Hi QAVVERS,
It’s been another week of “will he, won’t he” in Iran. JD Vance said there’s no way the U.S. will be sending in ground troops, which I believe, although I don’t trust anything anyone in the Trump administration says. I can’t see sending in ground troops as being something that they can sell politically – but, on the other hand, I can’t see how they get out of this morass without doing that, either. In the meantime, the Strait of Hormuz remains closed….
MARKET UPDATE
Wall Street had another lousy night. And the Australian market is following along.
Chip stocks copped it for a second day running. TSMC beat profit expectations and its US-listed shares still fell 2.3%. Apparently even good results aren’t good enough when everyone’s nervous about AI valuations.
BHP reported record FY26 iron ore production and about 2Mt of copper, with realised prices up on last year (copper by about 35%), and the stock still fell. The market’s problem wasn’t FY26, it was the outlook, with reports pointing to softer FY27 copper guidance at Escondida.
The China backdrop isn’t helping the miners either. Q2 GDP landed Wednesday at 4.3% year on year, down from 5.0% in Q1 and the weakest quarter since late 2022. First half growth of 4.7% keeps Beijing’s full-year target of 4.5% to 5% alive, but only just. The weakness is domestic: soft consumption, weak private investment, the property mess grinding on. Exports are the one thing still working, up 20.8% in June. China growing at its slowest pace in three and a half years while buying most of our iron ore is not a great combination.
Brent settled at US$84.23, down 0.8% on the night but still up around 10% for July after plunging 25% in June.
And the reason oil is doing what it’s doing: the Strait of Hormuz remains effectively closed to commercial traffic. Iran declared it shut on 12 July; the US disputes that, and the US Navy-backed maritime centre says a southern route on the Oman side is still open for two-way traffic. In practice, barely anyone is using it. S&P Global counted 32 transits on 10 July, 30 on 11 July and just 11 on 12 July, the lowest since mid June, against a pre-crisis norm somewhere between 60 and 88 a day depending on whose baseline you use. Hundreds of ships are stranded, war risk insurance is running at least 8 times normal, and somewhere between a fifth and a quarter of the world’s oil supply is at risk. Estimated cost is north of US$4 billion a day.
Short version: nothing much wrong with Australia this morning beyond a soft BHP outlook. We’re downwind of American AI nerves, a slowing China, and a shooting war in the Gulf.
So, let’s get into my weekly updates and see where we are at.
All the Best,
Cam
QAV MYTH KILLERS
Be Like Water
Chrissy and I celebrated our 18th anniversary last weekend at a two-day Wing Chun seminar. As you do.
It was run by Master Andrew Cheung, Chief Instructor of the Global Traditional Wing Chun Kung Fu Federation. His father is Grandmaster William Cheung, who trained under Ip Man in Hong Kong, and who in 1954 walked his friend, a 15-year-old Lee Jun Fan, aka Bruce Lee, into Ip Man’s school and talked the old man into taking him on. Ip initially said no. Lee had Caucasian blood on his mother’s side, and the convention of the day was that you didn’t teach foreigners. Cheung argued the case and won.
One of the core principles of Wing Chun is “don’t fight force with force”. Or, as I like to say:
According to tradition, the art was developed by two women, a Shaolin nun named Ng Mui and her student Yim Wing Chun. Whether that’s history or legend is an argument I’ll leave to other people (but I do get into it on my Kungfused podcast). The design brief is the same either way.
This is a system built for a smaller person facing a larger one. You don’t get to rely on strength, because you haven’t got any. You use structure, timing, and your opponent’s own momentum. When she pushes, you don’t push back. You turn, and let her fall into the space where you used to be.
Which brings us to the most famous thing that Bruce Lee ever said.
“Empty your mind. Be formless, shapeless, like water. Now if you put water into a cup, it becomes the cup. Put it into a teapot, it becomes the teapot. Now water can flow, or creep or drip or crash. Be water, my friend.”
Lee said that in September 1971, in an episode of the TV show Longstreet called “The Way of the Intercepting Fist”, which is what “Jeet Kune Do” (the name of the kung fu style he created) means in English.
So… what does this have to do with investing? I thought you’d never ask…
There’s this idea in investing – particularly in value investing – that you should stick to your guns.
You’ve got to have CONVICTION IN YOUR BELIEFS. BUY THE DIP. DOUBLE DOWN.
If you’ve done your research and decided that a stock is undervalued, you should buy it, regardless of what’s happening to it in the market.
We say (to use a recent WORDLE selection) – pshaw!
To fight the market is like fighting force with force. It’s one part ego, one part sunk cost fallacy. “I spent a lot of time and effort deciding this is a good investment, so damn you all to hell!”
If we have bought something and the force, i e the market, is pushing against us, we don’t push back. We flow with the force. We sell and then redirect that capital into another investment.
