin. – **[00:17:00] Netherlands HQ – Why?** Tax, regulatory and geopolitical benefits of being a “Dutch” company. – **[00:19:00] Historical Sidebar: Friars Hung for Transubstantiation** Cameron’s tangent on Gorinchem’s bloody Reformation history. – **[00:21:00] Crowded Marketplace – Smartwatch Wars** 45M units shipped in Q1 2025, Zepp fighting for space in cheap smartwatch jungle. – **[00:25:00] Margins, Hardware & Amazon Dominance** Race-to-the-bottom manufacturing, vertical integration, low build costs. – **[00:29:00] Financials Breakdown** – **[00:33:00] AI Push – The Bull Case** Expanding AI team to 120 people. Vision for on-device LLMs powering wearables. – **[00:36:00] The Future of Personal Devices** Onboard AIs, wearables, and the shifting market from fitness to full-assistant functionality. – **[00:38:00] Final Verdict** Transcription   [00:00:00] Cameron: Welcome back to QAV America, Tony, episode 13, timestamp. Tuesday, the 8th of July in Australia, about 2:30 PM in the afternoon. It’s a Tuesday. Uh, we’ve just done an Australian show where we talked about President Trump’s uh. Nobel Peace Prize nomination and congratulations to him on that. And uh, sure that’ll go great. And, um, more tariffs that he announced yesterday that he’s gonna hit Japan and South Korea with, if they don’t. Give him a call and pledge allegiance and, uh, the US markets fell, the Australian market fell and then woke up and went, what are we doing? And recovered. So Tony Kynaston: A, uh. Was that the Cameron: Kramer, Tony Kynaston: by the American? Uh, the Australian [00:01:00] market. Cameron: yeah. Tony Kynaston: it follows Wall Street up or down and it didn’t, it started to and it turned around today. But we do have Cameron: Started, Tony Kynaston: reserve bank meeting going on now, which may drop interest rates. Cameron: I think they had a cup of coffee, all of our traders, and realized that Trump will tar it. And so they went, what are we? Why are we doing this? Let’s just assume he’s gonna tar it and get back to business. Oh, I dunno what they did. Tony Kynaston: knows. Anyway, freedom Day number two. Coming up on Monday, Cameron: Yes, just volatility all over the place, still in the US markets. Um, we, we are fortunate that because we have a system that ignores noise, most of what’s going on, we just go, yeah, yeah, whatever. And we focus on the fundamentals. Tony Kynaston: And, and make a bit of fun of it too, usually. Cameron: Yes, you do. You Tony Kynaston: Hmm. Cameron: will just stick to our knitting. And so today I’m going to, for people that are [00:02:00] listening for the first time, um, QAV is a value based investing system that Tony has developed over the last 30 years, continues to develop and refine, uh, we call it QAV. It’s quality at value. So we’re looking for. Stocks in quality companies, basically companies that seem to be well run and are making money, uh, when we can get them at a discount to their intrinsic valuation. And we have a number of metrics that we look at. And so what I do in these US shows is I generate a buy list using our checklist that we have that scores companies based on whole range of fundamental metrics. I’ll pick one somewhat at random from that’s on the buy list. That’s getting a positive score. It comes up as a buy and then we’ll break it down and look at it. Tony and I are boast based in Australia, based in Australia. Dunno a lot about the companies that are on the US markets. New York Stock Exchange or the nasdaq, [00:03:00] and a lot of them are very different. Sorts of businesses to what we’re used to trading with in Australia. So we pull ’em apart and have a think about ’em and try and figure out, well, why is this showing up in our buy list and what do we think of it as an investment? If you know we do run a US portfolio, it’s doing very well. We actually don’t have any cash left to invest. So we’re not buying the company that I’m talking about today at this stage. But I will ask Tony the question at the end of this, if we had cash to buy, what do you think about this one? And these aren’t necessarily recommendations. We’re not financial advisors. See a financial advisor before you make any investing decisions. We’re just talking about companies that look interesting, uh, based on our analysis. And today’s company is one called Zep Health. I immediately liked it because I thought of Zeppo Marx. Tony Kynaston: did too. Cameron: Uh, yeah. My favorite of all the Marx