[00:00:00]
Cameron: Joined by the best looking man in value investing, the George Clooney of Value
Toby: Oh, keep it coming.
Tony Kynaston: Oh, the youngest, the youngest value investor. I know
Toby: Oh,
Tony Kynaston: we’re usually all old guys.
Toby: there’s, there’s no one left. How are you,
Cameron: Welcome.
Toby: Thanks. That’s a very
Cameron: Yeah. Good. Oh man, every time I see you, I’m like, how does he get to be so good looking? That’s not fair.
Toby: an app.
Cameron: sporting a little bit, a little bit more gray, a little bit more gray than the last time we talked, which was a couple of years ago, I think,
Toby: a, it’s that
Cameron: is
Toby: We’ll do it to you.
Cameron: I thought it was Trump’s tariffs that were doing it to you.
Um,
Toby: the news anymore. I switched it all off. So.
Cameron: So, uh, Tobias Carlisle from the Acquirer’s Fund, uh, the Acquirer’s Dilemma? No. What was the name of your book,
Toby: Yeah, the, the, uh, the last book was the [00:01:00] Acquirers multiple that came out in 2017, and the
Cameron: right.
Toby: Funds. I’ve got two they’re both ETFs listed on the NYC Zig, which is mid and large deep value domestic US, and Deep, which is small and micro deep value domestic
Cameron: they? Weren’t they zig and zag? No. Just
Toby: I, I’ve got somebody to put their foot on zag for me, but I don’t, I don’t have a zag fund. I probably would like to do an international or a global fund, uh, I
Cameron: right.
Toby: the two that I have. I need a little bit of, I need a little bit of a tailwind, I think, before I really launch another fund.
Cameron: So how’s the, how’s the funds going?
Toby: Um, they’re doing fine in their category, but the category is, is getting smashed. It’s the, it’s the curse of the deep value. It’s like all, all of these, all value, all strategies have their cycles, and this has been a very long one against value. Depending on how you measure it starts in [00:02:00] like 2010 or 11 or 15 and looked like there was a little bit of a bounce after 2020, but that AI.
News, you know, just crucified us since like the beginning of 24. And it’s been a little bit miserable since then. But I think that the values continue. It’s funny because the, it’s just multiple compression because the values tend to be quite good. I think the, the companies are getting healthier and healthier and looking better and better.
It feels to me like the early ni uh, the early two thousands, like, uh, after following the late. 1990s, which was a very growthy, large cap market, and it really left all of the small value stuff behind and the rest of the world behind. And then at some point that cycle’s changed. I think probably needs a crash to turn around, but, um, I’d be, you know, I’d be happy for it to happen without a crash.
I can tell you.
Tony Kynaston: Feels like the late nineties to me. All the AI stocks and the Mag seven stocks have been going up. [00:03:00] On, on forecast and predictions basically.
Toby: And that, um, you know, the, uh, what do they call it, the quantum computing, like there’s no, the, the, the market caps on those things are like seven or $8 billion they don’t do anything. They don’t even have a product. It’s pretty impressive.
I saw, you know, that open ai, it’s got like a hundred open AI’s a real business, like I think they’re probably still losing money, but it is a real business. People pay for that. You know, that little window that chat, GPT and you know, whether it can justify a hundred billion dollar valuation or not, I don’t know, but it’s good news for Johnny.
Ive, who was the bloke who, you know, he made the, the iPhone for, one of those, I think he was the iPhone of designer for Apple. And then he spun out and he’s created this consultancy. Like they don’t have a product or anything like that, they just consult. And OpenAI has picked them up for six and a half billion dollars, which is.
work if you can get it.
Cameron: It was [00:04:00] started Love, love from his consultancy. Was started last year. Started last year, just got it picked up. And Johnny wasn’t part of the deal. He, no, he’s, he’s gonna work for io, the new company that’s come out of the, the. Merging of open AI and love from as a consultant, consulting advisor or something.
But yeah, from zero to six and a half billion dollars in a year, not just the iPhone. I mean Johnny was the guy, sorry, apple fanboy here. Johnny was the guy behind the iPod, the iPhone, the iPad, the max, the original lolly Max, and when Steve came back and then the Mac books and everything. Cool that Apple. Did in that period when Steve was alive, was Johnny as leading the design team? So he is, uh, I mean, he, he stole it all from but, uh, all of the ideas from Braun but modernized it. So like he’s uh, he’s a genuine[00:05:00]
Toby: Credit where it’s due.
Tony Kynaston: From Bauhaus.
Cameron: guru.
Toby: he’s, good at
Cameron: Yeah. Yeah.
Toby: but I, I, I like the fact that their first product’s, like this hockey puck, no scream. And, and it’s basically Alexa, I don’t get it.
Cameron: Well, they haven’t, they haven’t actually said exactly what it is. They all, all they’ve said so far is what? It’s not Won’t have a screen. Yeah, it’s not a phone. But I think the, the, the assumption is, ’cause the rumors for the last couple years since he and Sam Altman have been working together is they’re gonna come out with a AI native phone to go up against the iPhone.
But, um, anyway, yes.
Tony Kynaston: edges, was his contribution to the iPhone. Yeah. I’m just marking off my bingo, my AI bingo card here. Uh, Tobias, it,
Toby: I’ve, I’ve
Tony Kynaston: the quick was a quick, uh,
Toby: This, uh, this
Tony Kynaston: it was a, well, well, cam does the futuristic podcast and we last about five minutes when we start talking about shares before AI comes up.
So, uh, well done.[00:06:00]
Toby: I’m a big fan of ai. I mean, I, I, I was a little bit skeptical initially because it was pretty middling, but I think that. got better at using it and it’s probably got better along the way as well. And I think that it’s, I can see, you know, it does replace like having, it’s gonna be tough for people to get a foothold in any industry because it’s like having a pretty competent MBA doing your research.
It’s not all, you know, you have to check it and you have to make sure that it’s right, but it’s often a pretty good it point for, for whatever project you’re working on. So I think it’s good stuff.
Tony Kynaston: Does it get to replace all of us? What’s your prediction?
Toby: I still think that like anything you need ultimately someone on, at the, at the very top of the output, making sure that it makes sense it’s, uh, it does sometimes it’s just, it’s 180 degrees wrong. It doesn’t know what it’s talking about. And, and, and it also has this, I think that the problem with using it for writing, I think it, I think I can recognize AI writing when I see it.
It has this particular, it’s almost like. It’s a little bit like poetry, like [00:07:00] it doesn’t quite make sense, but if you just let it wash over you, you kind of get the general gist of what they’re
Tony Kynaston: Right.
Toby: like reading some
Tony Kynaston: the vibe.
Toby: Elliott, or something like that. Yeah, it, it gives you the vibe rather than any sort of detail.