There are, of course, also practical reasons for not wanting to sell something you believe in. It’s time and effort. You have to pay brokerage. You might have capital gains tax implications. You have to spend time figuring out what to replace it with. I remember in the DARK AGES of 2022-2023 when we were in RULE 1 HELL. I get it. That sucked.
But we are realists. We do our research before we buy something – but we aren’t magic. We can’t see into the future. We can’t know everything about every stock, or sector, or industry. And there are people out there who know a LOT more than we do about this or that particular stock or sector. If they are driving the price down, whether it’s a single stock or an entire sector, hey, maybe they know something we don’t.
So we have rules that tell us when we should sell. Rule 1. 3PTL. Commodity sell. We might still be right and the market might be wrong. We might sell something and then check back a few months later and see it went through the roof. That happens. But we’ve done backtesting and found that as often as it happens, it happens more the other way – our rules get us out, and the stock keeps dropping.
Conviction is force. It’s a shape you commit to before you know what’s coming. Which is the exact thing Lee is telling you not to do, and the exact thing Ng Mui built a whole fighting system to avoid.
We don’t do conviction.
There’s no box on the QAV checklist for “how committed are you?”. It asks whether the company throws off cash, whether it’s cheap against its own numbers, whether the trend has broken. It never once asks what you think. In fact, it’s designed to AVOID your opinions. Opinions are bad for investors to have. Facts are far superior to opinions (I tend to think this is a pretty good rule for life outside of investing, too).
Rule 1 is “don’t fight force with force” bolted straight into the system. Down 20% and you’re out. You don’t get a vote. You don’t get to explain why the market’s got it wrong, why the thesis is intact, why this is actually a gift. You turn, and you let it fall into the space where you used to be.
The QAV AU Model Portfolio has returned about 16.1% a year since April 2019, against 7.7% for the SPDR ASX 200. Better than double the market, and you can go and check it on our website. Not one dollar of that came from a strongly held view. It came from rules that fire whether or not Tony and I agree with them, built by a bloke who’s been wrong plenty of times and designed a system that doesn’t care.
The market is always going to be bigger than you. Don’t fight it. Re-direct the force.
Be water, my friend.
STOCK ANALYSIS OF THE WEEK
I bought a couple of stocks for QAV AUSTRALIA Light this week. Nothing to sell. Details here.
I did have to replace something from the QAV AMERICA Light portfolio. Details here.
Tony did a deep dive on IVE Group (IGL), Australia’s largest printer and catalog distributor, including the remarkable detail that 14,000 people walk letterbox catalogs around the country every single week. Check out the full analysis in the podcast link below.
This week on the American podcast I did a deep dive on Telecom Argentina (TEO), a near-monopoly telco whose story comes with a Javier Milei subplot involving dead dogs, clones, and chainsaw economics. The numbers are genuinely solid, and you can hear the full analysis at the link below.
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.
AUSTRALIAN BUY LIST
QAV Value Investing Buy List (AU) 2026-07-12
U.S. BUY LIST
QAV Value Investing Buy List 2026-07-12
PORTFOLIO PERFORMANCE
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”.
We publish a fresh performance snapshot once a month. Weekly noise doesn’t tell you much in a value-investing system — what matters is the trend.
July 2026 performance snapshot.
Australian Model Portfolio: No trades this week.
American Model Portfolio: No trades this week.
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: You don’t need to build it to tell the time.
(Note: Americans interested in joining QAV Light or Club please go here instead.)
Add QAV America — US stocks, the same QAV method
Already a QAV member? You can add QAV America as your second membership at 50% off — US-listed stocks, the same QAV approach, billed in AUD through this site (just one payment to keep an eye on). Add QAV America →
Not a QAV member yet? Join QAV first, then you can add QAV America at the 50% member rate.
THIS WEEK’S EPISODES
Phigital Monopoly: IGL — QAV AU #928
Conan the Barbarian (TEO): QAV America #61
STOCK NEWS AND UPDATES
COMMODITIES
This week the big changes to commodities were the following:
| Commodity | Status |
|---|---|
| Coal (thermal) | BUY |
| Coal (coking) | JOSEPHINE |
| Crude Oil | JOSEPHINE |
| Copper | BUY |
| Platinum | JOSEPHINE |
| Zinc | BUY |
| Manganese | SELL |
| Nickel | JOSEPHINE |
| Wheat | BUY |
| Lithium | JOSEPHINE |
| WTI Crude | BUY |
| On the podcast, TK and I agree that Brent Crude is probably a BUY, despite my code arguing over 50 cents. |
DISCLOSURE
Please review our trading and disclosure policy.
SIGNING OFF
That’s the lot for this week. Happy hunting!
SSDD!
- Cam
That’s it for the week!
QAV A GOOD SHAREMARKET!
Got a question? info@qavamerica.com