brothers. Most underrated of all the Marx Brothers. Hey, he just, [00:04:00] he, he. He, he was, he was the good looking one. The good looking Marx brother. Tony Kynaston: didn’t Cameron: That’s what I think of. Tony Kynaston: though, Cameron: No, no. He was too good looking. Too good looking. That was his problem. Yeah. Yeah. Um, he was a DEI hire DEI. Diversity Tony Kynaston: The Nepo. Marks Cameron: the Nepo. zPo. The Nepo. Yeah. Tony Kynaston: The Nepo, Cameron: Um, ZEPP is the name of the company Z. That’s their ticket code as well. Tony Kynaston: ZEPP. This is the US Cameron: Z, sorry. ZEPP. Yeah. My American wife would, uh, have corrected me on that as well. Uh, but growing up watching Sesame Street, I should have known that. Anyway, uh, now I will, I. Just highlight the fact that if you’re looking at this in stock, EDIA, ’cause uh, that’s what our checklist is designed for. This is one of those stocks that we’ve been talking about lately [00:05:00] that does not report in USD. It reports in Remi, BRMB. Uh, for reasons that I’ll explain soon, so you’re gonna have to do a little bit of jiggling with the numbers. My other thing to let you know is that I did after our show last week when we decided to remove the Altman Zed score from our checklist. I did do that this morning, the score. Thank you, Tony. Although in Pulp Fiction, Bruce Willis says, Z’s dead baby. Tony Kynaston: Z’s dead. Cameron: Z’s dead. Tony Kynaston: Could never work that out. Cameron: Well, ’cause she’s French, I guess. Who is Zed? She sees the keys. Who is Zed Z’s Dead baby. Z’s dead and Z’s dead. Baby doesn’t, doesn’t work. So Tarantino? No. Near the alliteration there. Is that alliteration? No. What’s that? It’s just rhyming. Tony Kynaston: just rhyme. Yeah. Cameron: Anywho, yeah. Uh, so this is this, uh, company. I had to, I had to redo the [00:06:00] numbers. Um, the score wasn’t as good. When I redid it, the quality score wasn’t as good, but it still came out positive and still was on the buy list. The reason I picked this one is it wasn’t a shipping company and it wasn’t a financial services company, so, um, which is what most of them. Still. Uh, so I, I did a new buy list yesterday. I hadn’t done one for about a month for the US market, so I did do a new one. Pretty much all the same companies that have been on there for the last six months, which is fascinating. Tony Kynaston: Mm. Cameron: Even though our portfolio holds a lot of them and our portfolio is up 40% in the last year or something like that, um, those companies are still showing up anyway. What does this company do? Well, they design and wholesale smart watches, fitness bands and health earbuds odds. They are. They trade under a couple of brands. Now, AMA a Mabb Fit, but it’s no E in the Amaze, so it’s [00:07:00] M-A-Z-F-I, Tony Kynaston: Fit. Cameron: TMAs Fit, which they sell through Amazon Tony Kynaston: Um. Cameron: but are not associated with Amazon. But it kind of, when you look at it, you think, oh, this is like Amazon’s. House brand smart watches. No. And they also have their own brand, Zep. They also do some trading through Zomi. Z-I-A-O-M-I, big Chinese. I think they’re Chinese. Yeah. Chinese hardware company who I think now have rockets and you know, pretty much everything that can be built OMI have these days. Um, but these guys are on the low end of the smartwatch. Business. So you’ve got your Apple watches and you’ve got your Garmins, and then you’ve got, and your, your your top end, I guess, Android type brands. Then you’ve got all of the low end stuff, which is the majority of it. They’re [00:08:00] selling roughly sub $200 U

Cam and Tony dive deep into the performance of the QAV USA portfolio, which beat the S&P 500 handsomely with a 28.5% return over the last 12 months. The highlight of the episode is a rich and surprisingly wild pulled pork on Korean steel giant POSCO (PKX), including its transformation from a state-owned dinosaur into a cash-gushing, lithium-investing modern behemoth. Cam throws in a history lesson on South Korea’s postwar dictatorship, self-coups, and assassinations, making this one of the more cinematic episodes yet. They also discuss the removal of the Z-score from the checklist, U.S. tariffs, Trump’s fluctuating relationship with Elon Musk, and why lithium is flashing a buy signal.   ### **🕒 Timestamps & Key Topics** – **[00:00] Portfolio Update** – QAV USA beats S&P 500: 28.5% vs. 13.6%. – **[01:50] Z-score Removal** – Why the bankruptcy Z-score is out of the checklist. – **[04:00] U.S. News Roundup** – 90-day tariff pause, Elon’s political party, Trump’s Neuralink drama. – **[08:00] Currency Talk** – USD’s worst start to a year since 1973. – **[09:00] Pulled Pork: POSCO (PKX)** Transcription   [00:00:00] Cameron: Welcome back to QAV America tk. This is episode 12 of QAV America. It’s been, uh, it’s been the end of the financial year in Australia. Tony. I know Americans probably won’t appreciate this, but for us it’s the beginning of a new financial year. We’re recording this on the 1st of July, 2025. And, uh, now Australian show that we just finished, I did talk about our US portfolio. So Tony Kynaston: Mm-hmm. Cameron: List, it’s just the last 12 months. You don’t have to think about it as a financial year, but. It closed up about 28.5% for the last 12 months versus the s and p 500, which was up about 13.6%. So good year for our US portfolio. Not as good as it was months ago pre-Trump when we were up about 60% for the year already. But you know, I’m not gonna [00:01:00] turn my nose up at a 28% for the year. So. Tony Kynaston: Correct. What would Bill, what would baby, what would Baby Billy say about that Cam? Cameron: say, come on now. now, baby Billy from the Righteous Gemstones. If you haven’t watched that TV show, uh, Danny McBride show. Love it. Just finished. Great show. Um, Tony, uh, also on our Australian show, I mentioned the Z score. And we, we talked a lot about Stockopedia in the Zed score and whether or not we want to keep it in our checklist or not, we decided to rip it out that, uh, it is gonna come up in the pulled pork I’m gonna do today on Korean Steelmaker, or posco. uh, just for any US listeners that are using our checklist. I’ll have a new version up this week where I’m gonna rip out the Zed score. It’s, uh, ZED scores, the ZED scores for manufacturing, the [00:02:00] ZED scores for non-manufacturing, and they don’t apply for financials. And it’s very busy and it’s very messy. And we just decided we have enough other financial metrics that we’re using to assess these companies. And we have our sell triggers if they start to go south, both for the commodities and also for the. Business itself, its share price. So we think we’re pretty well protected. We don’t need the extra layer of protection of the Z bankruptcy So we’re gonna be removing that and you can get a new version of our checklist if you’re using it sometime after this episode comes out. Tony Kynaston: I just, just one thing to add. Um. I mean, you did reconcile the Zed scores to the Australian checklist that we were using from a different source, and they were a bit all over the place, but the F score was a much better match for what we had been used to for the last five years. So I’m, you know, confident that the fco, uh, fine. And there’s nothing wrong with the Zed score, but we just couldn’t get it to [00:03:00] correlate with what we were seeing from the other data sources we’d used before. Cameron: And partly as we said on the Australian show, partly that’s because the original Z score, which was developed in the sixties was looking at manufacturing companies and we don’t have a lot of manufacturing companies end up on our checklist in Australia. Tony Kynaston: Mm-hmm. Cameron: a lot of manufacturing companies ending up in our buy list. In the US that are based in the US either, I mean. I dunno if we could maybe say Ford as a manufacturing business, I guess, but probably not. one I’m gonna do today is based actually in Korea. It’s just got an a DR on the, uh, New York Stock Exchange. So, um. But it is, but there’s just too many messy variations of it for our purposes, and I don’t think it’s worth the effort and trouble it would take to reconcile all of them for all of the different stocks that we have in terms of us, uh, market news, Tony. Um. You know, it’s this [00:04:00] sort of the 90 day tariff pause is coming to an end. Supposedly lots of countries are trying to sign deals with the us whether or not those deals are much different to the deals they already had in place before Liberation Day. We’ll find out when we know more, but the big beautiful bill is still yet to pass through the Senate. Our old friend Elon Musk, has become a little bit vocal again in the last few days against the bill. I’m not sure if he had the Neuralink chip taken out or put back in or rebooted or upgraded, I think it was glitching for a few Tony Kynaston: Right. He walked past a big magnet. Yeah. Cameron: Yeah. Um, oh, I gotta, so you, this is completely got nothing to do with investing, but, um, do you know who Bob Ezrin [00:05:00] is? Tony Kynaston: I do not. Cameron: One of the greatest record producers of all time, uh, in the seventies. was the producer behind some of Lou Reed’s best albums. Alice Cooper’s Best albums, Kiss’s Best Albums, uh, was one of the great record producers of the seventies, but he also produced. The wall for Pink Floyd, and I was watching a bit of an interview with him the other day talking about the production value of the wall. And you still, you put it on E listen today, something like comfortably numb and it’s just magnificent, the sound and the ambiance and everything. And he was going into great detail in this talk, talking about magnetic tape, and he said when they recorded the Drummond bass. Four comfortably numb. He said, we, we, we made one copy of it, which was a mono copy to put in on our 24 track. He said, we recorded it on a 16 track, we put it in a safe and locked it away [00:06:00] for months and months and months and didn’t listen to it. He said, because every time you pass a magnetic tape over a tape head, Tony Kynaston: All right. Cameron: It’s deteriorating, it’s pulling atoms, shredding atoms off of the tape, which lessens the quality. So we had this really dinky mono version of it on our 24 track that we were using as the backing track. then right at the end, they’d used all the other tracks on the 24 track They, and so they had to delete the drum and bass. Backing track and pull this one out of the safe and put it in. So it was had this pristine quality to it, but he was like so deeply passionate about talking about. Magnetic tape and atoms and all of the stuff to get this quality. I really, I dug it. It was really, really cool. Anyway, back to Elon. Yeah. Elon Elon’s, chip Malfunctional, he took more ketamine, less ketamine. I dunno what’s going on. But, uh, anyway, he’s saying, he’s now saying in the New York Times today is covering this, that [00:07:00] he is promising a new political party if the G-O-B-G-O-P bill passes his new America party. That will challenge Republicans. Um, so it’s back on Trump 2.0, 3.0, whatever 0.0 this is, I’m not sure how many iterations of their relationship we’ve had in the last year. They hated each other, then they were best friends, then they hated each other. Then they’re okay again, and now they’re gonna war again. So watch this space. Tony Kynaston: And meanwhile, the share market just chugs along, doesn’t it? Cameron: Share market does, but the dollar’s not too great. The dollar’s had its worst start to a year since 1973. Continues to slide. Even as President Trump has backed down from his tariff threats and the US stock market has recovered from its losses. According to the New York’s Times, United States currency is weakened more than 10% over the past six months when compared with a basket of currencies from the country’s major trading partners. [00:08:00] The last time the dollar weakened so much at the start of the year was 1973 after the United States had made a seismic shift that had ended the linking of the dollar to the price of gold. So not a good thing for the US economy. Tony Kynaston: Well, yes and no. It’s not a good thing if you are buying overseas items and you’re living in the us but if you’re exporting them, it’s a good thing they become cheaper to your customers. So, um, depends how you look at it. Cameron: that’s right. There’s always two sides of the Tony Kynaston: Mm-hmm. Cameron: the FX coin. Well, speaking of which, unless you’ve got any other US news, I’ll get into my pulled pork. Tony Kynaston: No, please do I, I do. Cameron: Well, this is another, uh, foreign company, as I said, and a fascinating one. Uh, again, I really learned a lot of stuff about businesses I didn’t know and countries that I didn’t know. And I’m gonna gonna take us down a couple of [00:09:00] rabbit holes, historical rabbit holes. I hope everyone’s got their. Um, comfy pants on ’cause we’re gonna, gonna do a Cameron pull pork, which is a lot of completely irrelevant, slightly connected historical dive. I said, this company’s called Posco POSCO Holdings. A DR Outta Korea on the New York Stock Exchange. We talked about ADRs a bit last week. There a behemoth Korea’s steel behemoth cranking out roughly 40 million tons of crude steel a year out of the pong and guang yang mil