Tony Kynaston: I had a, I had an interesting discussion yesterday with a veteran fund manager and uh, we were talking about. Quant filters and, and he said his experience was they need at least one experienced person as the overlay, as a qual overlay, because sometimes the figures just need questioning.
They don’t make sense. And if you’re an AI or you’re a filter, you don’t pick up the fact that this, this could be fraud or something funny’s going on here.
Toby: I.
think that, I think that there’s a real problem with the data. The data is, you know, it misses, it can be up by a factor ’cause it’s sometimes the data’s just entered in in millions or thousands and it’s just, it’s just totally wrong from that perspective. So it’s just finding something that I. Oh, it’s one 100th of the price.
But if you get the decimal point in the right place, then it’s, you know, it’s overvalued by a [00:08:00] factor of 10 or something like that. That happens a lot. I do think that if you get good data and have a more sophisticated program that’s looking at a few different things, they’re pretty competent and I think they’re pull up some interesting ideas.
But there is always that risk of an outlier that makes no sense that any competent human being would look at it and recognize it immediately.
Tony Kynaston: Well, I think also too, eventually you’re gonna have an AI for A CFO who’s gonna try and gain the, the quant AI who are checking the, the balance sheet, right?
Toby: that certainly
Tony Kynaston: Yeah. Right.
Toby: I think if you read Amazon’s letters or Amazon stuff, I think that they’re, putting that through a quant filter because I’m aware there are, I’m aware of some firms that. Look at the tone of the letters and the tone of, uh, earnings calls, and they, there’s some really interesting stuff out there.
One guy was telling me that they can, they can detect, uh, depression in, in A CEO by the number of times that they [00:09:00] use. I. In a, and it’s undetectable to the human ear because the difference is like 4% in ordinary conversation or 6% in like, for it to become pathological, which is tiny and you can’t hear it.
where it starts trending up like that, sort of sets off all these alarms that there might be something going on that they haven’t sort of really disclosed yet, or doesn’t need to be disclosed when an actual fact that there is something there. But the, companies themselves are, are now aware of this and they’re putting it through the reverse filter to make sure that.
They’re not getting
Tony Kynaston: The CEO’s? Yeah, CEO’s trained. Yeah, they do. They do makeup, they do presentation skills, and then they do eye contact skills.
Toby: a, it’s a long way from that, um, Enron where I mean, I think that’s, I think that’s still a, a red flag if they’re swearing on the, on the, uh, so you know, that might rule out a lot of Australian companies, I
Tony Kynaston: Yeah. Hey, I wanted to just pick up something you said about the cycles of deep value because [00:10:00] might be, I dunno if it’s different in the American market or the Australian market, but, um, there’s certainly cycles in the stuff we do, but you know, we tend to still do well through all kinds of cycles, so, um. It might be a definitional thing. I mean, our, our big driver is price to operate in cash flow less than seven. Um, that’s probably how we define value. Um, but it, it kind of, it doesn’t always perform evenly, but it kind of performs all the way through cycles. Is that, do you have a diff do you have a different experience in the states?
Toby: I think that I’m talking about relative performance. Um, the, I think the thing that distinguishes the US market from really the rest of the world is they do have those very big, you know, fan mag, bagman, Fang fan, whatever the, whatever the current. Um, you know, bag of letters is for, for describing them those companies really do drive the index [00:11:00] they are very big companies, but they’re also very good companies.
They’ve got excellent returns on invested capital, but they tend to be pretty expensive. They’re often nosebleed valuations for those things. So they’re, they’re very rarely through my filters, although they have on occasion popped up. So meta popped up. You know, when they were having the problems with, when Zuck had decided that everybody was gonna be welded into the metaverse with him, and we were all gonna crash in the volcano, and it was like $12 billion a year in spending on servers or something like that.
They even, I mean, they changed the name from Facebook to Metaverse. That’s how committed it was to this thing. And I think everybody just got scared because free cash flow fell off a cliff. then. It’s still qualified as cheap because I was, I use, I use the acquirers multiple, which is, um, enterprise value to operating income.
It’s just the accounting variation of, of cash flow that you are identifying. And then I have various other filters to look for. I wanna see ca, you know, earnings converting into cash flow. I wanna see management doing [00:12:00] something sensible with it, reinvesting in the business at pretty good rates of return or buying back stock, or even doing acquisitions if that’s.
if they make sense. And I just measure the performance of all of that reinvestment over an extended period of time. And if those things are good, it’s a good position. It’s just that on a relative basis, it’s hard against some of those stocks like Nvidia. So, you know, Fang, Netflix quietly got dropped as the n and Nvidia became the N in, uh, in some of those definitions.
And NVIDIA’s had a pretty good run over the last few years. Um. And, and, and just by on a relative basis, it hasn’t been as strong. Uh, I think that I tend to invest in, in, you know, heavy metal, heavier industries. So that currently I’ve got a big exposure to oil and gas, um, a lot of value guys, these days, more modern value guys avoid because oil is a commodity.
totally [00:13:00] unpredictable. It could be up or down next year. And the attitude towards oil and all the oil conferences. And all the reports that I see are incredibly bearish oil, even though it is at 60 bucks for WTI. that supply destruction, which honestly I was a little bit surprised about.
’cause in my mind from about five years ago, I. 60 bucks was a pretty good price. Like 60, 65 bucks was, a lot of them were making money at that level. But there’s just been this inflation that everybody’s seen everywhere and that’s impacted the oil and gas companies in the states as well. So breakeven is now like 90 bucks, which is an extraordinarily high price.
So it’s 60 bucks. They can’t make any money and all of the high cost guys are burning cash or leaving. So I’m, there’s a portion of my fund depended on oil and gas, which think it’s a good bet ’cause they’re cheap. And they’re, and I favor the ones that are currently cash flowing and doing something about, you know, with good acreage, but there’s a little bit of, it’s subject to what the oil [00:14:00] price does over the next 12 months or, or few years.
Tony Kynaston: Yeah, we, I, I came out of the oil industry back in the, um, eighties and nineties, and so I keep an eye on it and I mean, very high level model for the oil. Market that to work for the last 10 years or so since Russia got involved with OPEC Plus. Is that, that as the oil price rise, it’s like a holding a sponge between two fingers.
Right. The oil price rises. The shale oil guys in the states go, beauty, we can make money. They come back on stream and then and OPEC close the PIs on the sponge again, and then they all go into dormancy for a while. So it kind of, it’s really controlled by Russia. At the moment with the all guys in the States having their day in the sun when the, when the barrel price rises for a while, but it’s very cyclical in that, in that tight range.
Toby: In 2021, we had $150 oil and we’ve come back pretty considerably since then in 2025. And it’s been just downhill [00:15:00] basically since then. So we’re at the lower end of the range here. And I think supply destruction is a good thing. If, and I have a
Tony Kynaston: I.
Toby: to get to get to 20% of the fund, I have a basket
Cameron: Hmm.
