Hi folks,
The All Ordinaries posted a solid 2.47% gain over the five-day period, climbing from around 8,700 to close near 9,107, despite the RBA raising interest rates again and the ongoing U.S. morass in the Middle East. But the AFR is predicting it will drop again today.
US markets also extended their strong momentum over the past five trading days, with the S&P 500 climbing approximately 1.78% to close near 7,337.
So, let’s get into my weekly updates and see where we are at.
All the Best,
Cam
QAV MYTH KILLERS
AVERAGE DOWN ON LOSERS
There’s a piece of value-investing folklore that goes like this: if you’ve done your homework and the price drops after you buy, that’s a gift. Buy more. Lower your average cost. Double down on your conviction. The fundamentals haven’t changed.
At a certain level, sure, it makes sense.
But more often than not, we think it’s an ego trade dressed up as analysis.
Maybe if you’re Warren Buffett or Charlie Munger, and you’ve spent 500 hours reading everything there is to read about a business, its sector, and its competitors, you’ve earned that level of conviction.
But who has time for that?
The right question is never “is this cheaper than I paid?”
It’s “would I buy this today if I owned no shares?”
Those are very different questions. The first one is about defending a decision you already made. The second one is about whether the decision still makes sense right now.
One of the reasons we use a sentiment chart (the 3PTL) to guide our investing is that we accept we can never know everything there is to know about a company and its short-term future. We rely on historical financials. But there are people out there who know far more about the business than we ever will – analysts who cover the sector, people who work in the company, its suppliers, its competitors. They have insights we can’t possibly match.
If the market is selling a business down, maybe there’s a good reason. Maybe there isn’t. Either way, we’re not willing to bet our house on which it is.
So we err on the side of caution. Even if our fundamental analysis says the stock is undervalued, if sentiment has turned against it, we sit on our hands and wait for the trend to reverse. That’s true whether or not we already own it.
We have a few guards built into the system. The first is sentiment-based sell triggers, with a layer of “trouble at the mill” red flags on top. The second is the Josephine trigger (“not tonight, Josephine”) that stops us from buying something while we wait for the sentiment to turn around. And the third, above all, is Rule 1: a hard 20% stop. If a stock falls 20% from its peak, it’s gone. The losers don’t stay in the portfolio long enough for averaging down to even become a temptation.
Because if a share price is heading in the wrong direction, you have no idea how long it’s going to continue. Months. Years. Maybe forever.
CSL is a stock a lot of people have been groaning about over the years. It had a great run, peaked just before COVID in February 2020 at $320, and then drifted between $320 and $248 for four years. In August 2024 it began a slide that has continued to today, with the share price now south of $124.
There were plenty of people in the Australian investing media plugging the hell out of CSL for the last six years. Buy the dip. Average down. The fundamentals haven’t changed.
We thought it was overvalued at the time and stayed clear. We admire CSL as a business, of course. But it’s a textbook example of why you shouldn’t keep buying something regardless of valuation and regardless of sentiment.
You don’t need conviction in your picks. You need a system that doesn’t care if you have any. Put your conviction in your SYSTEM, not in your ego.
STOCK ANALYSIS OF THE WEEK
I added one stock to the Light portfolios this week and you can see my Light posts here.
I also added something to the U.S. Light portfolio this week. U.S. Light and Club members can read about it here.
On the full Australian podcast this week, Tony did a deep dive on KAU. See the podcast link down below if you want to listen to his analysis.
BUY LIST
Each week, we produce a buy list based on our value investing system that we share with our QAV Club members. The intended primary purpose of this buy list is for club members to use as a reference for comparing their own buy list. In theory, all of our buy lists should look pretty similar each week.
QAV Value Investing Buy List (AU) 2026-05-03
Below is a link to the US list for this week (available exclusively to our U.S. Club members):
QAV Value Investing Buy List 2026-05-04
PORTFOLIOS
We compare our performance to what we think is the most relevant benchmark (SPDR 200 in Australia, S&P500 in the USA), but if you’re new to investing, these comparisons might not mean much. Instead, you can compare our performance to the top-performing Super Funds in Australia and see why an amateur active investor (who has a system to follow) can out-perform most of the “professionals”.
AUSTRALIAN
QAV DUMMY
Five Year Report: Over the last 5 years, the QAV AU portfolio delivered a return of approximately 14.06%, while the ASX 200 benchmark returned around 8.64%.
Monthly Report: Over the past 30 days, the QAV AU portfolio delivered a return of approximately -2.0%, while the ASX 200 benchmark fell around -0.8%.
No changes to our portfolio this week.
For FY26: Over the financial year to date, the QAV AU portfolio delivered a return of approximately 17.89%, while the ASX 200 benchmark gained around 7.57%.
QAV LIGHT
Financial Year to Date
Over the financial year to date, the QAV AU Light portfolio delivered a return of approximately 28.4%, while the ASX 200 benchmark gained around 7.6%.
Last 30 Days
Over the past 30 days, the QAV AU Light portfolio delivered a return of approximately 1.3%, while the ASX 200 benchmark fell around -0.8%.
Last 12 Months
Over the last 12 months, the QAV AU Light portfolio delivered a return of approximately 31.5%, while the ASX 200 benchmark returned around 13.0%.
Become a QAV Light Member today and start your investing on the right track
If you want to find out what we’re trading in QAV Light each week, sign up to become a member. You’ll get an email from me every Monday letting you know what we’re buying and selling in that portfolio. You can choose to copy our trades or not. It’s the easiest way to start your rules-based investing career… and you don’t even need to know the rules. I’ll follow the rules for you. It’s a good first step to eventually becoming a QAV Club member and learning how to run the system by yourself.
QAV LIGHT: We know where to drop your line.
(Note: Americans interested in joining QAV Light or Club please go here instead.)
AMERICAN
QAV DUMMY
Since inception (Sep 2023), our portfolio is +125% vs the S&P 500 +65%.
Over the last 30 days our portfolio is +15% vs the S&P 500 +11%.
No trades this week.
QAV LIGHT
Since inception (Dec 2025), our portfolio is +11% vs the S&P 500 +6.65%. Over the last 30 days our portfolio is +6.59% vs the S&P 500 +11%.
THIS WEEK’S EPISODES
Five Juicy Years: Gold, Oil, and the Art of Saying No – QAV AU #918
The Hausbank That Came In From The Cold (DB) – QAV America #51
STOCK NEWS AND UPDATES
COMMODITIES
This week the big changes to commodities were the following:
| Commodity | Status |
|---|---|
| Gold (USD) | JOSEPHINE |
| Coal (coking) | BUY |
| Platinum | JOSEPHINE |
| WTI Crude | BUY |
DISCLOSURE
Please review our trading and disclosure policy.
SIGNING OFF
Hope everyone’s having a ripper week! Our deep dives into KAU and DB this week should give you plenty to chew on – remember, the best opportunities often hide in plain sight when the market’s not paying attention. Keep doing the work, stick to the checklist, and let the numbers guide you through whatever noise the market throws our way.
SSDD!
- Cam
That’s it for the week!
QAV A GOOD SHAREMARKET!
Got a question? info@qavamerica.com