Toby: So some of them are. flowing really well at this level, and some of them are a little bit more marginal for the reason that if the price goes up, the marginal ones move a little bit more than ones that are doing well at this level. But there’s always a risk that the marginal ones can’t survive.
So I, I favor the ones that have got a healthier balance sheet and so on. There’s a little bit of speculation in it. I think it’s a, I think it’s an intelligent speculation, but it’s, you know, it remains to be seen.
Tony Kynaston: Yeah, fair enough. I guess of adjacent to the oil industry, we did a show last week on Ford we’re seeing, we’re seeing some value in some parts of the car industry. Is that something you are seeing as well? I.
Toby: cars are tough. So I I, a few, about a month ago I was in Shanghai [00:16:00] and I was looking at some of the tech shanghai’s kind of interesting because the Chinese have got high tech. So we visited some high tech VCs, hard tech, as they call it, and the hard tech VCs are walking, working on autonomous driving robotics and ai, which I was sort of a little bit surprised about that.
I would’ve thought maybe Fusion or something like that was hard tech. But stuff that they’re working on is probably what you’d expect that they’re working on and. While they said that they’re, they’re not quite where America is. They still think that Tesla is ahead in robotics, which I was a little bit surprised by.
And, um, open AI is ahead in ai, but they say that, you know, open AI is expensive, whereas their technology, which was deep seek, I think is 95% of the way there, but like 5% of the cost. And I think that where that really shows up is in the consumer tech where they, they have cars there. So Huawei is a maker of cars there.
Huawei make TVs and phones and everything. went into one of their [00:17:00] display areas and had a look at a couple of their cars. They’ve got these gorgeous looking cars, like leather, interior screens, all through the entire thing. They’re they charge, i, I, I think I said charge in five minutes on my podcast, but I think it might be charge in 15 minutes with, with the tech coming to charge in five and then the.
Um, the cost of those is $35,000. Us, like, there’s nothing in the states for $35,000. Us. only thing that’s gonna save Tesla and other companies like that in the US is if they can’t import them, which, you know, that’s currently the case. They’re not able to get into the states. But I think that there’s, I think what that means for some of the auto OEMs in Europe and the US is that they have to.
They’re gonna have to do something pretty unusual here to kind of, I, I, I don’t understand why they, you know, they’re, they’ve, they’ve got two choices really. They either themselves and do it, or they just go outta business. So I, I think [00:18:00] auto OEMs are tough. What are you, what are you seeing?
Tony Kynaston: Well, when, when we did our, did a deep dive on Ford and they’re basically, I mean, they spent $5 billion on their EVs and they’re basically trying to shut them down. Now they’re lobbying the government to change the incentives and they’re going back to. you know, the, the, what do they call it?
The skateboard, the F-150 chassis that they put everything else onto is, is their business model going forward. And that, you know, that might work as long as you, uh, the US has cheap oil. that’s kind of work. ’cause I mean, that’s the biggest thing that hits me when they go to the states is that is you can fill your car up for about a quarter of what you can in Australia.
So
Toby: Mm.
Tony Kynaston: a completely different market really.
Toby: that, is that including in California? California feels expensive to me when I travel around the
Tony Kynaston: Yeah. Okay. Yeah, true. No, I’m thinking about Florida and the, East coast.
Toby: I just think even more than the
Cameron: I think that,
Toby: Sorry, Kim.[00:19:00]
Cameron: oh, I was gonna say that the, our approach to analyzing these sorts of businesses is we don’t tend to get bogged down in future forecasting, predicting the future with these things. We look at where they’re at today and Ford’s division is generating. of cash still. They’re blowing it all on the EVs. They’re bleeding with the EV division. but they’re, as Tony said, they’re sort of pulling back from that. Uh, quite a bit at the moment, but they’re still generating tons of cash and the price to operating cash flow metric is really quite low. So we, we tend to look at, you know, what’s their cash flow like, what can we get the at. uh, we let the future sort of worry about itself. You know, we, we aren’t buy and hold forever value investors. If something breaches one of our sell triggers a year from [00:20:00] now, we’re happy to sell it and replace it with something else. So we just look at what we can get today. That seems to be a good business. The core fundamentals of it, without trying to, you know. Looking at, look into a crystal ball. What’s that line? Those who by the crystal ball will eat shattered glass. I think
Toby: That’s a.
Cameron: Ray Ray or one of those guys, one of those old, old time guys said that, um, and that’s what Tony’s drilled into me over the last five or six years we’ve been doing the show, is that don’t try and predict the future.
Just look at what’s really generating cash today. It has a track record of generating cash, you know, over a little while.
Tony Kynaston: you put a quality overlay on it to make sure the business is gonna be around like a low of debt. It’s been around for a long time, throwing off cash, it’s got good management, all that kind of thing. You question mark, I guess on fours management, it’s been a bit rocky over the years, but um, you know, it’s been around for a long time too, so about to go broke.
Toby: I don’t think the [00:21:00] US can let companies go outta business either. I think they need them for defense and just for, for other reasons. But I think they, they, it’s, it’s a tough competitive landscape globally. But I do, I, I’m with you on the, I, I look at the current performance of the businesses and tend to buy them on that basis too.
I don’t look too far into the future for the reason. I don’t think you can tell, you dunno what’s gonna happen.
Cameron: Can I ask you about China before we move on? Um, I read Thomas Friedman’s article in the New York Times a few weeks ago. He went to Huawei’s Technology Park. Uh, did you go to that? He said it’s like the size of 10 Disneylands, and it’s just lab after lab, after factory, after factory of the way he sold it.
It was like. Future land. Did you get to see any of that?
Toby: No, that’s, that’s not what we had. We just. We just rode a bike, rode bikes down the river, and we had a local guy there who would just say, you know, three months ago this was a cement factory and now it’s [00:22:00] this like gorgeous kind of shopping center precinct with, you know, lots of high-end shops inside. And we walked into Wonder, have dinner, and then as we were walking out on the ground floor, there was.
A big, uh, Huawei showroom, and it was, the showroom was like half a football field, but it was just, I think it’s just the ordinary. It was just one of them. There. There could have been a few others nearby.
Cameron: Right. And so what’s your take on China after your trip and where they’re at, where they’re going? We, we often laugh. Uh, the Australian media is constantly talking about how China’s about to implode. China’s economy is screwed, China’s. Massive debt crisis or real estate crisis, or this crisis or that crisis, and it just seems to be the never ending.
China’s about to fall over narrative. Uh, what’s your take on it after being there?
Toby: You know, some of those global macro type things are a little bit beyond my. [00:23:00] Pay grade. But I can tell you that just walking around it looks very wealthy. It, it looks very prosperous and speaking to people. And this is in Shanghai, which is like their New
Tony Kynaston: Yep.
Toby: Manhattan. So it’s a concentration of wealthy.
I.
Tony Kynaston: Yep.
Toby: people, but are very, very ambitious. They talk about 6, 6 9, which is, they work six days a week from six to nine, and they’re gonna grind really hard and, and make a lot of money and improve their lives and, and everything there is like pretty reasonably priced. You can get an apartment not that far from downtown for like a million bucks and it’s brand new, which is, you know.
That that’s unimaginable in, in New York for for sure. And you can buy, you know, pretty good. You know, the problem with coffee in the states for a long time was that it was just garbage. Like it was all that Starbucks
Tony Kynaston: Absolutely.
Toby: there, there has been an improvement. I could find some good coffee places here now, and China’s similarly, there were lots of good coffee places, but the coffee’s like two bucks where I’m, it’s like six to eight and it was great coffee [00:24:00] and then knocking them out really quickly, I just, I felt like, um, I.
Everything was a little bit better than in the States and considerably cheaper, and that was, you know, the, the cars are just the best example of that. I think they are a little bit better and they’re like half the price.
Tony Kynaston: Mm,
Cameron: Yeah.
Tony Kynaston: but not about to go broke.
Toby: Hard to, I mean at hard to tell at, you know, if the, if maybe there’s massive stimulus going on and I can’t, I don’t, I’m just not aware of that, but I don’t see them going broke. They look to me. I think there’s a reasonable chance that it’s like the US at the turn of the century or something like that, where everybody was like, you know, business minded and ambitious and prepared to work hard to.
Improve their lot, and I think that’s what they’re doing and I think they’ll probably succeed. They’re smart, they work hard, like those things help.
Cameron: Your comment about the Mabb not understanding the macro side of it, reminds me of that interview you did with Rich Zenner
Toby: Oh
Cameron: recently, which I thought was terrific interview. [00:25:00] Um, we, we stole a couple of quotes from it and talked about it on our show, um, I. Like, I think at one point towards the end of it, he said, I don’t understand macroeconomics.
Don’t try to, you know, it’s never been my thing. Uh, people ask me about Bitcoin, I say I don’t understand it. Um, that. It was great to hear a guy with that sort of pedigree. Just say, yeah, you don’t need, or he doesn’t even try to understand things that are beyond his remit. He just focuses on the businesses and looks at specific instances, you know.
Toby: really does. He likes investing. And so he started, the firm’s got his name on it, he started it and he ran it for a very long time. he’s decided that he doesn’t wanna do any of the stuff that he doesn’t wanna do anymore. So he is handed over management and marketing, all that other stuff to everybody else.
And all he does now pick stocks. Because that’s what he wants to
Cameron: mm-hmm.
Toby: And yeah,
Cameron: That’s what he loves.
Toby: knows,
Cameron: Yeah.
Toby: the macro. What do they say? Ignore the macro and just find the, the best biscuit maker in Bemidji or whatever it is. Like [00:26:00] that’s all you need to do,
Cameron: Yeah, that’s very much our focus as well, isn’t it, Tony? That’s what Tony drills into us is just ignore the, ignore the noise and look for businesses that seem to be well run that you can buy at a discount for some reason.
Tony Kynaston: Well, there aren’t, I mean,
Cameron: Mm-hmm.
Tony Kynaston: my experience, sorry Tobias, is that there aren’t that many macro economists who are billionaires, right. Maybe George Soros. Um, it, you know, if they were,
Toby: right once,
Tony Kynaston: yeah, if they were that good, rule the world, but they don’t. So they might be good at rear window telling you why it happened, but they’re terrible at predicting what comes next.
Toby: and I, I similarly like Druckenmiller, uh, who was a protege of so, and was the one who came up with the idea for the for, for the. The trade that broke the Bank of England and so’s commit. Uh, you know, part of that was just making him make it bigger. If you this Sure, sure, let’s make it 10 times bigger.
Tony Kynaston: Yeah. Right.
Toby: And, but I like, I like listening to Druck.
’cause Druck says all this stuff that I agree with. then, you know, he says he’s got these [00:27:00] trades on and then he, they, they talk to him a year later and he says, yeah, I just, I changed my mind. I reversed all those trades. I went and I made money. So don’t
Tony Kynaston: Yeah. No, that’s good. And, and like you just said, something important that you listen to some macro economist guy because you agree with him, and that’s what it is. It’s almost like politics these days. You’ve got Freeman on one side and someone on the right, on the other side, and people just listen to the They want to hear and believe in.
Toby: a lot of that. There’s a lot of that. And you’ve also got guys out there like Tepa. Like Tepa got that boss of the wall trade, right. Uh, like 2012 or something like that. He said, the feds told you what they’re gonna do, they’re gonna print, so just get max long. And that worked out really well for him.
And then he did it again recently where he said he was max Long China. And then he was selling in the aftermath of that, where everybody took him at his word, I guess, and was, you know, maybe that were getting longer, but he was distributing it out to them as, as they bought long. So I don’t know if you can necessarily listen to.
There are very few people who are investors who I would listen [00:28:00] to, and I mean, I would not trade on what anybody said necessarily, but you know, maybe Buffett would be the only one who he gets along. But even then, if you look at Buffett’s, if you look at Berkshire Hathaway’s trades that come out in their 13 F, they have lots of positions that they trade in and out of which maybe that’s the boys trading through the insurance companies or something like that.
But even Berkshire is not as buy and hold as
Tony Kynaston: No,
Toby: like on the label.
Tony Kynaston: no, they’ve, they’ve held onto the things which have done well, and they’ve gotten e either the, either the, the bad trades have quietly gone to zero, or they’ve gotten out of them.
Toby: That’s the trick I think, isn’t it? You just
Tony Kynaston: Yeah.
Toby: forever and quietly. So
Cameron: Mm-hmm.
Tony Kynaston: and then people say, oh, you’re buying whole, but like
Toby: you
Tony Kynaston: they, they’ve held about four. They’ve held about four positions.
Toby: That’s it.
Cameron: Do you wanna, do you wanna talk a little bit about Warren’s retirement and you know, what Warren means to value investing from your perspective?
Toby: Yeah, I’m, I’m a fan of Warren’s. [00:29:00] I started investing because a friend of mine in university said to me. There’s a bloke who runs an insur, well, the richest bloke in the world runs an insurance company. So I just tuned out as soon as he said that. then he said, but he writes these that explain what he does as an investor.
So I thought, oh, that’s interesting. I’ll go and read them. And it made sense when I read them. I think talk about that. Either they make sense or they don’t. Plenty of people who just like, I don’t want to take this long to get rich. people are like, well, at least this is like a, this kind of, there’s some scientific process to this that you can apply.
Tony Kynaston: It’s why Bitcoin exists, right? The people who don’t get buffer, they don’t wanna take time to get rich.
Toby: that’s right.
Cameron: The anti Buffett. Yeah.
Toby: it’s worked well for those guys too. So I shouldn’t
Tony Kynaston: Yeah. Yeah.
Toby: be too, critical of those guys. And then I think someone said, you know, there’s something about drinking, I, I forget the analogy that they made, but they were like, they equated it to drinking scotch where people start out drinking, you know, whatever.
Some pretty. Ordinary blend and then they become more into it and they drink these more [00:30:00] exotic things like Isle of His Israel or the F FRAs and all the really Petey ones. Then they go back to things that are just more easy to drink and they call it this like U-Shape appreciation. And I think it’s the same thing with buffet.
Like everybody knows that buffet’s wealthy and a good investment. So they start with buffet and then they just kind of describe, discard those ideas over the as they think they know better. And then after you’ve been doing it for a while and you’ve had some hide taken off and you’ve got some scars, then you go, I’ve done this plenty of times, thought that I’ve come up with something new and gone back and red buffet from 1983 and realized he’d already come up with that idea.
And then he explains the three reasons why it doesn’t work. Like, oh, okay, that’s good. In 1983, I saved myself the, the trouble. So the things that I like, he’s, he’s very, he has this kind of scientific approach. recognizes that you pr really your own worst enemy. You know, it’s so easy to follow a hot trend or to get scared out of something.
’cause the very next [00:31:00] print or the stock price direction isn’t the one that you want. if you’ve done enough work and nothing’s changed and you really shouldn’t be changing your mind that quickly. And the final thing that he does that I love, which is uh, I think he, he genuinely is honest. Like he’s trying to do it the right way.
And I remember reading the, the. That Lowenstein book, the Making It of An American Capitalist, when I was like, when I was just in early university and it made me feel positive that you probably could do it in a pretty honest, you didn’t have to be kind of cutthroat to succeed. And I thought that was a, so I thought those things were good.
And I think the fact that he’s as influential as he has and he’s sort of promoted those values has been good for society, good for business in general. Very sad to see him stand down, but that’s a pretty good knock.
Tony Kynaston: Yeah.
Toby: 60 years in the seat is a
Tony Kynaston: Yeah. Yeah, I mean, I, I agree with everything you said. He’s, he and Charlie are my heroes. probably add a couple of other things. I, I’d add that [00:32:00] he’s a very good marketer. think that’s probably his, his, apart from his investing skills, that’s his next biggest skill. so he always comes out in his annual reports and tells you what he did wrong that year, right off the bat.
So, which is really good, you.
Toby: There,
Tony Kynaston: Very,
Toby: don’t do that
Tony Kynaston: they spin.
Toby: a good marketer, just like saying that you’re,
Tony Kynaston: Oh, I think it is. Yeah. I mean, marketing 1 0 1 is you take your worst that take your worst thing and market it, market the hell out of it, Because it’s gonna be attacked. Everything else sells itself.
Toby: I see.
Tony Kynaston: So
Toby: sense. That might be
Tony Kynaston: yeah. So you look at any political party, they’ll, um, they’ll spend most of their time talking about the most controversial thing, right? ’cause everything else. Their followers are gonna believe. So that’s, but he is also, he also says things like, well, you know, tune out the noise. And I live in Omaha to keep away from Wall Street. And then you read about him, he’s on the Washington Post Board, he’s in Wall Street, he’s in New York with this guy and that person, he’s, he’s the [00:33:00] biggest networker under the sun.
Toby: he is
Tony Kynaston: So, um.
Toby: very, very sophisticated when he talks about. Yeah, when he talks about, like the derivatives one is one that always, everybody says, well, he wrote all of this stuff about derivatives being weapons of mass destruction. And then he turns around and sells this giant put uh, the index.
You know, how is that any different? But different because he got the cash up front and he got to hold onto of the cash. And then,
Tony Kynaston: Yeah.
Toby: he had this. about where the index was gonna be in 10 years time. And it was a very modest hurdle for him to get over and he could invest that cash at the same time.
And if he can outperform, then it makes total sense to do it as it happens. He, he didn’t have to pay out on it anyway, so he just got free of the cash. Pretty clever.
Tony Kynaston: Yeah, I mean, he makes the point that if he had, um, against Berkshire Hathaway shares along the way, he would’ve been broke twice. So, it’s a pretty strong argument against derivatives too.
Toby: do. you think, do you think that Musk has some pretty significant borrowings against. shares
Tony Kynaston: Uh, I, I couldn’t say, um, [00:34:00] I don’t, I don’t follow. It’s, uh, like the antithesis of what, what Warren teaches. So,
Toby: it
Tony Kynaston: I don’t, don’t go near it.
Toby: me it’s, I, I fi I’m sort of, I’m sort of about Tesla. I, I watch Tesla from a distance and I just, I, I, you know, it’s, it’s, I. Very well known. Musk is very well known. It’s, it’s in the news all the time, so it’s hard to avoid, but it’s one of those stocks that just seem to me, it just completely defies everything that I’ve ever learned investing and the fact that it has remained so resilient for so long.
And you can talk to people who are devotees and they have the similar attitude. To Musk and Tesla is probably, as I did to, we do, to Buffet and to Berkshire. So it’s, it’s just a curious thing and I think that, I think that he does have some borrowings against his, his shareholding. And I, I’ve always thought there’s a reasonable chance that there’s a smoking crater at the end of the, the Tesla, but not yet.
Tony Kynaston: Well, I think, I think his, um, big [00:35:00] advantage is Robin, what’s the name? Robin Denim. The, uh, chair of the company. Whenever he needs money, he just his options, his, uh, remuneration.
Toby: Well.
I thought, I thought another sneaky way of doing it might be if he sells X AI or X, whatever the whole, whatever that conglomerate is now called into into Tesla, which I think the Tesla shareholders are quite willing to entertain that proposition, and he’s valuing that at like a hundred billion or something like that.
So he’ll do well there too, if that happens.
Tony Kynaston: I, I went past a, a Tesla in a car park recently and I had a sticker on it saying, bought before Doge.
Toby: Yeah, I have
Cameron: I see he came, he came out today and was making some, uh, disparaging comments about the one big, beautiful bill and how it was go. was supposed to be helping reduce deficits and it’s gonna increase the deficit by 4 trillion or whatever. It is so to see where his relationship with the president is, uh, gonna go [00:36:00] in the next few months.
Toby: think he’s stepped back, hasn’t he? I think that’s the, I think it’s already happened.
Cameron: Well, he says he has, but it’s his team that is still running Doge, all of the guys that he put in there. So I’m not sure exactly to what degree his involvement, his, uh, out, I think he had to say something to sort of stop the bleeding from Tesla share price.
Tony Kynaston: he’s certainly got
Cameron: But, um.
Tony Kynaston: the White House given the reception the South African President had there in the last week, the
Toby: Yeah.
Tony Kynaston: white genocide
Toby: Yeah. I,
Tony Kynaston: issue.
Toby: the, I saw the, I saw the, um, I saw the presentation. Yeah. I, I saw what happened.
Cameron: So, um, Tobias, we, know, we’ve, um, started paying more attention to the US market now. I started a US portfolio 18 months ago. It’s doing quite well. It was doing a lot better before Trump’s tariffs, but, um, it’s still doing okay, it’s two things I [00:37:00] wanted to ask you about. One is about your. Prognostications on where the US economy is going, if you have any. And secondly, you talk about benchmarking your fund, you seem to be comparing it to the fangs or the AI stocks or whatever instead of against something like the s and p 500. Is that right? Is that, how do you measure your respective performance?
Is it against the top end of town or, or just the median?
Toby: Yeah, so I would measured properly against a basket of stocks that is more comparable to the universe that I’m investing from, which would be Russell 1000 for Zig 2000 for deep. And then really, Russell 1000 value is the appropriate benchmark on Russell 2000 value. But it’s, and that, that’s like intellectually, that’s, that’s the truth.
That’s a, that’s what I should be [00:38:00] measured against and that’s the, the place to be. That’s what I should be compared to. But realistically, s and p 500 is an option for people. And so are, you know, uh, an even further concentration in their end of the mag seven or something like that. So you can’t ignore those things completely.
And, but I, I am. I’m really, I don’t care too much about either of those things because I’m trying to, ultimately, I wanna find things that are gonna survive whatever happens over the next, you know, few years. And I don’t have any particular view about the US economy’s strengths or otherwise. I, I think that there’s lots of things that you could point to and say, these are scary, you know, got huge debt.
Um. That’s a problem at some point, although it doesn’t seem to have been a problem yet and so may maybe it never is a problem and there are all of these little like macroeconomic indicators that are variously up or down or I think that the picture is, you could make an argument either way that the US is a very [00:39:00] strong economy, markets very expensive.
Justifiably so, it’s weakening and it’s turning and it’s over. It’s too expensive and it should come down quite a lot. I don’t know which one of those play out. I think that whatever happens, I just wanna be in things that are cash flowing pretty well, pretty healthy balance sheets, doing something with those cash flows.
So if we go into something like if we are in fact in the early two thousands and the index goes sideways, I think folks. Might’ve forgotten this, but the index went sideways from 2000 to 2015 and there were two pretty big drops through that period of time. So it’s entirely possible that that happens again, if you are in that kind of market, you want to be in deep value because the deep value stuff value has traditionally worked by you buy something that’s a little bit that’s undervalued.
And you get a little bit of mean reversion. So it tends to go back to valuation or, or closer to what its average valuation should be as [00:40:00] whatever bad thing sort of passes on. And then you’re selling out of that more expensive stock now and rebuying something cheaper. And that sort of ratchet effect of buying and selling from to cheap and so on can generate performance when the stock market is drifting sideways, which is what I think happened in the two thousands.
It’s happened repeatedly since the stock market, you know, 1850 or 1825, wherever you can get the data going back to, not uncommon. And there’s the, the equally, the, the, the growthy techie cycles have been, um, they’ve happened many times too. They’ve been at least six. You know, the original one was, the first information boom was the telegraph, my latest subsea cable from London to New York, so they could do.
Gold arbitrage between the two. And the first transportation revolution was the steam ships, so they could move goods and things around a little bit faster [00:41:00] than they had previously. Everything was, you know, information and products traveled as fast as the wind blew from London to New York and, and back again.
And every single time that that’s happened, it’s been bad for value and, and great for growth. But then once the market sort of that information once. a.com is not merely enough to like pump your stock price up, and you need to, actually, a.com is table stakes Now every company’s got a.com.
So I think that same thing happens. Ai, there’s a little bit of excitement, eventually every company’s gonna have an AI strategy, whether dealing with customers or in their product. And that happens, the, the market will just assimilate that information. We’ll go back to normal, we’ll go back to buying on fi on a financial basis so it becomes more of a financial cycle.
that’s when you see the reemergence of the private equity guys and that sort of stuff. I think that we’re probably getting close to something like that happening. And that’s a good place. That’s, that’s good thing for deep value because that’s exactly [00:42:00] what deep value is. Just buying on the financials rather than the story that attaches to the stock.
Tony Kynaston: Yeah, I think you’ve made a lot of good points there, and the least of which was the market can go up, it can come down, it can go sideways. And as long as you pro have a framework for dealing with each of those, it doesn’t matter which way it goes And I think the value is the, or value is the framework. For that. it always has been the framework for that. and I, the only other thing I’d throw into the mix that you didn’t mention is, uh, passive investing. So we’re seeing it on the ASX in stocks, or particularly Commonwealth Bank, which is now the world’s most expensive bank on, you know, most metrics. Um, but it’s, you know, good old private, uh, good old, uh, you know, publicly owned, ex South Wales government owned. Pretty basic vanilla bank, selling mortgages and taking deposits, and yet it’s, [00:43:00] it’s, you know, and they normally trade on low double digit PEs. It’s like double that now at least. Um, and it’s all because index funds, I. It, becomes a hamster wheel index funds by Commonwealth Bank ’cause it’s the biggest share in the market, which drives up the price, which means insect funds by Commonwealth Bank ’cause it’s the biggest share in the market. A lot of that’s going on in the US now. I mean, I’ve seen seen analysis which says it’s something like I. I forget now what it is, the US is well over half of the index is now well over half of the internationally focused holdings for passive investing, and then the mag seven share of that is like 30 or 40%. So it’s soon as the speed bump gets hit and those passive funds flow out, that’s in the hamster wheel stops.
That’s when it’s gonna be a problem, I think.
Toby: There’s a theory that floats around here, promoted by Michael Green, who he, he, that’s his, basically, his theory that this passive investors are price insensitive because they. [00:44:00] purely based on Mabb float adjusted market capitalization. And so the biggest companies with the most float out there attract the lion’s share of the flows and everything else is kind of left behind.
And he says that the end result of that is that all of the price sensitive buyers leave the market. so you’ve only got these passive funds competing with each other, and eventually prices go to Infinity and then collapse to zero. I don’t know if we quite get to that point, but I, I think that this, we’ve seen this before though.
I think that every single market top looks like this. Every single market is
Tony Kynaston: Hmm.
Toby: good for big growthy. Companies, and this is, that’s exactly what happened in the late 1990s. It was everybody thinks of it as a.com boom, because that was sort of the, that was the new flavor at the time. But really it was companies like Walmart was very, very big.
GE was too big. Microsoft. Um, was massive and they, they were remained very, very good businesses from 2000 to 2015, but the stock [00:45:00] prices went nowhere because, um, they were just too expensive at the beginning, even though under the hood they were sort of still growing earnings at like 15 or 20% a year. They were compounding away as businesses, but the stock prices were going nowhere.
And that was a, a better market for value. I don’t know, um, that it’s a, that. is this passive flow that will always dictate it. It seems to me that if they, if these passive flows are up one part of the market and pulling down another part, or these, this other part isn’t participating, shouldn’t that mean that there are bargains there for value investors to pick up?
And if you are, you know, if
Tony Kynaston: Absolutely.
Toby: you don’t need necessarily multiple expansion to make money in a business. If the business is buying back stock, the multiple can stay flat and the underlying business can do quite well. On a per share basis, and that’s how your performance is measured. So I, I think that there’s lots of, and I, I, I particularly like those kind of companies where they’re really good cash flows business, the management [00:46:00] is smart, and they buy back stock at opportune times.
And I, my portfolio tends to be filled up with companies that pretty good repurchases of stock. And that’s been a very, like, if you look at something like AutoZone or O’Reilly, those are companies that there’s been this, you know, they, they sell, um. Goods for cars. Basically, they sell like parts for cars, for people who are DIY.
Like you wanna clean, you get some armor all or you, you know, change your own bits and pieces in your car. And the thesis has been, well, EVs are gonna come in, nobody’s gonna need these pieces anymore. All these businesses are gonna die. But they’ve, they’re still opening up hundreds of locations. These businesses, they’re still cash flowing really well, and because they’re cheap, they buy back stock.
And the stocks have performed phenomenally well for periods of time. And so I like that model where an understandable model. It’s a pretty simple business. There are lots of these little simple businesses around that do that, and I think they’ll do well, even if they don’t get the multiple expansion, simply because you’re just getting that [00:47:00] value concentrated in a, in whatever stock remains.
So I, I think that there are ways to outperform, even though there’s a little bit of multiple compression sort of going against you until the market turns. And when it turns, then you know, value will have a good. or 15 years, hopefully as it has in the past.
Tony Kynaston: Yeah. When the, when the tide goes out, we see he’s swimming naked. But, um, que question for you about buybacks because, uh, uh, you know, there’s is the, one of the differences between the Australian market and the US market as we have franking credit, so is a, is a company buying back shares equivalent to a company paying a good dividend yield in Australia? Or you’ve had experience in both.
Toby: Yeah, that’s a good question. Um, I. You would prefer probably just to get the dividends. you can get, if the, the, the Australian system is great because it, that franking credits make you, you’re, you’re totally, you, you’re, uh. I was gonna say ambivalent, but you don’t really care which way. You know, if you get the flows as dividends, not [00:48:00] double taxed.
Here, it’s a different
Tony Kynaston: Hmm.
Toby: are double taxed so all else being equal, you probably want the company buying back stock. problem here is that they have introduced this 1%, like it’s not, that’s not really much. That’s basically brokerage on, is a 1% tax on buybacks, which is either the thin end of the wedge, so they can jack that up over time.
Or it’s, it’s a little, it’s a little irritant. I think. It’s not a, it’s not the end of the world, but it’s definitely, you know, have to pay that. It is, it is a, it’s brokerage, I guess, but it’s, it’s, it’s an irritant. No, I would prefer that it wasn’t there.
Tony Kynaston: Uh, uh, you know, there, apart from the size and liquidity of the market, what other differences do you encounter running a fund in the US compared to how it might happen in Australia? I mean, I’m talking about quarterly reporting, regulatories, different classes of shares. What, what else do you need to take, take a, be aware of.
Toby: hate those different classes of shares. That’s something you encounter pretty frequently over here. Like Google is owned by three blokes. That’s Sergio Brynn, [00:49:00] Larry Page, and uh, Eric Schmidt. And everybody else has got non-voting stock. Even. There’s two classes of stock that are publicly traded that neither of them vote.
so you’re just participating with whatever those guys do, which, You know, that’s suboptimal. It’d probably be better to have a little bit more external pressure, particularly given the nature of that business, which is like information heavy. And everybody’s got a Gmail account, so they probably know everything that everybody’s doing.
not subject to, you know, any oversight. And they’ve got whoever their CEO is, uh, is it Sonder?
Cameron: Stu.
Toby: He’s out there, he is a human shield and he gets, you got a few hundred million to be a human shield. It’s probably a job I do wanna sleep at. You know, it’s not, it’s not a real, it’s not that same you have in Australia where there’s only ordinary shares.
There’s no second class of shares, which I think is a good thing. I, the reporting interesting because I’ve worked in a company that had to report in Australia and it’s, there’s a [00:50:00] lot of work in reporting, even, even half yearly. I don’t know how they do it in the states. I mean, it would take you a quarter to put together your reports, so you.
Just spend the entire quarter putting together your report, report and then, so your entire business is just reporting. You don’t actually ever get around to running the business. But as an investor, I like having quarterly reports so I can see what’s happening. that’s a, that is a, is a little bit of a difference.
The other thing is there’s market makers here. There’s no market makers in Australia, so you just, you stick your trade in the screen and it gets, somebody on the other side picks it up, or they don’t. Here the market maker can enter in. And, you know, cause the trades to occur, which is a strange kind of, um, hangover from a, from a previous time I think.
I don’t think you would necessarily need a market maker. I don’t know if it, I don’t know how that impacts the market, but it’s something that I’m always aware of. And also the prime brokerage is much more that prime brokerage is standard here. that used to be, nobody ever knew what that was [00:51:00] until A GFC came along.
And, you know, they had all those companies that had the reation of that they’d lent out to somebody else who. They didn’t, they didn’t own them. And then when they collapsed, you go to the company, you go to the broker asking for your stock, and they’ve already lent that out and it’s somebody else has got that stock.
That’s the standard here in Australia. You hold this, tend to hold the stock yourself, and it’s unusual to find prime brokerage. I don’t know that they really make much difference. Any of that stuff makes much difference to the way that the, the market runs. Like there’s plenty of tiny, tiny companies here that just never, ever trade.
Trade by appointment, just as there are in Australia. There’s plenty of big companies that, plenty of liquidity in their trade all the time. I always think it’s funny looking at, you know, some days Tesla trades more than spy, which I find just bizarre.
Tony Kynaston: Yeah. Right. And, um, what about, uh, regulatory, requirements? So for your podcast, for example, do you have to hold the equivalent of an A FSL [00:52:00] license to, to talk about shares?
Toby: So I have, I have a license. I have a Series 65, series seven, something like that. I forget, which I might have both or one or the other. I forget which one I have, and I have to, I have that to manage the funds, but I’m very careful not to mention funds on my podcast. And as long as I do that, I’m okay.
But if I start talking about my funds and I, then I have to put all of my podcasts through compliance, which would be, which would be a nightmare, which would mean that I would have to, I would have to approve an hour of me talking about them every week. Yeah. So you don’t need the A FSL for the podcast, but I do need it for the funds, the
Tony Kynaston: Right.
Toby: FSL.
Tony Kynaston: Yeah, yeah. Okay. Yeah. Interesting. Yeah. Yeah. I, I think that was my questions. Cam, do you have anything more to go through?
Cameron: No, I think we’re coming up on an hour. Anyway, we’ve taken [00:53:00] enough of your time Toby, so thanks for sharing that. And um, guess my last question really is, uh, do you have an exit plan if the US ends up in a civil war? How are you getting out? ’cause one of my, one of my sons moved to LA a couple of months ago, and it’s what he and I spent a lot of time talking about is if shit goes down, how do you get out? Do you have a submarine or something like that ready to
Toby: like that. I think that, I think that, you know, it’s like a little bit like being in China relative to what the rest of the world reports on. It’s really, you know, I, I go outside the sun’s shining. I walk the kids to school. It’s, it’s, it’s not a bad life where I live, and I, I don’t really encounter anybody who’s.
You know, know the, there, there’s a, the political view in California is one thing. Go to Texas. It’s a, it’s a different way, but don’t think that the fighting will be state by state or anything like that. Like it, it would break along very funny lines. [00:54:00] I don’t think a civil war is a real possibility.
Um,
Tony Kynaston: interesting, isn’t it? time I go to America, the people are really friendly and I get on well with them and I, you know, per trip I might encounter one or two idiots. But, um, they’re easily managed. But like in Australia, you get, I get in the car and they encounter one or two on the first street I drive down.
So it’s a pretty civil place in the us.
Toby: Americans, um, I think that Americans are great businessmen because they have this attitude that you, they really, they, they really do assume positive intent in most things that people say. And I. I think Australians, um, like we, we like to joke around a little bit. We’re sort of teasing, you know, that’s kind of the Australian personality.
Like never really give a straight answer to anything. And I think Americans are very earnest, you know, they take that what we, they take out teasing a little bit, literally sometimes. So I think that could create a little bit of tension. But now that I’m sort of aware of that, I just, I’m, I have fewer of [00:55:00] my little australianism than I try to just.
Answer the question directly for the
Tony Kynaston: Yeah,
Toby: And, uh, it’s been fine.
Tony Kynaston: they don’t get satire, do they? Very, ’cause they take it all literally.
Toby: I
Cameron: My wife.
Toby: uh, to give
Cameron: My wife,
Toby: it, there is a, it is a positive thing. It’s not, it’s not that they don’t
Tony Kynaston: Oh no, you’re right. Yeah.
Toby: positive intent.
Tony Kynaston: Yeah. Good
Toby: you.
Cameron: my wife’s American. No, that’s what I was gonna say. My wife’s American and it, it took her, I think, 10 years living here before she got, I. Uh, accustomed to people taking the piss and that it was a sign that they like you, you know, they, they wouldn’t take the piss if they didn’t like you. It’s, it’s, it’s a sign of affection, not a, not a sign of aggression.
Toby: trust you to
Cameron: Took a long time.
Toby: Oh, I trust
Cameron: Yes.
Toby: and,
Tony Kynaston: Right.
Cameron: Yeah.
Toby: me at face value, then we’re all then that it’s revealing something about the way that you think that I think, which is, yeah, I’ve, I’ve had a lot of time to think about this stuff ’cause I’ve had to navigate it both ways.
Tony Kynaston: Yeah. Right.
Cameron: Yeah.
Tony Kynaston: Well, I, I’m glad to hear your accent hasn’t changed. I’ve been listening to your, your podcast [00:56:00] in preparation for this, this discussion. uh, after about five minutes of the first one I listened to, I thought this is like a, this is like a cartoon, like a Disney cartoon, all these different American accents, but then it’s contrasted against.
What I would call a normal accent, an Australian accent. You sound like the adult in the room talking to Daffy Duck and Picky Mouse when you’re on the podcast. Yeah.
Toby: never, I don’t, I don’t consciously do anything, but I have, I have heard countries say in Australia that I’m easier to understand in Australia than other Australians, but it’s not anything conscious that I’m doing other than can’t, you can’t walk up to someone and say, gday like that.
You can’t open the conversation with gday ’cause that they’re not looking for that. They’re looking for
Tony Kynaston: Yeah. Right.
Toby: or hello or something like that.
Tony Kynaston: Yeah.
Toby: things. It’s just weird little cultural things like that.
Tony Kynaston: Very good.
Cameron: All right. Thanks for chatting with us, Tobias. Appreciate
Toby: it’s,
Cameron: Oh, before you [00:57:00] go, for our American listeners, if they wanna check out the fund, they go?
Toby: Zig and Deep. Go to your brokerage account. Type in Zig, type in deep. Check out acquirers multiple.com. Check out acquirers multiple in Amazon, I’m working on a new book. I’ve almost got the first draft finished, so that’ll be out hopefully sometime in the next few months, I think. Um, I haven’t, I, I’ve, I’ve just finished the first draft.
I’ve gotta go back and read it and make sure I haven’t gone insane, that it sort of makes sense, but I feel pretty good about this as it stands at the moment.
Cameron: Is this an investing book or is it about um, how to, how to be good looking. Oh, okay. So it’s, uh,
Toby: I’ve got a filter. That’s how, that’s how you get a, get a good filter.
Tony Kynaston: An
Cameron: you can’t trust I, you could be ai. As for all I know, what’s the, what’s the premise of the new book? Can you tell us a bit about it?
Toby: So I’ve called it Soldier of Fortune at the moment [00:58:00] and it is, um, the ancient art of risk taking. Using Sun Sue and Warren Buffet. Uh, it’s a, it’s a, it’s a gamble. People are either gonna think that I’m nuts or hopefully they’ll, they’ll get it and they’ll enjoy it. It should be, it’s supposed to be a pretty lighthearted read.
I’ve used three of buffet’s, known, but transformative deals and some of the motivations that he has for doing these things that were a little bit of a departure from what he has traditionally done. And then I just try to discuss what that reveals about. His strategy beyond sort of just trying to buy things that are undervalued or things that are like the wonderful companies at a fair price.
They’re just trying to reveal a little bit more of the strategy. That’s the idea.
Cameron: Terrific. Well, when it uh, comes out, you’ll have to come back on and we can talk about the
Tony Kynaston: And you have to
Cameron: Sounds great.
Tony Kynaston: be a soldier of fortune
Cameron: I.
Tony Kynaston: patch.
Toby: yeah, that’s the, that’s the only concern. I’m no soldier, I’m no [00:59:00] warrior. a lover, not a fighter.
Cameron: All right, well, uh, thanks again and, and look forward to having you on in a few months when the book comes out and we can get our head around it. That’d be great. Love, love a good Warren Buffett story.
Toby: I appreciate it.
Cameron: Thomas.
Toby: for having me
Cameron: Cheers, mate.
Tony Kynaston: bye.
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